<PAGE>
Filed Pursuant to Rule 424(b)(2)
(Registration Nos. 33-47386 and 33-50779)
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED FEBRUARY 27, 1995)
$250,000,000
CENTURY
[LOGO] COMMUNICATIONS
CORP.
9 1/2% SENIOR NOTES DUE 2005
----------------------
Interest on the 9 1/2% Senior Notes due March 1, 2005 (the 'Notes') of
Century Communications Corp. (the 'Company') is payable semi-annually on March 1
and September 1 of each year, commencing September 1, 1995. The Notes may not be
redeemed by the Company.
SEE 'INVESTMENT CONSIDERATIONS' FOR CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY
PROSPECTIVE INVESTORS.
----------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
----------------------
The Underwriter has agreed to purchase the Notes from the Company at
98.107% of their principal amount (resulting in $245,267,500 aggregate proceeds
to the Company, before deducting expenses payable by the Company estimated at
$250,000), plus accrued interest, if any, from March 6, 1995 to the date of
delivery, subject to the terms and conditions as set forth in the Underwriting
Agreement.
The Underwriter proposes to offer the Notes from time to time for sale in
one or more negotiated transactions, or otherwise, at market prices prevailing
at the time of sale, at prices related to such prevailing market prices or at
negotiated prices. For further information with respect to the plan of
distribution and any discounts, commissions or profits on resale that may be
deemed underwriting discounts or commissions, see 'Underwriting' herein. The
Company has agreed to indemnify the Underwriter against certain liabilities,
including liabilities under the Securities Act of 1933, as amended.
----------------------
The Notes are offered by the Underwriter, subject to prior sale, when, as
and if issued to and accepted by the Underwriter, subject to approval of certain
legal matters by counsel for the Underwriter and certain other conditions. The
Underwriter reserves the right to withdraw, cancel or modify such offer and to
reject orders in whole or in part. It is anticipated that delivery of the Notes
will be made in New York, New York, on or about March 6, 1995.
----------------------
MERRILL LYNCH & CO.
----------------------
The date of this Prospectus Supplement is February 27, 1995.
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NOTES OFFERED
HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET.
SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
RECENT DEVELOPMENTS
On November 28, 1994, the Company entered into an agreement to acquire the
cable television systems serving Anaheim, Hermosa Beach/Manhattan Beach,
Fairfield and Rohnert Park/Yountville, California, for an aggregate purchase
price of $286,000,000, subject to adjustment, payable in cash. At September 30,
1994, such cable television systems served an aggregate of approximately 135,000
primary basic subscribers. The obligation of the Company to consummate this
transaction is subject to certain closing conditions, including the approval of
the relevant franchise authorities of both the transfer and extension of the
relevant franchises and other regulatory approvals. The Company anticipates
completing this acquisition by September 30, 1995.
In December 1993, the Company entered into a letter of intent to acquire
cable television systems located in California, Colorado, Idaho, Montana and
Washington for an aggregate purchase price of $92,875,000, subject to
adjustment, payable by $50,000,000 in cash and the balance in approximately
3,500,000 registered shares of Class A Common Stock of the Company (valued at
$12.25 per share, subject to post-closing adjustment based on the price
performance of the Class A Common Stock). At August 1, 1994, such cable
television systems served an aggregate of approximately 44,000 primary basic
subscribers. The Company anticipates completing this acquisition on or before
March 1, 1995.
Centennial Cellular Corp., the Company's 33.9%-owned subsidiary, is
currently participating in the bidding with respect to the FCC auction of the
personal communication system (PCS) license to serve the Commonwealth of Puerto
Rico and the U.S. Virgin Islands. The latest bid submitted by Centennial was
approximately $55,000,000. There is no assurance that Centennial will be
successful in obtaining such license through such bidding and Centennial has no
obligation to submit additional bids.
In February 1994, the Company through a wholly owned subsidiary
('Australian Holding Company') invested approximately $58,000,000 in a company
(the 'Licensee') which presently owns a 91.5% interest in one of two licenses
issued by the Australian Broadcasting Authority authorizing the satellite
delivery of television programming on a paid subscription basis ('Satellite Pay
TV'). In addition, subsequent to year-end, the Company acquired for
approximately $15,000,000, through the Australian Holding Company, the
additional 8.5% interest in the license. With respect to the operation of the
Satellite Pay TV business, the Australian Holding Company has an agreement in
principle to cooperate with the other Satellite Pay TV license holder ('Second
License Holder') in the areas of marketing, distribution facilities (including
joint use of facilities for transmitting programming), subscriber management,
and other areas of operation as contemplated by the Australian Broadcast Service
Act. In addition, the Licensee has agreed to jointly use facilities for the
distribution of programming in Australia through the use of MMDS licenses owned
by the Second License Holder ('MMDS Venture'). The Licensee's initial interest
in the MMDS Venture accrued by reason of said joint use facilities is
approximately 25%, which may be increased by virtue of additional capital
contributions. The agreements relating to the cooperation with the Second
License Holder and the MMDS Venture are subject to regulatory review and
approval. There is no assurance such approval will be received. The Company has
also acquired, subsequent to May 31, 1994, an approximate 2% economic interest
in the Second License Holder for approximately $10,000,000.
In July 1994, the Company entered into an agreement to acquire a 50%
economic interest in an Australian company which is a franchisee (the
'Franchisee') of the Second License Holder. The franchise provides for the
exclusive distribution rights of certain programming as well as the use of
subscriber billing systems and distribution facilities. Pursuant to such
agreement, the Company agreed to invest up to $55,000,000 for the acquisition by
the Franchisee of MMDS licenses covering the franchised areas. The licenses were
acquired for approximately $12,000,000 through an auction process conducted by
the Australian Government. The Company has also agreed to fund up to
approximately $11,000,000 of working capital needs of the Franchisee on terms
which reflect the market for
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<PAGE>
commercial banking facilities. Subject to certain conditions precedent, the
agreement provided further that the Company would merge its Australian Holding
Company with the Franchisee through transfer of its interests in such Holding
Company for interests in the Franchisee. After completion of such merger, the
Company would have an approximate 75% to 77% economic interest in the combined
entity. The merger was completed in February 1995 pursuant to the terms of an
amending agreement entered into on the completion date. The Franchisee acquired
the outstanding shares of the Licensee and the aforementioned 8.5% interest in
the license. The assets associated with the Company's investments in Australia
are in the development stage and are not yet operational.
USE OF PROCEEDS
The net proceeds to be received by the Company from the sale of the Notes
(estimated to be $245,017,500, after deducting expenses payable by the Company
of approximately $250,000) may be used in whole or in part to repay all or a
portion of the long-term debt outstanding under two credit agreements executed
by subsidiaries of the Company and various banks (the 'Credit Agreements').
Further borrowings may be made under the Credit Agreements for any purpose,
including those described below, until February 28, 1996 and June 30, 1997. The
Credit Agreements expire on February 28, 2001 and June 30, 2002 and provide for
mandatory principal repayments commencing February 28, 1996 and June 30, 1997,
respectively. At February 27, 1995, the effective rate of interest under the
Credit Agreements was approximately 7.3% and the aggregate principal amount
outstanding thereunder was approximately $298,000,000. The balance of the net
proceeds may be used by the Company for general corporate purposes, including
but not limited to the financing of capital expenditures, investments, purchases
of the Company's securities and acquisitions. Pending any specific application,
the net proceeds will be added to working capital and invested in short-term
interest bearing obligations.
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SELECTED FINANCIAL INFORMATION
The selected consolidated financial information set forth below for the
five years ended May 31, 1994 has been derived from the Company's audited
consolidated financial statements. Such information should be read in
conjunction with, and is qualified in its entirety by, the consolidated
financial statements and notes thereto incorporated into the accompanying
Prospectus by reference to the Company's Annual Report on Form 10-K for the
fiscal year ended May 31, 1994. The selected consolidated financial information
set forth below for the six months ended November 30, 1993 and 1994 has been
derived from the Company's unaudited consolidated financial statements which in
the opinion of management reflect all adjustments (consisting only of normal
recurring adjustments) necessary for a fair presentation of interim data.
<TABLE>
<CAPTION>
SIX MONTHS ENDED
FISCAL YEARS ENDED MAY 31, NOVEMBER 30,
-------------------------------------------------------------- -----------------------
1990 1991 1992 1993 1994 1993 1994
---------- ---------- ---------- ---------- ---------- ---------- ----------
(IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues............................. $ 231,242 $ 277,049 $ 312,317 $ 345,131 $ 374,599 $ 185,549 $ 201,692
---------- ---------- ---------- ---------- ---------- ---------- ----------
Cost of services, selling, general and
administrative expenses............ 112,166 128,182 144,823 151,742 165,500 81,205 101,397
Depreciation and amortization........ 97,630 116,364 129,810 138,547 151,296 72,815 80,550
---------- ---------- ---------- ---------- ---------- ---------- ----------
Operating income..................... 21,446 32,503 37,684 54,842 57,803 31,529 19,745
Interest expense..................... 114,426 132,498 116,516 112,294 121,698 59,925 65,667
Other(1)............................. (29,950) (41,402) (22,686) (19,661) (21,968) (10,323) (14,348)
Writedown of marketable equity
securities......................... -- 21,702 -- -- -- -- --
Extraordinary item -- loss on early
retirement of debt................. -- -- 9,888 -- -- -- --
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net loss............................. $ (63,030) $ (80,295) $ (66,034) $ (37,791) $ (41,927) $ (18,073) $ (31,574)
---------- ---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net loss per common share............ $ (.72) $ (.92) $ (.80) $ (.49) $ (.53) $ (.24) $ (.38)
---------- ---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ---------- ----------
Dividend requirements on cumulative
preferred stock and subsidiary
convertible redeemable preferred
stock.............................. $ -- $ -- $ 4,809 $ 5,883 $ 5,838 $ 2,947 $ 2,324
---------- ---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ---------- ----------
</TABLE>
<TABLE>
<CAPTION>
AS OF MAY 31,
--------------------------------------------------------------
1990 1991 1992 1993 1994
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
CABLE SUBSCRIBER DATA:
Homes passed.................................................. 1,583,900 1,600,000 1,650,000 1,650,900 1,675,000
Basic subscribers............................................. 865,900 884,000 907,000 934,000 945,000
Penetration................................................... 54.7% 55.3% 54.9% 56.6% 56.4%
CELLULAR POPS AND SUBSCRIBER DATA (2):
Net pops of controlled systems................................ 2,373,900 2,662,700 2,950,700 3,048,047 3,941,000
Net pops of minority owned systems............................ -- -- 1,050,600 1,052,200 1,079,400
---------- ---------- ---------- ---------- ----------
Total net pops........................................... 2,373,900 2,662,700 4,001,300 4,100,247 5,020,400
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
Subscribers of controlled systems............................. 16,250 20,660 32,360 45,480 64,580
Pro rata share of subscribers of minority owned systems....... -- -- 20,000 30,520 42,000
---------- ---------- ---------- ---------- ----------
Total subscribers........................................ 16,250 20,660 52,360 76,000 106,580
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
</TABLE>
- ------------
(1) Other is comprised primarily of provision (benefit) for income taxes
computed in accordance with Financial Accounting Standards Board Statement
('SFAS') No. 96 'Accounting for Income Taxes' effective May 31, 1993, SFAS
No. 109 'Accounting for Income Taxes', the loss attributable to minority
partners, the early termination of certain interest rate hedge agreements in
1993 related to the refinancing of one of the Company's bank credit
agreements and the subsequent reduction of floating rate debt to which such
agreements were matched.
(2) See 'The Company' in the accompanying Prospectus for a description of the
Company's cellular systems and for the definition of 'net pops.'
S-4
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DESCRIPTION OF THE NOTES
The following description of the particular terms of the Notes supplements
and, to the extent inconsistent therewith, replaces the description of the
general terms of the Debt Securities set forth under the heading 'Description of
Debt Securities' in the accompanying Prospectus, to which description reference
is made. The Notes will be issued pursuant to an Indenture dated as of February
15, 1992 between the Company and Bank of America National Trust and Savings
Association, as trustee (the 'Trustee'), as supplemented by a Fourth
Supplemental Indenture to be dated as of March 6, 1995 (such Indenture, First
Supplemental Indenture dated as of February 15, 1992, Second Supplemental
Indenture dated as of August 15, 1992, Third Supplemental Indenture dated as of
April 1, 1993 and Fourth Supplemental Indenture, collectively the 'Indenture').
The Indenture is referred to in the Prospectus as the 'Senior Indenture.' The
Notes are 'Senior Debt Securities' as that term is used in the Prospectus and
are also referred to in the Prospectus as the 'Offered Debt Securities.'
GENERAL
The Notes are limited to $250,000,000 aggregate principal amount and will
be issued in fully registered form, without coupons, in denominations of $1,000
and integral multiples thereof. The Notes will mature on March 1, 2005.
The Notes will bear interest from March 6, 1995 at a rate of 9 1/2% per
annum, payable semi-annually on March 1 and September 1 of each year, commencing
September 1, 1995, to the person in whose name each Note was registered at the
close of business on the preceding February 15 and August 15, respectively,
subject to certain exceptions. Interest on the Notes will be computed on the
basis of a 360-day year of twelve 30-day months.
The Notes will rank pari passu with all existing and future Senior
Indebtedness (as that term is used in the Prospectus) of the Company, including
the 9 3/4% Senior Notes Due 2002, the 9 1/2% Senior Notes Due 2000 and the
Senior Discount Notes Due 2003, and will be senior in right of payment to all
existing and future subordinated indebtedness of the Company, including the
11 7/8% Senior Subordinated Debentures Due 2003.
REDEMPTION
The Notes may not be redeemed prior to maturity on March 1, 2005. See
'Certain Rights to Require Purchase of Notes.'
CERTAIN DEFINITIONS
Set forth below is a summary of certain of the defined terms used in the
Indenture. Reference is made to the Indenture for the full definition of all
such terms as well as any other capitalized terms used herein for which no
definition is provided.
'Advance' means any direct or indirect advance, loan, guarantee, transfer
(pursuant to contract or otherwise) or other extension of credit or capital
contribution (in cash or other property) by the Company or any Subsidiary, as
the case may be, to, or any purchase or other acquisition by such person of any
Capital Stock, equity or other ownership interests, bonds, notes, debentures or
other securities of, any Subsidiary or any other Affiliate of the Company, as
the case may be, but not including: (i) any Advance from the Company or any
Subsidiary to any Affiliate for use by such Affiliate in the ordinary course of
its business on terms that are no less favorable to the Company or such
Subsidiary than those that could have been obtained in a comparable transaction
by the Company or such Subsidiary from a Person who is not an Affiliate, or (ii)
any Advance from the Company or any directly or indirectly 90%-owned Subsidiary
to any other directly or indirectly 90%-owned Subsidiary or the Company. For
purposes of subclause (i) of this definition, expenditures in the ordinary
course of business shall mean and include expenditures for working capital,
capital improvements and acquisitions in the communications and media fields
whether by purchase of assets, capital stock or partnership or other equity
interests or by the formation of joint ventures, partnerships or other entities.
'Affiliate' of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes
S-5
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of this definition, 'control' (including, with correlative meanings, the terms
'controlled by' and 'under common control with'), when used with respect to any
Person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of such Person,
whether through the ownership of voting securities or by agreement or otherwise.
'Asset Sale' means the sale, transfer, or other disposition (other than to
the Company or any of its Subsidiaries) in any single transaction or series of
related transactions of (a) any Capital Stock of any Subsidiary, (b) all or
substantially all of the assets of the Company or any Subsidiary or (c) all or
substantially all of the assets of a division, line of business, or comparable
business segment of the Company or any Subsidiary.
'Capitalized Lease Obligation' means, as applied to any Person, any lease
of any property (whether real, personal or mixed) by that Person or lessee
which, in conformity with GAAP, is required to be accounted for as a capital
lease on the balance sheet of that Person.
'Capital Stock' means any and all shares, interests, rights to purchase,
warrants, options, participations or other equivalents of or interests in
(however designated) corporate stock and any and all equity, beneficial or
ownership interests in, or participations or other equivalents in, any
partnership, association, joint venture or other business entity.
'Cash Flow Available for Interest Expense' means, for any Person, for any
period, (A) the sum of the amount for such period of (i) Net Income, (ii)
Interest Expense, (iii) provisions for taxes based on income (excluding taxes
related to gains and losses excluded from the definition of Net Income), (iv)
depreciation expense, (v) amortization expense, and (vi) any other non-cash
items reducing the Net Income of such Person for such period, minus (B) all
non-cash items increasing Net Income of such Person, all as determined in
accordance with GAAP; provided that if, during such period, such Person shall
have made any Asset Sale, Cash Flow Available for Interest Expense of such
Person for such period shall be reduced by an amount equal to the Cash Flow
Available for Interest Expense (if positive) directly attributable to the assets
which are the subject of such Asset Sale for the period subsequent to such sale
or increased by an amount equal to the Cash Flow Available for Interest Expense
(if negative) directly attributable thereto for such period.
'Consolidated Cash Flow Available for Interest Expense' means, for any
Person, for any period, (A) the sum of the amount for such period of (i)
Consolidated Net Income, (ii) Consolidated Interest Expense, (iii) provisions
for taxes based on income (excluding taxes related to gains and losses excluded
from the definition of Consolidated Net Income or Net Income), (iv) depreciation
expense, (v) amortization expense, and (vi) any other non-cash items reducing
the Consolidated Net Income of such Person for such period, minus (B) all
non-cash items increasing Consolidated Net Income of such Person for such
period; all as determined on a consolidated basis for such Person and its
Subsidiaries in accordance with GAAP; provided that if, during such period, the
Company or any of its Subsidiaries shall have made any Asset Sale, Consolidated
Cash Flow Available for Interest Expense of the Company for such period shall be
reduced by an amount equal to the Consolidated Cash Flow Available for Interest
Expense (if positive) directly attributable to the assets which are the subject
of such Asset Sale for the period subsequent to such sale or increased by an
amount equal to the Consolidated Cash Flow Available for Interest Expense (if
negative) directly attributable thereto for such period.
'Consolidated Interest Expense' of any Person means, with respect to any
period, the aggregate Interest Expense of such Person and its Subsidiaries,
determined on a consolidated basis in accordance with GAAP; provided, however,
that Consolidated Interest Expense of the Company shall only include the
Interest Expense of any Subsidiary of the Company which, at the date of
determination of the Interest Expense Ratio of the Company, has an Interest
Expense Ratio of less than the ratios set forth below:
<TABLE>
<CAPTION>
PERIOD RATIO
- ---------------------------------------------------------------------- -----------
<S> <C>
November 15, 1988 -- November 14, 1990................................ 1.25 to 1.0
November 15, 1990 -- November 14, 1991................................ 1.35 to 1.0
Thereafter............................................................ 1.50 to 1.0
</TABLE>
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'Consolidated Net Income' with respect to any specified Person means, for
any period, the aggregate of the Net Income of such specified Person and its
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; provided that (i) the Net Income of any other Person which is not a
Subsidiary or is accounted for by such specified Person by the equity method of
accounting shall be included only to the extent of the amount of dividends or
distributions paid to such specified Person or a Subsidiary, and (ii) the Net
Income of any other Person acquired by such specified Person or a Subsidiary of
such Person in a pooling of interests transaction for any period prior to the
date of such acquisition shall be excluded and (iii) the Net Income (if
positive) of any Subsidiary that is subject to restrictions, direct or indirect,
on the payment of dividends or the making of distributions to such specified
Person shall be excluded to the extent of such restrictions.
'Currency Agreement' means any foreign exchange contract, currency swap
agreement or other similar agreement or arrangement designed to protect against
fluctuations in currency values.
'Debt' of any Person means (without duplication) any indebtedness,
contingent or otherwise, in respect of borrowed money (whether or not the
recourse of the lender is to the whole of the assets of such Person or only to a
portion thereof), or evidenced by bonds, notes, debentures or similar
instruments or representing the balance deferred and unpaid of the purchase
price of any property (except any such balance that constitutes a trade payable
or an accrued liability arising in the ordinary course of business that is not
overdue by more than 120 days or that is being contested in good faith), if and
to the extent any of the foregoing indebtedness would appear as a liability upon
a balance sheet of the Company in accordance with GAAP.
'GAAP' means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession as in effect on the date of the Indenture.
'Indebtedness' of any Person shall mean the Debt of such Person and shall
also include, to the extent not otherwise included, any Capitalized Lease
Obligation, the maximum fixed repurchase price of any Redeemable Stock,
Indebtedness secured by a Lien to which the property or assets owned or held by
the Company are subject (whether or not the obligations secured thereby shall
have been assumed), guarantees of items that would constitute Indebtedness under
this definition (whether or not such items would appear upon the balance sheet
of such Person), letters of credit and letter of credit reimbursement
obligations (whether or not such items would appear on such balance sheet), and
obligations in respect of Currency Agreements and Interest Swap Obligations, and
any renewal, extension, refunding or amendment of any of the foregoing. For
purposes of the preceding sentence, the maximum fixed repurchase price shall be
calculated in accordance with the terms of such Redeemable Stock as if such
Redeemable Stock were repurchased on any date on which Indebtedness shall be
required to be determined pursuant to the Indenture, and if such price is based
upon or measured by the fair market value of such Redeemable Stock (or any
equity security for which it may be exchanged or converted) such fair market
value shall be determined in good faith by the Board of Directors. The amount of
Indebtedness of any Person at any date shall be the outstanding balance at such
date of all unconditional obligations as described above and the maximum
liability of any such contingent obligations at such date.
'Interest Expense' of any Person means, for any period, the aggregate
amount of (i) interest in respect of Indebtedness of such Person (including
amortization of original issue discount on any such Indebtedness and the
interest portion of any deferred payment obligation, calculated in accordance
with the effective interest method of accounting, all commissions, discounts and
other fees and charges owed with respect to letters of credit and bankers'
acceptance financing and the net costs associated with Interest Swap Obligations
and Currency Agreements), (ii) all but the principal component of rentals in
respect of Capitalized Lease Obligations paid, accrued or scheduled to be paid
or accrued by such Person during such period, and (iii) any dividends or
distributions paid on any Redeemable Stock of such Person, all as determined in
accordance with GAAP.
'Interest Expense Ratio' means, for the Company, the ratio of (i) the
aggregate amount of Consolidated Cash Flow Available for Interest Expense of the
Company for the four fiscal quarters for
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which financial information in respect thereof is available immediately prior to
the date of the transaction giving rise to the need to calculate the Interest
Expense Ratio (the 'Transaction Date') to (ii) the aggregate Consolidated
Interest Expense which the Company will accrue during the fiscal quarter in
which the Transaction Date occurs and the three fiscal quarters immediately
subsequent to such fiscal quarter, assuming the Consolidated Interest Expense
accruing on the amount of the Company's Indebtedness on the Transaction Date and
reasonably anticipated by the Company in good faith to be outstanding from time
to time during such period (assuming the continuation of market interest rate
levels prevailing on the Transaction Date in any calculation of Interest Expense
relating to Indebtedness the interest on which is a function of such market
interest rate levels). 'Interest Expense Ratio' means, for any other Person, the
ratio of (i) the aggregate amount of Cash Flow Available for Interest Expense of
such other Person for the four fiscal quarters for which financial information
in respect thereof is available immediately prior to the relevant Transaction
Date to (ii) the aggregate Interest Expense which such other Person will accrue
during the fiscal quarter in which the Transaction Date occurs and the three
fiscal quarters immediately subsequent to such fiscal quarter, assuming the
Interest Expense accruing on the amount of such other Person's Indebtedness on
the Transaction Date and reasonably anticipated by such other Person in good
faith to be outstanding from time to time during such period (assuming the
continuation of market interest rate levels prevailing on the Transaction Date
in any calculation of Interest Expense relating to Indebtedness the interest on
which is a function of such market interest rate levels).
'Interest Swap Obligations' shall mean the obligations of any Person
pursuant to any arrangement with any other Person whereby, directly or
indirectly, such Person is entitled to receive from time to time periodic
payments calculated by applying either a floating or a fixed rate of interest on
a stated notional amount in exchange for periodic payment made by such Person
calculated by applying a fixed or a floating rate of interest on the same
notional amount.
'Lien' means any lien, security interest, charge or encumbrance of any kind
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, and any agreement to give any security interest).
'Net Income' of any Person shall mean the net income (loss) of such Person,
determined in accordance with GAAP, excluding, however, any gain (but not loss)
realized upon the sale or other disposition (including, without limitation,
dispositions pursuant to sale and leaseback transactions) of any real property
or equipment of such Person which is not sold or otherwise disposed of in the
ordinary course of business and any gain (but not loss) realized upon the sale
or other disposition of any Capital Stock of such Person or a Subsidiary of such
Person.
'Permitted Investment' means any investment after November 10, 1988 (a)
which when aggregated with all other outstanding Permitted Investments does not
exceed the aggregate of $50 million (excluding amounts which may be used to
acquire the remaining interests in the non-wireline cellular telephone systems
in Elkhart, Indiana, Lincoln, Nebraska and Charlottesville and Lynchburg,
Virginia) plus (i) the amount of Proceeds from the issuance or sale of Capital
Stock of the Company after November 15, 1988, (ii) the amount of Proceeds from
the issuance of indebtedness which is converted or exchanged for Capital Stock
of the Company after November 15, 1988, and (iii) amounts from dividends or
distributions made to the Company or any Restricted Subsidiary from an
Unrestricted Subsidiary after November 15, 1988, and (b) which is (i) loaned or
contributed to any Affiliate controlled, directly or indirectly, by the Company
in the ordinary course of business on terms that are no less favorable to the
Company or the Restricted Subsidiary than those that could have been obtained in
a comparable transaction by the Company or such Restricted Subsidiary from a
Person who is not an Affiliate, or (ii)(A) loaned or contributed to any
Unrestricted Subsidiary or (B) made by way of a guarantee by the Company or a
Restricted Subsidiary of Indebtedness of an Unrestricted Subsidiary. A Permitted
Investment in an Unrestricted Subsidiary will be deemed to be no longer
outstanding if such Unrestricted Subsidiary has been classified a Restricted
Subsidiary.
'Proceeds' means, with respect to any issuance or sale of securities, cash
or the fair market value of property other than cash (as determined by the Board
of Directors whose determination shall be evidenced by a resolution of the Board
of Directors filed with the Trustee) received in connection therewith.
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<PAGE>
'Pro Forma Operating Cash Flow' means, for any period, (A) the sum of the
amount for such period of (i) Net Income, (ii) Interest Expense, (iii)
provisions for taxes based on income (excluding taxes related to gains and
losses excluded from the definition of Consolidated Net Income or Net Income),
(iv) depreciation expense, (v) amortization expense, and (vi) any other non-cash
items reducing the Net Income of such Person for such period, minus (B) all
non-cash items increasing Net Income of such Person for such period; all as
determined on a consolidated basis for the Company and its Restricted
Subsidiaries in accordance with GAAP after giving effect to the following: (i)
if, during such period, the Company or any of its Restricted Subsidiaries shall
have made any Asset Sale, Pro Forma Operating Cash Flow of the Company for such
period shall be reduced by an amount equal to the Pro Forma Operating Cash Flow
(if positive) directly attributable to the assets which are the subject of such
Asset Sale for the period subsequent to such sale or increased by an amount
equal to the Pro Forma Operating Cash Flow (if negative) directly attributable
thereto for such period and (ii) if, during such period, Indebtedness is
incurred by the Company or any of its Restricted Subsidiaries for or in
connection with the acquisition of any Person or business which immediately
after acquisition is a Subsidiary or whose assets are held directly by the
Company or a Subsidiary, Pro Forma Operating Cash Flow shall be computed so as
to give pro forma effect to the acquisition of such Person or business.
'Redeemable Stock' means any Capital Stock which, by its terms (or by the
terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at
the option of the holder thereof, in whole or in part, on or prior to the
Maturity Date (as defined in the Indenture) of the Notes.
'Restricted Subsidiary' means (a) any Subsidiary of the Company, whether
existing on or after the date of the Indenture, unless such Subsidiary is an
Unrestricted Subsidiary or shall have been classified as an Unrestricted
Subsidiary by a resolution adopted by the Board of Directors of the Company and
(b) an Unrestricted Subsidiary which is reclassified as a Restricted Subsidiary
by a resolution adopted by the Board of Directors of the Company, provided that
on and after the date of such reclassification such Unrestricted Subsidiary
shall not incur Indebtedness other than that permitted to be incurred by a
Restricted Subsidiary under the provisions of the Indenture. Notwithstanding the
foregoing, Century-ML Cable Venture and its Subsidiaries and Century Venture
Corp. and its Subsidiaries shall be Restricted Subsidiaries unless any of the
foregoing shall be reclassified as an Unrestricted Subsidiary pursuant to clause
(d) of the definition of an Unrestricted Subsidiary.
'Subsidiary' of any specified Person means (i) a corporation a majority of
whose Capital Stock with voting power, under ordinary circumstances, to elect
directors is at any time, directly or indirectly, owned by such Person or by
such Person and a Subsidiary or Subsidiaries of such Person or by a Subsidiary
or Subsidiaries of such Person or (ii) any other Person (other than a
corporation) in which such Person or such Person and a Subsidiary or
Subsidiaries of such Person or a Subsidiary or Subsidiaries of such Person,
directly or indirectly, at the date of determination thereof has at least
majority ownership interest.
'Unrestricted Subsidiary' means (a) Century Cellular Holding Corp.;
provided that Century Cellular Holding Corp. may be reclassified as a Restricted
Subsidiary pursuant to clause (b) of the definition of Restricted Subsidiary,
(b) any Subsidiary as of the date of the Indenture which is not a Restricted
Subsidiary, (c) any Subsidiary of an Unrestricted Subsidiary and (d) any
Subsidiary organized or acquired after the date of the Indenture which is
classified as an Unrestricted Subsidiary by a resolution adopted by the Board of
Directors of the Company; provided that a Subsidiary may be so classified as an
Unrestricted Subsidiary only if immediately after the date of such
classification, the Company and its Restricted Subsidiaries would have
investments in such Subsidiary which would be Permitted Investments; and
provided further, that, notwithstanding the foregoing, no Subsidiary which is a
Restricted Subsidiary as of the date of the Indenture shall be reclassified as
an Unrestricted Subsidiary or be a Subsidiary of an Unrestricted Subsidiary.
Centennial Cellular is a subsidiary of Century Cellular Holding Corp. The
Trustee shall be given prompt notice by the Company of each resolution adopted
by the Board of Directors under this provision, together with a copy of each
such resolution adopted.
S-9
<PAGE>
'U.S. Government Obligations' means securities that are (i) direct
obligations of the United States of America for payment of which its full faith
and credit is pledged or (ii) obligations of a Person controlled or supervised
by and acting as an agency or instrumentality of the United States of America
the timely payment of which is unconditionally guaranteed as a full faith and
credit obligation of the United States of America, which, in either case under
clause (i) or (ii), are not callable or redeemable at the option of the issuer
thereof, and will also include a depository receipt issued by a bank or trust
company as custodian with respect to any such U.S. Government Obligation or a
specified payment of interest on or principal of any such U.S. Government
Obligation held by such custodian for the account of the holder of a depository
receipt, provided that (except as required by law) such custodian is not
authorized to make any deduction from the amount payable to the holder of such
depository receipt from any amount received by the custodian in respect of the
U.S. Government Obligation or the specific payment of interest on or principal
of the U.S. Government Obligation evidenced by such depository receipt.
CERTAIN COVENANTS
Dividend and Stock Purchase Restrictions. The Indenture provides that,
notwithstanding the restrictions on dividends and Capital Stock purchases by the
Company and its Subsidiaries, certain of which are referred to below, such
restrictions will not prevent (A) the payment of an amount not to exceed
$150,000,000 in the aggregate to repurchase shares of the common stock of the
Company, (B) the payment of any dividend within 60 days after the date of
declaration when the payment would have complied with the dividend restrictions
set forth below on the date of declaration or (C) the purchase, redemption,
acquisition or other retirement of any shares of the Company's Capital Stock by
exchange for, or out of the proceeds of the substantially concurrent sale of,
other shares of its Capital Stock (other than Redeemable Stock).
The Indenture provides that the Company will not, directly or indirectly,
(i) declare or pay any dividend on, or make any distribution to the holders (as
such) of, any shares of its Capital Stock (other than dividends or distributions
payable in Capital Stock (other than Redeemable Stock) of the Company); or (ii)
purchase, redeem or otherwise acquire or retire for value any Capital Stock of
the Company, any Subsidiary or other Affiliate (other than any such Capital
Stock owned by the Company or any directly or indirectly wholly-owned Subsidiary
of the Company); or (iii) permit any Subsidiary to declare or pay any dividend
on, or make any distribution to the holders (as such) of, any shares of its
Capital Stock except to the Company or a directly or indirectly wholly-owned
Subsidiary of the Company (other than dividends or distributions payable in
Capital Stock (other than Redeemable Stock) of such Subsidiary or the Company);
or (iv) permit any Subsidiary to purchase, redeem or otherwise acquire or retire
for value any Capital Stock of such Subsidiary, the Company or any Affiliate of
either of them (other than any such Capital Stock owned by the Company or any
directly or indirectly wholly-owned Subsidiary of the Company); or (v) make, or
permit any Subsidiary to make, an Advance (all of the foregoing, 'Restricted
Payments'; provided, however, that Restricted Payments shall not include any
amounts paid for the acquisition from a non-Affiliate of any Capital Stock of a
Subsidiary or other Affiliate) if at the time of such action (a) an Event of
Default (as defined in the Indenture) shall have occurred and be continuing, or
shall occur as a consequence thereof, or (b) if upon giving effect to such
payment the aggregate amount expended for all such Restricted Payments
subsequent to November 21, 1988 shall exceed the sum of (i) the excess of (X)
the aggregate of Consolidated Cash Flow Available for Interest Expense of the
Company accrued during all fiscal quarters ended subsequent to May 31, 1988 over
(Y) the product of (1) 1.2 and (2) the aggregate of Consolidated Interest
Expense of the Company accrued during all fiscal quarters ended subsequent to
May 31, 1988, (ii) the aggregate net proceeds, including cash and the fair
market value of property other than cash, received by the Company from the issue
or sale, after November 21, 1988, of Capital Stock of the Company (other than
redeemable Stock), including upon the exercise of any warrant, other than in
connection with the conversion or exchange of any Indebtedness or Capital Stock,
and (iii) the aggregate net proceeds received by the Company, subsequent to
November 21, 1988, from the issue or sale of any debt securities or Redeemable
Stock of the Company, if, at the time the determination is made, such debt
securities or Redeemable Stock, as the case may be, has been converted into or
exchanged for Capital Stock of the Company (other than Redeemable Stock).
S-10
<PAGE>
Limitation on Indebtedness. The Indenture provides that the Company will
not, and will not permit any Restricted Subsidiary to, directly or indirectly,
create, incur, issue, assume or become liable for, contingently or otherwise
(collectively an 'incurrence'), any Indebtedness (other than the Notes) unless,
after giving effect to such incurrence on a pro forma basis, Indebtedness of the
Company and its Restricted Subsidiaries, on a consolidated basis, shall not be
more than nine times Pro Forma Operating Cash Flow for the four fiscal quarters
immediately preceding such incurrence. For purposes of the above, an incurrence
will not be deemed to occur when any Person becomes a Subsidiary by merger,
consolidation, acquisition or otherwise. Notwithstanding the above, the
Indenture does not limit (i) Indebtedness incurred in connection with Currency
Agreements or Interest Swap Obligations, (ii) Indebtedness which is subordinated
in right of payment to the Notes and which has an average life to maturity
longer than that of the Notes and (iii) Indebtedness resulting in the extension,
refunding or renewal of any Indebtedness existing prior to such extension,
renewal or refunding which does not result in an increase in the principal
amount of such existing Indebtedness then outstanding.
Investments in Affiliates and Subsidiaries. After the date of this
Prospectus Supplement, the Company may not, nor will the Company allow any
Restricted Subsidiary to, invest in any Affiliate (other than the Company or a
Restricted Subsidiary) or in any Unrestricted Subsidiary other than by way of
Permitted Investments.
After the date of this Prospectus Supplement, neither the Company nor any
Restricted Subsidiary will guarantee or secure, pledge, encumber or otherwise
become directly or indirectly liable for investments in or borrowings by
Unrestricted Subsidiaries, except for Permitted Investments and except that the
Capital Stock of an Unrestricted Subsidiary may be pledged to secure borrowings
by such Unrestricted Subsidiary or other Unrestricted Subsidiaries.
Limitation on Transactions with Affiliates. The Indenture provides that
neither the Company nor any Subsidiary may engage in any transaction with an
Affiliate of the Company (other than a Restricted Subsidiary), or any director,
officer or employee of the Company or any Subsidiary, on terms less favorable to
the Company or such Subsidiary than would be obtainable at the time in
comparable transactions of the Company or such Subsidiary with Persons which are
not Affiliates. The provision described above does not apply to (i) any
Restricted Payment which is made in compliance with the 'Dividend and Stock
Purchase Restrictions' covenant described above or (ii) any transaction which
complies with the provisions described under 'Investments in Affiliates and
Subsidiaries' and 'Merger, Consolidation or Sale of Assets.'
MERGER, CONSOLIDATION OR SALE OF ASSETS
The Company may not consolidate or merge with or into, or sell, lease,
convey or otherwise dispose of all or substantially all of its assets to,
another corporation, Person or entity unless (i) the Company is the surviving
Person or the successor or transferee is a corporation organized and existing
under the laws of the United States, any state thereof or the District of
Columbia, (ii) the successor assumes all the obligations of the Company under
the Notes and the Indenture, (iii) after such transaction no Event of Default
exists and (iv) the Interest Expense Ratio of the surviving or successor entity
immediately following the transaction, determined on a pro forma basis, would be
at least 1 to 1; provided that, if the Interest Expense Ratio of the Company
immediately prior to any such transaction is within the range set forth in
Column A below, then the pro forma Interest Expense Ratio of the surviving or
successor entity shall be at least equal to the percentage of the Interest
Expense Ratio of the Company set forth in Column B below:
<TABLE>
<CAPTION>
(A) (B)
- ---------------------------------------------------------- ---
<S> <C>
1.1111:1 to 1.4999:1...................................... 90 %
1.5: 1 and higher......................................... 75 %
</TABLE>
and provided further, that, if the pro forma Interest Expense Ratio of the
surviving or successor entity is 2.0: 1 or more, the calculation in the
preceding proviso shall be inapplicable and such transaction shall be deemed to
have complied with the requirements of such provision.
S-11
<PAGE>
DEFEASANCE
Under the terms of the Indenture, the Company, at its option, (a) will be
deemed to be discharged from any and all obligations in respect of the Notes
(except in each case for certain obligations to register the transfer or
exchange of the Notes, replace stolen, lost or mutilated Notes and maintain
paying agencies) or (b) need not comply with certain covenants of the Indenture
described under 'Certain Covenants,' in each case, if the Company irrevocably
deposits with the Trustee, in trust, money or U.S. Government Obligations which
through the payment of interest thereon and principal thereof in accordance with
their terms will provide money in an amount sufficient to pay all the principal
of the Notes on the date such payment is due in accordance with the terms of the
Notes. To exercise any such option, the Company is required to deliver to the
Trustee an Opinion of Counsel or revenue ruling to the effect that the deposit
and related defeasance would not cause the holders of the Notes being defeased
to recognize income, gain or loss for federal income tax purposes. Because under
current federal income tax law a discharge from all obligations in respect of
the Notes may cause the holders thereof to recognize income, the Company may not
be able to be discharged from its obligations in respect of the Notes, but could
exercise its option in order that it not be required to comply with certain
covenants.
CERTAIN RIGHTS TO REQUIRE PURCHASE OF NOTES
The Indenture provides that in the event of the occurrence of a Triggering
Event (as hereinafter defined) with respect to the Company, then each holder of
Notes shall have the right, at the holder's option, to require the Company to
buy all or any part of such holder's Notes on the date (the 'Repurchase Date')
that is 115 days after the occurrence of such Triggering Event for an amount
equal to 101% of their principal amount plus accrued interest to the Repurchase
Date.
The Company is obligated to mail to all holders of record of the Notes,
within 30 days after occurrence of a Triggering Event, a notice of the
occurrence of such Triggering Event, specifying the date by which a holder must
notify the Trustee of such holder's intention to exercise the repurchase right
and describing the procedure which such holder must follow to exercise such
right. The Company shall deliver a copy of such notice to the Trustee and shall
cause a copy of such notice to be published in The Wall Street Journal (National
Edition). To exercise the repurchase right, the holder of a Note must deliver,
on or before the 90th day after the occurrence of the Triggering Event, written
notice (which shall be irrevocable) to the Trustee of the holder's exercise of
such right, together with the Note or Notes with respect to which the right is
being exercised, duly endorsed for transfer.
The terms below are defined in the Indenture as follows:
(i) 'Triggering Event' means the occurrence of any transaction or
event or series of transactions or events which results in (a) the Class A
Common Stock of the Company being held of record by less than three hundred
holders and (b) a Designated Downgrading. For purposes of clause (a) above,
'held of record' has the meaning set forth in Rule 12g5-1 promulgated by
the Commission under the Exchange Act;
(ii) In the event that the rating of the Notes by both Rating Agencies
on the date 60 days prior to the occurrence of a Triggering Event (a 'Base
Date') is equal to or higher than B Plus (as hereinafter defined), then a
'Designated Downgrading' means the reduction of the rating of the Notes by
either or both Rating Agencies on the date of the relevant event or
transaction resulting in the Class A Common Stock of the Company being held
of record by less than 300 holders (or, if the rating on such date does not
reflect the effect of such event or transaction, then on the earliest date
on which such rating shall reflect the effect of such event or transaction)
(as applicable, the 'Triggering Event Date') to a rating equal to or lower
than B minus (as hereinafter defined); in the event that the rating of the
Notes by either or both Rating Agencies on any Base Date is lower than B
Plus, then a 'Designated Downgrading' means the reduction of the rating of
the Notes by either or both Rating Agencies to a lower rating. In
determining whether the rating of the Notes has been reduced, a reduction
of a gradation (+ and - for S&P and l, 2 and 3 for Moody's or the
equivalent thereof by any substitute rating agency referred to below) shall
be taken into account;
S-12
<PAGE>
(iii) 'Rating Agency' means either Standard & Poor's Corporation or
its successor ('S&P') or Moody's Investors Service, Inc. or its successor
('Moody's');
(iv) 'B Plus' means, with respect to ratings by S&P, a rating of B+
and, with respect to ratings by Moody's, a rating of Bl, or the equivalent
thereof by any substitute agency referred to below;
(v) 'B Minus' means, with respect to ratings by S&P, a rating of B-
and, with respect to ratings by Moody's, a rating of B3, or the equivalent
thereof by any substitute agency referred to below.
The Company shall take all reasonable action necessary to enable each of
the Rating Agencies to provide a rating for the Notes, but, if either or both of
the Rating Agencies shall not make such a rating available, a nationally
recognized investment banking firm selected by the Company shall select a
nationally recognized securities rating agency or two nationally recognized
securities rating agencies to act as substitute rating agency or substitute
rating agencies, as the case may be.
DEFAULTS, NOTICE AND WAIVER
The following are Events of Default under the Indenture: (i) default in the
payment of interest on any Note when due continued for 30 days; (ii) default in
the payment of the principal of any Note when due (whether at maturity or by
declaration of acceleration or otherwise), (iii) default in the performance, or
breach, of any covenant or warranty of the Company in the Indenture or any Note
(other than a covenant included in the Indenture solely for the benefit of Debt
Securities other than the Notes) continued for 90 days after written notice from
the Trustee or the holders of 25% or more in principal amount of the Notes
outstanding, and (iv) certain events of bankruptcy, insolvency or reorganization
of the Company.
If an Event of Default occurs and is continuing, the Trustee or the holders
of not less than 25% in aggregate principal amount of the Notes then outstanding
may declare the Notes then outstanding due and payable.
The Company must file annually with the Trustee an Officers' Certificate
stating whether or not the Company is in default in the performance and
observance of any of the terms, provisions and conditions of the Indenture and,
if so, specifying the nature and status of the default.
The Indenture provides that the Trustee, within 90 days after the
occurrence of an Event of Default, will give to holders of Notes notice of all
uncured or unwaived defaults known to it; but, except in the case of a default
in the payment of the principal of any of the Notes, the Trustee shall be
protected in withholding such notice if the board of directors of the Company or
the executive or trust committee thereof or a Responsible Officer of the Trustee
in good faith determines that the withholding of such notice is in the interest
of such holders.
The Indenture contains a provision entitling the Trustee to be indemnified
by holders of Notes before proceeding to exercise any right or power under the
Indenture at the request of any such holders. The Indenture provides that the
holders of a majority in principal amount of the outstanding Notes may, subject
to certain exceptions, direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred upon the Trustee with respect to the Notes. The right of a
holder to institute a proceeding with respect to the Indenture is subject to
certain conditions precedent including notice and indemnity to the Trustee, but
the holder has an absolute right to receipt of principal when due and to
institute suit for the enforcement thereof.
REPORTS TO HOLDERS OF NOTES
Notwithstanding any Triggering Event (see 'Certain Rights to Require
Purchase of Notes') or any other event, the Indenture provides that the Company
must file with the Commission and provide the Trustee and the holders of the
Notes with copies of the quarterly and annual reports and other information,
documents and reports specified in Sections 13 and 15(d) of the Exchange Act as
long as any Notes are outstanding.
S-13
<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting
Agreement, the Company has agreed to sell to Merrill Lynch, Pierce, Fenner &
Smith Incorporated (the 'Underwriter') and the Underwriter has agreed to
purchase from the Company $250,000,000 aggregate principal amount of the Notes.
The distribution of the Notes by the Underwriter is being effected from
time to time in negotiated transactions or otherwise at market prices prevailing
at the time of sale, at prices related to such prevailing market prices or at
negotiated prices. In connection with the sale of any Notes, the Underwriter may
be deemed to have received compensation from the Company equal to the difference
between the amount received by the Underwriter upon the sale of such Notes and
the price at which the Underwriter purchased such Notes from the Company. In
addition, the Underwriter may sell Notes to or through certain dealers, and
dealers may receive compensation in the form of underwriting discounts,
concessions or commissions from the Underwriter and/or any purchasers of Notes
for whom they may act as agent (which compensation may be in excess of customary
commissions). The Underwriter may also receive compensation from the purchasers
of Notes for whom it may act as agent.
There is no public market for the Notes. The Company does not intend to
list the Notes on any securities exchange or to arrange for their quotation on
NASDAQ. The Company has been advised by the Underwriter that the Underwriter
presently intends to make a market in the Notes after the consummation of the
offering, although it is under no obligation to do so. No assurance can be
given, however, as to the liquidity of the trading market for the Notes or that
an active public market for the Notes will develop. If an active public market
does not develop, the market prices and liquidity of the Notes may be adversely
affected.
In connection with the offering, the Company has agreed to indemnify the
Underwriter against certain liabilities, including liabilities under the
Securities Act of 1933, as amended.
S-14
<PAGE>
PROSPECTUS
CENTURY
[LOGO] COMMUNICATIONS
CORP.
SENIOR DEBT SECURITIES, SENIOR SUBORDINATED
DEBT SECURITIES AND SUBORDINATED DEBT SECURITIES
Century Communications Corp. (the 'Company') from time to time may offer up
to $502,000,000 aggregate principal amount of debentures, notes and/or other
unsecured evidences of indebtedness consisting of senior debt securities
('Senior Debt Securities'), senior subordinated debt securities ('Senior
Subordinated Debt Securities') and subordinated debt securities ('Subordinated
Debt Securities') (collectively, the 'Debt Securities'). The Debt Securities may
be issued as convertible Debt Securities which, unless previously redeemed or
otherwise purchased, will be convertible at any time during the specified
conversion period into shares of the Company's Class A Common Stock, par value
$.01 per share (the 'Class A Common Stock'). The Debt Securities may be offered
as separate series in amounts, at prices and on terms to be determined at the
time of sale and to be set forth in supplements to this Prospectus. The Company
may sell Debt Securities to or through underwriters or dealers and also may sell
Debt Securities directly to other purchasers or through agents. See 'Plan of
Distribution.'
Certain terms of the Debt Securities in respect of which this Prospectus is
being delivered (the 'Offered Debt Securities'), including, where applicable,
the specific designation (including whether senior, senior subordinated or
subordinated and whether convertible), aggregate principal amount,
denominations, maturity or the method of determination thereof, interest rate
(which may be fixed or variable) and time of payment of interest, initial
conversion rate and terms relating to the adjustment thereof that are in
addition to or different from those described herein, the period during which
any convertible Debt Securities may be converted, terms for redemption at the
option of the Company or the holder, terms for sinking or purchase fund
payments, the initial public offering price, any listing or proposed listing on
a securities exchange, the names of any underwriters or agents and the
compensation of such underwriters or agents and the other terms in connection
with the offering and sale of the Offered Debt Securities are set forth in the
accompanying Prospectus Supplement ('Prospectus Supplement').
----------------
SEE 'INVESTMENT CONSIDERATIONS' FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS.
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
----------------
The date of this Prospectus is February 27, 1995.
<PAGE>
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
'Commission') two registration statements on Form S-3 (together with all
amendments and exhibits, referred to as the 'Registration Statements') under the
Securities Act of 1933, as amended, with respect to the Debt Securities. This
Prospectus does not contain all of the information set forth in the Registration
Statements, certain parts of which are omitted in accordance with the rules and
regulations of the Commission. For further information pertaining to the Debt
Securities, the Class A Common Stock and the Company, reference is made to the
Registration Statements.
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the 'Exchange Act'), and in accordance
therewith files reports, proxy statements and other information with the
Commission. Such reports, proxy statements and other information can be
inspected and copied at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
Commission's Regional Offices at 7 World Trade Center, New York, New York 10048,
and 500 West Madison, Suite 1400, Chicago, Illinois 60661. Copies of such
material can be obtained from the Public Reference Section of the Commission at
450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Annual Report on Form 10-K for the fiscal year ended May 31, 1994, and
the Quarterly Reports on Form 10-Q for the fiscal quarters ended August 31, 1994
and November 30, 1994 and the Current Report on Form 8-K, dated December 31,
1994, filed by the Company with the Commission pursuant to the Exchange Act are
incorporated herein by reference.
All documents subsequently filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act prior to the termination of the offering
of the Debt Securities shall be deemed to be incorporated by reference in this
Prospectus and to be a part hereof from the respective date of filing of each
such document. Any statement contained in a document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is, or is deemed to be,
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon written or oral request, a copy of any or all of
the documents incorporated by reference herein, other than certain exhibits to
such documents. Requests for such documents should be directed to Scott N.
Schneider, Senior Vice President and Treasurer, Century Communications Corp., 50
Locust Avenue, New Canaan, Connecticut 06840. The Company's telephone number is
(203) 972-2000.
2
<PAGE>
INVESTMENT CONSIDERATIONS
Before purchasing the Debt Securities, a prospective investor should
consider, among other things, the following factors.
LEVERAGE; CAPITAL REQUIREMENTS
In recent years, the Company and its subsidiaries have incurred substantial
indebtedness in connection with the acquisition, construction and start-up
expenses of cellular telephone systems as well as the acquisition, upgrade and
extension of cable television systems. At November 30, 1994, the Company and its
subsidiaries had $1,410,877,000 of long-term debt (exclusive of current
maturities of $1,643,000) including indebtedness under two credit agreements
executed by subsidiaries of the Company and various banks (the 'Credit
Agreements') and under a note agreement executed by a subsidiary of the Company
in December 1992 (the 'Note Agreement'). Reflecting net losses in prior periods,
the common stockholders' deficiency as stated on the Company's consolidated
balance sheet at November 30, 1994 was $213,041,000. The Company's assets,
including its cable television franchises and cellular telephone licenses, are
recorded on its balance sheet at historical cost. The Company believes that the
current fair value of such assets is significantly in excess of their historical
cost. Accordingly, the Company does not believe that the common stockholders'
deficiency reflects the current fair value of the Company.
The cable television and cellular telephone businesses are capital
intensive. While cash generated from operations is expected to fund an
increasing portion of the working capital requirements, capital expenditures and
debt service obligations of the Company and its subsidiaries, the Company will
require additional funds from bank borrowings and other sources. At November 30,
1994, subsidiaries of the Company had approximately $730,000,000 of potential
borrowing capacity under their bank lines of credit. In the past, the Company
has funded the principal obligations on its long-term debt by refinancing the
principal with expanded bank lines of credit. Although to date the Company has
been able to obtain financing on satisfactory terms, there can be no assurance
that this will continue to be the case in the future. The indentures for the
Company's outstanding issues of publicly-held debt (the 'Outstanding
Indentures') impose certain restrictions on the incurrence of indebtedness. See
'Restrictive Covenants; Consequences of Default' below.
For the year ended May 31, 1994 and the six months ended November 30, 1994,
earnings were less than fixed charges by $53,398,000 and $36,626,000,
respectively. See 'Ratio of Earnings to Fixed Charges.' Such amounts reflect
non-cash charges totaling $157,134,000 and $82,874,000, respectively, consisting
of depreciation and amortization and subsidiary preferred stock dividends.
RESTRICTIVE COVENANTS; CONSEQUENCES OF DEFAULT
The Credit Agreements, the Note Agreement and the Outstanding Indentures
contain various financial and operating covenants, including, among other
things, maintenance of certain financial ratios, restrictions on the ability of
certain subsidiaries of the Company to incur indebtedness or liens, to make
certain capital expenditures and to transfer funds to the Company and limits on
certain other corporate actions. The Outstanding Indentures also contain various
covenants, including, among other things, restrictions on the ability of the
Company to incur indebtedness and to make loans or capital contributions to, or
to act as a guarantor for, certain of its subsidiaries and affiliates, which
presently consist of those subsidiaries and affiliates engaged in the cellular
telephone and related businesses. The ability of the Company and its
subsidiaries to comply with such provisions may be affected by events beyond
their control.
In the event of a default under the agreements pursuant to which the
outstanding debt securities of the Company and its subsidiaries are issued, the
holders of such debt or the trustee acting on their behalf could elect to
declare all of such debt securities, together with accrued interest, to be due
and payable. Under certain of such agreements, the creditors would also have
other remedies available, including foreclosure on the capital stock of the
Company's subsidiaries which is pledged to secure such debt. In addition, in the
event of a default under the Outstanding Indentures, the Company would be
prohibited from making any payments on any Senior Subordinated Debt Securities
or Subordinated
3
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Debt Securities until all debt senior thereto was paid in full. There can be no
assurance that the assets of the Company would be sufficient to repay all such
senior debt and any Senior Subordinated Debt Securities and Subordinated Debt
Securities then outstanding.
The Company is currently in compliance with the financial and operating
covenants contained in the Credit Agreements, the Note Agreement and the
Outstanding Indentures and management believes it is not presently at risk of
noncompliance. However, there can be no assurance that this will continue to be
the case.
CELLULAR TELEPHONE INDUSTRY
Although numerous cellular telephone systems are operational in the United
States and other countries, the industry has only a limited operating history.
The Company, through its 33.9%-owned subsidiary Centennial Cellular Corp.
('Centennial Cellular'), owns or controls non-wireline cellular telephone
systems in 29 markets in six geographic areas ('controlled systems') and
minority interests in six limited partnerships which own wireline cellular
telephone systems which primarily serve the Sacramento Valley and San Francisco
Bay Area in California ('minority owned systems'). See 'The Company.' The
Company's cellular telephone systems compete in each market with a wireline or a
non-wireline system, as the case may be, as well as with other current and
developing mobile radio technologies and other communications services. All of
the controlled systems have experienced net operating losses and negative cash
flow. The Company anticipates that such losses and negative cash flow will
continue over the next several years and there can be no assurance that future
cellular telephone operations will be profitable. While all of the controlled
systems and the minority owned systems are operational, each of them is still in
the developmental or start-up phase and substantial additional expenditures for
construction and development will be required. Centennial Cellular may seek
various sources of external financing to meet its current and future needs,
including bank financing, joint ventures and partnerships, and public and
private placements of debt and equity securities of Centennial Cellular. If it
is unable to do so, the growth of the controlled systems will be impeded or, in
the case of minority owned systems, Centennial Cellular's percentage interest
could be diluted.
CONTROL BY CERTAIN STOCKHOLDERS
The ownership interest in the Company of Leonard Tow and certain trusts for
the benefit of members of his family (the 'Tow Trusts') and Sentry Insurance a
Mutual Company ('Sentry Insurance'), constituting approximately 96.4% of the
combined voting power of both classes of Common Stock, presently gives such
persons the power to elect all but one member of the Board of Directors of the
Company and to control the vote on all other matters submitted to a vote of the
Company's stockholders. See 'Description of Capital Stock -- Common
Stock -- Voting Rights.' Leonard Tow and the Tow Trusts on the one hand and
Sentry Insurance on the other hand have entered into a Principal Stockholders'
Agreement providing that Sentry Insurance will vote its shares of Common Stock
for the election of up to two directors designated by Leonard Tow, and that
Leonard Tow and the Tow Trusts will vote the shares of Common Stock owned or
controlled by them in favor of up to two directors designated by Sentry
Insurance. The Principal Stockholders' Agreement also provides that neither
Sentry Insurance nor Leonard Tow and the Tow Trusts may sell, assign or transfer
their shares of Common Stock in a public sale without first offering the shares
to the other party or parties to the Principal Stockholders' Agreement. See
'Description of Capital Stock -- Principal Stockholders' Agreement.'
Under certain of the Credit Agreements, an event of default occurs if
Leonard Tow ceases to be the chief executive officer of each of the Company and
the Company's principal operating subsidiaries and the Company and the Company's
principal operating subsidiaries fail to appoint a reasonably acceptable
successor to him within 30 days of his ceasing to hold such office or if Leonard
Tow and/or members of his immediate family or trusts for their benefit cease to
own, in the aggregate, stock of the Company having at least 33 1/3% of the
combined voting power of both classes of Common Stock and 33 1/3% of the issued
and outstanding shares of stock of the Company.
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THE COMPANY
The Company is principally engaged through its operating subsidiaries in
the business of owning and operating cable television and cellular telephone
systems. The Company also owns and operates four radio stations, two of which
are owned and operated by a joint venture which is 50% owned by the Company and
50% owned by an unaffiliated entity.
The Company currently owns and operates 56 cable television systems in 24
states and Puerto Rico. At November 30, 1994, the Company's cable systems passed
approximately 1,713,000 homes and served a total of approximately 995,000
primary basic subscribers. The cable system in Puerto Rico and one other cable
system are owned 50% by the Company and 50% by unaffiliated entities. At
November 30, 1994, these two systems passed approximately 432,000 homes and
served approximately 205,000 primary basic subscribers.
On August 30, 1991, Citizens Cellular Company ('Citizens Cellular'), a
wholly-owned subsidiary of Citizens Utilities Company ('Citizens'), was merged
with and into Century Cellular Corp., an indirect wholly-owned subsidiary of the
Company that owned or controlled non-wireline cellular telephone systems in five
geographic areas, the name of which was changed on February 7, 1992 to
Centennial Cellular Corp. The Company has a 1.96% equity interest in Citizens
and Leonard Tow, Chairman of the Board, Chief Executive Officer and Chief
Financial Officer of the Company, is Chairman of the Board, Chief Executive
Officer and Chief Financial Officer of Citizens. Citizens Cellular owned
minority interests in limited partnerships which own wireline cellular telephone
systems in six geographic areas. Upon consummation of the merger, Centennial
Cellular, as the surviving corporation, became the owner of all of the cellular
telephone properties previously owned by Centennial Cellular and Citizens
Cellular as well as the paging and two-way mobile radio systems owned by
Centennial Cellular. Centennial Cellular owns or controls non-wireline cellular
telephone systems in 29 markets in six geographic areas representing
approximately 5.04 million net pops and minority interests in six limited
partnerships which own wireline cellular telephone systems which primarily serve
the Sacramento Valley and San Francisco Bay Area in California representing
approximately 1.08 million net pops. 'Net pops' means the population of a
cellular market, based upon the 1990 Census Report of the Bureau of the Census,
United States Department of Commerce, multiplied by the Company's percentage
ownership interest in an entity licensed by the Federal Communications
Commission ('FCC') to construct or operate a cellular telephone system in that
market.
Centennial Cellular has two classes of Common Stock, Class A Common Stock
and Class B Common Stock. The holders of the Class A Common Stock are entitled
to one vote per share and the holders of the Class B Common Stock are entitled
to fifteen votes per share. The Company owns 81.2% of the outstanding Class B
Common Stock and 100% of the outstanding Second Series Convertible Redeemable
Preferred Stock of Centennial Cellular, and Citizens owns 18.8% of the
outstanding Class B Common Stock and 100% of the outstanding Convertible
Redeemable Preferred Stock of Centennial Cellular. The Company and Citizens own
74.2% and 17.2%, respectively, of the combined voting power of both classes of
Common Stock as of February 19, 1995 and, if the Company and Citizens each
converts the preferred stock owned by it, the Company will own 59.4%, and
Citizens will own 33.9%, of such voting power as of such date. As a result of
such ownership and in accordance with an agreement with Citizens, the Company
has the ability to nominate at least a majority and elect all of the directors
of Centennial Cellular and retains control of Centennial Cellular.
The Company expects to continue to consider acquisitions of or investments
in cable television systems, cellular telephone systems (through its cellular
subsidiaries) and other communications-related properties.
The Company's principal executive offices are located at 50 Locust Avenue,
New Canaan, Connecticut 06840, and its telephone number is (203) 972-2000.
RATIO OF EARNINGS TO FIXED CHARGES
For the purpose of calculating the ratio of earnings to fixed charges,
earnings consist of the amount of fixed charges plus earnings before income
taxes and extraordinary items. Fixed charges consist of interest and the portion
of rent deemed representative of the interest factor. For the years ended
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May 31, 1990, 1991, 1992, 1993 and 1994 and the six months ended November 30,
1994, earnings as defined were less than fixed charges by approximately
$85,453,000, $113,626,000, $69,246,000, $56,075,000, $53,398,000 and
$36,626,000, respectively. The increased deficiency of earnings to fixed charges
reflects higher levels of interest expense as a result of increased borrowings
incurred to finance acquisitions, capital expenditures, working capital
requirements, debt service and increases in non-cash depreciation and
amortization expense related to acquisitions and capital expenditures. See
'Investment Considerations -- Leverage; Capital Requirements.'
USE OF PROCEEDS
Except as otherwise described in the Prospectus Supplement relating to an
offering of Debt Securities, the net proceeds from the sale of the Debt
Securities will be used for general corporate purposes, including the reduction
of existing indebtedness under one or more of the Credit Agreements as well as
the financing of capital expenditures and acquisitions. The Company has no
current specific plans for the net proceeds of an offering of Offered Debt
Securities. Any specific allocation of the net proceeds of an offering of
Offered Debt Securities to a specific purpose will be determined at the time of
such offering and will be described in the related Prospectus Supplement.
Pending any specific application that may be described in the Prospectus
Supplement, the net proceeds will be added to working capital and invested in
short-term interest bearing obligations. Such investments will be subject to
fluctuating interest rates which may be lower than the rates applicable to the
Debt Securities.
The Company may borrow additional funds from time to time from public and
private sources on both a long-term and short-term basis to fund its future
capital and working capital requirements in excess of internally generated
funds. Certain of such borrowings may rank senior in right of payment to the
indebtedness represented by Debt Securities that are Senior Subordinated Debt
Securities or Subordinated Debt Securities. See 'Description of Debt
Securities -- Subordination.'
STOCK DISTRIBUTIONS AND DIVIDEND POLICY
In recent years, in recognition of improvements in earnings before
depreciation, amortization, interest and taxes ('operating cash flow'), the
Company has from time to time made pro rata distributions of common stock to its
stockholders, as discussed below. The effect of such distributions is to
increase the number of shares outstanding and reduce the proportionate
investment in the Company represented by each share. For accounting purposes,
since the Company continues to report net losses and has an accumulated deficit,
an amount equal to the aggregate par value ($.01 per share) of the shares
distributed is transferred from additional paid in capital to the common stock
account. If the Company had retained earnings, the accounting treatment would be
to transfer an amount equal to the market value of the shares issued from
retained earnings to additional paid-in capital. Since the Company has neither
retained earnings nor current earnings, the stock distributions represent a
reallocation of the shareholder's investment over an increased number of shares
and do not represent distributions of corporate earnings and profits.
On June 18, 1992, the Board of Directors of the Company declared a three
percent stock distribution on the Company's Class A Common Stock and Class B
Common Stock payable to the respective stockholders of record on July 3, 1992,
which was distributed on July 24, 1992.
On October 28, 1992, the Board of Directors of the Company declared a five
percent stock distribution on the Company's Class A Common Stock and Class B
Common Stock payable to the respective stockholders of record on November 11,
1992, which was distributed on December 2, 1992.
On February 16, 1993, the Board of Directors of the Company declared a
three percent stock distribution on the Company's Class A Common Stock and Class
B Common Stock payable to the respective stockholders of record on March 1,
1993, which was distributed on March 22, 1993.
On July 2, 1993, the Board of Directors of the Company declared a five
percent stock distribution on the Company's Class A Common Stock and Class B
Common Stock payable to the respective stockholders of record on July 15, 1993,
which was distributed on August 6, 1993.
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On October 28, 1993, the Board of Directors of the Company declared a three
percent stock distribution on the Company's Class A Common Stock and Class B
Common Stock payable to the respective stockholders of record on November 10,
1993, which was distributed on December 1, 1993.
The Company has never paid a cash dividend on its common stock. The Company
is currently restricted from paying cash dividends by certain of its debt
instruments. Its ability to do so is further limited by provisions of credit
agreements entered into by certain of its subsidiaries that limit the amount of
cash that may be upstreamed to the Company.
PRICE RANGE OF CLASS A COMMON STOCK
The Class A Common Stock has traded on the Nasdaq System ('NASDAQ') under
the symbol CTYA since January 5, 1995. Previously, it had traded on the American
Stock Exchange ('AMEX'). There is no established public market for the Class B
Common Stock. The table set forth below lists the high and low sale prices for
the Class A Common Stock reported on the AMEX for the period from January 1,
1993 through January 4, 1995 and the high asked and the low bid prices for the
Class A Common Stock reported on NASDAQ for the period from January 5, 1995
through February 24, 1995. The prices set forth below have been adjusted to give
effect to the stock distributions referred to under 'Stock Distributions and
Dividend Policy' above.
<TABLE>
<CAPTION>
HIGH LOW
------ -----
<S> <C> <C>
1993
First Quarter.......................................................... $ 9.53 $7.52
Second Quarter......................................................... 8.67 6.02
Third Quarter.......................................................... 9.47 6.81
Fourth Quarter......................................................... 13.83 8.73
1994
First Quarter.......................................................... 12.00 8.63
Second Quarter......................................................... 8.88 7.13
Third Quarter.......................................................... 9.75 7.00
Fourth Quarter......................................................... 9.25 6.25
1995
First Quarter (through February 24).................................... 8.50 7.25
</TABLE>
The Class A Common Stock is also listed for trading on the Boston Stock
Exchange under the symbol CMM.
DESCRIPTION OF DEBT SECURITIES
The following description sets forth certain general terms and provisions
of the Debt Securities to which any Prospectus Supplement may relate. The
particular terms of the Offered Debt Securities offered by any Prospectus
Supplement and any variations from such general terms and provisions applicable
to the Offered Debt Securities so offered will be described in the Prospectus
Supplement relating to such Offered Debt Securities.
The Debt Securities will be general unsecured obligations of the Company.
The Senior Debt Securities will be senior to all subordinated indebtedness of
the Company, including any outstanding Senior Subordinated Debt Securities and
Subordinated Debt Securities, and pari passu with other unsecured,
unsubordinated indebtedness of the Company. The Senior Subordinated Debt
Securities will be subordinate in right of payment to any Senior Debt
Securities, including $200,000,000 aggregate principal amount of 9 3/4% Senior
Notes Due 2002 issued by the Company in February 1992 (the '9 3/4% Notes'),
$150,000,000 aggregate principal amount of 9 1/2% Senior Notes Due 2000 issued
by the Company in August 1992 (the '9 1/2% Notes') and $444,000,000 aggregate
principal amount of Senior Discount Notes Due 2003 issued by the Company in
March 1993 (the 'Discount Notes'), and to certain other debt obligations of the
Company that may be outstanding from time to time, pari passu with $204,000,000
aggregate principal amount of 11 7/8% Senior Subordinated Debentures Due 2003
issued by the Company in October 1991 (the '11 7/8% Debentures') and certain
other senior subordinated
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indebtedness of the Company that may be outstanding from time to time and senior
to certain subordinated indebtedness of the Company that may be outstanding from
time to time, including any Subordinated Debt Securities. The Subordinated Debt
Securities will be subordinate in right of payment to any Senior Debt
Securities, including the 9 3/4% Notes, the 9 1/2% Notes and the Discount Notes,
and Senior Subordinated Debt Securities, including the 11 7/8% Debentures, and
to certain other debt obligations of the Company that may be outstanding from
time to time and pari passu with certain other subordinated indebtedness of the
Company that may be outstanding from time to time.
The principal operations of the Company are and will be conducted through
its subsidiaries. The Company's ability to service its indebtedness, including
the Debt Securities, is dependent primarily upon the receipt of funds from its
subsidiaries. The subsidiaries are separate legal entities and have no
obligation to pay any amounts due pursuant to the Debt Securities. The
provisions of the Credit Agreements limit the Company's ability to receive funds
from certain of its subsidiaries in the form of loans, advances, dividends,
management fees or otherwise to the amounts necessary to pay normal operating
expenses and Federal and state income and franchise taxes. Except to the extent
that the Company may itself be a creditor with recognized claims against its
subsidiaries, claims of creditors of such subsidiaries, including trade
creditors and the lending banks under the bank credit agreements, will have
priority with respect to the assets and earnings of such subsidiaries over the
claims of creditors of the Company, including holders of the Debt Securities,
even though such subsidiary obligations do not constitute Senior Indebtedness.
The amount of such subsidiary indebtedness as of November 30, 1994 was
$645,406,000.
Senior Debt Securities are to be issued under a supplement to the
Indenture, dated as of February 15, 1992, between the Company and Bank of
America National Trust and Savings Association, as trustee (the 'Senior
Indenture'); Senior Subordinated Debt Securities are to be issued under a
supplement to the Indenture, dated as of October 15, 1991, between the Company
and Bank of Montreal Trust Company, as trustee (the 'Senior Subordinated
Indenture'); and Subordinated Debt Securities are to be issued under an
Indenture to be executed by the Company and State Street Bank and Trust Company,
as trustee (the 'Subordinated Indenture'). In this Prospectus, the Senior
Indenture, the Senior Subordinated Indenture and the Subordinated Indenture are
sometimes collectively referred to as the Indentures and the trustees thereunder
are sometimes collectively referred to as the Trustees and individually as a
Trustee.
The terms of the Debt Securities include those stated in the Indentures and
those made part of such Indentures by reference to the Trust Indenture Act of
1939 as in effect on the date thereof. The Debt Securities are subject to all
such terms, and prospective purchasers of Debt Securities are referred to the
Indentures and the Trust Indenture Act for a statement thereof. The statements
under this caption relating to the general terms and provisions of the Debt
Securities and the Indentures are summaries of the material terms thereof. Such
summaries are qualified in their entirety by express reference to the Indentures
which have been filed as exhibits to the Registration Statements of which this
Prospectus is a part and must be read in conjunction with the description of the
particular terms of the Offered Debt Securities that will be set forth in the
Prospectus Supplement relating thereto.
GENERAL
The Indentures do not limit the aggregate principal amount of debentures,
notes or other evidences of indebtedness which may be issued thereunder and
provide that Debt Securities may be issued thereunder in one or more series, in
such form or forms, with such terms and up to the aggregate principal amount
authorized from time to time by the Company.
Reference is made to the Prospectus Supplement for the following terms of
the Offered Debt Securities: (1) the designation (including whether they are
Senior Debt Securities, Senior Subordinated Debt Securities or Subordinated Debt
Securities and whether such Debt Securities are convertible), aggregate
principal amount and authorized denominations of the Offered Debt Securities;
(2) the percentage of their principal amount at which such Offered Debt
Securities will be issued; (3) the date or dates on which the Offered Debt
Securities will mature or the method of determination thereof; (4) the rate or
rates (which may be fixed or variable) at which the Offered Debt Securities will
bear interest, if any, or the method by which such rate or rates shall be
determined, any reset features of the
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<PAGE>
rates and the date or dates from which such interest will accrue or the method
by which such date or dates shall be determined; (5) the dates on which any such
interest will be payable and the Regular Record Dates for such Interest Payment
Dates; (6) any mandatory or optional sinking fund or purchase fund or analogous
provisions; (7) if applicable, the date after which and the price or prices at
which the Offered Debt Securities may, pursuant to any optional or mandatory
redemption provisions, be redeemed at the option of the Company or of the Holder
thereof and the other detailed terms and provisions of such optional or
mandatory redemption; (8) if applicable, the terms and conditions upon which the
Offered Debt Securities may be convertible into Class A Common Stock, including
the initial conversion rate, the conversion period and any other provision in
addition to or in lieu of those described herein; (9) whether such Offered Debt
Securities shall be subject to defeasance and, if so, the terms thereof; (10)
any Events of Default provided with respect to the Offered Debt Securities that
are in addition to or different from those described herein; and (11) any other
terms of the Offered Debt Securities.
The Indentures for the 11 7/8% Debentures, the 9 3/4% Notes, the 9 1/2%
Notes and the Discount Notes provide that the holders of the 11 7/8% Debentures,
the 9 3/4% Notes, the 9 1/2% Notes and the Discount Notes, respectively, have
the right to require the Company to purchase the 11 7/8% Debentures, the 9 3/4%
Notes, the 9 1/2% Notes and the Discount Notes, as the case may be, following a
transaction or transactions which reduce below 300 the number of record holders
of the Class A Common Stock and which result in certain reductions in ratings of
the 11 7/8% Debentures, the 9 3/4% Notes, the 9 1/2% Notes and the Discount
Notes, as the case may be. Unless otherwise indicated in the Prospectus
Supplement relating thereto, the holders of Offered Debt Securities will not
have a similar right or be entitled to other types of event risk protection.
Unless otherwise indicated in the Prospectus Supplement relating thereto,
the principal of (and premium, if any) and interest on the Offered Debt
Securities will be payable, and the Offered Debt Securities will be exchangeable
and transfers thereof will be registrable, at the Corporate Trust Office of the
Trustee, provided that at the option of the Company, payment of any interest may
be made by check mailed to the address of the Person entitled thereto as it
appears in the Security Register.
Unless otherwise indicated in the Prospectus Supplement relating thereto,
the Offered Debt Securities will be issued only in fully registered form,
without coupons, in denominations of $1,000 or any integral multiple thereof. No
service charge will be made for any registration of transfer or exchange of the
Offered Debt Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
Debt Securities may be issued under the Indenture as Original Issue
Discount Securities to be offered and sold at a substantial discount from the
principal amount thereof. Special federal income tax, accounting and other
considerations applicable to any such Original Issue Discount Securities will be
described in the Prospectus Supplement relating thereto.
SUBORDINATION
The payment of the principal of (and premium, if any) and interest on
Subordinated Debt Securities is expressly subordinated, to the extent and in the
manner set forth in the Subordinated Indenture, in right of payment to the prior
payment in full of all present and future Senior Indebtedness (including the
9 3/4% Notes, the 9 1/2% Notes, the Discount Notes and any other Senior Debt
Securities and the 11 7/8% Debentures and any other Senior Subordinated Debt
Securities then outstanding) of the Company. Senior Indebtedness is defined in
the Subordinated Indenture as: (a) the Bank Obligations and (b) the principal of
(and premium, if any) and interest on (i) all other indebtedness for money
borrowed by the Company, whether outstanding on the date of the Indenture or
thereafter created or incurred; (ii) all other indebtedness for money borrowed
by another Person in which the Company has an equity interest or has the right
to purchase an equity interest, which is guaranteed in whole or in part directly
or indirectly by the Company (whether such guarantee is outstanding on the date
of the Indenture or thereafter created or incurred); and (iii) all indebtedness
constituting purchase money indebtedness for the payment of which the Company is
directly or contingently liable, whether outstanding on the date of the
Indenture or thereafter created or incurred; (c) any obligation of the Company
to purchase or guarantee indebtedness of, to supply funds to or invest in
another Person in
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<PAGE>
which the Company has an equity interest or has the right to purchase an equity
interest (whether such obligation is outstanding on the date of the Indenture or
is thereafter created or incurred); (d) any obligation of the Company to any
Person in respect of surety or similar bonds issued by such Person in connection
with entering into, renewing, extending or maintaining any cable television
franchise granted by a governmental authority or any construction in respect of
any cable television system by the Company or any other Person in which the
Company has an equity interest or has the right to purchase an equity interest;
(e) any obligation of the Company to compensate, reimburse or indemnify an
issuer with respect to any letter of credit issued at the request of or for the
account of the Company; (f) any obligation of the Company under any Interest
Swap Obligations or Currency Agreements (other than any Interest Swap
Obligations or Currency Agreements the payments with respect to which correspond
to payments on, or one of the events permitting the early termination of which
is expressly connected to, any indebtedness of the Company which is expressed to
be subordinate to other indebtedness of the Company or to rank on a parity with
the Subordinated Debt Securities); and (g) all renewals, extensions or
refundings of any such obligations, indebtedness and guarantees; provided,
however, that if, by the terms of the instrument creating or evidencing any
obligation, indebtedness or guarantee (referred to in clauses (a) through (g)
above), it is expressly provided that such obligation, indebtedness or guarantee
is subordinate to all indebtedness of the Company other than the Subordinated
Debt Securities or indebtedness ranking pari passu with the Subordinated Debt
Securities or is not superior in right of payment to the Subordinated Debt
Securities, such obligation, indebtedness or guarantee shall not be included as
Senior Indebtedness but shall rank pari passu with the Subordinated Debt
Securities.
The payment of the principal of (and premium, if any) and interest on
Senior Subordinated Debt Securities is expressly subordinated, to the extent and
in the manner set forth in the Senior Subordinated Indenture, in right of
payment to the prior payment in full of all present and future Senior
Indebtedness (including the 9 3/4% Notes, the 9 1/2% Notes, the Discount Notes
and any other Senior Debt Securities then outstanding) of the Company. Senior
Indebtedness is defined in the Senior Subordinated Indenture in the same manner
as in the Subordinated Indenture; provided, however, that if, by the terms of
the instrument creating or evidencing any obligation, indebtedness or guarantee
(referred to in clauses (a) through (g) of the preceding paragraph), it is
expressly provided that such obligation, indebtedness or guarantee is
subordinate to all other indebtedness of the Company or is not superior in right
of payment to the Senior Subordinated Debt Securities, such obligation,
indebtedness or guarantee (including any Subordinated Debt Securities) shall not
be included as Senior Indebtedness; and, provided, further, that Senior
Indebtedness as defined in the Senior Subordinated Indenture does not include
(i) the 11 7/8% Debentures then outstanding, if any, with which the Senior
Subordinated Debt Securities will rank pari passu and (ii) any other obligation,
indebtedness or guarantee that is created or evidenced by an instrument the
terms of which expressly provide that such obligation, indebtedness or guarantee
ranks pari passu with the Senior Subordinated Debt Securities.
The Indentures do not restrict the amount of additional Senior Indebtedness
that may be incurred by the Company. The aggregate principal amount of Senior
Indebtedness outstanding as of a recent date will be set forth in the
accompanying Prospectus Supplement.
Upon any payment or distribution of assets of the Company to creditors upon
any dissolution, winding up, total or partial liquidation or reorganization,
whether voluntary or involuntary, or in bankruptcy, insolvency or receivership
or upon an assignment for the benefit of creditors or any other marshalling of
the assets and liabilities of the Company or otherwise, all principal of,
premium, if any, and interest due on all Senior Indebtedness (including any
Outstanding Senior Debt Securities) must be paid in full before the holders of
the Senior Subordinated Debt Securities or the Subordinated Debt Securities are
entitled to receive or retain any payment thereon. Subject to the payment in
full of all Senior Indebtedness, the holders of the Senior Subordinated Debt
Securities or the Subordinated Debt Securities will be subrogated to the rights
of the holders of Senior Indebtedness (as respectively defined in the Senior
Subordinated Indenture and the Subordinated Indenture) to receive payments or
distributions of assets of the Company applicable to Senior Indebtedness until
the Senior Subordinated Debt Securities or Subordinated Debt Securities are paid
in full.
Upon any default by the Company in the payment of all or any portion of
principal of, premium, if any, or interest on Senior Indebtedness (as defined in
the Senior Subordinated Indenture or
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Subordinated Indenture, as applicable) and the Trustee has received written
notice thereof, when the same becomes due, no payment may be made on or in
respect of the Senior Subordinated Debt Securities or the Subordinated Debt
Securities until such default has been cured or waived or the benefits of this
provision have been waived by or on behalf of the holders of such Senior
Indebtedness.
CONVERSION RIGHTS
The Prospectus Supplement will provide whether the Offered Debt Securities
will be convertible and, if so, the initial conversion price or conversion rate
at which such convertible Debt Securities will be convertible into Class A
Common Stock. The holder of any convertible Debt Security will have the right
exercisable at any time during the time period specified in the Prospectus
Supplement, unless previously redeemed by the Company, to convert such Debt
Security at the principal amount thereof (or, if such Debt Security is an
Original Issue Discount Security, such portion of the principal amount thereof
as is specified in the terms of such Debt Security) into shares of Class A
Common Stock at the conversion price or conversion rate set forth in the
Prospectus Supplement, subject to adjustment as described below. The holder of a
convertible Debt Security may convert a portion thereof which is $1,000 or any
integral multiple of $1,000. In the case of Debt Securities called for
redemption, conversion rights will expire at the close of business on the date
fixed for the redemption as may be specified in the Prospectus Supplement,
except that in the case of redemption at the option of the holder, if
applicable, such right will terminate upon receipt of written notice of the
exercise of such option.
In certain events, the conversion rate will be subject to adjustment as set
forth in the Indentures. Such events include the issuance of shares of any class
of capital stock of the Company as a dividend on the Class A Common Stock into
which the Debt Securities of such series are convertible; subdivisions,
combinations and reclassifications of the Class A Common Stock into which Debt
Securities of such series are convertible; the issuance to all holders of Class
A Common Stock into which Debt Securities of such series are convertible of
rights or warrants entitling the holders (for a period not exceeding 45 days) to
subscribe for or purchase shares of Class A Common Stock at a price per share
less than the current market price per share of Class A Common Stock (as defined
in the Indentures); and the distribution to all holders of Class A Common Stock
of evidences of indebtedness of the Company or of assets (excluding cash
dividends paid from retained earnings and dividends payable in Class A Common
Stock for which adjustment is made as referred to above) or subscription rights
or warrants (other than those referred to above). No adjustment of the
conversion price or conversion rate will be required unless an adjustment would
require a cumulative increase or decrease of at least 1% in such price or rate.
Fractional shares of Class A Common Stock will not be issued upon conversion,
but, in lieu thereof, the Company will pay a cash adjustment. Convertible Debt
Securities surrendered for conversion between the record date for an interest
payment, if any, and the interest payment date (except convertible Debt
Securities called for redemption on a redemption date during such period) must
be accompanied by payment of an amount equal to the interest thereon which the
registered holder is to receive.
DEFAULTS, NOTICE AND WAIVER
The following are to be Events of Default under the Indentures with respect
to Debt Securities of any series issued thereunder: (i) default in the payment
of interest on any Debt Security of that series when due continued for 30 days
(whether or not such payment is prohibited by the subordination provisions of
the Indenture); (ii) default in the payment of the principal of (or premium, if
any, on) any Debt Security of that series at its Maturity (whether or not
payment is prohibited by the subordination provisions of the Indenture); (iii)
default in the deposit of any sinking fund payment or analogous obligation, when
and as due by the terms of any Debt Security of that series (whether or not
payment is prohibited by the subordination provisions of the Indenture); (iv)
default in the performance, or breach, of any other covenant or warranty of the
Company in the Indenture or any Debt Security of that series (other than a
covenant included in the Indenture solely for the benefit of Debt Securities
other than that series), continued for 90 days after written notice from the
Trustee or the holders of 25% or more in principal amount of the Debt Securities
of such series outstanding; (v) certain events of bankruptcy,
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<PAGE>
insolvency or reorganization; and (vi) any other event of default provided with
respect to Debt Securities of that series. If an Event of Default provided with
respect to Debt Securities of any series at the time Outstanding shall occur and
be continuing, the Trustee or the holders of not less than 25% in principal
amount of outstanding Debt Securities of that series may declare the unpaid
principal balance to be immediately due and payable. However, any time after a
declaration of acceleration with respect to Debt Securities of any series has
been made, but before judgment or decree based on such acceleration has been
obtained, the Holders of a majority in principal amount of Outstanding Debt
Securities of that series may, under certain circumstances, rescind and annul
such acceleration. For information as to waiver of defaults, see 'Modification
and Waiver.'
Reference is made to the Prospectus Supplement relating to any series of
Offered Debt Securities which are Original Issue Discount Securities for the
particular provision relating to acceleration of the Maturity of a portion of
the principal amount of such Original Issue Discount Securities upon the
occurrence of an Event of Default and the continuation thereof.
The Company must file annually with each Trustee an Officers' Certificate
stating whether or not the Company is in default in the performance and
observance of any of the terms, provisions and conditions of the respective
Indenture and, if so, specifying the nature and status of the default.
Each Indenture provides that the Trustee, within 90 days after the
occurrence of a default, will give to holders of Debt Securities of any series
notice of all defaults with respect to such series known to it, unless such
default shall have been cured or waived; but, except in the case of a default in
the payment of the principal of (or premium, if any) or interest on any Debt
Security of such series or in the payment of any sinking fund or analogous
obligation installment with respect to Debt Securities of such series, the
Trustee shall be protected in withholding such notice if the board of directors
or such committee of directors as designated in such Indenture or Responsible
Officer of the Trustee in good faith determines that the withholding of such
notice is in the interest of such holders.
Each Indenture contains a provision entitling the Trustee to be indemnified
by holders of Debt Securities before proceeding to exercise any right or power
under such Indenture at the request of any such holders. Each Indenture provides
that the holders of a majority in principal amount of the outstanding Debt
Securities of any series may, subject to certain exceptions, direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee or exercising any trust or power conferred upon the Trustee with respect
to Debt Securities of such series. The right of a holder to institute a
proceeding with respect to each Indenture is subject to certain conditions
precedent including notice and indemnity to the Trustee, but the holder has an
absolute right to receipt of principal and interest when due and to institute
suit for the enforcement thereof.
CONSOLIDATION, MERGER AND SALE OF ASSETS
Unless otherwise indicated in the Prospectus Supplement relating to Offered
Debt Securities, the Company, without the consent of any Holder of Outstanding
Debt Securities, may consolidate with or merge into any other Person, or convey,
transfer or lease its assets substantially as an entirety to, any Person,
provided that the Person formed by such consolidation or into which the Company
is merged or the Person which acquires by conveyance or transfer or lease the
assets of the Company substantially as an entirety is organized under the laws
of any United States jurisdiction and assumes the Company's obligations on the
Debt Securities and under the Indenture, that after giving effect to the
transaction, no Event of Default, and no event which, after notice or lapse of
time or both, would become an Event of Default, shall have happened and be
continuing, and that certain other conditions are met.
MODIFICATION AND WAIVER
Modification and amendments of the Indentures may be made by the Company
and the Trustee with the consent of the Holders of a majority in principal
amount of the Outstanding Debt Securities of each series affected thereby;
provided, however, that no such modification or amendment may, without the
consent of the Holder of each Outstanding Debt Security affected thereby: (a)
change the Stated Maturity of the principal of, or any installment of principal
of or interest on, any Debt Security; (b) reduce the principal amount of, or any
premium or interest on, any Debt Security; (c) reduce the
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<PAGE>
amount of principal of an Original Issue Discount Security payable upon
acceleration of the Maturity thereof; (d) adversely affect any right of
repayment at the option of the Holder of any Security, or reduce the amount of,
or postpone the date fixed for, the payment of any sinking fund or analogous
obligation; (e) impair the right to institute suit for the enforcement of any
payment on or with respect to any Debt Security; or (f) reduce the percentage in
principal amount of Outstanding Debt Securities of any series, the consent of
the Holders of which is required for modification or amendment of the Indenture
or for waiver of compliance with certain provisions of the Indenture or for
waiver of certain defaults.
Without the consent of any Holder of Outstanding Debt Securities, the
Company may amend or supplement the Indentures and each series of Debt
Securities to cure any ambiguity or inconsistency or to provide for Debt
Securities in bearer form in addition to or in place of registered Debt
Securities or to make any other provisions that do not adversely affect the
rights of any Holder of Outstanding Debt Securities.
The Holders of a majority in principal amount of the Outstanding Debt
Securities of any series may on behalf of the Holders of all Debt Securities of
that series waive any past default under the Indenture with respect to that
series, except a default in the payment of the principal of (or premium, if any)
or interest on any Debt Security of that series or in respect of a provision
which under such Indenture cannot be modified or amended without the consent of
the Holder of each Outstanding Debt Security of that series affected.
SATISFACTION AND DISCHARGE OF INDENTURE; DEFEASANCE
Each Indenture may be discharged upon payment of the principal of (and
premium, if any) and interest, if any, on all the Debt Securities and all other
sums due thereunder. In addition, the Indentures provide that if, at any time
after the date thereof, the Company, if so permitted with respect to Debt
Securities of a particular series, shall deposit with the Trustee, in trust for
the benefit of the holders thereof, (i) funds sufficient to pay, or (ii) U.S.
Government Obligations as will, or will together with the income thereon without
consideration of any reinvestment thereof, be sufficient to pay, all sums due
for the principal of (and premium, if any) and interest, if any, on the Debt
Securities of such series, as they shall become due from time to time, and
certain other conditions are met, the Trustee shall cancel and satisfy such
Indenture with respect to such series to the extent provided therein. The
Prospectus Supplement describing the Debt Securities of such series will more
fully describe the provisions, if any, relating to such cancellation and
satisfaction of the Indenture with respect to such series.
TRUSTEES
Bank of America National Trust and Savings Association is the trustee with
respect to the 9 3/4% Notes, the 9 1/2% Notes and the Discount Notes which were
issued under the Senior Indenture and will rank pari passu with any other Senior
Debt Securities. Bank of Montreal Trust Company is the trustee with respect to
the 11 7/8% Debentures, which were issued under the Senior Subordinated
Indenture and will rank pari passu with any other Senior Subordinated Debt
Securities. The Trustees may perform certain services for and transact other
banking business with the Company from time to time in the ordinary course of
business.
DESCRIPTION OF CAPITAL STOCK
The Company's authorized Capital Stock consists of 400,000,000 shares of
Class A Common Stock, 300,000,000 shares of Class B Common Stock, par value $.01
per share (the 'Class B Common Stock' and, together with the Class A Common
Stock, the 'Common Stock'), and 100,000,000 shares of preferred stock, par value
$.01 per share (the 'Preferred Stock'). As of February 19, 1995, 24,451,676
shares of Class A Common Stock were issued and outstanding (excluding treasury
shares) and 65,406,115 shares of Class B Common Stock were issued and
outstanding. At such date, 42,272,059 shares of Class B Common Stock were owned
by Leonard Tow, Chairman of the Board, Chief Executive Officer and Chief
Financial Officer of the Company, and certain trusts for the benefit of members
of his family and 23,134,056 shares were owned by Sentry Insurance. No shares of
Preferred
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<PAGE>
Stock are outstanding and there is no agreement or understanding that would
require the issuance of any series of such stock.
COMMON STOCK
Dividends
If all cumulative dividends shall have been paid as declared or set apart
for payment upon shares of Preferred Stock then outstanding, if any, holders of
shares of Class A Common Stock and Class B Common Stock are entitled to receive
such dividends as may be declared by the Company's Board of Directors out of
funds legally available for such purpose. No dividend may be declared or paid in
cash or property on any share of Class B Common Stock, however, unless
simultaneously the same dividend is paid on each share of Class A Common Stock.
Dividends can be declared and paid on shares of Class A Common Stock without
being declared and paid on the shares of Class B Common Stock. In the case of
any stock dividend, holders of Class A Common Stock are entitled to receive the
same percentage dividend (payable in shares of Class A Common Stock) as the
holders of Class B Common Stock receive (payable in shares of Class B Common
Stock). See 'Stock Distributions and Dividend Policy.'
Voting Rights
Holders of shares of Class A Common Stock and Class B Common Stock vote as
a single class on all matters submitted to a vote of the stockholders, with each
share of Class A Common Stock entitled to one vote and each share of Class B
Common Stock entitled to ten votes except (i) for the election of directors and
(ii) as otherwise required by law. Under New Jersey law, the affirmative vote of
the holders of a majority of the outstanding shares of Class A Common Stock is
required to approve, among other matters, an amendment of the certificate of
incorporation if the rights or preferences of such holders would be subordinated
or otherwise adversely affected thereby. In the election of directors, the
holders of Class A Common Stock, voting as a separate class, are entitled, to
elect one director. The holders of Class A Common Stock and Class B Common
Stock, voting as a single class with each share of Class A Common Stock entitled
to one vote and each share of Class B Common Stock entitled to ten votes, are
entitled to elect the remaining directors. Holders of Class A Common Stock and
Class B Common Stock are not entitled to cumulate votes in the election of
directors. The ownership interest in the Company of Leonard Tow and the Tow
Trusts and Sentry Insurance, constituting approximately 96.4% of the combined
voting power of both classes of Common Stock, gives such persons the power to
elect all but one Class A director as described above and to control the vote on
all other matters submitted to a vote of the Company's stockholders.
Liquidation Rights
Upon liquidation, dissolution or winding up of the Company, the holders of
Class A Common Stock are entitled to share ratably with the holders of Class B
Common Stock in all assets available for distribution after payment in full of
creditors and after the preferential rights of holders of shares of Preferred
Stock then outstanding, if any, have been satisfied.
Other Provisions
Each share of Class B Common Stock is convertible at the option of its
holder into one share of Class A Common Stock at any time, and converts
automatically into one share of Class A Common Stock upon sale or other transfer
prior to December 31, 2010 to a person other than an associate. The holders of
Class A Common Stock and Class B Common Stock are not entitled to preemptive or
subscription rights. Neither the Class A Common Stock nor the Class B Common
Stock may be subdivided, consolidated, reclassified, or otherwise changed unless
concurrently the other class of shares is subdivided, consolidated,
reclassified, or otherwise changed in the same proportion and in the same
manner.
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PREFERRED STOCK
The 100,000,000 shares of authorized and unissued Preferred Stock may be
issued with such designations, voting powers, preferences and relative,
participating, optional or other special rights, and qualifications, limitations
and restrictions of such rights, as the Company's Board of Directors may
authorize, including but not limited to: (i) the distinctive designation of each
series and the number of shares that will constitute such series; (ii) the
voting rights, if any, of shares of such series; (iii) the dividend rate on the
shares of such series, any restriction, limitation or condition upon the payment
of such dividends, whether dividends shall be cumulative and the dates on which
dividends are payable; (iv) the prices at which, and the terms and conditions on
which, the shares of such series may be redeemed, if such shares are redeemable;
(v) the purchase or sinking fund provisions, if any, for the purchase or
redemption of shares of such series; (vi) any preferential amount payable upon
shares of such series in the event of the liquidation, dissolution or winding-up
of the Company or the distribution of its assets; and (vii) the prices or rates
of conversion at which, and the terms and conditions on which, the shares of
such series may be converted into other securities, if such shares are
convertible.
PRINCIPAL STOCKHOLDERS' AGREEMENT
In connection with the formation of the Company as a holding company in New
Jersey, the then-existing stockholders of the Company entered into a Principal
Stockholders' Agreement. This agreement contains provisions which generally
restrict Sentry Insurance on the one hand, and Leonard Tow and the Tow Trusts on
the other hand, from selling, assigning or transferring their shares of Common
Stock in a public sale (as defined) without first offering the shares to the
other party or parties to the Principal Stockholders' Agreement, and in the case
of any other sale, to the Company and then the other party or parties to the
Principal Stockholders' Agreement. The agreement also contains provisions which
obligate each of Leonard Tow and the Tow Trusts and Sentry Insurance to vote for
the election of one director designated by the other if the number of directors
of the Company not elected solely by the holders of Class A Common Stock is
three or fewer, or two directors designated by the other if the number of
directors not elected solely by the holders of Class A Common Stock is four or
more, as long as Sentry Insurance or Leonard Tow and the Tow Trusts,
respectively, hold not less than 25% of the combined voting power of the Common
Stock.
TRANSFER AGENT
The Transfer Agent and Registrar for the Class A Common Stock is Mellon
Securities Trust Company, Ridgefield Park, New Jersey.
PLAN OF DISTRIBUTION
GENERAL
The Company may sell Offered Debt Securities on a negotiated or competitive
bid basis to or through underwriters or dealers, and also may sell Offered Debt
Securities directly to other purchasers or through agents. The Prospectus
Supplement will describe the method of distribution of the Offered Debt
Securities.
The distribution of the Offered Debt Securities may be effected from time
to time in one or more transactions at a fixed price or prices, which may be
changed, at market prices prevailing at the time of sale, at prices related to
such prevailing market prices or at negotiated prices.
If underwriters are used in the offering of Offered Debt Securities, the
names of the managing underwriter or underwriters and any other underwriters,
and the terms of the transaction, including compensation of the underwriters and
dealers, if any, will be set forth in the Prospectus Supplement relating to such
offering. Only underwriters named in a Prospectus Supplement will be deemed to
be underwriters in connection with the Offered Debt Securities described
therein. Firms not so named will have no direct or indirect participation in the
underwriting of such Offered Debt Securities, although such a firm may
participate in the distribution of such Offered Debt Securities under
circumstances entitling it to a dealer's commission. It is anticipated that any
underwriting agreement pertaining to any
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<PAGE>
Offered Debt Securities will (1) entitle the underwriters to indemnification by
the Company against certain civil liabilities, including liabilities under the
Securities Act of 1933, as amended (the 'Securities Act'), or to contribution
for payments which the underwriters may be required to make in respect thereof,
(2) provide that the obligations of the underwriters will be subject to certain
conditions precedent, and (3) provide that the underwriters generally will be
obligated to purchase all Offered Debt Securities if any are purchased.
The Company also may sell Offered Debt Securities to a dealer as principal.
In such event, the dealer may then resell such Offered Debt Securities to the
public at varying prices to be determined by such dealer at the time of resale.
The name of the dealer and the terms of the transaction will be set forth in the
Prospectus Supplement relating thereto.
Offered Debt Securities also may be offered through agents designated by
the Company from time to time. Any such agent will be named, and the terms of
any such agency will be set forth, in the Prospectus Supplement relating
thereto. Unless otherwise indicated in such Prospectus Supplement, any such
agent will act on a best efforts basis for the period of its appointment.
Dealers and agents named in a Prospectus Supplement may be deemed to be
underwriters (within the meaning of the Securities Act) of the Offered Debt
Securities described therein and, under agreements which may be entered into
with the Company, may be entitled to indemnification by the Company against
certain civil liabilities, including liabilities under the Securities Act, or to
contribution for payments which they may be required to make in respect thereof.
Underwriters, dealers and agents may engage in transactions with, or
perform services for, the Company in the ordinary course of business.
If so indicated in the Prospectus Supplement, the Company will authorize
agents and underwriters to solicit offers by certain institutional investors to
purchase Offered Debt Securities from the Company at the public offering price
set forth in the Prospectus Supplement pursuant to delayed delivery contracts
providing for payment and delivery on a specified date in the future.
Institutional investors with whom such contracts, when authorized, may be made
include commercial and savings banks, insurance companies, pension funds,
investment companies, educational and charitable institutions and other
institutions but shall in all cases be subject to the approval of the Company.
Such contracts will be subject only to those conditions set forth in the
Prospectus Supplement, and the Prospectus Supplement will set forth the
commission payable for solicitation of such contracts. Agents and underwriters
will not have any responsibility in respect of the validity of such contracts or
the performance of the Company or such institutional investors thereunder.
The anticipated place and time of delivery for the Offered Debt Securities
will be set forth in the Prospectus Supplement.
LEGAL MATTERS
The legality of the Debt Securities offered will be passed upon for the
Company by Leavy Rosensweig & Hyman, New York, New York. David Z. Rosensweig, a
partner in the firm of Leavy Rosensweig & Hyman, is the Secretary and a director
of the Company. Certain legal matters concerning the offering of the Debt
Securities will be passed upon for the Company by its securities counsel,
Whitman Breed Abbott & Morgan, New York, New York. Certain legal matters will be
passed upon for the underwriters or agents, if any, by Simpson Thacher &
Bartlett (a partnership which includes professional corporations), New York, New
York.
EXPERTS
The consolidated financial statements and related financial statement
schedules incorporated in this Prospectus by reference from the Company's Annual
Report on Form 10-K for the fiscal year ended May 31, 1994 have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their report which is
incorporated herein by reference and have been so incorporated in reliance upon
the report of such firm given upon their authority as experts in auditing and
accounting.
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________________________________________________________________________________
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS IN
CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE UNDERWRITER. NEITHER THE
DELIVERY OF THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS NOR ANY SALE MADE
HEREUNDER OR THEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE AN IMPLICATION THAT
THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.
THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER OR
SOLICITATION BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION
IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS
NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION.
---------------------------
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Recent Developments............................... S-2
Use of Proceeds................................... S-3
Selected Financial Information.................... S-4
Description of the Notes.......................... S-5
Underwriting...................................... S-14
PROSPECTUS
Available Information............................. 2
Incorporation of Certain Documents by Reference... 2
Investment Considerations......................... 3
The Company....................................... 5
Ratio of Earnings to Fixed Charges................ 5
Use of Proceeds................................... 6
Stock Distributions and Dividend Policy........... 6
Price Range of Class A Common Stock............... 7
Description of Debt Securities.................... 7
Description of Capital Stock...................... 13
Plan of Distribution.............................. 15
Legal Matters..................................... 16
Experts........................................... 16
</TABLE>
$250,000,000
CENTURY
[LOGO] COMMUNICATIONS
CORP.
9 1/2% SENIOR NOTES
DUE 2005
---------------------------
PROSPECTUS SUPPLEMENT
---------------------------
MERRILL LYNCH & CO.
FEBRUARY 27, 1995
________________________________________________________________________________
