<PAGE>
Rule 424(B)(5)
Registration No. 33-65367
LETTER OF TRANSMITTAL AND FORM OF ELECTION
TO ACCOMPANY CERTIFICATES WHICH REPRESENT COMMON STOCK OF
BUFFALO VALLEY TELEPHONE COMPANY
PLEASE FOLLOW CAREFULLY THE INSTRUCTIONS ON THE REVERSE SIDE
- --------------------------------------------------------------------------------
TO MAKE A VALID ELECTION, THIS LETTER (AND ALL OTHER REQUIRED DOCUMENTS) MUST BE
RECEIVED BY THE EXCHANGE AGENT BEFORE 5:00 P.M., NEW YORK TIME, ON JUNE 28, 1996
- --------------------------------------------------------------------------------
CONESTOGA ENTERPRISES, INC.
AS EXCHANGE AGENT
By Mail, Hand or Overnight Courier:
Conestoga Enterprises, Inc., as Exchange Agent
202 East First Street
Birdsboro, PA 19508-9989
For additional information, contact Suzanne Torak at (610) 582-6202.
DELIVERY OF THIS LETTER OF TRANSMITTAL AND FORM OF ELECTION TO AN ADDRESS
OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL AND FORM OF
ELECTION SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL AND FORM OF
ELECTION IS COMPLETED.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
DESCRIPTION OF SHARES TO WHICH THIS LETTER OF TRANSMITTAL
AND FORM OF ELECTION RELATES
- --------------------------------------------------------------------------------------
NAME AND ADDRESS OF REGISTERED OWNER(S) CERTIFICATE
(PLEASE FILL IN, IF BLANK, EXACTLY AS NUMBERS (IF KNOWN) (ATTACH NUMBER OF
NAME APPEARS ON CERTIFICATE(S)) SEPARATE LIST IF NEEDED) SHARES
- --------------------------------------------------------------------------------------
<S> <C> <C>
------------------------------------------
------------------------------------------
------------------------------------------
------------------------------------------
Total
- --------------------------------------------------------------------------------------
_______________________ For ease of identification please provide your Social
Social Security or Tax Security or Taxpayer Identification Number here. You
Identification No. must also provide such number on the Form W-9 on page 5.
- ---------------------------
</TABLE>
[_] Check here if you cannot locate your Certificate(s) and require assistance
in replacing them. Upon receipt of this notification, the Exchange Agent
will contact you directly with replacement instructions.
TO MAKE A VALID ELECTION, THE COMPLETED LETTER OF TRANSMITTAL AND FORM OF
ELECTION, TOGETHER WITH CERTIFICATES AND ANY OTHER REQUIRED DOCUMENTS MUST BE
RECEIVED BY THE EXCHANGE AGENT BY 5:00 P.M., NEW YORK TIME, ON JUNE 28, 1996
(THE "ELECTION DEADLINE").
AN ELECTION MADE IN ACCORDANCE HEREWITH MAY BE CHANGED OR REVOKED ONLY BY
WRITTEN NOTICE RECEIVED BY THE EXCHANGE AGENT PRIOR TO THE ELECTION DEADLINE,
INCLUDING, IN THE CASE OF A CHANGE, A PROPERLY COMPLETED REVISED ELECTION FORM.
ANY CERTIFICATES WHICH WERE SUBMITTED IN CONNECTION WITH AN ELECTION SHALL BE
RETURNED TO THE HOLDER THEREOF IN THE EVENT SUCH ELECTION IS REVOKED AS
AFORESAID AND SUCH HOLDER REQUESTS IN WRITING THE RETURN OF SUCH CERTIFICATES.
THIS LETTER OF TRANSMITTAL AND FORM OF ELECTION MAY BE SUBMITTED AT ANY
TIME PRIOR TO THE ELECTION DEADLINE, BUT SHALL ONLY CONSTITUTE A VALID ELECTION
IF THE SHARES TO WHICH THIS LETTER OF TRANSMITTAL AND FORM OF ELECTION RELATES
CONTINUE TO BE HELD AS OF THE ELECTION DEADLINE BY THE PERSON THAT SUBMITTED
THIS LETTER OF TRANSMITTAL AND FORM OF ELECTION.
1
<PAGE>
Ladies and Gentlemen:
This Letter of Transmittal and Form of Election is delivered in connection
with the acquisition (the "Acquisition") of Buffalo Valley Telephone Company, a
Pennsylvania corporation ("BVT") by Conestoga Enterprises, Inc., a Pennsylvania
corporation ("CEI") in accordance with the Agreement and Plan of Merger dated as
of October 18, 1995, (the "Merger Agreement"). The Acquisition occurred on May
31, 1996.
Pursuant to the Merger Agreement, Holders of shares of common stock of BVT,
no par value (the "BVT Common Stock") are entitled to receive, at their
election, in exchange for each share of BVT Common Stock, without par value (the
"BVT Common Stock"), either:
(i) cash in the amount of $65 (the "Cash Merger Consideration"),
(ii) one share of CEI's $3.42 Series A Convertible Preferred Stock,
par value $65 per share ("CEI Series A Preferred Shares") (the
"Preferred Stock Merger Consideration"), or
(iii) 2.4 shares of CEI Common Stock, par value $5.00 per share (the
"Common Stock Merger Consideration").
This Letter of Transmittal and Form of Election is submitted in order to
indicate any preference of the Holder of the shares of BVT Common Stock
identified above (the "Shares"), with respect to the form of consideration to be
received in the Acquisition in exchange for such Shares.
I understand that, as provided in the Merger Agreement and as described
further under "Description of Election and Allocation Procedures" and in the
accompanying instructions, elections with respect to the Cash Merger
Consideration indicated herein will be subject to allocation procedures such
that the number of shares of BVT Common Stock which will be converted into Cash
Merger Consideration will not exceed a specified percentage of all outstanding
shares of BVT Common Stock (the "Cash Percentage"). The Cash Percentage, as
determined by CEI following completion of the election period, will be 50% or,
if lower, the maximum percentage that would permit the Merger to qualify as a
tax-free exchange for federal income tax purposes. Cash elections by holders of
BVT Common Stock in excess of the Stock Percentage will receive the Preferred
Stock Merger Consideration.
The elections of the undersigned set forth herein shall be binding upon the
successors, assigns, heirs, executors, administrators, trustees in bankruptcy
and legal representatives of the undersigned and shall not be affected by, and
shall survive the death or incapacity of the undersigned.
2
<PAGE>
MARKET VALUE OF CEI COMMON STOCK
In accordance with the Merger Agreement, the Common Stock Merger
Consideration has been determined to be 2.4 shares of CEI Common Stock for each
share of BVT Common Stock. As of May 31, 1996, one share of CEI Common Stock had
a "Market Value" (as defined below) of $27.54; 2.4 shares of CEI Common Stock
had a "Market Value," therefore, of $66.10. BVT shareholders are advised to
obtain current market quotations for CEI Common Stock.
CONVERSION PRICE OF CEI PREFERRED STOCK
In accordance with the Merger Agreement, it has been determined that the
CEI Series A Preferred Shares will be convertible into shares of CEI Common
Stock at a conversion price equal to 125% of the Market Value of a share of CEI
Common Stock as of the Acquisition date, or $34.425, subject to adjustment in
the future under certain circumstances.
UPDATED SELECTED HISTORICAL FINANCIAL DATA OF CEI
The following table presents selected historical financial data for CEI for
the periods indicated, including the recently completed three month period ended
March 31, 1996. This information should be read in conjunction with the
consolidated financial statements and notes thereto of CEI incorporated by
reference in the Joint Proxy Statement/Prospectus referred to below.
<TABLE>
<CAPTION>
At or For the Three
Months Ended
March 31, At or For the Year Ended December 31,
------------------- -------------------------------------------
1996 1995 1995 1994 1993 1992 1991
---- ---- ---- ---- ---- ---- ----
(in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C>
Operating revenues.............. $ 8,694 $ 7,717 $30,869 $29,828 $28,360 $27,234 $25,270
Net income...................... 1,921 1,440 6,531 6,294 6,136 6,373 5,317
Net income per common share(1).. .50 .37 1.70 1.64 1.60 1.66 1.38
Dividends per common share(1)... .30 .30 1.20 1.11 1.10 1.09 1.05
Total assets.................... 59,106 55,975 58,595 55,799 53,232 52,041 51,550
Long-term debt, net of current
maturities................... 4,548 4,938 4,645 5,035 5,425 5,815 6,515
Net book value per common
share(1)..................... 11.17 10.45 10.94 10.38 9.80 9.30 8.72
</TABLE>
______________________
(1) Per share data has been adjusted to reflect a 5% stock dividend paid to CEI
shareholders of record as of January 31, 1995.
____________________________
THE JOINT PROXY STATEMENT/PROSPECTUS DATED APRIL 17, 1996 CONTAINS A
DESCRIPTION OF THE MERGER AGREEMENT AND THE ELECTION AND ALLOCATION PROCEDURES
RELATING TO THE ACQUISITION, AS WELL AS DETAILED INFORMATION REGARDING BVT AND
CEI. CEI WILL FURNISH COPIES OF SUCH JOINT PROXY STATEMENT/PROSPECTUS UPON
REQUEST.
3
<PAGE>
I hereby make the following elections as to the form of consideration to be
issued with respect to the Shares (See "Description of Election and Allocation
Procedures" and Instruction 1):
---------------------------------------------------------------------------
CASH ELECTION TOTAL NO. OF SHARES: ___________________
(REQUIRED FOR VALID ELECTION) ___________________
---------------------------------------------------------------------------
Number of Cash Date of Acquisition
Election Shares (Optional) (Optional-See Instruction 1)
- --------------------------------------------------------------------------------
(a)
- --------------------------------------------------------------------------------
(b)
- --------------------------------------------------------------------------------
(c)
- --------------------------------------------------------------------------------
---------------------------------------------------------------------------
COMMON STOCK ELECTION TOTAL NO. OF SHARES: ___________________
(REQUIRED FOR VALID ELECTION) ___________________
---------------------------------------------------------------------------
---------------------------------------------------------------------------
PREFERRED STOCK ELECTION TOTAL NO. OF SHARES: ___________________
(REQUIRED FOR VALID ELECTION) ___________________
---------------------------------------------------------------------------
I, being the registered Holder(s) of the Shares, or the transferee or
assignee of such registered Holder(s) (See Instruction 5), hereby surrender the
Share Certificates in exchange for the Common Stock Merger Consideration (and
cash in lieu of fractional shares), the Preferred Stock Merger Consideration
and/or the Cash Merger Consideration. Please issue certificates representing
shares of CEI Common Stock, CEI Preferred Stock, a check, or a combination
thereof, in the name and to the address indicated above, unless I have otherwise
instructed under Special Issuance Instruction or Special Delivery Instruction
below.
The delivery and surrender of the Share Certificates is not effective and
the risk of loss of the Share Certificates does not pass to the Exchange Agent
until receipt by the Exchange Agent of this Letter of Transmittal and Form of
Election, duly completed and signed, together with all accompanying evidence of
authority in form satisfactory to the Exchange Agent, the Share Certificates,
and all other required documents. All questions as to validity, form and
eligibility of any surrender of Share Certificates shall be determined by the
Exchange Agent.
Because of the timing of the stockholder election procedures, it is
anticipated that payment of the Cash Merger Consideration, the Preferred Stock
Merger Consideration and the Common Stock Merger Consideration (and cash in lieu
of fractional shares) will be made approximately 15 working days after the
Election Deadline. Funds estimated to be sufficient to make payment with respect
to the Cash Merger Consideration will be made available by CEI on or prior to
the anticipated payment date.
4
<PAGE>
-----------------------------------------------------------
PLEASE SIGN HERE
ALL HOLDERS OF THE SHARES MUST SIGN BELOW
Important - Please endorse the certificates ONLY if (i) the
new certificates and the check for any fractional interest
and/or (ii) the check are to be issued in a different name,
as provided by Instruction 7 below. SIGN IN THE SPACE
PROVIDED BELOW IN ANY CASE. The undersigned represents that
he or she has read and agrees to all of the terms and
conditions set forth herein.
___________________________________________________________
Area Code and Home/Office Telephone Number
SIGN BELOW
X
-----------------------------------------------------------
Signature Date
X
-----------------------------------------------------------
Signature Date
X
-----------------------------------------------------------
Signature Date
Please sign EXACTLY as your name(s) appear(s) on the
surrendered BVT Common Stock certificates. Each joint owner
must sign. If you are signing for someone else, you must
send documentation with this form certifying your authority
to sign.
-----------------------------------------------------------
PLEASE ALSO COMPLETE THE SUBSTITUTE FORM W-9 ON THE NEXT PAGE
For additional guidance, see the Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 (the "Guidelines") which are
enclosed at the end of this Letter of Transmittal and Form of Election.
--------------------------------------------------
SPECIAL ISSUANCE INSTRUCTIONS
To be completed ONLY if (i) certificate for
CEI Common Stock (and the check for any fractional
interest) and/or (ii) the check for cash payment
are to be issued in a name other than the name of
the registered Holder(s) of the surrendered
certificates (see Instruction 7).
Issue certificate (and any fractional interest
check) and/or check to:
Name______________________________________________
(Please Print)
__________________________________________________
Address___________________________________________
__________________________________________________
(Include Zip Code)
__________________________________________________
(Tax Identification or Social Security No.)
(Note: If this box is completed, endorsement
on surrendered certificate(s) or signature(s) on
the accompanying instrument of transfer MUST BE
GUARANTEED in the usual form by an Eligible
Guarantor Institution. See Instruction 7.) PLEASE
ALSO COMPLETE THE SUBSTITUTE FORM W-9 ON THE NEXT
PAGE.
--------------------------------------------------
--------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
To be completed ONLY if (i) certificate for
CEI Common Stock (and the check for any fractional
interest), (ii) certificate for CEI Preferred
Stock, and/or (ii) the check for cash payment are
to be mailed to someone other than the registered
owner(s) or to an address other than the address
of record indicated on this form (see Instruction
7).
Mail certificate (and any fractional interest
check) and/or check to:
Name______________________________________________
(Please Print)
__________________________________________________
Address___________________________________________
__________________________________________________
(Include Zip Code)
--------------------------------------------------
5
<PAGE>
STOCKHOLDERS MUST COMPLETE THE FOLLOWING SUBSTITUTE FORM W-9 IF THEY DO NOT
WISH TO BE SUBJECT TO WITHHOLDING WITH RESPECT TO PAYMENTS MADE IN CONNECTION
WITH THE ACQUISITION. SEE INSTRUCTION 9. FOR ADDITIONAL GUIDANCE, PLEASE
REVIEW THE "GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON
SUBSTITUTE FORM W-9" WHICH ARE ENCLOSED AT THE END OF THIS LETTER OF TRANSMITTAL
AND FORM OF ELECTION.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
SUBSTITUTE FORM W-9
(SEE INSTRUCTION 9)
PAYER'S NAME: ____________________________________
- --------------------------------------------------------------------------------------------------------------
SUBSTITUTE FORM W-9 PART 1: TAXPAYER IDENTIFICATION NUMBER-FOR ALL ACCOUNTS
----------------------------------------------------------------------------
<S> <C> <C>
DEPARTMENT OF THE TREASURY Enter taxpayer identification number in the
INTERNAL REVENUE SERVICE appropriate box. For most individuals, this is
your social security number. If you do not have a
number, see How to Obtain a TIN in the enclosed
Guidelines. SOCIAL SECURITY NUMBER
----------------------
PAYER'S REQUEST FOR TAXPAYER OR
IDENTIFICATION NUMBER
----------------------
NOTE: If the account is in more than one name,
see the chart in the enclosed Guidelines on which EMPLOYER IDENTIFICATION
number to give the payer. NUMBER
- --------------------------------------------------------------------------------------------------------------
PART 2: FOR PAYEES EXEMPT FROM BACKUP WITHHOLDING (SEE ENCLOSED GUIDELINES)
CERTIFICATION-Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct taxpayer identification number, or I am waiting for a
number to be issued to me and either (a) I have mailed or delivered an application to receive a
taxpayer identification number to the appropriate Internal Revenue Service Center or Social Security
Administration Office or (b) I intend to mail or deliver an application in the near future. I
understand that if I have not provided a taxpayer identification number, 31% of all reportable
payments made to me will be withheld until I provide a number.
(2) I am not subject to backup withholding either because (a) I am exempt from backup withholding, or (b)
I have not been notified by the Internal Revenue Service ("IRS") that I am subject to backup
withholding as a result of a failure to report all interest or dividends, or (c) the IRS has notified
me that I am no longer subject to backup withholding; and
(3) Any information provided on this form is true, correct and complete.
- --------------------------------------------------------------------------------------------------------------
CERTIFICATION INSTRUCTIONS-You must cross out item (2) above if you have been notified by the IRS that you are
subject to backup withholding because of under reporting interest or dividends on your tax return. However,
if after being notified by the IRS that you were subject to backup withholding you received another
notification from the IRS that you are no longer subject to backup withholding, do not cross out item (2).
- --------------------------------------------------------------------------------------------------------------
PART 3 - CHECK THE BOX IF YOU
SIGNATURE___________________________________ DATE__________________________ ARE AWAITING A TIN [_]
- --------------------------------------------------------------------------------------------------------------
</TABLE>
6
<PAGE>
DESCRIPTION OF ELECTION AND ALLOCATION PROCEDURES:
In connection with the acquisition (the "Acquisition") of Buffalo Valley
Telephone Company ("BVT") by Conestoga Enterprises, Inc. ("CEI"), BVT
stockholders may indicate their preference to receive the Cash Merger
Consideration, the Preferred Stock Merger Consideration or the Common Stock
Merger Consideration, as described below. BVT and CEI have set 5:00 p.m. New
York time, June 28, 1996 as the deadline for stockholders to make such elections
(the "Election Deadline").
DEFINITIONS APPLICABLE TO MERGER CONSIDERATION
"Cash Merger Consideration" means cash in the amount of $65.00 per share
for each share of BVT Common Stock as to which such Cash Merger Consideration is
to be paid in accordance with the provisions set forth below.
"Market Value" means the sum of the average of the last reported bid and
ask prices of a share of CEI Common Stock as quoted by CEI's four principal
market makers on the NASDAQ Small Cap Market for each of the last 10 trading
days immediately preceding the fourth business day prior to May 31, 1996, the
date on which the Acquisition became effective (the "Effective Date").
"Common Stock Merger Consideration" means certificates representing 2.4
shares of CEI Common Stock for each share of BVT Common Stock as to which such
Common Stock Merger Consideration is to be paid in accordance with the
provisions set forth below. As of May 31, 1996, 2.4 shares of CEI Common Stock
had a "Market Value" of $66.10. THE AMOUNT OF COMMON STOCK MERGER CONSIDERATION
IS FIXED AND WILL NOT BE ADJUSTED FOR FLUCTUATIONS IN THE MARKET PRICE OF CEI
COMMON STOCK SUBSEQUENT TO THE EFFECTIVE DATE OF THE ACQUISITION. STOCKHOLDERS
ARE ADVISED TO OBTAIN CURRENT MARKET QUOTATIONS FOR CEI COMMON STOCK.
"Preferred Stock Merger Consideration" means a certificate representing one
share of CEI's $3.42 Series A Convertible Preferred Stock, par value $65 per
share ("CEI Series A Preferred Shares") for each share of BVT Common Stock as to
which such Preferred Stock Merger Consideration is to be paid in accordance with
the provisions set forth below. In accordance with the Merger Agreement, the CEI
Series A Preferred Shares will be convertible into CEI Common Stock at a
conversion price of 125% of the Market Value of a share of CEI Common Stock as
of the Effective Date, or $34.425, subject to adjustment in the future under
certain circumstances.
OTHER DEFINITIONS
"Aggregate Shares" means the aggregate number of shares of BVT Common Stock
outstanding on the Effective Date, including Dissenters' Shares (defined below).
"Dissenters Shares" means the shares of BVT Common Stock the holders of
which are exercising dissenters rights pursuant to the Pennsylvania Business
Corporation Law.
"Cash Percentage" means the maximum permissible percentage of the Aggregate
Shares (defined above) for which Cash Merger Consideration may be issued. The
Cash Percentage shall be selected by CEI, in its sole discretion, and CEI shall
give BVT written notice of such election within five business days following the
Election Deadline. The Cash Percentage shall be 50% or, if lower, the maximum
possible percentage which would permit the Merger to qualify as a tax-free
exchange for federal income tax purposes.
PROCEDURES
1. Subject to and in accordance with the allocation and election
procedures set forth herein, each record holder of shares of BVT Common Stock
(the "Holders") shall, prior to the Election Deadline specify (a) the number of
whole shares of BVT Common Stock held by such Holder as to which such Holder
shall desire to receive the Cash Merger Consideration, (b) the number of whole
shares of BVT Common Stock held by such Holder as to which such Holder shall
desire to receive the Preferred Stock Merger Consideration, and (c) the number
of whole shares of BVT Common Stock held by such Holder as to which such Holder
shall desire to receive the Common Stock Merger Consideration.
7
<PAGE>
2. An election as described in clause (a) of Paragraph 1 is herein
referred to as a "Cash Election," and shares of BVT Common Stock as to which a
Cash Election has been made are herein referred to as "Cash Election Shares."
An election as described in clause (b) of Paragraph 1 is herein referred to as a
"Preferred Stock Election," and shares as to which a Preferred Stock Election
has been made are herein referred to as "Preferred Stock Election Shares." An
election as described in clause (c) of Paragraph 1 is herein referred to as a
"Common Stock Election," and shares as to which a Common Stock Election has been
made are herein referred to as "Common Stock Election Shares." A failure to
indicate a preference in accordance herewith is herein referred to as a "Non-
Election," and shares as to which there is a Non-Election are herein referred to
as "Non-Electing Shares."
3. Any record holder of BVT Common Stock who is holding shares for a
beneficial owner, or as a nominee for one or more beneficial owners, may submit
an Election Form for purposes of making elections and containing instructions
with respect thereto on behalf of any such beneficial owners. Any beneficial
owner of BVT Common Stock on whose behalf a record owner of BVT Common Stock has
submitted an Election Form in accordance with this paragraph 3 will be
considered a separate Holder of BVT Common Stock for purposes of these election
and allocation procedures.
4. All Preferred Stock Election Shares shall receive Preferred Stock
Merger Consideration (and cash in lieu of fractional shares).
5. All Common Stock Election Shares shall receive Common Stock Merger
Consideration (and cash in lieu of fractional shares).
6. All Non-Election Shares shall receive Common Stock Merger
Consideration (and cash in lieu of fractional shares).
7. Elections by BVT shareholders to receive Cash Merger Consideration
will be subject to allocation procedures such that the number of shares of BVT
Common Stock which will be converted into Cash Merger Consideration will not
exceed a specified percentage of all outstanding shares of BVT Common Stock (the
"Cash Percentage"). The Cash Percentage, as determined by CEI, will be 50% or,
if lower, the maximum percentage that would permit the Merger to qualify as a
tax-free exchange for federal income tax purposes. To the extent that cash
elections are not satisfied, BVT shareholders will receive Preferred Stock
Merger Consideration.
8. Payment of the Cash Merger Consideration shall be allocated to Holders
making Cash Elections such that the number of the Aggregate Shares as to which
cash is paid shall not exceed the Cash Percentage times the number of Aggregate
Shares. To the extent Cash Election Shares are not permitted to receive cash,
such shares will receive Preferred Stock Merger Consideration, as follows:
If the number of Cash Election Shares plus the number of Dissenters' Shares
is more than the Cash Percentage, (i) the Cash Election Shares of each
Holder shall be reduced pro rata by multiplying the number of Cash Election
Shares of such Holder by a fraction, the numerator of which is the number
of shares of BVT Common Stock equal to (x) the Cash Percentage times (y)
the Aggregate Shares minus the aggregate number of Dissenters' Shares and
the denominator of which is the aggregate number of Cash Election Shares,
and (ii) the shares of such Holder representing the difference between such
Holder's initial Cash Election and such Holder's reduced Cash Election
pursuant to clause (i) shall be converted into and be deemed to be
Preferred Stock Election Shares.
NOTE: ALL CASH ELECTIONS WILL BE SUBJECT TO ADJUSTMENT PURSUANT TO THE
FOREGOING PROVISIONS. THE PRECISE AMOUNT OF CASH MERGER CONSIDERATION TO BE
RECEIVED BY A HOLDER WILL BE INFLUENCED BY THE NUMBER OF OTHER HOLDERS OF BVT
COMMON STOCK WHO MAKE CASH ELECTIONS AS WELL AS THE CASH PERCENTAGE SELECTED BY
CEI AFTER THE ELECTION DEADLINE.
8
<PAGE>
INSTRUCTIONS
FOR SURRENDERING CERTIFICATES WHICH REPRESENT BVT
COMMON STOCK IN EXCHANGE FOR EITHER (I) A CERTIFICATE REPRESENTING CEI
COMMON STOCK AND ANY CASH FOR FRACTIONAL INTERESTS, (II) A CERTIFICATE
REPRESENTING CEI SERIES A PREFERRED STOCK, (III) CASH OR (IV) A COMBINATION
THEREOF
1. ELECTIONS
In order to make a valid Cash Election, Common Stock Election or Preferred
Stock Election with respect to shares of BVT Common Stock the accompanying
Letter of Transmittal and Form of Election must be completed and executed by the
appropriate Holder of shares of BVT Common Stock, and the Letter of Transmittal
and Form of Election must be received, together with the Share Certificates in
acceptable form by the Exchange Agent before 5:00 p.m., New York time, June 28,
1996. (the "Election Deadline").
A single Letter of Transmittal and Form of Election may be used for all
Certificates held in exactly the same name. For Certificates held in different
names, a separate Letter of Transmittal and Form of Election must be used for
each name.
Cash Election: To make a valid election you MUST indicate the total number
of Shares as to which a Cash Election is being made in the upper right hand
corner of the Cash Election box. If desired, you may also (but are not required
to) list Shares as to which a Cash Election is being made in the spaces provided
(in spaces (a), (b) and (c)) in order of priority (i.e. those to be converted
last into Stock Election Shares in the event of a required adjustment as
discussed above should be listed first), identified by the date of purchase of
such Shares.
FOR CASH ELECTIONS, LISTING THE SHARES IN ORDER OF PRIORITY AND IDENTIFYING
THE DATE OF PURCHASE OF SHARES IS OPTIONAL; a failure to do so will not result
in an invalid election. Provision of such information, however, may be
important in connection with your calculation of federal or state taxes in
connection with the Acquisition. Stockholders should consult with their
personal tax advisor with respect to tax issues in connection with the
Acquisition. If you do list Shares in order of priority, be sure to retain a
copy of this Letter of Transmittal and Election Form for your tax records.
Common Stock Election: To make a valid election you MUST indicate the
total number of Shares as to which a Common Stock Election is being made in the
upper right hand corner of the Common Stock Election box.
Preferred Stock Election: To make a valid election you MUST indicate the
total number of Shares as to which a Preferred Stock Election is being made in
the upper right hand corner of the Preferred Stock Election box.
FAILURE TO INDICATE THE TOTAL NUMBER OF SHARES AS TO WHICH A CASH ELECTION,
PREFERRED STOCK ELECTION OR COMMON STOCK ELECTION IS BEING MADE IN THE REQUIRED
BOX OR FAILURE TO SUBMIT THE CERTIFICATES WITH RESPECT THERETO WILL RESULT IN
YOUR ELECTION BEING INVALID, AND SUCH SHARES WILL BE TREATED AS NON-ELECTING
SHARES.
2. DELIVERY
In order to make a valid election:
(A) this Letter of Transmittal and Form of Election must be properly
completed, dated, and signed, and must be received by the Exchange Agent,
together with any other documents required by the Letter of Transmittal and Form
of Election in form satisfactory to Exchange Agent (including, if applicable,
any required signature guarantees) at one of the addresses set forth on the face
of the Letter of Transmittal and Form of Election by the Election Deadline of
5:00 p.m. New York time, on June 28, 1996; and
9
<PAGE>
(B) the Share Certificates for the Shares to which this Letter of
Transmittal and Form of Election relates must be delivered with the Letter of
Transmittal and Form of Election and received by the Exchange Agent at one of
such addresses prior to the Election Deadline.
If Share Certificates are forwarded separately to the Exchange Agent, the
Letter of Transmittal and Form of Election (or a facsimile thereof) properly
completed and duly executed must accompany each such delivery.
THE METHOD OF DELIVERY OF SHARES AND ALL OTHER REQUIRED DOCUMENTS IS AT THE
OPTION AND RISK OF THE HOLDER AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN
ACTUALLY RECEIVED BY THE EXCHANGE AGENT. IF SHARE CERTIFICATES ARE SENT BY
MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS
RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY
DELIVERY.
STOCKHOLDERS WHOSE PROPERLY COMPLETED LETTERS OF TRANSMITTAL AND FORMS OF
ELECTION ARE NOT RECEIVED BY THE EXCHANGE AGENT PRIOR TO THE ELECTION DEADLINE,
OR WHOSE SHARES ARE NOT RECEIVED BY THE EXCHANGE AGENT PRIOR TO THE ELECTION
DEADLINE WILL BE CONSIDERED TO HAVE MADE NO ELECTION WITH RESPECT TO THEIR
SHARES.
3. REVOCATION AND CHANGES
This Letter of Transmittal and Form of Election may be revoked or changed
by the person submitting it at or prior to the Election Deadline by (i)
submitting a new Letter of Transmittal and Form of Election or (ii) revoking the
election indicated on this Letter of Transmittal and Form of Election by written
notice to the Exchange Agent. Additional blank copies of the Letter of
Transmittal and Form of Election can be obtained upon request from the Exchange
Agent at any of the addresses set forth on the face of this Letter of
Transmittal and Form of Election. In the event this Letter of Transmittal and
Form of Election is revoked prior to the Election Deadline and no election is
made, the shares of BVT Common Stock represented hereby will become shares for
which no election is made.
THIS LETTER OF TRANSMITTAL AND FORM OF ELECTION MAY BE SUBMITTED AT ANY
TIME PRIOR TO THE ELECTION DEADLINE, BUT SHALL ONLY CONSTITUTE A VALID ELECTION
IF THE SHARES TO WHICH THIS LETTER OF TRANSMITTAL AND FORM OF ELECTION RELATES
CONTINUE TO BE OWNED AS OF THE ELECTION DEADLINE BY THE PERSON THAT SUBMITTED
THIS LETTER TO TRANSMITTAL AND FORM OF ELECTION.
4. INADEQUATE SPACE
If there is insufficient space on this Letter of Transmittal and Form of
Election to list all your share certificates being submitted to the Exchange
Agent, please attach a separate list.
5. SIGNATURES
THE SIGNATURE (OR SIGNATURES, IN THE CASE OF CERTIFICATES OWNED BY TWO OR
MORE JOINT HOLDERS) ON THIS LETTER OF TRANSMITTAL AND FORM OF ELECTION SHOULD
CORRESPOND EXACTLY WITH THE NAME AS WRITTEN ON THE FACE OF THE SHARE
CERTIFICATE(S) TRANSMITTED UNLESS THE SHARES DESCRIBED ON THIS LETTER OF
TRANSMITTAL AND FORM OF ELECTION HAVE BEEN ASSIGNED BY THE REGISTERED HOLDER OR
HOLDERS. IN THAT CASE, THIS LETTER OF TRANSMITTAL AND FORM OF ELECTION SHOULD
BE SIGNED IN EXACTLY THE SAME FORM AS THE NAME OF THE LAST TRANSFEREE INDICATED
ON THE TRANSFERS ATTACHED TO OR ENDORSED ON THE CERTIFICATE(S). ANY ELECTION
SUBMITTED BY THE TRANSFEROR SHALL BE INVALID.
If this Letter of Transmittal and Form of Election is signed by a trustee,
executor, administrator, guardian, officer of a corporation, partner of a
partnership, or attorney-in-fact, or by a person acting in any other
representative or fiduciary capacity, the person signing must give his or her
full title, and appropriate evidence of authority to act in such capacity must
be forwarded with this Letter of Transmittal and Form of Election. If
additional documents are required by the Exchange Agent, you will be so advised.
10
<PAGE>
If any Holder's Shares are registered in different ways on different stock
certificates, it will be necessary for the Holders to complete, sign, and submit
as many separate Letters of Transmittal and Forms of Election as there are
different registrations.
6. CERTIFICATE FOR CEI COMMON STOCK OR CEI PREFERRED STOCK IN SAME NAME
If the certificate representing CEI Common Stock or CEI Preferred Stock is
to be registered in exactly the same name that appears on the certificate(s)
that represented BVT Common Stock being submitted herewith, you are not required
to endorse the certificates that represented BVT Common Stock.
7. SPECIAL ISSUANCE INSTRUCTIONS AND SPECIAL DELIVERY INSTRUCTIONS
A Holder of a certificate(s) that represent BVT Common Stock should
indicate in the applicable space provided the name and address to which (i) a
certificate(s) for CEI Common Stock or CEI Preferred Stock and a check for any
fractional interest and/or (ii) a check are to be issued or sent, if different
from the name and address of the person signing this Letter of Transmittal and
Form of Election. In the case of issuance to a different person, the Tax
Identification or Social Security Number of the person named must also be
indicated.
If this Letter of Transmittal and Form of Election is signed by someone
other than the registered Holder appearing on the surrendered stock
certificate(s), or if the registered Holder signs this Letter of Transmittal and
Form of Election but requests that CEI Common Stock or CEI Preferred Stock
and/or a check be issued to someone other than the registered Holder, then (i)
the surrendered certificate(s) that represented BVT Common Stock must be
endorsed on the reverse thereof or accompanied by separate stock powers for each
registration and must be signed by the registered Holder and (ii) the person
submitting this Letter of Transmittal and Form of Election shall pay to the
Exchange Agent any transfer or other taxes required as a result of the requested
issuance or establish to the satisfaction of the Exchange Agent that such tax
either has been paid or is not payable. The signature must be guaranteed by an
eligible guarantor institution such as a commercial bank, trust company,
securities broker/dealer, credit union, or a savings association participating
in a medallion program approved by the Securities Transfer Association, Inc. In
that case, the signature on this Letter of Transmittal and Form of Election must
correspond exactly with the name of the person to whom the CEI Common Stock or
CEI Preferred Stock and/or check are to be issued, as shown on the assignment
from the registered Holder of certificate(s) that represented BVT Common Stock.
A single certificate will be issued to represent all of the CEI Common
Stock or CEI Preferred Stock to which a surrendering Holder is entitled.
8. CORRECTION OF OR CHANGE OF NAME OR ADDRESS
For correction of name or for a change in name that does not involve a
change of ownership, proceed as described in this Instruction 8. For a change
in name by marriage or comparable change, the surrendered stock certificate
should be endorsed, e.g. "Mary Doe, now by marriage Mary Smith," with the
signature guaranteed as described in Instruction 7 above. For a correction in
name, the surrendered certificate should be endorsed, e.g. "James E. Jones,
incorrectly inscribed J.B. Jones," with the signature guaranteed as described in
Instruction 7 above. A correction of or change in address of the registered
Holder should be indicated by crossing out the address shown on the label and
writing in the new or correct address.
9. DIVIDENDS ON CEI COMMON STOCK OR CEI PREFERRED STOCK
Holders of BVT Common Stock who receive CEI Common Stock or CEI Preferred
Stock shall be entitled to receive dividends payable to Holders of CEI Common
Stock or CEI Preferred Stock as of any record date after the Effective Date of
the Acquisition.
It is important that certificates that represented BVT Common Stock be
surrendered in accordance with Instruction 2. Until so surrendered, the Holders
thereof will NOT receive payment of any dividends or other distributions on
their CEI Common Stock or CEI Preferred Stock. Upon surrender, any such
dividends to which the Holders may be entitled will be paid without interest.
You will receive a Form 1099 for dividends declared on your
11
<PAGE>
CEI Common Stock or CEI Preferred Stock whether or not you surrender your
certificates that represented your BVT Common Stock.
10. SUBSTITUTE FORM W-9
Under the Federal income tax laws, the Exchange Agent will be required to
withhold 31% of the amount of any reportable payments made to certain Holders of
certificates that represented BVT Common Stock. In order to avoid backup
withholding, each tendering Holder must provide the Exchange Agent with such
Holder's correct Taxpayer Identification Number (TIN) and certify that such
Holder is not subject to such backup withholding by completing the Substitute
Form W-9 set forth above. In general, if a Holder is an individual, the TIN is
the Social Security Number of such individual. If the Exchange Agent is not
provided with the correct TIN, the Holder may be subject to a $50 penalty
imposed by the Internal Revenue Service. Certain Holders (including, among
others, all corporations and certain foreign individuals) are not subject to
these backup withholding and reporting requirements. In order to satisfy the
Exchange Agent that a foreign individual qualifies as an exempt recipient, the
Holder must submit a statement, signed under penalties of perjury, attesting to
that individual's exempt status. Forms of such statements can be obtained from
the Exchange Agent. The box in Part 3 of the Substitute Form W-9 may be checked
if the person surrendering the certificates has not been issued a TIN and has
applied for a TIN or intends to apply for a TIN in the near future. If the box
in Part 3 has been checked, the person surrendering the certificate(s) must
still complete Part 2 of the Substitute Form W-9. Notwithstanding that the box
in Part 3 is checked, the Exchange Agent will withhold 31% of cash payments to
be made with respect to surrendered certificate(s) until the time it is provided
with a properly certified TIN. FOR FURTHER INFORMATION CONCERNING BACKUP
WITHHOLDING AND INSTRUCTIONS FOR COMPLETING THE SUBSTITUTE FORM W-9 (INCLUDING
HOW TO OBTAIN A TIN IF YOU DO NOT HAVE ONE AND HOW TO COMPLETE THE SUBSTITUTE
FORM W-9 IF SHARES OF BVT COMMON STOCK ARE HELD IN MORE THAN ONE NAME), CONSULT
THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON
SUBSTITUTE FORM W-9 ENCLOSED AT THE END OF THIS LETTER OF TRANSMITTAL AND FORM
OF ELECTION.
Failure to complete the Substitute Form W-9 will not, by itself, cause a
Holder's shares of BVT Common Stock to be deemed invalidly tendered, but may
require the Exchange Agent to withhold 31% of cash proceeds with respect to the
sale of BVT Common Stock and dividends, interest and other reportable payments
made with respect to the CEI Common Stock or CEI Preferred Stock received.
11. MUTILATED, LOST, STOLEN, OR DESTROYED CERTIFICATES
If your certificate(s) that represented BVT Common Stock has (have) been
mutilated, lost, stolen, or destroyed, please check the box on the front page of
this Letter of Transmittal and Form of Election. You will then be instructed as
to the steps you must take in order to surrender your certificate(s) for
exchange. For assistance call the Exchange Agent at 610-582-6202.
12. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES
Questions relating to the election and exchange process, as well as
requests for assistance or for additional copies of this Letter of Transmittal
and Form of Election, may be directed to Suzanne Torak at telephone number 610-
582-6202.
13. FRACTIONAL INTERESTS IN CEI COMMON STOCK OR CEI PREFERRED STOCK; MAILING OF
CEI STOCK AND CASH
No fractional interests in CEI Common Stock or CEI Preferred Stock will be
issued. Holders who would otherwise be entitled to receive fractional CEI
Common Stock or CEI Preferred Stock will instead be entitled to receive from the
Exchange Agent a cash payment determined by multiplying the fractional interest
to which such Holder would otherwise be entitled by (i) the Market Value of a
share of CEI Common Stock (as defined above) or (ii) $65.00, as appropriate.
THE CEI COMMON STOCK, THE CEI PREFERRED STOCK (AND THE CHECK FOR ANY
FRACTIONAL INTEREST) AND/OR THE CHECK FOR CASH PAYMENT WILL BE MAILED AS SOON AS
POSSIBLE FOLLOWING THE COMPLETION OF THE ALLOCATION PURSUANT TO AND IN
ACCORDANCE WITH THE PROVISIONS OF THIS LETTER OF TRANSMITTAL AND FORM OF
ELECTION. IT IS CURRENTLY ANTICIPATED THAT, BECAUSE OF THE TIMING OF THE
STOCKHOLDER ELECTION PROCEDURES, THE FINAL CALCULATION
12
<PAGE>
AND DISTRIBUTION OF SHARES AND CASH WILL OCCUR APPROXIMATELY 15 WORKING DAYS
AFTER THE ELECTION DEADLINE. FUNDS ESTIMATED TO BE SUFFICIENT TO MAKE PAYMENT
WITH RESPECT TO THE CASH MERGER CONSIDERATION WILL BE MADE AVAILABLE BY CEI ON
OR BEFORE THE ANTICIPATED PAYMENT DATE. IF SPECIAL ISSUANCE INSTRUCTIONS ARE
PROVIDED IN THIS LETTER OF TRANSMITTAL AND FORM OF ELECTION, OR IF THESE
INSTRUCTIONS ARE NOT PROPERLY FOLLOWED, THE MAILING OF THE CEI COMMON STOCK, THE
CEI PREFERRED STOCK (AND THE CHECK FOR ANY FRACTIONAL INTEREST) AND/OR THE CHECK
FOR CASH PAYMENT MAY BE DELAYED.
If there are surrendered for exchange two or more certificates that
represented BVT Common Stock that are registered in the name of the same owner
or owners, the determination of the fractional interest of such registered owner
or owners shall be based on the aggregate number of shares of BVT Common Stock
represented by the surrendered certificates that are registered in the name of
such owner or owners.
14. BVT CERTIFICATES NOT SURRENDERED
If certificates that represented BVT Common Stock are not surrendered in
exchange for certificates for CEI Common Stock, CEI Preferred Stock and/or cash
before the date on which the CEI Common Stock, CEI Preferred Stock or cash would
otherwise escheat to or become the property of any governmental unit or agency,
the unclaimed CEI Common Stock, CEI Preferred Stock and/or cash shall, to the
extent permitted by applicable law, become the property of CEI, free and clear
of all claims or interest of any person previously or otherwise entitled
thereto.
15. VALIDITY OF SURRENDER; IRREGULARITIES.
All questions as to validity, form and eligibility of any surrender of this
Letter of Transmittal and Form of Election, Share Certificates, or other
documents required hereunder will be resolved by CEI acting as the Exchange
Agent, and such resolution shall be final and binding. CEI reserves the right
to waive any irregularities or defects in the surrender of any Letter of
Transmittal and Form of Election or other required documents, and CEI's
interpretation of the terms and conditions of the Merger Agreement and of this
Letter of Transmittal and Form of Election (including these instructions) with
respect to such irregularities or defects shall be final and binding. Receipt
by CEI acting as the Exchange Agent will not be deemed to have been made until
all irregularities have been cured or waived.
13
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER - Social Security Numbers have nine digits separated by two hyphens: i.e.,
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen: i.e., 000-000000. The table below will help determine the number to
give the payer.
<TABLE>
<CAPTION>
Give the Give the EMPLOYER
SOCIAL SECURITY IDENTIFICATION
For this type of account: number of -- For this type of account: number of --
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. An individual's account The individual 9. A valid trust estate, Legal entity (Do not furnish
or pension fund the identifying number of
the personal representative
or trustee unless the legal
entity itself is not
designated in the account
title)
2. Two or more individuals The actual owner of the account or, 10. Corporate account The corporation
(joint account) if combined funds, any one of the
individuals
3. Husband and wife The actual owner of the account or, 11. Religious, charitable The organization
(joint account) if joint funds, either person (1) or educational
organization account
4. Custodian account of a The minor(2) 12. Partnership account The partnership
minor (Uniform Gift to held in the name of the
Minors Act) business
5. Adult and minor (joint The adult or, if the minor is the 13. Association, club, or The organization
account) only contributor, the minor (1) other tax-exempt
organization
6. Account in the name of The ward, minor, or incompetent 14. A broker or registered The broker or nominee
guardian or committee person nominee
for a designated ward,
minor, or incompetent
person
7. a. The usual The grantor-trustee(1) 15. Account with the The public entity
revocable Department of
savings trust Agriculture in the
account (grantor name of a public
is also trustee) entity (such as a State
b. So-called trust The actual owner(1) or local government,
account that is school district, or
not a legal or prison) that receives
valid trust under agricultural program
State law payments
8. Sole proprietorship The Owner(4)
payments
</TABLE>
____________________
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show the name of the owner.
(5) List first and circle the name of the legal trust, estate or pension trust.
NOTE: If no name is circled when there is more than one name, the number will
be considered to be that of the first name listed.
OBTAINING A NUMBER
If you don't have a taxpayer identification or you don't know your number,
obtain Form SS-5, Application for a Social Security Number Card, or Form SS-5,
Application for Employer Identification Number, at the local office of the
Social Security Administration or the Internal Revenue Service and apply for a
number. (Section references are to the Internal Revenue Code)
14
<PAGE>
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments include the
following:
. A corporation.
. A financial institution.
. An organization exempt from tax under section 501(a) or an individual
retirement plan.
. The United States or any agency or instrumentality thereof.
. A State, the District of Columbia, a possession of the United States,
or any subdivision or instrumentality thereof.
. A foreign government, a political subdivision of a foreign government,
or agency or instrumentality thereof.
. An international organization or any agency or instrumentality
thereof.
. A registered dealer in securities or commodities registered in the
U.S. or a possession of the U.S.
. A real estate investment trust.
. A common trust fund operated by a bank under section 584(a).
. An exempt charitable remainder trust or a non-exempt trust described
in section 4947(a)(1).
. An entity registered at all times under the Investment Company Act of
1940.
. A foreign central bank of issue.
Exempt payees described above should file Form W-9 to avoid possible erroneous
backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER
IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT TO
THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS,
ALSO SIGN AND DATE THE FORM.
Certain payments other than interest, dividends, and patronage dividends, that
are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041, 6041A(a),
6045, and 6050A.
PRIVACY ACT NOTICE.
Section 6109 requires you to furnish your correct TIN to persons who must file
information returns with the IRS to report interest, dividends, and certain
other income paid to you, mortgage interest you paid, the acquisition or
abandonment of secured property, or contributions you made to an IRA. The IRS
uses the numbers for identification purposes and to help verify the accuracy of
your tax return. Payers must generally withhold 31% of taxable interest,
dividend, and certain other payments to a payee who does not furnish a TIN to a
payer. Certain penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER - If you fail
to furnish your taxpayer identification number to a payer, you are subject to a
penalty of $50 for each such failure unless your failure is due to reasonable
causes and not to willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING - If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION - Willfully falsifying
certifications or affirmations may subject you to criminal penalties including
fines and/or imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE.
15
