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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 8, 1998
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
CENTENNIAL CELLULAR CORP.
(Exact name of registrant as specified in its charter)
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DELAWARE 4812 06-1242753
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer Identification No.)
incorporation or organization) Classification Code Number)
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50 LOCUST AVENUE
NEW CANAAN, CONNECTICUT 06840
(203) 972-2000
(Address, including zip code, and telephone number, including
area code, of Registrant's principal executive offices)
------------------------
DAVID Z. ROSENSWEIG, ESQ.
LEAVY ROSENSWEIG & HYMAN
11 EAST 44TH STREET
NEW YORK, NEW YORK 10017
(212) 983-0400
(Name, address, including zip code, and telephone number, including
area code, of agent for service)
------------------------
Copies to:
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TOBY S. MYERSON, ESQ. ROBERT A. SCHWED, ESQ.
KENNETH M. SCHNEIDER, ESQ. KAREN C. WIEDEMANN, ESQ.
PAUL, WEISS, RIFKIND, WHARTON & GARRISON REBOUL, MACMURRAY, HEWITT, MAYNARD & KRISTOL
1285 AVENUE OF THE AMERICAS 45 ROCKEFELLER PLAZA
NEW YORK, NEW YORK 10019-6064 NEW YORK, NEW YORK 10111
(212) 373-3000 (212) 841-5700
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement and after
all other conditions to the transactions described in the enclosed Information
Statement/Prospectus have been satisfied or waived.
------------------------
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ] _______________
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier registration statement for the same
offering. [ ] _______________
------------------------
CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM
TITLE OF EACH CLASS OF PROPOSED MAXIMUM AGGREGATE
SECURITIES TO BE AMOUNT TO BE OFFERING PRICE OFFERING AMOUNT OF
REGISTERED REGISTERED PER SHARE PRICE(1) REGISTRATION FEE(2)
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Common Stock, par value $.01
per share (3)............... 736,639 shares $41.50 $30,570,519 $8,499
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(1) Estimated solely for the purpose of determining the registration fee in
accordance with Rule 457(f), based upon the proposed offering price to
existing security holders.
(2) Pursuant to Rule 457(b), the required fee of $8,499 is reduced by the fee of
$253,556 previously paid at the time of filing of preliminary information
statement materials in connection with this transaction on August 21, 1998,
resulting in a net payment of $0.
(3) This Registration Statement relates to Class A Common Stock of the
Registrant to be received by holders of the Registrant's Class A Common
Stock and Class B Common Stock in the proposed merger of CCW Acquisition
Corp. with and into the Registrant, with the Registrant continuing as the
surviving corporation in the merger.
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THIS REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
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DATED DECEMBER 8, 1998
CENTENNIAL CELLULAR CORP.
INFORMATION STATEMENT/PROSPECTUS
-------------
We are sending you this Information Statement/Prospectus to describe the
proposed merger (the 'Merger') between Centennial Cellular Corp. ('Centennial'
or the 'Company') and CCW Acquisition Corp., a Delaware corporation
('Acquisition') organized at the direction of Welsh, Carson, Anderson & Stowe
VIII, L.P., a Delaware limited partnership ('WCAS'). This Information
Statement/Prospectus constitutes a prospectus registering the shares of common
stock of the Company, as the surviving corporation in the Merger, to be received
upon completion of the Merger by current holders of common stock of the Company
who make an effective election to receive such shares or are required to receive
such shares due to proration. Pursuant to the Agreement and Plan of Merger
executed on July 2, 1998 and amended on November 29, 1998 by Centennial and
Acquisition (as amended, the 'Merger Agreement'), in the Merger, Acquisition
will merge with and into Centennial, with Centennial continuing as the surviving
corporation. Centennial will continue to operate as an independent company under
its current name.
Following the Merger, Centennial will continue to operate in substantially
the same manner as it has in the past, except that the Company will be more
highly leveraged, will have a different capital structure and will have a new
controlling stockholder. SEE 'RISK FACTORS' ON PAGE 23.
WCAS, certain of its affiliates, certain of the affiliates of Blackstone
Capital Partners, L.P. (collectively, 'Blackstone') and certain other investors
(collectively, the 'Equity Investors') have agreed, subject to certain
conditions, to acquire equity interests in Acquisition prior to the Merger. Upon
completion of the Merger, the Equity Investors will control the Company through
the ownership of an aggregate of 92.9% of the outstanding common stock of the
surviving corporation. Other than the $400 million equity contribution by the
Equity Investors, the merger consideration will be funded with borrowings by the
surviving corporation and certain of its subsidiaries arranged by Acquisition.
Subject to the effects of proration as described in this Information
Statement/Prospectus, pursuant to the Merger, all holders of Class A Common
Stock, par value $0.01, of the Company, who collectively have an approximate 59%
common stock interest and an approximate 9% voting interest in the Company, will
have the opportunity to elect to receive for each share of Class A Common Stock
as consideration in the Merger either (i) $41.50 in cash or (ii) one share of
Centennial, as the surviving corporation. Stockholders who fail to make an
election to receive shares of the surviving corporation will be deemed to have
elected to receive cash.
Holders of Class A Common Stock may, due to proration, receive different
consideration from what they elect. Upon completion of the Merger, current
holders of Class A Common Stock and Class B Common Stock, of the Company will
own an aggregate of 7.1% of the common stock of the surviving corporation. If
current holders of Class A Common Stock elect to receive more than 7.1% of the
common stock of the surviving corporation, then those stockholders who elected
to receive shares rather than cash will receive fewer shares, on a pro rata
basis, than they elected, so that such electing holders of common stock of the
Company will own 7.1% of the common stock of the surviving corporation. If
current holders of Class A Common Stock elect to receive less than 7.1% of the
common stock of the surviving corporation, then all holders of (i) shares of
Class A Common Stock with respect to which an election to receive common shares
of the surviving corporation has not been made and (ii) shares of Class B Common
Stock will receive additional shares on a pro rata basis.
Upon the Merger, all issued and outstanding shares of capital stock of
Centennial, other than shares owned by Acquisition or Centennial and Dissenting
Shares (as hereinafter defined), will be converted as follows: (i) each
outstanding share of Class A Common Stock will, pursuant to each holder's
election and subject to proration, be converted into the right to receive either
(a) one common
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share of the surviving corporation or (b) $41.50 in cash; (ii) all outstanding
shares of Class B Common Stock will be converted into the right to receive
$41.50 per share in cash, provided, that if the aggregate number of common
shares of the surviving corporation elected to be received by the holders of
Class A Common Stock is less than a number of shares equal to 7.1% of the common
shares of the surviving corporation outstanding immediately after the Merger,
then a number of shares of Class B Common Stock equal to a portion of such
shortfall will be converted into common shares of the surviving corporation on a
pro rata basis with shares of Class A Common Stock with respect to which an
election to receive common shares of the surviving corporation has not been
made; and (iii) all outstanding shares of (x) Convertible Preferred Stock, par
value $0.01, of the Company and (y) Second Series Convertible Preferred Stock,
par value $0.01, of the Company will be converted into the right to receive
$41.50 per share in cash on an as-converted basis. The record date for the
determination of your status as a holder of shares of the Company was December
4, 1998.
Pursuant to the Stockholder Agreement, dated as of July 2, 1998, between
Century Communications Corp. ('Century') and Acquisition, Century, Centennial's
principal stockholder, agreed to vote its shares of the Company in favor of the
Merger so long as the Merger Agreement remains in effect. On December 4, 1998,
Century executed a written stockholder's consent in lieu of meeting to approve
the Merger.
As of November 20, 1998, Century had an approximate 33% common stock
interest and an approximate 74% voting interest in the Company through ownership
of approximately 81.2% of the issued and outstanding shares of Class B Common
Stock of the Company which have disproportionate votes per share (15 votes per
share). Century also owns 100% of the issued and outstanding shares of Second
Series Convertible Preferred Stock of the Company. Century does not own any
shares of Class A Common Stock, all of which are publicly held. Due to their
positions with and ownership of stock of Century, Leonard Tow, Chairman of the
Board and Chief Executive Officer of Century, and his wife, Claire L. Tow, a
Senior Vice President and director of Century, may be deemed to own beneficially
together a majority voting interest in the Company.
Since Century controls, on a fully diluted basis, more than a majority of
the outstanding votes of Centennial required to approve the Merger, no further
vote is necessary to approve the Merger. WE ARE NOT ASKING YOU FOR A PROXY OR A
WRITTEN CONSENT AND YOU ARE REQUESTED NOT TO SEND US A PROXY OR A WRITTEN
CONSENT. As we explain in this Information Statement/Prospectus, however,
completion of the Merger is still subject to certain conditions, including the
funding of committed financing, which financing is no longer subject to any
material adverse change in relevant capital markets. Subject to the satisfaction
of the conditions to closing the Merger, we hope to complete the Merger in
January 1999. See 'The Merger -- Financing' and 'Certain Provisions of the
Merger Agreement -- Conditions to the Consummation of the Merger.'
Pursuant to the Merger Agreement, Acquisition has agreed that it will, for
at least three years after the effective time of the Merger, use reasonable best
efforts to cause the common stock of the surviving corporation to continue to be
listed on The Nasdaq National Market ('Nasdaq') and registered under the
Securities Exchange Act of 1934, as amended (the 'Exchange Act').
We are sending this Information Statement/Prospectus to all holders of
Class A Common Stock, Class B Common Stock, Convertible Preferred Stock and
Second Series Convertible Preferred Stock.
A holder of Class A Common Stock electing to receive common shares of the
surviving corporation must return the enclosed Form of Non-Cash Election
together with duly endorsed Centennial Class A Common Stock Certificates as
instructed in the Information Statement/Prospectus by 5:00 p.m., New York City
time, on January 6, 1999. See 'The Merger -- Non-Cash Election Procedure' for
instructions for stockholders electing to receive common shares of the surviving
corporation. Otherwise, stock certificates should be retained until letters of
transmittal are received after the effective time of the Merger. Stockholders
who fail to make any election will, subject to proration, have their shares
converted to cash. See 'The Merger -- Conversion/Receipt of Surviving
Corporation Shares; Procedures for Exchange of Certificates.'
ii
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If you have any questions or require additional copies of the Information
Statement/Prospectus and related materials, please contact American Stock
Transfer & Trust Company, Shareholder Department at (800) 937-5449 ext. 6820 or
(718) 921-8200.
-----------------------------
THIS TRANSACTION HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION (THE 'COMMISSION') OR ANY STATE SECURITIES REGULATOR, NOR
HAS THE COMMISSION PASSED UPON THE FAIRNESS OR MERITS OF SUCH TRANSACTION NOR
UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED IN THIS DOCUMENT. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
This Information Statement/Prospectus is dated December 8, 1998, and was
first mailed to stockholders of Centennial on or about December 8, 1998.
iii
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TABLE OF CONTENTS
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PAGE
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AVAILABLE INFORMATION...................................................................................... 1
CAUTIONARY STATEMENT REGARDING FORWARD LOOKING INFORMATION................................................. 2
SUMMARY.................................................................................................... 3
SELECTED HISTORICAL FINANCIAL INFORMATION OF CENTENNIAL.................................................... 10
PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED).................................................... 13
CERTAIN COMPANY PROJECTIONS................................................................................ 21
RISK FACTORS............................................................................................... 23
Risk Factors Relating to the Effects of the Merger; Receiving Common Stock of the Surviving
Corporation in the Merger Or Receiving Cash due to Proration......................................... 23
Control by the Equity Investors.................................................................. 23
Loss of Liquidity................................................................................ 23
Substantial Leverage; Common Stockholders' Deficit............................................... 24
Potential Dilution of Common Stock of the Surviving Corporation.................................. 25
Non-Cash Election and Proration into Cash; Possible Dividend Treatment........................... 25
Risk Factors Relating to the Company's Business....................................................... 25
Net Losses; Operating Losses; Interest Expense................................................... 25
Restrictive Covenants; Consequences of Default................................................... 25
Highly Competitive Industry...................................................................... 26
Highly Regulated Industry........................................................................ 27
New Industry; Developing and Changing Technologies; Subscriber Cancellations..................... 28
Acquisitions and Investments..................................................................... 28
Investment Interests; Capital Calls.............................................................. 28
APPROVAL OF THE MERGER..................................................................................... 29
Recommendation of the Board of Directors of the Company............................................... 29
Opinion of Donaldson, Lufkin & Jenrette............................................................... 29
Approval by Stockholders of the Company............................................................... 29
THE COMPANIES.............................................................................................. 30
Centennial............................................................................................ 30
Acquisition, WCAS and Blackstone...................................................................... 30
THE MERGER................................................................................................. 31
Background of the Merger.............................................................................. 31
Recommendation of the Board of Directors; Reasons for the Merger...................................... 37
Opinion of Donaldson, Lufkin & Jenrette............................................................... 39
Approval by Stockholders of the Company............................................................... 44
Merger Consideration.................................................................................. 44
Non-Cash Election..................................................................................... 45
Non-Cash Election Procedure........................................................................... 48
Acquisition Common Stock.............................................................................. 48
Effective Time of the Merger.......................................................................... 49
Conversion/Receipt of Surviving Corporation Shares; Procedures for Exchange of Certificates........... 49
Fractional Shares..................................................................................... 50
Conduct of Business Pending the Merger................................................................ 50
Accounting Treatment.................................................................................. 50
Certain Effects of Recapitalization................................................................... 50
Federal Income Tax Consequences....................................................................... 50
Effect on Options and Employee Benefit Matters........................................................ 54
Interests of Certain Persons in the Merger............................................................ 54
Resale of Surviving Corporation Shares Following the Merger........................................... 55
Financing............................................................................................. 55
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iv
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REGULATORY APPROVALS....................................................................................... 58
FCC Approval.......................................................................................... 58
State PUCs............................................................................................ 58
HSR Act and Antitrust Matters......................................................................... 58
DESCRIPTION OF CAPITAL STOCK OF THE COMPANY................................................................ 59
DESCRIPTION OF THE CAPITAL STOCK OF THE SURVIVING CORPORATION.............................................. 60
Surviving Corporation Common Stock.................................................................... 60
Certain Provisions of the Surviving Corporation's Certificate of Incorporation and Bylaws............. 60
Statutory Business Combination Provision.............................................................. 61
Transfer Agent and Registrar.......................................................................... 61
CERTAIN PROVISIONS OF THE MERGER AGREEMENT................................................................. 62
The Merger............................................................................................ 62
Representations and Warranties........................................................................ 62
Certain Covenants of the Company...................................................................... 63
Certain Covenants of Acquisition...................................................................... 64
Certain Covenants of Acquisition and the Company...................................................... 65
Stock and Employee Benefit Plans...................................................................... 67
Conditions to the Consummation of the Merger.......................................................... 67
Termination of the Merger Agreement................................................................... 68
Effect of Termination................................................................................. 69
Fees and Expenses..................................................................................... 69
Amendment and Waiver.................................................................................. 70
Charter Documents of Centennial Following the Merger.................................................. 70
CERTAIN STOCKHOLDER ARRANGEMENTS........................................................................... 71
THE STOCKHOLDER AGREEMENT.................................................................................. 71
Voting................................................................................................ 72
Transfer Restrictions................................................................................. 72
No Solicitation....................................................................................... 72
Other Agreements...................................................................................... 72
Termination........................................................................................... 73
MANAGEMENT OF CENTENNIAL................................................................................... 74
MARKET PRICE OF AND DIVIDENDS ON CENTENNIAL COMMON SHARES.................................................. 76
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS, DIRECTORS AND MANAGEMENT.................................. 77
APPRAISAL RIGHTS OF DISSENTING STOCKHOLDERS................................................................ 81
EXPERTS.................................................................................................... 83
LEGAL COUNSEL.............................................................................................. 83
STOCKHOLDER PROPOSALS...................................................................................... 83
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE............................................................ 83
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APPENDICES
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APPENDIX A Agreement and Plan of Merger, dated as of July 2, 1998
APPENDIX B Amendment to the Agreement and Plan of Merger, dated as of November 29, 1998
APPENDIX C Opinion of Donaldson, Lufkin & Jenrette Securities Corporation, dated November 29, 1998
APPENDIX D Stockholder Agreement, dated as of July 2, 1998
APPENDIX E Section 262 of the General Corporation Law of the State of Delaware
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v
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NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS, OTHER THAN AS CONTAINED IN THIS INFORMATION
STATEMENT/PROSPECTUS, IN CONNECTION WITH THE MERGER, INCLUDING A STOCKHOLDER'S
ELECTION WHETHER TO RECEIVE SHARES OF THE SURVIVING CORPORATION IN CONNECTION
WITH THE MERGER, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST
NOT BE RELIED ON AS HAVING BEEN AUTHORIZED BY CENTENNIAL OR ACQUISITION. THIS
INFORMATION STATEMENT/PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY THE SECURITIES TO WHICH IT RELATES IN ANY
JURISDICTION IN WHICH, OR TO ANY PERSON TO WHOM, IT IS UNLAWFUL TO MAKE SUCH AN
OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS INFORMATION
STATEMENT/PROSPECTUS NOR ANY OFFER OR SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
INFORMATION SET FORTH HEREIN OR IN THE AFFAIRS OF THE COMPANY SINCE THE DATE
HEREOF.
AVAILABLE INFORMATION
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 and information Statement/Prospectus and other
information with the Commission. Reports, proxy and information
Statement/Prospectuses and other information filed by the Company with the
Commission can be inspected and copied at the public reference facilities
maintained by the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549 and at the web site (http://www.sec.gov) maintained
by the Commission, or at its regional offices located at 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661, and 7 World Trade Center, Suite
1300, New York, New York 10048. 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. Shares of Class A Common Stock of
the Company are listed on The Nasdaq National Market ('Nasdaq'). Reports and
other information concerning Centennial can also be inspected at the offices of
the National Association of Securities Dealers, Inc., 1735 K Street, N.W.,
Washington, D.C. 20006.
This Information Statement/Prospectus also constitutes a prospectus of the
Company filed as part of a Registration Statement on Form S-4 (the 'Registration
Statement') under the Securities Act of 1933, as amended (the 'Securities Act').
This Information Statement/Prospectus omits certain information contained in the
Registration Statement and the exhibits thereto. Reference is made to the
Registration Statement and related exhibits for further information with respect
to the Company and the issuance of common shares of the surviving corporation.
Statements contained herein concerning the contents of any document referred to
herein are qualified by reference to the copy of such document filed as an
exhibit to the Registration Statement or otherwise filed with the Commission.
1
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CAUTIONARY STATEMENT REGARDING FORWARD LOOKING INFORMATION
This Information Statement/Prospectus includes 'forward-looking statements'
within the meaning of various provisions of the Securities Act and the Exchange
Act, including, without limitation, statements under 'Certain Company
Projections,' 'The Companies' and 'The Merger -- Background of the Merger.' All
statements included in this Information Statement/Prospectus, other than
statements of historical facts, that address activities, events or developments
that the Company expects or anticipates will or may occur in the future,
including such things as future capital expenditures (including the amount and
nature thereof), business strategy and measures to implement strategy,
competitive strengths, goals, expansion and growth of the Company's business and
operations, plans, references to future success and other such matters are
forward-looking statements. Such statements represent the Company's reasonable
judgment on the future and are subject to risks and uncertainties that could
cause the Company's actual results and financial position to differ materially.
Such factors include, but are not limited to: a change in economic conditions in
the Company's markets which adversely affects the level of demand for wireless
services; greater than anticipated competition resulting in price reductions,
new product offerings or higher customer acquisition costs; better than expected
customer growth necessitating increased investment in network capacity;
increased cellular fraud; the impact of new business opportunities requiring
significant initial investments; and the impact of deployment of new
technologies on capital spending. All forward-looking statements contained in
this Information Statement/Prospectus are qualified in their entirety by this
cautionary statement. The Company does not intend to update or otherwise revise
the forward-looking statements to reflect events or circumstances after the date
of this Information Statement/Prospectus or to reflect the occurrence of
unanticipated events.
2
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SUMMARY
This Summary is a summary of, and qualified in its entirety by, the more
detailed information contained elsewhere in this Information
Statement/Prospectus, its Appendices and the documents incorporated by reference
or otherwise referred to in it. STOCKHOLDERS OF THE COMPANY ARE URGED TO READ
THIS ENTIRE INFORMATION STATEMENT/PROSPECTUS CAREFULLY, INCLUDING THE APPENDICES
AND OTHER DOCUMENTS.
APPROVAL OF THE MERGER
The board of directors of the Company (the 'Board' or the 'Board of
Directors'), after careful consideration and based upon its determination that
the Merger is in the best interests of the Company and its stockholders,
unanimously approved the Merger at a special meeting of the Board on November
29, 1998. On November 19, 1998 and again on November 29, 1998, Donaldson, Lufkin
& Jenrette Securities Corporation, the Company's financial advisor, delivered
its oral opinion, confirmed in writing as of November 29, 1998, to the Board of
Directors to the effect that, as of such date and based upon the assumptions
made, matters considered and limits of review set forth in such opinion, the
proposed consideration to be received by the holders of all issued and
outstanding shares of capital stock of the Company (the 'Shares'), other than by
affiliates of the Company, in the Merger is fair from a financial point of view
to such holders. Pursuant to the Stockholder Agreement, the Company's principal
stockholder, Century, agreed to vote its Shares of the Company in favor of the
Merger so long as the Merger Agreement remains in effect. On December 4, 1998,
Century executed a written stockholder's consent in lieu of meeting to approve
the Merger. Since Century controls, on a fully diluted basis, more than a
majority of the outstanding votes of the Company required to approve the Merger,
no further vote is necessary to approve the Merger. See 'Approval Of The
Merger,' 'The Merger -- Background of the Merger,' ' -- Recommendation of the
Board of Directors; Reasons for the Merger,' ' -- Opinion of Donaldson, Lufkin &
Jenrette,' ' -- Approval by Stockholders of the Company' and 'The Stockholder
Agreement.'
THE COMPANIES
Centennial. Centennial is primarily engaged in the ownership and operation
of wireless telephone systems. The Company's current wireless telephone
interests represent approximately 10.8 million Net Pops (as hereinafter
defined). The Company's wireless telephone systems, which include systems
utilizing both cellular and personal communications service ('PCS') licenses,
provide communications services to vehicle-installed ('mobile'), ready-to-carry
('transportable') and hand-held ('portable') wireless telephones. Approximately
5.8 million of these Net Pops are represented by the Company's wireless
telephone systems located in the continental United States. Approximately 3.8
million Net Pops represents the Company's wireless telephone system in the
Commonwealth of Puerto Rico. In addition, the Company owns minority interests,
representing approximately 1.2 million Net Pops, in certain other cellular
operations controlled and managed by other cellular providers. Centennial was
organized in 1988. The Company's principal executive offices are located at 50
Locust Avenue, New Canaan, Connecticut 06840. The Company's principal corporate
office is located at 1305 Campus Parkway, Neptune, New Jersey 07753. Its
telephone number is (203) 972-2000.
Acquisition, WCAS and Blackstone. Acquisition is a Delaware corporation
organized at the direction of WCAS, a Delaware limited partnership, for the
purpose of effecting the Merger of Acquisition with and into Centennial. The
principal executive office of Acquisition is located at c/o Welsh, Carson,
Anderson & Stowe VIII, L.P., 320 Park Avenue, Suite 2500, New York, New York
10022. Its telephone number is (212) 893-9500.
WCAS is a private investment partnership that was formed in 1998. Since
1979, WCAS and its affiliated investment partnerships have completed over eighty
management buyouts concentrated in the healthcare and information services
industries. Its principal executive office is located at 320 Park Avenue, Suite
2500, New York, New York 10022. Its telephone number is (212) 893-9500.
3
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Certain affiliates of Blackstone Capital Partners, L.P. (collectively,
'Blackstone') have agreed, subject to certain conditions, to acquire equity
interests in Acquisition prior to the Merger. Blackstone is one of the leading
firms engaged in institutional private equity investing. The principal offices
of Blackstone are located at 345 Park Avenue, New York, New York, 10154;
telephone number (212) 935-2626.
WCAS, Blackstone and certain of their respective affiliates and certain
other investors are hereinafter collectively referred to as the 'Equity
Investors.'
THE MERGER
At the Effective Time (as hereinafter defined), Acquisition will be merged
with and into Centennial and Centennial will continue as the surviving
corporation (the 'Surviving Corporation') in the Merger. Subject to the effects
of proration as described herein, pursuant to the Merger Agreement, outstanding
shares of Class A Common Stock, par value $0.01, of the Company (the 'Common
Shares') will be converted into the right to receive $41.50 per share in cash
(the 'Cash Election Price') or to receive common shares of the Surviving
Corporation (the 'Surviving Corporation Shares') representing up to 7.1% of the
Surviving Corporation Shares outstanding immediately after the Merger (each, an
'Electing Share'). Outstanding shares of Class B Common Stock, par value $0.01,
of the Company (the 'Class B Shares') will be converted into the right to
receive $41.50 in cash; provided, that if the aggregate number of Surviving
Corporation Shares elected to be received by the holders of Common Shares is
less than 7.1% of the common shares of the Surviving Corporation outstanding
immediately after the Merger, then a number of Class B Shares equal to a portion
of such shortfall will be converted into Surviving Corporation Shares on a pro
rata basis with Common Shares other than Electing Shares. All outstanding shares
of Convertible Preferred Stock par value $0.01, of the Company (the 'Convertible
Preferred Shares') and Second Series Convertible Stock, par value $0.01, of the
Company (the 'Second Series Convertible Preferred Shares' and, together with the
Convertible Preferred Shares, the 'Convertible Preferred Stock') will be
converted into the right to receive $41.50 in cash on an as-converted basis. The
following Common Shares are not subject to conversion pursuant to the Merger:
fractional shares that will be converted to cash; Dissenting Shares, which may
receive appraisal rights; and Common Shares held by the Company as treasury
stock, owned by any Subsidiary (as hereinafter defined) or held by Acquisition
(the 'Canceled Shares'), which Shares will be canceled and no payment shall be
made with respect thereto.
Each holder of Common Shares may elect to receive the Cash Election Price
with respect to some of the stockholder's Common Shares and Surviving
Corporation Shares with respect to other Common Shares, provided that the
aggregate number of Surviving Corporation Shares to be received at the Effective
Time by all existing holders must equal 7.1% of the common shares of the
Surviving Corporation outstanding immediately after the Effective Time (the
'Non-Cash Election Number').
Because existing holders of common stock of the Company must receive in the
Merger an amount of Surviving Corporation Shares equal to 7.1% of the common
shares of the Surviving Corporation outstanding immediately after the Effective
Time, holders of Common Shares who do not elect to receive any shares and
holders of Class B Shares may, due to proration, be required to receive some
Surviving Corporation Shares. In addition, holders of Common Shares who elect to
receive shares may, due to proration, receive Surviving Corporation Shares and
receive cash in amounts which vary from the amounts such holders elected.
Immediately following the Merger, the Surviving Corporation intends to
effect a stock split if necessary to comply with the Nasdaq National Market
Maintenance Standards. The Surviving Corporation would make appropriate
adjustments to the number of shares of its common stock outstanding following
the Merger to reflect the stock split.
4
<PAGE>
<PAGE>
NON-CASH ELECTION
Holders of Common Shares will be entitled to make an unconditional election
(a 'Non-Cash Election'), on or prior to the Election Date (as defined below), to
receive fully paid and nonassessable Surviving Corporation Shares. Stockholders
who do not make any election will, subject to proration, have their shares
converted to cash. If, however, the number of Electing Shares exceeds the
Non-Cash Election Number, then (i) the number of Electing Shares to be converted
into the right to receive Surviving Corporation Shares will be determined by
multiplying the total number of Electing Shares covered by a holder's Non-Cash
Election by a proration factor determined by dividing the Non-Cash Election
Number by the total number of Electing Shares; (ii) such number of Electing
Shares will be so converted; and (iii) each Class B Share will be converted into
an amount in cash equal to the Cash Election Price. All Electing Shares, other
than those shares converted into the right to receive Surviving Corporation
Shares as described in the immediately preceding sentence, will be converted
into cash (on a consistent basis among stockholders who made the Non-Cash
Election, pro rata to the number of shares as to which they made such election)
as if such shares were not Electing Shares.
If the number of Electing Shares is less than the Non-Cash Election Number,
then (i) all Electing Shares will be converted into the right to receive
Surviving Corporation Shares in accordance with the Merger Agreement; (ii) (A)
additional Common Shares will be converted into the right to receive Surviving
Corporation Shares, which number of additional shares will be determined by
multiplying the total number of Common Shares outstanding at the Effective Time,
other than Canceled Shares, Electing Shares and Dissenting Shares, by a
proration factor (the 'Shortfall Proration Factor') determined by dividing (x)
the difference between the Non-Cash Election Number and the number of Electing
Shares by (y) the total number of Common Shares outstanding at the Effective
Time, other than Canceled Shares, Electing Shares and Dissenting Shares and
including, as if they had been converted into Common Shares, all Class B Shares
issued and outstanding at the Effective Time, and (B) such additional Common
Shares will be converted into the right to receive Surviving Corporation Shares
(on a consistent basis among holders of such shares, pro rata based on the
number of such shares held by each stockholder); and (iii) the Class B Shares
issued and outstanding immediately prior to the Effective Time will be converted
into (A) the right to receive a number of Surviving Corporation Shares, after
conversion of the Class B Shares into Common Shares, equal to the Shortfall
Proration Factor multiplied by the total number of Class B Shares issued and
outstanding immediately prior to the Effective Time, and (B) an amount in cash
equal to the Cash Election Price multiplied by the total number of Class B
Shares issued and outstanding immediately prior to the Effective Time less the
aggregate number of Surviving Corporation Shares received pursuant to clause
(iii)(A) above. See 'The Merger -- Non-Cash Election.'
If a stockholder elects to make a Non-Cash Election and receives cash as a
result of the proration procedures described in the immediately preceding
paragraph, such stockholder may receive dividend treatment (rather than capital
gain treatment) for any cash received in the Merger as a result of such
proration procedures. See 'Risk Factors -- Risk Factors Relating to the Effects
of the Merger; Receiving Common Stock of the Surviving Corporation in the Merger
or Receiving Cash due to Proration -- Non-Cash Election and Proration into Cash;
Possible Dividend Treatment' and 'The Merger -- Federal Income Tax
Consequences.'
STOCKHOLDERS THAT DO NOT MAKE A NON-CASH ELECTION WILL RECEIVE AN AMOUNT
EQUAL TO $41.50 IN CASH FROM THE COMPANY FOLLOWING THE MERGER FOR EACH COMMON
SHARE (OTHER THAN CANCELED SHARES AND DISSENTING SHARES) HELD BY SUCH
STOCKHOLDER, SUBJECT TO THE PRORATION PROCEDURES DESCRIBED ABOVE. SEE 'THE
MERGER -- NON-CASH ELECTION' FOR EXAMPLES ILLUSTRATING THE POTENTIAL EFFECTS OF
PRORATION.
NON-CASH ELECTION PROCEDURE
Holders of Common Shares electing to receive Surviving Corporation Shares
must properly complete and sign the Non-Cash Election Form (the 'Form of
Election') accompanying this Information Statement/Prospectus, and each Form of
Election, together with all certificates representing Common Shares as to which
such Non-Cash Election is being made, duly endorsed in blank or
5
<PAGE>
<PAGE>
otherwise in form acceptable for transfer on the books of the Company (or by
appropriate guarantee of delivery, as set forth in such Form of Election), must
be received by American Stock Transfer & Trust Company (the 'Exchange Agent') at
one of the addresses listed on the Form of Election by 5:00 p.m., New York City
time, on January 6, 1999 (the 'Election Date'). A Non-Cash Election may be
revoked and certificates for Electing Shares withdrawn by written notice duly
executed and received by the Exchange Agent prior to the Election Date. After
the Election Date, shares for which a Non-Cash Election has been made may not be
withdrawn. Due to the requirement to obtain regulatory approval of the Merger
and satisfy all other conditions to the Merger, a period of time could elapse
between the Election Date and the Effective Time. See 'The Merger -- Non-Cash
Election Procedure' and 'Certain Provisions of the Merger
Agreement -- Conditions to the Consummation of the Merger.'
FRACTIONAL SHARES
Fractional shares will not be issued in the Merger. Holders of Common
Shares otherwise entitled to receive fractional Surviving Corporation Shares
following the Merger will receive cash or receive an additional Surviving
Corporation Share in lieu of such fractional share as described in 'The
Merger -- Fractional Shares.'
CONDITIONS TO THE CONSUMMATION OF THE MERGER
Conditions to the Obligations of Each Party. The respective obligations of
Acquisition and the Company to consummate the Merger are subject to the
satisfaction, at or before the Effective Time, of certain conditions, including,
without limitation, obtaining the requisite approval of relevant government
authorities and the absence of any injunction or other legal restraint or
prohibition preventing the consummation of the Merger.
Conditions Precedent to the Obligations of Acquisition. The obligation of
Acquisition to consummate the Merger is also subject to additional conditions,
including, without limitation, the Company obtaining the FCC Transfer Approvals
(as hereinafter defined) by Final Order (as hereinafter defined) from the
Federal Communications Commission (the 'FCC') approving the transfer of control
of the Company to the Equity Investors, the Company consummating the Debt Offers
(as hereinafter defined), and Acquisition obtaining the Financing (as
hereinafter defined) substantially on the terms contemplated by the Financing
Documents (as hereinafter defined), or alternative financing on terms no less
favorable than those set forth in the Financing Documents at or prior to the
Effective Time. The Financing commitments are not subject to any material
adverse change in relevant capital markets or to syndication of the commitments.
Through December 1, 1998, approximately 99% of the Company's public debt
was tendered and consents were delivered to the Company pursuant to the Debt
Offers commenced on September 8, 1998. The Company has extended the tender offer
expiration date for the Debt Offers to January 4, 1999. In addition, on
September 25, 1998, the Company's request for early termination of the waiting
period provided by certain rules of the premerger notification rules under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the 'HSR
Act'), was granted. The Company has also completed filing the applications
seeking FCC Transfer Approvals (as hereinafter defined) of the Merger. The last
of these applications that are material to the transaction was placed on public
notice by the FCC on August 17, 1998 and approved for grant by the FCC on
October 9, 1998, which approval became final on November 18, 1998.
ACCOUNTING TREATMENT; CERTAIN EFFECTS OF RECAPITALIZATION
Receipt by existing stockholders of 7.1% of the common shares of the
Surviving Corporation issued and outstanding immediately after the Merger will
enable such stockholders to continue to participate in the equity of the Company
and is intended to permit the treatment of the Merger as a recapitalization for
financial reporting purposes. Accordingly, the Merger will have no impact on the
historical basis of the Company's assets and liabilities for financial reporting
purposes, one result of
6
<PAGE>
<PAGE>
which will be a reduction in common stockholders' equity of the Company from
approximately $42.2 million to a deficit of approximately $581.3 million. See
'Risk Factors -- Risk Factors Relating to the Effects of the Merger; Receiving
Common Stock of the Surviving Corporation in the Merger Or Receiving Cash due to
Proration -- Substantial Leverage; Common Stockholders' Deficit.'
RISK FACTORS
Holders of Shares of the Company should carefully consider the following
factors before making a decision to either receive the Cash Election Price or
Surviving Corporation Shares in connection with the Merger. In addition to the
risk factors summarized below, holders of Common Shares should consider that the
effects of proration may result in stockholders receiving consideration which is
different from the consideration specified in their respective elections. See
'The Merger -- Merger Consideration.'
RISK FACTORS RELATING TO THE EFFECTS OF THE MERGER; RECEIVING COMMON STOCK OF
THE SURVIVING CORPORATION IN THE MERGER OR RECEIVING CASH DUE TO PRORATION
As a result of the Merger:
the Equity Investors will have control of the Company, including the
ability to elect directors;
there will be a substantial decrease in the number of common shares
held by holders other than the Equity Investors, which is expected to
result in a substantial decrease in the liquidity of the common shares;
the terms of the Financing are expected to subject the Company to
significant operating and financial restrictions, to increase substantially
the leverage of the Company and to result in a substantial decrease in the
liquidity of the common shares;
following the Merger, existing Options (as hereinafter defined) may
remain outstanding and the Company may otherwise permit management to
participate in the equity of the Company, which could dilute the ownership
interest of holders of common shares; and
the risk of proration, as described in greater detail herein, may
subject holders of Shares to dividend treatment for tax purposes with
respect to cash received in the Merger.
RISK FACTORS RELATING TO THE COMPANY'S BUSINESS
The Company's business entails certain risks relating to:
historical operating losses and net losses;
certain credit agreement restrictions;
the highly competitive nature of the wireless communications
industry;
the highly regulated nature of the wireless communications industry;
the limited operating history and constantly changing landscape of
the wireless communications industry and the substantial rate of subscriber
cancellations;
the uncertainty of opportunities for growth through acquisitions and
investments; and
the limited ability to direct the operations of systems in which the
Company has an investment interest as a limited partner.
See 'Risk Factors' below for a more detailed discussion of the above
mentioned and other risk factors.
FEDERAL INCOME TAX CONSEQUENCES
It is generally anticipated that each stockholder will recognize capital
gain or loss equal, in each case, to the difference between the cash proceeds
received pursuant to the Merger and the stockholder's adjusted tax basis in the
Shares surrendered in exchange therefor. It is possible, however, that if the
7
<PAGE>
<PAGE>
Merger does not result in an adequate reduction in the common stock ownership of
a stockholder, by reason of such stockholder's receipt of Surviving Corporation
Shares or the attribution of Surviving Corporation Shares from a related party,
then, to the extent the Company has sufficient earnings and profits, a
substantial portion of the cash received by such stockholder may be treated as a
dividend, taxable as ordinary income. A stockholder will not recognize any gain
or loss as a result of the Merger to the extent such stockholder receives
Surviving Corporation Shares or receives Common Shares in exchange for Class B
Shares.
For a more detailed summary of the material U.S. federal income tax
consequences of the Merger, including consequences to certain foreign
stockholders, and backup withholding and information reporting requirements, see
'The Merger -- Federal Income Tax Consequences.'
BECAUSE CERTAIN TAX CONSEQUENCES OF THE MERGER MAY VARY DEPENDING ON THE
PARTICULAR CIRCUMSTANCES OF EACH STOCKHOLDER, IT IS RECOMMENDED THAT
STOCKHOLDERS CONSULT THEIR TAX ADVISORS CONCERNING THE FEDERAL (AND ANY STATE,
LOCAL AND FOREIGN) TAX CONSEQUENCES OF THE MERGER IN THEIR PARTICULAR
CIRCUMSTANCES.
TREATMENT OF COMPANY STOCK OPTIONS
It is anticipated that each Option will be exercised or canceled pursuant
to its terms or canceled in exchange for cash equal to the difference between
$41.50 and the exercise price of each Option prior to the Effective Time. Each
Option granted under the Option Plans (as hereinafter defined) that is not
exercised or canceled will remain outstanding immediately following the
Effective Time and such Options will be subject to adjustment pursuant to the
terms of the Option Plans. As a condition to closing, the number of Common
Shares purchasable upon the exercise of Options that have not been exercised or
canceled may not exceed 750,000. See 'The Merger -- Interests of Certain Persons
in the Merger' and 'Certain Provisions of the Merger Agreement -- Conditions to
the Consummation of the Merger.'
INTERESTS OF CERTAIN PERSONS IN THE MERGER
Certain directors and executive officers of the Company may have interests,
described herein, that present them with potential conflicts of interest in
connection with the Merger. See 'The Merger -- Interests of Certain Persons in
the Merger.' The Board of Directors was aware of the potential conflicts
described below and considered them in addition to the other matters described
under 'The Merger -- Recommendation of the Board of Directors; Reasons for the
Merger.'
Common Shares held by officers and directors of the Company, subject to any
Non-Cash Election made with respect thereto, will be converted into the right to
receive the same consideration as Common Shares held by other stockholders.
Pursuant to the Merger Agreement, the Company has agreed to maintain for
six years after the Effective Time all rights to indemnification existing in
favor of all present directors and officers of the Company. See 'Certain
Provisions of The Merger Agreement -- Certain Covenants of Acquisition --
Indemnification.'
TERMINATION OF THE MERGER AGREEMENT
The Merger Agreement may be terminated and the Merger may be abandoned at
any time prior to the Effective Time, notwithstanding approval thereof by the
stockholders of the Company, by the mutual written consent of Acquisition and
the Company or by either party if (i) any governmental entity (as hereinafter
defined) has enjoined, restrained or otherwise prohibited the Merger, (ii) the
other party is in breach of the Merger Agreement and has not cured within 30
days, (iii) the Company has entered into a definitive written agreement with
respect to an Acquisition Transaction (as hereinafter defined) with a third
party, or a third party has commenced a tender offer which, in either case, the
Board of Directors of the Company believes in good faith is more favorable to
the Company's stockholders than the transactions contemplated by the Merger
Agreement, (iv) if the Board shall have withdrawn, modified or amended in any
manner adverse to Acquisition or the stockholders of
8
<PAGE>
<PAGE>
Acquisition its approval or recommendation of the Merger Agreement and the
Merger, or approved, recommended or endorsed any proposal for an Acquisition
Transaction with a third party, or (v) if such party has not breached any of its
obligations under the Merger Agreement, on March 31, 1999.
EFFECT OF TERMINATION
If the Merger Agreement is terminated, it shall become void and of no
effect with no liability on the part of any party or its respective directors,
officers or stockholders, except that the agreements relating to confidentiality
and fees and expenses shall survive the termination of the Merger Agreement, and
neither party shall be relieved from liability for any breach of the Merger
Agreement or the Confidentiality Agreement (as hereinafter defined).
FEES AND EXPENSES
Whether or not the Merger is consummated, all costs and expenses incurred
in connection with the Merger, the Merger Agreement and the transactions
contemplated by the Merger Agreement shall be paid by the party incurring such
expenses. In the event the Company or Acquisition shall have terminated the
Merger Agreement because the Company has entered into a definitive agreement
with respect to an Acquisition Transaction with a third party or a third party
has commenced a tender offer, then the Company shall simultaneously with such
termination reimburse Acquisition for the documented fees and expenses of
Acquisition related to and the transactions contemplated under the Merger
Agreement (including, without limitation, any fees and expenses of counsel,
accountants and other professional advisors, commitment fees and other financing
costs and interest, underwriting discounts, debt tender payments and fees,
expenses and other costs of consummating and unwinding any issuance of
securities) (subject to a maximum of $25 million) and simultaneously with such
termination pay Acquisition a termination fee of $40 million.
APPRAISAL RIGHTS
Holders of Common Shares, Class B Shares, Convertible Preferred Shares and
Second Series Convertible Preferred Shares are entitled to appraisal rights
under Section 262 of the General Corporation Law of the State of Delaware,
provided that they comply with the conditions established by such section. See
'Appraisal Rights of Dissenting Stockholders.'
REGULATORY APPROVALS
In order to consummate the Merger, the FCC must approve the transfer of
control of the Company to the Equity Investors. The Company and the Equity
Investors have completed filing joint applications seeking these approvals. The
FCC considers whether the Equity Investors are qualified to control the
Company's FCC licenses and authorizations and whether the public interest,
convenience and necessity will be served by the transfer of control to the
Equity Investors. The Company and WCAS believe that the joint applications
demonstrate compliance with these standards. The last of these applications that
are material to the transaction was placed on public notice by the FCC on August
17, 1998 and approved for grant by the FCC on October 9, 1998, which approval
became final on November 18, 1998. See 'Regulatory Approvals -- FCC Approval.'
Acquisition and the Company are required to seek such approvals from and
make such filings and reports with any state public service or public utilities
commission ('PUCs') and the Telecommunications Regulatory Board of Puerto Rico
that are necessary or required. The approval of any State PUCs or Puerto Rico
authorities is not a condition to the closing of the Merger. See 'Regulatory
Approvals -- State PUCs.'
The consummation of the Merger is subject to the Company and Acquisition
obtaining the requisite approvals from the Antitrust Division of the United
States Department of Justice and the Federal Trade Commission under the HSR Act,
which were obtained on September 25, 1998. See 'Regulatory Approvals -- HSR Act
and Antitrust Matters.'
9
<PAGE>
<PAGE>
SELECTED HISTORICAL FINANCIAL INFORMATION OF CENTENNIAL
The selected Statement of Operations information and Balance Sheet
information set forth below as of and for the five years ended May 31, 1998 has
been derived from the Company's audited consolidated financial statements. The
selected financial data for the three months ended August 31, 1998 are derived
from the unaudited financial statements of the Company, which, in the opinion of
the Company, reflect all adjustments necessary for a fair presentation of the
results for the unaudited periods. Operating results for the three months ended
August 31, 1998 are not necessarily indicative of results that may be achieved
for the fiscal year ending May 31, 1999. The pro forma consolidated statements
of operations for the fiscal year ended May 31, 1998 and the three months ended
August 31, 1998 give effect to the Merger and related transactions as if such
transactions were consummated as of June 1, 1997 and the pro forma balance sheet
data for the three months ended August 31, 1998 give effect to the Merger and
related transactions as if such transactions occurred as of August 31, 1998.
Such information should be read in conjunction with, and is qualified in its
entirety by, the consolidated financial statements and notes thereto
incorporated into this Information Statement/Prospectus. See 'Available
Information' and 'Incorporation of Certain Documents by Reference.'
<TABLE>
<CAPTION>
YEAR ENDED MAY 31,
----------------------------------------------------------------------
1998 PRO
FORMA 1998 1997 1996 1995 1994
--------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA
Revenues.............................. $ 235,816 $237,501 $151,023 $112,197 $ 85,419 $ 56,373
--------- -------- -------- -------- -------- --------
Cost of services and equipment sold... 54,818 54,818 38,228 26,129 22,152 13,424
Selling, general and administrative... 82,540 81,790 55,132 34,188 26,055 17,787
Depreciation and amortization......... 114,194 114,194 83,720 70,989 65,642 47,652
--------- -------- -------- -------- -------- --------
251,552 250,802 177,080 131,306 113,849 78,863
--------- -------- -------- -------- -------- --------
Operating loss........................ (15,736) (13,301) (26,057) (19,109) (28,430) (22,490)
Interest expense...................... 153,265 45,155 33,379 27,886 23,357 21,040
Gain on sale of assets................ 5 5 3,819 8,310 -- --
Income from equity investments........ 13,069 13,069 15,180 10,473 4,670 3,645
--------- -------- -------- -------- -------- --------
Loss before income tax benefit and
minority interest................... (155,927) (45,382) (40,437) (28,212) (47,117) (39,885)
Income tax benefit.................... (13,597) (13,597) (7,295) (11,596) (14,456) (11,780)
--------- -------- -------- -------- -------- --------
Loss before minority interest......... (142,330) (31,785) (33,142) (16,616) (32,661) (28,105)
Minority interest in (income) loss of
subsidiaries........................ (162) (162) (153) (15) (69) 321
--------- -------- -------- -------- -------- --------
Net loss.............................. $(142,492) $(31,947) $(33,295) $(16,631) $(32,730) $(27,784)
--------- -------- -------- -------- -------- --------
--------- -------- -------- -------- -------- --------
Dividend requirements on preferred
stock............................... $ -- $ 16,451 $ 15,948 $ 13,590 $ 12,634 $ 11,678
--------- -------- -------- -------- -------- --------
--------- -------- -------- -------- -------- --------
Loss applicable to common shares...... $(142,492) $(48,398) $(49,243) $(30,221) $(45,364) $(39,462)
--------- -------- -------- -------- -------- --------
--------- -------- -------- -------- -------- --------
Loss per common share -- basic and
diluted............................. $ (13.73) $ (1.85) $ (1.83) $ (1.13) $ (1.93) $ (3.28)
--------- -------- -------- -------- -------- --------
--------- -------- -------- -------- -------- --------
Weighted average number of basic
common shares outstanding during the
period.............................. 10,375,193 26,181,000 26,934,000 26,770,000 23,544,000 12,033,000
---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ----------
Deficiencies of earnings to fixed
charges............................. $(160,923) $(45,382) $(43,189) $(33,412) $(47,117) $(39,885)
--------- -------- -------- -------- -------- --------
--------- -------- -------- -------- -------- --------
</TABLE>
10
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<PAGE>
<TABLE>
<CAPTION>
AS OF MAY 31,
---------------------------------------------------------------
1998 1997 1996 1995 1994
---------- ---------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA
Total assets................................... $847,417 $844,850 $785,812 $844,384 $502,384
Long-term debt................................. 510,000 429,000 350,000 350,000 250,000
Redeemable preferred stock..................... 193,539 193,539 189,930 176,340 163,706
Common stockholders' equity.................... 40,409 112,882 160,006 188,831 24,143
</TABLE>
<TABLE>
<CAPTION>
AS OF MAY 31,
----------------------------------------------------------------
1998 1997 1996 1995 1994
---------- ---------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C>
WIRELESS POPS AND SUBSCRIBER DATA(1)(2)
Net Pops of Domestic Wireless Telephone
Systems and Puerto Rico Wireless
Telephone System....................... 9,616,000 9,616,000 9,431,000 5,412,100 3,941,000
Net Pops of minority owned systems....... 1,230,000 1,230,000 1,230,000 1,079,400 1,079,400
---------- ---------- ---------- --------- ---------
Total Net Pops...................... 10,846,000 10,846,000 10,661,000 6,491,500 5,020,400
---------- ---------- ---------- --------- ---------
---------- ---------- ---------- --------- ---------
Subscribers of Domestic Wireless
Telephone Systems and Puerto Rico
Wireless Telephone System.............. 322,200 203,900 135,000 85,900 49,000
Pro rata share of subscribers of minority
owned systems.......................... 122,000 105,000 83,000 57,900 42,000
---------- ---------- ---------- --------- ---------
Total subscribers................... 444,200 308,900 218,000 143,800 91,000
---------- ---------- ---------- --------- ---------
---------- ---------- ---------- --------- ---------
</TABLE>
- ------------
(1) 'Net Pops' means the estimate of the 1996 population of a Metropolitan
Statistical Area ('MSA') or Rural Service Area ('RSA'), as derived from the
1997 Paul Kagan Associates population estimates multiplied by the percentage
interest that the Company owns in the entity licensed by the Federal
Communications Commission to construct or operate a wireless telephone
system in that market.
(2) For the years ended May 31, 1995 and May 31, 1994, the number of Net Pops is
based on 1990 population figures of an MSA or RSA, as derived from the 1990
U.S. Census data.
11
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
THREE MONTHS ENDED AUGUST 31,
-------------------------------------------
(UNAUDITED)
1998 PRO
FORMA 1998 1997
----------- ----------- -----------
<S> <C> <C> <C>
STATEMENT OF OPERATIONS DATA
Revenues.............................................................. $ 77,446 $77,446 $ 52,189
----------- ----------- -----------
Cost of services and equipment sold................................... 14,915 14,915 11,955
Selling, general and administrative................................... 24,084 23,896 17,964
Depreciation and amortization......................................... 31,804 31,804 25,062
----------- ----------- -----------
70,803 70,615 54,981
----------- ----------- -----------
Operating income (loss)............................................... 6,643 6,831 (2,792)
Interest expense, net................................................. 38,662 11,131 10,041
Gain on sale of assets................................................ 9,556 9,556 5
Income from equity investments........................................ 3,649 3,649 4,206
----------- ----------- -----------
Income (loss) before income tax benefit and minority interest......... (18,814) 8,905 (8,622)
Income tax expense (benefit).......................................... 3,008 3,008 (1,971)
----------- ----------- -----------
Income (loss) before minority interest................................ (21,822) 5,897 (6,651)
Minority interest in income of subsidiaries........................... (242) (242) (135)
----------- ----------- -----------
Net income (loss)..................................................... $ (22,064) $ 5,655 $ (6,786)
----------- ----------- -----------
----------- ----------- -----------
Dividend requirements on preferred stock.............................. $ -- $ 4,113 $ 4,113
----------- ----------- -----------
----------- ----------- -----------
Income (loss) applicable to common shares............................. $ (22,064) $ 1,542 $ (10,899)
----------- ----------- -----------
----------- ----------- -----------
Income (loss) per common share -- basic and diluted................... $ (2.13) $ 0.06 $ (0.41)
----------- ----------- -----------
----------- ----------- -----------
Weighted average number of basic common shares outstanding during the
period.............................................................. 10,375,193 25,629,000 26,860,000
----------- ----------- -----------
----------- ----------- -----------
Excess (deficiencies) of earnings to fixed charges.................... $ (19,838) $ 8,905 $ (8,622)
----------- ----------- -----------
----------- ----------- -----------
</TABLE>
<TABLE>
<CAPTION>
AS OF AUGUST 31,
----------------------------------
1998 PRO
FORMA 1998 1997
---------- -------- --------
<S> <C> <C> <C>
BALANCE SHEET DATA
Total assets............................................................... $ 933,107 $850,756 $846,369
Long-term debt............................................................. 1,450,236 500,000 449,500
Redeemable preferred stock................................................. -- 193,539 193,539
Common stockholders' (deficiency) equity................................... (581,294) 42,156 97,871
</TABLE>
12
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PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
The following Pro Forma Consolidated Financial Statements have been derived
by the application of pro forma adjustments to the Company's historical
consolidated financial statements included herein. The pro forma consolidated
statement of operations for the fiscal year ended May 31, 1998 and the three
months ended August 31, 1998 give effect to the Merger and related transactions
as if such transactions were consummated as of June 1, 1997. The pro forma
consolidated balance sheet gives effect to the Merger and related transactions
as if such transactions had occurred as of August 31, 1998. The adjustments are
described in the accompanying notes. The Pro Forma Consolidated Financial
Statements should not be considered indicative of actual results that would have
been achieved had the Merger and related transactions been consummated on the
dates indicated and do not purport to indicate balance sheet data or results of
operations as of any future date or for any future period. The Pro Forma
Consolidated Financial Statements should be read in conjunction with the
Company's historical financial statements and the notes thereto included herein.
At the Effective Time, Acquisition will be merged with and into Centennial
and Centennial will continue as the surviving corporation in the Merger.
Acquisition was organized in connection with the Merger and has not carried on
any activities to date other than those incident to its formation and the
transactions contemplated by the Merger Agreement.
The pro forma adjustments were applied to the respective historical
consolidated financial statements to reflect and account for the Merger as a
recapitalization. Accordingly, the historical basis of the Company's assets and
liabilities will not be affected by the transaction.
13
<PAGE>
<PAGE>
PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF AUGUST 31, 1998
<TABLE>
<CAPTION>
AUGUST 31, 1998 PRO FORMA AUGUST 31, 1998
HISTORICAL ADJUSTMENTS(a) PRO FORMA
--------------- -------------- ---------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents........................... $ 29,385 $ (29,385) --
Restricted cash..................................... -- 60,000 $ 60,000
Accounts receivable................................. 41,787 -- 41,787
Inventory -- Phones and accessories................. 10,481 -- 10,481
Prepaid expenses and other current assets........... 2,271 -- 2,271
--------------- -------------- ---------------
Total current assets........................... 83,924 30,615 114,539
Property, plant and equipment -- net..................... 265,130 -- 265,130
Equity investments in wireless systems -- net............ 81,441 -- 81,441
Debt issuance costs -- net............................... 8,000 47,950 55,950
Cellular telephone licenses.............................. 223,126 -- 223,126
Personal communications service license -- net........... 60,043 -- 60,043
Goodwill................................................. 121,973 -- 121,973
Deferred Income Taxes.................................... -- 3,786 3,786
Other assets -- net...................................... 7,119 -- 7,119
--------------- -------------- ---------------
Total assets................................... $ 850,756 $ 82,351 $ 933,107
--------------- -------------- ---------------
--------------- -------------- ---------------
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
Current liabilities:
Accounts payable.................................... $ 10,586 -- $ 10,586
Accrued expenses and other current liabilities...... 77,460 $ (23,881) 53,579
--------------- -------------- ---------------
Total current liabilities...................... 88,046 (23,881) 64,165
Long term liabilities:
Long term debt...................................... 500,000 (500,000) --
Senior secured credit facility...................... -- 922,736 922,736
Senior subordinated notes........................... -- 370,000 370,000
Subordinated notes.................................. -- 157,500 157,500
Deferred income taxes............................... 27,015 (27,015) --
Preferred stock:
Preferred stock -- convertible redeemable........... 186,287 (186,287) --
Preferred stock -- second series convertible
redeemable........................................ 7,252 (7,252) --
Common stockholders' equity (deficiency):
Common stock -- class A............................. 167 (52) 115
Common stock -- class B............................. 105 (105) --
Additional paid in capital.......................... 353,915 61,900 415,815
Accumulated deficit................................. (278,583) (718,641) (997,224)
Class A shares in treasury.......................... (30,614) 30,614 --
Deferred compensation............................... (2,834) 2,834 --
--------------- -------------- ---------------
Total common stockholders' equity
(deficiency)................................. 42,156 (623,450) (581,294)
--------------- -------------- ---------------
Total liabilities and stockholders' equity
(deficiency)................................. $ 850,756 $ 82,351 $ 933,107
--------------- -------------- ---------------
--------------- -------------- ---------------
</TABLE>
See Notes to Pro Forma Consolidated Balance Sheet
14
<PAGE>
<PAGE>
NOTES TO PRO FORMA CONSOLIDATED BALANCE SHEET
The pro forma financial data have been derived by the application of pro
forma adjustments to the Company's historical financial statements as of the
date noted. The Merger will be accounted for as a recapitalization which will
have no impact on the historical basis of the Company's assets and liabilities.
The pro forma financial data assume that there are no dissenting stockholders to
the Merger.
(a) Pro forma adjustments to the Pro Forma Consolidated Balance Sheet are
summarized in the following table (dollars in thousands) and are described in
the notes that follow.
<TABLE>
<CAPTION>
REPAYMENT
OF EXISTING
DEBT AND
CONVERSION RETIRE PURCHASE PREFERRED TRANSACTION
OF CLASS B TREASURY PRICE OF COMPENSATION DIVIDENDS FEES AND
SHARES(1) SHARES(2) FINANCING(3) EQUITY(4) EXPENSES(5) ACCRUED(6) EXPENSES(7)
---------- --------- ------------ ----------- ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Cash and cash equivalents... -- -- $1,812,736 $(1,161,208) $(42,332) $(565,881) $ (72,700)
Restricted Cash............. -- 60,000 -- -- -- --
Deferred Income Taxes....... -- -- -- -- -- 3,786 --
Debt issuance costs......... -- -- -- -- -- (8,000) 55,950
Accrued expenses and other
current liabilities....... -- -- -- -- -- (23,881) --
Deferred tax liability...... (11,801) (15,214)
Long term debt.............. -- -- -- -- -- (500,000) --
Senior secured credit
facilities................ -- -- 922,736 -- -- -- --
Senior subordinated notes... -- -- 370,000 -- -- -- --
Subordinated notes.......... -- -- 157,500 -- -- -- --
Preferred
stock -- convertible
redeemable................ -- -- -- (186,287) -- -- --
Preferred stock -- second
series convertible
redeemable................ -- -- -- (7,252) -- -- --
Common stock -- class A..... $ 105 -- 91 (248) -- -- --
Common stock -- class B..... (105) -- -- -- -- -- --
Class A Shares in
Treasury.................. $30,614 -- -- -- -- --
Additional paid in
capital................... -- 422,409 (343,759) -- -- (16,750)
Deferred Compensation....... -- -- -- 2,834 --
Accumulated Deficit --
Increase (Decrease) in
R/E....................... -- (30,614) -- (623,662) (33,365) (31,000) --
<CAPTION>
TOTAL NET
ADJUSTMENT
----------
<S> <C>
Cash and cash equivalents... $(29,385)
Restricted Cash............. 60,000
Deferred Income Taxes....... 3,786
Debt issuance costs......... 47,950
Accrued expenses and other
current liabilities....... (23,881)
Deferred tax liability...... (27,015)
Long term debt.............. (500,000)
Senior secured credit
facilities................ 922,736
Senior subordinated notes... 370,000
Subordinated notes.......... 157,500
Preferred
stock -- convertible
redeemable................ (186,287)
Preferred stock -- second
series convertible
redeemable................ (7,252)
Common stock -- class A..... (52)
Common stock -- class B..... (105)
Class A Shares in
Treasury.................. 30,614
Additional paid in
capital................... 61,900
Deferred Compensation....... 2,834
Accumulated Deficit --
Increase (Decrease) in
R/E....................... (718,641)
</TABLE>
- ------------
(1) Adjustment represents conversion of existing Class B shares to Class A
shares.
(2) Represents the retirement of treasury shares.
(3) Sources and uses of cash for the recapitalization are as follows:
<TABLE>
<CAPTION>
(IN THOUSANDS)
<S> <C>
Sources:
Senior secured credit facility.................................... $ 922,736
Senior subordinated notes......................................... 370,000
Subordinated notes(i)............................................. 157,500
Common equity attached to subordinated notes(i)................... 22,500
Cash equity investment............................................ 400,000
----------------------
Total........................................................ $1,872,736
----------------------
----------------------
</TABLE>
15
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
(IN THOUSANDS)
<S> <C>
Uses:
Redemption of Common Shares....................................... $1,033,054
Redemption of Preferred Shares.................................... 128,154
Settlement of Options............................................. 42,332
Repurchase Existing Notes......................................... 350,000
Repayment of Existing Credit Facilities........................... 150,000
Debt Retirement Premium........................................... 42,000
Payment of Accrued Interest....................................... 11,543
Preferred Dividends Accrued....................................... 12,338
Interest Escrow for Senior Subordinated Notes..................... 60,000
Transaction Expenses.............................................. 72,700
Decrease in Balance Sheet Cash.................................... (29,385)
----------------------
Total........................................................ $1,872,736
----------------------
----------------------
</TABLE>
(i) Represents $180 million aggregate principal amount of subordinated
notes with 542,168 shares attached and issued to WCAS Capital
Partners III, L.P., an affiliate of WCAS. The principal amount of
the notes have therefore been discounted by $41.50 per share or by
an aggregate amount equal to $22,500,000.
(4) The adjustments represent the repurchase of common and preferred stock from
existing stockholders. Subsequent to the merger, existing shareholders will
own approximately 736,639 shares or 7.1% of the Surviving Corporation
without taking into account any stock split that may be necessary to comply
with Nasdaq National Market Maintenance Standards.
(5)The adjustments represent the following:
-- Compensation expense of $42,332 ($31,608 after related tax effect)
related to the repurchase of all outstanding stock options at the
difference between $41.50 per share and the exercise price of the
options, assuming the respective option holders agree to such repurchase.
-- Compensation expense of $2,834 ($1,757 after related tax effect) related
to the immediate vesting, at a change of control, of restricted stock
issued under the Company's 1993 Equity Incentive Plan (the 'Equity
Plan').
(6) The adjustments represent the repayment of existing indebtedness and related
accrued interest and preferred dividends accrued by the Company, including
an estimated debt retirement premium of $42,000 ($26,040 after related tax
effect), and assumes all note holders tender their Notes in the Debt Offers.
Such premium and unamortized deferred loan costs of $8,000 ($4,960 after
related tax effect) related to existing indebtedness will be written off as
an extraordinary charge upon early repayment of the existing indebtedness.
(7) The adjustment represents the estimated transaction fees and expenses of
$72,700. The portion of estimated transaction fees and expenses attributable
to the Secured Credit Facilities and Unsecured Notes totals $55,950 and will
be recorded as debt issuance costs and will be amortized over the expected
life of the debt to be issued. Such estimated debt issuance costs include
estimated fees and expenses payable to banks and related advisors. The
remaining estimated transaction fees and expenses of $16,750 represent costs
associated with the equity transactions.
16
<PAGE>
<PAGE>
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR PERIOD ENDED MAY 31, 1998
<TABLE>
<CAPTION>
YEAR ENDED MAY 31, 1998
---------------------------------------------------
PRO FORMA
HISTORICAL ADJUSTMENTS(a) NOTE PRO FORMA
---------- -------------- ---- ---------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
Revenues:
Service revenue.......................................... $ 231,097 -- $ 231,097
Equipment sales.......................................... 4,719 -- 4,719
Interest income.......................................... 1,685 $ (1,685) (b) --
---------- -------------- ---------
237,501 (1,685) 235,816
---------- -------------- ---------
Costs and expenses:
Cost of services......................................... 38,389 -- 38,389
Cost of equipment sold................................... 16,429 -- 16,429
Selling, general and administrative expenses............. 81,790 750 (c) 82,540
Depreciation and amortization............................ 114,194 -- 114,194
---------- -------------- ---------
250,802 750 251,552
---------- -------------- ---------
Operating loss................................................ (13,301) (2,435) (15,736)
Interest expense.............................................. 45,155 108,110 (d) 153,265
Gain on sale of assets........................................ 5 -- 5
Income from equity investments................................ 13,069 -- 13,069
---------- -------------- ---------
Loss before income taxes and minority interest................ (45,382) (110,545) (155,927)
Income tax expense (benefit).................................. (13,597) -- (e) (13,597)
---------- -------------- ---------
Loss before minority interest................................. (31,785) (110,545) (142,330)
Minority interest in income of subsidiaries................... (162) -- (162)
---------- -------------- ---------
Net loss...................................................... $ (31,947) $ (110,545) $(142,492)
---------- -------------- ---------
---------- -------------- ---------
Dividend requirements on preferred stock...................... $ 16,451 $ (16,451) (f) $ --
---------- -------------- ---------
---------- -------------- ---------
Loss applicable to common shares.............................. $ (48,398) $ (94,094) $(142,492)
---------- -------------- ---------
---------- -------------- ---------
Net loss per common share -- basic and diluted................ $ (1.85) -- $ (13.73)
---------- -------------- ----------
---------- -------------- ----------
Weighted average shares outstanding........................... 26,181,000 -- 10,375,193
---------- -------------- ----------
---------- -------------- ----------
Pro Forma Ratio of earnings to fixed charges(g)
</TABLE>
See Notes to Pro Forma Consolidated Statement of Operations
17
<PAGE>
<PAGE>
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
FOR PERIOD ENDED AUGUST 31, 1998
<TABLE>
<CAPTION>
THREE MONTHS ENDED AUGUST 31, 1998
---------------------------------------------------
PRO FORMA
HISTORICAL ADJUSTMENTS(a) NOTE PRO FORMA
---------- -------------- ---- ---------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
Revenues:
Service revenue......................................... $ 76,191 -- $ 76,191
Equipment sales......................................... 1,255 -- 1,255
---------- -------------- ---------
77,446 -- 77,446
---------- -------------- ---------
Costs and expenses:
Cost of services........................................ 10,382 -- 10,382
Cost of equipment sold.................................. 4,533 -- 4,533
Selling, general and administrative expenses............ 23,896 $ 188 (c) 24,084
Depreciation and amortization........................... 31,804 -- 31,804
---------- -------------- ---------
70,615 188 70,803
---------- -------------- ---------
Operating income (loss)...................................... 6,831 (188) 6,643
Interest expense, net........................................ 11,131 27,531 (d) 38,662
Gain on sale of assets....................................... 9,556 -- 9,556
Income from equity investments............................... 3,649 -- 3,649
---------- -------------- ---------
Income (loss) before income taxes and minority interest...... 8,905 (27,719) (18,814)
Income tax expense (benefit)................................. 3,008 -- (e) 3,008
---------- -------------- ---------
Income (loss) before minority interest....................... 5,897 (27,719) (21,822)
Minority interest in income of subsidiaries.................. (242) -- (242)
---------- -------------- ---------
Net income (loss)............................................ $ 5,655 $(27,719) $(22,064)
---------- -------------- ---------
---------- -------------- ---------
Dividend requirements on preferred stock..................... $ 4,113 $ (4,113) (f) $ --
---------- -------------- ---------
---------- -------------- ---------
Income (loss) applicable to common shares.................... $ 1,542 $(23,606) $(22,064)
---------- -------------- ---------
---------- -------------- ---------
Net loss per common share -- basic and diluted............... $ (.06) $ -- $ (2.13)
---------- -------------- ---------
---------- -------------- ---------
Weighted average shares outstanding.......................... 25,629,000 $ -- 10,375,193
----------- -------------- ----------
----------- -------------- ----------
Pro Forma Ratio of earnings to fixed charges(g)
</TABLE>
See Notes to Pro Forma Consolidated Statement of Operations
18
<PAGE>
<PAGE>
NOTES TO CONSOLIDATED PRO FORMA STATEMENT OF OPERATIONS
The pro forma financial data have been derived by the application of pro
forma adjustments to the Company's historical financial statements for the
periods noted. The Merger will be accounted for as a recapitalization which will
have no impact on the historical basis of the Company's assets and liabilities.
The pro forma financial data assumes that there are no dissenting stockholders
to the Merger.
The pro forma adjustments to the Statement of Operations exclude (a) the
write-off of $8,000 ($4,960 after related tax effect) of deferred loan costs
associated with the existing indebtedness, (b) the estimated $42,000 ($26,040
after related tax effect) of fees payable for the early retirement of existing
indebtedness, (c) $42,332 ($31,608 after related tax effect) of employee
compensation expenses relating to the exercise of the options, and (d) $2,834
($1,757 after related tax effect) deferred compensation expenses. Such amounts
represent non-recurring expenses which the Company anticipates will be recorded
in the Consolidated Statement of Operations for the period including the Merger.
(a) The Company has a Services Agreement and other cost sharing agreements
with Century Communications Corp. and other related parties which will be
terminated as of the date of the merger. The costs of replacing these services
is uncertain. However, the impact of the termination of these agreements is not
expected to be material.
(b) Represents the elimination of interest income on overnight deposits.
(c) Represents monitoring fee paid to affiliates of WCAS and Blackstone.
(d) The pro forma adjustments to interest expense reflect the following:
<TABLE>
<CAPTION>
THREE MONTHS
YEAR ENDED ENDED
MAY 31, 1998 AUGUST 31, 1998
------------ ---------------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Credit Facility
Revolving Credit Facility(1)....................................... $ 1,976 $ 494
Tranche A term loans(2)............................................ 43,450 10,863
Tranche B term loans(3)............................................ 18,380 4,595
Tranche C term loans(4)............................................ 18,880 4,720
Senior Subordinated Notes(5)............................................ 40,700 10,175
Subordinated Notes(6)................................................... 9,199 2,389
Commitment fee(7)....................................................... 636 159
------------ ---------------
Cash Interest Expense................................................... 133,221 33,395
Subordinated Notes(8)................................................... 11,441 3,116
Amortization of discount on subordinated notes(9)....................... 2,271 568
Amortization of debt issuance costs(10)................................. 6,332 1,583
------------ ---------------
Pro forma interest expense.............................................. 153,265 38,662
Less: historical interest expense on debt repaid(11).................... (42,663) (10,580)
Less: historical amortization of debt issuance costs(12)................ (2,492) (551)
------------ ---------------
Total adjustment.............................................. $108,110 $ 27,531
------------ ---------------
------------ ---------------
</TABLE>
- ------------
(1) Represents interest on the Revolving Credit Facility using an assumed
interest rate of 8.69% and assuming a $22.7 million drawdown at Closing.
(2) Represents interest on $500 million of Tranche A term loans using an
assumed interest rate of 8.69%.
(3) Represents interest on $200 million of Tranche B term loans using an
assumed interest rate of 9.19%.
(4) Represents interest on $200 million of Tranche C term loans using an
assumed interest rate of 9.44%.
(footnotes continued on next page)
19
<PAGE>
<PAGE>
(footnotes continued from previous page)
(5) Represents interest on $370 million of Senior Subordinated Notes using an
interest rate of 11.00%.
(6) Represents cash interest portion of the $180 million of Subordinated Notes.
(7) Represents a 0.5% commitment fee on the unused portions of the Revolving
Credit Facility.
(8) Represents Paid In Kind portion of the $180 million of Subordinated Notes.
(9) Represents the amortization of the discount ($22.5 million) on the shares
issued to the Subordinated Notes holder.
(10) Represents amortization of deferred financing costs of $56.0 million over
the term of the related debt.
(11) Represents the elimination of historical interest expense paid or payable
in cash.
(12) Represents the elimination of historical amortization of deferred financing
fees.
A 0.125% increase or decrease in the assumed weighted average interest rate
applicable to the credit facilities and the Senior Subordinated Notes would
change the pro forma interest expense and income before taxes as follows:
<TABLE>
<CAPTION>
YEAR ENDED QUARTER ENDED
MAY 31, 1998 AUGUST 31, 1998
------------ ---------------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Credit Facility
Revolving Credit Facility.................................................... $ 28 $ 7
Tranche A term loans......................................................... 625 156
Tranche B term loans......................................................... 250 63
Tranche C term loans......................................................... 250 63
Senior subordinated notes.................................................... 463 116
------------ ------
Total................................................................... $1,616 $ 405
------------ ------
------------ ------
</TABLE>
(e) No net tax benefit is provided for the pro forma adjustments to
earnings before taxes on the assumption that an offsetting increase to the
valuation allowance would be recorded with respect to the resultant tax loss
carryforward asset.
(f) To eliminate dividends on preferred stock redeemed as part of the
recapitalization.
(g) For purposes of determining the pro forma ratio of fixed charges,
earnings are defined as earnings before income taxes, minority interest and
extraordinary items, plus fixed charges. Fixed charges include interest expense
on all indebtedness, amortization of deferred debt issuance costs, one-third of
rental expense on operating leases representing that portion of rental expense
deemed to be attributable to interest. Earnings were insufficient to cover fixed
charges on a pro forma basis for Centennial by $160.9 million for the year ended
May 31, 1998 and by $19.8 million for the three months ended August 31, 1998.
20
<PAGE>
<PAGE>
CERTAIN COMPANY PROJECTIONS
Prior to the execution of the Merger Agreement, in connection with WCAS's
review of the Company, the Company provided representatives of WCAS information
concerning projected revenue and expenses of the Company which was prepared in
June 1998, and which the Company and WCAS believe is not publicly available.
WCAS has informed the Company that, in its judgment, it does not expect the
projected results to be achieved and accordingly, did not rely on such
projections in negotiating the Merger Agreement or the amount of the Cash
Election Price.
CENTENNIAL CELLULAR CORP.
PROJECTED FINANCIAL INFORMATION
FURNISHED TO WCAS IN JUNE 1998
CONSOLIDATED FIVE YEAR PROJECTIONS*
(DOLLAR AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
1999E 2000E 2001E 2002E 2003E 2004E
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Total revenue.............................. $336,761 $456,927 $564,635 $668,938 $773,090 $880,038
Revenue growth rate........................ 30% 36% 24% 18% 16% 14%
Adjusted EBITDA(a)......................... 156,273 219,437 282,455 340,829 400,032 459,253
Margin..................................... 46% 48% 50% 51% 52% 52%
Adjusted EBITDA growth rate................ 55% 40% 29% 21% 17% 15%
EBIT....................................... 29,585 104,484 171,790 235,979 294,184 352,431
Margin..................................... 9% 23% 30% 35% 38% 40%
Capital expenditures....................... 90,000 85,000 80,000 74,000 68,500 65,500
</TABLE>
- ------------
(a) Adjusted EBITDA is defined, for any period, as earnings before minority
interest, interest expense, income taxes, depreciation and amortization, and
gain on sale of assets. EBITDA projections were provided to WCAS and were
presented because it is a widely accepted financial indicator of a company's
ability to service and/or incur indebtedness. EBITDA should not be
considered an alternative to net income as a measure of the Company's
operating results or to cash flow as a measure of liquidity. In addition,
although the EBITDA measure of performance is not recognized under generally
accepted accounting principles, it is widely used by various companies as a
general measure of a company's performance because it assists in comparing
performance on a relatively consistent basis across companies without regard
to depreciation and amortization, which can vary significantly depending on
accounting methods (particularly where acquisitions are involved or non-
operating factors such as historical cost bases). Because EBITDA is not
calculated identically by all companies, the presentation here may not be
strictly comparable to other similarly titled measures of other companies.
* The foregoing Company projections were based on the following assumptions and
projected growth rates that were derived from the Company's analyses of
historical trends in the telecommunications industry, internal market
forecasts, the continued development of the recently started Puerto Rico
wireless and wireline operations and projected growth rates in industry
reports:
(1) Subscribers are assumed to grow at a compounded annual growth rate of 14%
through 2004 for domestic operations and wireless subscribers are assumed
grow at a compounded annual growth rate of 28% through 2004 for Puerto
Rico operations.
(2) Service revenues per subscriber are assumed to decrease 5% in year 2000,
2.5% in 2001 and 1.5% in 2002, and remain flat thereafter for domestic
operations and service revenues per subscriber are assumed to decrease
over the next five years for Puerto Rico operations.
(3) Operating expenses are assumed to be 23% of revenues in 1999, increasing
to 24% of revenues in 2004 for domestic operations and are assumed to be
25% of revenues in 1999, decreasing to 22% of revenues in 2004 for Puerto
Rico operations.
(4) Administrative expenses are assumed to be 14% of revenues in 1999,
decreasing to 12% of revenues in 2004 for domestic operations and are
assumed to be 16% of revenues in 1999, decreasing to 12% of revenues in
2004 for Puerto Rico operations.
21
<PAGE>
<PAGE>
THE COMPANY DOES NOT AS A MATTER OF COURSE MAKE PUBLIC ANY PROJECTIONS AS
TO FUTURE PERFORMANCE OR EARNINGS, AND THE PROJECTIONS SET FORTH ABOVE ARE
INCLUDED IN THIS INFORMATION STATEMENT/PROSPECTUS ONLY BECAUSE THE INFORMATION
WAS MADE AVAILABLE TO REPRESENTATIVES OF WCAS BY THE COMPANY IN JUNE 1998. THE
PROSPECTIVE FINANCIAL INFORMATION WAS NOT PREPARED WITH A VIEW TOWARD PUBLIC
DISCLOSURE OR WITH A VIEW TOWARDS COMPLYING WITH THE GUIDELINES ESTABLISHED BY
THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS WITH RESPECT TO
PROSPECTIVE FINANCIAL INFORMATION, BUT, IN THE VIEW OF THE COMPANY'S MANAGEMENT,
WERE PREPARED ON A REASONABLE BASIS, REFLECT THE COMPANY'S BEST ESTIMATES AND
JUDGMENTS AT THE TIME OF PREPARATION AND PRESENTED, TO THE BEST OF MANAGEMENT'S
KNOWLEDGE AND BELIEF, THE EXPECTED COURSE OF ACTION AND THE EXPECTED FUTURE
FINANCIAL PERFORMANCE OF THE COMPANY. HOWEVER, THIS INFORMATION IS NOT FACT AND
SHOULD NOT BE RELIED UPON AS NECESSARILY INDICATIVE OF FUTURE RESULTS, AND
READERS OF THIS INFORMATION STATEMENT/PROSPECTUS ARE CAUTIONED NOT TO PLACE ANY
RELIANCE ON THE FORECASTED FINANCIAL INFORMATION. NEITHER THE COMPANY'S
INDEPENDENT AUDITORS, NOR ANY OTHER INDEPENDENT ACCOUNTANTS OR FINANCIAL
ADVISORS, HAVE COMPILED, EXAMINED, OR PERFORMED ANY PROCEDURES WITH RESPECT TO
THE PROSPECTIVE FINANCIAL INFORMATION CONTAINED HEREIN, NOR HAVE THEY EXPRESSED
ANY OPINION OR ANY FORM OF ASSURANCE ON SUCH INFORMATION OR ITS ACHIEVABILITY,
AND ASSUME NO RESPONSIBILITY FOR, AND DISCLAIM ANY ASSOCIATION WITH, THE
PROSPECTIVE FINANCIAL INFORMATION.
THE COMPANY HAS ALSO INFORMED WCAS THAT ITS INTERNAL FINANCIAL FORECASTS
(UPON WHICH THE PROJECTED FINANCIAL PERFORMANCE PROVIDED TO WCAS WAS BASED IN
PART) ARE, IN GENERAL, PREPARED SOLELY FOR INTERNAL USE AND CAPITAL BUDGETING
AND OTHER MANAGEMENT DECISION-MAKING PURPOSES AND ARE SUBJECTIVE IN MANY
RESPECTS AND THUS SUSCEPTIBLE TO VARIOUS INTERPRETATIONS AND PERIODIC REVISION
BASED ON ACTUAL EXPERIENCE AND BUSINESS DEVELOPMENTS. PROJECTED INFORMATION OF
THIS TYPE IS BASED ON ESTIMATES AND ASSUMPTIONS THAT ARE INHERENTLY SUBJECT TO
SIGNIFICANT ECONOMIC AND COMPETITIVE UNCERTAINTIES AND CONTINGENCIES, ALL OF
WHICH ARE DIFFICULT TO PREDICT AND MANY OF WHICH ARE BEYOND THE CONTROL OF THE
COMPANY, WCAS OR ACQUISITION OR THEIR RESPECTIVE FINANCIAL ADVISORS. MANY OF THE
ASSUMPTIONS UPON WHICH THE FOREGOING PROJECTED FINANCIAL PERFORMANCE WAS BASED,
NONE OF WHICH WAS APPROVED BY WCAS OR ACQUISITION, ARE DEPENDENT UPON ECONOMIC
FORECASTING (BOTH GENERAL AND SPECIFIC TO THE COMPANY'S BUSINESSES), WHICH IS
INHERENTLY UNCERTAIN AND SUBJECTIVE. ACCORDINGLY, THERE CAN BE NO ASSURANCE THAT
FORECASTED RESULTS ARE INDICATIVE OF THE FUTURE PERFORMANCE OF THE COMPANY OR
THAT ACTUAL RESULTS WILL NOT BE MATERIALLY HIGHER OR LOWER THAN THOSE
FORECASTED. INCLUSION OF THE PROSPECTIVE FINANCIAL INFORMATION IN THIS
INFORMATION STATEMENT/PROSPECTUS SHOULD NOT BE REGARDED AS A REPRESENTATION BY
ANY PERSON THAT THE FORECASTED RESULTS WILL BE ACHIEVED. NONE OF WCAS,
ACQUISITION, THE COMPANY OR THEIR RESPECTIVE FINANCIAL ADVISORS ASSUMES ANY
RESPONSIBILITY FOR THE ULTIMATE OUTCOME OF ANY OF SUCH PROJECTIONS. INCLUSION OF
THE FOREGOING PROJECTIONS SHOULD NOT BE REGARDED AS AN INDICATION THAT WCAS,
ACQUISITION, THE COMPANY OR ANY OTHER PERSON WHO RECEIVED SUCH INFORMATION
CONSIDERS IT AN ACCURATE PREDICTION OF FUTURE EVENTS.
THE COMPANY DOES NOT GENERALLY PUBLISH ITS BUSINESS PLANS AND STRATEGIES OR
MAKE EXTERNAL FORECASTS OF ITS ANTICIPATED FINANCIAL POSITION OR RESULTS OF
OPERATIONS. ACCORDINGLY, NONE OF WCAS, ACQUISITION OR THE COMPANY, OR THEIR
RESPECTIVE FINANCIAL ADVISORS, OR ANY OTHER PARTY, INTENDS TO PUBLICLY UPDATE OR
OTHERWISE PUBLICLY REVISE THE PROJECTIONS SET FORTH ABOVE TO REFLECT
CIRCUMSTANCES EXISTING SINCE THEIR PREPARATION OR TO REFLECT THE OCCURRENCE OF
UNANTICIPATED EVENTS, EVEN IN THE EVENT THAT ANY OR ALL OF THE UNDERLYING
ASSUMPTIONS ARE SHOWN TO BE IN ERROR. FURTHERMORE, THE COMPANY DOES NOT INTEND
TO UPDATE OR REVISE THE PROSPECTIVE FINANCIAL INFORMATION TO REFLECT CHANGES IN
GENERAL ECONOMIC OR INDUSTRY CONDITIONS. SEE 'CAUTIONARY STATEMENT REGARDING
FORWARD LOOKING INFORMATION.'
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RISK FACTORS
In addition to the other information contained in this Information
Statement/Prospectus, the holders of Common Shares could carefully consider the
following risk factors before making a decision to elect to receive either the
Cash Election Price or Surviving Corporation Shares.
Set forth below under separate headings are (i) risk factors relating to
the effects of the Merger, including receiving common stock of the Surviving
Corporation in the Merger or receiving cash due to proration and (ii) risk
factors relating to the Company's business.
As described herein, the election of holders of Common Shares to receive
Surviving Corporation Shares or to receive the Cash Election Price pursuant to
the Merger is subject to the proration procedures of the Merger Agreement.
Accordingly, if the Merger is consummated, stockholders will not necessarily
receive the type of consideration they have elected to receive. See 'The
Merger -- Merger Consideration.'
RISK FACTORS RELATING TO EFFECTS OF THE MERGER; RECEIVING COMMON STOCK OF THE
SURVIVING CORPORATION IN THE MERGER OR RECEIVING CASH DUE TO PRORATION
Holders of Common Shares of the Company should carefully consider the
following factors in connection with a decision to elect to receive any
Surviving Corporation Shares as part of their consideration in the Merger.
CONTROL BY THE EQUITY INVESTORS
Upon completion of the Merger, 92.9% of the outstanding common stock of the
Surviving Corporation will be held by the Equity Investors, including for this
purpose the affiliate of WCAS that will purchase the subordinated notes.
Accordingly, the Equity Investors will control the Company and have the power to
elect all of its directors, appoint new management and approve or reject any
action requiring the approval of the holders of common shares of the Surviving
Corporation, including adopting amendments to the Company's Certificate of
Incorporation and approving mergers or sales of all or substantially all of the
Company's assets. See 'Certain Stockholder Arrangements.' The directors elected
by the Equity Investors will have the authority to effect decisions affecting
the capital structure of the Company, including the issuance of additional
capital stock, the implementation of stock repurchase programs and the
declaration of dividends. There can be no assurance that the capital policies of
the Company in effect prior to the Merger will continue after the Merger.
In addition, the existence of one or more controlling stockholders may have
the effect of making it difficult for a third party to acquire, or of
discouraging a third party from seeking to acquire, a majority of the
outstanding common shares. A third party would be required to negotiate any such
transaction with the Equity Investors and the interests of the Equity Investors
may be different from the interests of other holders of common stock of the
Surviving Corporation.
LOSS OF LIQUIDITY
The holders of Common Shares will receive in the Merger an aggregate amount
of Surviving Corporation Shares equal to 7.1% of the common shares of the
Surviving Corporation outstanding immediately after the Effective Time,
regardless of the number of Common Shares that such holders elect to receive.
Consequently, following the consummation of the Merger, there will be a
substantial decrease in the number of Common Shares held by holders other than
the Equity Investors, which is expected to result in a substantial decrease in
the liquidity of the Surviving Corporation Shares relative to the liquidity of
the Common Shares prior to the Merger. It is also anticipated that the trading
volume of Surviving Corporation Shares following the Merger will be
substantially smaller than the trading volume of the Common Shares prior to the
Merger. Although Acquisition has agreed to use reasonable best efforts to cause
the Surviving Corporation Shares to continue to be listed on Nasdaq and
registered under the Exchange Act for at least three years after the Effective
Time, there can be no assurance that after the Merger the Company will continue
to meet the listing requirements of Nasdaq or after the three-year period the
Surviving Corporation Shares will continue to be listed on Nasdaq or registered
under the Exchange Act. See 'Certain Provisions of The Merger
Agreement -- Certain Covenants of Acquisition -- Nasdaq Listing and Exchange Act
Registration.' If, despite such efforts (or after three years), the Company
ceases to be subject to the reporting requirements of the Exchange Act, the
Company does not intend to provide reports or information to its public
stockholders other than
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pursuant to the right to inspect the books and records of the Company as
required by Delaware law. Upon any such delisting, Surviving Corporation Shares
would trade only in the over-the-counter market. Although prices in respect of
trades would be published by the National Association of Securities Dealers,
Inc. periodically in the 'pink sheets,' quotes for such shares would not be
readily available.
SUBSTANTIAL LEVERAGE; COMMON STOCKHOLDERS' DEFICIT
The wireless telephone business is capital intensive. The Company requires
substantial capital to operate, construct, expand and acquire wireless telephone
systems; to build out and operate its Puerto Rico Wireless Telephone System; and
to service its debt. Historically, the Company has been dependent upon
borrowings, operating cash flow and the issuance of its equity securities to
provide funds for such purposes.
Following the Merger, the Company will be highly leveraged. In connection
with consummating the transactions contemplated by the Merger Agreement, the
Company will enter into the Financing to, among other things: (i) fund payment
of the cash consideration in the Merger, (ii) repay or repurchase certain
indebtedness of the Company, (iii) pay the fees and expenses incurred in
connection with the Merger and (iv) provide for working capital requirements and
general corporate purposes after the Effective Time. Although the definitive
terms of the Financing have not been finalized as of the date of this
Information Statement/Prospectus, the terms of the Financing will include
significant operating and financial restrictions, such as limits on the
Company's ability to incur indebtedness, create liens, sell assets, engage in
mergers or acquisitions, make investments and pay dividends. See 'The Merger --
Financing.'
As of August 31, 1998, after giving pro forma effect to the Merger and the
Financing and the application of the net proceeds therefrom, the Company would
have had (i) $1,450.2 million of consolidated indebtedness and (ii) a common
stockholders' deficit of approximately $581.3 million. The pro forma level of
consolidated indebtedness is substantially greater than the Company's pre-Merger
indebtedness. Such high leverage may have important consequences for the Company
including: (a) the Company's ability to obtain additional financing for future
acquisitions (if any), working capital, capital expenditures or other purposes
may be impaired or any such financing may not be on terms favorable to the
Company; (b) a substantial portion of the Company's cash flow available from
operations after satisfying certain liabilities arising in the ordinary course
of business will be dedicated to the payment of principal of and interest on its
indebtedness, thereby reducing funds that would otherwise be available to the
Company for future business opportunities and other purposes; (c) a substantial
decrease in net operating cash flows or an increase in expenses of the Company
could make it difficult for the Company to meet its debt service requirements or
force it to modify its operations; (d) high leverage may place the Company at a
competitive disadvantage and may make it vulnerable to a downturn in its
business or the economy generally and (e) certain of the Company's borrowings
will be at variable rates of interest, which could cause the Company to be
vulnerable to increases in such interest rates. See 'The Merger -- Financing.'
In addition, the substantial leverage will have a negative effect on the
Company's net income. Pro forma net loss for the fiscal year ended May 31, 1998
would have been $142.5 million, as compared to $31.9 million for the same period
on a historical basis, and pro forma interest expense for fiscal 1998 would have
been $153.3 million, as compared to $45.2 million for the same period on a
historical basis. Pro forma net loss for the fiscal quarter ended August 31,
1998 would have been $22.1 million, as compared to net income of $5.7 million
for the same period on a historical basis, and pro forma interest expense for
the fiscal quarter ended August 31, 1998 would have been $38.7 million, as
compared to $11.1 million for the same period on a historical basis.
After the Merger is consummated, the Company's principal sources of
liquidity are expected to be cash flow from operations, net proceeds from the
issuance of senior and subordinated notes of the Surviving Corporation and its
subsidiaries, which are expected to be consummated simultaneously with the
Merger, and borrowings under the senior secured credit facility (the 'Credit
Facility') to be entered into by a direct subsidiary of the Surviving
Corporation. It is anticipated that the Company's principal uses of liquidity
will be to provide working capital, to meet debt service requirements and other
liabilities arising in the ordinary course and to finance the Company's
strategic plans.
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POTENTIAL DILUTION OF COMMON STOCK OF THE SURVIVING CORPORATION
Following the Merger, the Company may grant or sell, or grant options to
purchase, additional Surviving Corporation Shares to members of the Company's
management or otherwise permit management to participate in the equity of the
Company. The foregoing could dilute the holdings of holders of Surviving
Corporation Shares. See 'The Merger -- Interests of Certain Persons in the
Merger.'
As a condition to the consummation of the Merger, the number of Common
Shares purchasable upon exercise of Options that have not been canceled may not
exceed 750,000. Although the Company anticipates that a substantial number of
Options will be canceled prior to the Effective Time (in exchange for a cash
amount per Option share equal to the difference between $41.50 and the exercise
price of the applicable Option), some existing Options, which would become
options to purchase Surviving Corporation Shares, may remain outstanding
following the Merger, which could also dilute the holdings of holders of
Surviving Corporation Shares. See 'The Merger -- Effect on Options and Employee
Benefit Matters.'
NON-CASH ELECTION AND PRORATION INTO CASH; POSSIBLE DIVIDEND TREATMENT
As described herein, a stockholder may make a Non-Cash Election and thereby
elect to receive Surviving Corporation Shares in the Merger. However, if the
number of Electing Shares exceeds the Non-Cash Election Number, such electing
stockholder may receive cash for a portion of his or her Common Shares as a
result of the proration procedures described herein under 'The Merger -- Non-
Cash Election.' In such event, a stockholder may receive dividend treatment
(rather than the generally more favorable capital gain treatment) for any cash
received in the Merger as a result of such proration procedures. See 'The
Merger -- Federal Income Tax Consequences' for a more detailed discussion of the
tax consequences of receiving cash.
RISK FACTORS RELATING TO THE COMPANY'S BUSINESS
NET LOSSES; OPERATING LOSSES; INTEREST EXPENSE
The Company has reported net losses of approximately $31.9 million, $33.3
million and $16.6 million for the fiscal years ended May 31, 1998, 1997 and
1996, respectively. Operating loss was approximately $13.3 million, $26.1
million and $19.1 million for the respective fiscal years. Interest expense was
approximately $45.2 million, $33.4 million and $27.9 million for the respective
fiscal years. The Company reported net income of approximately $5.7 million and
net loss of approximately $6.8 million for the fiscal quarters ended August 31,
1998 and 1997, respectively. Operating income was approximately $6.8 million for
the fiscal quarter ended August 31, 1998 and operating loss was approximately
$2.8 million for the fiscal quarter ended August 31, 1997. Interest expense was
approximately $11.1 million and $10.0 million for the fiscal quarters ended
August 31, 1998 and 1997, respectively. There can be no assurance that future
operations will be profitable, generate positive cash flow or provide funds
sufficient to meet the debt service requirements of the Financing. Upon
consummation of the Financing, interest expense will increase compared to prior
years.
RESTRICTIVE COVENANTS; CONSEQUENCES OF DEFAULT
The instruments governing the indebtedness of subsidiaries of the Surviving
Corporation under the Credit Facility entered into and notes to be issued by the
Surviving Corporation and its subsidiary will impose significant operating and
financial restrictions on the Company and its subsidiaries. Such restrictions
will affect, and in many respects significantly limit or prohibit, among other
things, the ability of the Company to incur additional indebtedness, pay
dividends, repay indebtedness prior to stated maturities, sell assets, make
investments, engage in transactions with stockholders and affiliates, issue
capital stock, create liens, or engage in mergers or acquisitions. In addition,
the Credit Facility will require the borrower thereunder to maintain certain
financial ratios. These restrictions could also limit the ability of the Company
to effect future financings, make needed capital expenditures, withstand a
future downturn in its business or the economy in general, or otherwise conduct
necessary corporate activities. A failure by the Company to comply with these
restrictions could lead to a default under the terms of such indebtedness
notwithstanding the ability of the Company to meet its debt service obligations.
In the event of a default, the holders of such indebtedness could elect to
declare all such indebtedness to be due and payable together with accrued and
unpaid interest. In such event, a
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significant portion of the Company's other indebtedness (including its
subsidiaries') may become immediately due and payable and there can be no
assurance that the Company would be able to make such payments or borrow
sufficient funds from alternative sources to make any such payment. Even if
additional financing could be obtained, there can be no assurance that it would
be on terms that are acceptable to the Company.
In addition, the Surviving Corporation and the subsidiary or subsidiaries
that are borrowers under the Credit Facility are generally expected to pledge as
security the capital stock of all of their direct and indirect subsidiaries to
the lenders providing such Credit Facility. The pledge of this capital stock
could impair the Company's ability to obtain future financing on favorable
terms, if at all. Further, in the event the subsidiary were to default on its
obligations under the Credit Facility and the lenders were to foreclose upon
such pledged capital stock, the Company, as the holding company for such
subsidiary, would likely be unable to service or repay its existing
indebtedness.
HIGHLY COMPETITIVE INDUSTRY
The Company's principal business, wireless telephone service, is highly
competitive. Competition for wireless telephone service in each of the Company's
markets is based primarily on the quality of service, price, system coverage,
enhancements offered, capacity and customer service. The Company competes with
one cellular licensee in each geographic area and most of these competitors are
larger and have greater financial resources than the Company. The Company also
faces competition from paging companies, landline telephone companies and
resellers. The FCC requires providers of wireless telephone service to offer
service to resellers on a nondiscriminatory basis. A reseller buys blocks of
telephone numbers from a wireless telephone service provider, usually at a
discounted rate, and resells the service to the public for a profit. Many
telecommunications companies resell wireless telephone service as a complement
to other services, such as long distance or local telephone services.
As a result of recent regulatory and legislative initiatives, the Company's
cellular operations are also subject to increased competition from entities
using or proposing to use other comparable communications technologies. The FCC
currently is licensing commercial PCS. The FCC identified two categories of PCS:
broadband and narrowband. PCS is not a specific technology, but a variety of
potential technologies that could compete with cellular telephone systems. For
example, the broadband PCS systems licensed to operate in the 2 GHz band provide
wireless two-way telecommunications services for voice, data, graphic and other
transmissions. Equipment used for broadband PCS includes small, lightweight and
wireless telephone handsets, computers that can communicate over the airwaves
wherever they are located, and portable facsimile machines and other graphic
devices. Many PCS systems have commenced operations in the last few years. When
a PCS system employs microcell technology, as is common, it uses a network of
small, low-powered transceivers placed throughout a neighborhood, business
complex, community or metropolitan area to provide customers with mobile and
portable voice and data communications. Many PCS licensees who will compete with
the Company have access to substantial capital resources. In addition, many of
these companies, or their predecessors and affiliates, already operate large
cellular telephone systems and thus bring significant wireless experience to
this new marketplace. To date, the Company has experienced little impact from
PCS competition. However, there can be no assurance of the long-term effect
these new PCS licensees may have on the Company.
Enhanced Specialized Mobile Radio ('ESMR') is a two-way wireless
communications service that incorporates characteristics of cellular technology,
including multiple low-power transmitters and interconnection with the landline
telephone network. ESMR service may compete with cellular service by providing
digital communication technology, lower rates, enhanced privacy and additional
features such as electronic mail and built-in paging.
The Company may also face competition from satellite-based services. The
FCC has issued a number of licenses to provide such services which would enable
subscribers to access mobile communications throughout the world. Additional
proposals for the provision of satellite services remain pending with the FCC
and foreign regulatory bodies must approve certain aspects of some satellite
systems. Although the Company may experience increased competition from such
services in the future, such systems have not affected the Company's operations
to date.
The FCC has also made available other frequency bands that may be used for
the provision of cellular-like services. The General Wireless Communications
Service and the Wireless Communications
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Service ('WCS') are two such services that are in their infancy. Although the
FCC has proposed technical rules for WCS that will make commercial mobile
services like cellular and PCS infeasible, there can be no assurance that the
FCC will not adopt more flexible WCS technical rules that will enable WCS
licensees to provide service comparable to cellular and PCS services.
The Company is unable to predict whether such competing technologies will
be successful and, if successful, whether any will provide significant
competition to the Company. There can be no assurance, however, that one or more
of the technologies currently used by the Company in its business will not
become inferior or obsolete at some time in the future.
HIGHLY REGULATED INDUSTRY
The licensing, construction, operation, acquisition and sale of commercial
wireless communications systems, as well as the number of wireless licensees
permitted in each market, are regulated by the FCC. Certain aspects of cellular
operations may also be subject to public utility regulation in the state in
which the service is provided. Changes in the regulation of commercial wireless
services (such as cellular, PCS or paging), wireless carriers, the licensing of
additional connecting carriers in the Company's service areas, the deregulation
of interconnection arrangements or the loss of any license or licensed area
previously awarded to the Company could have a material adverse effect on the
Company's operations. The FCC continues to license additional spectrum to
providers of wireless communications. In addition, all cellular and PCS licenses
in the United States are subject to renewal upon the expiration of their initial
ten-year term. The Company's initial cellular licenses have expired and will
continue to expire in the near future. To date, however, the Company has
successfully renewed each of its cellular licenses. The Company will continue to
apply for renewal of its licenses in a timely fashion and, although there can be
no assurance that these licenses will be renewed, the Company believes that each
license will be renewed based upon FCC rules establishing a presumption in favor
of licensees that have complied with their regulatory obligations during the
prior license term.
The Company must obtain a number of other approvals, licenses and permits
in the operation of its business, including determinations of no hazard
navigation from the Federal Aviation Administration in connection with the
construction of cellular and PCS towers. Additionally, the wireless
communications industry is subject to certain state and local government
regulation. Operating costs are also affected by other governmental actions that
are beyond the Company's control. There can be no assurance that the various
federal, state and local agencies responsible for grading licenses, approvals
and permits will do so or that, once granted, will not revoke or fail to renew
them. The absence of such licenses, approvals and permits would adversely affect
the Company's existing operations and could delay commencement of or prohibit
business operations proposed by the Company.
The wireless communications industry is subject to continually evolving
regulation. As new regulations are promulgated, the Company may be required to
modify its business plans or operations in order to comply with any such
regulations. There can be no assurance that the Company will be able to do so in
a cost-effective manner, if at all.
The Communications Act of 1934 requires FCC approval for transfers of
controlling interests in any license or construction permit. The Company has
completed filing the applications seeking FCC approval of the Merger. The last
of these applications that are material to the transaction was placed on public
notice by the FCC on August 17, 1998 and approved for grant by the FCC on
October 9, 1998, which approval became final on November 18, 1998.
From time to time, legislation that potentially could affect the Company,
either beneficially or adversely, is proposed by federal or state legislators.
There can be no assurance that legislation will not be enacted by the federal or
state governments, or that regulations will not be adopted or actions taken by
the FCC or state regulatory authorities that might adversely affect the business
of the Company. Changes such as the allocation by the FCC of radio spectrum for
services that compete with the Company's business could adversely affect the
Company's business, prospects, operating results or ability to service its
indebtedness.
The transfer of a license or any controlling interest in a license is
subject to prior approval by the FCC. See 'Regulatory Approvals -- FCC
Approval.'
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NEW INDUSTRY; DEVELOPING AND CHANGING TECHNOLOGIES; SUBSCRIBER CANCELLATIONS
Although over 600 wireless telephone systems are operational in the United
States and other countries, the industry has only a limited operating history.
As a result, there is uncertainty concerning the future of the industry and the
potential demand for wireless telephone service by the public. In addition, the
success of the Company's operations may be adversely affected by matters beyond
its control, such as changes in technology, decisions by the federal government
as to spectrum allocation and competition, and the future cost of wireless
telephones. The Company and the industry have also been affected by high rates
of subscriber cancellations that require continuing replacement of the customer
base in order to maintain subscription levels and revenues.
The telecommunications industry is subject to rapid and significant changes
in technology, including advancements protected by intellectual property laws.
In particular, the wireless telecommunications industry is experiencing
significant technological change, as evidenced by the increasing pace of digital
upgrades in existing analog wireless systems, evolving industry standards, the
availability of new radio frequency spectrum allocations in which to develop
wireless services, ongoing improvements in the capacity and quality of digital
technology, shorter development cycles for new products and enhancements, and
changes in end-user requirements and preferences. There is also uncertainty as
to the extent of customer demand as well as the extent to which airtime and
monthly access rates may continue to decline. The effect of technological
changes on the business of the Company cannot be predicted, and there can be no
assurance that technological developments will not have a material adverse
effect on the Company.
ACQUISITIONS AND INVESTMENTS
Opportunities for growth through acquisitions and investments in the
Company's wireless telephone and other communications businesses, and future
operating results and the success of acquisitions and investments within and
outside the United States may be subject to the effects of, and changes in, U.S.
and foreign trade and monetary policies, laws and regulations, political and
economic developments, inflation rates, and the effects of taxes and operating
conditions.
INVESTMENT INTERESTS; CAPITAL CALLS
With respect to any system in which the Company now or in the future holds
an investment interest as a limited partner, the Company has limited ability to
direct the operation of such system. In addition, these investment partnerships
are entitled to make certain demands for capital contributions, including to
complete acquisitions by the limited partnerships. If the Company does not meet
a capital call, the Company's ownership interest in such system may be diluted.
Capital calls with respect to such investment interests for the fiscal years
ended May 31, 1998, 1997 and 1996 were approximately $0.8 million, $2.9 million
and $1.5 million, respectively. There were no capital calls with respect to such
investment interests for the fiscal quarters ended August 31, 1998 and 1997. The
Company has, to date, paid all capital calls that it has received. Although the
Company anticipates that such capital calls will decrease over time, there can
be no assurance that such capital calls will, in fact, decrease. Capital calls
may also be issued in connection with acquisitions by the respective limited
partnerships. The Company intends to fund its pending and future capital calls
from internally generated funds, bank borrowings or the issuance of additional
debt or equity securities. There can be no assurance that the Company will be
able to pay such capital calls when due.
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APPROVAL OF THE MERGER
RECOMMENDATION OF THE BOARD OF DIRECTORS OF THE COMPANY
The Board of Directors, after careful consideration and based upon its
determination that the Merger is in the best interests of the Company and its
stockholders, unanimously adopted and approved the Merger Agreement and
recommended that the Company's stockholders approve and adopt the Merger
Agreement and the transactions contemplated thereby. The determination of the
Board of Directors with respect to the Merger is based on a number of factors.
See 'The Merger -- Background of the Merger', ' -- Recommendation of the Board
of Directors; Reasons for the Merger.'
OPINION OF DONALDSON, LUFKIN & JENRETTE
On November 19, 1998 and again on November 29, 1998, DLJ rendered an oral
opinion, which was confirmed by a written opinion dated November 29, 1998, that,
as of such written opinion date, based upon and subject to the assumptions,
limitations, and qualifications set forth in such opinion, the consideration to
be received by the Unaffiliated Stockholders pursuant to the Merger Agreement
was fair, from a financial point of view, to the Unaffiliated Stockholders. A
copy of such opinion, which sets forth the assumptions made, matters considered
and certain limitations on the scope of review undertaken by DLJ, is attached as
Appendix C to this Information Statement/Prospectus. See 'The Merger -- Opinion
of Donaldson, Lufkin & Jenrette.' STOCKHOLDERS ARE URGED TO READ SUCH OPINION IN
ITS ENTIRETY.
APPROVAL BY STOCKHOLDERS OF THE COMPANY
Pursuant to the Stockholder Agreement, the Company's principal stockholder,
Century, agreed to vote its Shares of the Company in favor of the Merger so long
as the Merger Agreement remains in effect. On December 4, 1998, Century executed
a written stockholder's consent in lieu of meeting to approve the Merger. Since
Century controls, on a fully diluted basis, more than a majority of the
outstanding votes of the Company required to approve the Merger, no further vote
is necessary to approve the Merger. See 'The Stockholder Agreement.'
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THE COMPANIES
CENTENNIAL
Centennial is primarily engaged in the ownership and operation of wireless
telephone systems. The Company's current wireless telephone interests represent
approximately 10.8 million Net Pops. Approximately 6.5 million of these Net Pops
are represented by the Company's wireless telephone systems located in the
continental United States. Approximately 3.8 million Net Pops represents the
Company's wireless telephone system in the Commonwealth of Puerto Rico. In
addition the Company owns minority interests, representing approximately 1.2
million Net Pops in certain other cellular operations controlled and managed by
other cellular providers. 'Pops' means the population of a market derived from
the 1997 Paul Kagan Associates population estimates, and 'Net Pops' means a
market's Pops multiplied by the percentage interest that the Company owns in an
entity licensed (a 'licensee') by the FCC to construct or operate a wireless
telephone system in that market.
The Company's wireless telephone systems, which include systems utilizing
both cellular and PCS licenses, provide communications services to mobile,
transportable and portable wireless telephones. Wireless telephone systems are
designed to allow for significant mobility of the subscriber. In addition to
mobility, wireless telephone systems provide access through system
interconnections to local and long distance telecommunications networks and
offer other ancillary services such as voice-mail, call-waiting, call-forwarding
and conference calling. These communications services can be integrated with a
variety of competing networks.
Centennial was organized in 1988. The Company's principal executive offices
are located at 50 Locust Avenue, New Canaan, Connecticut 06840. The Company's
principal corporate office is located at 1305 Campus Parkway, Neptune, New
Jersey 07753. Its telephone number is (203) 972-2000.
ACQUISITION, WCAS AND BLACKSTONE
Acquisition is a Delaware corporation organized at the direction of WCAS, a
Delaware limited partnership, for the purpose of effecting the Merger of
Acquisition with and into Centennial. The principal executive office of
Acquisition is located at c/o Welsh, Carson, Anderson & Stowe VIII, L.P., 320
Park Avenue, Suite 2500, New York, New York 10022. Its telephone number is
(212) 893-9500.
WCAS is a private investment partnership with over $3.0 billion in
committed capital. As of September 30, 1998, WCAS and its affiliates had
organized and managed eleven limited partnerships with total capital of
approximately $7.6 billion. Since 1979, WCAS and its affiliated investment
partnerships have completed over eighty management buyouts concentrated in the
healthcare and information services industries. Its principal executive office
is located at 320 Park Avenue, Suite 2500, New York, New York 10022. Its
telephone number is (212) 893-9500.
Partnerships controlled by Blackstone have agreed, subject to certain
conditions, to acquire equity interests in Acquisition prior to the Merger.
Blackstone is one of the leading firms engaged in institutional private equity
investing. The firm's current primary corporate private equity investment
vehicle is Blackstone Capital Partners III Merchant Banking Fund L.P., with
approximately $3.8 billion in committed capital. Blackstone has significant
experience in the media and telecommunications sector with investments in
companies such as CommNet Cellular, Intermedia Cable and TW/Fanch
Communications. The principal offices of Blackstone are located at 345 Park
Avenue, New York, New York, 10154. Its telephone number is (212) 935-2626.
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THE MERGER
BACKGROUND OF THE MERGER
The Board of Directors has reviewed on an ongoing basis alternative
strategies for enhancing stockholder value, including strategic acquisitions and
alliances and the undertaking of operating, administrative and financial
measures.
On October 15, 1996, the Company retained Peter J. Solomon Company Limited
('PJSC') to render financial advisory services to the Company in connection with
the possible sale of the Company's minority investment interests (the
'Investment Interests') in the limited partnerships operating wireless systems
in Sacramento Valley, San Francisco, Del Norte and Modoc, California; Lawrence,
Pennsylvania; and Coconino, Arizona. On June 8, 1998, the Company disposed of
its Investment Interest in Coconino, Arizona RSA Limited Partnership,
representing approximately 43,500 Net Pops, for $13.5 million in cash.
At a meeting of the Board of Directors on June 11, 1997, the Board
discussed potential strategic alternatives for the Company to pursue, including
the disposition of the Company's domestic operations or the Company's business
as a whole. At the meeting, Bernard Gallagher, the Chairman of the Board and
Chief Executive Officer of the Company, indicated that the prices paid in recent
merger and acquisition transactions in the cellular and PCS industries,
including the Palmer Wireless, Inc. and CommNet Cellular Inc. acquisitions
announced in late May of 1997, were attractive from a seller's point of view.
Accordingly, the Board authorized Mr. Gallagher to explore the various strategic
alternatives and to retain a financial advisor. Later that day, Mr. Gallagher,
who is also a member of the board of directors of Century, advised Century's
board in his capacity as the Chairman of the Board and Chief Executive Officer
of the Company that the Company was likely to begin exploring strategic
alternatives.
Mr. Gallagher and Scott Schneider, Senior Vice President, Chief Financial
Officer and Treasurer of the Company, met on a preliminary basis with
prospective financial advisors to discuss possible strategic alternatives for
the Company. During the late summer of 1997, Messrs. Gallagher and Schneider
concluded after discussions with prospective financial advisors that, although
the market did not appropriately value the shares of the Company, a business
combination or sale of the Company should not be pursued at that time.
Accordingly, the Board rescinded its prior authorization to explore alternatives
that might include a business combination or sale of the Company.
During February and March of 1998, the Board discussed the potential future
performance of the Common Shares and whether the full value of the Company's
properties was reflected in its stock price. During such discussions, concerns
were expressed that, notwithstanding the Company's solid operating performance
in fiscal year 1997 and positive market conditions prevailing for equity
securities generally, the Common Shares had been trading in a narrow price
range. Accordingly, management was asked to determine if there were any
strategic measures available to increase stockholder value.
In response to these discussions, and as part of its ongoing efforts to
maximize stockholder value, the Company contacted prospective financial advisors
and asked them to assist the Company in evaluating various strategies to enhance
stockholder value, including possible business combinations or a sale of the
Company. In light of recent transactions involving similar companies, including
the acquisitions of Atlantic Cellular Corporation and PriCellular Corporation
announced in February and March of 1998, respectively, the Board determined that
the Company's value was not adequately reflected in the price of the Common
Shares. DLJ, one of the prospective financial advisors contacted by the Company,
outlined possible strategies and also presented an approach for soliciting
offers from potential buyers designed to elicit the most attractive price in the
event the Board elected to explore a business combination or a sale of the
Company. On April 2, 1998, after discussing the courses of action presented by
DLJ, the Board authorized the formal retention of DLJ as financial advisor to
the Company and authorized Mr. Gallagher to explore various strategic
alternatives available to the Company, including disposition of the business of
the Company which could include a separate spin-off of the Company's Puerto Rico
operations.
Pursuant to the Board's directives, the Company retained DLJ. DLJ and the
Company, based upon their collective experience and knowledge of the wireless
telecommunications industry, compiled a list of prospective strategic and
financial purchasers to be contacted directly regarding their potential
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interest in a possible acquisition of the Company. DLJ also assisted the Company
in preparing a confidential memorandum describing the Company for use in
discussions with prospective buyers (the 'Confidential Information Memorandum').
On April 14, 1998, the Company publicly announced its decision to explore
strategic alternatives and to engage the services of DLJ to assist it in
exploring these various available strategic alternatives.
DLJ began to contact the identified potential buyers on April 14, 1998.
Initial contacts were made with 114 potential buyers and consisted of a brief
discussion of the Company's possible interest in engaging in a business
combination and an inquiry as to whether the potential buyer would be interested
in receiving further information. To those who expressed interest, DLJ sent a
draft of a confidentiality agreement and, if requested, certain publicly
available information. Between April 18 and May 8, DLJ negotiated and executed
confidentiality agreements on behalf of the Company with 56 potential buyers, of
which there were 25 strategic and 31 financial buyers, who expressed an initial
interest in a possible transaction with the Company. Each of the 56 potential
buyers received a Confidential Information Memorandum.
On May 11, 1998, DLJ received written indications of interest in the form
of preliminary, non-binding proposals from twelve potential buyers. Each of the
preliminary proposals was subject to the completion of a due diligence review of
the Company. Of the twelve potential buyers, six submitted proposals for the
acquisition of the entire Company. These potential buyers stated that they would
consider using either cash or non-cash consideration or a combination of the two
and suggested possible prices per share ranging from prices below the trading
price of the Common Shares to prices representing a significant premium over
such trading price. In addition, five potential buyers, including one of the
potential buyers who had submitted a proposal for the acquisition of the entire
Company, submitted proposals for an acquisition of only the Puerto Rico
operations of the Company ('Centennial de Puerto Rico'). The remaining two
potential buyers expressed interest in only certain clusters of the Company's
domestic operations. DLJ also received oral indications of interest from several
parties interested in specific assets of the Company.
Beginning on May 12, seven potential buyers conducted a review of various
legal, financial and accounting matters with respect to the Company.
Between May 19 and June 19, 1998, management of the Company met with
representatives of the potential buyers to discuss the Company and the cellular
industry generally. In addition, during that time, DLJ coordinated and conducted
site visits for the potential buyers.
On June 19, 1998, DLJ sent a letter, along with a proposed merger
agreement, to five potential buyers. In the letter, DLJ stated the Company's
belief that the highest transaction value could be achieved by selling the
Company to one buyer and solicited final, definitive proposals in writing by
June 29, 1998. DLJ requested that such proposals include the final purchase
price in cash, a marked copy of the proposed merger agreement and sources of
financing (including commitment letters from external sources of financing). The
letter also stated that such proposals should not be subject to financing or
further due diligence.
Also on June 19, 1998, DLJ sent a letter to four of the potential buyers
who had previously expressed interest in acquiring only Centennial de Puerto
Rico, including one potential buyer who also had expressed an interest in
acquiring the entire Company and was sent a proposed merger agreement for the
entire Company, inviting such potential buyers to submit a definitive proposal
for only Centennial de Puerto Rico, subject to substantially similar terms as
the definitive proposals for the whole Company. DLJ noted that the Company's
willingness to pursue a separate sale of Centennial de Puerto Rico would depend
on how the Company and its advisors believed that stockholder value could be
maximized. DLJ enclosed a proposed stock purchase agreement, to be marked by the
potential buyers, for the acquisition of Centennial de Puerto Rico.
On June 29, 1998, DLJ and certain members of management of the Company,
including Messrs. Gallagher and Schneider, held a conference call to discuss the
status of contacts with the parties that remained interested in a possible
acquisition of the Company or Centennial de Puerto Rico. Among other things, the
conference call participants discussed the final proposal submitted by WCAS (the
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'WCAS Proposal'), which was deemed by management to be particularly attractive
from the point of view of maximizing stockholder value.
The WCAS Proposal was structured as a recapitalization pursuant to which
Acquisition would acquire all of the then issued and outstanding Common Shares
and Class B Shares, other than the number of shares that would represent 12.1%
of the common stock of the Surviving Corporation, and 100% of the Convertible
Preferred Shares and Second Series Convertible Preferred Shares for an aggregate
cash purchase price of $1,200 million, or $42 per share on a fully-diluted and
as-converted basis. Following the transaction, the stockholders of Acquisition
would hold an 87.9% equity interest in the Company, with existing stockholders
holding the remainder. In addition, the WCAS Proposal stated that Acquisition
had made arrangements with financing sources which were prepared to execute and
deliver commitments for financing up to $2,015 million in order to provide all
the funds required to finance the transaction, to refinance existing
indebtedness of the Company, to pay transaction expenses and to provide working
capital to the operating companies. The WCAS Proposal noted that (i) Merrill
Lynch was prepared to execute and deliver a commitment letter containing a
commitment to provide an aggregate of $1,165 million of secured credit
facilities and $350 million of bridge financing (to be replaced or refinanced
with at least $300 million aggregate principal amount of unsecured notes to be
issued by subsidiaries of the Surviving Corporation), (ii) WCAS Capital Partners
III, L.P. ('WCAS Capital'), an affiliate of WCAS, was prepared to execute and
deliver a commitment letter containing a commitment to purchase not less than
$150 million in aggregate principal amount of unsecured subordinated notes to be
issued by the Surviving Corporation and (iii) WCAS, on behalf of itself and
certain affiliates, was prepared to execute and deliver a commitment letter
containing a commitment to provide an equity contribution to Acquisition of
approximately $350 million, which would represent an 87.9% interest in the
Surviving Corporation. The WCAS Proposal also included, as conditions to
closing, the cancellation of all outstanding Options and the tendering,
elimination or defeasance, to the maximum extent possible, of the Company's
Senior Notes pursuant to a self-tender and consent solicitation to be undertaken
by the Company for all of its outstanding Senior Notes. WCAS requested that the
Company agree to terminate all negotiations and other discussions with any other
party with respect to any potential acquisition, business combination or
purchase of the Company's assets and agree, for a period of 15 days, (i) not to
solicit, encourage or initiate inquiries, offers or proposals from, or
participate in any discussions or negotiations with, any other person concerning
any acquisition, business combination or purchase of the Company's assets, (ii)
not to disclose to any other person any information concerning the Company's
business and properties not customarily disclosed to such persons and (iii) not
to provide any such person with access to the Company's properties, books and
records, except as required by law. WCAS stated that the WCAS Proposal would
remain open until the close of business on July 2, 1998.
During the June 29, 1998 conference call, the Company decided not to agree
to exclusive negotiations with WCAS. Although the Company continued to explore
its other options, it directed its outside counsel, Leavy Rosensweig & Hyman and
Paul, Weiss, Rifkind, Wharton & Garrison, and DLJ to continue negotiations with
WCAS, including addressing specific comments made by WCAS to the proposed merger
agreement and the specific terms of the various financing commitments described
in the preceding paragraph. The Company's decision to engage in such
negotiations with WCAS was based on the favorable price offered by WCAS, the
strength of the proposed financing commitments and the short time frame within
which to operate given that the offer contained in the WCAS Proposal would
remain open only until July 2, 1998.
On June 30 and July 1, 1998, DLJ and the Company's legal counsel and
Merrill Lynch and WCAS's legal counsel, Reboul, MacMurray, Hewitt, Maynard &
Kristol, negotiated the terms of the Merger Agreement and the terms and
conditions to be contained in the WCAS financing commitments.
The Board convened a meeting via conference call on July 1, 1998 at 8:00
p.m. at which DLJ and Mr. Gallagher reviewed the sale process to date and
presented a status report on the various options available to the Company. Among
other things, DLJ informed the Board that negotiations were progressing very
rapidly. Mr. Gallagher informed the Board that a proposal would likely be
presented to the Board for its approval by the end of the night.
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At 11:00 p.m. on July 1, 1998, the Board convened a meeting via conference
call to consider the WCAS Proposal. Mr. Gallagher informed the Board that
subsequent to its meeting earlier that evening, further discussions had been
held between representatives of the Company and WCAS and that basic agreement
had been reached on all major issues. Pursuant to such discussions, WCAS agreed
to raise its offer price from $42 to $43.25 per share and to decrease the
percentage of the common stock of the Surviving Corporation to be held by
existing stockholders of the Company from 12.1% to 7.1%. Drafts of the proposed
merger agreement, in substantially the form of the Merger Agreement, were
distributed to members of the Board, and Mr. Rosensweig of Leavy Rosensweig &
Hyman and the Company's special outside counsel, Paul, Weiss, Rifkind, Wharton &
Garrison, reviewed the terms of the proposed merger agreement with the Board.
After various questions were raised by the directors and addressed by the
Company's special outside counsel and Mr. Rosensweig, DLJ presented the Board
with an overview of the entire sale process and discussed with the Board the
financial terms of the proposed merger with WCAS. At the conclusion of such
discussion, DLJ orally delivered its opinion that, as of such date, and based
upon the assumptions made, matters considered and limits of its review, the
consideration to be received by the stockholders of the Company (other than
affiliates of the Company) pursuant to the proposed merger was fair from a
financial point of view to such holders. See ' -- Opinion of Donaldson, Lufkin &
Jenrette.'
During and shortly after the 11:00 p.m. meeting, the Company's outside
counsel and DLJ continued negotiations with WCAS. Pursuant to such negotiations,
resolution was reached on substantially all outstanding issues and WCAS agreed
to raise its offer price from $43.25 to $43.50 per share.
At the conclusion of the 11:00 p.m. meeting, the Board of Directors, after
careful consideration and based upon its determination that the proposed merger
was in the best interests of the Company and its stockholders, unanimously
adopted and approved the original Merger Agreement and recommended that the
Company's stockholders approve and adopt the original Merger Agreement and the
transactions contemplated thereby. See ' -- Recommendation of the Board of
Directors; Reasons for the Merger.' In addition, the Board adopted resolutions
that, among other things, authorized the consummation of the Debt Offers.
During the early morning of July 2, 1998, the original Merger Agreement was
executed and delivered by the Company and Acquisition and the Company asked
Nasdaq to halt trading of the Common Shares pending an announcement. Later that
morning, the Company issued a press release announcing the proposed Merger
contemplated by the original Merger Agreement (the 'Original Merger'). Later
that day, DLJ delivered to the Company its written opinion. See ' -- Opinion of
Donaldson, Lufkin & Jenrette.'
Amendment to the Merger Agreement
On October 12, 1998, the Company received a letter from Acquisition
attaching a communication from Merrill Lynch (the 'Merrill Lynch Letter') in
which Merrill Lynch advised Acquisition that if it were requested to fund, as of
such date, the credit facilities and bridge loan contemplated by its commitment
letter, dated as of July 2, 1998 (the 'Original Merrill Lynch Commitment
Letter'), a condition to funding the credit facilities and bridge loan set forth
in the Original Merrill Lynch Commitment Letter would not be satisfied and
Merrill Lynch would therefore have no obligation to fund the credit facilities
or the bridge loan as of October 12, 1998. The condition to funding referred to
was that no material adverse change shall have occurred in the domestic or
international financial, banking or capital markets since the date of its
commitment that, in the reasonable judgment of Merrill Lynch, would adversely
affect the syndication of credit facilities of the same type as the credit
facilities contemplated in the Original Merrill Lynch Commitment Letter or debt
securities of the same type contemplated to replace the bridge loan commitments.
However, Merrill Lynch recognized in its communication that such condition to
funding contemplated by the Original Merrill Lynch Commitment Letter need only
be satisfied on the date of request for such funding. Therefore, Merrill Lynch
informed Acquisition that its communication was for information purposes only
and did not constitute a termination, repudiation or modification of the
Original Merrill Lynch Commitment Letter, which (subject to its conditions)
remained in full force and effect.
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On October 13, 1998, representatives of the Company met with
representatives of Acquisition and Merrill Lynch regarding the condition of the
market for high-yield debt and the status of the Merrill Lynch financing.
Merrill Lynch and Acquisition expressed concern about the state of the
high-yield debt market and the loan syndication market for the credit
facilities. Representatives of the Company proposed to Acquisition that, in lieu
of the contemplated senior notes offerings or the Merrill Lynch bridge loan, the
Company would consider having its stockholders accept bridge notes as part of
the merger consideration.
Between October 16 and November 4, 1998, the Company had communications and
meetings with Acquisition and Merrill Lynch regarding the feasibility of
completing the financing or alternative financing and consummating the Original
Merger and the obligations of the parties with respect thereto.
On November 9, 1998, the Company met with Acquisition to discuss the status
of Acquisition's financing arrangements. After expressing concern about the
ability, in light of then current market conditions, to syndicate credit
facilities of the size contemplated by the Original Merrill Lynch Commitment
Letter, Acquisition informed the Company that it believed that it would be able
to secure the necessary financing to close the Original Merger if the cash
merger consideration were reduced from the agreed upon price of $43.50 per share
to $38.00 per share. Alternatively, Acquisition indicated that it believed that
it would be able to close the Original Merger for consideration consisting of a
combination of cash and a face amount of debt securities aggregating $43.50 per
share. The Company and its financial advisors believed that such debt securities
to be received in lieu of a portion of the cash consideration would, based on
prevailing market conditions, trade at less than their face amount. The Company
responded to Acquisition's proposal by emphasizing that Acquisition was required
to pursue financing that would permit it to close the transaction at the
originally agreed upon price of $43.50 per share and Acquisition stated that it
was continuing to do so.
On November 13, 1998, the Company met with Acquisition to discuss the
status of the syndication markets for senior credit facilities. At the meeting,
Acquisition updated the Company on the status of Acquisition's financing
arrangements, including the increased costs associated with such financing.
Acquisition also informed the Company that it believed that it would be able to
close the Merger if the cash merger consideration were reduced to $40.00 per
share or if the Company's stockholders received part of the merger consideration
in debt securities, which the Company and its financial advisors continued to
believe would trade at less than their face amount. The Company again responded
to Acquisition's proposal by emphasizing that Acquisition was required to pursue
financing that would permit it to close the transaction at the originally agreed
upon price of $43.50 per share and Acquisition stated that it was continuing to
do so.
On November 17, 1998, DLJ updated the Company and Acquisition on DLJ's view
of the status of the senior credit and high-yield markets.
On November 18, 1998, the Company met with Acquisition to discuss Merrill
Lynch's position on the status of the financing. Acquisition reiterated to the
Company that, in light of then current market conditions, the costs associated
with the proposed financing had increased substantially since July. Acquisition
stated that it would not be able to syndicate credit facilities of the size
contemplated by the Original Merrill Lynch Commitment Letter and, therefore,
would have to decrease the amounts available under the credit facilities and
increase the amount raised through the high-yield offerings, which, together
with increased market interest rate spreads and financing fees as well as market
changes in financing terms such as redemption prices, interest rate options and
financing structure, would result in an increase in transaction costs and
interest expense and a decrease in financing flexibility. By Acquisition's
estimates, the increased financing costs amounted to the equivalent of
approximately $4.00 per share.
Later on November 18, 1998, Mr. McInerney, a managing member of WCAS'
general partner, informed Mr. Gallagher by telephone that Acquisition believed
that it could close the merger if the cash merger consideration were reduced to
$41.00 per share. Mr. Gallagher responded that, given the higher financing costs
and in the interest of accomplishing the transaction, subject to the necessary
board and stockholder approval, the Company would consider amending the Original
Merger Agreement to change the cash merger consideration to $42.50 per share if
certain conditions to the obligations of
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Acquisition in the Merger Agreement and certain conditions to the obligations of
Merrill Lynch in its financing commitment were removed.
Following the telephone conversation, certain members of management of the
Company discussed the existing financing commitments in light of market changes
since July and the advantages and disadvantages of alternatives available to the
Company, including the possibility of costly and protracted litigation with an
uncertain outcome if an agreement with Acquisition were not reached.
During a second telephone conversation on November 18, 1998, Mr. McInerney
stated that Acquisition would agree to a reduction in the cash merger
consideration to $41.50 per share, but that such amount was Acquisition's 'best
and final offer.' Messrs. Gallagher and McInerney then reached a preliminary
understanding, subject to board and stockholder approval, (i) to amend the
Merger Agreement by reducing the cash merger consideration to $41.50 per share
and (ii) revise the commitment letters and Merger Agreement to increase the
certainty of the financing, including deletion of the 'market out' under the
Original Merrill Lynch Commitment Letter, but they did not agree on a specific
amendment to the Merger Agreement or to the Original Merrill Lynch Commitment
Letter on such issue.
On November 19, 1998 at 10:30 a.m., the Company's Board convened a meeting
at which a proposed amendment to the Merger Agreement was discussed. Mr.
Gallagher reviewed the financing concerns and the conversations and meetings
with Acquisition that led to the proposed amendment to the Merger Agreement.
Management also reviewed with the Board the possibility of not entering into an
amendment to the original Merger Agreement and insisting that Acquisition
perform its obligations and, if Acquisition failed to do so, enforcing the
Company's rights under the original Merger Agreement and continuing operations
with a view towards the possible sale of the Company at a later date. Management
reviewed with the Board that if an amendment to the original Merger Agreement
were not reached, the results of the Company enforcing its rights under the
original Merger Agreement were uncertain as to timing and ultimate outcome. In
addition, management reviewed with the Board the results of the efforts
previously undertaken by DLJ to sell the Company, the uncertain value that a
future sale would yield and the considerable delay that would be incurred in
pursuing and closing an alternative transaction, which would require that any
future payments be discounted to a present value in order to compare future
payments with the value of the revised merger consideration. Ultimately, the
Board determined that entering into the amendment to the original Merger
Agreement was, in its judgment, the best available means of maximizing
shareholder value in the foreseeable future.
Mr. Friedman, on behalf of DLJ, discussed with the Board the financial
terms of the proposed merger with Acquisition, as amended. At the conclusion
of such discussion, DLJ orally rendered its opinion that, as of such date, and
based upon and subject to the assumptions, limitations and qualifications set
forth in such opinion, the revised consideration to be received by the
stockholders of the Company (other than affiliates of the Company) pursuant to
the proposed merger was fair from a financial point of view to such holders.
See ' -- Opinion of Donaldson, Lufkin & Jenrette.' At the conclusion of the
meeting, the Board of Directors approved and recommended to the stockholders
of the Company the approval of a proposed amendment to the Merger Agreement
pursuant to which the cash price per share to be paid in the Merger would be
$41.50, subject to achieving greater certainty with respect to the financing
including the deletion of the 'market out' from the commitment letters.
Between November 19 and November 29, 1998, the Company and Acquisition
continued to negotiate the conditions to Acquisition's obligations under the
Merger Agreement and the conditions to the obligations of Acquisition's
financing sources pursuant to their respective commitment letters.
Pursuant to these negotiations, WCAS agreed to increase the equity
investment from $350 million to $400 million, and WCAS Capital Partners III,
L.P. agreed to increase the aggregate amount of unsecured subordinated notes of
the Company which it will purchase from $150.0 million to $180.0 million.
In addition, Merrill Lynch, together with Nationsbank, N.A., The Chase
Manhattan Bank, The Bank of Nova Scotia and Morgan Stanley Senior Funding, Inc.
and certain of their affiliates (collectively, the 'Lead Agents') indicated they
were prepared to execute new commitment letters containing a commitment to
provide up to $1.05 billion of senior credit facilities and to underwrite an
offering of not less than $310 million (plus interest escrow) of senior
subordinated notes (the 'New Commitment Letters').
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The Board convened a meeting on November 29, 1998 at which Messrs.
Gallagher and Schneider reviewed the status of the negotiations and the specific
terms of the proposed amendment to the Merger Agreement. A presentation followed
regarding the increased certainty with respect to the funding of the Financing
under the New Commitment Letters compared to the Original Merrill Lynch
Commitment Letter due primarily to the following: (i) the commitments thereunder
would no longer be subject to any material adverse change in the domestic or
international financial, banking or capital markets, and (ii) syndication of
these commitments would not be a condition to the Lead Agents' commitments
thereunder. The proposed amendment also limited the financing condition under
the Merger Agreement such that the condition would be deemed satisfied if the
failure to satisfy the condition was, among other things, a result of WCAS' or
its affiliates' failure to provide its equity contribution or purchase the
subordinated notes or Acquisition's breach of its obligations under the New
Commitment Letters and extended the termination date from January 31, 1998 to
March 31, 1998. At this meeting, DLJ orally confirmed its opinion previously
rendered at the November 19, 1998 Board meeting. At the conclusion of the
meeting, the Board of Directors, after careful consideration and based upon its
determination that the proposed Merger was in the best interests of the Company
and its stockholders, adopted and approved the Amendment to the Merger
Agreement. See ' -- Recommendation of the Board of Directors; Reasons for the
Merger.'
Following the Board meeting, the Amendment was executed and delivered by
the Company and Acquisition and early the next morning, the Company and
Acquisition issued a press release announcing the Amendment. Later that day, DLJ
delivered to the Company its written opinion.
RECOMMENDATION OF THE BOARD OF DIRECTORS; REASONS FOR THE MERGER
At the conclusion of its 11:00 p.m. meeting on July 2, 1998, the Board of
Directors, after careful consideration and based upon its determination that the
Merger is in the best interests of the Company and its stockholders, unanimously
adopted and approved the original Merger Agreement and recommended that the
Company's stockholders approve and adopt the original Merger Agreement and the
transactions contemplated thereby. In the course of reaching its decision to
adopt and approve the original Merger Agreement and the Original Merger and to
recommend approval to the stockholders, the Board of Directors consulted with
the Company's legal and financial advisors and considered a number of factors,
including the following principal factors which were material to the Board's
decision:
(a) Its knowledge of the Company's business, operations, properties,
assets, financial condition, operating results and prospects including,
without limitation, the expected growth of the Company, as well as DLJ's
and its collective experience and knowledge of the wireless
telecommunications industry including, without limitation, the expected
growth of the industry.
(b) The July DLJ Opinion delivered at the July 1, 1998 meeting of the
Board of Directors to the effect that, as of such date, and based upon the
assumptions made, matters considered and limits of review set forth in such
opinion, the proposed consideration to be received by the stockholders of
the Company (other than by affiliates of the Company) in the Merger was
fair from a financial point of view to such holders, and the presentation
of DLJ at the July 1, 1998 Board meeting in connection with its opinion.
See ' -- Opinion of Donaldson, Lufkin & Jenrette.'
(c) The fact that DLJ conducted a broad-based search for potential
acquirors at the request of the Board and such process did not yield any
proposals more attractive to the Company's stockholders from a financial
point of view than the WCAS Proposal.
(d) The sale of the Company was, in the judgment of the Board of
Directors, the best available means of maximizing stockholder value in the
foreseeable future.
(e) The premium of $5 1/8 per share, representing the difference
between the sale price of Common Shares on Nasdaq on July 1, 1998 and the
$43.50 per share price which would have been received by stockholders of
the Company who receive cash for their Shares.
(f) The experience and high rate of success of WCAS and its affiliated
partnerships in structuring and closing acquisition transactions, and the
terms of the financing commitments for the Original Merger arranged by
WCAS.
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(g) The fact that the stockholders of the Company would have the right
to elect to receive cash or to receive Surviving Corporation Shares
representing an aggregate of 7.1% of the common shares of the Surviving
Corporation outstanding immediately after the Merger, which right the Board
of Directors believed would provide some flexibility to any of the
Company's stockholders who might desire to receive more Surviving
Corporation Shares after the Merger than would automatically be received
under a non-election based formula (subject to proration if the holders of
Common Shares elected to receive Surviving Corporation Shares representing
more than 7.1% of the common shares of the Surviving Corporation
outstanding immediately after the Merger). This election would also provide
the possibility that the Company's stockholders who desire to receive more
cash for their shares than would be provided under a non-election based
formula would receive such additional cash if other stockholders ultimately
elect to receive Surviving Corporation Shares.
(h) The other terms and conditions of the Merger Agreement, including
(i) those relating to the fee and expense reimbursement by the Company not
to exceed a total of $65 million to Acquisition upon termination of the
Merger Agreement in certain circumstances, the aggregate amount of which
would not, in the judgment of the Board of Directors, preclude a third
party from making an offer that was materially more favorable to the
Company's stockholders; (ii) those relating to the ability of the Board to
consider unsolicited offers from third parties prior to the Effective Time
of the Merger and to terminate the Merger Agreement in certain
circumstances to accept an unsolicited offer; and (iii) those relating to
Acquisition's undertaking not to take any action for at least three years
after the Effective Time of the Merger to cause the common shares of the
Surviving Corporation to be de-listed from Nasdaq or not to be registered
under the Exchange Act.
In its deliberations regarding the adoption and approval of the original
Merger Agreement and the Original Merger, the Board of Directors also considered
the possible consequences of WCAS's control of the Company upon completion of
the Merger; the expected substantial decrease in the liquidity of common shares
of the Surviving Corporation; the substantial leverage to be incurred by the
Company in connection with the financing and the decrease in common
stockholders' equity; the potential post-closing dilution of the ownership
interests of the Company's stockholders; and the risk that proration might
interfere with the elections made by holders of Common Shares and the tax
consequences of such procedure. See 'Risk Factors' for a more detailed
discussion of the above-mentioned factors considered by the Board of Directors.
Reasons for the Amendment to the Merger Agreement
At the conclusion of its meeting on November 29, 1998, the Board of
Directors adopted and approved and recommended to the stockholders of the
Company the approval of the Amendment pursuant to which (i) the cash price per
share to be paid in the merger would be $41.50, (ii) Acquisition's condition to
obtain the Financing would be limited, (iii) the New Commitment Letters were
executed and delivered deleting certain conditions from the Original Merrill
Lynch Commitment Letter, including any material adverse change in the relevant
capital markets, and (iii) the termination date of the Merger Agreement would be
extended from January 31, 1999 to March 31, 1999. In the course of reaching its
decision to adopt and approve the Amendment and to recommend approval to the
stockholders, the Board of Directors consulted with the Company's legal and
financial advisors and considered a number of factors in addition to those
considered at the time of approval of the original Merger Agreement on July 1,
1998 including the following principal factors which were material to the
Board's decision:
(a) the status of Acquisition's prior financing arrangements in light
of the Merrill Lynch letter of October 12, 1998 and subsequent
communications and meetings with Acquisition and Merrill Lynch and the
uncertainty regarding the ability of Acquisition to obtain financing for
the Merger under the terms of its then existing financing commitments in
light of market changes since July 2, 1998;
(b) the DLJ Opinion rendered at the November 29, 1998 meeting of the
Board of Directors to the effect that, as of such date, and based upon the
assumptions made, matters considered and limits of review set forth in such
opinion, the proposed consideration to be received by the
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stockholders of the Company (other than by affiliates of the Company) in
the Merger was fair from a financial point of view to such holders, and the
presentation of DLJ at the November 19 and 29, 1998 Board meetings in
connection with its opinion. The Board was aware that certain analyses
performed by DLJ yielded higher valuations, but the Board recognized that,
as DLJ indicated, the determination by DLJ of the fairness of the
transaction was based on all analyses conducted by DLJ and that selecting
portions of DLJ's analysis creates an incomplete view of the evaluation
process underlying the DLJ Opinion. The Board also took into account that
the discounted cash flow analysis provided by DLJ was based on projected
results of the Company that are inherently subject to significant economic
and competitive uncertainties and contingencies and therefore there were no
assurances that such results would be achieved. See ' -- Opinion of
Donaldson, Lufkin & Jenrette';
(c) the possibility of costly and protracted litigation with an
uncertain outcome if an agreement with Acquisition were not reached;
(d) that the $41.50 per share cash merger consideration amount was
Acquisition's 'best and final offer';
(e) the limitations of Acquisition's 'financing out' and the more
definitive nature of the financing commitments, including the deletion of
the Lead Agents' 'market out' under the commitments; and
(f) the increased costs associated with Acquisition's financing,
including bank fees for the credit facilities and spreads on the high-yield
offerings, as compared to July.
The foregoing discussion of the information and factors considered by the
Board of Directors is not intended to be exhaustive but is believed to include
all material factors considered by the Board of Directors. In view of the
variety of factors considered in connection with its evaluation of the Merger,
the Board of Directors did not find it practicable to, and did not, quantify or
otherwise attempt to assign relative weight to the specific factors considered
in reaching its determination. In addition, individual members of the Board of
Directors may have given different weights to different factors. In the course
of its deliberations, the Board of Directors did not establish a range of values
for the Company; however, based on the factors outlined above and on the
presentation and opinion of DLJ, the Board of Directors determined that the
Merger Agreement and the Merger are in the best interests of the Company and its
stockholders and recommended approval to the stockholders.
OPINION OF DONALDSON, LUFKIN & JENRETTE
The Company retained DLJ to act as its financial advisor in connection with
the Merger Agreement and the transactions contemplated thereby. In its role as
financial advisor to the Company, DLJ was asked by the Company to render an
opinion to the Board as to the fairness from a financial point of view of the
consideration to be received in the Merger by the stockholders of the Company
other than stockholders who are affiliates of the Company (the 'Unaffiliated
Stockholders').
On July 1, 1998, DLJ rendered an oral opinion, which was subsequently
confirmed by a written opinion dated July 2, 1998 (the 'July DLJ Opinion'),
that, as of such written opinion date, based upon and subject to the
assumptions, limitations and qualifications set forth in such opinion, the
consideration to be received by the Unaffiliated Stockholders pursuant to the
original Merger Agreement was fair, from a financial point of view, to the
Unaffiliated Stockholders.
On November 19, 1998 and again on November 29, 1998, DLJ rendered an oral
opinion, which was confirmed by a written opinion dated November 29, 1998 (the
'DLJ Opinion'), that, as of such written opinion date, based upon and subject to
the assumptions, limitations and qualifications set forth in such opinion, the
revised consideration to be received by the Unaffiliated Stockholders pursuant
to the Merger Agreement was fair, from a financial point of view, to the
Unaffiliated Stockholders.
THE FULL TEXT OF THE DLJ OPINION IS ATTACHED HERETO AS APPENDIX C.
STOCKHOLDERS SHOULD READ AND REVIEW THE DLJ OPINION CAREFULLY AND IN ITS
ENTIRETY FOR ASSUMPTIONS MADE, PROCEDURES FOLLOWED, OTHER MATTERS CONSIDERED,
AND LIMITS OF THE REVIEW BY DLJ IN CONNECTION WITH SUCH OPINION. THE DLJ OPINION
IS DIRECTED ONLY TO THE FAIRNESS OF THE CONSIDERATION TO BE RECEIVED BY THE
UNAFFILIATED STOCKHOLDERS FROM A FINANCIAL POINT OF VIEW AND DOES NOT ADDRESS
ANY OTHER ASPECT OF THE MERGER OR RELATED TRANSACTIONS.
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THE DLJ OPINION DOES NOT CONSTITUTE A RECOMMENDATION TO ANY STOCKHOLDER AS TO
WHETHER SUCH STOCKHOLDER SHOULD ELECT TO RECEIVE THE CASH ELECTION PRICE OR TO
RECEIVE SURVIVING CORPORATION SHARES.
The Company selected DLJ to act as its financial advisor because of DLJ's
expertise and familiarity with the Company and the cellular and PCS
telecommunications industries. DLJ is a nationally recognized investment banking
firm and is engaged in the valuation of businesses and their securities in
connection with mergers and acquisitions, negotiated underwritings, secondary
distributions of listed and unlisted securities, leveraged buy-outs and
valuations for estate, corporate and other purposes. The Company did not impose
any restrictions or limitations upon DLJ with respect to the investigations made
or the procedures followed by DLJ in rendering the DLJ Opinion.
In arriving at the DLJ Opinion, DLJ reviewed the Merger Agreement and the
exhibits and schedules thereto, as well as related financing commitment letters
and term sheets. DLJ also reviewed financial and other information that was
publicly available or furnished to it by the Company including information
provided during discussions with the Company's management. Included in the
information provided during discussions with the Company's management were
certain financial projections for the Company for the period beginning June 1,
1998 and ending May 31, 2003, prepared by the Company's management. In addition,
DLJ compared certain financial and securities data of the Company with various
other companies whose securities are traded in public markets, reviewed the
historical stock prices and trading volumes of the Common Shares, reviewed
prices and premiums paid in certain other business combinations and conducted
such other financial studies, analyses and investigations as DLJ deemed
appropriate for purposes of rendering the DLJ Opinion.
In rendering the DLJ Opinion, DLJ relied upon and assumed the accuracy and
completeness of all of the financial and other information that was available to
it from public sources, that was provided to it by the Company or its
representatives or that was otherwise reviewed by it. DLJ also assumed that the
financial projections supplied to it were reasonably prepared on a basis
reflecting the best currently available estimates and judgments of the
management of the Company as to the future operating and financial performance
of the Company. DLJ did not assume responsibility for making any independent
evaluation of the assets, liabilities or operations of the Company, nor did DLJ
make any independent verification of the information reviewed by it. DLJ relied
as to certain legal matters on advice of the Company's counsel.
The DLJ Opinion is necessarily based on economic, market, financial and
other conditions as they existed on, and on the information made available to it
as of, the date of the DLJ Opinion. The DLJ Opinion states that, although
subsequent developments may affect this opinion, DLJ does not have any
obligation to update, revise or reaffirm its opinion. The DLJ Opinion does not
address the relative merits of the Merger or any other business strategies being
considered by the Board, nor does it address the Board's decision to proceed
with the Merger or any other aspect of the Merger or related transactions.
The following summarizes the financial analyses that DLJ presented to the
Board on July 1 and November 19, 1998 in connection with its opinion. For the
November 19, 1998 Board meeting DLJ conducted an analysis of the implied equity
value per share based on certain valuation methodologies utilized by DLJ in
connection with the July DLJ Opinion and compared these implied equity values to
the revised merger price. In the November 19, 1998 analysis, DLJ included
intervening events between the rendering of the July DLJ Opinion and November
10, 1998. At the November 29, 1998 Board meeting, prior to rendering its oral
opinion, DLJ informed the Board that the financial analyses presented at the
November 19, 1998 Board meeting continued to be applicable.
Comparable Publicly Traded Company Analysis. DLJ compared multiples of
selected historical and projected operating information, stock market data and
financial ratios for the Company implied by the July 1 WCAS offer (the 'Offer')
to multiples of selected historical and projected operating information, stock
market data and financial ratios of certain other comparable publicly-traded
cellular and PCS telecommunications companies followed by the research
department of DLJ ('DLJ Research'). The universe of comparable companies for the
July analysis included three cellular operators (CoreComm Incorporated, United
States Cellular Corporation and Vanguard Cellular Systems, Inc.) and seven PCS
operators (Western Wireless Corporation, Omnipoint Corporation, Powertel Inc.,
Nextel Communications Inc., Clearnet Communications Inc., Microcell
Telecommunications Inc. and Aerial Communica-
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tions, Inc.) and the universe for the November analysis added Rural Cellular
Corporation and CommNet Cellular Inc. and deleted Vanguard Cellular Systems,
Inc. (which had since been acquired) (in each case, the 'Comparable Companies').
The July analysis conducted by DLJ of the implied value per share of the
Comparable Companies yielded a range of $21.75 to $25.25. The November analysis
yielded a range of $23.00 to $33.75 per share compared to the revised Merger
price of $41.50 per share. The following chart summarizes such November
analysis:
[COMPARABLE COMPANIES ANALYSIS GRAPH]
<TABLE>
<CAPTION>
RANGE BASED ON IMPLIED EQUITY
COMPARABLE COMPANIES ANALYSIS VALUE PER SHARE
- ----------------------------- ---------------
<S> <C>
Low $23.00
High $33.75
Merger Price $41.50
</TABLE>
For the July analysis, DLJ presented the following information for the
comparable cellular and PCS companies:
For the comparable cellular companies, an analysis conducted by DLJ
Research of current enterprise value (defined as trading equity value
adjusted by adding long-term debt and preferred stock, if any, and
subtracting cash, short-term investments and other asset values at varying
discounts of Private Market Value) to 1998 estimated revenue yielded a
range of 2.8 to 3.7 times revenue with a mean of 3.3 times revenue,
compared to 6.1 times calendarized revenue and 7.5 times fiscal year
revenue for the Company implied by the Offer. An analysis of current
enterprise value to 1999 estimated revenue yielded a range of 2.4 to 3.5
times revenue with a mean of 2.9 times revenue, compared to an indicated
enterprise value of 4.4 times calendarized revenue and 5.3 times fiscal
year revenue for the Company implied by the Offer. An analysis of current
enterprise value to 1998 estimated earnings before interest, taxes,
depreciation and amortization ('EBITDA') yielded a range of 8.4 to 10.5
times EBITDA with a mean of 9.7 times EBITDA, compared to an indicated
enterprise value of 13.4 times calendarized EBITDA and 17.6 fiscal year
EBITDA for the Company implied by the Offer. An analysis of current
enterprise value to 1999 estimated EBITDA yielded a range of 6.5 to 9.3
times EBITDA with a mean of 8.3 times EBITDA, compared to an indicated
enterprise value of 9.3 times calendarized EBITDA and 11.4 times fiscal
year EBITDA for the Company implied by the Offer. DLJ also compared the
price per Pop of each comparable company (defined as enterprise value
divided by the existing number of Pops). An analysis of current enterprise
value to existing Pops yielded a range of $138.1 to $196.8 per Pop with a
mean of $166.4 per Pop, compared to an indicated price per Pop of $184.1
for the Company implied by the Offer. DLJ indicated that the ratio of
enterprise value to estimated 1998 and 1999 estimated revenue multiples, to
1998 and 1999 estimated EBITDA multiples and to existing Pops calculated
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for the Company based on the financial terms of the Original Merger were
within the ranges of multiples of the comparable companies and/or above the
means with respect thereto.
For the comparable PCS companies, an analysis conducted by DLJ
Research of current enterprise value to 1998 estimated revenue yielded a
range of 6.7 to 16.2 times revenue with a mean of 8.3 times revenue,
compared to 6.1 times calendarized revenue for the Company implied by the
Offer. An analysis of current enterprise value to 1999 estimated revenue
yielded a range of 4.0 to 6.7 times revenue with a mean of 4.4 times
revenue, compared to an indicated enterprise value of 4.4 times
calendarized revenue for the Company implied by the Offer. An analysis of
current enterprise value to 1998 and 1999 estimated EBITDA yielded a result
that was not meaningful, compared to an indicated enterprise value of 9.3
times calendarized EBITDA for the Company in the Original Merger because
the comparable PCS companies do not have significant positive projected
EBITDA. DLJ also compared the price per Pop of each comparable company,
which yielded a range of $22.6 to $51.6 per Pop with a mean of $43.6 per
Pop, compared to an indicated price per Pop of $184.1 for the Company
implied by the Offer. DLJ indicated that the ratio of enterprise value to
estimated 1998 and 1999 estimated revenue multiples, to 1998 and 1999
estimated EBITDA multiples and to existing Pops calculated for the Company
based on the financial terms of the Original Merger were within the ranges
of multiples of the comparable companies and/or above the means with
respect thereto.
Comparable M&A Transactions Analysis. For the July analysis, DLJ reviewed
selected acquisitions involving cellular and PCS telecommunications companies
during the period from January 1, 1996 to June 20, 1998, including twelve
cellular transactions (360[d] Communications Company/ALLTEL Corporation;
Vanguard Cellular Systems, Inc./Triton PCS, Inc.; PriCellular
Corporation/American Cellular Corp.; Atlantic Cellular Corp./Rural Cellular
Corporation; Price Communications Inc./WirelessOne Network LP; CommNet Cellular
Corp./Blackstone Capital Partners; Palmer Wireless, Inc./Price Communications
Corporation; Triad Cellular Corp./Western Wireless Corporation; U S WEST,
Inc./AirTouch Communications, Inc.; Pacific Telecommunications/Century Telephone
Enterprises, Inc.; Independent Cellular Network, Inc./ 360 Communications
Company and Cellular Communications, Inc./AirTouch Communications, Inc.) and two
PCS transactions (Western Wireless Corporation/Hutchinson Whampoa Telecom Ltd.
and U S WEST's stake in PCS PrimeCo. L.P./AirTouch Communications, Inc.). For
the November analysis, DLJ included the subsequent acquisition of Vanguard
Cellular Systems, Inc. by AT&T.
In examining these transactions, DLJ analyzed certain income statement and
balance sheet parameters of the acquired company relative to the consideration
paid. The multiples analyzed included total transaction value (defined as
transaction equity value adjusted by adding long-term debt and preferred stock,
if any, and subtracting cash and short-term investments) as a multiple of
forward fiscal year EBITDA and as a ratio per existing Pop.
The July analysis of total transaction value of the comparable cellular
companies to forward EBITDA yielded an average of 12.2 times and a median of
11.7 times forward EBITDA, compared to an indicated enterprise value of 9.3
times forward calendarized EBITDA and 11.4 times forward fiscal year EBITDA for
the Company implied by the Offer. An analysis of total transaction value of the
comparable PCS companies to forward EBITDA yielded an average that was not
meaningful because the comparable PCS companies do not have significant positive
projected EBITDA. DLJ also compared the price per Pop of each comparable
company, which yielded an average of $240 and a median of $227 per Pop, compared
to an indicated price per Pop of $184.1 for the Company implied by the Offer. An
analysis of transaction value to existing comparable PCS Pops yielded an average
and median of $49 per Pop, compared to an indicated price per Pop of $184.1 for
the Company implied by the Offer.
For the November analysis, DLJ compared the revised Merger price to the
equity value per share implied by calculating multiples of selected historical
and projected operating information, stock market data and financial ratios of
certain other comparable acquisitions of cellular and PCS telecommunications
companies. This calculation yielded a range of $28.75 to $46.75 per share
compared to the revised Merger price of $41.50 per share.
Premiums Paid Analysis. DLJ's July analysis indicated that the average
percentage premium of offer prices to trading prices one day, one week and one
month prior to the date of the announcement
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of discussions for publicly announced transactions (between June 1, 1995 and
June 6, 1998 and for transactions sized between $1.5 and $2.5 billion) was
29.8%, 36.6% and 38.0%, respectively, while the median was 25.7%, 28.2% and
35.7%, respectively. The consideration to be received under the original Merger
Agreement of $43.50 per share represented a premium to Company common stock
based on the closing stock price one day, one week and one month prior to the
Company's public disclosure of the exploration of strategic alternatives on
April 14, 1998 of 74.9%, 73.2% and 78.5%, respectively.
For the November analysis, DLJ compared the revised Merger price to the
equity value per share implied by calculating the average percentage premium of
offer prices to trading prices one day, one week and one month prior to the date
of the announcement of discussions for publicly announced transactions (between
November 18, 1995 and November 18, 1998 and for transactions sized between $1.5
and $2.5 billion). This calculation yielded a range of $30.25 to $32.25 per
share compared to the revised Merger price of $41.50 per share.
Discounted Cash Flow Analysis. DLJ performed a discounted cash flow
analysis of the Company. DLJ performed this analysis on a set of projections
provided by the Company's management and prepared as part of the sale process.
Using assumed weighted average costs of capital between 12.0% and 14.0% and
terminal EBITDA multiples of 9.0 to 10.0 times for domestic cash flow, of 7.5 to
8.0 times for Puerto Rico cash flow and of 2.0 times for minority interest cash
flow, the analysis yielded values ranging from $57.50 to $70.00 per share
compared to the revised Merger price of $41.50 per share.
DLJ Research Private Market Value Analysis. DLJ compared the Merger price
to the equity value per share calculated by DLJ Research in a report published
in Spring 1998. This calculation yielded a range of $33.41 to $39.08 per share
compared to the revised Merger price of $41.50 per share.
Leveraged Recapitalization Stub Trading Analysis. For the July
presentation, DLJ also analyzed the stock price performance of selected
leveraged recapitalizations completed since 1990 including Fischer Scientific
International Inc., Paragon Health Network, Inc., DecisionOne Holding Corp.,
Amphenol Corp., Syratech Corporation and Bruno's, Inc. DLJ analyzed the returns
to pre-announcement equity value over a period from the effective date of each
transaction to the 12 month anniversary of each transaction. The empirical data
suggested a positively-sloped line with a return to pre-announcement equity at
the effective date of approximately 32% and a return to pre-announcement equity
at the 12 month anniversary of approximately 70%.
The summary set forth above provides a description of the material analyses
performed by DLJ. The preparation of a fairness opinion involves various
determinations as to the most appropriate and relevant methods of financial
analysis and the application of these methods to the particular circumstances.
Therefore, such an opinion is not readily susceptible to summary description.
Each of the analyses conducted by DLJ was carried out in order to provide a
different perspective on the transactions and add to the total mix of
information available. DLJ did not form a conclusion as to whether any
individual analysis, considered in isolation, supported or failed to support an
opinion as to a fairness from a financial point of view. Rather, in reaching its
conclusion, DLJ considered the results of the analyses in the light of each
other and ultimately reached its opinion based on the results of all analyses
taken as a whole. DLJ did not place particular reliance or weight on any
individual analysis, but instead concluded that its analyses, taken as a whole,
supported its determination. Accordingly, notwithstanding the separate factors
summarized above, DLJ has indicated to the Company that it believes that its
analyses must be considered as a whole and that selecting portions of its
analyses and the factors considered by it, without considering all analyses and
factors, could create an incomplete view of the evaluation process underlying
its opinion. While the discounted cash flow analyses yielded values above the
offer, which analysis was considered by the Board, the determination by DLJ of
the fairness of the transaction was based on all the analyses conducted by DLJ.
The analyses performed by DLJ are not necessarily indicative of actual values or
future results, which may be significantly more or less favorable than those
suggested by such analyses.
Pursuant to the Board's directive on April 2, 1998 to retain DLJ, the
Company and DLJ executed an engagement letter (the 'Engagement Letter').
According to the terms of the Engagement Letter, the Company agreed (i) to pay
to DLJ (a) a retainer fee of $100,000, payable upon execution of the Engagement
Letter, (b) a fee of $1,000,000 at the time DLJ delivers the DLJ Opinion to the
Board,
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(c) upon consummation of the Merger, an amount equal to one-half of one percent
(0.50%) of the aggregate value of outstanding common stock of the Company
(treating any shares issuable upon exercise of options, warrants or other rights
of conversion as outstanding), plus the amount of any debt assumed, acquired,
remaining outstanding, retired or defeased or preferred stock redeemed or
remaining outstanding in connection with the Merger, less the amount paid by the
Company pursuant to clauses (i)(a) and (b) above and (ii) upon request by DLJ
from the time to time, to reimburse DLJ for all out-of-pocket expenses
(including, up to a maximum of $25,000 without the prior written approval of the
Company, the reasonable fees and expenses of counsel) incurred by DLJ in
connection with its engagement thereunder. In addition, the Company has agreed
to indemnify DLJ and certain related persons against certain liabilities and
expenses relating to or arising out of its rendering of services under the
Engagement Letter. DLJ and the Company negotiated this fee arrangement at arms'
length and the Board was aware of such arrangement, including the fact that a
significant portion of the aggregate fee payable to DLJ is contingent upon
consummation of the Merger. DLJ and the Company believe that the terms of this
fee arrangement are customary in transactions of this nature.
In the ordinary course of its business, DLJ actively trades the securities
of the Company for its own account and for the accounts of its customers and,
accordingly, may at any time hold a long or short position in the Company's
securities. DLJ has performed investment banking and other services for the
Company in the past including co-managing the Company's $221 million follow-on
equity offering in 1997 and joint-lead managing the $51 million initial public
offering in 1991. The Company has compensated DLJ for such services. In
addition, DLJ has performed investment banking services for WCAS and its
affiliated investment partnerships on several occasions including advising on
mergers and acquisitions assignments and underwriting both equity and debt
securities for their portfolio companies including advising Norand Corporation,
a WCAS affiliate- and DLJ Sprout Group-sponsored company, in its sale to Western
Atlas in January 1997, and has received customary compensation for such
services.
APPROVAL BY STOCKHOLDERS OF THE COMPANY
Pursuant to the Stockholder Agreement, the Company's principal stockholder,
Century, agreed to vote its Shares of the Company in favor of the Merger so long
as the Merger Agreement remains in effect. On December 4, 1998, Century executed
a written stockholder's consent in lieu of meeting to approve the Merger. Since
Century controls, on a fully diluted basis, more than a majority of the
outstanding votes of the Company required to approve the Merger, no further vote
is necessary to approve the Merger. See 'The Stockholder Agreement.'
MERGER CONSIDERATION
At the Effective Time, Acquisition will be merged with and into Centennial
and Centennial will continue as the Surviving Corporation in the Merger. Subject
to the effects of proration as described herein, pursuant to the Merger
Agreement, holders of outstanding Common Shares will have the opportunity to
elect to receive the Cash Election Price ($41.50 per share) or to receive
Surviving Corporation Shares representing up to 7.1% of the common shares of the
Surviving Corporation outstanding immediately after the Merger. Stockholders who
fail to make an election to receive shares of the surviving corporation will be
deemed have elected to receive cash. Class B Shares will be converted into the
right to receive $41.50 per share in cash; provided, that if the aggregate
number of Surviving Corporation Shares elected to be received by the holders of
Common Shares represents less than 7.1% of the common shares of the Surviving
Corporation outstanding immediately after the Merger, then a number of Class B
Shares equal to a portion of such shortfall will be converted into Surviving
Corporation Shares on a pro rata basis with Common Shares other than Electing
Shares. All outstanding Convertible Preferred Shares and Second Series
Convertible Preferred Shares will be converted into the right to receive $41.50
in cash on an as-converted basis. The following Common Shares are not subject to
conversion pursuant to the Merger: fractional shares that will be converted to
cash; Dissenting Shares, which may receive appraisal rights; and Common Shares
held by the Company as treasury stock or owned by any Subsidiary, or held by
Acquisition, which shares will be canceled and no payment shall be made with
respect thereto.
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Each holder of Common Shares may elect to receive the Cash Election Price
with respect to some of the stockholder's Common Shares and Surviving
Corporation Shares with respect to other Common Shares, provided that the
aggregate number of Surviving Corporation Shares to be received at the Effective
Time must equal the Non-Cash Election Number (7.1% of the common shares of the
Surviving Corporation outstanding immediately after the Merger).
Because Surviving Corporation Shares representing 7.1% of the common shares
of the Surviving Corporation outstanding immediately after the Merger must be
received by existing stockholders of the Company in the Merger, holders of
Common Shares who do not elect to receive any shares and holders of Class B
Shares may, due to proration, be required to receive some Surviving Corporation
Shares. In addition, stockholders who elect to receive shares may, due to
proration, receive Surviving Corporation Shares and receive cash in amounts
which vary from the amounts such holders elected. See 'Risk Factors.'
Immediately following the Merger, the Surviving Corporation intends to
effect a stock split if necessary to comply with the Nasdaq National Market
Maintenance Standards. The Surviving Corporation would make appropriate
adjustments to the number of shares of its common stock outstanding following
the Merger to reflect the stock split.
NON-CASH ELECTION
Holders of Common Shares will be entitled to make an unconditional Non-Cash
Election, on or prior to the Election Date, to receive Surviving Corporation
Shares. If, however, the number of Electing Shares exceeds the Non-Cash Election
Number, then (i) the number of Electing Shares to be converted into the right to
receive Surviving Corporation Shares will be determined by multiplying the total
number of Electing Shares covered by a holder's Non-Cash Election by a proration
factor determined by dividing the Non-Cash Election Number by the total number
of Electing Shares; (ii) such number of Electing Shares will be so converted;
and (iii) each Class B Share will be converted into an amount in cash equal to
the Cash Election Price. All Electing Shares, other than those shares converted
into the right to receive Surviving Corporation Shares as described in the
immediately preceding sentence, will be converted into cash (on a consistent
basis among stockholders who made the Non-Cash Election, pro rata to the number
of shares as to which they made such election) as if such shares were not
Electing Shares.
If the number of Electing Shares is less than the Non-Cash Election Number,
then (i) all Electing Shares will be converted into the right to receive
Surviving Corporation Shares in accordance with the Merger Agreement; (ii) (A)
additional Common Shares will be converted into the right to receive Surviving
Corporation Shares, which number of additional shares will be determined by
multiplying the total number of Common Shares outstanding at the Effective Time,
other than Canceled Shares, Electing Shares and Dissenting Shares, by the
Shortfall Proration Factor, which is determined by dividing (x) the difference
between the Non-Cash Election Number and the number of Electing Shares by (y)
the total number of Common Shares outstanding at the Effective Time, other than
Canceled Shares, Electing Shares and Dissenting Shares and including, as if they
had been converted into Common Shares, all Class B Shares issued and outstanding
at the Effective Time, and (B) such additional Common Shares will be converted
into the right to receive Surviving Corporation Shares (on a consistent basis
among holders of such shares, pro rata based on the number of such shares held
by each stockholder); and (iii) the Class B Shares issued and outstanding
immediately prior to the Effective Time will be converted into (A) the right to
receive a number of Surviving Corporation Shares, after conversion of the Class
B Shares into Common Shares, equal to the Shortfall Proration Factor multiplied
by the total number of Class B Shares issued and outstanding immediately prior
to the Effective Time, which Common Shares will be deemed to be Electing Shares,
and (B) an amount in cash equal to the Cash Election Price multiplied by the
total number of Class B Shares issued and outstanding immediately prior to the
Effective Time less the aggregate number of Surviving Corporation Shares
received pursuant to clause (iii)(A) above.
If a holder of Common Shares elects to make a Non-Cash Election and
receives cash as a result of the proration procedures described in the
immediately preceding paragraph, such stockholder may receive dividend treatment
(rather than capital gain treatment) for any cash received in the Merger as a
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result of such proration procedures. See 'Risk Factors -- Risk Factors Relating
to the Effects of the Merger; Receiving Common Stock of the Surviving
Corporation in the Merger or Receiving Cash Due to Proration -- Non-Cash
Election and Proration into Cash; Possible Dividend Treatment' and 'The
Merger -- Federal Income Tax Consequences.'
HOLDERS OF COMMON SHARES THAT DO NOT MAKE A NON-CASH ELECTION WILL RECEIVE
AN AMOUNT EQUAL TO $41.50 IN CASH FROM THE COMPANY FOLLOWING THE MERGER FOR EACH
COMMON SHARE (OTHER THAN CANCELED SHARES AND DISSENTING SHARES) HELD BY SUCH
STOCKHOLDER, SUBJECT TO THE PRORATION PROCEDURES DESCRIBED ABOVE.
Examples. As set forth in greater detail below, holders of Common Shares
who elect to receive Surviving Corporation Shares or to convert such shares into
the right to receive the Cash Election Price may experience a range of actual
outcomes based upon the actions taken by other stockholders. The following
examples are based on the number of Shares issued and outstanding as of
November 4, 1998 and do not take into account the contemplated stock split. On
that day, there were 15,085,398 Common Shares and 10,544,113 Class B Shares
issued and outstanding. To calculate the number of shares to be received by
existing stockholders of the Company, it is necessary to take into account that
the additional paid-in capital of the Surviving Corporation will be
approximately $430.57 million. Since the merger consideration is $41.50 per
share, there will be 10,375,193 shares of common stock of the Surviving
Corporation outstanding immediately after the Effective Time. Immediately after
the Effective Time, existing stockholders of the Company will hold 7.1% of the
outstanding shares (or 736,639 shares) of common stock of the Surviving
Corporation. Such shares represent approximately 2.9% of the aggregate number of
Common Shares and Class B Shares and approximately 4.9% of just the Common
Shares issued and outstanding as of November 4, 1998.
A stockholder holding 1,000 Common Shares and electing to receive Surviving
Corporation Shares for all of them will receive, in most circumstances, from 49
to 1,000 shares, depending upon the actions of other stockholders. A stockholder
holding 1,000 Common Shares and electing to convert all of them into the right
to receive the Cash Election Price with respect thereto will receive the Cash
Election Price for from 971 to 1,000 of such shares and will receive from 0 to
29 shares, depending on the actions of other stockholders. The following
examples, which assume there are no Dissenting Shares, further illustrate the
potential effects of proration. The impact of fractional shares has been
excluded to simplify the examples set forth below. If there are a substantial
number of Dissenting Shares, and the number of Electing Shares is less than the
Non-Cash Election Number, the proration factor would result in more than 2.9% of
the Common Shares and Class B Shares other than Dissenting Shares being prorated
into Surviving Corporation Shares.
A. Holder A owns 1,000 Common Shares and does not elect to receive any
Surviving Corporation Shares.
1. If other holders of Common Shares elect to receive 736,639 or more
Surviving Corporation Shares in the aggregate, then Holder A will receive
$41,500 in cash (1,000 shares at $41.50 per share), as other holders of
Common Shares have satisfied the Non-Cash Election Number (7.1% of the
outstanding shares of common stock of the Surviving Corporation immediately
after the Effective Time, or 736,639 shares).
2. If holders of Common Shares elect to receive fewer than 736,639
Surviving Corporation Shares in the aggregate, then Holder A will not
receive all cash for its 1,000 shares and will be required to receive some
Surviving Corporation Shares, as the Non-Cash Election Number has not been
met. Each holder of Common Shares other than Electing Shares and each
holder of Class B Shares will receive a small number of shares in order to
increase the number of Surviving Corporation Shares to be held by existing
stockholders to 736,639 and meet the Non-Cash Election Number. However,
even in the case of maximum proration, in which no holder of Common Shares
elects to receive shares, Holder A will be assured of receiving at least
$40,296.50 in cash (971 shares at $41.50 per share) and will receive 29
Surviving Corporation Shares, as all holders of both Common Shares and
Class B Shares will receive additional shares of the Surviving Corporation
on a pro rata basis.
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B. Holder B owns 1,000 Common Shares and elects to receive Surviving
Corporation Shares for all of its Common Shares.
1. If holders of Common Shares (including Holder B) elect to receive
more than 736,639 Surviving Corporation Shares in the aggregate, then
Holder B will not receive all 1,000 Surviving Corporation Shares that it
elected and will be required to receive some cash, as the number of
Electing Shares has exceeded 7.1% of the shares of common stock of the
Surviving Corporation to be outstanding immediately after the Effective
Time and the number of Surviving Corporation Shares which may be received
must be reduced in order to meet the Non-Cash Election Number. For example,
if holders of Common Shares elected to receive, in the aggregate, an amount
of Surviving Corporation Shares equal to 10% of the Common Shares
outstanding immediately prior to the Merger (or 1,508,540 Surviving
Corporation Shares in the aggregate), then each electing holder of Common
Shares, including Holder B, would be able to receive only 49% of its
Electing Shares in order to reduce the number of shares to 7.1% of the
outstanding shares of common stock of the Surviving Corporation immediately
after the Effective Time (or 736,639 Surviving Corporation Shares) and meet
the Non-Cash Election Number. Therefore, Holder B would be able to receive
only 490 shares (49% of the 1,000 shares it elected to receive) and would
receive $21,165 in cash (510 shares at $41.50 per share). In the case of
maximum proration, in which all holders of Common Shares elect to receive
Surviving Corporation Shares, Holder B would be able to receive only 49
shares (or 4.9%) and would receive $39,466.50 in cash (951 shares at $41.50
per share), as holders of only the Common Shares would receive, on a pro
rata basis, fewer Surviving Corporation Shares than they elected.
2. If holders of Common Shares (including Holder B) elect to receive
736,639 or fewer Surviving Corporation Shares in the aggregate, then Holder
B will receive all 1,000 Surviving Corporation Shares that it elected. In
this situation all Surviving Corporation Shares elected to be received will
be received in order to meet the Non-Cash Election Number. As described in
example A.2. above, if fewer than 736,639 Surviving Corporation Shares in
the aggregate are elected to be received, non-electing holders of Common
Shares and all holders of Class B Shares will receive Surviving Corporation
Shares on a pro rata basis in order to meet the Non-Cash Election Number.
C. Holder C owns 1,000 Common Shares and elects to receive some but not all
Surviving Corporation Shares. (This example assumes an election to
receive 500 Surviving Corporation Shares and convert 500 shares to
cash.)
1. If holders of Common Shares (including Holder C) elect to receive
exactly 736,639 Surviving Corporation Shares in the aggregate, then Holder
C will receive 500 Surviving Corporation Shares and will receive $20,750 in
cash (500 shares at $41.50 per share), as the Non-Cash Election Number will
have been met exactly.
2. If holders of Common Shares (including Holder C) elect to receive
more than 736,639 Surviving Corporation Shares in the aggregate, then
Holder C will not receive all 500 Surviving Corporation Shares that it
elected, as the number of shares which may be received must be reduced in
order to meet the Non-Cash Election Number. For example, if holders of
Common Shares elected to receive, in the aggregate, an amount of Surviving
Corporation Shares equal to 10% of the Common Shares outstanding
immediately prior to the Merger (or 1,508,540 Surviving Corporation Shares
in the aggregate), then each holder of Common Shares, including Holder C,
would be able to receive only 49% of its Electing Shares in order to reduce
the number of Surviving Corporation Shares to be held by existing
stockholders to 7.1% of the shares of common stock of the Surviving
Corporation to be outstanding immediately after the Effective Time and meet
the Non-Cash Election Number. Therefore, Holder C would be able to receive
only 245 shares (49% of its 500 Electing Shares) and would receive
$31,322.50 in cash (755 shares at $41.50 per share). If holders of Common
Shares elected to receive an amount of Surviving Corporation Shares equal
to more than 10% of the Common Shares outstanding immediately prior to the
Merger, Holder C would receive fewer Surviving Corporation Shares than in
the example above, but would receive a commensurately greater amount of
cash.
3. If holders of Common Shares (including Holder C) elect to receive
fewer than 736,639 Surviving Corporation Shares in the aggregate, then
Holder C would be required to receive more
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than 500 Surviving Corporation Shares, as the Non-Cash Election Number will
not have been met and each non-electing holder of Common Shares and all
holders of Class B Shares will receive a small number of shares (in the
case of Holder C, a small number of additional shares) in order to increase
the aggregate number of Surviving Corporation Shares to be held by existing
stockholders to 7.1% of the shares of common stock of the Surviving
Corporation to be outstanding immediately after the Effective Time, or
736,639 shares. For example, if holders of Common Shares elected to
receive, in the aggregate, 224,049 Surviving Corporation Shares (or
approximately 1.5% of the Common Shares outstanding immediately prior to
the Merger), then all holders of Common Shares other than Electing Shares
and all holders of Class B Shares must collectively receive an additional
512,590 shares (or approximately 2% of the total number of Common Shares
and Class B Shares outstanding immediately prior to the Merger) in the
aggregate on a pro rata basis in order to meet the Non-Cash Election
Number. In this example, Holder C would be required to receive an
additional 2% of the 500 shares Holder C did not elect to receive (an
additional 10 shares, for a total of 510 shares) and would receive $20,335
in cash (490 shares at $41.50 per share). If holders of Common Shares
elected to receive fewer than 224,049 shares in the aggregate, Holder C
would receive more Surviving Corporation Shares than in the example above,
but would receive commensurately less cash.
With respect to certain risks related to the receipt of Surviving
Corporation Shares, see 'Risk Factors.'
NON-CASH ELECTION PROCEDURE
Holders of Common Shares electing to receive Surviving Corporation Shares
must properly complete and sign the Form of Election accompanying this
Information Statement/Prospectus, and each Form of Election, together with all
certificates representing Common Shares as to which such Non-Cash Election is
being made, duly endorsed in blank or otherwise in form acceptable for transfer
on the books of the Company (or by appropriate guarantee of delivery, as set
forth in such Form of Election), must be received by the Exchange Agent at one
of the addresses listed on the Form of Election by the Election Date, and must
not be withdrawn. Stockholders who fail to make an election will, subject to
proration, have their shares converted to cash. After the Election Date, shares
for which a Non-Cash Election has been made may not be withdrawn. Due to the
requirement to obtain regulatory approval of the Merger and satisfy all other
conditions to the Merger, a period of time could elapse between the Election
Date and the Effective Time.
A NON-CASH ELECTION MAY BE REVOKED AND CERTIFICATES FOR ELECTING SHARES
WITHDRAWN BY WRITTEN NOTICE DULY EXECUTED AND RECEIVED BY THE EXCHANGE AGENT
PRIOR TO THE ELECTION DATE. IF AN ELECTION IS REVOKED, AND THE CERTIFICATES FOR
SHARES WITHDRAWN, THE CENTENNIAL CLASS A COMMON STOCK CERTIFICATES SUBMITTED
THEREWITH WILL BE PROMPTLY RETURNED BY THE EXCHANGE AGENT TO THE PERSON WHO
SUBMITTED SUCH CERTIFICATES. AFTER THE ELECTION DATE, SHARES FOR WHICH A
NON-CASH ELECTION HAS BEEN MADE MAY NOT BE WITHDRAWN. DUE TO THE REQUIREMENT TO
OBTAIN REGULATORY APPROVAL OF THE MERGER, A PERIOD OF TIME COULD ELAPSE BETWEEN
THE ELECTION DATE AND THE EFFECTIVE TIME.
Holders of Common Shares who make a Non-Cash Election for less than all of
their shares will receive a new share certificate from the Exchange Agent
representing the number of Surviving Corporation Shares to be received.
The determinations of the Exchange Agent as to whether or not Non-Cash
Elections have been properly made or revoked, and when such election or
revocations were received, will be binding.
ACQUISITION COMMON STOCK
In the Merger, all shares of stock of Acquisition issued and outstanding
immediately prior to the Effective Time will be converted into a number of
common shares of the Surviving Corporation equal to 92.9% of common shares of
the Surviving Corporation outstanding immediately after the Effective Time.
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EFFECTIVE TIME OF THE MERGER
The Merger shall become effective at such time as a certificate of merger
(the 'Certificate of Merger') is duly filed with the Secretary of State of the
State of Delaware, or such later time as Acquisition and the Company specify in
the Certificate of Merger (the 'Effective Time'). Such filing shall be made upon
the closing of the Merger (the 'Closing'), which, unless the parties to the
Merger Agreement otherwise agree, shall be no later than the second business day
(the 'Closing Date') after satisfaction or waiver of the conditions (excluding
conditions that by their terms cannot be satisfied until the Closing Date) set
forth in the Merger Agreement. Subject to certain limitations, the Merger
Agreement may be terminated by either Acquisition or the Company if, among other
reasons, the Merger has not been consummated on or before March 31, 1999. See
'Certain Provisions of the Merger Agreement -- The Merger,' ' -- Conditions to
the Consummation of the Merger' and ' -- Termination of the Merger Agreement.'
CONVERSION/RECEIPT OF SURVIVING CORPORATION SHARES; PROCEDURES FOR EXCHANGE OF
CERTIFICATES
The conversion of Shares (other than Canceled Shares and Dissenting Shares)
into the right to receive cash or, in the case of certain Common Shares and
Class B Shares, the right to receive Surviving Corporation Shares following the
Merger will occur at the Effective Time.
As soon as practicable after the Effective Time, the Exchange Agent will
send a letter of transmittal to each holder of Shares (other than holders of
Common Shares making a Non-Cash Election with respect to all of such holders'
shares who have properly submitted Forms of Election and share certificates to
the Exchange Agent). The letter of transmittal will contain instructions with
respect to the surrender of certificates representing Shares in exchange for
cash and, under certain circumstances, certificates representing Surviving
Corporation Shares to be received in the Merger.
EXCEPT FOR CENTENNIAL CLASS A COMMON STOCK CERTIFICATES SURRENDERED WITH A
FORM OF ELECTION AS DESCRIBED ABOVE UNDER ' -- NON-CASH ELECTION PROCEDURE,'
STOCKHOLDERS OF THE COMPANY SHOULD NOT FORWARD STOCK CERTIFICATES TO THE
EXCHANGE AGENT UNTIL THEY HAVE RECEIVED THE LETTER OF TRANSMITTAL.
As soon as practicable after the Effective Time, each holder of an
outstanding certificate or certificates which prior thereto represented Shares
shall, upon surrender to the Exchange Agent of such certificate or certificates
and acceptance thereof by the Exchange Agent, be entitled to the amount of cash,
if any, into which the number of Shares previously represented by such
surrendered certificate or certificates shall have been converted pursuant to
the Merger Agreement and a certificate or certificates representing the number
of full Surviving Corporation Shares, if any, to be received by the holder
thereof pursuant to the Merger Agreement. The Exchange Agent will accept such
certificates upon compliance with such reasonable terms and conditions as the
Exchange Agent may impose to effect an orderly exchange thereof in accordance
with normal exchange practices. After the Effective Time, there will be no
further transfer on the records of the Company or its transfer agent of
certificates representing Shares which have been converted, in whole or in part,
pursuant to the Merger Agreement into the right to receive cash, and if such
certificates are presented to the Company for transfer, they will be canceled
against delivery of cash and, if appropriate, certificates for Surviving
Corporation Shares. Until surrendered as contemplated by the Merger Agreement,
each certificate for Shares will be deemed at any time after the Effective Time
to represent only the right to receive upon such surrender the consideration
contemplated by the Merger Agreement. No interest will be paid or will accrue on
any cash payable as consideration in the Merger or in lieu of any fractional
Common Shares.
After the Effective Date, no dividends or other distributions will be paid
to the holder of any unsurrendered certificate for Common Shares with respect to
the Surviving Corporation Shares represented thereby and no cash payment in lieu
of fractional shares shall be paid to any such holder pursuant to the Merger
Agreement until the surrender of such certificate in accordance with the Merger
Agreement. Subject to the effect of applicable laws, there shall be paid to the
holder of a certificate representing whole Surviving Corporation Shares issued
in connection therewith, without interest, (i) at the time of such surrender or
as promptly after the sale of the Excess Shares (as defined below) as
practicable, the amount of any cash payable in lieu of a fractional Surviving
Corporation Share to which such holder is entitled pursuant to the Merger
Agreement and the proportionate amount of dividends
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or other distributions, if any, with a record date after the Effective Time
theretofore paid with respect to such whole Surviving Corporation Shares, and
(ii) following surrender, the proportionate amount of dividends or other
distributions, if any, with a record date after the Effective Time but prior to
such surrender and a payment date subsequent to such surrender payable with
respect to such whole Surviving Corporation Shares.
FRACTIONAL SHARES
No certificates or scrip representing fractional Surviving Corporation
Shares will be issued in connection with the Merger, and such fractional share
interests will not entitle the owner thereof to vote or to any rights of a
stockholder of the Company after the Merger. Each holder of Common Shares
exchanged pursuant to the Merger who would otherwise have been entitled to
receive a fraction of a Surviving Corporation Share (after taking into account
all Common Shares delivered by such holder) will receive, in lieu thereof,
either (i) an additional Surviving Corporation Share if necessary to cause the
number of Surviving Corporation Shares to be received at the Effective Time by
all holders to equal the Non-Cash Election Number or (ii) a cash payment
(without interest) representing such holder's proportionate interest in the net
proceeds from the sale by the Exchange Agent (following the deduction of
applicable transaction costs), on behalf of all such holders, of the shares (the
'Excess Shares') of Surviving Corporation Shares representing such fractions.
All such holders of Excess Shares shall be treated equitably. Such sale shall be
made as soon as practicable after the Effective Time.
CONDUCT OF BUSINESS PENDING THE MERGER
Pursuant to the Merger Agreement, the Company has agreed that prior to the
Effective Time its business and that of its consolidated subsidiaries and
certain affiliates will be conducted only in the ordinary course of business.
See 'Certain Provisions of the Merger Agreement -- Certain Covenants of the
Company -- Conduct of the Company Pending the Merger.'
ACCOUNTING TREATMENT
Receipt by existing stockholders of 7.1% of the Surviving Corporation
Shares issued and outstanding immediately after the Merger will enable such
stockholders to continue to participate in the equity of the Company and is
intended to permit the treatment of the Merger as a recapitalization for
financial reporting purposes. Accordingly, the historical basis of the Company's
assets and liabilities will not be affected by the transaction for financial
reporting purposes.
CERTAIN EFFECTS OF RECAPITALIZATION
Upon consummation of the Merger, Surviving Corporation Shares which are
received by existing stockholders in the Merger will represent 7.1% of the
outstanding common stock of the Surviving Corporation. Because the Merger is
intended to be accounted for as a recapitalization, it will have no impact on
the historical basis of the Company's assets and liabilities, one result of
which will be a change in common stockholders' equity of the Company from
stockholders' equity of approximately $42.2 million to a deficit of
approximately $581.3 million. See 'Risk Factors -- Risk Factors Relating to the
Effects of the Merger; Receiving Common Stock of the Surviving Corporation in
the Merger or Receiving Cash due to Proration -- Substantial Leverage; Common
Stockholders' Deficit.'
FEDERAL INCOME TAX CONSEQUENCES
The following discussion sets forth the opinion of Paul, Weiss, Rifkind,
Wharton & Garrison with respect to the material expected United States federal
income tax consequences generally applicable to stockholders of the Company who
receive Surviving Corporation Shares (which, for purposes of the following
discussion, shall include stockholders who receive Common Shares in exchange for
Class B Shares pursuant to the Merger) and/or receive cash in the Merger. The
discussion is based upon current provisions of the Internal Revenue Code of
1986, as amended (the 'Code'), currently applicable Treasury regulations, and
judicial and administrative decisions and rulings. There can be no assurance
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that the Internal Revenue Service ('IRS') will not take a contrary view, and no
ruling from the IRS has been or will be sought. Legislative, judicial or
administrative changes or interpretations may be forthcoming that could alter or
modify the statements and conclusions set forth herein. Any such changes or
interpretations could be retroactive and could affect the tax consequences to
the stockholders.
The discussion describes the material United States federal income tax
consequences generally applicable to stockholders, but does not purport to deal
with all aspects of United States federal income taxation that may affect
particular stockholders in light of their individual circumstances, and is not
intended for stockholders subject to special treatment under the United States
federal tax law (e.g., insurance companies, tax-exempt organizations, financial
institutions, broker-dealers, stockholders who hold their Shares as part of a
hedge, straddle or conversion transaction, stockholders who do not hold their
Shares as capital assets and stockholders who have acquired their Shares upon
the exercise of options or otherwise as compensation). In addition, this
discussion does not consider the effect of any applicable foreign, state, local
or other tax laws. Foreign Stockholders (as defined below) may be subject to
special rules not discussed herein.
THE FOLLOWING DISCUSSION DESCRIBES THE MATERIAL UNITED STATES FEDERAL
INCOME TAX CONSEQUENCES GENERALLY APPLICABLE TO STOCKHOLDERS. HOWEVER, A
STOCKHOLDER'S ACTUAL TAX TREATMENT MAY VARY DEPENDING UPON SUCH STOCKHOLDER'S
PARTICULAR SITUATION. STOCKHOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO
THE PARTICULAR TAX CONSEQUENCES TO THEM OF THE MERGER, INCLUDING THE
APPLICABILITY AND EFFECT OF ANY FOREIGN, STATE, LOCAL OR OTHER TAX LAWS.
Characterization of the Merger for United States Federal Income Tax
Purposes. For United States federal income tax purposes, both Acquisition and
the Merger will be disregarded as transitory, with the result that stockholders
who do not receive Surviving Corporation Shares for all of their Common Shares
will be treated as transferring a portion of their Shares in a sale transaction
and a portion of their Shares to the Company in a redemption transaction. See
'Stockholders Receiving Cash' below for a discussion of the consequences of cash
being deemed paid in redemption of Shares.
Tax Consequences to Stockholders on Receipt of Consideration. The following
discussion assumes that Shares held by a stockholder are held as a capital
asset. A holding period of more than one year is required for long-term capital
gain or loss treatment. Net capital gains of individuals are subject to tax at
lower rates than items of ordinary income.
As described more fully below, the United States federal income tax
consequences of the Merger with respect to a particular stockholder will depend
upon, among other things (i) whether the stockholder received any cash proceeds
pursuant to the Merger, (ii) the extent to which a stockholder will be treated
as transferring Shares to the Equity Investors (in a sale transaction) and to
the Company (in a redemption transaction) and (iii) whether the redemption of a
stockholder's Shares by the Company will qualify as a sale or exchange under
Section 302 of the Code.
Stockholders Receiving Cash. To the extent that a stockholder is considered
to have transferred Shares to the Equity Investors, such stockholder will
recognize capital gain or loss equal to the difference between the amount
realized on such deemed sale (i.e., the cash proceeds properly allocated
thereto) and the stockholder's adjusted tax basis in such Shares.
To the extent that a stockholder is considered to have transferred Shares
to the Company in a redemption transaction, such stockholder also will recognize
capital gain or loss equal to the difference between the cash proceeds allocable
to such deemed redemption and the stockholder's adjusted tax basis in such
Shares, provided that such redemption is treated as a sale or exchange under
Section 302 of the Code with respect to such stockholder.
Under Section 302 of the Code, a redemption of Shares pursuant to the
Merger will generally be treated as a sale or exchange if such redemption (a) is
'substantially disproportionate' with respect to the stockholder, (b) results in
a 'complete redemption' of the stockholder's interest in the Company or (c) is
'not essentially equivalent to a dividend' with respect to the stockholder. In
determining whether any of these Section 302 tests is satisfied, stockholders
must take into account both Shares that they
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actually own and Shares that they are deemed to own under the constructive
ownership rules set forth in Section 318 of the Code. Under such rules, a
stockholder is treated as owning Shares that are owned by certain related
individuals or entities and Shares that the stockholder has the right to acquire
by exercise of an option or by conversion or exchange of a security.
The deemed redemption of a stockholder's Shares in the Merger will be
'substantially disproportionate' with respect to such stockholder if, among
other things, the percentage of common stock actually and constructively owned
by such stockholder immediately following the Merger is less than 80% of the
percentage of common stock actually and constructively owned by such stockholder
immediately prior to the Merger. Additionally, the redemption of a stockholder's
Shares will not be 'substantially disproportionate' with respect to such
stockholder unless, after the Merger, such stockholder owns less than 50% of the
total combined voting power of all classes of stock entitled to vote in the
Company. STOCKHOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE
APPLICATION OF THE 'SUBSTANTIALLY DISPROPORTIONATE' TEST TO THEIR PARTICULAR
FACTS AND CIRCUMSTANCES.
The redemption of a stockholder's Shares will result in a 'complete
redemption' of a stockholder's interest in the Company if either (a) all the
Shares actually and constructively owned by the stockholder are redeemed (or
deemed sold) pursuant to the Merger or (b) all the Shares actually owned by the
stockholder are redeemed (or deemed sold) pursuant to the Merger and the
stockholder meets certain requirements allowing the stock constructively owned
to be disregarded.
Even if the redemption of a stockholder's Shares fails to satisfy the
'substantially disproportionate' test and the 'complete redemption' test
described above, the redemption of a stockholder's Shares may nevertheless
satisfy the 'not essentially equivalent to a dividend' test if the Merger
results in a 'meaningful reduction' in such stockholder's proportionate equity
interest in the Company. Whether the receipt of cash by a stockholder will be
considered 'not essentially equivalent to a dividend' will depend upon such
stockholder's facts and circumstances.
A stockholder may not be able to satisfy one of the above tests because of
the receipt (by election or proration) or the contemporaneous acquisition of
Surviving Corporation Shares by such stockholder or a related party whose Shares
would be attributed to such stockholder under Section 318 of the Code.
If a stockholder who is considered to have transferred Shares to the
Company in a redemption transaction cannot satisfy any of the three tests
described above, then to the extent the Company has sufficient current and/or
accumulated earnings and profits, such stockholder will be treated as having
received a dividend which will be includible in gross income (and treated as
ordinary income) in an amount equal to the cash received that is allocable to
the redemption transaction (without regard to gain or loss, if any). In such
case, in general, the basis of the Shares transferred to the Company in the
redemption transaction by such stockholder will be allocated to the adjusted
basis of the Surviving Corporation Shares received by such stockholder.
In the case of a corporate stockholder, if the cash paid is treated as a
dividend, such dividend income may be eligible for the 70% dividends-received
deduction. However, if a dividends-received deduction is available, the dividend
may be treated as an 'extraordinary dividend' under Section 1059(a) of the Code,
in which case a corporate stockholder's adjusted tax basis in Surviving
Corporation Shares received by such stockholder would be reduced, but not below
zero, by the amount of the nontaxed portion of such dividend. If the nontaxed
portion of such dividend exceeds such basis, such excess will be treated as gain
from the sale or exchange of the Shares for the taxable year in which the
extraordinary dividend is received.
Stockholders Receiving Surviving Corporation Shares and Receiving No Cash.
The Merger will have no United States federal income tax consequences for
stockholders who receive Surviving Corporation Shares and receive no cash.
Accordingly, a stockholder will not recognize any gain or loss on Surviving
Corporation Shares received by such stockholder.
As described above under ' -- Stockholders Receiving Surviving Corporation
Shares and Receiving No Cash,' the Merger will have no tax consequences to a
stockholder (and, thus, a stockholder will not recognize any gain or loss as a
result of the Merger), to the extent such stockholder receives Surviving
Corporation Shares. However, as described more fully above under
' -- Stockholders Receiving Cash,' a stockholder's receipt of Surviving
Corporation Shares may, under certain circumstances, cause the
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redemption portion of the cash received by such stockholder to be treated as a
dividend for United States federal income tax purposes.
Foreign Stockholders -- Withholding. The following is a discussion of
certain United States federal income tax consequences of the Merger to Foreign
Stockholders. For this purpose, a Foreign Stockholder is any stockholder who is
not, for United States federal income tax purposes, (i) a citizen or resident of
the United States, (ii) a corporation created or organized under the laws of the
United States or any political subdivision thereof, (iii) an estate the income
of which is subject to United States federal income taxation regardless of its
source or (iv) a trust if a court within the United States is able to exercise
primary supervision over the administration of the trust and one or more United
States fiduciaries have the authority to control all substantial decisions of
the trust (a 'Foreign Person').
In the case of any Foreign Stockholder, the Exchange Agent will withhold
30% of the amount paid to redeem the Shares of such stockholder in order to
satisfy certain United States withholding requirements, unless such Foreign
Stockholder proves in a manner satisfactory to the Company and the Exchange
Agent that either (i) the redemption of its Shares pursuant to the Merger will
qualify as a sale or exchange under Section 302 of the Code, rather than as a
dividend for United States federal income tax purposes, in which case no
withholding will be required, (ii) the Foreign Stockholder is eligible for a
reduced tax treaty rate with respect to dividend income, in which case the
Exchange Agent will withhold at the reduced treaty rate, or (iii) no United
States withholding is otherwise required.
FOREIGN STOCKHOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS REGARDING THE
APPLICATION TO THEM OF THESE WITHHOLDING RULES. FURTHER, SINCE THE FOREGOING
DISCUSSION DOES NOT ADDRESS ANY OF THE OTHER POTENTIAL UNITED STATES FEDERAL
INCOME AND ESTATE TAX CONSEQUENCES OF THE MERGER TO FOREIGN STOCKHOLDERS, SUCH
STOCKHOLDERS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO SUCH
POTENTIAL TAX CONSEQUENCES.
Information Reporting and Backup Withholding. The Company may be required
to report annually to the IRS and to a stockholder the amount of dividends paid
to such stockholder and any amount withheld under the backup withholding rules
with respect to such dividends. Copies of these reports also may be made
available to the tax authorities in the country in which a Foreign Stockholder
resides under applicable income tax treaties.
United States backup withholding (which generally is a withholding tax
imposed at the rate of 31% on certain payments to persons that fail to furnish
certain information under the United States information reporting requirements)
generally will not apply to (i) dividends paid to Foreign Stockholders that are
subject to the 30% withholding discussed above (or that are not so subject
because a tax treaty applies that reduces or eliminates such 30% withholding) or
(ii) under current law, dividends paid to a Foreign Stockholder at an address
outside of the United States. However, under final United States Treasury
regulations, effective as of January 1, 2000, a Foreign Stockholder will
generally be subject to United States withholding tax at a 31% rate, unless
certain certification procedures (or, in the case of payments made outside the
United States with respect to an offshore account, certain documentary evidence
procedures) are satisfied, directly or through a foreign intermediary.
Backup withholding and information reporting generally will apply to
dividends paid to addresses inside the United States on shares of stock to
beneficial owners that are not 'exempt recipients' and that fail to provide in
the manner required certain identifying information.
The payment of the proceeds of the disposition of Shares to or through the
United States office of a broker is subject to information reporting unless the
disposing stockholder, under penalty of perjury, certifies its foreign status or
otherwise establishes an exemption. Generally, United States information
reporting and backup withholding will not apply to a payment of disposition
proceeds if the payment is made outside the United States through a foreign
office of a foreign broker. However, information reporting requirements (but,
prior to January 1, 2000, not backup withholding) will apply to a payment of
disposition proceeds outside the United States if (i) the payment is made
through an office outside the United States of a broker that is either (A) a
United States person, (B) a Foreign Person which derives 50% or more of its
gross income for certain periods from the conduct of a trade or business in the
United States, (C) a 'controlled foreign corporation' for United States federal
income tax purposes, or (D) effective January 1, 2000, a foreign broker that is
(1) a foreign partnership, one or more of whose
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partners are United States persons who, in the aggregate, hold more than 50% of
the income or capital interest in the partnership at any time during its tax
year, or (2) a foreign partnership engaged at any time during its tax year in
the conduct of a trade or business in the United States, and (ii) the broker
fails to maintain documentary evidence that the stockholder is a Foreign
Stockholder and that certain conditions are met, or that the stockholder
otherwise is entitled to an exemption.
Any amounts withheld under the backup withholding rules may be allowed as a
refund or a credit against the stockholder's United States federal income tax
liability provided the required information is furnished to the IRS.
THE FOREGOING DESCRIPTION OF POTENTIAL UNITED STATES FEDERAL INCOME TAX
CONSIDERATIONS GENERALLY APPLICABLE TO STOCKHOLDERS IN THE MERGER DOES NOT
ADDRESS EVERY FEDERAL INCOME TAX CONCERN WHICH MAY BE APPLICABLE TO A PARTICULAR
STOCKHOLDER. EACH STOCKHOLDER IS URGED TO CONSULT SUCH STOCKHOLDER'S OWN TAX
ADVISOR TO DETERMINE THE TAX CONSEQUENCES TO SUCH STOCKHOLDER, IN THE LIGHT OF
SUCH STOCKHOLDER'S PARTICULAR CIRCUMSTANCES, OF THE DISPOSITION OF SHARES
PURSUANT TO THE MERGER.
EFFECT ON OPTIONS AND EMPLOYEE BENEFIT MATTERS
It is anticipated that each option to purchase Common Shares (an 'Option')
granted under the Company's 1991 Employee Stock Option Plan and
Non-Employee/Officer Director Option Plan (the 'Option Plans') will be exercised
or canceled pursuant to its terms or canceled in exchange for a cash amount
equal to the difference between $41.50 and the exercise price of the Option
prior to the Effective Time. Each Option that is not exercised or canceled will
remain outstanding immediately following the Effective Time and such Options
will be subject to adjustment pursuant to the terms of the Option Plans. As a
condition to closing, the number of Common Shares purchasable upon the exercise
of Options that have not been exercised or canceled may not exceed 750,000. In
addition, following the Merger, the Company may grant or sell, or grant options
to purchase, additional common shares of the Surviving Corporation to members of
the Company's management or otherwise permit management to participate in the
equity of the Company. The foregoing could dilute the holdings of existing
holders of common shares of the Company. See 'Risk Factors -- Risk Factors
Relating to the Effects of the Merger; Receiving Common Stock of the Surviving
Corporation in the Merger or Receiving Cash due to Proration -- Potential
Dilution of Common Stock of the Surviving Corporation.'
Acquisition has agreed in the Merger Agreement that the Company will, for a
period of two years from the Effective Time, provide employees of the Company
and its Subsidiaries with cash compensation, employee benefit and incentive
compensation and similar plans and programs (other than equity-based
compensation plans and programs) as will provide compensation and benefits which
in the aggregate are no less favorable than those provided to such employees as
of the date of the Merger Agreement.
INTERESTS OF CERTAIN PERSONS IN THE MERGER
Certain directors and executive officers of the Company may have interests,
described herein, that present them with potential conflicts of interest in
connection with the Merger. The Board of Directors was aware of the potential
conflicts described below and considered them in addition to the other matters
described under 'The Merger -- Recommendation of the Board of Directors; Reasons
for the Merger.'
On October 15, 1996, the Company retained PJSC to render financial services
to the Company in connection with the possible sale of the Company's Investment
Interests (the 'PJSC Agreement'). See ' -- Background of the Merger.' In light
of the Company's decision to expand from exploring the possibility of the sale
of the Investment Interests to pursuing strategic alternatives, the Company and
PJSC executed a second agreement on May 25, 1998 (the 'Second PJSC Agreement'
and, together with the PJSC Agreement, the 'PJSC Agreements'), pursuant to which
the role of PJSC was similarly expanded to include the rendering of advice to
the Company with respect to a possible business combination or sale of the
Company. As part of the Second PJSC Agreement, the Company agreed to pay PJSC
$2,250,000 upon the closing of a business combination or sale of the Company in
satisfaction
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of its payment obligations under both PJSC Agreements. Peter J. Solomon, who is
a director of the Company, is the chairman of PJSC.
Common Shares held by officers and directors of the Company will be
converted into the right to receive the same consideration as Common Shares held
by other stockholders.
Pursuant to the Merger Agreement, the Company has agreed to maintain for
six years after the Effective Time all rights to indemnification existing in
favor of all present directors and officers of the Company. See 'Certain
Provisions of the Merger Agreement -- Certain Covenants of Acquisition --
Indemnification.'
Pursuant to the Merger Agreement, upon consummation of the Merger, each
outstanding Option granted under the Non-Employee/Officer Director Option Plan
will be exercised or canceled pursuant to its terms or in exchange for a cash
amount equal to the difference between $41.50 and the exercise price of the
Option prior to the Effective Time. Upon consummation of the Merger, each
outstanding Option granted under the 1991 Employee Stock Option Plan will,
subject to the agreement of the holder, be exercised or canceled pursuant to its
terms or in exchange for a cash amount equal to the difference between $41.50
and the exercise price of the Option prior to the Effective Time. See
' -- Effect on Options and Employee Benefit Matters.' The following table sets
forth the number of outstanding Options held by (i) each Executive Officer of
the Company; (ii) the non-employee directors of the Company and (iii) all
executive officers and directors of the Company as a group, each as of November
20, 1998.
<TABLE>
<CAPTION>
EXECUTIVE OFFICERS NUMBER OF
(INCLUDING EMPLOYEE DIRECTORS) OPTIONS
- ---------------------------------------------------------------------------------- ----------
<S> <C>
Bernard P. Gallagher.............................................................. 251,767
Rudy J. Graf...................................................................... 177,648
Scott N. Schneider................................................................ 154,119
David Z. Rosensweig............................................................... 4,798
Phillip Mayberry.................................................................. 90,993
Thomas Cogar...................................................................... 55,662
NON-EMPLOYEE DIRECTORS
- ----------------------------------------------------------------------------------
Daryl A. Ferguson................................................................. 6,066
William M. Kraus.................................................................. 6,066
Peter J. Solomon.................................................................. 6,066
Frank Tow......................................................................... 4,000
All Executive Officers and Directors as a group (11 persons)...................... 757,185
</TABLE>
RESALE OF SURVIVING CORPORATION SHARES FOLLOWING THE MERGER
The Surviving Corporation Shares to be received in connection with the
Merger will be freely transferable, except that shares received by any
stockholder who may be deemed to be an 'affiliate' (as defined under the
Securities Act and generally including, without limitation, directors, certain
executive officers and beneficial owners of 10% or more of a class of capital
stock) of the Company for purposes of Rule 145 under the Securities Act will not
be transferable except in compliance with the Securities Act. This Information
Statement/Prospectus does not cover sales of Surviving Corporation Shares
received by any person who may be deemed to be an affiliate of the Company.
Pursuant to the Merger Agreement, Acquisition has agreed to use reasonable best
efforts to cause the Surviving Corporation Shares received in connection with
the Merger to continue to be listed on Nasdaq and registered under the Exchange
Act for at least three years after the Effective Time. See 'Certain Provisions
of the Merger Agreement -- Certain Covenants of Acquisition -- Nasdaq Listing
and Exchange Act Registration.'
FINANCING
A total of approximately $1.87 billion will be required to pay the cash
consideration to stockholders of the Company in the Merger, repay the Company's
indebtedness (including the purchase of outstanding Existing Senior Notes (as
hereinafter defined) in the Debt Offers), pay the related fees and expenses, and
provide for working capital requirements and general corporate purposes after
the Effective Time. The sources of funding for the Merger and the related
transactions are expected to be
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the Credit Facility, the Mezzanine Financing, the Equity Contribution and the
Offering (each as hereinafter defined).
In connection with the Merger, a direct subsidiary or subsidiaries of the
Surviving Corporation expects to borrow approximately $922.7 million under a
$1,050 million credit facility (the 'Credit Facility'). A direct subsidiary of
the Surviving Corporation expects to conduct an offering (the 'Offering') of
senior subordinated notes due 2008 (the 'Senior Subordinated Notes'), in an
aggregate principal amount sufficient to provide gross cash proceeds of at least
$370 million, approximately $60 million of which will be used to fund the
interest escrow contemplated by the instruments governing notes to be issued by
certain of the Company's subsidiaries. WCAS Capital Partners III, L.P., an
affiliate of WCAS, will also purchase unsecured subordinated notes due 2009 with
542,168 shares of the surviving corporation attached, resulting in gross cash
proceeds of not less than $180 million (the 'Mezzanine Financing'). Pursuant to
the New Commitment Letters and related documents (the 'Financing Documents'),
the Lead Agents committed to provide Acquisition with the Credit Facility,
consisting of an aggregate of $900 million in term loan facilities and a $150
million revolving credit facility and certain affiliates of the Lead Agents
committed to underwrite the Senior Subordinated Notes. In addition, Acquisition
has commitments for the $400 million Equity Contribution from certain of the
Equity Investors for the purchase of approximately 9.1 million shares.
The New Commitment Letters are no longer subject to any material adverse
change in relevant capital markets and are not conditioned upon the syndication
of the Lead Agents' commitments. The New Commitment Letters terminate on
January 31, 1999. Acquisition agreed, however, in the Amendment to the Merger
Agreement to use its reasonable best efforts to have the commitments under the
New Commitment Letters extended until March 31, 1999, the termination date for
the Merger Agreement, so long as Acquisition did not have to accept less
favorable terms than those contemplated by the Financing Documents.
Sources and Uses of Funds. The following table sets forth the expected
sources and uses of funds in connection with the financing of the Merger (the
'Financing') assuming the Merger had been consummated on August 31, 1998:
<TABLE>
<CAPTION>
AMOUNT
-------------
(IN MILLIONS)
<S> <C>
SOURCES OF FUNDS:
Credit Facility(1)(2):............................................................... $ 922.7
Notes issued in the Offering(3)...................................................... 370.0
Subordinated notes of Centennial(4).................................................. 180.0
Equity Contribution.................................................................. 400.0
-------------
Total Sources of Funds.......................................................... $1,872.7
-------------
-------------
USES OF FUNDS:
Redemption of Common Shares(5)....................................................... $1,033.1
Redemption of Preferred Shares(5).................................................... 128.1
Settlement of Options(5)............................................................. 42.3
Repayment of net existing indebtedness and preferred dividends accrued(6)............ 494.5
Restricted escrow investment......................................................... 60.0
Estimated fees and expenses(7)....................................................... 114.7
-------------
Total Uses of Funds........................................................ $1,872.7
-------------
-------------
</TABLE>
- ------------
(1) The Credit Facility will consist of three term loans in aggregate principal
amounts of $500 million, $200 million and $200 million, respectively, and a
revolving credit facility in an aggregate principal amount of up to $150
million. The borrower under these facilities will be a direct, wholly-owned
subsidiary of the Company. Centennial and certain of its other direct and
indirect subsidiaries will unconditionally guarantee, jointly and severally,
the obligations of the borrower.
(2) The borrowings that would be required under the Credit Facility to fund the
Merger if the Merger were consummated on or about December 31, 1998 are
estimated to increase to approximately $930 million.
(footnotes continued on next page)
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(footnotes continued from previous page)
(3) Represents the Offering by a direct, wholly-owned subsidiary of Centennial
following the Merger, of unsecured senior subordinated notes due 2008,
resulting in gross cash proceeds of not less than $370 million.
(4) Represents the purchase by WCAS Capital Partners III, L.P., an affiliate of
WCAS, of unsecured subordinated notes due 2009 and shares of the surviving
corporation for an aggregate price of $180 million.
(5) Represents the consideration to be paid pursuant to the Merger for the
Common Shares, the Common Shares issuable upon conversion of the Convertible
Preferred Stock and for the settlement of outstanding options to purchase
Common Shares.
(6) Represents the funds required to repay total existing indebtedness plus
accrued interest of $11.5 million and preferred dividends of $12.4 million
of the Company less estimated cash on hand at August 31, 1998. The actual
cash on hand, debt balance, accrued interest and preferred dividends accrued
upon consummation of the Merger may vary from the estimated amount. In
connection with the Merger, Centennial will consummate the Debt Offers to
acquire all of the Company's Existing Senior Notes (as hereinafter defined).
The amount shown above includes the consent solicitation fees associated
with the Debt Offers, assuming that 100% of the Existing Senior Notes are
repurchased and all holders of Existing Senior Notes receive the consent
fees. To the extent all of the Existing Senior Notes are not tendered,
indebtedness under the term loans of the Credit Facilities will be reduced
accordingly. Through December 1, 1998, approximately 99% of the Company's
public debt was tendered and consents were delivered to the Company pursuant
to the Debt Offers commenced on September 8, 1998. The Company has extended
the tender offer expiration date for the Debt Offers to January 4, 1999.
(7) Includes all fees and expenses related to the Merger and the transactions
contemplated thereby, including the Debt Offers.
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REGULATORY APPROVALS
FCC APPROVAL
In order to consummate the Merger, the FCC must approve the transfer of
control of the Company to the Equity Investors. The Company and the Equity
Investors have completed filing joint applications seeking these approvals. The
FCC considers whether the Equity Investors are qualified to control the
Company's FCC licenses and authorizations and whether the public interest,
convenience and necessity will be served by the transfer of control to the
Equity Investors. The Company and WCAS believe that the joint applications
demonstrate compliance with these standards. The last of these applications that
are material to the transaction was placed on public notice by the FCC on
August 17, 1998 and approved for grant by the FCC on October 9, 1998, which
approval became final on November 18, 1998.
STATE PUCs
The Company and Acquisition are also required to seek such approvals,
consents, permits, licenses and other authorizations from and to make such
filings and reports with any appropriate state public service or public
utilities commission and the Telecommunications Regulatory Board of Puerto Rico
('State PUC') as are necessary or required. However, the approval of any such
State PUCs is not a condition to the closing of the Merger. See 'Certain
Provisions of The Merger Agreement -- Certain Covenants of the
Company -- Communications Licenses and Authorizations' and ' -- Certain
Covenants of Acquisition and the Company -- FCC and State PUC Applications.'
HSR ACT AND ANTITRUST MATTERS
Under the provisions of the HSR Act applicable to the Merger, the Merger
may only be consummated following the expiration of a 30-calendar day waiting
period following the filing by the Company and Acquisition of Notification and
Report Forms with respect to the Merger, unless the Company or Acquisition
receives a formal request for additional information or documentary material
from the Antitrust Division of the United States Department of Justice (the
'Antitrust Division') or the Federal Trade Commission (the 'FTC') or unless
early termination of the waiting period is granted. Acquisition and the Company
submitted their Notification and Report Forms with respect to the Merger on
September 11, 1998 and on September 25, 1998, the Company's request for early
termination of the waiting period under the HSR Act was granted.
At any time before or after the Effective Time, the Antitrust Division or
the FTC could take such action under the antitrust laws as it deems necessary or
desirable in the public interest, including seeking to enjoin the consummation
of the Merger or seeking the divestiture of common shares of the Company
acquired by Acquisition or the divestiture of substantial assets of the Company
or its Subsidiaries or Acquisition or its subsidiaries. Private parties may also
bring legal action under the antitrust laws under certain circumstances. There
can be no assurance that a challenge to the Merger on antitrust grounds will not
be made or, if such a challenge is made, that it will fail.
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DESCRIPTION OF CAPITAL STOCK OF THE COMPANY
The Company's authorized capital stock prior to the Effective Time consists
of (i) 100,000,000 Common Shares; (ii) 50,000,000 Class B Shares (together with
the Common Shares, the 'Common Stock'); (iii) 102,187 Convertible Preferred
Shares; (iv) 250,000 shares of Senior Preferred Stock, par value $0.01 per share
(the 'Senior Preferred Shares'); (v) 3,978 Second Series Convertible Preferred
Shares (together with the Convertible Preferred Shares and the Senior Preferred
Shares, the 'Authorized Preferred Shares') and (vi) 9,996,022 shares of
Additional Preferred Stock, par value $0.01 per share (the 'Additional Preferred
Shares' and, together with the Authorized Preferred Shares, the 'Preferred
Shares'). As of November 4, 1998, (i) 15,085,398 Common Shares; (ii) 10,544,113
Class B Shares; (iii) 102,187 Convertible Preferred Shares; (iv) no Senior
Preferred Shares; (v) 3,978 Second Series Convertible Preferred Shares and (vi)
no Additional Preferred Shares were issued and outstanding. At such date,
8,561,819 Class B Shares and 3,978 Second Series Convertible Preferred Shares
were owned by Century, and 1,982,294 Class B Shares and 102,187 Convertible
Preferred Shares were owned by Citizens Utilities Company ('Citizens').
Immediately following the Merger, the Surviving Corporation intends to
effect a stock split if necessary to comply with the Nasdaq National Market
Maintenance Standards. The Surviving Corporation would make appropriate
adjustments to the number of shares of its common stock outstanding following
the Merger to reflect the stock split.
Under the Certificate of Incorporation of the Company in effect prior to
the Effective Time, in the event of a merger, the Company shall make appropriate
provision so that the holder of each Convertible Preferred Share and Second
Series Convertible Preferred Share then outstanding shall receive the kind and
amount of shares of stock or other securities or property receivable upon such
merger by a holder of the number of Common Shares or Class B Shares into which
such Convertible Preferred Shares and Second Series Convertible Preferred Shares
could have been converted immediately prior to such merger. Subject to certain
adjustments, (i) each Convertible Preferred Share is convertible into four
Common Shares or Class B Shares, or any combination thereof, as such Common
Shares and Class B Shares were constituted as of the date immediately prior to
the date of the resolution of the Board of the Company authorizing the splitting
of the Class B Shares on a 7.27182 to 1 basis, and (ii) each Second Series
Convertible Share is convertible into that number of Common Shares or Class B
Shares, or any combination thereof, determined by dividing 115,709 by the total
number of Second Series Convertible Preferred Shares issued and outstanding.
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DESCRIPTION OF THE CAPITAL STOCK OF THE SURVIVING CORPORATION
Following the Merger, the Certificate of Incorporation of the Surviving
Corporation shall be the certificate of incorporation of Acquisition. The
Certificate of Incorporation provides the Surviving Corporation with the
authority to issue 100,000,000 shares of common stock, $0.01 par value per share
('Surviving Corporation Common Stock'), of which 10,375,193 will be outstanding
after the Merger, without giving effect to the contemplated stock split, and up
to 750,000 shares will be reserved for issuance upon the exercise of the
Options. No preferred stock will be authorized or outstanding after consummation
of the Merger. The following summary description of the capital stock of the
Surviving Corporation is qualified by reference to the Certificate of
Incorporation and Bylaws of the Surviving Corporation.
SURVIVING CORPORATION COMMON STOCK
Voting. Holders of Surviving Corporation Common Stock are entitled to one
vote per share on all matters to be voted on by stockholders and are not
entitled to cumulative voting rights. Therefore, the holders of a majority of
the shares voted in an election of directors at which a quorum is present can
elect all of the directors then standing for election. The holders of Surviving
Corporation Common Stock have no preemptive or other subscription rights, and
there are no conversion rights or redemption or sinking fund provisions with
respect to the Surviving Corporation Common Stock.
Dividends. The holders of Surviving Corporation Common Stock are entitled
to receive such dividends, if any, as may be declared from time to time by the
Board of Directors from funds legally available therefor, with each share of
Surviving Corporation Common Stock sharing equally in such dividends.
The Bylaws provide that the number of directors shall be fixed by the Board
of Directors and shall initially be three. Any director of the Surviving
Corporation may be removed from office with or without cause at any time by the
affirmative vote of a majority of the stockholders.
CERTAIN PROVISIONS OF THE SURVIVING CORPORATION'S CERTIFICATE OF INCORPORATION
AND BYLAWS
Meetings of Stockholders. The Bylaws provide that a special meeting of
stockholders may be called by the Chairman of the Board of Directors, the Chief
Executive Officer or by order of the Board of Directors and shall be called by
the Secretary upon the written request of stockholders holding a majority of the
outstanding common stock of the Surviving Corporation. The Bylaws provide that
only those matters set forth in the notice of the special meeting may be
considered or acted upon at that special meeting, unless otherwise provided by
law. In addition, the Bylaws set forth certain advance notice and informational
requirements and time limitations on any director nomination or any new business
which a stockholder wishes to propose for consideration at an annual meeting of
stockholders.
Stockholder Action by Written Consent. The Certificate provides that any
action required or permitted to be taken by the stockholders of the Surviving
Corporation at an annual or special meeting of stockholders may be taken without
a meeting if a written consent setting forth the action so taken shall be signed
by the holders having at least the number of shares that would be necessary to
authorize or take such action at a meeting at which all shares entitled to vote
were present and voted.
Indemnification and Limitation of Liability. The Bylaws of the Surviving
Corporation provide that directors and officers of the Surviving Corporation and
its subsidiaries shall be indemnified by the Surviving Corporation to the
fullest extent authorized by Delaware law, as it now exists or may in the future
be amended, against all expenses and liabilities reasonably incurred in
connection with service for or on behalf of the Surviving Corporation. The
Bylaws of the Surviving Corporation also provide that the right of directors and
officers to indemnification shall not be exclusive of any other right under any
bylaw, agreement, vote of shareholders or disinterested directors or otherwise.
The Certificate of Incorporation contains a provision permitted by Delaware law
that generally eliminates the personal liability of directors for monetary
damages for breaches of their fiduciary duty, including breaches involving
negligence or gross negligence, unless the director has breached his or her duty
of loyalty, failed to act in good faith, engaged in intentional misconduct or a
knowing violation of law, paid a dividend or approved a stock repurchase in
violation of the Delaware Law or obtained an improper
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personal benefit. This provision does not alter a director's liability under the
federal securities laws. In addition, this provision does not affect the
availability of equitable remedies, such as an injunction or rescission, for
breach of fiduciary duty.
Amendment of the Certificate of Incorporation. Pursuant to the Delaware
law, an amendment to the Certificate of Incorporation must first be approved by
a majority of the Board of Directors and (with certain exceptions) thereafter
must be approved by the holders of a majority of the total votes eligible to be
cast by holders of Surviving Corporation Common Stock with respect to such
amendment or repeal.
Amendment of Bylaws. The Certificate of Incorporation provides that the
Bylaws may be amended or repealed by the Board of Directors. Such action by the
Board of Directors requires the affirmative vote of a majority of the Board of
Directors then in office.
STATUTORY BUSINESS COMBINATION PROVISION
Upon completion of the Offering, the Surviving Corporation will be subject
to the provisions of Section 203 of the Delaware Law ('Section 203'). Section
203 provides, with certain exceptions, that a Delaware corporation may not
engage in any of a broad range of business combinations with a person, or an
affiliate or associate of such person, who is an 'interested stockholder' for a
period of three years from the date that such person became an interested
stockholder unless: (i) the transaction resulting in the person becoming an
interested stockholder, or the business combination, is approved by the board of
directors of the corporation before the person becomes an interested
stockholder; (ii) the interested stockholder acquired 85% or more of the
outstanding voting stock of the corporation (excluding shares owned by persons
who are both officers and directors of the corporation, and shares held by
certain employee stock ownership plans) in the same transaction that makes it an
interested stockholder; or (iii) on or after the date the person becomes an
interested stockholder, the business combination is approved by the
corporation's board of directors and by the holders of at least 66 2/3% of the
corporation's outstanding voting stock, excluding shares owned by the interested
stockholder, at an annual or special meeting. Under Section 203, an 'interested
stockholder' is defined (with certain limited exceptions) as any person that is
(A) the owner of 15% or more of the outstanding voting stock of the corporation
or (B) an affiliate or associate of the corporation and was the owner of 15% or
more of the outstanding voting stock of the corporation at any time within the
three-year period immediately prior to the date on which it is sought to be
determined whether such person is an interested stockholder.
A corporation may, at its option, exclude itself from the coverage of
Section 203 by amending its certificate of incorporation or bylaws by action of
its stockholders to exempt itself from coverage; provided that, with certain
limited exceptions, such bylaw or charter amendment shall not become effective
until 12 months after the date it is adopted. Neither the Certificate of
Incorporation nor the Bylaws contains any such exclusion.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for the Surviving Corporation Common Stock
is American Stock Transfer & Trust Company.
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CERTAIN PROVISIONS OF THE MERGER AGREEMENT
The following summarizes the material provisions of the Merger Agreement,
which appears as Appendix A to this Information Statement/Prospectus and is
incorporated herein by reference, and the Amendment to the Merger Agreement,
which appears as Appendix B to this Information Statement/Prospectus and is
incorporated herein by reference. Such summary is qualified in its entirety by
reference to Merger Agreement, as amended.
THE MERGER
The Merger Agreement provides that, following the approval of the Merger by
the stockholders of the Company and the satisfaction or waiver of the other
conditions to the Merger, Acquisition shall be merged with and into the Company
and the Company shall be the Surviving Corporation.
The Merger shall become effective at the Effective Time. Filing of the
Certificate of Merger shall be made upon the Closing of the Merger, which shall
be no later than the Closing Date, unless another time is agreed to by the
parties.
Subject to the effects of proration, (i) each Electing Share of the Company
will be converted into the right to receive one Surviving Corporation Share and
(ii) each other Common Share other than Canceled Shares, Electing Shares and
Dissenting Shares will be converted into the right to receive the Cash Elective
Price, as more fully described under 'The Merger -- Merger Consideration' and
' -- Non-Cash Election.'
REPRESENTATIONS AND WARRANTIES
The Merger Agreement contains customary representations and warranties of
the Company relating to, among other things, (a) corporate existence, good
standing, power and similar corporate matters; (b) authorization, execution,
delivery and performance of the Merger Agreement; (c) compliance with applicable
governmental requirements; (d) non-contravention of the Company's corporate
documents, applicable law or the provisions of the Company's material
agreements; (e) the Company's capital structure; (f) corporate existence, good
standing, power and similar corporate matters and ownership of the Company's
Subsidiaries; (g) documents filed by the Company with the Commission and the
accuracy of information contained therein; (h) financial statements filed by the
Company with the Commission, the accuracy of information contained therein and
the absence of undisclosed liabilities; (i) the accuracy of information supplied
by the Company in connection with this Information Statement/Prospectus and the
documents to be executed in connection with the Debt Offers; (j) the absence of
certain changes or events since May 31, 1997, including material adverse changes
with respect to the Company; (k) pending or threatened material litigation; (l)
filing of tax returns, payment of taxes, establishment of reserves for payment
of taxes and compliance with withholding requirements; (m) employee benefit
plans and other matters relating to the Employee Retirement Income Security Act
of 1974, as amended; (n) brokers' and finders' fees and expenses; (o)
authorization issued by the FCC and other governmental entities and compliances
with the Communications Act and applicable state regulations; (p) compliance
with applicable laws, regulations and orders; (q) environmental matters; (r)
receipt of written opinion of the Company's financial advisor; (s) material
transactions or arrangements between the Company and its affiliates; and (t)
intellectual property of the Company.
The Merger Agreement also contains customary representations and warranties
of Acquisition relating to, among other things, (a) corporate existence, good
standing, power and similar corporate matters; (b) authorization, execution,
delivery and performance of the Merger Agreement; (c) compliance with applicable
governmental requirements; (d) non-contravention of Acquisition's corporate
governance documents, applicable law or the provisions of Acquisition's material
agreements; (e) the accuracy of information supplied by Acquisition in
connection with this Information Statement/Prospectus and the documents to be
executed in connection with the Debt Offers; (f) brokers' and finders' fees and
expenses; (g) the qualification of Acquisition under the Communications Act; (h)
the absence of ownership of Common Shares of the Company by Acquisition or its
affiliates; and (i) financing of Acquisition for the Merger.
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CERTAIN COVENANTS OF THE COMPANY
Conduct of the Company Pending the Merger. From the date of the Merger
Agreement until the Effective Time, except as contemplated by the Merger
Agreement or with the prior written consent of Acquisition, the Company and its
Subsidiaries shall conduct their business in the ordinary course consistent with
past practice and shall use reasonable efforts to preserve intact their business
organizations and relationships with third parties and to keep available the
services of their present officers and key employees. Specifically, the Merger
Agreement contains certain covenants of the Company relating to the amendment of
corporate governance documents; the issuance of securities; the redemption,
declaration or payment of dividends; changes in capital stock; executive
compensation and employee benefit plans; the acquisition or disposition of
material assets or securities; the incurrence and satisfaction of indebtedness;
amendments of any material contract rights; and capital expenditures.
Access to Information. From the date of the Merger Agreement until the
Effective Time, the Company shall give Acquisition and its authorized
representatives reasonable access during normal business hours to the offices,
properties, books and records of the Company and its Subsidiaries as is
reasonably requested. Such information shall be held in confidence to the extent
required by the Confidentiality Agreement between DLJ and WCAS (the
'Confidentiality Agreement').
No Solicitation. The Company has agreed that, prior to the Effective Time,
it shall not, and shall not authorize or permit any of its Subsidiaries, to
solicit, initiate or encourage any inquiries or the making of any proposal with
respect to any merger, consolidation or other business combination, tender or
exchange offer, recapitalization transaction or other similar transaction
involving the Company or any of its Significant Subsidiaries (as defined below),
acquisition of all or any material portion of the assets or capital stock of the
Company or the acquisition of all or substantially all of the assets or capital
stock of any Significant Subsidiary (an 'Acquisition Transaction') or provide
information to or negotiate, explore or otherwise engage in discussions with any
Person (other than Acquisition or its representatives) with respect to any
Acquisition Transaction or enter into any agreement, arrangement or
understanding requiring it to abandon, terminate or fail to consummate the
Merger or any other transactions contemplated by the Merger Agreement; provided,
however, that the Company may, in response to an unsolicited proposal with
respect to an Acquisition Transaction from a third party, furnish information
to, and negotiate, explore and otherwise engage in substantive discussions with
such third party, and enter into any such agreement, arrangement or
understanding (so long as immediately after entering into any such agreement the
Company terminates the Merger Agreement), in each case, if the Board determines
in its good faith judgment, after consultation with its independent legal
counsel, that the failure to do so would result in a breach of its fiduciary
obligations. The Company has agreed that it shall promptly notify Acquisition if
any proposal or offer is received by, or any information is requested from, or
any discussions or negotiations are sought to be initiated or continued with,
the Company in respect of an Acquisition Transaction, and shall, in any such
notice to Acquisition, indicate the identity of the third party and the terms
and conditions of any proposals or offers; provided, however, that such notice
shall be given only to the extent the Board may disclose such information
without breaching its fiduciary duties as advised by counsel and as determined
in good faith and without violating any of the conditions of such Acquisition
Transaction. Thereafter, the Company shall keep Acquisition informed (subject to
such fiduciary duties), on a current basis, of the status and terms of any such
proposals or offers and the status of any such discussions or negotiations. For
purposes of the Merger Agreement, a 'subsidiary' of any Person means any other
Person of which securities or other ownership interests having ordinary voting
power to elect a majority of the board of directors or other Persons performing
similar functions are directly or indirectly owned or controlled by such Person,
and unless otherwise specified 'Subsidiary' means a subsidiary of the Company.
'Significant Subsidiary' includes each significant Subsidiary within the meaning
of Regulation S-X under the Exchange Act.
Communications Licenses and Authorizations. The Company has agreed that it
shall, and shall cause its Subsidiaries to, use commercially reasonable efforts
to obtain and maintain in full force and effect all approvals, consents,
permits, licenses and other authorizations, and any renewals thereof, from the
FCC and State PUCs, and to make all filings and reports, reasonably necessary or
required for the continued operation of the Company's and its Subsidiaries'
businesses, as and when such approvals, consents, permits, licenses, filings or
reports or other authorizations are necessary or required. The
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Company has completed filing the applications seeking FCC approval of the
Merger. The last of these applications that are material to the transaction was
placed on public notice by the FCC on August 17, 1998 and approved for grant by
the FCC on October 9, 1998, which approval became final on November 18, 1998.
Debt Offers. The Company has agreed that, provided the Merger Agreement has
not been terminated, the Company shall, within 20 days of receiving any request
by Acquisition to do so (but in no event earlier than twenty calendar days after
the date of the Merger Agreement), commence offers to purchase, accompanied by
related solicitations of consent regarding covenant amendments, all of the
Company's outstanding 8 7/8% Senior Notes due 2001 (the '8 7/8% Senior Notes')
and the Company's outstanding 10 1/8% Senior Notes due 2005 (the '10 1/8% Senior
Notes' and, together with the 8 7/8% Senior Notes, the 'Existing Senior Notes')
on such customary terms and conditions as are acceptable to Acquisition, in the
exercise of its judgment in making Debt Offers on commercially reasonable terms
to the Company and the holders of the Existing Senior Notes (the 'Debt Offers').
The Company has agreed that, subject to the terms and conditions of the Merger
Agreement, including but not limited to the conditions in the Debt Offers, it
will accept for payment and pay for the Existing Senior Notes as soon as
reasonably practicable after such conditions to the Debt Offers are satisfied
and it is permitted to do so under applicable law, provided that the Company
shall use reasonable best efforts to coordinate the timing of any such purchase
with Acquisition in order to obtain the greatest participation in the Debt
Offers. Pursuant to the Merger Agreement and at request the of Acquisition, the
Company prepared, subject to advice and comments of Acquisition, an offer to
purchase for each of the issues of Existing Senior Notes and forms of the
related letters of transmittal and summary advertisement, as well as all other
information and exhibits (collectively, the 'Offer Documents') and on September
8, 1998 commenced the Debt Offers. Through December 1, 1998, approximately 99%
of the Company's public debt was tendered and consents were delivered to the
Company. The Company has extended the tender offer expiration date for the Debt
Offers to January 4, 1999.
As of August 31, 1998, $250.0 million in aggregate principal amount of the
8 7/8% Senior Notes was outstanding and $100.0 million in aggregate principal
amount of the 10 1/8% Senior Notes was outstanding. An aggregate of
approximately $150.0 million will be required to refinance the Existing Senior
Notes.
Notice of Certain Events. The Company has agreed that it shall promptly
notify Acquisition of certain notices or other communications from any Person
alleging that the consent of such Person is or may be required in connection
with the transactions contemplated by the Merger Agreement; notices or other
communications from any governmental entity in connection with the transactions
contemplated by the Merger Agreement; actions, suits, claims, investigations or
proceedings commenced or, to its knowledge, threatened against the Company or
any of its Subsidiaries; and filings with, or notices from, or the initiation of
any complaint or other proceedings by, the FCC or any State PUC relating to the
communications licenses held by the Company or any of its Subsidiaries.
State Takeover Laws. The Company has agreed that it shall, upon the request
of Acquisition, take all reasonable steps to assist in any challenge by
Acquisition to the validity or applicability to the transactions contemplated by
the Merger Agreement, including the Merger, of any state takeover law.
CERTAIN COVENANTS OF ACQUISITION
Confidentiality. Acquisition has agreed that all information received from
or on behalf of the Company or any of the Company's Subsidiaries in connection
with the Merger shall be deemed received pursuant to the Confidentiality
Agreement and Acquisition shall, and shall cause its affiliates and
representatives, to comply with the provisions of the Confidentiality Agreement
with respect to such information.
Indemnification. Acquisition has agreed that all rights to indemnification
existing as of the date of the Merger Agreement in favor of any employee, agent,
director or officer of the Company and its Subsidiaries (the 'Indemnified
Parties') as provided in their respective charters or bylaws, in an agreement
between an Indemnified Party and the Company or one of its Subsidiaries, or
otherwise in effect on the date hereof shall survive the Merger and shall
continue in full force and effect for a period
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of not less than six years from the Effective Time; provided that in the event
any claim or claims are asserted or made within such six-year period, all rights
to indemnification in respect of any such claim or claims shall continue until
final disposition of any and all such claims. Acquisition has also agreed to
indemnify all Indemnified Parties to the fullest extent permitted by applicable
law with respect to all acts and omissions arising out of such individuals'
services as officers, directors, employees or agents of the Company or any of
its Subsidiaries or as trustees or fiduciaries of any plan for the benefit of
employees, or otherwise on behalf of, the Company or any of its Subsidiaries,
occurring prior to the Effective Time including, without limitation, the
transactions contemplated by this Agreement.
Employee Benefit Arrangements. Acquisition has agreed that the Company will
honor and, from and after the Effective Time, Acquisition will cause the
Surviving Corporation to honor, all Employee Benefit Arrangements to which the
Company or any of its Subsidiaries is currently a party. Acquisition will cause
the Surviving Corporation to take such actions as are necessary so that, for a
period of at least two years from the Effective Time, employees of the Company
and its Subsidiaries will be provided cash compensation, employee benefit and
incentive compensation and similar plans and programs (other than equity-based
compensation plans and programs) as will provide compensation and benefits which
in the aggregate are no less favorable than those provided to such employees as
of the date of the Merger Agreement.
Financing. Acquisition has agreed that it shall use commercially reasonable
efforts to consummate the Financing or alternative financing on terms no more
onerous than the terms of the Financing.
It is expected that financing proceeds and equity contributions aggregating
approximately $1,872.7 million will be required to pay cash consideration to
Centennial stockholders in connection with the Merger, to settle outstanding
Options, to refinance the Senior Notes and to pay for fees and expenses in
connection with the Merger. The equity contribution to be made by the Equity
Investors will constitute $400.0 million. In addition, WCAS Capital has
committed to purchase $180.0 million in aggregate principal amount of
subordinated notes.
Acquisition has agreed that neither it, WCAS nor their affiliates will
terminate, amend, modify or supplement in any respect the terms or conditions of
the Financing or the Financing Documents, without the prior written consent of
the Company, except to amend or modify in a manner more favorable to
Acquisition, WCAS or their affiliates the interest rates relating to the
Financing or the terms of the covenants to be in effect following consummation
of the Merger, but only to the extent that such amendment or modification will
not adversely affect the probability that such Financing will be actually
funded, or the timing thereof. Acquisition also agreed that it will, and will
cause its affiliates to, perform all of its obligations under such Financing
Documents and satisfy all conditions precedent to the funding thereunder that
are within its control and use reasonable best efforts to satisfy all conditions
precedent to the funding thereunder that are not within its control.
WCAS has committed to cause Acquisition to perform its obligations under
the Merger Agreement up to the amount of the $400.0 million equity contribution
to be made by the Equity Investors.
Nasdaq Listing and Exchange Act Registration. Acquisition has agreed that
it will, for at least three years after the Effective Time of the Merger, use
reasonable best efforts to cause the Surviving Corporation Shares to continue to
be listed on Nasdaq and registered under the Exchange Act.
CERTAIN COVENANTS OF ACQUISITION AND THE COMPANY
Reasonable Best Efforts. Subject to the terms and conditions provided in
the Merger Agreement, Acquisition and the Company have agreed to use reasonable
best efforts to take, or cause to be taken, all action, and to do, or cause to
be done, in the case of the Company, subject to the limitations provided in the
Merger Agreement regarding the fiduciary duties of the Board, and to assist and
cooperate with each other in doing, as promptly as practicable, all things
necessary or advisable under applicable laws and regulations to ensure that the
conditions to the consummation of the Merger are satisfied and to consummate and
make effective the transactions contemplated by the Merger Agreement. If at any
time after the Effective Time any further action is necessary or desirable to
carry out the purposes of the Merger Agreement, including the execution of
additional instruments, the
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proper officers and directors of each party to the Merger Agreement shall take
all such necessary action.
FCC and State PUC Applications. Acquisition and the Company have agreed
that, as promptly as practicable after the execution and delivery of the Merger
Agreement, each party shall prepare all appropriate applications for FCC
approval, and such other documents as may be required, with respect to the
transfer of control of the Company to Acquisition (collectively, the 'FCC
Applications'). As promptly as practicable following execution and delivery of
the Merger Agreement, the Company shall deliver to Acquisition its completed
portion of the FCC Applications. Not later than the fifth business day following
the delivery of the FCC Applications to Acquisition, Acquisition shall file, or
cause to be filed, the FCC Applications. If the Closing shall not have occurred
for any reason within any applicable initial consummation period relating to the
FCC's grant of the FCC Applications, and neither Acquisition nor the Company
shall have terminated the Merger Agreement, Acquisition and the Company shall
jointly request one or more extensions of the consummation period of such grant.
Neither party shall knowingly take, or fail to take, any action if the intent or
reasonably anticipated consequence of such action or failure to act is, or would
be, to cause the FCC not to grant approval of the FCC Applications or materially
delay either such approval or the consummation of the transfer of control of the
Company. The Company and the Equity Investors have filed the FCC Applications.
The last of these applications that are material to the transaction was placed
on public notice by the FCC on August 17, 1998 and approved for grant by the FCC
on October 9, 1998, which approval became final on November 18, 1998.
Acquisition and the Company have also agreed that, as promptly as
practicable after the execution and delivery of the Merger Agreement, each party
shall prepare all required applications for approval by State PUCs, and such
other documents as may be required, with respect to the transfer of control of
the Company (collectively, the 'State PUC Applications'). Not later than the
twentieth business day following execution and delivery of the Merger Agreement,
the Company shall deliver to Acquisition its completed portion of the State PUC
Applications. Not later than the thirtieth business day following execution and
delivery of the Merger Agreement, Acquisition and the Company shall file, or
cause to be filed, the State PUC Applications. If the Closing shall not have
occurred for any reason within any applicable consummation period relating to
any State PUC's grant of any State PUC Application, and neither Acquisition nor
the Company shall have terminated this Agreement, Acquisition and the Company
shall jointly request one or more extensions of the consummation period of such
grant. Neither party shall knowingly take, or fail to take, any action if the
intent or reasonably anticipated consequence of such action or failure to act
is, or would be, to cause any State PUC not to grant approval of any State PUC
Application or materially delay either such approval or the consummation of the
transfer of control of the Company.
Acquisition and the Company shall each pay one-half of any FCC fees that
may be payable in connection with the filing or granting of approval of the FCC
Applications. Each of Acquisition and Company shall bear its own expenses in
connection with the preparation and prosecution of the FCC Applications and the
State PUC Applications. Acquisition and the Company shall each use its best
efforts to prosecute the FCC Applications and the State PUC Applications in good
faith and with due diligence before the FCC and the State PUCs and in connection
therewith shall take such action or actions as may be necessary or reasonably
required in connection with the FCC Applications and the State PUC Applications,
including furnishing to the FCC and the State PUCs any documents, materials or
other information requested by the FCC and the State PUCs in order to obtain
such approvals as expeditiously as practicable. However, the approval of any
State PUCs is not a condition to the closing of the Merger.
Certain Other Covenants. The Merger Agreement also contains customary
covenants applicable to transactions like the Merger, including covenants
relating to (a) stockholder approval; (b) registration of Electing Shares; (c)
governmental consents, including without limitation consents required under
antitrust laws, rules or regulations; (d) restrictions on public announcements;
(e) notification of certain matters affecting the accuracy of any representation
or warranty or the ability to comply with or satisfy any covenant, condition or
agreement under the Merger Agreement; (f) further assurances on the
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ability of the Surviving Corporation to act on behalf of Acquisition and the
Company; and (g) compliance with the HSR Act.
STOCK AND EMPLOYEE BENEFIT PLANS
The treatment in the Merger of outstanding Options and the Company's
employee benefit plans is described under the heading 'The Merger -- Effect on
Options and Employee Benefit Matters.'
CONDITIONS TO THE CONSUMMATION OF THE MERGER
Conditions to the Obligations of Each Party. The respective obligations of
Acquisition and the Company to consummate the Merger are subject to the
satisfaction, at or before the Effective Time, of certain conditions, including
the following: (a) the stockholders of the Company shall have approved the
transactions contemplated by the Merger Agreement, pursuant to the requirements
of the Company's certificate of incorporation and applicable law; (b) the
waiting period (and any extension thereof) applicable to the Merger under the
HSR Act shall have expired or been terminated (such waiting period was
terminated on September 25, 1998); (c) the Form S-4 Registration Statement shall
have been declared effective and no stop order with respect thereto shall be in
effect at the Effective Time; and (d) the consummation of the Merger shall not
be restrained, enjoined or prohibited by any order, judgment, decree, injunction
or ruling of a court of competent jurisdiction or any governmental entity
entered after the parties have used reasonable best efforts to prevent such
entry and there shall not have been any statute, rule or regulation enacted,
promulgated or deemed applicable to the Merger by any governmental entity which
prevents the consummation of the Merger.
Conditions Precedent to the Obligations of Acquisition. The obligation of
Acquisition to consummate the Merger is also subject to additional conditions,
including the following: (a) each of the representations and warranties of the
Company contained in the Merger Agreement that is qualified as to materiality or
Material Adverse Effect shall have been true and correct when made and on and as
of the Closing Date as if made on and as of such date, and each of the other
representations and warranties of Company contained in the Merger Agreement
shall have been true and correct in all material respects when made and on and
as of the Closing Date as if made on and as of such date, and Acquisition shall
have received a certificate to such effect of the Chief Executive Officer of the
Company; (b) the Company shall have performed and complied in all material
respects with all agreements and covenants required to be performed and complied
with by it under the Merger Agreement on or prior to the Closing Date, and
Acquisition shall have received a certificate to such effect of the Chief
Executive Officer of the Company; (c) (i) all consents, waivers, approvals and
authorizations required to be obtained from the FCC ('FCC Transfer Approvals')
prior to the consummation of the transactions contemplated under the Merger
Agreement shall have been obtained by a Final Order without the imposition of
any condition that Acquisition, in its sole discretion, deems materially adverse
to the Company's or its Subsidiaries' continued operation of their businesses
from and after the Effective Time and (ii) all filings and notices required to
be made by the Company or Acquisition prior to the consummation of the
transactions contemplated under the Merger Agreement shall have been made (for
purposes of the Merger Agreement, 'Final Order' shall mean an action by the FCC:
(x) that is not reversed, stayed, enjoined, set aside, annulled or suspended
within the deadline, if any, provided by applicable statute or regulation, (y)
with respect to which no request for stay, motion or petition for
reconsideration or rehearing, application or request for review, or notice of
appeal or other judicial petition for review that is filed within such period is
pending and (z) as to which the deadlines, if any, for filing any such request,
motion, petition, application, appeal or notice, and for the entry by the FCC of
orders staying, reconsidering or reviewing on its own motion have expired); (d)
on or prior to the Closing Date, the Company shall have consummated the Debt
Offers, unless failure to consummate the Debt Offers was a result of a failure
by Acquisition to perform any covenant or condition contained in the Offer
Documents or the Merger Agreement or the inaccuracy of any representation or
warranty of Acquisition contained therein; (e) Acquisition shall have obtained
the Financing substantially on the terms contemplated by the Financing Documents
or alternative financing on terms no less favorable than those set forth in the
Financing Documents, unless the failure to obtain such financing was the result
of (i) a failure by Acquisition, WCAS or any of their affiliates to perform
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any covenant or condition contained therein or the inaccuracy of any
representation or warranty of Acquisition (other than certain representatives
and warrants made by Acquisition as to the Company's business operations and
financial condition), (ii) a failure of WCAS to provide the Equity Contribution
or a failure of its affiliate to purchase the subordinated notes, (iii) a
failure by Acquisition to accept modifications, amendment, terms or conditions
as contemplated under the Financing Documents or (iv) a breach by Acquisition of
its obligations under the Merger Agreement to obtain the Financing (see 'The
Merger -- Financing'); and (f) the number of Common Shares purchasable upon the
exercise of Options that have not been canceled in accordance with the
applicable provisions of the Merger Agreement shall not exceed 750,000.
Through December 1, 1998, approximately 99% of the Company's public debt
was tendered and consents were delivered to the Company pursuant to the Debt
Offers commenced on September 8, 1998. The Company extended the tender offer
expiration date for the Debt Offers to January 4, 1999. In addition, on
September 25, 1998, the Company's request for early termination of the waiting
period provided by certain rules of the premerger notification rules under the
HSR Act was granted. The Company has also completed filing the applications
seeking FCC approval of the Merger. The last of these applications that are
material to the transaction was placed on public notice by the FCC on August 17,
1998 and approved for grant by the FCC on October 9, 1998, which approval became
final on November 18, 1998. To date, the Company has also received the necessary
consents from holders of Options to enable the Company to cancel a sufficient
number of Options, so that the number of Common Shares purchasable upon exercise
of the Option that have not been exercised or canceled will not exceed 750,000
immediately prior to the Merger; however, such consents may be withdrawn at any
time prior to the Effective Time.
Conditions Precedent to the Obligations of the Company. The obligation of
the Company to consummate the Merger is also subject to additional conditions,
including the following: (a) each of the representations and warranties of
Acquisition contained in the Merger Agreement that is qualified as to
materiality or Material Adverse Effect shall have been true and correct when
made and on and as of the Closing Date as if made on and as of such date, and
each of the other representations and warranties of Acquisition contained in the
Merger Agreement shall have been true and correct in all material respects when
made and on and as of the Closing Date as if made on and as of such date, and
the Company shall have received a certificate to such effect of the President of
Acquisition; and (b) Acquisition shall have performed and complied in all
material respects with all agreements and covenants required to be performed and
complied with by it under the Merger Agreement on or prior to the Closing Date,
and the Company shall have received a certificate to such effect of the
President of Acquisition.
TERMINATION OF THE MERGER AGREEMENT
The Merger Agreement may be terminated and the Merger may be abandoned at
any time prior to the Effective Time, notwithstanding approval thereof by the
stockholders of the Company:
(a) by the mutual written consent of Acquisition and the Company;
(b) by Acquisition or the Company if any court or other governmental
entity shall have issued, enacted, entered, promulgated or enforced any
order, judgment, decree, injunction, or ruling or taken any other action
restraining, enjoining or otherwise prohibiting the Merger and such order,
judgment, decree, injunction, ruling or other action shall have become
final and nonappealable after the parties have used reasonable best efforts
to prevent such issuance, enactment, entry, promulgation or enforcement;
(c) by the Company if (i) (A) any of the representations and
warranties of the Acquisition set forth in the Merger Agreement shall not
be true and correct (in the case of representations and warranties
qualified as to materiality or Acquisition Material Adverse Effect) or true
and correct in all material respects (in the case of other representations
and warranties), in each case when made, or (B) there shall have occurred,
on the part of Acquisition, a breach of any covenant or agreement contained
in the Merger Agreement which if not cured would have a Material Adverse
Effect and which, in the case of (A) or (B), is not curable or, if curable,
is not cured within 30 calendar days
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after written notice of such breach is given by the Company to Acquisition,
(ii) the Company shall enter into a definitive written agreement with
respect to an Acquisition Transaction, with a third party, or a third party
has commenced a tender offer which, in either case, the Board of Directors
of the Company believes in good faith is more favorable to the Company's
stockholders than the transactions contemplated by the Merger Agreement or
(iii) if the Board shall have withdrawn, modified or amended in any manner
adverse to Acquisition or the stockholders of Acquisition its approval or
recommendation of the Merger Agreement and the Merger, or approved,
recommended or endorsed any proposal for an Acquisition Transaction with a
third party;
(d) by Acquisition if (i) (A) any of the representations and
warranties of the Company set forth in the Merger Agreement shall not be
true and correct (in the case of representations and warranties qualified
as to materiality or Material Adverse Effect) or true and correct in all
material respects (in the case of other representations and warranties), in
each case when made, or (B) there shall have occurred, on the part of the
Company and its Subsidiaries, taken as a whole, a breach of any covenant or
agreement contained in this Agreement which if not cured would have a
Material Adverse Effect and which, in the case of (A) or (B), is not
curable or, if curable, is not cured within 30 calendar days after written
notice of such breach is given by Acquisition to the Company, (ii) the
Company shall enter into a definitive written agreement with respect to an
Acquisition Transaction, with a third party, or a third party has commenced
a tender offer which, in either case, the Board of Directors of the Company
believes in good faith is more favorable to the Company's stockholders than
the transactions contemplated by the Merger Agreement or (iii) if the Board
shall have withdrawn, modified or amended in any manner adverse to
Acquisition or the stockholders of Acquisition its approval or
recommendation of the Merger Agreement and the Merger or approved,
recommended or endorsed any proposal for an Acquisition Transaction with a
third party; or
(e) by either party if it shall not have breached any of its
obligations under the Merger Agreement on March 31, 1999, provided,
however, that neither party may so terminate the Merger Agreement on or
before April 30, 1999 if the conditions to Acquisition's obligations to
consummate the transactions contemplated under the Merger Agreement have
not been satisfied on account of the failure to receive FCC Transfer
Approvals.
EFFECT OF TERMINATION
If the Merger Agreement is terminated, it shall become void and of no
effect with no liability on the part of any party or its respective directors,
officers or stockholders the agreements relating to confidentiality and fees and
expenses shall survive the termination of the Merger Agreement, and neither
party shall be relieved from liability for any breach of the Merger Agreement or
the Confidentiality Agreement. In the Amendment to the Merger Agreement, the
parties agreed that if the Merger Agreement is terminated and Acquisition has
liability for breach, damages shall be calculated as if the cash portion of the
merger consideration were $43.50 and the reduction to $41.50 had not occurred.
FEES AND EXPENSES
Whether or not the Merger is consummated, all costs and expenses incurred
in connection with the Merger, the Merger Agreement and the transactions
contemplated by the Merger Agreement shall be paid by the party incurring such
expenses. In the event the Company shall have terminated the Merger Agreement
pursuant to the provisions described in clauses (c)(ii) or (iii) under the
heading ' -- Termination of the Merger Agreement,' or Acquisition shall have
terminated the Merger Agreement pursuant to the provisions described in clauses
(d)(ii) or (iii) under the heading ' -- Termination of the Merger Agreement,'
then the Company shall simultaneously with such termination reimburse
Acquisition for the documented fees and expenses of Acquisition related to and
the transactions contemplated under the Merger Agreement (including, without
limitation, any fees and expenses of counsel, accountants and other professional
advisors, commitment fees and other financing costs and interest, underwriting
discounts, debt tender payments and fees, expenses and other costs of
consummating and unwinding any issuance of securities) (subject to a maximum of
$25.0 million) and simultaneously with such termination pay Acquisition a
termination fee of $40 million.
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AMENDMENT AND WAIVER
Amendment. The Merger Agreement may be amended by the Company and
Acquisition at any time before or after any approval of the Merger Agreement by
the stockholders of the Company but, after any such approval, no amendment shall
be made which decreases the Merger Consideration or which adversely affects the
rights of the Company's stockholders without the approval of such stockholders.
The Merger Agreement may not be amended except by an instrument in writing
signed on behalf of all the parties. The Merger Agreement was amended on
November 29, 1998 by a writing which was signed by all parties.
Extension; Waiver. At any time prior to the Effective Time, Acquisition and
the Company may (i) extend the time for the performance of any of the
obligations or other acts of any other party, (ii) waive any inaccuracies in the
representations and warranties by any other party or in any document,
certificate or writing delivered by any other party or (iii) waive compliance
with any of the agreements of any other party or with any conditions to its own
obligations under the Merger Agreement. Any agreement on the part of any party
to any such extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such party.
CHARTER DOCUMENTS OF CENTENNIAL FOLLOWING THE MERGER
The certificate of incorporation and bylaws of Acquisition in effect at the
Effective Time shall be the certificate of incorporation of the Company
following the Merger until amended in accordance with applicable law.
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CERTAIN STOCKHOLDER ARRANGEMENTS
At the Effective Time of the Merger, the Equity Investors and the Company
will enter into a Stockholders' Agreement (the 'New Equity Stockholders
Agreement') pursuant to which they will agree to establish a board of directors
of the Company consisting of nine members. WCAS and certain of its affiliates
(the 'WCAS Investors') will designate three of such directors, who shall
initially be Thomas E. McInerney, Anthony J. de Nicola and Rudolph E. Rupert so
long as the WCAS Investors own in the aggregate at least 25% of the shares of
the Surviving Corporation owned by them as of the date of the Merger. Blackstone
and its affiliates (the 'Blackstone Investors') will designate two directors,
who shall initially be Mark T. Gallogly and Lawrence H. Guffey, so long as the
Blackstone Investors own in the aggregate at least 25% of the shares of the
Surviving Corporation owned by them as of the date of the Merger. The Chief
Executive Officer and the Chief Operating Officer of the Company, who will
initially be Michael J. Small and Rudy J. Graf respectively, will also be
directors. The remaining two directors will be outside directors nominated by
the board of directors and elected by stockholders of the Company including the
Equity Investors. Pursuant to the New Equity Stockholders' Agreement, the Equity
Investors (other than the WCAS Investors) shall also have 'tag-along' rights to
participate in certain proposed dispositions of the Company's shares by the WCAS
Investors. In addition, in the event that the WCAS Investors or the Company
receives a third party offer to purchase at least 80% of the outstanding capital
stock of the Company, a majority of the WCAS Investors will be able to require
the other Equity Investors to accept such offer and to sell their shares of the
Company to such third party. In the New Equity Stockholders Agreement, the
Company will grant the Equity Investors pre-emptive rights to participate, on a
pro rata basis according to their stock ownership, in certain eligible offerings
(excluding registered public offerings of Common Shares and offerings of Common
Shares or options to purchase Common Shares in connection with any stock option
plans or stock purchase plans for the Company's full-time employees, officers,
directors, consultants and/or advisers). While the New Equity Stockholders
Agreement is in effect, the Company may not amend, alter or repeal its
organizational documents without obtaining the consent of a majority in interest
of the WCAS Investors and the Blackstone Investors, as well as a majority of the
other Equity Investors adversely affected by such amendment or alteration.
Further, the New Equity Stockholders Agreement will contain certain restrictions
on transactions with related persons. Upon the consummation of the Merger and
related transactions, an affiliate of each of WCAS and Blackstone shall each
receive a deal consummation fee of $10.6 million and $3.4 million, respectively.
An Equity Investor unaffiliated with Blackstone and WCAS will receive a fee of
$4.0 million upon the consummation of the Merger. During the term of the
Stockholders' Agreement, an affiliate of each of WCAS and Blackstone shall
receive an annual monitoring fee of $450,000 and $300,000, respectively.
Pursuant to the Registration Rights Agreement to be entered into among the
Company and the Equity Investors, the WCAS Investors and the Blackstone
Investors shall have certain rights to require the Company to register their
shares of the Company under the Securities Act and to include, upon request,
their shares in any registration of shares effected by the Company.
THE STOCKHOLDER AGREEMENT
The following summarizes the material provisions of the Stockholder
Agreement, dated as of July 2, 1998, between Century Communications Corp.
('Century' or the 'Principal Stockholder') and Acquisition (the 'Stockholder
Agreement'), a copy of which appears as Appendix D to this Information
Statement/Prospectus and is incorporated herein by reference. This summary is
qualified in its entirety by reference to the Stockholder Agreement.
In connection with the execution of the Merger Agreement, the Principal
Stockholder entered into a Stockholder Agreement with Acquisition. Pursuant to
the agreement, the Principal Stockholder, which controls more than a majority,
on a fully diluted basis, of the outstanding votes of the Company required to
approve the Merger (through its beneficial ownership of approximately 81.2% of
the outstanding Class B Shares and 100% of the Second Series Convertible
Preferred Shares), agreed to vote its shares in favor of the approval and
adoption of the Merger Agreement. On December 4, 1998, Century executed a
written stockholder's consent to approve the Merger. Since the Principal
Stockholder controls, on a fully diluted basis, more than a majority of the
outstanding votes of
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<PAGE>
Centennial required to approve the Merger, consummation of the Merger does not
require approval by a majority of Centennial stockholders who are not affiliated
with the Company or Acquisition. See 'Approval of the Merger -- Approval by
Stockholders of the Company.' Except for certain provisions thereof, the
Stockholder Agreement terminates upon termination of the Merger Agreement.
VOTING
Pursuant to the Stockholder Agreement, the Principal Stockholder agreed to
vote all of the shares of Common Stock owned by the Principal Stockholder in
favor of the approval and adoption of the Merger Agreement and the Merger and
the other transactions contemplated thereby at any meeting of the stockholders
of the Company, and at any adjournment thereof, at which such Merger Agreement
and the Merger, or such other transactions or actions, are submitted for the
consideration and vote of the stockholders of the Company (or execute a written
consent pursuant to Section 228 of the Delaware Law). The Principal Stockholder
also agreed that, except as contemplated by the Merger Agreement, it will vote
all of the shares of Common Stock or Preferred Stock owned by the Principal
Stockholder against (i) any extraordinary corporate transaction, such as a
merger, consolidation or other business combination involving the Company or any
of its Subsidiaries; (ii) any sale, lease or transfer of a material amount of
assets of the Company or any of its Subsidiaries, or a reorganization,
recapitalization, dissolution or liquidation of the Company or any of its
Subsidiaries; and (iii) (A) any change in the majority of the persons who
constitute the Board of Directors of the Company; (B) any change in the present
capitalization of the Company or any amendment of the Company's Certificate of
Incorporation or By-laws; (C) any other material change in the Company's
corporate structure or business; or (D) any other action which, in the case of
each of the matters referred to in clauses (A), (B) or (C), is intended, or
could reasonably be expected, to impede, interfere with, delay, postpone, or
materially adversely affect the transactions contemplated by the Stockholders
Agreement and the Merger Agreement.
TRANSFER RESTRICTIONS
Pursuant to the Stockholder Agreement, the Principal Stockholder has agreed
that it will not, and will not permit any of its affiliates to, contract to
sell, sell or otherwise pledge, encumber, transfer or dispose of any of the
Shares owned beneficially or of record by it or any interest therein or
securities convertible thereinto or any voting rights with respect thereto,
other than (i) pursuant to the Merger or (ii) with Acquisition's prior written
consent. The Principal Stockholder has also agreed to revoke any and all
previous proxies with respect to the Principal Stockholder's Shares or any other
voting securities of the Company.
NO SOLICITATION
The Principal Stockholder has agreed that it will not, and will not cause
or permit its respective officers, employees, representatives and agents,
directly or indirectly, to solicit, initiate or encourage any inquiries or the
making of any proposal with respect to any Acquisition Transaction or provide
information to or negotiate, explore, or otherwise engage in discussions with or
in any other way cooperate with any person (other than Acquisition or its
directors, officers, employees, agents and representatives) with respect to any
Acquisition Transaction or enter into any agreement, arrangement or
understanding requiring or causing the Company to abandon, terminate or fail to
consummate the Merger or any other transactions contemplated by the Merger
Agreement.
OTHER AGREEMENTS
Stock Transfer Agreement. The Principal Stockholder has agreed to the
termination of the Amended and Restated Stock Transfer Agreement, dated October
4, 1991, between the Company, Century and Citizens (the 'Stock Transfer
Agreement'), effective as of the Effective Time.
Release of Certain Restrictions. Effective as of the Effective Time, the
Principal Stockholder has agreed to release the Company and its affiliates
(other than the Principal Stockholder and its other affiliates) from, and waives
in all respects, any obligation that may exist to the Principal Stockholder or
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any of its affiliates anywhere in the world (i) not to engage, or to refrain
from engaging, in any activity anywhere in the world or (ii) that otherwise
restricts or limits the ability of the Company or any of its affiliates to
engage in any business anywhere in the world.
Non-Compete. The Principal Stockholder has agreed that on the Effective
Date it will execute and deliver a non-compete agreement with the Surviving
Corporation, pursuant to which the Principal Stockholder will agree that, for a
period of three years from the Effective Date, the Principal Stockholder will
not engage in, or acquire a controlling interest in, any business that competes
with any of businesses of the Company's current operations in Puerto Rico;
provided, however, that such non-compete shall not extend to or restrict in any
manner the activities of the Principal Stockholder's existing joint venture in
Puerto Rico.
TERMINATION
The Stockholder Agreement, other than as set forth below, will terminate
upon the termination of the Merger Agreement or the Effective Time, whichever is
earliest.
The Principal Stockholder has agreed that in the event that the Merger
Agreement is terminated by Acquisition because (i) any of the representations
and warranties of the Company set forth in the Merger Agreement shall not be
true and correct (in the case of representations and warranties qualified as to
materiality or Material Adverse Effect) or true and correct in all material
respects (in the case of other representations and warranties), in each case
when made, or (ii) there shall have occurred, on the part of the Company and its
Subsidiaries, taken as a whole, a breach of any covenant or agreement contained
in the Merger Agreement which if not cured would have a Material Adverse Effect
and which, in the case of (A) or (B), is not curable or, if curable, is not
cured within 30 calendar days after written notice of such breach is given by
Acquisition to the Company, or the Merger Agreement is terminated by Acquisition
or by the Company because (i) the Company shall have entered into a definitive
written agreement with respect to an Acquisition Transaction with a third party
or a third party has commenced a tender offer which, in either case, the Board
of Directors of the Company believes in good faith is more favorable to the
Company's stockholders than the transactions contemplated by this Agreement, or
(ii) the Board shall have withdrawn, modified or amended in any manner adverse
to Acquisition or the stockholders of Acquisition its approval or recommendation
of the Merger Agreement and the Merger or approved, recommended or endorsed any
proposal for an Acquisition Transaction with a third party, then the Stockholder
Agreement shall terminate six months after termination of the Merger Agreement.
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MANAGEMENT OF CENTENNIAL
The Merger Agreement provides that the directors of Acquisition at the
Effective Time shall be the directors of the Company following the Merger and
that the officers of the Company at the Effective Time shall be the officers of
the Company following the Merger, until successors are duly elected and
appointed and qualified in accordance with applicable law.
The present directors of Acquisition are Thomas E. McInerney, Anthony J. de
Nicola and Rudolph E. Rupert.
It is expected that the following individuals will be directors at the
Effective Time: Thomas E. McInerney, Anthony J. de Nicola, Rudolph E. Rupert,
Mark T. Gallogly, Lawrence H. Guffey, Michael J. Small, Rudy J. Graf and two
outside directors who have not yet been determined.
The following table sets forth the name, age and position with the Company
of each person who is expected to serve as a director or executive officer of
the Company after the Effective Time.
<TABLE>
<CAPTION>
NAME AGE POSITION
- -------------------------------- --- ---------------------------------------------------------------
<S> <C> <C>
Michael J. Small................ 41 Chief Executive Officer and Director
Rudy J. Graf.................... 49 President, Chief Operating Officer and Director
Peter W. Chehayl................ 50 Vice President-Chief Financial Officer
Phillip H. Mayberry............. 45 Senior Vice President-Operations
Kari L. Jordan.................. 45 Senior Vice President of International Operations
Thomas R. Cogar, Jr. ........... 41 Vice President-Engineering
Michael Marrero................. 36 Vice President -- Engineering (Puerto Rico)
Thomas E. Bucks................. 42 Vice President-Controller
John H. Casey III............... 42 Vice President-Administration
Edward G. Owen.................. 41 Vice President -- Corporate Development
Thomas E. McInerney............. 56 Director
Anthony J. de Nicola............ 34 Director
Rudolph E. Rupert............... 32 Director
Mark T. Gallogly................ 41 Director
Lawrence H. Guffey.............. 30 Director
</TABLE>
Two outside directors will also be designated, but have not yet been determined.
Michael J. Small will become Chief Executive Officer of Centennial upon the
consummation of the Merger. Prior to joining Centennial, Mr. Small served as
Executive Vice President and Chief Financial Officer of 360 Communications
Company since 1995. Prior to 1995, he served as President of Lynch Corporation,
a diversified acquisition-oriented company with operations in
telecommunications, manufacturing and transportation services.
Rudy J. Graf has been President, Chief Operating Officer and a director of
Centennial since August 1991, and was Vice President, Operations of Centennial
from November 1990 to August 1991. Prior to joining Centennial, Mr. Graf served
in various executive capacities, including Regional Vice President from December
1987 to July 1990 and as Vice President and General Manager from December 1985
to November 1987 of Metromedia Company, a cellular telephone company.
Peter W. Chehayl will become Vice President, Chief Financial Officer of
Centennial upon the consummation of the Merger. Prior to joining Centennial, Mr.
Chehayl was the Vice President and Treasurer of 360[d] Communications Company
since 1996. Prior to 1996, he served as Vice President, Capital Markets at
Sprint Corporation.
Phillip H. Mayberry has been Senior Vice President, Operations of
Centennial since December 1994, and was Vice President, Operations of Centennial
from April 1990 to December 1994. From March 1989 to April 1990, Mr. Mayberry
was a Vice President and General Manager of Metro Mobile CTS, Inc., a cellular
telephone company.
Kari L. Jordan joined Centennial in January 1998 as Senior Vice President
of International Operations from PrimeCo where she was responsible for the
operations of the North Texas MTA. From 1990 to January 1997, Ms. Jordan worked
at US Cellular as Vice-President of Business Development.
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During her tenure at US Cellular, Ms. Jordan also served as Vice President of
National Operations and Regional General Manager.
Thomas R. Cogar, Jr. joined Centennial in September 1990 as Director of
Engineering and has been Vice President, Engineering of Centennial since August
1991. From May 1987 to September 1990, Mr. Cogar was employed by Metro Mobile
CTS, Inc. in various technical capacities, most recently as Northeast Manager of
Technical Operations.
Michael Marrero has been Vice President -- Engineering (Puerto Rico) of
Centennial since April 1997, and was Director of Technical Operations from April
1995 to April 1997. Prior to joining Centennial, Mr. Marrero served as the
Manager of Strategic Planning for the PRTC from May 1987 to April 1995. Prior to
1987, Mr. Marrero served in various capacities at Bell Corp.
Thomas E. Bucks has been Vice President, Controller of Centennial since
March 1995. Prior to joining Centennial, Mr. Bucks was employed by Southwestern
Bell Corporation in various financial capacities; most recently as District
Manager, Financial Analysis and Planning.
John H. Casey III has been Vice President, Operations of Centennial since
January 1995 and was a regional manager of Centennial from January 1991 until
December 1994. From August 1989 to December 1990, Mr. Casey was employed by
McCaw Cellular One as a district general manager.
Edward G. Owen will become Vice President -- Corporate Development upon the
consummation of the Merger. Since 1996, Mr. Owen has been Vice
President -- Planning and Corporate Development at ALLTEL Corporation (formerly
360[d] Communications). Prior to 1996, he was the director of marketing at
360[d] Communications.
Thomas E. McInerney has served as a managing member or general partner of
the respective sole general partners of WCAS and other associated investment
partnerships since 1986. He is a director of The Cerplex Group, Inc., The BISYS
Group, Inc. and several private companies.
Anthony J. de Nicola has served as a managing member or general partner of
the respective sole general partners of WCAS and other associated investment
partnerships since 1994. Previously he worked for William Blair & Co. for four
years financing middle market buyouts. He is a director of SEER Technologies,
Inc. and several private companies.
Rudolph E. Rupert is a managing member of the sole general partner of WCAS.
He is also a Vice President of the investment advisor to WCAS and other
associated investment partnerships. Prior to 1997, he worked for three years at
General Atlantic Partners where he was involved in the information technology
industry. From 1987 to 1992, he worked for Lazard Freres and Company ('Lazard'),
initially in the Mergers and Acquisitions Department and then with Lazard's
European leveraged buyout fund. Mr. Rupert is a director of several private
companies.
Mark T. Gallogly is a member of the limited liability company which acts as
the general partner of Blackstone Capital Partners, L.P. and its affiliates. He
is a Senior Managing Director of The Blackstone Group, L.P. and has been with
Blackstone since 1989. Mr. Gallogly is a member of the boards of directors of
InterMedia Partners VI, L.P., CommNet Cellular Inc., and TWFanch-One Co.
Lawrence H. Guffey is a Vice President of The Blackstone Group L.P., with
which he has been associated since 1991. He is a member of the board of
directors of CommNet Cellular Inc. and TWFanch-One Co.
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MARKET PRICE OF AND DIVIDENDS ON CENTENNIAL COMMON SHARES
The Common Shares of the Company are listed and traded on Nasdaq under the
symbol 'CYCL.' The following table shows, for the fiscal periods and indicated,
the high and low sale prices of a Common Share of the Company on Nasdaq. The
Company's first fiscal quarter ends August 31, the second fiscal quarter ends
November 30, the third fiscal quarter end on the last day of February and the
fourth fiscal quarter ends May 31.
<TABLE>
<CAPTION>
HIGH LOW
---- ---
<S> <C> <C>
Fiscal 1996
First Quarter.............................................................. $19 $13
Second Quarter............................................................. 20 1/8 15 7/8
Third Quarter.............................................................. 19 15 7/8
Fourth Quarter............................................................. 17 7/8 14 7/8
Fiscal 1997
First Quarter.............................................................. $18 1/4 $14 1/8
Second Quarter............................................................. 15 1/4 10 7/8
Third Quarter.............................................................. 14 5/8 10 3/8
Fourth Quarter............................................................. 14 1/4 8 5/8
Fiscal 1998
First Quarter.............................................................. $18 1/8 $12 7/8
Second Quarter............................................................. 21 1/8 15 3/4
Third Quarter.............................................................. 22 1/8 18
Fourth Quarter............................................................. 35 5/16 16 1/2
Fiscal 1999
First Quarter.............................................................. $41 1/2 $33 5/8
Second Quarter............................................................. 40 3/8 22
Third Quarter (through December 7, 1998)................................... 40 1/4 39 1/2
</TABLE>
On July 1, 1998, the last trading day before public announcement of the
execution of the Merger Agreement, the last sale price of Common Shares on
Nasdaq was $38 3/8 per share and on November 27, 1998, the last trading day
before the execution of the Amendment to the Merger Agreement, the last sale
price of Common Shares on Nasdaq was $36 7/8 per share. On December 7, 1998, the
most recent practicable date prior to the distribution of this Information
Statement/Prospectus, the last sale price of Common Shares on Nasdaq was $40 1/8
per share. STOCKHOLDERS OF THE COMPANY SHOULD OBTAIN CURRENT MARKET PRICES FOR
COMMON SHARES.
The Company has not paid cash dividends on the Common Shares and does not
anticipate that any cash dividends will be paid on the Common Shares in the
foreseeable future. Furthermore, certain financing agreements to which the
Company is a party contain, and the agreements related to the Financing are
expected to contain, provisions which restrict the payment by the Company of
dividends or distributions on the common shares (other than dividends or
distributions payable in common shares).
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS,
DIRECTORS AND MANAGEMENT
The following table sets forth, as of November 20, 1998, certain
information with respect to the beneficial ownership of Common Shares or Class B
Shares by each person known to the Company to own beneficially more than 5% of
the outstanding Common Shares or Class B Shares. Each Class B Share is
convertible, at any time, into one Common Share. Holders of Common Shares are
entitled to one vote per share and holders of Class B Shares are entitled to 15
votes per share.
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP(1)
---------------------------------
CLASS/NUMBER PERCENT
NAME AND ADDRESS OF 5% STOCKHOLDERS OF SHARES OF CLASS
- ------------------------------------------------------------------------------- --------------------- --------
<S> <C> <C> <C>
Century Communications Corp.(2)(3) ............................................ Class B: 8,561,819 81.2%
50 Locust Avenue
New Canaan, CT 06840
Citizens Utilities Company(2)(3) .............................................. Class B: 1,982,294 18.8
High Ridge Park
Stamford, CT 06905
Wallace R. Weitz & Company(4) ................................................. Class A: 2,594,900 16.4
1125 South 103rd Street
Omaha, NE 68124-6008
Ronald Baron(5) ............................................................... Class A: 1,646,200 10.4
Baron Capital Group, Inc.
BAMCO, Inc.
Baron Capital Management, Inc.
Baron Asset Fund
767 Fifth Avenue
New York, NY 10153
GAMCO Investors, Inc.(6) ...................................................... Class A: 1,589,200 10.1
James E. McKee
One Corporate Center
Rye, NY 10580
Prudential Insurance Co. of America(7) ........................................ Class A: 1,266,200 8.0
751 Broad Street
Newark, NJ 07102
Putnam Investments, Inc.(8) ................................................... Class A: 1,102,470 7.0
Marsh & McLennan Companies, Inc.
Putnam Investment Management, Inc.
The Putnam Advisory Company, Inc.
One Post Office Square
Boston, MA 02109
Wanger Asset Management, L.P.(9) .............................................. Class A: 942,500 6.0
Wanger Asset Management, L.P.
Wanger Asset Management, Ltd.
227 West Monroe Street
Chicago, IL 60606
James W. Hickman et al.(10) ................................................... Class A: 930,632 5.9
c/o Jonathan R. Moore
Moore & Bruce
1627 I Street, N.W.
Washington, D.C. 20006
Oliver R. Grace, Jr.(11) ...................................................... Class A: 853,506 5.4
55 Brookville Road
Glen Head, NY 11545
</TABLE>
- ------------
(1) As used in this table, 'beneficial ownership' means the sole or shared
power to vote, or to direct the voting of, a security, or the sole or
shared investment power with respect to a security (i.e., the power to
dispose of, or to direct the disposition of, a security). In addition, for
purposes of this table, a person is deemed, as of any date, to have
'beneficial ownership' of any security that such person has the right to
acquire within 60 days after such date.
(footnotes continued on next page)
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(footnotes continued from previous page)
(2) Due to their positions with and ownership of stock of Century and their
positions with Citizens, Leonard Tow, Chairman of the Board and Chief
Executive Officer of Century and Chairman of the Board and Chief Executive
Officer of Citizens and his wife, Claire L. Tow, a Senior Vice President
and director of Century and a director of Citizens, may be deemed to own
beneficially together 100% of the Company's outstanding Class B Shares.
Century currently owns 3,978 Second Series Convertible Preferred Shares
which are convertible into 115,709 Class B Shares. If all of the Second
Series Convertible Preferred Shares were converted, Century would hold
81.4% of the Class B Shares and Citizens would hold 18.6% of the Class B
Shares.
(3) Citizens currently owns 102,187 Convertible Preferred Shares which are
convertible into 2,972,342 Class B Shares of the Company. If all of the
Convertible Preferred Shares were converted, Citizens would hold 36.7% of
the Class B Shares and Century would hold 63.3% of the Class B Shares. If
all of both the Convertible Preferred Shares and the Second Series
Convertible Preferred Shares were converted, Century would hold 63.65% of
the Class B Shares and Citizens would hold 36.35% of the Class B Shares.
(4) Based solely upon information contained in a Statement on Schedule 13G
filed with the Commission on September 9, 1998. According to said Schedule
13G, Wallace R. Weitz & Company has sole voting power and sole dispositive
power with respect to such Common Shares.
(5) Based solely upon information contained in a Statement on Schedule 13G
filed with the Commission on May 11, 1998. According to said Schedule 13G,
the securities reported therein as being beneficially owned by Ronald Baron
and Baron Capital Group, Inc. ('BCG'), which is wholly owned by Ronald
Baron, consist of an aggregate of 1,646,200 Common Shares beneficially
owned by subsidiaries of BCG and an investment advisory client of a
subsidiary of BCG. BAMCO, Inc. and Baron Capital Management, Inc. are such
subsidiaries, and respectively beneficially own 1,570,000 and 76,200
shares. Baron Asset Fund is an investment advisory client of BAMCO, Inc.
that beneficially owns 845,000 Common Shares. Ronald Baron and BCG have
shared voting and dispositive power of 1,646,200 shares.
(6) Based solely upon information contained in Amendment No. 3 to a Statement
on Schedule 13D filed with the Commission on October 19, 1998. According to
said Schedule 13D, the securities reported therein as being beneficially
owned by entities directly or indirectly controlled by Mario J. Gabelli and
Marc J. Gabelli, or for which either one acts as chief investment officer,
consist of an aggregate of 1,589,200 Common Shares. GAMCO Investors, Inc.
is such an entity and beneficially owns 950,700 shares. GAMCO Investors,
Inc. has sole voting as to 940,700 of its shares and sole dispositive power
as to all of its shares.
(7) Based solely upon information contained in a Statement on Schedule 13G
filed with the Commission on February 11, 1998. According to said Schedule
13G, the Prudential Insurance Company of America ('Prudential') holds
1,226,200 Common Shares for the benefit of its clients by its separate
accounts, externally managed accounts, registered investment companies,
subsidiaries and/or other affiliates. Prudential has sole voting and
dispositive power with respect to 391,200 shares and shared voting and
dispositive power with respect to 875,000 shares.
(8) Based solely upon information contained in a Statement on Schedule 13G
filed with the Commission on February 9, 1996. According to said Schedule
13G, securities reported therein as being beneficially owned by Putnam
Investments, Inc. and Marsh & McLennan Companies, Inc. consist of an
aggregate of 1,102,470 Common Shares beneficially owned by subsidiaries of
Putnam Investments, Inc. that are registered investment advisors, which in
turn include securities beneficially owned by clients of such investment
advisors. Putnam Investment Management, Inc. and The Putnam Advisory
Company, Inc. are such investment advisors and respectively beneficially
own 933,476 and 168,994 Common Shares. Putnam Investments, Inc. has shared
voting power with respect to 142,544 shares and shared dispositive power
with respect to all of its shares.
(footnotes continued on next page)
78
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<PAGE>
(footnotes continued from previous page)
(9) Based solely upon information contained in a Statement on Schedule 13G
filed with the Commission on February 6, 1998. According to said Schedule
13G, Wanger Asset Management, L.P. has shared voting and dispositive power
with respect to such Common Shares.
(10) Based solely upon information contained in Amendment No. 2 to Statement on
Schedule 13D filed with the Commission on August 22, 1994. According to
said Schedule 13D, James W. Hickman and members of his family owned more
than 5% of the Common Shares at that time. The Company has been advised
that Mr. Hickman is deceased.
(11) Based solely upon information contained in a Statement on Schedule 13G
filed with the Commission on February 14, 1995. Includes 46,132 Common
Shares held by Mr. Grace as custodian for his minor children as to which
shares Mr. Grace disclaims beneficial ownership.
------------------------
The following table set forth, as of November 20, 1998, certain information
with respect to the beneficial ownership of Common Shares by each executive
officer and director of the Company individually and in the aggregate.
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP(1)
---------------------------------
CLASS/NUMBER PERCENT
NAME AND ADDRESS OF EXECUTIVE OFFICERS AND DIRECTORS OF SHARES OF CLASS
- ------------------------------------------------------------------------------- --------------------- --------
<S> <C> <C> <C>
Bernard P. Gallagher(2) ....................................................... Class A: 366,897 2.2%
115 Lone Tree Farm Road
New Canaan, CT 06840
Rudy J. Graf(3) ............................................................... Class A: 256,719 1.5%
267 Beachfront
Manasquan, NJ 08736
Scott N. Schneider(4) ......................................................... Class A: 207,268 1.2%
75 Marshall Road
Ridgefield, CT 06877
David Z. Rosensweig(5) ........................................................ Class A: 8,451 *
162 Brite Avenue
Scarsdale, NY 10583
Daryl A. Ferguson(6) .......................................................... Class A: 11,826 *
Citizens Utilities Company
High Ridge Park
Stamford, CT 06905
William M. Kraus(7) ........................................................... Class A: 10,280 *
946 Spaight Street
Madison, WI 53703
Peter J. Solomon(8) ........................................................... Class A: 31,072 *
767 Fifth Avenue
26th Floor
New York, NY 10153
Frank Tow(9) .................................................................. Class A: 4,000 *
25 Llanderris
Bala Cynwyd, PA 19004
Phillip Mayberry(10) .......................................................... Class A: 131,931 *
11134 W. Sycamore Hills Drive
Fort Wayne, IN 46804
Thomas Cogar(11) .............................................................. Class A: 83,377 *
11022 Monte Vista Ct.
Fort Wayne, IN 46804
All executive officers and directors as a group (10 persons) .................. Class A: 1,111,821 6.7%
</TABLE>
- ------------
* Less than 1%.
(footnotes continued on next page)
79
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(footnotes continued from previous page)
(1) As used in this table, 'beneficial ownership' means the sole or shared
power to vote, or to direct the voting of, a security, or the sole or
shared investment power with respect to a security (i.e., the power to
dispose of, or to direct the disposition of, a security). In addition, this
table includes all outstanding Options, all of which are exercisable
pursuant to the Merger Agreement.
(2) Consists of 95,130 shares as to which Mr. Gallagher's spouse is the record
and beneficial holder, 251,767 shares which Mr. Gallagher has the right to
acquire pursuant to stock option grants and 20,000 shares granted to Mr.
Gallagher under the 1993 Management Equity Incentive Plan.
(3) Consists of 19,071 shares as to which Mr. Graf is the record and beneficial
holder, 177,648 shares which Mr. Graf has the right to acquire pursuant to
stock option grants and 60,000 shares granted to Mr. Graf under the 1993
Management Equity Incentive Plan.
(4) Consists of 38,149 shares as to which Mr. Schneider is the record and
beneficial holder, 154,119 shares which Mr. Schneider has the right to
acquire pursuant to stock option grants and 15,000 shares granted to Mr.
Schneider under the 1993 Management Equity Incentive Plan.
(5) Consists of 3,653 shares as to which Mr. Rosensweig is the record and
beneficial holder and 4,798 shares which Mr. Rosensweig has the right to
acquire pursuant to stock option grants.
(6) Consists of 5,760 shares as to which Mr. Ferguson is the record and
beneficial holder and 6,066 shares which Mr. Ferguson has the right to
acquire pursuant to stock option grants.
(7) Consists of 4,214 shares as to which Mr. Kraus or his spouse is the record
and beneficial holder and 6,066 shares which Mr. Kraus has the right to
acquire pursuant to stock option grants.
(8) Consists of 25,006 shares as to which Mr. Solomon is the record and
beneficial holder and 6,066 shares which Mr. Solomon has the right to
acquire pursuant to stock option grants.
(9) Consists of 4,000 shares which Mr. Frank Tow has the right to acquire
pursuant to stock option grants.
(10) Consists of 8,438 shares as to which Mr. Mayberry is the record and
beneficial holder, 90,993 shares which Mr. Mayberry has the right to
acquire pursuant to stock option grants and 32,500 shares granted to Mr.
Mayberry under the 1993 Management Equity Incentive Plan.
(11) Consists of 9,649 shares as to which Mr. Cogar or his spouse is the record
and beneficial holder, 55,662 shares which Mr. Cogar has the right to
acquire pursuant to stock option grants, 1,066 shares which Mr. Cogar's
spouse has the right to acquire pursuant to stock option grants and 17,000
shares granted to Mr. Cogar under the 1993 Management Equity Incentive
Plan.
80
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<PAGE>
APPRAISAL RIGHTS OF DISSENTING STOCKHOLDERS
Holders of Common Shares, Class B Shares, Convertible Preferred Shares and
Second Series Convertible Preferred Shares are entitled to appraisal rights
under Section 262 ('Section 262') of the General Corporation Law of the State of
Delaware (the 'Delaware Law'), provided that they comply with the conditions
established by Section 262. Section 262 is reprinted in its entirety as Appendix
E to this Information Statement/Prospectus. The following discussion does not
purport to be a complete statement of the law relating to appraisal rights and
is qualified in its entirety by reference to Appendix E. THIS DISCUSSION AND
APPENDIX E SHOULD BE REVIEWED CAREFULLY BY ANY HOLDER WHO WISHES TO EXERCISE
STATUTORY APPRAISAL RIGHTS OR WHO WISHES TO PRESERVE THE RIGHT TO DO SO, AS
FAILURE TO COMPLY WITH THE PROCEDURES SET FORTH HEREIN OR THEREIN MAY RESULT IN
THE LOSS OF APPRAISAL RIGHTS. Stockholders of record who desire to exercise
their appraisal rights must: (i) hold Shares on the date of making a demand for
appraisal; (ii) continuously hold such Shares through the Effective Time; (iii)
deliver a properly executed written demand for appraisal to the Company within
20 days after the date of mailing of this Information Statement/Prospectus;
(iv) file any necessary petition in the Delaware Court of Chancery (the
'Delaware Court'), as more fully described below, within 120 days after the
Effective Time; and (v) otherwise satisfy all of the conditions described more
fully below and in Appendix E.
A record holder of Shares who makes the demand described below with respect
to such Shares (the 'Dissenting Shares'), who continuously is the record holder
of such Shares through the Effective Time, who otherwise complies with the
statutory requirements of Section 262 and who neither votes in favor of the
Merger nor consents thereto in writing will be entitled, if the Merger is
consummated, to receive payment of the fair value of such record holder's Shares
as appraised by the Delaware Court. All references in Section 262 and in this
summary of appraisal rights to a 'stockholder' or 'holders of Shares' are to the
record holder or holders of Shares.
Under Section 262, where a proposed merger is approved by written consent
of stockholders, the corporation must notify each of its stockholders that
appraisal rights are available, and must include in such notice a copy of
Section 262. THIS INFORMATION STATEMENT/PROSPECTUS CONSTITUTES SUCH NOTICE TO
STOCKHOLDERS OF CENTENNIAL.
ANY HOLDER OF SHARES WHO DESIRES TO EXERCISE HIS OR HER RIGHT TO DISSENT
FROM THE MERGER MUST DELIVER TO THE COMPANY A WRITTEN DEMAND FOR APPRAISAL OF
HIS OR HER SHARES WITHIN 20 DAYS AFTER THE DATE OF MAILING OF THIS NOTICE OF
APPRAISAL RIGHT. SUCH WRITTEN DEMAND MUST REASONABLY INFORM THE COMPANY OF THE
IDENTITY OF THE STOCKHOLDER OF RECORD AND OF SUCH STOCKHOLDER'S INTENTION TO
DEMAND APPRAISAL OF THE SHARES HELD BY SUCH STOCKHOLDER.
A demand for appraisal must be executed by or on behalf of the stockholder
of record, fully and correctly, as such stockholder's name appears on the
certificate or certificates representing the Shares. A person having a
beneficial interest in Shares that are held of record in the name of another
person, such as a broker, fiduciary or other nominee, must act promptly to cause
the record holder to follow the steps summarized herein properly and in a timely
manner to perfect any appraisal rights. If the Shares are owned of record by a
person other than the beneficial owner, including a broker, fiduciary (such as a
trustee, guardian or custodian) or other nominee, such demand must be executed
by or for the record owner. If the Shares are owned of record by more than one
person, as in a joint tenancy or tenancy in common, such demand must be executed
by or for all such joint owners. An authorized agent, including an agent for two
or more joint owners, may execute the demand for appraisal for a stockholder of
record; however, the agent must identify the record owner and expressly disclose
the fact that, in exercising the demand, such person is acting as agent for the
record owner. A record owner, such as a broker, fiduciary or other nominee, who
holds Shares as a nominee for others, may exercise appraisal rights with respect
to the shares held for all or less than all beneficial owners of shares as to
which such person is the record owner. In such case, the written demand must set
forth the number of shares covered by such demand. Where the number of shares is
not expressly stated, the demand will be presumed to cover all Shares
outstanding in the name of such record owner. The written demand for appraisal
should specify the stockholder's name and mailing address, the number of Shares
owned, and that the stockholder is thereby demanding appraisal of his or her
shares.
81
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<PAGE>
A STOCKHOLDER WHO ELECTS TO EXERCISE APPRAISAL RIGHTS SHOULD MAIL OR
DELIVER HIS OR HER WRITTEN DEMAND TO: CENTENNIAL CELLULAR CORP., 50 LOCUST
AVENUE, NEW CANAAN, CONNECTICUT 06840, ATTENTION: SECRETARY.
Prior to or within ten days after the Effective Time of the Merger, the
Surviving Corporation must provide notice of the Effective Time to all
stockholders who have complied with Section 262. Within 120 days after the
Effective Time, either the Surviving Corporation or any stockholder who has
complied with the required conditions of Section 262 may file a petition in the
Delaware Court, with a copy served on the Surviving Corporation in the case of a
petition filed by a stockholder, demanding a determination of the fair value of
the shares of all dissenting stockholders. The Surviving Corporation does not
currently intend to file an appraisal petition and stockholders seeking to
exercise appraisal rights should not assume that the Surviving Corporation will
file such a petition or that the Surviving Corporation will initiate any
negotiations with respect to the fair value of such shares. Accordingly,
stockholders who desire to have their shares appraised should initiate any
petitions necessary for the perfection of their appraisal rights within the time
periods and in the manner prescribed in Section 262. Within 120 days after the
Effective Time, any stockholder who has theretofore complied with the applicable
provisions of Section 262 will be entitled, upon written request, to receive
from the Surviving Corporation a statement setting forth the aggregate number of
Shares not voted in favor of the Merger and with respect to which demands for
appraisal were received by the Company and the number of holders of such shares.
Such statement must be mailed within 10 days after the written request therefor
has been received by the Surviving Corporation or within 10 days after
expiration of the time for delivery of demands for appraisal under Section 262,
whichever is later.
If a petition for an appraisal is timely filed, at the hearing on such
petition, the Delaware Court will determine which stockholders are entitled to
appraisal rights and will appraise the Shares owned by such stockholders,
determining the fair value of such shares exclusive of any element of value
arising from the accomplishment or expectation of the Merger, together with a
fair rate of interest, if any, to be paid upon the amount determined to be the
fair value. In determining fair value, the Delaware Court is to take into
account all relevant factors. In Weinberger v. UOP, Inc., the Delaware Supreme
Court discussed the factors that could be considered in determining fair value
in an appraisal proceeding and stated that 'proof of value by any techniques or
methods which are generally considered acceptable in the financial community and
otherwise admissible in court' should be considered, and that, 'fair price
obviously requires consideration of all relevant factors involving the value of
a company.' The Delaware Supreme Court stated that in making this determination
of fair value the court must consider market value, asset value, dividends,
earnings prospects, the nature of the enterprise and any other facts which are
known or which can be ascertained as of the date of the merger and throw any
light on future prospects of the merged corporation. In Weinberger, the Delaware
Supreme Court stated that 'elements of future value, including the nature of the
enterprise, which are known or susceptible of proof as of the date of the merger
and not the product of speculation, may be considered.' Section 262, however,
provides that fair value is to be 'exclusive of any element of value arising
from the accomplishment or expectation of the merger.'
Stockholders considering seeking appraisal should recognize that the fair
value of their shares as determined under Section 262 could be more than, the
same as or less than the Merger Consideration to be received if they do not seek
appraisal of their shares. The cost of the appraisal proceeding may be
determined by the Delaware Court and taxed against the parties as the Delaware
Court deems equitable in the circumstances. Upon application of a dissenting
stockholder of the Company, the Delaware Court may order that all or a portion
of the expenses incurred by any dissenting stockholder in connection with the
appraisal proceeding, including without limitation, reasonable attorneys' fees
and the fees and expenses of experts, be charged pro rata against the value of
all shares of stock entitled to appraisal.
Any holder of Shares who has duly demanded appraisal in compliance with
Section 262 will not, after the Effective Time, be entitled to vote for any
purpose any shares subject to such demand or to receive payment of dividends or
other distributions on such shares, except for dividends or distributions
payable to stockholders of record at a date prior to the Effective Time.
82
<PAGE>
<PAGE>
At any time within 60 days after the Effective Time, any stockholder will
have the right to withdraw such demand for appraisal and to accept the terms
offered in the Merger; after this period, the stockholder may withdraw such
demand for appraisal only with the consent of the Surviving Corporation. If no
petition for appraisal is filed with the Delaware Court within 120 days after
the Effective Time, stockholders' rights to appraisal will cease, and all
holders of Shares will be entitled to receive the Merger Consideration. Inasmuch
as the Surviving Corporation has no obligation to file such a petition, and has
no present intention to do so, any holder of Shares who desires such a petition
to be filed is advised to file it on a timely basis.
FAILURE TO TAKE ANY REQUIRED STEP IN CONNECTION WITH THE EXERCISE OF
APPRAISAL RIGHTS MAY RESULT IN TERMINATION OF SUCH RIGHTS. IN VIEW OF THE
COMPLEXITY OF THESE PROVISIONS OF THE DELAWARE LAW, STOCKHOLDERS WHO ARE
CONSIDERING EXERCISING THEIR RIGHTS UNDER SECTION 262 SHOULD CONSULT WITH THEIR
LEGAL ADVISORS.
EXPERTS
The consolidated financial statements incorporated in this Information
Statement/Prospectus by reference from the Company's Annual Report on Form 10-K
for the fiscal year ended May 31, 1998, 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 accounting and auditing.
LEGAL COUNSEL
The legality of the Common Shares being received in the Merger will be
passed upon by Leavy Rosensweig & Hyman, New York, New York. An opinion with
respect to all material tax consequences of the Merger will be rendered to the
Company by Paul, Weiss, Rifkind, Wharton & Garrison, New York, New York.
STOCKHOLDER PROPOSALS
In general, stockholder proposals intended to be presented at an Annual
Meeting, including proposals for the nomination of directors, must be received
by the Company at least 120 days in advance of the day and month of the last
proxy statement mailed out for any annual meeting to be considered for the next
Annual Meeting. The requirements for submitting such proposals are set forth in
the Company's Bylaws.
Stockholder proposals intended to be considered for inclusion in the proxy
statement for presentation at the 1998 Annual Meeting had to be received by the
Company by June 2, 1998.
Stockholders proposals intended to be considered for inclusion in the proxy
statement for presentation at the 1999 Annual Meeting must be received by the
Company by June 5, 1999.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
This Information Statement/Prospectus incorporates by reference documents
which are not presented herein or delivered herewith. Copies of any such
documents relating to the Company, other than exhibits to such documents (unless
such exhibits specifically are incorporated by reference in such documents), are
available without charge, upon written or oral request, from Centennial Cellular
Corp., 50 Locust Avenue, New Canaan, Connecticut 06840, Attention: Secretary,
telephone: (203) 972-2000. In order to ensure timely delivery of the documents
requested, any such request should be made by December 30, 1998.
The following documents previously filed by the Company with the Commission
(File Number 0-19603) are incorporated in this Information Statement/Prospectus
by reference:
(1) the Company's Current Report on Form 8-K filed with the Commission
on December 7, 1998;
83
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<PAGE>
(2) the Company's Current Report on Form 8-K filed with the Commission
on October 19, 1998;
(3) the Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended August 31, 1998 filed with the Commission on October 9, 1998;
(4) the Company's Annual Report on Form 10-K for the fiscal year ended
May 31, 1998 filed with the Commission on August 20, 1998; and
(5) the Company's Current Report on Form 8-K filed with the Commission
on July 16, 1998.
All reports and other documents subsequently filed by the Company with the
Commission pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act
prior to the Election Date shall be deemed to be incorporated by reference
herein and to be part hereof from the date of the filing of such reports and
documents.
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 Information Statement/Prospectus to the extent that a
statement contained herein, or in any other subsequently filed document that
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 part of this
Information Statement/Prospectus.
84
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<PAGE>
APPENDICES
TO
INFORMATION STATEMENT
OF
CENTENNIAL CELLULAR CORP.
<PAGE>
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
<PAGE>
APPENDIX A
AGREEMENT AND PLAN OF MERGER
<PAGE>
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
<PAGE>
________________________________________________________________________________
AGREEMENT AND PLAN OF MERGER
BY AND BETWEEN
CCW ACQUISITION CORP.
AND
CENTENNIAL CELLULAR CORP.
------------------------
DATED AS OF JULY 2, 1998
------------------------
________________________________________________________________________________
<PAGE>
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<C> <S> <C>
ARTICLE I
THE MERGER............................................................................................... 1
1.1 The Merger..................................................................................... 1
1.2 Conversion of Shares........................................................................... 2
1.3 Common Share Elections......................................................................... 2
1.4 Proration...................................................................................... 4
1.5 Surrender and Payment.......................................................................... 4
1.6 Dissenting Shares.............................................................................. 5
1.7 Stock Options.................................................................................. 6
ARTICLE II
THE SURVIVING CORPORATION................................................................................ 6
2.1 Certificate of Incorporation................................................................... 6
2.2 Bylaws......................................................................................... 6
2.3 Directors...................................................................................... 6
2.4 Officers....................................................................................... 6
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY............................................................ 6
3.1 Corporate Existence and Power.................................................................. 6
3.2 Corporate Authorization........................................................................ 7
3.3 Governmental Authorization..................................................................... 7
3.4 Non-contravention.............................................................................. 7
3.5 Capitalization................................................................................. 8
3.6 Subsidiaries................................................................................... 8
3.7 SEC Filings.................................................................................... 9
3.8 Financial Statements........................................................................... 9
3.9 Disclosure Documents........................................................................... 9
3.10 Absence of Certain Changes or Events........................................................... 10
3.11 Litigation..................................................................................... 10
3.12 Taxes.......................................................................................... 10
3.13 Employee Benefit Plans......................................................................... 11
3.14 Brokers........................................................................................ 12
3.15 FCC Matters.................................................................................... 12
3.16 Compliance with Applicable Laws................................................................ 13
3.17 Environmental Matters.......................................................................... 13
3.18 Opinion of Financial Advisor................................................................... 13
3.19 Affiliate Transactions......................................................................... 13
3.20 Intellectual Property.......................................................................... 13
3.21 No Other Representations....................................................................... 14
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF ACQUISITION............................................................ 14
4.1 Corporate Existence and Power.................................................................. 14
4.2 Corporate Authorization........................................................................ 14
4.3 Governmental Authorization..................................................................... 14
4.4 Non-contravention.............................................................................. 14
4.5 Information.................................................................................... 15
4.6 Brokers........................................................................................ 15
4.7 Qualification of Acquisition................................................................... 15
4.8 Acquisition Not an Interested Stockholder...................................................... 15
4.9 Financing...................................................................................... 15
</TABLE>
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<TABLE>
<C> <S> <C>
ARTICLE V
COVENANTS OF THE COMPANY................................................................................. 16
5.1 Conduct of the Company......................................................................... 16
5.2 Access to Information.......................................................................... 17
5.3 No Solicitation................................................................................ 17
5.4 Communications Licenses and Authorizations..................................................... 18
5.5 Debt Offers.................................................................................... 18
5.6 Notices of Certain Events...................................................................... 19
5.7 State Takeover Laws............................................................................ 19
ARTICLE VI
COVENANTS OF ACQUISITION................................................................................. 19
6.1 Confidentiality................................................................................ 19
6.2 Indemnification; Directors' and Officers' Insurance............................................ 19
6.3 Employee Benefit Arrangements.................................................................. 20
6.4 Financing...................................................................................... 20
6.5 NASDAQ Listing................................................................................. 20
ARTICLE VII
COVENANTS OF ACQUISITION AND THE COMPANY................................................................. 20
7.1 Reasonable Best Efforts........................................................................ 20
7.2 Stockholder Meeting............................................................................ 20
7.3 Consents....................................................................................... 21
7.4 Public Announcements........................................................................... 22
7.5 Notification of Certain Matters................................................................ 22
7.6 Further Assurances............................................................................. 22
7.7 FCC Applications............................................................................... 22
7.8 HSR Act Matters................................................................................ 23
ARTICLE VIII
CONDITIONS TO THE MERGER................................................................................. 23
8.1 Conditions to the Obligations of Each Party.................................................... 23
8.2 Conditions Precedent to the Obligations of Acquisition......................................... 24
8.3 Conditions Precedent to the Obligations of the Company......................................... 24
ARTICLE IX
TERMINATION.............................................................................................. 25
9.1 Termination.................................................................................... 25
9.2 Effect of Termination.......................................................................... 26
9.3 Fees and Expenses.............................................................................. 26
ARTICLE X
MISCELLANEOUS............................................................................................ 26
10.1 Notices........................................................................................ 26
10.2 Survival of Representations and Warranties and Agreements...................................... 27
10.3 Amendment...................................................................................... 27
10.4 Extension; Waiver.............................................................................. 27
10.5 Successors and Assigns......................................................................... 27
10.6 Governing Law.................................................................................. 27
10.7 Jurisdiction................................................................................... 27
10.8 Counterparts; Effectiveness.................................................................... 27
10.9 Entire Agreement; No Third-party Beneficiaries................................................. 27
10.10 Headings....................................................................................... 28
10.11 Schedules...................................................................................... 28
10.12 Severability................................................................................... 28
10.13 WAIVER OF JURY TRIAL........................................................................... 28
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
SCHEDULES
- -----------------
<S> <C>
Schedule 3.4 Violations Caused by Consummation of the Merger
Schedule 3.5(e) Voting, Transfer and Registration Rights
Schedule 3.5(f) Minority Interests in Limited Partnerships of the Company and its Subsidiaries and
Other Outstanding Obligations of the Company and its Subsidiaries
Schedule 3.6(a) Significant Subsidiaries of the Company
Schedule 3.6(b) Other Ownership Interests in Subsidiaries of the Company
Schedule 3.10 Liabilities and Obligations of the Company and its Subsidiaries
Schedule 3.11 Litigation of the Company and its Subsidiaries
Schedule 3.12 Tax Matters
Schedule 3.13(a) Employee Benefit Plans of the Company
Schedule 3.13(g) Severance Benefits
Schedule 3.15(a) Communications Licenses of the Company and its Subsidiaries
Schedule 3.15(b) Communications Licenses Exceptions
Schedule 3.19 Affiliate Transactions
Schedule 3.20 Intellectual Property
</TABLE>
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<PAGE>
<PAGE>
INDEX OF DEFINED TERMS
<TABLE>
<CAPTION>
TERM SECTION
- ----------------------------------------------------------------------------------------------------- ---------
<S> <C>
Acquisition.......................................................................................... Preamble
Acquisition Material Adverse Effect.................................................................. 4.1
Acquisition Transaction.............................................................................. 5.3
Affiliate............................................................................................ 3.13(f)
Antitrust Laws....................................................................................... 7.3(b)
Board................................................................................................ 3.2
Cash Election Price.................................................................................. 1.2(b)
Cash Merger Consideration............................................................................ 1.2
Class B Shares....................................................................................... Preamble
Closing.............................................................................................. 1.1(b)
Closing Date......................................................................................... 1.1(b)
Code................................................................................................. 1.5(c)
Commitment Letters................................................................................... 4.9(b)
Common Shares........................................................................................ Preamble
Company Securities................................................................................... 3.5(c)
Communications Act................................................................................... 3.3
Communications Licenses.............................................................................. 3.15(a)
Company.............................................................................................. Preamble
Company Securities................................................................................... 3.5(c)
Confidentiality Agreement............................................................................ 5.2
Convertible Preferred Shares......................................................................... Preamble
Debt Offers.......................................................................................... 5.5(a)
Delaware Law......................................................................................... Preamble
Dissenting Shares.................................................................................... 1.6
Effective Time....................................................................................... 1.1(c)
Electing Shares...................................................................................... 1.2(b)
Election Date........................................................................................ 1.3(b)
Eligible Institution................................................................................. 1.3(b)
Employee Benefit Arrangement......................................................................... 5.1(e)
Employee Plan........................................................................................ 3.13(a)
Environmental Law.................................................................................... 3.17(a)
ERISA................................................................................................ 3.13(c)
Excess Proration Factor.............................................................................. 1.4(b)
Exchange Act......................................................................................... 3.3
Exchange Agent....................................................................................... 1.5(a)
FCC.................................................................................................. 1.1(a)
FCC Applications..................................................................................... 7.7(a)
FCC Licenses......................................................................................... 3.15(a)
FCC Transfer Approvals............................................................................... 8.2(c)
Financing............................................................................................ 4.9(b)
Form of Election..................................................................................... 1.3(b)
Form S-4............................................................................................. 7.2(b)
Governmental Entity.................................................................................. 1.5(f)
Hazardous Substance.................................................................................. 3.17
HSR Act.............................................................................................. 3.3
Indemnified Parties.................................................................................. 6.2(a)
Intellectual Property................................................................................ 3.20(a)
Interested Stockholder............................................................................... 4.8
Lien................................................................................................. 3.4
Material Adverse Effect.............................................................................. 3.1
Merger............................................................................................... 1.1(a)
Merger Consideration................................................................................. 1.2
</TABLE>
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<TABLE>
<CAPTION>
TERM SECTION
- ----------------------------------------------------------------------------------------------------- ---------
<S> <C>
Non-Cash Election.................................................................................... 1.3(a)
Non-Cash Election Number............................................................................. 1.4(a)
Non-Cash Election Share.............................................................................. 1.2(b)
Offer Documents...................................................................................... 5.5(b)
Option............................................................................................... 1.7(a)
Option Plans......................................................................................... 1.7(a)
Person............................................................................................... 1.5(d)
Preferred Shares..................................................................................... Preamble
Proxy Statement/Prospectus........................................................................... 7.2(b)
Returns.............................................................................................. 3.12(a)
SEC.................................................................................................. 1.3(b)
SEC Reports.......................................................................................... 3.7(a)
Second Series Convertible Preferred Shares........................................................... Preamble
Securities Act....................................................................................... 3.3
Senior Notes......................................................................................... 5.5(a)
Shares............................................................................................... Preamble
Shortfall Proration Factor........................................................................... 1.4(c)
Significant Subsidiary............................................................................... 3.6(a)
State Licenses....................................................................................... 3.15(a)
State PUC............................................................................................ 3.15(a)
State PUC Applications............................................................................... 7.7(b)
Stockholder Meeting.................................................................................. 7.2(a)
Stockholders Agreement............................................................................... Preamble
Subsidiary........................................................................................... 3.1
Subsidiary Securities................................................................................ 3.6(b)
Surviving Corporation................................................................................ 3.1(a)
Tax.................................................................................................. 3.12(d)
Violation............................................................................................ 3.4
WCAS................................................................................................. 3.4
</TABLE>
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of July 2, 1998 by and between
CCW ACQUISITION CORP., a Delaware corporation ('Acquisition'), and CENTENNIAL
CELLULAR CORP., a Delaware corporation (the 'Company').
WHEREAS, Acquisition and the Company desire that Acquisition merge
with and into the Company, upon the terms and conditions set forth herein and in
accordance with the General Corporation Law of the State of Delaware (the
'Delaware Law') with the result that the Company shall continue as the surviving
corporation and the separate existence of Acquisition shall cease;
WHEREAS, Acquisition and the Company desire that upon the Merger (as
hereinafter defined), at the Effective Time (as hereinafter defined), all issued
and outstanding shares of capital stock of the Company (collectively, the
'Shares'), other than Shares owned by Acquisition or the Company and Dissenting
Shares (as hereinafter defined), be converted as follows: (i) all outstanding
shares of Class A Common Stock, par value $.01 per share, of the Company (the
'Common Shares'), be converted into the right to (a) retain Common Shares or
(b) receive cash; (ii) all outstanding shares of Class B Common Stock, par value
$0.01 per share, of the Company (the 'Class B Shares') be converted into the
right to receive cash and, after the conversion thereof into Common Shares, to
retain a number of Common Shares, if any, such that the aggregate number of
Common Shares retained pursuant to clauses (i) and (ii) shall equal 7.1% of the
total number of Common Shares issued and outstanding immediately after the
Effective Time; and (iii) all outstanding shares of (x) Convertible Preferred
Stock, par value $.01 per share, of the Company (the 'Convertible Preferred
Shares') and (y) Second Series Convertible Preferred Stock, par value $.01 per
share, of the Company (the 'Second Series Convertible Preferred Shares' and,
together with the Convertible Preferred Shares, the 'Preferred Shares') be
converted into the right to receive cash;
WHEREAS, Acquisition and the Company desire that upon the Merger, at
the Effective Time, all issued and outstanding shares of capital stock of
Acquisition be converted into a number of Common Shares equal to 92.9% of the
total number of Common Shares issued and outstanding immediately after the
Effective Time;
WHEREAS, the respective Boards of Directors of the Company and
Acquisition have each approved the Merger and declared it to be in the best
interests of their respective stockholders;
WHEREAS, the sole stockholder of Acquisition has approved and adopted
this Agreement and the Merger;
WHEREAS, Acquisition has required, as a condition to its willingness
to enter into this Agreement, that Century Communications Corp., a stockholder
of the Company, contemporaneously enter into a stockholder agreement (the
'Stockholder Agreement'), which includes, among other things, an agreement to
vote in favor of this Agreement and the Merger;
WHEREAS, it is intended that the Merger be accounted for as a
recapitalization for financial reporting purposes;
NOW, THEREFORE, in consideration of the promises and the respective
representations, warranties, covenants, and agreements set forth herein, the
parties hereto agree as follows:
ARTICLE I
THE MERGER
1.1 The Merger.
(a) Upon the terms and subject to the conditions set forth in
this Agreement (including approval of the Federal Communications Commission (the
'FCC') as set forth in Article VIII hereof), at the Effective Time, Acquisition
shall be merged (the 'Merger') with and into the Company in accordance with
Delaware Law whereupon the separate existence of Acquisition shall cease, and
the Company shall be the surviving corporation (the 'Surviving Corporation').
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(b) Upon the terms and subject to the conditions of this
Agreement, the closing of the Merger (the 'Closing') shall take place at 10:00
a.m. on a date to be specified by the parties (the 'Closing Date'), which shall
be no later than the second business day after satisfaction of the conditions
set forth in Article VIII, at the offices of Paul, Weiss, Rifkind, Wharton &
Garrison, 1285 Avenue of the Americas, New York, New York 10019, unless another
time, date or place is agreed to in writing by the parties hereto.
(c) Upon the Closing, the Company and Acquisition will file a
certificate of merger with the Secretary of State of the State of Delaware and
make all other filings or recordings required by Delaware Law in connection with
the Merger. The Merger shall become effective at such time as the certificate of
merger is duly filed with the Secretary of State of the State of Delaware or at
such later time as is specified in the certificate of merger (the 'Effective
Time').
(d) The Merger shall have the effects set forth in Section 259 of
the Delaware Law.
1.2 Conversion of Shares. At the Effective Time:
(a) each Share held by the Company as treasury stock or owned by
any Subsidiary (as hereinafter defined) or Acquisition immediately prior to the
Effective Time shall be canceled, and no payment shall be made with respect
thereto;
(b) except as otherwise provided in Section 1.2(a) or as provided
in Section 1.6 with respect to Shares as to which appraisal rights have been
exercised, each Common Share issued and outstanding immediately prior to the
Effective Time shall be converted into the following:
(i) in the case of Common Shares with respect to which an
election to retain has been effectively made and not revoked or
forfeited pursuant to Sections 1.3(c), (d) and (e) ('Electing
Shares'), and subject to Section 1.4 below, the right to retain one
fully paid and nonassessable Common Share (a 'Non-Cash Election
Share'); and
(ii) in the case of Common Shares other than Electing
Shares, and subject to Section 1.4 below, the right to receive a cash
payment of $43.50 per Common Share (the 'Cash Election Price');
(c) except as otherwise provided in Section 1.2(a), each Class B
Share issued and outstanding immediately prior to the Effective Time shall be
converted into the right to receive the following:
(i) after conversion thereof into Common Shares, the right
to retain a number of Common Shares equal to the 'Shortfall Proration
Factor' (as hereinafter defined), which Common Shares, if any, shall
be deemed to be Non-Cash Election Shares; and
(ii) an amount in cash equal to the Cash Election Price
multiplied by a fraction, the numerator of which is the number of
Class B Shares issued and outstanding immediately prior to the
Effective Time less the aggregate number, if any, of Common Shares
retainable pursuant to clause (c)(i), and the denominator of which is
the number of Class B Shares issued and outstanding immediately prior
to the Effective Time;
(d) except as otherwise provided in Section 1.2(a), each
Preferred Share issued and outstanding immediately prior to the Effective Time
shall be converted into the right to receive a cash payment equal to the product
of the Cash Election Price and the number of Common Shares into which such
Preferred Share could have been converted immediately prior to the Effective
Time; and
(e) the shares of common stock of Acquisition issued and
outstanding immediately prior to the Effective Time shall be converted into a
total number of Shares equal to 92.9% of the outstanding Shares as of the
Effective Time (excluding Options).
The cash amounts payable pursuant to paragraphs (b), (c) and (d) above are
collectively referred to as the 'Cash Merger Consideration,' and including the
Non-Cash Election Shares, the 'Merger Consideration.'
1.3 Common Share Elections.
(a) Each Person (as hereinafter defined) who, on the Election
Date (as hereinafter defined), is a record holder of Common Shares will be
entitled, with respect to all or any portion of such
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Shares, to make an unconditional election (a 'Non-Cash Election') on or prior to
the Election Date to retain Non-Cash Election Shares, on the basis hereinafter
set forth.
(b) The Company shall prepare a form of election, which form
shall be subject to the reasonable approval of Acquisition (as the same may be
amended or supplemented, the 'Form of Election'), to be mailed by the Company
with the Proxy Statement/Prospectus (as hereinafter defined) to the record
holders of Common Shares as of the record date for the Stockholder Meeting (as
hereinafter defined) and otherwise distributed in accordance with the
requirements of the Securities and Exchange Commission ('SEC'), which Form of
Election shall be used by each record holder of Common Shares who wishes to
elect, subject to the provisions of Section 1.4, to retain Non-Cash Election
Shares for any or all Common Shares as to which it is the record holder. The
Company will use its reasonable efforts to make the Form of Election and the
Proxy Statement/Prospectus available to all Persons who become holders of Common
Shares during the period between the record date and the Election Date. Any such
holder's election to retain Non-Cash Election Shares shall have been properly
made only if the Exchange Agent (as hereinafter defined) shall have received at
its designated office, by 5:00 p.m., local time for the Exchange Agent, on the
second business day prior to the date of the Stockholder Meeting (the 'Election
Date'), pursuant to (i) a Form of Election properly completed and signed and
accompanied by certificates representing the Common Shares to which such Form of
Election relates, duly endorsed in blank or otherwise in form acceptable for
transfer on the books of the Company (or by an appropriate guarantee of delivery
of such certificates as set forth in such Form of Election from a firm which is
an 'eligible guarantor institution' (as defined in Rule 17Ad-15 under the
Exchange Act (as hereinafter defined)) (an 'Eligible Institution'), provided
such certificates are in fact delivered to the Exchange Agent within three
Nasdaq trading days after the date of execution of such guarantee of delivery)
or (ii) such other procedures as may be set forth in the Proxy
Statement/Prospectus.
(c) Any Form of Election may be revoked by the holder submitting
it to the Exchange Agent only by notice received by the Exchange Agent prior to
5:00 p.m., local time for the Exchange Agent, on the Election Date in accordance
with the procedures set forth in the Proxy Statement/Prospectus (unless
Acquisition and the Company determine not less than two Business Days prior to
the Election Date that the Closing Date is not likely to occur within five
Business Days following the Election Date, in which case any Form of Election
will remain revocable until a subsequent date which shall be a date prior to the
Closing Date determined by Acquisition and the Company). In addition, all Forms
of Election shall automatically be revoked if the Exchange Agent is notified in
writing by Acquisition and the Company that this Agreement has been terminated.
If a Form of Election is properly revoked, the certificate or certificates (or
guarantees of delivery, as appropriate) for the Common Shares to which such Form
of Election relates shall be promptly returned by the Exchange Agent to the
shareholder submitting the same, or pursuant to such other procedures as are set
forth in the Proxy Statement/Prospectus.
(d) The determination of the Exchange Agent (or the Company if
the Exchange Agent declines to make such determination) shall be binding as to
whether elections to retain Non-Cash Election Shares have been properly made or
revoked pursuant to this Section 1.3 with respect to Common Shares and as to
when elections and revocations were received by it. If the Exchange Agent
reasonably determines in good faith that any election to retain Non-Cash
Election Shares was not properly made with respect to Common Shares, such shares
shall be treated by the Exchange Agent as shares that were not Electing Shares
at the Effective Time, and such shares shall be exchanged in the Merger for cash
pursuant to Section 1.2(b)(ii), subject to proration as provided in Section 1.4.
The Exchange Agent (or the Company if the Exchange Agent declines to make such
determination) shall also make all computations as to the allocation and the
proration contemplated by Section 1.4, and any such computation shall be
conclusive and binding on the holders of Common Shares and the Class B Common
Shares. The Exchange Agent may, with the mutual written agreement of Acquisition
and the Company, establish procedures as are consistent with this Section 1.3
for the implementation of the elections provided for herein as shall be
necessary or desirable fully to effect such elections.
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1.4 Proration.
(a) Notwithstanding anything in this Agreement to the contrary,
the aggregate number of Common Shares to be retained pursuant to paragraphs (b)
and (c) of Section 1.2 at the Effective Time shall be equal to 7.1% of the
Common Shares to be issued and outstanding immediately after the Effective Time
(the 'Non-Cash Election Number').
(b) If the number of Electing Shares exceeds the Non-Cash
Election Number, then each Electing Share shall be converted into the right to
retain Non-Cash Election Shares or receive cash in accordance with the terms of
Section 1.2(b) in the following manner:
(i) a proration factor (the 'Excess Proration Factor')
shall be determined by dividing the Non-Cash Election Number by the
total number of Electing Shares;
(ii) the number of Electing Shares covered by each Non-Cash
Election shall be determined by multiplying the Excess Proration
Factor by the total number of Electing Shares covered by such
Non-Cash Election (subject to rounding, to avoid the issuance of
fractional shares); and
(iii) all Electing Shares, other than those Shares
converted into the right to retain Non-Cash Election Shares in
accordance with Section 1.4(b)(ii), shall be converted into cash in
accordance with the terms of Section 1.2(b)(ii), as if such Shares
were not Electing Shares.
(c) If the number of Electing Shares is less than the Non-Cash
Election Number, then:
(i) all Electing Shares shall be converted into the right
to retain Common Shares in accordance with the terms of Section
1.2(b)(i);
(ii) additional Common Shares (other than Electing Shares
and Dissenting Shares) shall be converted into the right to retain
Non-Cash Election Shares in accordance with the terms of Section
1.2(b) in the following manner:
(A) a proration factor (the 'Shortfall Proration
Factor') shall be determined by dividing (x) the difference between
the Non-Cash Election Number and the number of Electing Shares, by
(y) the total number of Common Shares outstanding at the Effective
Time (other than Electing Shares and Dissenting Shares) and
including, as if they had been converted into Common Shares, all
Class B Shares issued and outstanding at the Effective Time; and
(B) the number of Common Shares (other than Electing
Shares and Dissenting Shares) held by each stockholder that shall be
converted into the right to retain Non-Cash Election Shares shall be
determined by multiplying the Shortfall Proration Factor by the total
number of Common Shares (other than Electing Shares and Dissenting
Shares) held by such holder (subject to rounding to avoid the
issuance of fractional shares) and
(iii) Common Shares subject to clause (ii) of this Section
1.4(c) shall be converted into the right to retain Non-Cash Election
Shares in accordance with Section 1.2(b)(i), as if such shares were
Electing Shares.
1.5 Surrender and Payment.
(a) Prior to the Effective Time, Acquisition shall authorize one
or more commercial banks (acceptable to the Company) organized under the laws of
the United States or any state thereof with capital, surplus and undivided
profits of at least $500,000,000 to act as Exchange Agent hereunder (the
'Exchange Agent') for the purpose of exchanging certificates representing Shares
for the Merger Consideration. Acquisition will make available to the Exchange
Agent prior to the Effective Time the Merger Consideration to be paid in respect
of the Shares. Promptly after the Effective Time, Acquisition will send, or will
cause the Exchange Agent to send, to each holder of Shares at the Effective Time
a letter of transmittal for use in such exchange (which shall specify that the
delivery shall
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be effected, and risk of loss and title shall pass, only upon proper delivery of
the certificates representing Shares to the Exchange Agent).
(b) Each holder of Shares that have been converted into a right
to receive the Merger Consideration, upon surrender to the Exchange Agent of a
certificate or certificates representing such Shares, together with a properly
completed letter of transmittal covering such Shares, will be entitled to
receive the Merger Consideration payable in respect of such Shares. Until so
surrendered, each such certificate shall, after the Effective Time, represent
for all purposes, only the right to receive such Merger Consideration.
(c) Acquisition shall be entitled to deduct and withhold from the
consideration otherwise payable pursuant to this Agreement to any holder of
Shares such amounts as Acquisition is required to deduct and withhold with
respect to the making of such payment under the Internal Revenue Code of 1986,
as amended (the 'Code'), or any provision of state, local or foreign tax law. To
the extent that amounts are so withheld by Acquisition, such withheld amounts
shall be treated for all purposes of this Agreement as having been paid to the
holder of the Shares in respect of which such deduction and withholding was made
by Acquisition.
(d) If any portion of the Merger Consideration is to be paid to a
Person other than the registered holder of the Shares represented by the
certificate or certificates surrendered in exchange therefor, it shall be a
condition to such payment that the certificate or certificates so surrendered
shall be properly endorsed or otherwise be in proper form for transfer and that
the Person requesting such payment shall pay to the Exchange Agent any transfer
or other taxes required as a result of such payment to a Person other than the
registered holder of such Shares or establish to the satisfaction of the
Exchange Agent that such tax has been paid or is not payable. For purposes of
this Agreement, 'Person' means an individual, a corporation, a limited liability
company, a partnership, an association, a trust or any other entity or
organization, including a government or political subdivision or any agency or
instrumentality thereof.
(e) After the Effective Time, there shall be no further
registration of transfers of Shares. If, after the Effective Time, certificates
representing Shares are presented to the Surviving Corporation, they shall be
canceled and exchanged for the consideration provided for, and in accordance
with the procedures set forth, in this Article I.
(f) Any portion of the Merger Consideration made available to the
Exchange Agent pursuant to Section 1.5(a) that remains unclaimed by the holders
of Shares six months after the Effective Time shall be returned to the Surviving
Corporation, upon demand, and any such holder who has not exchanged its Shares
for the Merger Consideration in accordance with this Section 1.5 prior to that
time shall thereafter look only to the Surviving Corporation for payment of the
Merger Consideration in respect of its Shares. Notwithstanding the foregoing,
neither Acquisition nor the Surviving Corporation shall be liable to any holder
of Shares for any amount paid to a public official pursuant to applicable
abandoned property laws. Any amounts remaining unclaimed by holders of Shares
two years after the Effective Time (or such earlier date immediately prior to
such time as such amounts would otherwise escheat to or become property of any
Governmental Entity) shall, to the extent permitted by applicable law, become
the property of the Surviving Corporation free and clear of any claims or
interest of any Person previously entitled thereto. As used in this Agreement,
'Governmental Entity' means any government or subdivision thereof, or any
administrative, governmental or regulatory authority, agency, commission,
tribunal or body, domestic, foreign or supranational.
1.6 Dissenting Shares. Notwithstanding Section 1.2, Shares
outstanding immediately prior to the Effective Time and held by a holder who has
not voted in favor of the Merger or consented thereto in writing and who has
demanded appraisal for such Shares in accordance with Section 262 of the
Delaware Law ('Dissenting Shares') shall not be converted into a right to
receive the Merger Consideration, unless such holder fails to perfect or
withdraws or otherwise loses its right to appraisal. If after the Effective
Time, any such holder fails to perfect or withdraws or loses its right to
appraisal, such Dissenting Shares shall be treated as if they had been converted
as of the Effective Time into the right to receive the Cash Merger Consideration
to which such holder is entitled, without interest or dividends thereon. The
Company shall give Acquisition prompt notice of any demands received by the
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Company for appraisal of Shares, and, prior to the Effective Time, Acquisition
shall have the right to participate in all negotiations and proceedings with
respect to such demands. Prior to the Effective Time, the Company shall not,
except with the prior written consent of Acquisition, make any payment with
respect to, or settle or offer to settle, any such demands.
1.7 Stock Options. The Company shall take all actions necessary so
that, immediately prior to the Effective Time, (i) each outstanding option to
purchase Class A Shares (an 'Option') granted under the Company's 1991 Employee
Stock Option Plan, as amended, and Non-Employee/Officer Director Option Plan
(collectively, the 'Option Plans'), whether or not then exercisable or vested,
shall become fully exercisable and vested, (ii) each Option which is then
outstanding shall be canceled and (iii) in consideration of such cancellation,
and except to the extent that Acquisition and the holder of any such Option
otherwise agree, the Company shall pay to such holders of Options an amount in
respect thereof equal to the product of (x) the excess of the Cash Merger
Consideration over the exercise price thereof and (y) the number of Common
Shares subject thereto (such payment to be net of taxes required by law to be
withheld with respect thereto); provided that the foregoing shall be subject to
the obtaining of any necessary consents of holders of Options, it being agreed
that the Company and Acquisition will use their reasonable best efforts to
obtain any such consents.
ARTICLE II
THE SURVIVING CORPORATION
2.1 Certificate of Incorporation. The certificate of incorporation
of Acquisition in effect at the Effective Time shall be the certificate of
incorporation of the Surviving Corporation until amended in accordance with
applicable law.
2.2 Bylaws. Subject to Section 6.2 hereof, the bylaws of Acquisition
in effect at the Effective Time shall be the bylaws of the Surviving Corporation
until amended in accordance with applicable law.
2.3 Directors. From and after the Effective Time, until successors
are duly elected or appointed and qualified in accordance with applicable law,
the directors of Acquisition at the Effective Time shall be the directors of the
Surviving Corporation.
2.4 Officers. From and after the Effective Time, until successors
are duly elected or appointed and qualified in accordance with applicable law,
the officers of the Company at the Effective Time shall be the officers of the
Surviving Corporation.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Acquisition that:
3.1 Corporate Existence and Power. The Company is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware, and has all corporate powers required to carry on its business as
now conducted. The Company is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction where the character of
the property owned or leased by it or the nature of its activities makes such
qualification necessary, except for those jurisdictions where the failure to be
so qualified would not have a material adverse effect on the business, assets,
operations or financial condition of the Company and its Subsidiaries, taken as
a whole, or upon the ability of the Company to consummate the transactions
contemplated by this Agreement or perform its obligations hereunder (a 'Material
Adverse Effect'). The Company has heretofore delivered to Acquisition complete
and correct copies of the Company's certificate of incorporation and bylaws as
currently in effect. For purposes of this Agreement, a 'subsidiary' of any
Person means any other Person of which securities or other ownership interests
having ordinary voting power to elect a majority of the board of directors or
other Persons performing similar functions are directly or indirectly owned or
controlled by such Person, and unless otherwise specified, 'Subsidiary' means a
subsidiary of the Company.
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3.2 Corporate Authorization. The execution, delivery and performance
by the Company of this Agreement and the consummation by the Company of the
transactions contemplated hereby are within the Company's corporate powers and,
except for the approval by the Company's stockholders of this Agreement and the
Merger, have been duly authorized by all necessary corporate action. This
Agreement has been duly and validly executed and delivered by the Company and,
assuming the due and valid authorization, execution and delivery of this
Agreement by Acquisition and receipt of all required approvals by the Company's
stockholders in connection with the consummation of the Merger, constitutes a
valid and binding agreement of the Company, enforceable against it in accordance
with its terms except as may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer and other similar laws affecting
creditors' rights generally and by equitable principles of general
applicability. The Board of Directors of the Company (the 'Board') has approved
the Merger, this Agreement and the transactions contemplated hereby and such
approval, assuming the accuracy of Acquisition's representation in Section 4.8
hereof, is sufficient to render the provisions of Section 203 of Delaware Law
inapplicable to the Merger, this Agreement and the transactions contemplated
hereby. No other corporate proceedings on the part of the Company are necessary
to authorize or approve this Agreement or to consummate the transactions
contemplated hereby (other than the approval and adoption of the Merger and this
Agreement by holders of the Shares to the extent required by the Company's
certificate of incorporation and by applicable law).
3.3 Governmental Authorization. The execution, delivery and
performance by the Company of this Agreement and the consummation by the Company
of the Merger and the other transactions contemplated hereby require no consent,
waiver, approval, authorization or permit by or from, or action by or in respect
of, or filing with, any Governmental Entity, other than (i) the filing of a
certificate of merger in accordance with Delaware Law; (ii) compliance with any
applicable requirements of state takeover laws; (iii) compliance with the
applicable requirements of the Hart-Scott-Rodino Antitrust Improvements Act of
1976 (the 'HSR Act'); (iv) compliance with any applicable requirements of the
Securities Act of 1933, as amended (together with the rules and regulations
promulgated thereunder, the 'Securities Act') and the Securities Exchange Act of
1934, as amended (together with the rules and regulations promulgated
thereunder, the 'Exchange Act'); (v) compliance with any applicable requirements
of the Communications Act of 1934, as amended (together with the rules,
regulations and published decisions of the FCC, the 'Communications Act'); (vi)
compliance with the applicable requirements of state and local public utility
commissions or similar entities; and (vii) any action, filing, consent, waiver,
approval, authorization or permit that would not in the aggregate prevent or
delay consummation of the Merger in any material respect, or otherwise prevent
the Company from performing its obligations under this Agreement in any material
respect or would not in the aggregate have a Material Adverse Effect.
3.4 Non-contravention. Except as described in Schedule 3.4 and
assuming compliance with the matters referred to in Section 3.3, the execution,
delivery and performance by the Company of this Agreement and the consummation
by the Company of the transactions contemplated hereby do not and will not (i)
assuming receipt of the approval of stockholders referred to in Section 3.2,
contravene or conflict with the certificate of incorporation or bylaws of the
Company, (ii) contravene or conflict with or constitute a violation of any
provision of any law, regulation, judgment, injunction, order or decree binding
upon or applicable to the Company or any Subsidiary, (iii) result in a breach or
violation of or constitute a default under (or an event which with the giving of
notice or the lapse of time or both would constitute a default under) or give
rise to a right of termination, amendment, cancellation or acceleration of any
right or obligation of the Company or any Subsidiary or to a loss of any benefit
to which the Company or any Subsidiary is entitled or require any consent,
approval or authorization under any provision of any material agreement,
contract or other instrument binding upon the Company or any Subsidiary or any
of their respective assets (including any material license, franchise, permit or
other similar authorization held by the Company or any Subsidiary) or (iv)
result in the creation or imposition of any Lien (as defined below) on any
material asset of the Company or any Subsidiary, except for such contraventions,
conflicts or violations referred to in clause (ii) and breaches, violations,
defaults, rights of termination, cancellation or acceleration, losses, Liens or
other occurrences referred to in clauses (iii) and (iv) (each, a 'Violation')
that in the aggregate would not have a Material Adverse Effect or prevent or
materially delay the consummation of the Merger in any material respect
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or otherwise prevent the Company from performing its obligations under this
Agreement in any material respect. For purposes of this Agreement, 'Lien' means,
with respect to any asset, any mortgage, lien, pledge, charge, security interest
or encumbrance of any kind in respect of such asset.
3.5 Capitalization.
(a) The authorized capital stock of the Company consists of the
following, as of June 25, 1998: (i) 100,000,000 Class A Shares, of which
15,070,470 are issued and outstanding; (ii) 50,000,000 Class B Shares, of which
10,544,113 were issued and outstanding; (iii) 102,187 Convertible Preferred
Shares, of which 102,187 are issued and outstanding; (iv) 3,978 Second Series
Convertible Preferred Shares, of which 3,978 are issued and outstanding; (v)
250,000 shares of Senior Preferred Stock, par value $0.01 per share, of which no
shares are issued and outstanding; and (vi) 9,996,022 shares of Additional
Preferred Stock, par value $0.01 per share, of which no shares are issued and
outstanding.
(b) As of June 25, 1998, there were outstanding, under the Option
Plans, Options to purchase an aggregate of 1,503,643 Common Shares.
(c) All outstanding shares of capital stock of the Company have
been duly authorized and validly issued and are fully paid and nonassessable.
Except as set forth in this Section 3.5 and except for changes since June 25,
1998, resulting from the exercise of Options outstanding on such date, there are
outstanding (i) no shares of capital stock or other voting securities of the
Company, (ii) no securities of the Company convertible into or exchangeable for
shares of capital stock or voting securities of the Company and (iii) no options
or other rights to acquire from the Company, and no obligation of the Company to
issue, any capital stock, voting securities or securities convertible into or
exchangeable for capital stock or voting securities of the Company (the items in
clauses (a) and (b) of this Section 3.5 being referred to collectively as the
'Company Securities'). Except pursuant to the terms of the Company Securities as
set forth in the Company's Certificate of Incorporation, there are no
outstanding obligations of the Company or any Subsidiary to repurchase, redeem
or otherwise acquire any Company Securities or pay any dividend or make any
other distribution in respect thereof.
(d) Upon consummation of the Merger, neither any outstanding
Convertible Preferred Shares, Second Series Convertible Preferred Shares nor any
other outstanding securities of the Company shall be convertible into or
exchangeable for any equity security of the Surviving Corporation other than
Options that have not been canceled.
(e) Except as set forth in Schedule 3.5(e), upon consummation of
the Merger, the Company shall have no obligations due under any contracts
entered into by the Company on or prior to the Closing Date with regard to the
voting, transfer or registration under the Securities Act of any equity
securities of the Company or that grant any preemptive rights with respect to
its equity securities (other than any such contracts executed with Acquisition).
(f) Except with respect to the minority interests in the limited
partnerships listed in Schedule 3.5(f), there are no outstanding obligations of
the Company or any Subsidiary to provide funds to, or make any investment (in
the form of a loan, capital contribution or otherwise) in, any Subsidiary or any
other Person, other than to wholly owned Subsidiaries of the Company in the
ordinary course of business consistent with past practice.
3.6 Subsidiaries.
(a) Each Subsidiary is a corporation duly incorporated, validly
existing and in good standing under the laws of its jurisdiction of
incorporation, has all corporate powers required to carry on its business as now
conducted and is duly qualified to do business as a foreign corporation and is
in good standing in each jurisdiction where the character of the property owned
or leased by it or the nature of its activities makes such qualification
necessary, except for such qualifications the failure of which to obtain would
not, individually or in the aggregate, have a Material Adverse Effect. All
significant Subsidiaries within the meaning of Regulation S-X under the Exchange
Act (a 'Significant Subsidiary') and their respective jurisdictions of
incorporation are identified in Schedule 3.6(a).
(b) Except as set forth in Schedule 3.6(b), all of the
outstanding capital stock of, or other ownership interests in, each Subsidiary
of the Company, is owned by the Company, directly or indirectly, free and clear
of any Lien and free of any other limitation or restriction (including any
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restriction on the right to vote, sell or otherwise dispose of such capital
stock or other ownership interests). There are no outstanding (i) securities of
the Company or any Subsidiary convertible into or exchangeable for shares of
capital stock or other voting securities or ownership interests in any
Subsidiary and (ii) options or other rights to acquire from the Company or any
Subsidiary, and no other obligation of the Company or any Subsidiary to issue,
any capital stock, voting securities or other ownership interests in, or any
securities convertible into or exchangeable for any capital stock, voting
securities or ownership interests in, any Subsidiary (the items in clauses
3.6(b)(i) and 3.6(b)(ii) being referred to collectively as the 'Subsidiary
Securities'). There are no outstanding obligations of the Company or any
Subsidiary to repurchase, redeem or otherwise acquire any outstanding Subsidiary
Securities or pay any dividend or make any other distribution in respect thereof
to a Person other than the Company or a wholly-owned Subsidiary except as set
forth in the Company Securities.
3.7 SEC Filings.
(a) The Company has filed with the SEC all forms, reports,
definitive proxy statements, schedules and registration statements (the 'SEC
Reports') required to be filed with the SEC since February 28, 1997.
(b) No Subsidiary is required to file any report, form or
document with the SEC pursuant to the Exchange Act or the Securities Act.
(c) As of their respective filing dates, none of the SEC Reports
contained any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make the statements
made therein, in the light of the circumstances under which they were made, not
misleading.
(d) The SEC Reports (including, without limitation, any financial
statements and schedules included therein) when filed complied in all material
respects with applicable requirements of the Securities Act and the Exchange
Act.
3.8 Financial Statements. The audited consolidated financial
statements and unaudited consolidated interim financial statements of the
Company included in the SEC Reports filed since May 31, 1997 fairly present, in
conformity with generally accepted accounting principles applied on a consistent
basis (except as may be indicated in the notes thereto or in the case of
unaudited interim financial statements as permitted by Form 10-Q of the SEC),
the consolidated financial position of the Company and its consolidated
Subsidiaries as of the dates thereof and its consolidated statements of
operations, stockholders' equity and cash flows for the periods then ended
(subject to normal year-end adjustments in the case of any unaudited interim
financial statements which would not be material in amount or effect). Except as
and to the extent set forth on the consolidated balance sheet of the Company and
the Subsidiaries as of May 31, 1997, including the notes thereto, neither the
Company nor any Subsidiary has any liability or obligation of any nature
(whether accrued, absolute, contingent or otherwise) which would be required to
be reflected on a balance sheet prepared in accordance with generally accepted
accounting principles, except for liabilities and obligations (i) incurred in
the ordinary course of business consistent with past practice since May 31,
1997, (ii) that would not be material to the Company or the Subsidiaries or
(iii) as set forth on Schedule 3.8.
3.9 Disclosure Documents. None of the information supplied or to be
supplied by the Company for inclusion or incorporation by reference in:
(a) the Form S-4 (as hereinafter defined) will, at the time the
Form S-4 is filed with the SEC, at any time it is amended or supplemented and at
the time it becomes effective under the Securities Act, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they are made, not misleading;
(b) the Proxy Statement/Prospectus will, at the date it is first
mailed to the Company's stockholders or at the time of the Stockholder Meeting,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they are made, not misleading; or
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(c) the Offer Documents (as hereinafter defined) will, at the
time the Offer Documents (or any amendments or supplements thereto) are first
published, sent or given to holders of the Senior Notes, or at the time the
applicable Debt Offer is consummated, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they are made, not misleading;
provided, that in each case no representation is made by the Company with
respect to statements made therein based on information supplied in writing by
Acquisition specifically for inclusion therein. The Form S-4, as of its
effective date, and the Proxy Statement/Prospectus and the Offer Documents, as
of their respective dates, will comply as to form with the applicable
requirements of the Securities Act and the Exchange Act, as the case may be;
provided, that in each case no representation is made by the Company with
respect to statements made therein based on information supplied in writing by
Acquisition specifically for inclusion therein.
3.10 Absence of Certain Changes or Events. Since May 31, 1997,
neither the Company nor any Subsidiary has (i) incurred or agreed to incur any
indebtedness for borrowed money other than in the ordinary course of business,
(ii) discharged or satisfied any material lien (prior to the time it is due and
payable) or any material obligation or liability (absolute or contingent) which
would have a Material Adverse Effect other than current liabilities shown on the
consolidated balance sheet of the Company as of May 31, 1997 or which are
required to be discharged, satisfied or paid by any law, (iii) declared or made
any payment or distribution to stockholders or purchased or redeemed any shares
of its capital stock or other securities, (iv) sold, assigned or transferred any
of its tangible assets material to the consolidated business of the Company and
its Subsidiaries, or canceled any material debts or claims, except in the
ordinary course of business or as otherwise contemplated hereby, (v) granted any
general or uniform increase in the rates of pay of employees other than in the
ordinary course of business or any material increase in salary payable or to
become payable by the Company or any of its Subsidiaries to any officer,
director or senior executive of the Company (other than normal increases
consistent with past practices or as required under any existing employment
agreement), (vi) agreed, in writing or otherwise, to take any of the actions
listed in clauses (i) through (v) above, or (vii) suffered any Material Adverse
Effect.
3.11 Litigation. Except as set forth in the Company's SEC Reports
filed prior to the date hereof or in Schedule 3.11, there is no action, suit or
proceeding pending, or to the knowledge of the Company threatened, against the
Company or any Subsidiary before any court, arbitrator or other Governmental
Entity which, if adversely decided, individually or in the aggregate, would
reasonably be expected to have a Material Adverse Effect.
3.12 Taxes.
(a) Except as set forth on Schedule 3.12 hereto and except to
the extent that failure to do so would not have a Material Adverse Effect, each
of the Company, the Subsidiaries and any affiliated, combined or unitary group
of which any such corporation or other Person is or was a member has (i) timely
filed all Federal, state, local and foreign returns, declarations, reports,
estimates, information returns and statements ('Returns') required to be filed
by it in respect of any Taxes (as hereinafter defined), which Returns correctly
reflect the facts regarding the income, business, assets, operations, activities
and status of the Company and the Subsidiaries, (ii) timely paid or withheld all
Taxes that are due and payable with respect to the Returns referred to in clause
(i) (other than Taxes that are being contested in good faith by appropriate
proceedings and are adequately reserved for in the Company's most recent
consolidated financial statements described in Section 3.8 hereof), (iii)
established reserves that are adequate for the payment of all Taxes not yet due
and payable with respect to the results of operations of the Company and the
Subsidiaries through the date hereof, and (iv) complied with all applicable
laws, rules and regulations relating to the payment and withholding of Taxes and
has timely withheld from employee wages and paid over to the proper governmental
authorities all material amounts required to be so withheld and paid over.
(b) Except as set forth on Schedule 3.12 hereto and except as
would not have a Material Adverse Effect, (i) there is no deficiency, claim,
audit, action, suit, proceeding, or investigation now pending against or with
respect to the Company or any Subsidiary in respect of any Taxes; and (ii)
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there are no requests for rulings or determinations in respect of any Taxes
pending between the Company or any Subsidiary and any taxing authority.
(c) Except as set forth on Schedule 3.12 hereto and except as
would not have a Material Adverse Effect, neither the Company nor any Subsidiary
has executed or entered into (or prior to the Effective Time will execute or
enter into) with the Internal Revenue Service or any taxing authority (i) any
agreement or other document extending or having the effect of extending the
period for assessments or collection of any Taxes for which the Company or any
Subsidiary would be liable or (ii) a closing agreement pursuant to Section 7121
of the Code, or any predecessor provision thereof or any similar provision of
foreign, state or local Tax law that relates to the assets or operations of the
Company or any Subsidiary.
(d) For purposes of this Agreement, 'Tax' (and with correlative
meaning, 'Taxes') shall mean all federal, state, local, foreign or other taxing
authority net income, franchise, sales, use, ad valorem, property, payroll,
withholding, excise, severance, transfer, employment, alternative or add-on
minimum, stamp, occupation, premium, environmental or windfall profits taxes,
and other taxes, charges, fees, levies, imposts, customs, duties, licenses or
other assessments, together with any interest and any penalties, additions to
tax or additional amounts imposed by any taxing authority.
3.13 Employee Benefit Plans.
(a) Schedule 3.13(a) identifies each employment, severance or
similar contract or arrangement whether or not written or any plan, policy,
fund, program or contract or arrangement (whether or not written) providing for
compensation, bonus, profit-sharing, stock option, or other stock related rights
or other forms of incentive or deferred compensation, vacation benefits,
insurance coverage (including any self-insured arrangements), health or medical
benefits, disability benefits, workers' compensation, supplemental unemployment
benefits, severance benefits and post-employment or retirement benefits
(including compensation, pension, health, medical or life insurance or other
benefits) that (i) is entered into, maintained, administered or contributed to,
as the case may be, by the Company or any Subsidiary and (ii) covers any
employee or former employee of any Company or Subsidiary employed in the United
States or Puerto Rico (each, an 'Employee Plan').
(b) The Company has furnished or made available to Acquisition
copies of the Employee Plans (and, if applicable, related trust agreements) and
all amendments thereto and written interpretations thereof together with the
most recent annual report (Form 5500 including, if applicable, Schedule B
thereto) and the most recent actuarial valuation report prepared in connection
with any Employee Plan.
(c) Each Employee Plan that is intended to be qualified under
Section 401(a) of the Code has been determined by the Internal Revenue Service
to be qualified under Section 401(a) of the Code and each trust related thereto
has been determined to be exempt from tax pursuant to Section 501(a) of the
Code, and the Company is not aware of any event that has occurred since the date
of such determinations that would adversely affect such qualification or tax
exempt status. The Company has provided Acquisition with the most recent
determination letter of the Internal Revenue Service relating to each such
Employee Plan. Each Employee Plan has been maintained in compliance in all
material respects with its terms and with the requirements prescribed by any and
all applicable statutes, orders, rules and regulations, including but not
limited to the Employee Retirement Income Security Act of 1974, as amended
('ERISA') and the Code.
(d) No Employee Plan is a multiemployer plan as defined in
Section 3(37) of ERISA or is a plan subject to Title IV of ERISA and neither the
Company nor any Subsidiary has ever maintained, adopted or established,
contributed or been required to contribute to, or otherwise participated or been
required to participate in, any such plan.
(e) Neither the Company nor any Subsidiaries has any current or
projected liability in respect of post-employment or post-retirement health or
medical or life insurance benefits for retired, former or current employees of
the Company, except as required to avoid excise tax under Section 4980B of the
Code.
(f) There has been no amendment to, written interpretation of or
announcement (whether or not written) by the Company, any Subsidiary or their
respective Affiliates relating to, or
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change in employee participation or coverage under, any Employee Plan that would
increase materially the expense of maintaining such Employee Plan above the
level of the expense incurred in respect thereof for the most recent fiscal year
ended prior to the date hereof. As used in this Agreement, unless the context
requires otherwise, 'Affiliate,' as applied to any Person, shall mean any other
Person directly or indirectly controlling, controlled by, or under common
control with, that Person. For the purposes of this definition, 'control'
(including, with correlative meanings, the terms 'controlling,' 'controlled by'
and 'under common control with'), as applied to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of that Person, whether through the
ownership of voting securities, by contract or otherwise.
(g) Other than as described in Schedule 3.13(g), no employee or
former employee of the Company or any Subsidiary will become entitled to any
bonus, retirement, severance, job security or similar benefit or an enhancement
of such benefit (including acceleration of vesting or exercise of an incentive
award) under any Employee Plan as a result of the transactions contemplated
hereby.
(h) Notwithstanding anything else set forth herein, other than
routine claims for benefits and liability for premiums due to the Pension
Benefit Guaranty Corporation, neither the Company nor any Subsidiary has
incurred any material liability with respect to any Employee Plan that is
currently due and owing and has not yet been satisfied, including without
limitation under ERISA (including without limitation Title I or Title IV
thereof), the Code or other applicable law, and no event has occurred, and, to
the knowledge of the Company, there exists no condition or set of circumstances
(other than the accrual of benefits under the normal terms of the Employee
Plans), that could result in the imposition of any material liability on the
Company or any Subsidiary with respect to any Employee Plan, including without
limitation under ERISA (including without limitation Title I or Title IV of
ERISA), the Code or other applicable law with respect to any Employee Plan.
3.14 Brokers. Except for the engagement of Donaldson, Lufkin &
Jenrette Securities Corporation and Peter J. Solomon & Co. pursuant to
engagement letters that have been provided to Acquisition, none of the Company
or any of its Subsidiaries, or any of their respective officers, directors or
employees has employed any investment banker, broker, finder or other
intermediary or incurred any liability for any brokerage fees, commissions or
finder's fees in connection with the transactions contemplated by this
Agreement.
3.15 FCC Matters.
(a) The Company and its Subsidiaries hold all licenses, permits,
certificates, franchises, registrations and other authorizations issued by the
FCC (the 'FCC Licenses') or by any governmental entity asserting jurisdiction
over the Company or one of its Subsidiaries (the 'State Licenses'), including,
without limitation, any state public service or public utilities commission and
the Telecommunications Regulatory Board of Puerto Rico ('State PUC'), that are
required for the conduct of their businesses as presently conducted, and for the
holding of their assets, except where the failure to obtain or hold such
licenses would not have a Material Adverse Effect. All of the FCC Licenses and
the State Licenses (collectively the 'Communications Licenses') are set forth in
Schedule 3.15(a) hereto.
(b) Except as set forth on Schedule 3.15(b), each of the
Communications Licenses was duly issued, and is valid and in full force and
effect except where failure to be in full force and effect would not have a
Material Adverse Effect, and to the Company's knowledge, each of the
Communications Licenses has not been modified, canceled, revoked, or conditioned
in any manner which would have a Material Adverse Effect.
(c) Each holder of a Communications License has operated in
compliance with all terms thereof, and each holder is in compliance with, and
its businesses have operated in compliance with, the Communications Act or any
applicable state regulations, and has filed all registrations and reports,
including any renewal applications, required by the Communications Act or any
applicable state regulations, except where the failure to so comply or file
would not have a Material Adverse Effect. To the Company's knowledge, there is
no pending or threatened action by or before the FCC or any State PUC to revoke,
cancel, suspend, modify or refuse to renew any of the Communications Licenses.
There is not now issued or outstanding or, to the Company's knowledge,
threatened any notice
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of violation or complaint against the Company or any of its Subsidiaries with
respect to the operation of its respective businesses, the resolution of which
violation or complaint could reasonably be expected to have a Material Adverse
Effect.
(d) No event has occurred which permits the revocation or
termination of any of the Communications Licenses or the imposition of any
restriction thereon of such a nature as would have a Material Adverse Effect.
3.16 Compliance with Applicable Laws. The Company and its
Subsidiaries are in substantial compliance with all laws, regulations and orders
of any Governmental Entity applicable to it or such Subsidiaries, except for
such failures so to comply which would not have a Material Adverse Effect.
Except as set forth in the Schedules hereto, neither the Company nor any
Subsidiary has failed to obtain any licenses, permits, franchises or other
governmental authorizations necessary to the ownership of its properties or to
the conduct of its business, which failure would have a Material Adverse Effect.
3.17 Environmental Matters. Except as would not have a Material
Adverse Effect, (i) no real property currently or formerly owned or operated by
the Company or any current Subsidiary is contaminated with any Hazardous
Substances (as defined herein) to an extent or in a manner or condition now
requiring remediation under any Environmental Law (as defined herein), (ii) no
judicial or administrative proceeding is pending or, to the knowledge of the
Company, threatened relating to liability for any off-site disposal or
contamination and (iii) the Company and its Subsidiaries have not received in
writing any claims or notices alleging liability under any Environmental Law.
Neither the Company nor any Subsidiary is in violation of any applicable
Environmental Law and no condition or event has occurred with respect to the
Company or any Subsidiary that would constitute a violation of such
Environmental Law, excluding in any event, such violations, conditions and
events that would not have a Material Adverse Effect. 'Environmental Law' means
any applicable federal, state or local law, regulation, order, decree or
judicial opinion or other agency requirement having the force and effect of law
and relating to noise, odor, Hazardous Substances or the protection of the
environment. 'Hazardous Substance' means any toxic or hazardous substance that
is regulated by or under authority of any Environmental Law.
3.18 Opinion of Financial Advisor. The Company has received the
written opinion of Donaldson, Lufkin & Jenrette Securities Corporation to the
effect that the Merger Consideration is fair from a financial point of view to
the stockholders of the Company (other than Acquisition and stockholders who are
Affiliates of the Company).
3.19 Affiliate Transactions. Except as described in the SEC Reports,
there are no existing or proposed material transactions or arrangements between
the Company or any Subsidiary and any Affiliate of the Company (including,
without limitation, Century Communications Corp., Citizens Utility Company and
the Company's directors and executive officers, but excluding wholly owned
Subsidiaries). Except as set forth in Schedule 3.19 hereto, there are no
payments due from the Company or any Subsidiary to any such Affiliate between
May 31, 1998 and the Effective Time for which adequate reserves are not
reflected in the Company's consolidated balance sheet as of May 31, 1998 except
for those payments that would not be material to the operations of the Company
and the Subsidiaries.
3.20 Intellectual Property. Except as set forth in Schedule 3.20
hereto:
(a) The Company and its Subsidiaries own or have the right to
use all material copyrights, trade names, trademarks, service marks, trade
secrets, know-how, designs, software, patents, licenses and other intellectual
property rights (collectively, the 'Intellectual Property') that are necessary
to conduct the business of the Company and its Subsidiaries as presently
conducted, free and clear of all Liens, other than those rights the absence of
which individually or in the aggregate would not have a Material Adverse Effect.
There are no material trade names, trademarks or service marks owned by the
Company or any of its Subsidiaries that are not registered or the subject of
applications therefor.
(b) There is no suit, action or proceeding pending or, to the
Company's knowledge, threatened against or affecting the Company or any of its
Subsidiaries, which challenges the legality,
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validity, enforceability of, or the Company's or any of its Subsidiaries' use or
ownership of, any of the Intellectual Property owned by the Company or any of
its Subsidiaries or, to the Company's knowledge, licensed to the Company or to
any of its Subsidiaries, other than any such suit, action or proceeding that
individually or in the aggregate would not have a Material Adverse Effect.
(c) To the knowledge of the Company, neither the Company nor any
Subsidiary has infringed upon or otherwise violated the intellectual property
rights of third parties or has received or has been the subject of any claim,
charge or notice alleging any such infringement or other violation, other than
any such infringement, violation or appropriation that individually or in the
aggregate would not have a Material Adverse Effect.
(d) The Company has taken steps that are reasonable to ensure
that the occurrence of the year 2000 will not materially and adversely affect
the information and business systems of the Company or the Subsidiaries and no
expenditures in excess of currently budgeted items are expected to cause such
systems to operate properly following the change of the year 1999 to 2000.
3.21 No Other Representations. Except as specifically set forth in
this Article III, the Company has not made, and Acquisition has not relied upon,
any other representations or warranties, whether express or implied.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF ACQUISITION
Acquisition represents and warrants to the Company that:
4.1 Corporate Existence and Power. Acquisition is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware. Acquisition has all corporate powers and all governmental licenses,
authorizations, consents and approvals required to carry on its businesses as
now conducted, except for such licenses, authorizations, consents and approvals
the failure of which to obtain would not, individually or in the aggregate, have
a material adverse effect on the business, assets, operations or financial
condition of Acquisition or upon the ability of Acquisition to consummate the
transactions contemplated by this Agreement or perform its obligations hereunder
(an 'Acquisition Material Adverse Effect'). Since the date of its incorporation,
Acquisition has not engaged in any activities other than in connection with or
as contemplated by this Agreement or in connection with arranging any financing
required to consummate the transactions contemplated hereby.
4.2 Corporate Authorization. The execution, delivery and performance
by Acquisition of this Agreement and the consummation by Acquisition of the
transactions contemplated hereby are within the corporate powers of Acquisition
and have been duly authorized by all necessary corporate action. Assuming the
due and valid authorization, execution and delivery of this Agreement by the
Company, this Agreement constitutes a valid and binding agreement of
Acquisition, enforceable against each in accordance with its terms except as may
be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer and other similar laws affecting creditors' rights generally and by
equitable principles of general applicability.
4.3 Governmental Authorization. The execution, delivery and
performance by Acquisition of this Agreement and the consummation by Acquisition
of the transactions contemplated by this Agreement require no action by or in
respect of, or filing with, any Governmental Entity other than (i) the filing of
a certificate of merger in accordance with Delaware Law, (ii) compliance with
any applicable requirements of the HSR Act, (iii) compliance with any applicable
requirements of the Securities Act and Exchange Act, (iv) compliance with any
applicable requirements of the Communications Act, (v) compliance with the
applicable requirements of state and local utility commissions or similar
entities and (vi) compliance with applicable state takeover statutes.
4.4 Non-contravention. The execution, delivery and performance by
Acquisition of this Agreement and the consummation by Acquisition of the
transactions contemplated hereby do not and will not (i) contravene or conflict
with the certificate of incorporation or bylaws of Acquisition, (ii) assuming
compliance with the matters referred to in Section 4.3, contravene or conflict
with or
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constitute a violation of any provision of law, regulation, judgment, order or
decree binding upon Acquisition or (iii) result in a breach or violation of or
constitute a default under (or an event which with the giving of notice or the
lapse of time or both would constitute a default under) or give rise to any
right of termination, cancellation or acceleration of any right or obligation of
Acquisition or to a loss of any benefit to which it is entitled or require any
consent, approval or authorization under any provision of any material
agreement, contract or other instrument binding upon Acquisition or any of its
assets, except for such contraventions, conflicts or violations referred to in
clause (ii) and breaches, violations, defaults, rights of termination,
cancellation or acceleration or losses referred to in clause (iii) that in the
aggregate would not have an Acquisition Material Adverse Effect or prevent or
delay the consummation of the Merger in any material respect or otherwise
prevent Acquisition from performing their obligations under this Agreement in
any material respect.
4.5 Information. None of the information supplied or to be supplied
by Acquisition in writing specifically for inclusion in (i) the Offer Documents,
(ii) the Form S-4, (iii) the Proxy Statement/Prospectus or (iv) any other
filings will, at the respective times filed with the SEC or such other
Governmental Entity, and, in addition, in the case of the Proxy
Statement/Prospectus, at the date it or any amendment or supplement is mailed to
stockholders and at the time of the Special Meeting, or in the case of the Offer
Documents, at the date such documents are mailed to the holders of the Senior
Notes, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
made therein, in light of the circumstances under which they were made, not
misleading.
4.6 Brokers. None of Acquisition or any of its respective
subsidiaries, officers, directors or employees has employed any investment
banker, broker, finder or other intermediary or incurred any liability for any
brokerage fees, commissions or finder's fees in connection with the transactions
contemplated by this Agreement for or with respect to which the Company or any
Subsidiary is or might be liable prior to the Effective Time.
4.7 Qualification of Acquisition. Acquisition is and at the
Effective Time will be legally, technically and otherwise qualified under the
Communications Act to acquire, own and operate the assets and business of the
Company and its Subsidiaries. To the best of Acquisition's knowledge, there are
no facts or proceedings which would reasonably be expected to disqualify
Acquisition under the Communications Act or otherwise from acquiring or
operating any of the assets and business of the Company and its Subsidiaries or
would cause the FCC not to approve the FCC Applications (as defined herein).
Acquisition has no knowledge of any fact or circumstance relating to Acquisition
or any of its Affiliates that would be reasonably be expected to (a) cause the
filing of any meritorious objection to the FCC Applications which is likely to
prevail or (b) lead to a material delay in the processing by the FCC of the FCC
Applications. No waiver of any FCC rule or policy is necessary to be obtained
for the approval of the FCC Applications, and no processing pursuant to any
exception or rule of general applicability will be requested or required in
connection with the consummation of the transaction herein.
4.8 Acquisition Not an Interested Stockholder. As of the date of
this Agreement, neither Acquisition nor any of its Affiliates is an 'Interested
Stockholder' as such term is defined in Section 203 of the Delaware Law.
4.9 Financing. Acquisition has received and executed commitment
letters each dated July 2, 1998 (the 'Commitment Letters'), from (i) Merrill
Lynch Capital Corporation, pursuant to which it has committed, subject to the
terms and conditions set forth therein, to provide Acquisition and certain
existing or future subsidiaries of the Company with up to $1.21 billion of
financing under available senior secured credit facilities and $350.0 million in
aggregate principal amount of financing in the form of an unsecured senior
bridge loan, (ii) WCAS Capital Partners III, L.P., pursuant to which it has
committed, subject to the terms and conditions set forth therein, to purchase
$150.0 million in aggregate principal amount of subordinated notes of
Acquisition and (iii) Welsh, Carson, Anderson & Stowe VIII, L.P. ('WCAS')
pursuant to which it has committed to provide to Acquisition $350.0 million in
equity to consummate the Merger, pay the Merger Consideration and pay the
related transaction expenses (the financings referred to in clauses (i), (ii)
and (iii) above being collectively referred to as the 'Financing'). Such
Financing is adequate to pay in full in cash at closing the Cash Merger
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Consideration together with all fees and expenses of Acquisition associated with
the transactions contemplated hereby, and to make any other payments necessary
to consummate the transactions contemplated hereby. True and complete copies of
the Commitment Letters have been furnished to the Company. Neither Acquisition,
WCAS nor their affiliates will terminate, amend or modify in any respect the
Commitment Letters in a manner which will adversely affect the probability that
such financing will be actually funded, or the timing thereof, without prior
written consent of the Company. Acquisition or WCAS has fully paid any and all
commitment fees or other fees required by such Commitment Letters to be paid as
of the date hereof (and will duly pay any such fees after the date hereof). The
Commitment Letters are valid and in full force and effect and no event has
occurred which (with or without notice, lapse of time or both) would constitute
a default on the part of WCAS or Acquisition thereunder or would adversely
affect the probability that such financing will actually be funded. The $350.0
million equity investment of WCAS will be used solely to acquire common stock of
Acquisition at a price of $43.50 per share.
ARTICLE V
COVENANTS OF THE COMPANY
The Company agrees that:
5.1 Conduct of the Company. From the date hereof until the Effective
Time, except as contemplated by this Agreement or with the prior written consent
of Acquisition (which consent shall not be unreasonably withheld or delayed),
the Company and its Subsidiaries shall conduct their business in the ordinary
course consistent with past practice and shall use reasonable efforts to
preserve intact their business organizations and relationships with third
parties and to keep available the services of their present officers and key
employees. Without limiting the generality of the foregoing, the Company will
not, and will not permit any of its Subsidiaries to, do any of the following:
(a) adopt any amendment to its certificate of incorporation or
bylaws;
(b) except for issuances of capital stock of the Company's
Subsidiaries to the Company or a wholly-owned Subsidiary of the Company, issue,
reissue or sell, or authorize the issuance, reissuance or sale of (i) additional
shares of capital stock of any class, or securities convertible into capital
stock of any class, or any rights, warrants or options to acquire any
convertible securities or capital stock, other than the issue of Common Shares,
in accordance with the terms of the instruments governing such issuance on the
date hereof, pursuant to the exercise of Options outstanding on the date hereof
or pursuant to the conversion of Convertible Preferred Shares, Second Series
Convertible Preferred Shares or Class B Common Shares outstanding on the date
hereof, or (ii) any other securities in respect of, in lieu of, or in
substitution for, Common Shares outstanding on the date hereof;
(c) redeem or otherwise repurchase, or declare, set aside or pay
any dividend or other distribution (whether in cash, securities or property or
any combination thereof) in respect of any class or series of its capital stock
other than between any of the Company and any of its wholly owned Subsidiaries;
(d) split, combine, subdivide, reclassify or redeem, purchase or
otherwise acquire, or propose to redeem or purchase or otherwise acquire, any
shares of its capital stock, or any of its other securities;
(e) (i) except for (x) increases in salary, wages and benefits of
non-executive officers or employees of the Company or its Subsidiaries in
accordance with past practice and (y) increases in salary, wages and benefits
granted to non-executive officers and employees of the Company or its
Subsidiaries in conjunction with new hires, promotions or other changes in job
status, increase the compensation or fringe benefits payable or to become
payable to its directors, officers or key employees (whether from the Company or
any of its Subsidiaries); (ii) pay any benefit not required by any existing plan
or arrangement (including, without limitation, the granting of stock options,
stock appreciation rights, shares of restricted stock or performance units);
(iii) grant any severance or termination pay to (except pursuant to existing
agreements, plans or policies), or enter into any employment or severance
agreement with, any director, officer or other employee of the Company or any of
its Subsidiaries; or (iv) establish, adopt, enter into, or amend any collective
bargaining, bonus, profit sharing, thrift,
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compensation, stock option, restricted stock, pension, retirement, savings,
welfare, deferred compensation, employment, termination, severance or other
employee benefit plan, agreement, trust, fund, policy or arrangement for the
benefit or welfare of any directors, officers or current or former employees
(any of the foregoing being an 'Employee Benefit Arrangement'), except in each
case to the extent required by applicable law or regulation; provided, however,
that nothing herein will be deemed to prohibit the payment of benefits payable
under terms of plans existing on or prior to the date hereof as they become
payable;
(f) acquire, sell, lease or dispose of any assets (other than in
the ordinary course of business consistent with past practice) or securities
which are material to the Company and its Subsidiaries, taken as a whole, or
enter into any commitment to do any of the foregoing or enter into any material
commitment or transaction outside the ordinary course of business other than
transactions between any wholly owned Subsidiary of the Company and the Company
or another wholly owned Subsidiary of the Company;
(g) (i) incur, assume or pre-pay any long-term debt or incur or
assume any short-term debt, except that the Company and its Subsidiaries may
incur, assume or pre-pay debt in the ordinary course of business consistent with
past practice under existing lines of credit, (ii) assume, guarantee, endorse or
otherwise become liable or responsible (whether directly, contingently or
otherwise) for the obligations of any other Person or Persons that are
individually or in the aggregate material, or (iii) make any loans, advances or
capital contributions to, or investments in, any other Person or Persons that
are individually or in the aggregate material except for loans, advances,
capital contributions or investments between any wholly owned Subsidiary of the
Company and the Company or another wholly owned Subsidiary of the Company; or
(h) terminate, modify, assign, waive, release or relinquish any
material contract rights or amend any material rights or claims not in the
ordinary course of business;
(i) make any capital expenditures, except in the ordinary course
of business and consistent with past practice or as currently budgeted; or
(j) agree in writing or otherwise to take any of the foregoing
actions.
5.2 Access to Information. From the date hereof until the Effective
Time, the Company will (i) give Acquisition and its counsel, financial advisors,
auditors and other authorized representatives reasonable access during normal
business hours to the offices, properties, books and records of the Company and
its Subsidiaries as such Persons may reasonably request, and furnish such
Persons with such financial and operating data and other information as such
Persons may reasonably request and (ii) instruct the Company's employees,
counsel and financial advisors to cooperate with Acquisition in its
investigation of the business of the Company and its Subsidiaries; provided that
no investigation pursuant to this Section 5.2 shall affect any representation or
warranty given by the Company to Acquisition hereunder. The foregoing
information shall be held in confidence to the extent required by, and in
accordance with, the provisions of the letter agreement between Donaldson,
Lufkin & Jenrette Securities Corporation and WCAS (the 'Confidentiality
Agreement').
5.3 No Solicitation. The Company (i) agrees that, prior to the
Effective Time, it shall not, and shall not authorize or permit any of its
Subsidiaries or any of its or its Subsidiaries' directors, officers, employees,
agents or representatives, directly or indirectly, to solicit, initiate or
encourage any inquiries or the making of any proposal with respect to any
merger, consolidation or other business combination, tender or exchange offer,
recapitalization transaction or other similar transaction involving the Company
or any of its Significant Subsidiaries, acquisition of all or any material
portion of the assets or capital stock of the Company or the acquisition of all
or substantially all of the assets or capital stock of any Significant
Subsidiary (an 'Acquisition Transaction') or provide information to or
negotiate, explore or otherwise engage in discussions with any Person (other
than Acquisition or its directors, officers, employees, agents and
representatives) with respect to any Acquisition Transaction or enter into any
agreement, arrangement or understanding requiring it to abandon, terminate or
fail to consummate the Merger or any other transactions contemplated by this
Agreement, provided, however, that the Company may, in response to an
unsolicited proposal with respect to an Acquisition Transaction from a third
party, furnish information to, and negotiate, explore and otherwise engage in
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substantive discussions with such third party, and enter into any such
agreement, arrangement or understanding (so long as immediately after entering
into any such agreement the Company terminates this Agreement), in each case, if
the Board determines in its good faith judgment, after consultation with its
independent legal counsel, that the failure to do so would result in a breach of
its fiduciary obligations; and (ii) represents that, as of the date of this
Agreement, the Company has discontinued, and has caused its Subsidiaries and its
and their respective directors, officers, employees, agents and representatives
to discontinue, discussions or negotiations with all persons or groups with whom
discussions or negotiations have previously been held concerning any proposal
with respect to an Acquisition Transaction. The Company shall promptly notify
Acquisition if any proposal or offer is received by, or any information is
requested from, or any discussions or negotiations are sought to be initiated or
continued with, the Company in respect of an Acquisition Proposal, and shall, in
any such notice to Acquisition, indicate the identity of the third party and the
terms and conditions of any proposals or offers; provided, however, that such
notice shall be given only to the extent the Board may disclose such information
without breaching its fiduciary duties as advised by counsel and as determined
in good faith and without violating any of the conditions of such Acquisition
Proposal. Thereafter, the Company shall keep Acquisition informed (subject to
such fiduciary duties), on a current basis, of the status and terms of any such
proposals or offers and the status of any such discussions or negotiations.
5.4 Communications Licenses and Authorizations. The Company shall,
and shall cause its Subsidiaries to, use commercially reasonable efforts to
obtain and maintain in full force and effect all approvals, consents, permits,
licenses and other authorizations, and any renewals thereof, from the FCC and
any appropriate State PUC, and to make all filings and reports, reasonably
necessary or required for the continued operation of the Company's and its
Subsidiaries' businesses, as and when such approvals, consents, permits,
licenses, filings or reports or other authorizations are necessary or required.
5.5 Debt Offers.
(a) Provided that this Agreement shall not have been terminated
in accordance with Section 9.1 hereof, the Company shall, within 20 days of
receiving any request by Acquisition to do so (but in no event earlier than
twenty calendar days after the date hereof), commence offers to purchase,
accompanied by related solicitations of consent regarding covenant amendments,
all of the Company's outstanding 8 7/8% Senior Notes due 2001 and the Company's
outstanding 10 1/8% Senior Notes due 2005 (collectively, the 'Senior Notes') on
such customary terms and conditions as are acceptable to Acquisition, in the
exercise of its judgment in making Debt Offers on commercially reasonable terms
to the Company and the holders of the Senior Notes (the 'Debt Offers'). The
Company shall waive any of the conditions to the Debt Offers and make any other
changes in the terms and conditions of the Debt Offers as may be requested by
Acquisition to the extent that after giving effect to such requests the Debt
Offers will be made on commercially reasonable terms to the Company and the
holders of the Senior Notes, and the Company shall not, without Acquisition's
prior consent, which shall not be unreasonably withheld or delayed, waive any
material condition to the Debt Offers, make any changes to the terms and
conditions of the Debt Offers set forth in Schedule 5.5(a) hereto or make any
other material changes in the terms and conditions of the Debt Offers.
Notwithstanding the immediately preceding sentence, Acquisition shall not
request that the Company make any change to the terms and conditions of the Debt
Offers that decreases the price per Senior Note payable in the Debt Offers or
imposes conditions to the Debt Offers in addition to those set forth in Schedule
5.5(a) hereto that are materially adverse to holders of Senior Notes, unless
such change was previously approved by the Company in writing. The Company
covenants and agrees that, subject to the terms and conditions of this
Agreement, including but not limited to the conditions in the Debt Offers, it
will accept for payment and pay for the Senior Notes as soon as reasonably
practicable after such conditions to the Debt Offers are satisfied and it is
permitted to do so under applicable law, provided that the Company shall use
reasonable best efforts to coordinate the timing of any such purchase with
Acquisition in order to obtain the greatest participation in the Debt Offers.
(b) Promptly following the date of this Agreement, the Company
shall prepare, subject to advice and comments of Acquisition, an offer to
purchase for each of the issues of Senior Notes and forms of the related letters
of transmittal and summary advertisement, as well as all other
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information and exhibits (collectively, the 'Offer Documents'). All mailings to
the holders of Senior Notes in connection with the Debt Offers shall be subject
to the prior review, comment and approval of Acquisition (which approval shall
not be unreasonably withheld or delayed). The Company will use its reasonable
best efforts to cause the Offer Documents to be mailed to the holders of the
Senior Notes as promptly as practicable following receipt of the request from
Acquisition under paragraph (a) above to do so. The Company agrees promptly to
correct any information in the Offer Documents that shall be or have become
false or misleading in any material respect.
5.6 Notices of Certain Events. The Company shall promptly notify
Acquisition of:
(a) any notice or other communication from any Person alleging
that the consent of such Person is or may be required in connection with the
transactions contemplated by this Agreement;
(b) any notice or other communication from any Governmental
Entity in connection with the transactions contemplated by this Agreement;
(c) any actions, suits, claims, investigations or proceedings
commenced or, to its knowledge, threatened against the Company or any Subsidiary
which, if pending on the date of this Agreement, would have been required to
have been disclosed pursuant to Section 3.11 or which relate to the consummation
of the transactions contemplated by this Agreement; and
(d) any filings with, or notices from, or the initiation of any
complaint or other proceedings by, the FCC or any State PUC relating to the
Communications Licenses held by the Company or any of its Subsidiaries.
5.7 State Takeover Laws. The Company shall, upon the request of
Acquisition, take all reasonable steps to assist in any challenge by Acquisition
to the validity or applicability to the transactions contemplated by this
Agreement, including the Merger, of any state takeover law.
ARTICLE VI
COVENANTS OF ACQUISITION
Acquisition agrees that:
6.1 Confidentiality. Acquisition acknowledges and agrees that all
information received from or on behalf of the Company or any of the Company's
Subsidiaries in connection with the Merger shall be deemed received pursuant to
the Confidentiality Agreement and Acquisition shall, and shall cause its
Affiliates and representatives, to comply with the provisions of the
Confidentiality Agreement with respect to such information and the provisions of
the Confidentiality Agreement are hereby incorporated herein by reference with
the same effect as if fully set forth herein.
6.2 Indemnification; Directors' and Officers' Insurance.
(a) Acquisition agrees that all rights to indemnification now
existing in favor of any employee, agent, director or officer of the Company and
its Subsidiaries (the 'Indemnified Parties') as provided in their respective
charters or bylaws, in an agreement between an Indemnified Party and the Company
or one of its Subsidiaries, or otherwise in effect on the date hereof shall
survive the Merger and shall continue in full force and effect for a period of
not less than six years from the Effective Time; provided that in the event any
claim or claims are asserted or made within such six-year period, all rights to
indemnification in respect of any such claim or claims shall continue until
final disposition of any and all such claims. Acquisition also agrees to
indemnify all Indemnified Parties to the fullest extent permitted by applicable
law with respect to all acts and omissions arising out of such individuals'
services as officers, directors, employees or agents of the Company or any of
its Subsidiaries or as trustees or fiduciaries of any plan for the benefit of
employees, or otherwise on behalf of, the Company or any of its Subsidiaries,
occurring prior to the Effective Time including, without limitation, the
transactions contemplated by this Agreement. Without limitation of the
foregoing, in the event any such Indemnified Party is or becomes involved in any
capacity in any action, proceeding or investigation in connection with any
matter, including, without limitation, the transactions contemplated by this
Agreement, occurring prior to, and including, the Effective Time, Acquisition
will pay as incurred such Indemnified Party's legal and other expenses
(including the cost of any investigation and preparation) incurred in connection
therewith. Acquisition shall pay all expenses, including attorneys' fees, that
may
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be incurred by any Indemnified Party in enforcing the indemnity and other
obligations provided for in this Section 6.2.
(b) Acquisition agrees that the Company and, from and after the
Effective Time, the Surviving Corporation shall cause to be maintained in effect
for not less than six years from the Effective Time the current policies of the
directors' and officers' liability insurance maintained by the Company; provided
that (i) the Surviving Corporation may substitute therefor policies of at least
the same coverage containing terms and conditions which are no less
advantageous; (ii) such substitution shall not result in any gaps or lapses in
coverage with respect to matters occurring prior to the Effective Time; and
(iii) the Surviving Corporation shall not be required to pay an annual premium
in excess of 200% of the last annual premium paid by the Company prior to the
date hereof and if the Surviving Corporation is unable to obtain the insurance
required by this Section 6.2(b) it shall obtain as much comparable insurance as
possible for an annual premium equal to such maximum amount.
6.3 Employee Benefit Arrangements.
(a) Acquisition agrees that the Company will honor and, from and
after the Effective Time, Acquisition will cause the Surviving Corporation to
honor, all Employee Benefit Arrangements to which the Company or any of its
Subsidiaries is currently a party.
(b) Acquisition will cause the Surviving Corporation to take such
actions as are necessary so that, for a period of at least two years from the
Effective Time, employees of the Company and its Subsidiaries will be provided
cash compensation, employee benefit and incentive compensation and similar plans
and programs (other than equity-based compensation plans and programs) as will
provide compensation and benefits which in the aggregate are no less favorable
than those provided to such employees as of the date hereof.
(c) Nothing in this Section 6.3 shall be construed to limit the
ability of the Surviving Corporation or any of its subsidiaries to terminate the
employment of any employee (it being understood that such employment shall, to
the maximum extent permitted by law, be at will) or to review Employee Benefit
Arrangements from time to time and make such changes as it or they deem
appropriate.
6.4 Financing. Acquisition shall use commercially reasonable efforts
to consummate the Financing or alternative financing on terms no more onerous
than the terms of the Financing.
6.5 NASDAQ Listing. Acquisition will, for at least three years after
the Effective Time of the Merger, use reasonable best efforts to cause the
Common Shares to be listed on the NASDAQ National Market System and registered
under the Exchange Act.
ARTICLE VII
COVENANTS OF ACQUISITION AND THE COMPANY
Each of the parties hereto agrees that:
7.1 Reasonable Best Efforts. Subject to the terms and conditions
herein provided, each of the parties hereto agrees to use its reasonable best
efforts to take, or cause to be taken, all action, and to do, or cause to be
done, in the case of the Company, subject to the limitations provided herein
regarding the fiduciary duties of the Board, and to assist and cooperate with
the other party hereto in doing, as promptly as practicable, all things
necessary or advisable under applicable laws and regulations to ensure that the
conditions set forth in Article VIII are satisfied and to consummate and make
effective the transactions contemplated by this Agreement.
If at any time after the Effective Time any further action is
necessary or desirable to carry out the purposes of this Agreement, including
the execution of additional instruments, the proper officers and directors of
each party to this Agreement shall take all such necessary action.
7.2 Stockholder Meeting.
(a) Promptly upon the request of Acquisition, the Company shall
take all action necessary in accordance with the Delaware Law and its
certificate of incorporation and bylaws to call, give notice of and convene a
meeting (the 'Stockholder Meeting') of its stockholders to consider and
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vote upon the approval and adoption of this Agreement and the Merger and for
such other purposes as may be necessary or desirable.
(b) Promptly upon the request of Acquisition, the Company shall
prepare a Registration Statement on Form S-4 covering the Electing Shares (the
'Form S-4') and a proxy or information statement pertaining to the Merger, which
shall also constitute the prospectus included in the Form S-4 (the 'Proxy
Statement/Prospectus'). Subject to the Board's determination that in its good
faith judgment, after consultation with its independent legal counsel, that the
failure to do so would result in a breach of its fiduciary obligations, the
Board shall recommend that the stockholders of the Company vote to approve and
adopt this Agreement and the Merger and any other matters to be submitted to
stockholders in connection therewith and the Company include such recommendation
in the Proxy Statement/Prospectus. Acquisition and its stockholders shall
cooperate fully with the Company in the preparation of the Proxy
Statement/Prospectus and any amendments and supplements thereto. The Proxy
Statement/Prospectus shall not be distributed, and no amendment or supplement
thereto shall be made by the Company, without the prior consent of Acquisition
and its counsel. The Company shall use its reasonable best efforts to have the
Form S-4 declared effective by the SEC as promptly as practicable and shall
cause a definitive Proxy Statement/Prospectus to be distributed to its
stockholders entitled to vote upon the Merger as promptly as practicable
thereafter.
(c) The Company shall notify Acquisition of the receipt of the
comments of the SEC and of any requests by the SEC for amendments or supplements
to the Form S-4 or the Proxy Statement/Prospectus, or for additional
information, and shall promptly supply the Company with copies of all
correspondence between the Company (or its representatives) and the SEC (or its
staff) with respect thereto. If, at any time prior to the Meeting, any event
should occur relating to or affecting the Company or Acquisition, or to their
respective officers or directors, which event should be described in an
amendment or supplement to the Form S-4 or the Proxy Statement/Prospectus, the
parties shall promptly inform one another and shall cooperate in promptly
preparing, filing and having declared effective or clearing with the SEC and, if
required by applicable securities laws, distributing to the Company's
stockholders such amendment or supplement.
7.3 Consents.
(a) Each of the parties will use its reasonable best efforts to
obtain as promptly as practicable all consents, waivers, approvals,
authorizations or permits of any Governmental Entity or any other Person
required in connection with, and waivers of any Violations that may be caused
by, the consummation of the transactions contemplated by this Agreement.
(b) In furtherance and not in limitation of the foregoing,
Acquisition shall use its best efforts to resolve such objections, if any, as
may be asserted with respect to the transactions contemplated by this Agreement
under any antitrust, competition or trade regulatory laws, rules or regulations
of any domestic or foreign government or governmental authority ('Antitrust
Laws'). If any suit is threatened or instituted challenging any of the
transactions contemplated by this Agreement as violative of any Antitrust Law,
Acquisition shall take such action (including, without limitation, agreeing to
hold separate or to divest any of the businesses, product lines or assets of
Acquisition or any of its Affiliates controlled by it or of any of the Company,
its Subsidiaries or Affiliates) as may be required (i) by the applicable
government or governmental authority (including, without limitation, the
Antitrust Division of the United States Department of Justice or the Federal
Trade Commission) in order to resolve such objections as such government or
authority may have to such transactions under such Antitrust Law or (ii) by any
domestic or foreign court or similar tribunal, in any suit brought by a private
party or governmental authority challenging the transactions contemplated by
this Agreement as violative of any Antitrust Law, in order to avoid the entry
of, or to effect the dissolution of, any injunction, temporary restraining order
or other order that has the effect of preventing the consummation of any of such
transactions. The entry by a court, in any suit brought by a private party or
governmental authority challenging the transactions contemplated by this
Agreement as violative of any Antitrust Law, of an order or decree permitting
the transactions contemplated by this Agreement, but requiring that any of the
businesses, product lines or assets of any of Acquisition or its Affiliates
controlled by it or the Company or its Subsidiaries or Affiliates be divested or
held separate by Acquisition, or that would otherwise limit Acquisition's
freedom of action with respect to, or its ability
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to retain, the Company and its Subsidiaries or any portion thereof or any of
Acquisition's or its Affiliates' other assets or businesses, shall not be deemed
a failure to satisfy the conditions specified in Section 8.1(d) hereof.
(c) Each party hereto shall promptly inform the other party of
any material communication from the Federal Trade Commission, the Department of
Justice, the FCC or any other domestic or foreign government or governmental
authority regarding any of the transactions contemplated by this Agreement. If
any party or any Affiliate thereof receives a request for additional information
or documentary material from any such government or authority with respect to
the transactions contemplated by this Agreement, then such party will endeavor
in good faith to make, or cause to be made, as soon as reasonably practicable
and after consultation with the other parties, an appropriate response in
compliance with such request. Acquisition will advise the Company promptly in
respect of any understandings, undertakings or agreements (oral or written)
which Acquisition proposes to make or enter into with the Federal Trade
Commission, the Department of Justice, the FCC or any other domestic or foreign
government or governmental authority in connection with the transactions
contemplated by this Agreement.
7.4 Public Announcements. So long as this Agreement is in effect,
the Company and Acquisition agree that they will not issue any press release or
make any other public announcement concerning this Agreement, the Merger or the
transactions contemplated hereby or thereby without the prior consent of the
other party, except that the Company or Acquisition may make such public
disclosure that it believes in good faith to be required by law (in which event
such party shall notify the other party prior to making such disclosure).
7.5 Notification of Certain Matters. Acquisition and the Company
shall promptly notify the other party of (i) the occurrence or non-occurrence of
any fact or event which would be reasonably likely (x) to cause any
representation or warranty contained in this Agreement to be untrue or
inaccurate in any material respect at any time from the date hereof to the
Effective Time or (y) to cause any material covenant, condition or agreement
hereunder not to be complied with or satisfied in all material respects and (ii)
any failure of the Company or Acquisition, as the case may be, to comply with or
satisfy any covenant, condition or agreement to be complied with or satisfied by
it hereunder in any material respect; provided, however, that no such
notification shall affect the representations or warranties of any party or the
conditions to the obligations of any party hereunder.
7.6 Further Assurances. At and after the Effective Time, the
officers and directors of the Surviving Corporation will be authorized to
execute and deliver, in the name and on behalf of the Company or Acquisition,
any deeds, bills of sale, assignments or assurances and to take and do, in the
name and on behalf of the Company or Acquisition, any other actions and things
to vest, perfect or confirm of record or otherwise in the Surviving Corporation
any and all right, title and interest in, to and under any of the rights,
properties or assets of the Company acquired or to be acquired by the Surviving
Corporation as a result of, or in connection with, the Merger.
7.7 FCC Applications.
(a) As promptly as practicable after the execution and delivery
of this Agreement, Acquisition and the Company shall prepare all appropriate
applications for FCC approval, and such other documents as may be required, with
respect to the transfer of control of the Company to Acquisition (collectively,
the 'FCC Applications'). As promptly as practicable following execution and
delivery of this Agreement, the Company shall deliver to Acquisition its
completed portion of the FCC Applications. Not later than the fifth business day
following the delivery of the FCC Applications to Acquisition, Acquisition shall
file, or cause to be filed, the FCC Applications. If the Closing shall not have
occurred for any reason within any applicable initial consummation period
relating to the FCC's grant of the FCC Applications, and neither Acquisition nor
the Company shall have terminated this Agreement pursuant to Section 9.1,
Acquisition and the Company shall jointly request one or more extensions of the
consummation period of such grant. No party hereto shall knowingly take, or fail
to take, any action if the intent or reasonably anticipated consequence of such
action or failure to act is, or would be, to cause the FCC not to grant approval
of the FCC Applications or materially delay either such approval or the
consummation of the transfer of control of the Company.
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(b) As promptly as practicable after the execution and delivery
of this Agreement, Acquisition and the Company shall prepare all required
applications for approval by State PUCs, and such other documents as may be
required, with respect to the transfer of control of the Company (collectively,
the 'State PUC Applications'). Not later than the twentieth business day
following execution and delivery of this Agreement, the Company shall deliver to
Acquisition its completed portion of the State PUC Applications. Not later than
the thirtieth business day following execution and delivery of this Agreement,
Acquisition and the Company shall file, or cause to be filed, the State PUC
Applications. If the Closing shall not have occurred for any reason within any
applicable consummation period relating to any State PUC's grant of any State
PUC Application, and neither Acquisition nor the Company shall have terminated
this Agreement pursuant to Section 9.1, Acquisition and the Company shall
jointly request one or more extensions of the consummation period of such grant.
No party hereto shall knowingly take, or fail to take, any action if the intent
or reasonably anticipated consequence of such action or failure to act is, or
would be, to cause any State PUC not to grant approval of any State PUC
Application or materially delay either such approval or the consummation of the
transfer of control of the Company.
(c) Acquisition and the Company shall each pay one-half (1/2) of
any FCC fees that may be payable in connection with the filing or granting of
approval of the FCC Applications. Each of Acquisition and Company shall bear its
own expenses in connection with the preparation and prosecution of the FCC
Applications and the State PUC Applications. Acquisition and the Company shall
each use its best efforts to prosecute the FCC Applications and the State PUC
Applications in good faith and with due diligence before the FCC and the State
PUCs and in connection therewith shall take such action or actions as may be
necessary or reasonably required in connection with the FCC Applications and the
State PUC Applications, including furnishing to the FCC and the State PUCs any
documents, materials or other information requested by the FCC and the State
PUCs in order to obtain such approvals as expeditiously as practicable.
7.8 HSR Act Matters. Promptly after the date hereof, Acquisition and
the Company (as may be required pursuant to the HSR Act) will complete all
documents required to be filed with the Federal Trade Commission and the
Department of Justice in order to comply with the HSR Act and, not later than 15
business days after the date hereof, together with the Persons who are required
to join in such filings, shall file the same with the appropriate Governmental
Entities. Acquisition and the Company shall promptly furnish all materials
thereafter required by any of the Governmental Entities having jurisdiction over
such filings, and shall take all reasonable actions and shall file and use all
reasonable efforts to have declared effective or approved all documents and
notifications with any such Governmental Entities, as may be required under the
HSR Act or other federal antitrust laws for the consummation of the Merger and
any other transactions contemplated hereby.
ARTICLE VIII
CONDITIONS TO THE MERGER
8.1 Conditions to the Obligations of Each Party. The respective
obligations of Acquisition and the Company to consummate the Merger are subject
to the satisfaction, at or before the Effective Time, of each of the following
conditions:
(a) Stockholder Approval. The stockholders of the Company shall
have duly approved the transactions contemplated by this Agreement, pursuant to
the requirements of the Company's certificate of incorporation and applicable
law.
(b) HSR Act. The waiting period (and any extension thereof)
applicable to the Merger under the HSR Act shall have expired or been
terminated.
(c) Form S-4. The Form S-4 shall have been declared effective and
no stop order with respect thereto shall be in effect at the Effective Time.
(d) Injunctions; Illegality. The consummation of the Merger shall
not be restrained, enjoined or prohibited by any order, judgment, decree,
injunction or ruling of a court of competent jurisdiction or any Governmental
Entity entered after the parties have used reasonable best efforts to prevent
such entry and there shall not have been any statute, rule or regulation
enacted, promulgated or
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deemed applicable to the Merger by any Governmental Entity which prevents the
consummation of the Merger.
8.2 Conditions Precedent to the Obligations of Acquisition.
(a) Representations and Warranties. Each of the representations
and warranties of the Company contained in this Agreement that is qualified as
to materiality or Material Adverse Effect shall have been true and correct when
made and on and as of the Closing Date as if made on and as of such date, and
each of the other representations and warranties of Company contained in this
Agreement shall have been true and correct in all material respects when made
and on and as of the Closing Date as if made on and as of such date, and
Acquisition shall have received a certificate to such effect of the Chief
Executive Officer of the Company.
(b) Performance. The Company shall have performed and complied in
all material respects with all agreements and covenants required to be performed
and complied with by it under this Agreement on or prior to the Closing Date,
and Acquisition shall have received a certificate to such effect of the Chief
Executive Officer of the Company.
(c) FCC Approvals. All consents, waivers, approvals and
authorizations required to be obtained from the FCC ('FCC Transfer Approvals')
prior to the consummation of the transactions contemplated hereby shall have
been obtained by a 'Final Order' (as hereinafter defined) without the imposition
of any condition that Acquisition, in its sole discretion, deems materially
adverse to the Company's or its Subsidiaries' continued operation of their
businesses from and after the Effective Time. All filings and notices required
to be made by the Company or Acquisition prior to the consummation of the
transactions contemplated hereby shall have been made. For purposes of this
Agreement, 'Final Order' shall mean an action by the FCC: (i) that is not
reversed, stayed, enjoined, set aside, annulled or suspended within the
deadline, if any, provided by applicable statute or regulation, (ii) with
respect to which no request for stay, motion or petition for reconsideration or
rehearing, application or request for review, or notice of appeal or other
judicial petition for review that is filed within such period is pending and
(iii) as to which the deadlines, if any, for filing any such request, motion,
petition, application, appeal or notice, and for the entry by the FCC of orders
staying, reconsidering or reviewing on its own motion have expired.
Notwithstanding anything to the contrary contained herein or otherwise,
Acquisition may, at its option by written notice to the Company, waive on behalf
of both parties hereto the requirement that each of the FCC Transfer Approvals
shall have become a Final Order.
(d) Debt Offers. On or prior to the Closing Date, the Company
shall have consummated the Debt Offers, unless failure to consummate the Debt
Offers was a result of a failure by Acquisition to perform any covenant or
condition contained in the Offer Documents or this Agreement or the inaccuracy
of any representation or warranty of Acquisition contained therein.
(e) Financing. Acquisition shall have obtained the Financing
substantially on the terms contemplated by the Commitment Letters or alternative
financing on terms no less favorable than those set forth in the Commitment
Letters, unless the failure to obtain such financing was the result of a failure
by Acquisition to perform any covenant or condition contained therein or the
inaccuracy of any representation or warranty of Acquisition.
(f) Option Plans. The number of Common Shares purchasable upon
the exercise of Options that have not been cancelled in accordance with Section
1.7 shall not exceed 750,000.
8.3 Conditions Precedent to the Obligations of the Company.
(a) Representations and Warranties. Each of the representations
and warranties of Acquisition contained in this Agreement that is qualified as
to materiality or Material Adverse Effect shall have been true and correct when
made and on and as of the Closing Date as if made on and as of such date, and
each of the other representations and warranties of Acquisition contained in
this Agreement shall have been true and correct in all material respects when
made and on and as of the Closing Date as if made on and as of such date, and
the Company shall have received a certificate to such effect of the President of
Acquisition.
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(b) Performance. Acquisition shall have performed and complied in
all material respects with all agreements and covenants required to be performed
and complied with by it under this Agreement on or prior to the Closing Date,
and the Company shall have received a certificate to such effect of the
President of Acquisition.
ARTICLE IX
TERMINATION
9.1 Termination. This Agreement may be terminated and the Merger
contemplated hereby may be abandoned at any time prior to the Effective Time,
notwithstanding approval thereof by the stockholders of the Company:
(a) by the mutual written consent of Acquisition and the Company;
(b) by Acquisition or the Company if any court or other
Governmental Entity shall have issued, enacted, entered, promulgated or enforced
any order, judgment, decree, injunction, or ruling or taken any other action
restraining, enjoining or otherwise prohibiting the Merger and such order,
judgment, decree, injunction, ruling or other action shall have become final and
nonappealable after the parties have used reasonable best efforts to prevent
such issuance, enactment, entry, promulgation or enforcement;
(c) by the Company if (i) (A) any of the representations and
warranties of the Acquisition set forth herein shall not be true and correct (in
the case of representations and warranties qualified as to materiality or
Acquisition Material Adverse Effect) or true and correct in all material
respects (in the case of other representations and warranties), in each case
when made, or (B) there shall have occurred, on the part of Acquisition, a
breach of any covenant or agreement contained in this Agreement which if not
cured would have a Material Adverse Effect and which, in the case of (A) or (B),
is not curable or, if curable, is not cured within 30 calendar days after
written notice of such breach is given by the Company to Acquisition, (ii) the
Company shall enter into a definitive written agreement with respect to an
Acquisition Transaction, with a third party, or a third party has commenced a
tender offer which, in either case, the Board of Directors of the Company
believes in good faith is more favorable to the Company's stockholders than the
transactions contemplated by this Agreement or (iii) if the Board shall have
withdrawn, modified or amended in any manner adverse to Acquisition or the
stockholders of Acquisition its approval or recommendation of this Agreement and
the Merger, or approved, recommended or endorsed any proposal for an Acquisition
Transaction with a third party;
(d) by Acquisition if (i) (A) any of the representations and
warranties of the Company set forth herein shall not be true and correct (in the
case of representations and warranties qualified as to materiality or Material
Adverse Effect) or true and correct in all material respects (in the case of
other representations and warranties), in each case when made, or (B) there
shall have occurred, on the part of the Company and its Subsidiaries, taken as a
whole, a breach of any covenant or agreement contained in this Agreement which
if not cured would have a Material Adverse Effect and which, in the case of (A)
or (B), is not curable or, if curable, is not cured within 30 calendar days
after written notice of such breach is given by Acquisition to the Company, (ii)
the Company shall enter into a definitive written agreement with respect to an
Acquisition Transaction, with a third party, or a third party has commenced a
tender offer which, in either case, the Board of Directors of the Company
believes in good faith is more favorable to the Company's stockholders than the
transactions contemplated by this Agreement or (iii) if the Board shall have
withdrawn, modified or amended in any manner adverse to Acquisition or the
stockholders of Acquisition its approval or recommendation of this Agreement and
the Merger or approved, recommended or endorsed any proposal for an Acquisition
Transaction with a third party; or
(e) by either party if it shall not have breached any of its
obligations hereunder on January 31, 1999; provided, however, that neither party
may terminate this Agreement pursuant to this Section 9.1(e) on or before April
30, 1999 if the conditions to Acquisition's obligations to consummate the
transactions contemplated hereunder have not been satisfied on account of the
failure to receive FCC Transfer Approvals.
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9.2 Effect of Termination. If this Agreement is terminated pursuant
to Section 9.1, this Agreement shall become void and of no effect with no
liability on the part of any party hereto or its respective directors, officers
or stockholders, except that the agreements contained in Sections 6.1 and 9.3
shall survive the termination hereof, and except that nothing herein shall
relieve any party from liability for any breach of this Agreement or the
Confidentiality Agreement.
9.3 Fees and Expenses.
(a) Whether or not the Merger is consummated, all costs and
expenses incurred in connection with the Merger, this Agreement and the
transactions contemplated by this Agreement shall be paid by the party incurring
such expenses.
(b) In the event the Company shall have terminated this Agreement
pursuant to Section 9.1(c)(ii) or (iii), or Acquisition shall have terminated
this Agreement pursuant to Section 9.1(d)(ii) or (iii), then the Company shall
simultaneously with such termination reimburse Acquisition for the documented
fees and expenses of Acquisition related to this Agreement and the transactions
contemplated hereby (including, without limitation, any fees and expenses of
counsel, accountants and other professional advisors, commitment fees and other
financing costs and interest, underwriting discounts, debt tender payments and
fees, expenses and other costs of consummating and unwinding any issuance of
securities) (subject to a maximum of $25.0 million) and simultaneously with such
termination pay Acquisition a termination fee of $40 million.
ARTICLE X
MISCELLANEOUS
10.1 Notices. All notices, requests and other communications to any
party hereunder shall be in writing and shall be deemed to have been duly given
when delivered in person, by overnight courier or by facsimile to the respective
parties as follows:
If to Acquisition, to:
c/o Welsh, Carson, Anderson & Stowe VIII, L.P.
320 Park Avenue
Suite 2500
New York, New York 10022-6815
Attn: Thomas E. McInerney
Facsimile: (212) 893-9575
with a copy to:
Robert A. Schwed, Esq.
Karen C. Wiedemann, Esq.
Reboul, MacMurray, Hewitt, Maynard & Kristol
45 Rockefeller Plaza
New York, New York 10111
Facsimile: (212) 841-5725
If to the Company, to:
Centennial Cellular Corp.
50 Locust Avenue
New Canaan, Connecticut 06840
Facsimile: (203) 972-2013
Attn: Bernard P. Gallagher
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with a copy to:
Toby S. Myerson, Esq.
Kenneth M. Schneider, Esq.
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, NY 10019
Facsimile: (212) 757-3990
or such other address or facsimile number as such party may hereafter specify
for the purpose by written notice to the other parties hereto. Each such notice,
request or other communication shall be effective (i) if delivered in person,
when such delivery is made at the address specified in this Section 10.1; (ii)
if delivered by overnight courier, the next business day after such delivery is
sent to the address specified in this Section 10.1; or (iii) if delivered by
facsimile, when such facsimile is transmitted to the facsimile number specified
in this Section 10.1 and the appropriate confirmation is received.
10.2 Survival of Representations and Warranties and Agreements. The
representations and warranties and agreements contained herein and in any
certificate or other writing delivered pursuant hereto shall not survive beyond
the Effective Time except for the agreements set forth in Sections 6.2 and 6.3,
which shall survive the Effective Time, and Sections 6.1 and 9.3 and this
Article X, which shall survive the termination of this Agreement.
10.3 Amendment. This Agreement may be amended by the Company and
Acquisition at any time before or after any approval of this Agreement by the
stockholders of the Company but, after any such approval, no amendment shall be
made which decreases the Merger Consideration or which adversely affects the
rights of the Company's stockholders hereunder without the approval of such
stockholders. This Agreement may not be amended except by an instrument in
writing signed on behalf of all the parties.
10.4 Extension; Waiver. At any time prior to the Effective Time, the
parties hereto may (i) extend the time for the performance of any of the
obligations or other acts of any other party hereto, (ii) waive any inaccuracies
in the representations and warranties contained herein by any other party or in
any document, certificate or writing delivered pursuant hereto by any other
party or (iii) waive compliance with any of the agreements of any other party or
with any conditions to its own obligations. Any agreement on the part of any
party to any such extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such party.
10.5 Successors and Assigns. The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, provided that no party may assign, delegate
or otherwise transfer any of its rights or obligations under this Agreement
without the prior written consent of the other parties hereto.
10.6 Governing Law. This Agreement shall be construed in accordance
with and governed by the law of the State of Delaware applicable to agreements
entered into and to be performed wholly within such State.
10.7 Jurisdiction. Each of the parties hereto (a) consents to submit
itself to the personal jurisdiction of any federal court located in the State of
Delaware or any Delaware state court in the event any dispute arises out of this
Agreement or any of the transactions contemplated by this Agreement, (b) agrees
that it will not attempt to deny or defeat such personal jurisdiction by motion
or other request for leave from any such court and (c) agrees that it will not
bring any action relating to this Agreement or any of the transactions
contemplated hereby in any court other than a federal or state court sitting in
the State of Delaware.
10.8 Counterparts; Effectiveness. This Agreement may be signed in
any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement shall become effective when each party hereto shall have received
counterparts hereof signed by all of the other parties hereto.
10.9 Entire Agreement; No Third-party Beneficiaries. This Agreement
and the other agreements referred to herein or executed contemporaneously
herewith constitute the entire
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agreement, and supersede all prior agreements and understandings, both written
and oral, between the parties with respect to the subject matter of this
Agreement. No representation, inducement, promise, understanding, condition or
warranty not set forth herein has been made or relied upon by any party hereto.
This Agreement, other than as provided in Sections 6.2 and 6.3, is not intended
to confer upon any Person other than the parties hereto any rights or remedies.
10.10 Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
10.11 Schedules. Schedule references contained in Article III of
this Agreement are for convenience only and matters disclosed pursuant to one
section, subsection or other provision of Article III are deemed disclosed for
all purposes of Article III to the extent this Agreement requires such
disclosure.
10.12 Severability. In the event that any one or more of the
provisions contained in this Agreement or in any other instrument referred to
herein, shall, for any reason, be held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality or unenforceability shall not affect
any other provision of this Agreement or any other such instrument.
10.13 WAIVER OF JURY TRIAL. EACH OF THE COMPANY AND ACQUISITION
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ALL RIGHTS TO
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON
CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY
OF THE TRANSACTIONS CONTEMPLATED HEREBY.
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be duly executed by its respective authorized officer as of the day
and year first above written.
CCW ACQUISITION CORP.
By: /S/ THOMAS E. MCINERNEY
__________________________________
Name: Thomas E. McInerney
Title: President
CENTENNIAL CELLULAR CORP.
By: /S/ DAVID Z. ROSENSWEIG
__________________________________
Name: David Z. Rosensweig
Title: President
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APPENDIX B
AMENDMENT TO AGREEMENT AND PLAN OF MERGER
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AMENDMENT TO AGREEMENT AND PLAN OF MERGER
AMENDMENT, dated as of November 29, 1998 (the 'Amendment'), to
the Agreement and Plan of Merger, dated as of July 2, 1998 (the 'Merger
Agreement'), by and between CCW Acquisition Corp., a Delaware corporation
('Acquisition'), and Centennial Cellular Corp., a Delaware corporation (the
'Company').
WHEREAS, Acquisition and the Company desire that the Merger
Agreement be amended as provided herein;
WHEREAS, all capitalized terms not otherwise defined in this
Amendment shall have the meanings assigned to them in the Merger Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, and intending to be legally bound hereby, the
parties agree as follows:
1. Section 1.2(b)(ii) of the Merger Agreement is hereby amended by
replacing '$43.50' with '$41.50.'
2. Section 4.9 of the Merger Agreement is hereby amended by deleting
such Section in its entirety and replacing it with the following:
Acquisition has received and executed commitment letters each dated
November 29, 1998 (together with the exhibits and attachments thereto,
the 'Commitment Letters,' and together with any fee letters and any
other documents executed in connection therewith and any amendments or
supplements thereto permitted under this Section 4.9 being collectively
referred to as the 'Financing Documents'), from (i) Merrill Lynch,
Pierce Fenner and Smith Incorporated and certain other financial
institutions (the 'Lead Agents') pursuant to which they have committed,
subject to the terms and conditions set forth therein, to provide
Acquisition and certain existing or future subsidiaries of the Company
with up to $1.05 billion of financing under available senior secured
credit facilities and $310.0 million (plus interest escrow) in aggregate
principal amount of financing in the form of senior subordinated notes,
(ii) WCAS Capital Partners III, L.P. ('WCAS Capital'), pursuant to which
it has committed, subject to the terms and conditions set forth therein,
to purchase $180.0 million in aggregate principal amount of subordinated
notes of the Company (the 'Subordinated Notes') and (iii) Welsh, Carson,
Anderson & Stowe VIII, L.P. ('WCAS') pursuant to which it has committed
to provide to Acquisition $400.0 million in equity (the 'Equity
Contribution') to consummate the Merger, pay the Merger Consideration
and pay the related transaction expenses (the financings referred to in
clauses (i), (ii) and (iii) above being collectively referred to as the
'Financing'). Such Financing is adequate to pay in full in cash at
closing the Cash Merger Consideration together with all fees and
expenses of Acquisition associated with the transactions contemplated
hereby, and to make any other payments necessary to consummate the
transactions contemplated hereby. True and complete copies of the
Commitment Letters have been furnished to the Company. Neither
Acquisition, WCAS nor their affiliates will terminate, amend, modify or
supplement in any respect the terms or conditions of the Financing or
the Financing Documents, without the prior written consent of the
Company, except to amend or modify in a manner more favorable to
Acquisition, WCAS or their affiliates the interest rates relating to the
Financing or the terms of the covenants to be in effect following
consummation of the Merger, but only to the extent that such amendment
or modification will not adversely affect the probability that such
Financing will be actually funded, or the timing thereof. Acquisition or
WCAS has fully paid any and all commitment fees or other fees required
by such Financing Documents to be paid as of the date hereof (and will
fully pay any such fees after the date hereof). The Financing Documents
are valid and in full force and effect and no event has occurred which
(with or without notice, lapse of time or both) would constitute a
default on the part of WCAS or Acquisition thereunder or would adversely
affect the probability that such Financing will actually be funded.
Acquisition will, and will cause its affiliates to, perform all of its
obligations under such Financing Documents and satisfy all conditions
precedent to the funding thereunder that are within its control and use
reasonable best efforts to satisfy all conditions precedent to the
funding thereunder that
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are not within its control. The $400.0 million equity investment of WCAS
will be used solely to acquire common stock of Acquisition at a price of
$41.50 per share.
3. Section 8.2(e) of the Merger Agreement is hereby amended by
deleting such Section in its entirety and replacing it with the following:
(e) Financing. Acquisition shall have obtained the portion of the
Financing described in clause (i) of Section 4.9 substantially on terms
contemplated by the Financing Documents relating thereto or alternative
financing on terms no less favorable than those set forth in such
Financing Documents; provided, however, that the condition of this
Section 8.2(e) shall be deemed to have been satisfied if the failure to
obtain such Financing was the result of (i) a failure by Acquisition,
WCAS or any of their affiliates to perform any covenant or obligation
contained in the Financing Documents or the inaccuracy of any
representation or warranty of Acquisition contained therein (other than
any representation or warranty made by Acquisition as to the Company's
business, operations or financial condition, other than to the extent
any such representation or warranty relates to (A) any matter that gives
effect to consummation of the Merger or the Financing, (B) any
information prepared by Acquisition, WCAS or any of their affiliates
regarding the Company's future operations or pro forma financial
information, (C) the granting, perfection, maintenance and any other
matters in respect of the security interests contemplated in the
Financing Documents, (D) any approvals or consents relating to the
Financing, (E) any information or reports given to lenders regarding any
matters described in clauses (A) through (J) of this Section 8.2(e)(i),
(F) the authorization, execution and delivery of the documentation
relating to the Financing, (G) the use of proceeds from the Financing,
(H) the solvency of the Company, (I) the corporate structure necessary
to give effect to the Financing or (J) year 2000 compliance other than
to the extent disclosed in the Company's public filings, (ii) a failure
of WCAS to provide the Equity Contribution or a failure by WCAS Capital
to purchase the Subordinated Notes, (iii) a failure of Acquisition to
accept modifications, amendments, terms or conditions as contemplated
under the terms of such Financing Documents or (iv) a breach by
Acquisition of its obligations under Section 4.9.
4. Section 9.1(e) of the Merger Agreement is hereby amended by
replacing 'January 31, 1999' with 'March 31, 1999'.
5. Acquisition undertakes to use its reasonable best efforts to cause
the Lead Agents to amend the Financing Documents relating to the portion of
the Financing described in clause (i) of Section 4.9 to extend the
termination dates thereunder until March 31, 1999, it being understood that
reasonable best efforts shall not require Acquisition to accept less
favorable terms than those contemplated by the Financing Documents.
6. The parties acknowledge and agree that, in the event the Merger
Agreement is terminated and Acquisition shall have liability thereunder for
breach, any damages shall be calculated as if the amendment to Section
1.2(b)(ii) hereto had not been made and the Cash Election Price shall be
deemed to be $43.50 for purposes of calculating damages.
7. Other than as expressly set forth herein, the Merger Agreement is
hereby ratified and shall remain unchanged in all other respects.
8. This Amendment shall be construed in accordance with and governed
by the law of the State of Delaware applicable to agreements entered into
and to be performed wholly within such State.
9. This Amendment may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument. This Amendment shall
become effective when each party hereto shall have received counterparts
hereof signed by the other party hereto.
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IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to
be duly executed by its respective authorized officer as of the day and year
first above written.
CCW ACQUISITION CORP.
By: /S/ ANTHONY J. DENICOLA
____________________________________
Name: Anthony J. deNicola
Title: Vice President and Treasurer
CENTENNIAL CELLULAR CORP.
By: /S/ DAVID Z. ROSENSWEIG
____________________________________
Name: David Z. Rosensweig
Title: Secretary
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APPENDIX C
OPINION OF DONALDSON, LUFKIN & JENRETTE
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[LOGO]
Donaldson, Lufkin & Jenrette Securities Corporation
277 Park Avenue, New York, New York 10172 (212) 892-3000
LOUIS P. FRIEDMAN
Managing Director
Investment Banking
(212) 892-3545 Fax (212) 892-7272
November 29, 1998
Board of Directors
Centennial Cellular Corp.
50 Locust Avenue
New Canaan, CT 06840
Dear Sirs:
You have requested our opinion as to the fairness from a financial point of
view to the stockholders of Centennial Cellular Corp., a Delaware corporation
(the 'Company'), other than stockholders of the Company who are affiliates of
the Company (the 'Unaffiliated Stockholders'), of the consideration to be
received by the Unaffiliated Stockholders pursuant to the terms of the Agreement
and Plan of Merger, dated as of July 2, 1998 and amended as of November 29, 1998
(the 'Agreement'), by and between the Company and CCW Acquisition Corp., a
Delaware corporation ('Acquisition'), pursuant to which Acquisition will be
merged with and into the Company (the 'Merger'). In connection therewith, Welsh,
Carson, Anderson & Stowe VIII, L.P. ('WCA&S'), the controlling stockholder of
Acquisition, has provided an undertaking to fund Acquisition's obligations under
the Agreement, up to the amount of its $400 million equity commitment.
Pursuant to the Agreement (including the proration adjustments contained
therein), at the Effective Time (as defined in the Agreement), all issued and
outstanding shares of capital stock of the Company (collectively, the 'Shares'),
other than Shares owned by Acquisition or the Company and Dissenting Shares (as
defined in the Agreement), shall be converted as follows: (i) all outstanding
shares of Class A Common Stock, par value $.01 per share, of the Company (the
'Common Shares'), shall be converted into the right to (a) retain Common Shares
or (b) receive $41.50 in cash; (ii) all outstanding shares of Class B Common
Stock, par value $.01 per share, of the Company shall be converted into the
right to receive $41.50 in cash and a number of Common Shares, if any, such that
the aggregate number of Common Shares retained or issued pursuant to clauses
(i) and (ii) shall equal 7.1% of the total number of Common Shares issued and
outstanding immediately after the Effective Time; and (iii) all outstanding
shares of (x) Convertible Preferred Stock, par value $.01 per share, of the
Company and (y) Second Series Convertible Preferred Stock, par value $.01 per
share, of the Company shall be converted into the right to receive $41.50 in
cash on a Common Share equivalent basis. Following the Merger, the holders of
the issued and outstanding shares of capital stock of Acquisition will own 92.9%
of the total number of Common Shares issued and outstanding.
In arriving at our opinion, we have reviewed the Agreement, the exhibits
and schedules thereto as well as related financing commitment letters and term
sheets. We also have reviewed financial and other information that was publicly
available or furnished to us by the Company including information provided
during discussions with management. Included in the information provided during
discussions with the management were certain financial projections of the
Company for the period beginning June 1998 and ending May 2003 prepared by the
management of the Company. In addition, we have compared certain financial and
securities data of the Company with various other companies whose securities are
traded in public markets, reviewed the historical stock prices and trading
volumes of the common stock of the Company, reviewed prices and premiums paid in
certain other business
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combinations and conducted such other financial studies, analyses and
investigations as we deemed appropriate for purposes of this opinion.
In rendering our opinion, we have relied upon and assumed the accuracy and
completeness of all of the financial and other information that was available to
us from public sources, that was provided to us by the Company or its
representatives, or that was otherwise reviewed by us. With respect to the
financial projections supplied to us, we have assumed that they have been
reasonably prepared on a basis reflecting reasonable estimates and judgments of
the management of the Company as to the future operating and financial
performance of the Company. We have not assumed any responsibility for making an
independent evaluation of any assets or liabilities or for making any
independent verification of any of the information reviewed by us. We have
relied as to certain legal matters on advice of counsel to the Company.
Our opinion is necessarily based on economic, market, financial and other
conditions as they exist on, and on the information made available to us as of,
the date of this letter. It should be understood that, although subsequent
developments may affect this opinion, we do not have any obligation to update,
revise or reaffirm this opinion. Our opinion does not address the relative
merits of the Merger and the other business strategies being considered by the
Company's Board of Directors, nor does it address the Board's decision to
proceed with the Merger. Our opinion does not constitute a recommendation to any
stockholder as to how such stockholder should vote on the proposed Merger.
Donaldson, Lufkin & Jenrette Securities Corporation ('DLJ'), as part of its
investment banking services, is regularly engaged in the valuation of businesses
and securities in connection with mergers, acquisitions, underwritings, sales
and distributions of listed and unlisted securities, private placements and
valuations for corporate and other purposes. DLJ has performed investment
banking and other services for the Company, for its stockholder Century
Communications Corp., and for WCA&S and certain of its affiliates in the past
and has been compensated for such services.
Based upon the foregoing and such other factors as we deem relevant, we are
of the opinion that the consideration to be received by the Unaffiliated
Stockholders of the Company pursuant to the Agreement is fair to such
Unaffiliated Stockholders from a financial point of view.
Very truly yours,
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By: /S/ LOUIS P. FRIEDMAN
____________________________________
Louis P. Friedman
Managing Director
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APPENDIX D
STOCKHOLDER AGREEMENT
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STOCKHOLDER AGREEMENT
AGREEMENT, dated as of July 2, 1998, between CCW Acquisition Corp., a
Delaware corporation ('Acquisition'), and Century Communications Corp., a
Delaware corporation (the 'Stockholder').
WHEREAS, concurrently herewith, Acquisition and Centennial Cellular
Corp., a Delaware corporation (the 'Company'), are entering into an Agreement
and Plan of Merger (the 'Merger Agreement'; capitalized terms used without
definition herein having the meanings ascribed thereto in the Merger Agreement);
WHEREAS, the Stockholder is the record and beneficial owner of the
number of Shares set forth opposite the Stockholder's name in Schedule I hereto;
WHEREAS, approval of the Merger Agreement by the Company's
stockholders is a condition to the consummation of the Merger;
WHEREAS, the Board of Directors of the Company has, prior to the
execution of this Agreement, duly and validly approved and adopted the Merger
Agreement and approved this Agreement, and such approvals and adoption have not
been withdrawn; and
WHEREAS, Acquisition is unwilling to enter into the Merger Agreement
unless the Stockholder enters into this Agreement concurrently with the
execution of the Merger Agreement, and the Stockholder desires and is willing to
induce Acquisition to enter into the Merger Agreement by its entry into this
Agreement;
NOW THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements set forth herein, the parties hereto agree as follows:
Section 1. Agreement to Vote; Irrevocable Proxy.
(a) The Stockholder hereby agrees that, during the period commencing
on the date hereof and continuing until the termination of this Agreement, at
any stockholders' meeting of the Company at which any of the following matters
is submitted to a vote of the stockholders, it shall vote (or cause to be voted)
its shares of Common Stock (or shall execute and deliver a written consent
pursuant to Section 228 of the Delaware Law):
(i) in favor of the Merger Agreement, the transactions described
therein and the agreements and transactions contemplated thereby; and
(ii) except as otherwise agreed to in writing in advance by
Acquisition against the following actions (except as contemplated by the
Merger Agreement):
(A) any extraordinary corporate transaction, such as a
merger, consolidation or other business combination involving the
Company or any of its subsidiaries;
(B) any sale, lease or transfer of a material amount of
assets of the Company or any of its subsidiaries, or a
reorganization, recapitalization, dissolution or liquidation of the
Company or any of its subsidiaries; and
(C)(1) any change in the majority of the persons who
constitute the Board of Directors of the Company; (2) any change in
the present capitalization of the Company or any amendment of the
Company's Certificate of Incorporation or By-laws; (3) any other
material change in the Company's corporate structure or business; or
(4) any other action which, in the case of each of the matters
referred to in clauses (1), (2) or (3), is intended, or could
reasonably be expected, to impede, interfere with, delay, postpone,
or materially adversely affect the transactions contemplated by this
Agreement and the Merger Agreement.
(b) In furtherance of the foregoing, the Stockholder hereby
constitutes and appoints Thomas E. McInerney and Anthony J. de Nicola, and each
of them, with full power of substitution, its true and lawful proxies and
attorneys-in-fact to vote the Shares held by the Stockholder as provided in
paragraph (a) above for so long as this Agreement is in effect. The Stockholder
hereby affirms that this proxy is given in connection with the Merger Agreement,
as an inducement to Acquisition to enter into
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the Merger Agreement and to consummate the transactions contemplated thereby
and, as such, is coupled with an interest and is irrevocable for so long as this
Agreement shall remain in effect.
(c) The Stockholder agrees that it will not, and will not permit any
of its Affiliates to, contract to sell, sell or otherwise pledge, encumber,
transfer or dispose of any of the Shares owned beneficially or of record by it
or any interest therein or securities convertible thereinto or any voting rights
with respect thereto, other than (i) pursuant to the Merger or (ii) with
Acquisition's prior written consent.
(d) The Stockholder hereby revokes any and all previous proxies with
respect to the Stockholder's Shares or any other voting securities of the
Company.
Section 3. Cooperation; No Solicitation. The Stockholder hereby agrees to
cooperate reasonably with Acquisition and the Company in connection with the
Merger Agreement and consummation of the transactions contemplated thereby.
Acquisition agrees to cooperate reasonably with the Stockholder in connection
with any filings required to be made by the Stockholder pursuant to the HSR Act
in connection with the Merger Agreement and consummation of the transactions
contemplated thereby. The Stockholder agrees that it will not, and will not
cause or permit their respective officers, employees, representatives and
agents, directly or indirectly, to solicit, initiate or encourage any inquiries
or the making of any proposal with respect to any Acquisition Transaction or
provide information to or negotiate, explore, otherwise engage in discussions
with or in any other way cooperate with any Person (other than Acquisition or
its directors, officers, employees, agents and representatives) with respect to
any Acquisition Transaction or enter into any agreement, arrangement or
understanding requiring or causing the Company to abandon, terminate or fail to
consummate the Merger or any other transactions contemplated by the Merger
Agreement.
Section 4. Termination of Services Agreement. The Stockholder hereby agrees
that, effective as of the Effective Time, each of the Services Agreement,
effective as of August 30, 1996, between the Company and the Stockholder, and
the Extension and Renewal Agreement dated as of March 21, 1997 between the
Company and the Stockholder shall be terminated.
Section 5. Other Covenants and Agreements.
(a) Stock Transfer Agreement. The Stockholder hereby agrees to the
termination of the Stock Transfer Agreement effective as of the Effective Time.
(b) Further Assurances. Each party shall execute and deliver such
additional instruments and other documents and shall take such further actions
as may be necessary or appropriate to effectuate, carry out and comply with all
of its obligations under this Agreement. Without limiting the generality of the
foregoing, none of the parties hereto shall enter into any agreement or
arrangement (or alter, amend or terminate any existing agreement or arrangement)
if such action would materially impair the ability of such party to effectuate,
carry out or comply with all of the terms of this Agreement.
(c) Release of Certain Restrictions. Effective as of the Effective
Time, the Stockholder hereby releases the Company and its Affiliates (other than
the Stockholder and its other Affiliates) from, and waives in all respects, any
obligation that may exist to the Stockholder or any of its Affiliates anywhere
in the world, (ii) not to engage, or to refrain from engaging, in any activity
anywhere in the world, or (iii) that otherwise restricts or limits the ability
of the Company or any of its Affiliates to engage in any business anywhere in
the world.
Section 6. Representations and Warranties of Acquisition. Acquisition
represents and warrants to the Stockholder as follows:
(a) This Agreement has been approved by the Board of Directors of
Acquisition and its stockholders, representing all necessary corporate action on
the part of Acquisition for the execution and performance hereof and of the
Merger Agreement.
(b) This Agreement has been duly executed and delivered by a duly
authorized officer of Acquisition.
(c) This Agreement constitutes a valid and binding agreement of
Acquisition, enforceable against Acquisition in accordance with its terms.
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(d) The execution and delivery of this Agreement by Acquisition does
not violate or breach, and will not give rise to any violation or breach of, the
charter or bylaws of Acquisition, or, except as will not materially impair its
ability to effectuate, carry out or comply with all of the terms of this
Agreement, any law, contract, instrument, arrangement or agreement by which
Acquisition is bound.
Section 7. Representations and Warranties of the Stockholders. The
Stockholder represents and warrants to Acquisition as follows:
(a) Schedule I sets forth, opposite the Stockholder's name, the
number and type of Shares of which the Stockholder is the record and beneficial
owner. The Stockholder is the lawful owner of such Shares, free and clear of all
liens, charges, encumbrances, voting agreements and commitments of every kind,
other than this Agreement, the Stock Transfer Agreement and as disclosed on
Schedule I. Except as set forth in Schedule I and except pursuant to the Stock
Transfer Agreement, the Stockholder does not own or hold any rights to acquire
any additional Shares or other securities of the Company or any interest therein
or any voting rights with respect to any additional Shares or any other
securities of the Company or any interest therein or any voting rights with
respect to any additional Shares or any other securities of the Company.
(b) This Agreement has been approved by the Stockholder's Board of
Directors and its stockholders, representing all necessary corporate action on
the part of the Stockholder for the execution and performance hereof by the
Stockholder.
(c) This Agreement has been duly executed and delivered by a duly
authorized officer of the Stockholder.
(d) This Agreement constitutes the valid and binding agreement of the
Stockholder, enforceable against the Stockholder in accordance with its terms.
(e) The execution and delivery of this Agreement by the Stockholder
does not violate or breach, and will not give rise to any violation or breach,
of the Stockholder's charter or bylaws, or, except as will not materially impair
the ability of the Stockholder to effectuate, carry out or comply with all of
the terms of this Agreement, any law, contract, instrument, arrangement or
agreement by which the Stockholder is bound.
(f) The execution and delivery of this Agreement by the Stockholder
does not create or give rise to any right in any other Person with respect to
the Shares or any other securities of the Company (including, without
limitation, voting rights and rights to purchase or sell any such Shares or
other securities) pursuant to the Stock Transfer Agreement.
(g) The execution and delivery of the proxies by the Stockholder are
adequate to approve and adopt the Merger Agreement and the Merger without the
vote or consent of any other stockholder of the Company.
Section 8. Effectiveness and Termination. This Agreement shall terminate
and be of no further force or effect (i) immediately upon termination of the
Merger Agreement pursuant to Section 9.1(a), 9.1(b), 9.1(c)(i) or 9.1(e)
thereof, (ii) six months after the termination of the Merger Agreement pursuant
to any other section thereof or (iii) at the Effective Time, whichever is
earliest. Upon such termination, except for any rights a party may have in
respect of any breach by the other party of its obligations hereunder, neither
party hereto shall have any further obligation or liability hereunder.
Section 9. Non-compete. The Stockholder agrees that on the Effective Date
it will execute and deliver a non-compete agreement with the Surviving
Corporation, pursuant to which the Stockholder will agree that, for a period of
three years from the Effective Date, the Stockholder will not engage in, or
acquire a controlling interest in, any business that competes with any of
businesses of the Company's current operations in Puerto Rico; provided,
however, that such non-compete shall not extend to or restrict in any manner the
activities of the Stockholder's existing joint venture in Puerto Rico.
Section 10. Miscellaneous.
(a) Notices, Etc. All notices, requests, demands or other
communications required by or otherwise with respect to this Agreement shall be
in writing and shall be deemed to have been duly given to any party when
delivered personally (by courier service or otherwise), when delivered by
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telecopy and confirmed by return telecopy, or seven days after being mailed by
first-class mail, postage prepaid in each case to the applicable addresses set
forth below:
If to Acquisition, to it at:
c/o Welsh, Carson, Anderson & Stowe VIII, L.P.
320 Park Avenue
Suite 2500
New York, New York 10022-6815
Facsimile: 212-893-9575
with a copy to:
Robert A. Schwed, Esq.
Reboul, MacMurray, Hewitt, Maynard & Kristol
45 Rockefeller Plaza
New York, New York 10111
Facsimile: 212-841-5725
If to the Stockholder, to it at:
50 Locust Avenue
New Canaan, Connecticut 06840
Attention: Office of the President
Facsimile: 203-966-9228
with a copy to:
David Z. Rosensweig, Esq.
Leavy Rosensweig & Hyman
11 East 44th Street
New York, New York 10017
Facsimile: 212-983-2537
or to such other address as such party shall have designated by notice received
by the other party.
(b) Amendments, Waivers, Etc. This Agreement may not be amended,
changed, supplemented, waived or otherwise modified or, except as expressly set
forth in Section 8, terminated, except by an instrument in writing signed by
each party hereto.
(c) Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of and be enforceable by the parties and their
respective successors and assigns; provided that, except as contemplated by the
Merger Agreement, neither the rights nor the obligations of any party may be
assigned or delegated without the prior written consent of the other party.
(d) Entire Agreement. This Agreement (together with the Merger
Agreement and the other agreements and documents expressly contemplated hereby
and thereby) embodies the entire agreement and understanding among the parties
relating to the subject matter hereof and supersedes all prior agreements and
understandings relating to such subject matter. There are no representations,
warranties or covenants by the parties hereto relating to such subject matter
other than those expressly set forth in this Agreement and the Merger Agreement.
(e) Severability. If any term of this Agreement or the application
thereof to any party or circumstance shall be held invalid or unenforceable to
any extent, the remainder of this Agreement and the application of such term to
the other party or circumstances shall not be affected thereby and shall be
enforced to the greatest extent permitted by applicable law, provided that, in
such event, the parties shall negotiate in good faith in an attempt to agree to
another provision (in lieu of the term or application held to be invalid or
unenforceable) that will be valid and enforceable and will carry out the
parties' intentions hereunder.
(f) Specific Performance. The parties acknowledge that money damages
are not an adequate remedy for violations of this Agreement and that any party
may, in its sole discretion, apply to a court of competent jurisdiction for
specific performance or injunctive or such other relief as such court may deem
just and proper in order to enforce this Agreement or prevent any violation
hereof and, to
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the extent permitted by applicable law, each party waives any objection to the
imposition of such relief or any requirement for a bond.
(g) Remedies Cumulative. All rights, powers and remedies provided
under this Agreement or otherwise available in respect hereof at law or in
equity shall be cumulative and not alternative, and the exercise or beginning of
the exercise of any thereof by any party shall not preclude the simultaneous or
later exercise of any other such right, power or remedy by such party.
(h) No Waiver. The failure of any party hereto to exercise any right,
power or remedy provided under this Agreement or otherwise available in respect
hereof at law or in equity, or to insist upon compliance by the other party
hereto with its obligations hereunder, and any custom or practice of the parties
at variance with the terms hereof, shall not constitute a waiver by such party
of its right to exercise any such or other right, power or remedy or to demand
such compliance.
(i) No Third Party Beneficiaries. This Agreement is not intended to
be for the benefit of and shall not be enforceable by any person or entity who
or which is not a party hereto.
(j) Jurisdiction. Each party hereby irrevocably submits to the
exclusive jurisdiction of the Court of Chancery in the State of Delaware or the
United States District Court of Delaware or any court of the State of Delaware
in any action, suit or proceeding arising in connection with this Agreement, and
agrees that any such action, suit or proceeding shall be brought only in such
court (and waives any objection based on forum non conveniens or any other
objection to venue therein); provided, however, that such consent to
jurisdiction is solely for the purpose referred to in this paragraph (j) and
shall not be deemed to be a general submission to the jurisdiction of said
Courts or in the State of Delaware other than for such purposes. Each party
hereto hereby waives any right to a trial by jury in connection with any such
action, suit or proceeding.
(k) Governing Law. This Agreement and all disputes hereunder shall be
governed by and construed and enforced in accordance with the internal laws of
the State of Delaware, without regard to principles of conflicts of law.
(l) Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed to be an original, but all of which together shall
constitute one instrument.
(m) Expenses. Acquisition and the Stockholder shall bear its own
expenses incurred in connection with this Agreement and the transactions
contemplated hereby, except that in the event of a dispute concerning the terms
or enforcement of this Agreement, the prevailing party in any such dispute shall
be entitled to reimbursement of reasonable legal fees and disbursements from the
other party to such dispute.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as
of the date first above written.
CCW ACQUISITION CORP.
By: /S/ THOMAS E. MCINERNEY
__________________________________
Name: Thomas E. McInerney
Title: President
CENTURY COMMUNICATIONS CORP.
By: /S/ DAVID Z. ROSENSWEIG
__________________________________
Name: David Z. Rosensweig
Title: Secretary
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SCHEDULE I
Share Ownership
<TABLE>
<S> <C>
Century Communications Corp. 8,561,819 shares of Class B Common Stock,
par value $0.01 per share
3,978 shares of Second Series Convertible Preferred
Stock, par value $0.01 per share
</TABLE>
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APPENDIX E
SECTION 262 OF THE DELAWARE GENERAL CORPORATION LAW
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DELAWARE CODE ANNOTATED
TITLE 8. CORPORATIONS
CHAPTER 1. GENERAL CORPORATION LAW
SUBCHAPTER IX. MERGER OR CONSOLIDATION
Copyright'c' 1975-1997 by The State of Delaware. All rights reserved.
Current through End of 1997 Reg. Sess.
SECTION 262. APPRAISAL RIGHTS
(a) Any stockholder of a corporation of this State who holds shares of
stock on the date of the making of a demand pursuant to subsection (d) of this
section with respect to such shares, who continuously holds such shares through
the effective date of the merger or consolidation, who has otherwise complied
with subsection (d) of this section and who has neither voted in favor of the
merger or consolidation nor consented thereto in writing pursuant to Section 228
of this title shall be entitled to an appraisal by the Court of Chancery of the
fair value of the stockholder's shares of stock under the circumstances
described in subsections (b) and (c) of this section. As used in this section,
the word 'stockholder' means a holder of record of stock in a stock corporation
and also a member of record of a nonstock corporation; the words 'stock' and
'share' mean and include what is ordinarily meant by those words and also
membership or membership interest of a member of a nonstock corporation; and the
words 'depository receipt' mean a receipt or other instrument issued by a
depository representing an interest in one or more shares, or fractions thereof,
solely of stock of a corporation, which stock is deposited with the depository.
(b) Appraisal rights shall be available for the shares of any class or
series of stock of a constituent corporation in a merger or consolidation to be
effected pursuant to Section 251 (other than a merger effected pursuant to
Section 251(g) of this title), Section 252, Section 254, Section 257, Section
258, Section 263 or Section 264 of this title:
(1) Provided, however, that no appraisal rights under this section
shall be available for the shares of any class or series of stock, which
stock, or depository receipts in respect thereof, at the record date fixed
to determine the stockholders entitled to receive notice of and to vote at
the meeting of stockholders to act upon the agreement of merger or
consolidation, were either (i) listed on a national securities exchange or
designated as a national market system security on an interdealer quotation
system by the National Association of Securities Dealers, Inc. or (ii) held
of record by more than 2,000 holders; and further provided that no
appraisal rights shall be available for any shares of stock of the
constituent corporation surviving a merger if the merger did not require
for its approval the vote of the stockholders of the surviving corporation
as provided in subsection (f) of Section 251 of this title.
(2) Notwithstanding paragraph (1) of this subsection, appraisal
rights under this section shall be available for the shares of any class or
series of stock of a constituent corporation if the holders thereof are
required by the terms of an agreement of merger or consolidation pursuant
to Sections 251, 252, 254, 257, 258, 263 and 264 of this title to accept
for such stock anything except:
a. Shares of stock of the corporation surviving or resulting from
such merger or consolidation, or depository receipts in respect thereof;
b. Shares of stock of any other corporation, or depository
receipts in respect thereof, which shares of stock (or depository
receipts in respect thereof) or depository receipts at the effective
date of the merger or consolidation will be either listed on a national
securities exchange or designated as a national market system security
on an interdealer quotation system by the National Association of
Securities Dealers, Inc. or held of record by more than 2,000 holders;
c. Cash in lieu of fractional shares or fractional depository
receipts described in the foregoing subparagraphs a. and b. of this
paragraph; or
d. Any combination of the shares of stock, depository receipts
and cash in lieu of fractional shares or fractional depository receipts
described in the foregoing subparagraphs a., b. and c. of this
paragraph.
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(3) In the event all of the stock of a subsidiary Delaware
corporation party to a merger effected under Section 253 of this title is
not owned by the parent corporation immediately prior to the merger,
appraisal rights shall be available for the shares of the subsidiary
Delaware corporation.
(c) Any corporation may provide in its certificate of incorporation that
appraisal rights under this section shall be available for the shares of any
class or series of its stock as a result of an amendment to its certificate of
incorporation, any merger or consolidation in which the corporation is a
constituent corporation or the sale of all or substantially all of the assets of
the corporation. If the certificate of incorporation contains such a provision,
the procedures of this section, including those set forth in subsections (d) and
(e) of this section, shall apply as nearly as is practicable.
(d) Appraisal rights shall be perfected as follows:
(1) If a proposed merger or consolidation for which appraisal rights
are provided under this section is to be submitted for approval at a
meeting of stockholders, the corporation, not less than 20 days prior to
the meeting, shall notify each of its stockholders who was such on the
record date for such meeting with respect to shares for which appraisal
rights are available pursuant to subsection (b) or (c) hereof that
appraisal rights are available for any or all of the shares of the
constituent corporations, and shall include in such notice a copy of this
section. Each stockholder electing to demand the appraisal of his shares
shall deliver to the corporation, before the taking of the vote on the
merger or consolidation, a written demand for appraisal of his shares. Such
demand will be sufficient if it reasonably informs the corporation of the
identity of the stockholder and that the stockholder intends thereby to
demand the appraisal of his shares. A proxy or vote against the merger or
consolidation shall not constitute such a demand. A stockholder electing to
take such action must do so by a separate written demand as herein
provided. Within 10 days after the effective date of such merger or
consolidation, the surviving or resulting corporation shall notify each
stockholder of each constituent corporation who has complied with this
subsection and has not voted in favor of or consented to the merger or
consolidation of the date that the merger or consolidation has become
effective; or
(2) If the merger or consolidation was approved pursuant to Section
228 or Section 253 of this title, each constituent corporation, either
before the effective date of the merger or consolidation or within ten days
thereafter, shall notify each of the holders of any class or series of
stock of such constituent corporation who are entitled to appraisal rights
of the approval of the merger or consolidation and that appraisal rights
are available for any or all shares of such class or series of stock of
such constituent corporation, and shall include in such notice a copy of
this section; provided that, if the notice is given on or after the
effective date of the merger or consolidation, such notice shall be given
by the surviving or resulting corporation to all such holders of any class
or series of stock of a constituent corporation that are entitled to
appraisal rights. Such notice may, and, if given on or after the effective
date of the merger or consolidation, shall, also notify such stockholders
of the effective date of the merger or consolidation. Any stockholder
entitled to appraisal rights may, within 20 days after the date of mailing
of such notice, demand in writing from the surviving or resulting
corporation the appraisal of such holder's shares. Such demand will be
sufficient if it reasonably informs the corporation of the identity of the
stockholder and that the stockholder intends thereby to demand the
appraisal of such holder's shares. If such notice did not notify
stockholders of the effective date of the merger or consolidation, either
(i) each such constituent corporation shall send a second notice before the
effective date of the merger or consolidation notifying each of the holders
of any class or series of stock of such constituent corporation that are
entitled to appraisal rights of the effective date of the merger or
consolidation or (ii) the surviving or resulting corporation shall send
such a second notice to all such holders on or within 10 days after such
effective date; provided, however, that if such second notice is sent more
than 20 days following the sending of the first notice, such second notice
need only be sent to each stockholder who is entitled to appraisal rights
and who has demanded appraisal of such holder's shares in accordance with
this subsection. An affidavit of the secretary or assistant secretary or of
the transfer agent of the corporation that is required to give either
notice that such notice has been given shall, in the absence of fraud, be
prima facie evidence of the facts stated therein. For purposes of
determining the stockholders entitled to receive either
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notice, each constituent corporation may fix, in advance, a record date
that shall be not more than 10 days prior to the date the notice is given,
provided, that if the notice is given on or after the effective date of the
merger or consolidation, the record date shall be such effective date. If
no record date is fixed and the notice is given prior to the effective
date, the record date shall be the close of business on the day next
preceding the day on which the notice is given.
(e) Within 120 days after the effective date of the merger or
consolidation, the surviving or resulting corporation or any stockholder who has
complied with subsections (a) and (d) hereof and who is otherwise entitled to
appraisal rights, may file a petition in the Court of Chancery demanding a
determination of the value of the stock of all such stockholders.
Notwithstanding the foregoing, at any time within 60 days after the effective
date of the merger or consolidation, any stockholder shall have the right to
withdraw his demand for appraisal and to accept the terms offered upon the
merger or consolidation. Within 120 days after the effective date of the merger
or consolidation, any stockholder who has complied with the requirements of
subsections (a) and (d) hereof, upon written request, shall be entitled to
receive from the corporation surviving the merger or resulting from the
consolidation a statement setting forth the aggregate number of shares not voted
in favor of the merger or consolidation and with respect to which demands for
appraisal have been received and the aggregate number of holders of such shares.
Such written statement shall be mailed to the stockholder within 10 days after
his written request for such a statement is received by the surviving or
resulting corporation or within 10 days after expiration of the period for
delivery of demands for appraisal under subsection (d) hereof, whichever is
later.
(f) Upon the filing of any such petition by a stockholder, service of a
copy thereof shall be made upon the surviving or resulting corporation, which
shall within 20 days after such service file in the office of the Register in
Chancery in which the petition was filed a duly verified list containing the
names and addresses of all stockholders who have demanded payment for their
shares and with whom agreements as to the value of their shares have not been
reached by the surviving or resulting corporation. If the petition shall be
filed by the surviving or resulting corporation, the petition shall be
accompanied by such a duly verified list. The Register in Chancery, if so
ordered by the Court, shall give notice of the time and place fixed for the
hearing of such petition by registered or certified mail to the surviving or
resulting corporation and to the stockholders shown on the list at the addresses
therein stated. Such notice shall also be given by 1 or more publications at
least 1 week before the day of the hearing, in a newspaper of general
circulation published in the City of Wilmington, Delaware or such publication as
the Court deems advisable. The forms of the notices by mail and by publication
shall be approved by the Court, and the costs thereof shall be borne by the
surviving or resulting corporation.
(g) At the hearing on such petition, the Court shall determine the
stockholders who have complied with this section and who have become entitled to
appraisal rights. The Court may require the stockholders who have demanded an
appraisal for their shares and who hold stock represented by certificates to
submit their certificates of stock to the Register in Chancery for notation
thereon of the pendency of the appraisal proceedings; and if any stockholder
fails to comply with such direction, the Court may dismiss the proceedings as to
such stockholder.
(h) After determining the stockholders entitled to an appraisal, the
Court shall appraise the shares, determining their fair value exclusive of any
element of value arising from the accomplishment or expectation of the merger or
consolidation, together with a fair rate of interest, if any, to be paid upon
the amount determined to be the fair value. In determining such fair value, the
Court shall take into account all relevant factors. In determining the fair rate
of interest, the Court may consider all relevant factors, including the rate of
interest which the surviving or resulting corporation would have had to pay to
borrow money during the pendency of the proceeding. Upon application by the
surviving or resulting corporation or by any stockholder entitled to participate
in the appraisal proceeding, the Court may, in its discretion, permit discovery
or other pretrial proceedings and may proceed to trial upon the appraisal prior
to the final determination of the stockholder entitled to an appraisal. Any
stockholder whose name appears on the list filed by the surviving or resulting
corporation pursuant to subsection (f) of this section and who has submitted his
certificates of stock to the Register in Chancery, if such is required, may
participate fully in all proceedings until it is finally determined that he is
not entitled to appraisal rights under this section.
E-3
<PAGE>
<PAGE>
(i) The Court shall direct the payment of the fair value of the shares,
together with interest, if any, by the surviving or resulting corporation to the
stockholders entitled thereto. Interest may be simple or compound, as the Court
may direct. Payment shall be so made to each such stockholder, in the case of
holders of uncertificated stock forthwith, and the case of holders of shares
represented by certificates upon the surrender to the corporation of the
certificates representing such stock. The Court's decree may be enforced as
other decrees in the Court of Chancery may be enforced, whether such surviving
or resulting corporation be a corporation of this State or of any state.
(j) The costs of the proceeding may be determined by the Court and taxed
upon the parties as the Court deems equitable in the circumstances. Upon
application of a stockholder, the Court may order all or a portion of the
expenses incurred by any stockholder in connection with the appraisal
proceeding, including, without limitation, reasonable attorney's fees and the
fees and expenses of experts, to be charged pro rata against the value of all
the shares entitled to an appraisal.
(k) From and after the effective date of the merger or consolidation, no
stockholder who has demanded his appraisal rights as provided in subsection (d)
of this section shall be entitled to vote such stock for any purpose or to
receive payment of dividends or other distributions on the stock (except
dividends or other distributions payable to stockholders of record at a date
which is prior to the effective date of the merger or consolidation); provided,
however, that if no petition for an appraisal shall be filed within the time
provided in subsection (e) of this section, or if such stockholder shall deliver
to the surviving or resulting corporation a written withdrawal of his demand for
an appraisal and an acceptance of the merger or consolidation, either within 60
days after the effective date of the merger or consolidation as provided in
subsection (e) of this section or thereafter with the written approval of the
corporation, then the right of such stockholder to an appraisal shall cease.
Notwithstanding the foregoing, no appraisal proceeding in the Court of Chancery
shall be dismissed as to any stockholder without the approval of the Court, and
such approval may be conditioned upon such terms as the Court deems just.
(l) The shares of the surviving or resulting corporation to which the
shares of such objecting stockholders would have been converted had they
assented to the merger or consolidation shall have the status of authorized and
unissued shares of the surviving or resulting corporation.
1998 UPDATES TO SECTION 262:
Amend Section 262(d)(1), Title 8, Delaware Code, by deleting the word
'his' in each instance where it appears and substituting in lieu thereof the
words 'such stockholder's.'
Amend Section 262(e), Title 8, Delaware Code, by deleting the word 'his'
in each instance where it appears and substituting in lieu thereof the words
'such stockholder's' and by deleting the word 'he' and substituting in lieu
thereof the words 'such stockholder.'
Amend Section 262(h), Title 8, Delaware Code, by deleting the word 'his'
and substituting in lieu thereof the words 'such stockholder's', and by deleting
the word 'he' and substituting in lieu thereof the words 'such stockholder.'
Amend Section 262(k), Title 8, Delaware Code, by deleting the word 'his'
in each instance where it appears and substituting in lieu thereof in only the
second place it appears the words 'such stockholder's.'
E-4
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<PAGE>
<PAGE>
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<PAGE>
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 20. Indemnification of Directors and Officers.
Section 102(b)(7) of the General Corporation Law of the State of Delaware
(the 'Delaware Law') permits a provision in the certificate of incorporation of
each corporation organized thereunder, eliminating or limiting, with certain
exceptions, the personal liability of a director to the corporation or its
stockholders for monetary damages for certain breaches of fiduciary duty as a
director. The Restated Certificate of Incorporation of the Registrant eliminates
the personal liability of directors to the fullest extent permitted by the
Delaware Law.
Section 145 of the Delaware Law ('Section 145'), in summary, empowers a
Delaware corporation, within certain limitations, to indemnify its officers,
directors, employees and agents against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement, actually and reasonably
incurred by them in connection with any suit or proceeding other than by or on
behalf of the corporation, if they acted in good faith and in a manner
reasonably believed to be in or not opposed to the best interest of the
corporation, and, with respect to a criminal action or proceeding, had no
reasonable cause to believe their conduct was unlawful.
With respect to actions by or on behalf of the corporation, Section 145
permits a corporation to indemnify its officers, directors, employees and agents
against expenses (including attorneys' fees) actually and reasonably incurred in
connection with the defense or settlement of such action or suit, provided such
person meets the standard of conduct described in the preceding paragraph,
except that no indemnification is permitted in respect of any claim where such
person has been found liable to the corporation, unless the Court of Chancery or
the court in which such action or suit was brought approves such indemnification
and determines that such person is fairly and reasonably entitled to be
indemnified.
Article VIII of the Restated Certificate of Incorporation of the Registrant
provides for the indemnification of officers and directors and certain other
parties (the 'Indemnified Parties') of the Registrant to the fullest extent
permitted under the Delaware Law.
II-1
<PAGE>
<PAGE>
Item 21. Exhibits and Financial Statement Schedules.
(a) Exhibits
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibits
------- -----------------------------------------------------------------------------------
<S> <C>
2.1 Agreement and Plan of Merger, dated as of July 2, 1998, by and between CCW
Acquisition Corp. and the Registrant.*
2.2 Amendment to Agreement and Plan of Merger, dated as of November 29, 1998, by and
between CCW Acquisition Corp. and the Registrant.**
3.1 Form of Certificate of Incorporation of The Registrant (to become effective upon
consummation of the Merger).
3.2 Form of Bylaws of CCW Acquisition Corp. (to become the Bylaws of the Registrant
upon consummation of the Merger).
5.1 Opinion of Leavy Rosensweig & Hyman as to the legality of the securities.
8.1 Opinion of Paul, Weiss, Rifkind, Wharton & Garrison regarding tax matters.
9.1 Stockholder Agreement, dated as of July 2, 1998, by and between CCW Acquisition
Corp. and Century Communications Corp.***
23.1 Consent of Deloitte & Touche LLP.
23.2 Consent of Leavy Rosensweig & Hyman (contained in Exhibit 5.1 to this Registration
Statement).
23.3 Consent of Paul, Weiss, Rifkind, Wharton & Garrison (contained in Exhibit 8.1 to
this Registration Statement).
23.4 Consent of Donaldson, Lufkin & Jenrette Securities Corporation.
24.1 Powers of Attorney (included on signature page to Registration Statement).
99.1 Non-Cash Election Form to be used in connection with the Merger.
99.2 Form of Letter of Transmittal for Class A Common Stock to be used in connection
with the Merger.
99.3 Form of Letter of Transmittal for Class B Common Stock to be used in connection
with the Merger.
99.4 Form of Letter of Transmittal for Convertible Preferred Stock and Second Series
Convertible Preferred Stock to be used in connection with the Merger.
99.5 Consent of Mark T. Gallogly.
99.6 Consent of Lawrence H. Guffey.
99.7 Consent of Michael Small.
99.8 Consent of Thomas E. McInerney.
99.9 Consent of Anthony J. de Nicola.
99.10 Consent of Rudolph E. Rupert.
</TABLE>
------------------------
* Attached as Appendix A to the Information Statement/Prospectus
filed as part of this Registration Statement.
** Attached as Appendix B to the Information Statement/Prospectus
filed as part of this Registration Statement.
*** Attached as Appendix D to the Information Statement/Prospectus
filed as part of this Registration Statement.
II-2
<PAGE>
<PAGE>
(b) Report, Opinion or Appraisal
The opinion of Donaldson, Lufkin & Jenrette Securities Corporation,
financial advisor to the Registrant, dated November 29, 1998, is attached as
Appendix C to the Information Statement/Prospectus filed as part of this
Registration Statement.
II-3
<PAGE>
<PAGE>
Item 22. Undertakings.
(a) The undersigned Registrant hereby undertakes to file, during any period
in which offers or sales are being made, a post-effective amendment to this
registration statement: (i) to include any prospectus required by Section
10(a)(3) of the Securities Act of 1933; (ii) to reflect in the prospectus any
facts or events arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information set forth in
the registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any deviation
from the low or high and of the estimated maximum offering range may be
reflected in the form of prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price represent no more
than a 20% change in the maximum aggregate offering price set forth in the
'Calculation of Registration Fee' table in the effective registration statement;
and (iii) to include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement. The
undersigned Registrant hereby undertakes that, for the purpose of determining
any liability under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof. The undersigned
Registrant hereby undertakes to remove from registration by means of a post-
effective amendment any of the securities being registered which remain unsold
at the termination of the offering.
(b) The undersigned Registrant hereby undertakes as follows: that prior to
any public reoffering of the securities registered hereunder through use of a
prospectus that is a part of this Registration Statement, by any person or party
who is deemed to be an underwriter within the meaning of Rule 145(c), the issuer
undertakes that such reoffering prospectus will contain the information called
for by the applicable registration with respect to reofferings by persons who
may be deemed to be underwriters, in addition to the information called for by
the other Items of the applicable form. The Registrant undertakes that every
prospectus (i) that is filed pursuant to the immediately preceding sentence or
(ii) that purports to meet the requirements of Section 10(a)(3) of the
Securities Act and is used in connection with an offering of securities subject
to Rule 415, will be filed as a part of an amendment to the registration
statement and will not be used until such amendment is effective, and that, for
purposes of determining any liability under the Securities Act, each such
post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(d) The undersigned Registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Items 4, 10(b), 11, or 13 of this Form S-4, within one business day of receipt
of such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through the
date of responding to the request.
(e) The undersigned Registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
(f) Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended, may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the
II-4
<PAGE>
<PAGE>
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that such a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in Act and will be
governed by the final adjudication of such issue.
II-5
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on December 8, 1998.
CENTENNIAL CELLULAR CORP.
By /S/ BERNARD P. GALLAGHER
____________________________________
Bernard P. Gallagher
Chairman of the Board,
Chief Executive Officer and Director
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Bernard P. Gallagher, Rudy J. Graf, Scott
N. Schneider and David Z. Rosensweig and each of them, with full power to act
without the other, his true and lawful attorney-in-fact and agent, with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments, including
post-effective amendments, to this Registration Statement, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary fully to all intents and purposes as
he might or could do in person thereby ratifying and confirming all that said
attorney-in-fact and agents of any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- ------------------------------------------ --------------------------------------------- ------------------
<S> <C> <C>
/S/ BERNARD P. GALLAGHER Chairman of the Board, Chief Executive December 8, 1998
- ------------------------------------------ Officer and Director (Principal Executive
Bernard P. Gallagher Officer)
/S/ RUDY J. GRAF President, Chief Operating Officer and December 8, 1998
- ------------------------------------------ Director
Rudy J. Graf
/S/ SCOTT N. SCHNEIDER Chief Financial Officer, Treasurer and December 8, 1998
- ------------------------------------------ Director (Principal Financial Officer)
Scott N. Schneider
</TABLE>
II-6
<PAGE>
<PAGE>
<TABLE>
<S> <C> <C>
/S/ DAVID Z. ROSENSWEIG Secretary and Director December 8, 1998
- ------------------------------------------
David Z. Rosensweig
/S/ DARYL A. FERGUSON Director December 8, 1998
- ------------------------------------------
Daryl A. Ferguson
/S/ WILLIAM M. KRAUS Director December 8, 1998
- ------------------------------------------
William M. Kraus
/S/ PETER J. SOLOMON Director December 8, 1998
- ------------------------------------------
Peter J. Solomon
/S/ FRANK TOW Director December 8, 1998
- ------------------------------------------
Frank Tow
/S/ THOMAS E. BUCKS Vice President, Controller December 8, 1998
- ------------------------------------------
Thomas E. Bucks
</TABLE>
II-7
<PAGE>
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibits
- ------- ------------------------------------------------------------------------------------------------------
<C> <S>
2.1 Agreement and Plan of Merger, dated as of July 2, 1998, by and between CCW Acquisition Corp. and the
Registrant.*
2.2 Amendment to Agreement and Plan of Merger, dated as of November 29, 1998, by and between CCW
Acquisition Corp. and the Registrant.**
3.1 Form of Certificate of Incorporation of The Registrant (to become effective upon consummation of the
Merger).
3.2 Form of Bylaws of CCW Acquisition Corp. (to become the Bylaws of the Registrant upon consummation of
the Merger).
5.1 Opinion of Leavy Rosensweig & Hyman as to the legality of the securities.
8.1 Opinion of Paul, Weiss, Rifkind, Wharton & Garrison regarding tax matters.
9.1 Stockholder Agreement, dated as of July 2, 1998, by and between CCW Acquisition Corp. and Century
Communications Corp.***
23.1 Consent of Deloitte & Touche LLP.
23.2 Consent of Leavy Rosensweig & Hyman (contained in Exhibit 5.1 to this Registration Statement).
23.3 Consent of Paul, Weiss, Rifkind, Wharton & Garrison (contained in Exhibit 8.1 to this Registration
Statement).
23.4 Consent of Donaldson, Lufkin & Jenrette Securities Corporation.
24.1 Powers of Attorney (included on signature page to Registration Statement).
99.1 Non-Cash Election Form to be used in connection with the Merger.
99.2 Form of Letter of Transmittal for Class A Common Stock to be used in connection with the Merger.
99.3 Form of Letter of Transmittal for Class B Common Stock to be used in connection with the Merger.
99.4 Form of Letter of Transmittal for Convertible Preferred Stock and Second Series Convertible Preferred
Stock to be used in connection with the Merger.
99.5 Consent of Mark T. Gallogly.
99.6 Consent of Lawrence H. Guffey.
99.7 Consent of Michael Small.
99.8 Consent of Thomas E. McInerney.
99.9 Consent of Anthony J. de Nicola.
99.10 Consent of Rudolph E. Rupert.
</TABLE>
- ------------
* Attached as Appendix A to the Information Statement/Prospectus filed as part
of this Registration Statement.
** Attached as Appendix B to the Information Statement/Prospectus filed as part
of this Registration Statement.
*** Attached as Appendix D to the Information Statement/Prospectus filed as part
of this Registration Statement.
STATEMENT OF DIFFERENCES
------------------------
The copyright symbol shall be expressed as ............................... 'c'
<PAGE>
<PAGE>
FORM OF
CERTIFICATE OF AMENDMENT
TO THE
CERTIFICATE OF INCORPORATION
OF
CCW ACQUISITION CORP.
---------------------------
CCW ACQUISITION CORP., a corporation organized and existing under
the laws of the State of Delaware (the "Corporation"), hereby certifies as
follows:
FIRST: That the following resolutions were duly adopted by the
Board of Directors of the Corporation, setting forth a proposed amendment to the
Certificate of Incorporation of the Corporation, declaring such amendment to be
advisable and directing that such amendment be submitted to the stockholders of
the Corporation for their approval. The resolutions are as follows:
"RESOLVED, that there is hereby adopted an amendment to the
Corporation's Certificate of Incorporation pursuant to which the name of
the Corporation shall be changed to "Centennial Cellular Corp."
effective upon the filing of the Certificate of Merger, and, in
connection with such change, Article FIRST of the Corporation's
Certificate of Incorporation shall be amended to read in its entirety as
follows:
'FIRST: The name of the Corporation is
Centennial Cellular Corp.'
RESOLVED, that in connection with the Merger, and as further
contemplated by the Merger Agreement, there is hereby adopted an amendment to
the Corporation's Certificate of Incorporation pursuant to which the authorized
capital stock of the Corporation shall be changed from 1,000 shares, consisting
entirely of Common Stock, par value $.01 per share ("Common Stock"), to
15,000,000 shares, consisting entirely of Common Stock, and, in connection with
such change, Article FOURTH of the Corporation's Certificate of Incorporation
shall be amended to read in its entirety as follows:
<PAGE>
<PAGE>
'FOURTH: The total number of shares of stock which the
Corporation shall have authority to issue is 15,000,000 shares, par
value $.01 per share. All such shares shall be of one class and shall be
designated Common Stock.'
FURTHER RESOLVED, that the Board of Directors of the Corporation
hereby declares that the foregoing amendment to the Corporation's
Certificate of Incorporation is desirable and in the best interests of
the Corporation, and hereby recommends that the amendment be submitted
to the stockholders of the Corporation for their approval pursuant to
Section 242(b) of the General Corporation Law of the State of Delaware."
SECOND: That thereafter the amendment to the Restated Certificate
of Incorporation of the Corporation effected by this Certificate was duly
authorized by the affirmative vote of the holders of not less than a majority of
the outstanding shares of capital stock of the Corporation entitled to vote
thereon, after having been declared advisable by the Board of Directors of the
Corporation, all in accordance with the provisions of Sections 228 and 242 of
the General Corporation Law of the State of Delaware.
2
<PAGE>
<PAGE>
IN WITNESS WHEREOF, CCW ACQUISITION CORP. has caused this
Certificate to be signed by Thomas E. McInerney, its President, who hereby
acknowledges under penalties of perjury that the facts herein stated are true
and that this Certificate is his act and deed, as of the ___ day of December
1998.
CCW ACQUISITION CORP.
By _____________________________________
Thomas E. McInerney,
President
3
<PAGE>
<PAGE>
CERTIFICATE OF INCORPORATION
OF
CCW ACQUISITION CORP.
-------------
FIRST: The name of the Corporation is:
CCW Acquisition Corp.
SECOND: The address of the registered office of the
Corporation in the State of Delaware is 1013 Centre Road, in the City of
Wilmington, County of New Castle. The name of the Corporation's registered agent
at such address is Corporation Service Company.
THIRD: The purposes for which the Corporation is formed are
to engage in any lawful act or activity for which corporations may be organized
under the Delaware General Corporation Law.
FOURTH: The total number of shares of stock which the
Corporation shall have authority to issue is 1,000 shares, par value $.01 per
share. All such shares shall be of one class and shall be designated Common
Stock.
FIFTH: The name and mailing address of the sole incorporator
of the Corporation are as follows:
Karen C. Wiedemann
45 Rockefeller Plaza
New York, New York 10111
<PAGE>
<PAGE>
SIXTH: In furtherance and not in limitation of the powers
conferred by the laws of the State of Delaware, the Board of Directors of the
Corporation is expressly authorized and empowered to make, alter or repeal the
By-laws of the Corporation, subject to the power of the stockholders of the
Corporation to alter or repeal any By-law made by the Board of Directors.
SEVENTH: The Corporation reserves the right at any time and
from time to time to amend, alter, change or repeal any provisions contained in
this Certificate of Incorporation; and other provisions authorized by the laws
of the State of Delaware at the time in force may be added or inserted, in the
manner now or hereafter prescribed by law; and all rights, preferences and
privileges of whatsoever nature conferred upon stockholders, directors or any
other persons whomsoever by and pursuant to this Certificate of Incorporation in
its present form or as hereafter amended are granted subject to the right
reserved in this Article.
EIGHTH: (1) The Corporation shall, to the fullest extent
permitted by Section 145 of the Delaware General Corporation Law, as the same
may be amended and supplemented, indemnify any and all persons whom it shall
have power to indemnify under said section from and against any and all of the
expenses, liabilities and other matters referred to in or covered by said
section, and the indemnification provided for herein shall not be deemed
exclusive of any other rights to which those indemnified may be entitled under
any By-law, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in his or her official capacity and as to action in
another capacity while holding such office, and shall continue as to a person
who has ceased to be a director, officer, employee or agent and shall inure to
the benefit of the heirs, executors and administrators of such a person.
2
<PAGE>
<PAGE>
(2) No person shall be personally liable to the Corporation
or its stockholders for monetary damages for breach of fiduciary duty as a
director, provided, however, that the foregoing shall not eliminate or limit
the liability of a director (i) for any breach of the director's duty of
loyalty to the Corporation or its stockholders, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation of
law, (iii) under Section 174 of the General Corporation Law of the State of
Delaware or (iv) for any transaction from which the director derived an
improper personal benefit.
IN WITNESS WHEREOF, the undersigned, being the incorporator
hereinabove named, for the purpose of forming a corporation pursuant to the
General Corporation Law of the State of Delaware, does make this Certificate,
hereby declaring, certifying and acknowledging under penalties of perjury that
the facts herein stated are true and that this Certificate is her act and deed,
and accordingly has hereunto set her hand, as of the 29th day of June, 1998.
/s/ Karen C. Wiedemann
----------------------------
Karen C. Wiedemann
Incorporator
3
<PAGE>
<PAGE>
================================================================================
FORM OF
AMENDED AND RESTATED
BY-LAWS
OF
CCW ACQUISITION CORP.
------------------
Incorporated under the Laws of the
State of Delaware
------------------
As amended through
December __, 1998
================================================================================
<PAGE>
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE I Offices.......................................................................1
ARTICLE II Meetings of Stockholders......................................................1
Section 1 Place of Meetings.............................................................1
Section 2 Annual Meeting................................................................1
Section 3 Special Meetings..............................................................1
Section 4 Notice of Meetings............................................................2
Section 5 List of Stockholders..........................................................2
Section 6 Quorum........................................................................2
Section 7 Voting........................................................................3
Section 8 Proxies.......................................................................3
Section 9 Action Without a Meeting......................................................3
ARTICLE III Board of Directors............................................................4
Section 1 Powers........................................................................4
Section 2 Election and Term.............................................................4
Section 3 Number........................................................................4
Section 4 Quorum and Manner of Acting...................................................4
Section 5 Organization Meeting..........................................................4
Section 6 Regular Meetings..............................................................5
Section 7 Special Meetings; Notice......................................................5
Section 8 Removal of Directors..........................................................5
Section 9 Resignations..................................................................5
Section 10 Vacancies.....................................................................5
Section 11 Committees....................................................................6
Section 12 Compensation of Directors.....................................................6
Section 13 Action Without a Meeting......................................................6
Section 14 Telephonic Participation in Meetings..........................................7
ARTICLE IV Officers......................................................................7
Section 1 Principal Officers............................................................7
Section 2 Election and Term of Office...................................................7
Section 3 Other Officers................................................................7
Section 4 Removal.......................................................................7
Section 5 Resignations..................................................................7
Section 6 Vacancies.....................................................................7
Section 7 Chairman of the Board.........................................................8
</TABLE>
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<TABLE>
<CAPTION>
Page
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<S> <C> <C>
Section 8 President.....................................................................8
Section 9 Vice President................................................................8
Section 10 Treasurer.....................................................................8
Section 11 Secretary ....................................................................8
Section 12 Salaries......................................................................9
ARTICLE V Indemnification of Officers and Directors.....................................9
Section 1 Right of Indemnification......................................................9
Section 2 Expenses......................................................................9
Section 3 Other Rights of Indemnification...............................................9
ARTICLE VI Shares and Their Transfer....................................................10
Section 1 Certificate for Stock........................................................10
Section 2 Stock Certificate Signature..................................................10
Section 3 Stock Ledger.................................................................10
Section 4 Cancellation.................................................................10
Section 5 Registrations of Transfers of Stock..........................................10
Section 6 Regulations..................................................................11
Section 7 Lost, Stolen, Destroyed or
Mutilated Certificates.....................................................11
Section 8 Record Dates.................................................................11
ARTICLE VII Miscellaneous Provisions.....................................................11
Section 1 Corporate Seal...............................................................11
Section 2 Voting of Stocks Owned by the
Corporation................................................................12
Section 3 Dividends....................................................................12
ARTICLE VIII Amendments...................................................................12
</TABLE>
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BY-LAWS
OF
CCW ACQUISITION CORP.
(a Delaware corporation)
----------
ARTICLE I
OFFICES
The registered office of the Corporation in the State of Delaware
shall be located in the City of Wilmington, County of New Castle. The
Corporation may establish or discontinue, from time to time, such other offices
within or without the State of Delaware as may be deemed proper for the conduct
of the Corporation's business.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. Place of Meetings. All meetings of stockholders shall
be held at such place or places, within or without the State of Delaware, as may
from time to time be fixed by the Board of Directors, or as shall be specified
in the respective notices, or waivers of notice, thereof.
Section 2. Annual Meeting. The annual meeting of stockholders for
the election of Directors and the transaction of other business shall be held on
such date and at such place as may be designated by the Board of Directors. At
each annual meeting the stockholders entitled to vote shall elect a Board of
Directors and may transact such other proper business as may come before the
meeting.
Section 3. Special Meetings. A special meeting of the
stockholders, or of any class thereof entitled to vote, for any purpose or
purposes, may be called at any time by the Chairman of the Board, if any, the
Chief Executive Officer or by order of the Board of Directors and shall be
called by the Secretary upon the written request of stockholders holding of
record at least 50% of the outstanding shares of stock of the Corporation
entitled to
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vote at such meeting. Such written request shall state the purpose or purposes
for which such meeting is to be called.
Section 4. Notice of Meetings. Except as otherwise provided by
law, written notice of each meeting of stockholders, whether annual or special,
stating the place, date and hour of the meeting shall be given not less than
twenty days or more than sixty days before the date on which the meeting is to
be held to each stockholder of record entitled to vote thereat by delivering a
notice thereof to him personally or by mailing such notice in a postage prepaid
envelope directed to him at his address as it appears on the records of the
Corporation, unless he shall have filed with the Secretary of the Corporation a
written request that notices intended for him be directed to another address, in
which case such notice shall be directed to him at the address designated in
such request. Notice shall not be required to be given to any stockholder who
shall waive such notice in writing, whether prior to or after such meeting, or
who shall attend such meeting in person or by proxy unless such attendance is
for the express purpose of objecting, at the beginning of such meeting, to the
transactions of any business because the meeting is not lawfully called or
convened. Every notice of a special meeting of the stockholders, besides the
time and place of the meeting, shall state briefly the objects or purposes
thereof.
Section 5. List of Stockholders. It shall be the duty of the
Secretary or other officer of the Corporation who shall have charge of the stock
ledger to prepare and make, at least ten days before every meeting of the
stockholders, a complete list of the stockholders entitled to vote thereat,
arranged in alphabetical order, and showing the address of each stockholder and
the number of shares registered in his name. Such list shall be open to the
examination of any stockholder, for any purpose germane to the meeting, during
ordinary business hours, for a period of at least ten days prior to the meeting,
either at a place within the city where the meeting is to be held, which place
shall be specified in the notice of the meeting, or, if not so specified, at the
place where the meeting is to be held. The list shall be kept and produced at
the time and place of the meeting during the whole time thereof and subject to
the inspection of any stockholder who may be present. The original or duplicate
ledger shall be the only evidence as to who are the stockholders entitled to
examine such list or the books of the Corporation or to vote in person or by
proxy at such meeting.
Section 6. Quorum. At each meeting of the stockholders, the
holders of record of a majority of the issued and outstanding stock of the
Corporation entitled to vote at such meeting, present in person or by proxy,
shall constitute a quorum for the transaction of business, except where
otherwise provided by law, the Articles of Incorporation or these By-laws. In
the
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absence of a quorum, any officer entitled to preside at, or act as Secretary
of, such meeting shall have the power to adjourn the meeting from time to time
until a quorum shall be constituted.
Section 7. Voting. Every stockholder of record who is entitled to
vote shall at every meeting of the stockholders be entitled to one vote for each
share of stock held by him on the record date; except, however, that shares of
its own stock belonging to the Corporation or to another corporation, if a
majority of the shares entitled to vote in the election of directors of such
other corporation is held by the Corporation, shall neither be entitled to vote
nor counted for quorum purposes. Nothing in this Section shall be construed as
limiting the right of the Corporation to vote its own stock held by it in a
fiduciary capacity. At all meetings of the stockholders, a quorum being present,
all matters shall be decided by majority vote of the shares of stock entitled to
vote held by stockholders present in person or by proxy, except as otherwise
required by law or the Articles of Incorporation. Unless demanded by a
stockholder of the Corporation present in person or by proxy at any meeting of
the stockholders and entitled to vote thereat or so directed by the chairman of
the meeting or required by law, the vote thereat on any question need not be by
written ballot. On a vote by written ballot, each ballot shall be signed by the
stockholder voting, or in his name by his proxy, if there be such proxy, and
shall state the number of shares voted by him and the number of votes to which
each share is entitled.
Section 8. Proxies. Each stockholder entitled to vote at a
meeting of stockholders or to express consent to corporate action in writing
without a meeting may authorize another person or persons to act for him by
proxy. A proxy acting for any stockholder shall be duly appointed by an
instrument in writing subscribed by such stockholder. No proxy shall be valid
after the expiration of three years from the date thereof unless the proxy
provides for a longer period and conforms with applicable law.
Section 9. Action Without a Meeting. Any action required to be
taken at any annual or special meeting of stockholders or any action which may
be taken at any annual or special meeting of stockholders may be taken without a
meeting, without prior notice and without a vote, if a consent in writing
setting forth the action so taken shall be signed by the holders of outstanding
stock having not less than the minimum number of votes that would be necessary
to authorize or take such action at a meeting at which all shares entitled to
vote thereon were present and voted. Prompt notice of the taking of the
corporate action without a meeting by less than unanimous written consent shall
be given to those stockholders who have not consented in writing.
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ARTICLE III
BOARD OF DIRECTORS
Section 1. Powers. The business and affairs of the Corporation
shall be managed under the direction of the Board of Directors.
Section 2. Election and Term. Except as otherwise provided by
law, Directors shall be elected at the annual meeting of stockholders and shall
hold office until the next annual meeting of stockholders and until their
successors are elected and qualify, or until they sooner die, resign or are
removed. At each annual meeting of stockholders, at which a quorum is present,
the persons receiving a plurality of the votes cast shall be the Directors.
Acceptance of the office of Director may be expressed orally or in writing, and
attendance at the organization meeting shall constitute such acceptance.
Section 3. Number. The number of Directors shall be such number
as determined from time to time by the Board of Directors, but shall be not less
than three (3) nor more than nine (9), and initially shall be nine (9).
Section 4. Quorum and Manner of Acting. Unless otherwise provided
by law, the presence of a majority of the whole Board of Directors shall be
necessary to constitute a quorum for the transaction of business. In the absence
of a quorum, a majority of the Directors present may adjourn the meeting from
time to time until a quorum shall be present. Notice of any adjourned meeting
need not be given. At all meetings of Directors, a quorum being present, all
matters shall be decided by the affirmative vote of a majority of the Directors
present, except as otherwise required by law. The Board of Directors may hold
its meetings at such place or places within or without the State of Delaware as
the Board of Directors may from time to time determine or as shall be specified
in the respective notices, or waivers of notice, thereof.
Section 5. Organization Meeting. Immediately after each annual
meeting of stockholders for the election of Directors the Board of Directors
shall meet at the place of the annual meeting of stockholders for the purpose of
organization, the election of officers and the transaction of other business.
Notice of such meeting need not be given. If such meeting is held at any other
time or place, notice thereof must be given as hereinafter provided for special
meetings of the Board of Directors, subject to the execution of a waiver of the
notice thereof signed by, or the attendance at such meeting of, all Directors
who may not have received such notice.
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Section 6. Regular Meetings. Regular meetings of the Board of
Directors may be held at such place, within or without the State of Delaware, as
shall from time to time be determined by the Board of Directors. After there has
been such determination, and notice thereof has been once given to each member
of the Board of Directors as hereinafter provided for special meetings, regular
meetings may be held without further notice being given.
Section 7. Special Meetings; Notice. Special meetings of the
Board of Directors shall be held whenever called by the Chairman of the Board,
if any, the Chief Executive Officer or by any three Directors. Notice of each
such meeting shall be mailed to each Director, addressed to him at his residence
or usual place of business, at least five days before the date on which the
meeting is to be held, or shall be sent to him at such place by telgraph, cable,
radio or wireless, or be delivered personally or by telephone, not later than
the day before the day on which such meeting is to be held. Each such notice
shall state the time and place of the meeting and, as may be required, the
purposes thereof. Notice of any meeting of the Board of Directors need not be
given to any Director if he shall sign a written waiver thereof either before or
after the time stated therein for such meeting, or if he shall be present at the
meeting. Unless limited by law, the Articles of Incorporation, these By-laws or
the terms of the notice thereof, any and all business may be transacted at any
meeting without the notice thereof having specifically identified the matters to
be acted upon.
Section 8. Removal of Directors. Any Director or the entire Board
of Directors may be removed, with or without cause, at any time, by action of
the holders of record of the majority of the issued and outstanding stock of the
Corporation (a) present in person or by proxy at a meeting of holders of such
stock and entitled to vote thereon or (b) by a consent in writing in the manner
contemplated in Section 9 of Article II, and the vacancy or vacancies in the
Board of Directors caused by any such removal may be filled by action of such a
majority at such meeting or at any subsequent meeting or by consent.
Section 9. Resignations. Any Director of the Corporation may
resign at any time by giving written notice to the Chairman of the Board, if
any, the Board, the President or the Secretary of the Corporation. The
resignation of any Director shall take effect upon receipt of notice thereof or
at such later time as shall be specified in such notice; and, unless otherwise
specified therein, the acceptance of such resignation shall not be necessary to
make it effective.
Section 10. Vacancies. Any newly created directorships and
vacancies occurring in the Board by reason of death,
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resignation, retirement, disqualification or removal, with or without cause, may
be filled (i) by the action of a majority of the directors then in office,
though less than a quorum, or by a sole remaining director, or (ii) by the
action of the holders of record of the majority of the issued and outstanding
stock of the Corporation (a) present in person or by proxy at a meeting of
holders of such stock and entitled to vote thereon or (b) by a consent in
writing in the manner contemplated in Section 9 of Article II. The Director so
chosen, whether selected to fill a vacancy or elected to a new directorship,
shall hold office until the next meeting of stockholders at which the election
of Directors is in the regular order of business, and until his successor has
been elected and qualifies, or until he sooner dies, resigns or is removed.
Section 11. Committees. The Board of Directors may, by resolution
passed by a majority of the entire Board of Directors, designate one or more
committees, each committee to consist of one or more of the directors of the
Corporation. The Board of Directors may designate one or more directors as
alternate members of any committee, who may replace any absent or disqualified
member at any meeting of such committee. In the absence or disqualification of a
member of a committee, and in the absence of a designation by the Board of
Directors of an alternate member to replace the absent or disqualified member,
the member or members thereof present at any meeting and not disqualified from
voting, whether or not he or they constitute a quorum, may unanimously appoint
another member of the Board of Directors to act at the meeting in the place of
any absent or disqualified member. Any committee, to the extent allowed by law
and provided in the resolution establishing such committee, shall have and may
exercise all the powers and authority of the Board of Directors in the
management of the business and affairs of the Corporation. Each committee shall
keep regular minutes and report to the Board of Directors when required.
Section 12. Compensation of Directors. Directors, as such, shall
not receive any stated salary for their services, but, by resolution of the
Board of Directors, a specific sum fixed by the Board plus expenses may be
allowed for attendance at each regular or special meeting of the Board or any
committee thereof, provided, however, that nothing herein contained shall be
construed to preclude any Director from serving the Corporation or any parent or
subsidiary corporation thereof in any other capacity and receiving compensation
therefor.
Section 13. Action Without a Meeting. Any action required or
permitted to be taken at any meeting of the Board of Directors may be taken
without a meeting if a written consent thereto is signed by all members of the
Board, and such written consent is filed with the minutes or proceedings of the
Board.
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Section 14. Telephonic Participation in Meetings. Members of the
Board of Directors may participate in a meeting of the Board by means of
conference telephone or similar communications equipment by means of which all
persons participating in the meeting can hear each other, and such participation
shall constitute presence in person at such meeting.
ARTICLE IV
OFFICERS
Section 1. Principal Officers. The Board of Directors shall elect
a President, a Secretary and a Treasurer, and may in addition elect one or more
Vice Presidents and such other officers as it deems fit; the President, the
Secretary, the Treasurer, and the Vice Presidents (if any) being the principal
officers of the Corporation. One person may hold, and perform the duties of, any
two or more of said offices.
Section 2. Election and Term of Office. The principal officers of
the Corporation shall be elected annually by the Board of Directors at the
organization meeting thereof. Each such officer shall hold office until his
successor shall have been elected and shall qualify, or until his earlier death,
resignation or removal.
Section 3. Other Officers. In addition, the Board of Directors
may elect such other officers as they deem fit. Any such other officers chosen
by the Board of Directors shall be subordinate officers and shall hold office
for such period, have such authority and perform such duties as the Board of
Directors or the President from time to time determine.
Section 4. Removal. Any officer may be removed, either with or
without cause, at any time, by resolution adopted by the Board of Directors at
any regular meeting of the Board, or at any special meeting of the Board called
for that purpose, at which a quorum is present.
Section 5. Resignations. Any officer may resign at any time by
giving written notice to the President, the Secretary or the Board of Directors.
Any such resignation shall take effect upon receipt of such notice or at any
later time specified therein; and, unless otherwise specified therein, the
acceptance of such resignation shall not be necessary to make it effective.
Section 6. Vacancies. A vacancy in any office may be filled for
the unexpired portion of the term in the manner prescribed in these By-laws for
election or appointment to such office for such term.
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Section 7. Chairman of the Board. The Chairman of the Board of
Directors, if one has been elected, shall preside if present at all meetings of
the Board of Directors, and he shall have and perform such other duties as from
time to time may be assigned to him by the Board of Directors.
Section 8. President. The President shall be the chief executive
officer of the Corporation and shall have the general powers and duties of
supervision and management usually vested in the office of president of a
corporation. He shall preside at all meetings of the stockholders if present
thereat, and at all meetings of the Board of Directors, and shall have general
supervision, direction and control of the business of the Corporation. Except as
the Board of Directors shall authorize the execution thereof in some other
manner, he shall execute bonds, mortgages, and other contracts on behalf of the
Corporation, and shall cause the seal to be affixed to any instrument requiring
it and when so affixed the seal shall be attested by the signature of the
Secretary or the Treasurer.
Section 9. Vice President. Each Vice President, if any have been
elected, shall have such powers and shall perform such duties as shall be
assigned to him by the President or the Board of Directors.
Section 10. Treasurer. The Treasurer shall have charge and
custody of, and be responsible for, all funds and securities of the Corporation.
He shall exhibit at all reasonable times his books of account and records to any
of the Directors of the Corporation upon application during business hours at
the office of the Corporation where such books and records shall be kept; when
requested by the Board of Directors, he shall render a statement of the
condition of the finances of the Corporation at any meeting of the Board or at
the annual meeting of stockholders; he shall receive, and give receipt for,
moneys due and payable to the Corporation from any source whatsoever; in
general, he shall perform all the duties incident to the office of Treasurer and
such other duties as from time to time may be assigned to him by the President
or the Board of Directors. The Treasurer shall give such bond, if any, for the
faithful discharge of his duties as the Board of Directors may require.
Section 11. Secretary. The Secretary, if present, shall act as
secretary at all meetings of the Board of Directors and of the stockholders and
keep the minutes thereof in a book or books to be provided for that purpose; he
shall see that all notices required to be given by the Corporation are duly
given and served; he shall have charge of the stock records of the Corporation;
he shall see that all reports, statements and other documents required by law
are properly kept and filed; and in general he shall perform all the duties
incident to the office of
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Secretary and such other duties as from time to time may be assigned to him by
the President or the Board of Directors.
Section 12. Salaries. The salaries of the principal officers
shall be fixed from time to time by the Board of Directors or, if one has been
established, the Compensation Committee of the Board of Directors, and the
salaries of any other officers may be fixed by the President.
ARTICLE V
INDEMNIFICATION OF OFFICERS AND DIRECTORS
Section 1. Right of Indemnification. Every person now or
hereafter serving as a Director or officer of the Corporation and every such
Director or officer serving at the request of the Corporation as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, shall be indemnified by the Corporation in accordance
with and to the fullest extent permitted by law for the defense of, or in
connection with, any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative.
Section 2. Expenses. Expenses (including attorneys' fees)
incurred in defending a civil, criminal, administrative, or investigative
action, suit or proceeding shall be paid by the Corporation in advance of the
final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such Director or officer to repay such amount if
it shall ultimately be determined that he is not entitled to be indemnified by
the Corporation as authorized in this Article V.
Section 3. Other Rights of Indemnification. The right of
indemnification herein provided shall not be deemed exclusive of any other
rights to which any such Director or officer may now or hereafter be entitled
under any by-law, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office, and shall continue as to a person
who has ceased to be a Director or officer and shall inure to the benefit of the
heirs, executors and administrators of such person.
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ARTICLE VI
SHARES AND THEIR TRANSFER
Section 1. Certificate for Stock. Every stockholder of the
Corporation shall be entitled to a certificate or certificates, to be in such
form as the Board of Directors shall prescribe, certifying the number of shares
of the capital stock of the Corporation owned by him. No certificate shall be
issued for partly paid shares.
Section 2. Stock Certificate Signature. The certificates for such
stock shall be numbered in the order in which they shall be issued and shall be
signed by the President or any Vice President and by the Secretary or an
Assistant Secretary or the Treasurer of the Corporation, and its seal shall be
affixed thereto. If such certificate is countersigned (1) by a transfer agent
other than the Corporation or its employee, or, (2) by a registrar other than
the Corporation or its employee, the signatures of such officers of the
Corporation may be facsimiles. In case any officer of the Corporation who has
signed, or whose facsimile signature has been placed upon, any such certificate
shall have ceased to be such officer before such certificate is issued, it may
be issued by the Corporation with the same effect as if he were such officer at
the date of issue.
Section 3. Stock Ledger. A record shall be kept by the Secretary
or by any other officer, employee or agent designated by the Board of Directors
of the name of each person, firm or corporation holding capital stock of the
Corporation, the number of shares represented by, and the respective dates of,
each certificate for such capital stock, and in case of cancellation of any such
certificate, the respective dates of cancellation.
Section 4. Cancellation. Every certificate surrendered to the
Corporation for exchange or registration of transfer shall be canceled, and no
new certificate or certificates shall be issued in exchange for any existing
certificate until such existing certificate shall have been so canceled, except,
subject to Section 7 of this Article VI, in cases provided for by applicable
law.
Section 5. Registrations of Transfers of Stock. Registrations of
transfers of shares of the capital stock of the Corporation shall be made on the
books of the Corporation by the registered holder thereof, or by his attorney
thereunto authorized by power of attorney duly executed and filed with the
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Secretary of the Corporation or with a transfer clerk or a transfer agent
appointed as in Section 6 of this Article VI provided, and on surrender of the
certificate or certificates for such shares properly endorsed and the payment of
all taxes thereon. The person in whose name shares of stock stand on the books
of the Corporation shall be deemed the owner thereof for all purposes as regards
the Corporation, provided, however, that whenever any transfer of shares shall
be made for collateral security, and not absolutely, it shall be so expressed in
the entry of the transfer if, when the certificates are presented to the
Corporation for transfer, both the transferor and the transferee request the
Corporation to do so.
Section 6. Regulations. The Board of Directors may make such
rules and regulations as it may deem expedient, not inconsistent with the
Articles of Incorporation or these By- laws, concerning the issue, transfer and
registration of certificates for shares of the stock of the Corporation. It may
appoint, or authorize any principal officer or officers to appoint, one or more
transfer clerks or one or more transfer agents and one or more registrars, and
may require all certificates of stock to bear the signature or signatures of any
of them.
Section 7. Lost, Stolen, Destroyed or Mutilated Certificates.
Before any certificates for stock of the Corporation shall be issued in exchange
for certificates which shall become mutilated or shall be lost, stolen or
destroyed, proper evidence of such loss, theft, mutilation or destruction shall
be procured for the Board of Directors, if it so requires.
Section 8. Record Dates. For the purpose of determining the
stockholders entitled to notice of or to vote at any meeting of stockholders or
any adjournment thereof, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock or for the purpose of any
other lawful action, the Board of Directors may fix, in advance, a date as a
record date for any such determination of stockholders. Such record date shall
not be more than sixty or less than twenty days before the date of such meeting,
or more than sixty days prior to any other action.
ARTICLE VII
MISCELLANEOUS PROVISIONS
Section 1. Corporate Seal. The Board of Directors shall provide a
corporate seal, which shall be in such form as the Board of Directors may
decide. The Secretary shall be the
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custodian of the seal. The Board of Directors may authorize a duplicate seal
to be kept and used by any other officer.
Section 2. Voting of Stocks Owned by the Corporation. The Board
of Directors may authorize any person on behalf of the Corporation to attend,
vote and grant proxies to be used at any meeting of stockholders of any
corporation (except the Corporation) in which the Corporation may hold stock.
Section 3. Dividends. Subject to the provisions of the Articles
of Incorporation, the Board of Directors may, out of funds legally available
therefor, at any regular or special meeting declare dividends upon the capital
stock of the Corporation as and when they deem expedient. Before declaring any
dividend there may be set apart out of any funds of the Corporation available
for dividends such sum or sums as the Directors from time to time in their
discretion deem proper for working capital or as a reserve fund to meet
contingencies or for equalizing dividends or for such other purposes as the
Board of Directors shall deem conducive to the interests of the Corporation.
ARTICLE VIII
AMENDMENTS
These By-laws of the Corporation may be altered, amended or
repealed by the Board of Directors at any regular or special meeting of the
Board of Directors or by the affirmative vote of the holders of record of a
majority of the issued and outstanding stock of the Corporation (i) present in
person or by proxy at a meeting of holders of such stock and entitled to vote
thereon or (ii) by a consent in writing in the manner contemplated in Section 9
of Article II, provided, however, that notice of the proposed alteration,
amendment or repeal is contained in the notice of such meeting. By-laws, whether
made or altered by the stockholders or by the Board of Directors, shall be
subject to alteration or repeal by the stockholders as in this Article VIII
above provided.
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Exhibit 5.1
LEAVY ROSENSWEIG & HYMAN
11 East 44th Street
New York, NY 10017
December 8, 1998
Centennial Cellular Corp.
50 Locust Avenue
New Canaan, CT 06840
Re: Common Stock, $.01 par value per share
Ladies and Gentlemen:
We have acted as counsel to Centennial Cellular Corp., a
Delaware corporation (the "Company"), in connection with the issuance of shares
of the Company's Common Stock, $.01 par value per share (the "Common Stock"), in
a proposed merger (the "Merger") between the Company and CCW Acquisition Corp.,
a Delaware corporation, pursuant to the Agreement and Plan of Merger, dated as
of July 2, 1998 and as amended as of November 29, 1998, between the Company
and CCW Acquisition Corp. (the "Merger Agreement"). We have also participated
in the preparation and filing with the Securities and Exchange Commission
under the Securities Act of 1933, as amended (the "Securities Act"), of a
registration statement on Form S-4 (the "Registration Statement") relating to
the Common Stock. In this connection, we have examined the Merger Agreement and
those corporate and other records, instruments, certificates and documents as
we considered necessary to enable us to express this opinion.
In our examination of the documents and in rendering the
opinions set forth below, we have assumed, without independent investigation,
the genuineness of all signatures, the authenticity of all documents submitted
to us as originals, the conformity to the original documents of all documents
submitted to us as certified, photostatic, reproduced or conformed copies of
validly existing agreements or other documents, the authenticity of all the
latter documents and the legal capacity of all individuals who have executed any
of the documents which we examined. In rendering the opinions set forth below,
we have relied on the description of the transaction as set forth in the
Registration Statement and its accompanying exhibits.
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Centennial Cellular Corp. 2
Based on the foregoing, it is our opinion that, upon
consummation of the Merger pursuant to the Merger Agreement, the Common Stock
will be duly authorized for issuance and, upon receipt of the Common Stock by
stockholders of the Company in the Merger, will be fully paid and
non-assessable.
We consent to the use of our name in the Registration
Statement and in the prospectus contained in the Registration Statement as it
appears in the caption "Legal Counsel" and to the use of this opinion as an
exhibit to the Registration Statement. In giving this consent, we do not admit
that we come within the category of persons whose consent is required by the
Securities Act or by the rules and regulations under the Securities Act.
The opinions expressed above are limited to the federal laws
of the United States of America, the laws of the State of New York and the
corporate law of the State of Delaware as in effect on the date hereof.
Very truly yours,
LEAVY ROSENSWEIG & HYMAN
<PAGE>
<PAGE>
Exhibit 8.1
PAUL, WEISS, RIFKIND, WHARTON & GARRISON
1285 Avenue of the Americas
New York, New York 10019-6064
December 8, 1998
Centennial Cellular Corp.
50 Locust Avenue
New Canaan, CT 06840
Re: Centennial Cellular Corp.
Registration Statement on Form S-4
Ladies and Gentlemen:
In connection with the above captioned Registration Statement
on Form S-4 (the "Registration Statement") filed with the Securities and
Exchange Commission pursuant to the Securities Act of 1933, as amended (the
"Act"), and the rules and regulations thereunder (the "Rules") by Centennial
Cellular Corp., a Delaware corporation, we have been requested to render our
opinion as to the matters hereinafter set forth. Capitalized terms used and not
otherwise defined herein have the meanings given them in the Registration
Statement.
For purposes of our opinion, we have reviewed the Registration
Statement (including the exhibits thereto) and relied upon the description of
the Merger contained therein. We have also made such other investigations of
fact and law and have examined the originals, or copies authenticated to our
satisfaction, of such other documents, records, certificates or other
instruments as in our judgment are necessary or appropriate to render the
opinion expressed below.
The opinion set forth below is limited to the Internal Revenue
Code of 1986, as amended, administrative rulings, judicial decisions, treasury
regulations and other applicable authorities, all as in effect on the date
hereof. The statutory provisions, regulations, and interpretations upon which
our opinion is based are subject to change, and such changes could apply
retroactively. Any such change could affect the continuing validity of the
opinion set forth below.
Based upon and subject to the foregoing, and subject to the
qualifications set forth herein, we hereby confirm that the discussion set forth
in the Registration Statement under the heading "THE MERGER--Federal Income Tax
Consequences" is our opinion.
<PAGE>
<PAGE>
Centennial Cellular Corp. 2
We hereby consent to the filing of this opinion as an exhibit
to the Registration Statement and to the reference to us under the heading
"LEGAL COUNSEL" in the prospectus included in the Registration Statement. In
giving this consent, we do not hereby admit that we come within the category of
persons whose consent is required by the Act or the Rules.
Very truly yours,
PAUL, WEISS, RIFKIND, WHARTON & GARRISON
<PAGE>
<PAGE>
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Centennial Cellular Corp. on Form S-4 of our report dated July 17, 1998,
appearing in the Annual Report on Form 10-K of Centennial Cellular Corp. for the
year ended May 31, 1998 and to the reference to us under the heading "Experts"
in the Prospectus, which is part of this Registration Statement.
Deloitte & Touche
Stamford, CT
December 8, 1998
<PAGE>
<PAGE>
EXHIBIT 23.4
CONSENT OF DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
December 8, 1998
The Board of Directors
Centennial Cellular Corp.
50 Locust Avenue
New Canaan, CT 06840
Dear Members of the Board:
We hereby consent to the use of our opinion letter, dated
November 29, 1998, to the Board of Directors of Centennial Cellular Corp.
("Centennial"), included as Appendix C to the Information Statement/Prospectus
which forms a part of the Registration Statement on Form S-4 relating to the
proposed merger of Centennial and CCW Acquisition Corp., and to the references
therein to such opinion under the captions "SUMMARY--Approval of the Merger,"
"APPROVAL OF THE MERGER--Opinion of Donaldson, Lufkin & Jenrette," "THE
MERGER--Background of the Merger," "THE MERGER--Background of the Amendment to
the Merger Agreement," "THE MERGER-- Recommendation of the Board of Directors;
Reasons for the Merger" and "THE MERGER--Opinion of Donaldson, Lufkin &
Jenrette" [Additional Sections].
In giving such consent, we do not admit that we come within
the category of persons whose consent is required under Section 7 of the
Securities Act of 1933, as amended, or the rules and regulations of the
Securities and Exchange Commission thereunder, nor do we thereby admit that we
are experts with respect to any part of such Registration Statement within the
meaning of the term "experts" as used in the Securities Act of 1933, as amended,
or the rules and regulations of the Securities and Exchange Commission
thereunder.
Very truly yours,
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By: /s/ Louis P. Friedman
-------------------------
Name: Louis P. Friedman
Title: Managing Director
<PAGE>
<PAGE>
Exhibit 99.1
NON-CASH ELECTION FORM
This Form is to accompany the certificates for shares of Class A Common
Stock, par value $.01 per share ("Common Shares"), of Centennial Cellular Corp.
("Centennial" or the "Company") if such certificates are submitted pursuant to
an election (a "Non-Cash Election") to receive shares of common stock of the
surviving corporation ("Surviving Corporation Shares") in connection with the
proposed merger (the "Merger") of CCW Acquisition Corp. with and into
Centennial. Upon consummation of the Merger, all Surviving Corporation Shares
will be denominated as shares of Centennial Common Stock.
Holders of Common Shares who do not wish to make a Non-Cash Election (any
such holder, a "Non-Electing Holder") should not submit this form. Stockholders
who fail to make an election to receive Surviving Corporation Shares will be
deemed to have elected to receive cash. Each Common Share owned by any
Non-Electing Holder will automatically, subject to proration as described in the
Information Statement/Prospectus (as defined below), be converted into the right
to receive an amount equal to $41.50 in cash from Centennial following the
Merger.
To: American Stock Transfer & Trust Company, Exchange Agent
<TABLE>
<S> <C> <C>
By Mail: By Facsimile: By Hand or Overnight Courier:
American Stock Transfer (For Eligible Financial Institutions Only) American Stock Transfer
& Trust Company & Trust Company
40 Wall Street (718) 234-5001 40 Wall Street
New York, NY 10005 46th floor
New York, NY 10005
Confirm by Telephone to:
(718) 921-8200
</TABLE>
DELIVERY OF THIS FORM TO AN ADDRESS, OR TRANSMISSION OF THIS FORM VIA A
FACSIMILE TRANSMISSION NUMBER, OTHER THAN AS SET FORTH ABOVE, DOES NOT
CONSTITUTE A VALID DELIVERY.
QUESTIONS AND REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES OF THIS FORM MAY BE
OBTAINED FROM AMERICAN STOCK TRANSFER & TRUST COMPANY BY CALLING (718) 921-8200
OR (800) 937-5449.
PLEASE READ CAREFULLY THE ACCOMPANYING INSTRUCTIONS
<TABLE>
<CAPTION>
BOX I
- ---------------------------------------------------------------------------------------------
Shares Submitted
(Attach additional list if necessary)
-----------------------------------------------------------------
Total Number of
Name and Address of Certificate Shares Represented by Number of Shares
Registered Holder* Number Certificate(s) Elected**
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
-----------------------------------------------------------------
-----------------------------------------------------------------
-----------------------------------------------------------------
-----------------------------------------------------------------
-----------------------------------------------------------------
Total Shares
- ---------------------------------------------------------------------------------------------
</TABLE>
* Only certificates registered in a single form may be deposited with this
Form of Election. If certificates are registered in different forms (e.g.,
John R. Doe and J.R. Doe), it will be necessary to fill in, sign and submit
as many separate Forms of Election as there are different registrations of
certificates.
** Unless otherwise indicated, it will be assumed that all shares submitted
are to be treated as having made a Non-Cash Election.
- --------------------------------------------------------------------------------
[ ] Check here if you cannot locate certificates. Upon receipt of this Form,
the Exchange Agent will contact you directly with replacement instructions.
<PAGE>
<PAGE>
Ladies and Gentlemen:
In connection with the merger (the "Merger") of CCW Acquisition Corp. with
and into Centennial Cellular Corp. ("Centennial" or the "Company"), the
undersigned hereby submits the certificate(s) for shares of Class A Common
Stock, par value $.01 per share, of Centennial ("Common Shares") listed above
and elects, subject as set forth below, to have all or a portion of the Common
Shares represented by such certificates as set forth below converted into the
right to receive shares of common stock of the surviving corporation which, upon
consummation of the Merger, will be denominated as shares of Common Stock, par
value $.01 per share, of Centennial ("Surviving Corporation Shares").
It is understood that the following election is subject to (i) the terms,
conditions and limitations set forth in the Information Statement/Prospectus,
dated December 8, 1998, relating to the Merger (including all annexes and
schedules thereto, and as it may be amended or supplemented from time to time,
the "Information Statement/Prospectus"), receipt of which is acknowledged by the
undersigned, (ii) the terms of the Agreement and Plan of Merger, dated as of
July 2, 1998 and as amended as of November 29, 1998, as the same may be amended
or supplemented from time to time (the "Merger Agreement"), a conformed copy of
each appears as Appendices A and B, respectively, to the Information
Statement/Prospectus, and (iii) the accompanying instructions.
The undersigned authorizes and instructs you, as Exchange Agent, to
deliver such certificates of Common Shares to the Company and to receive on
behalf of the undersigned, in exchange for the Common Shares represented
thereby, any certificate for Surviving Corporation Shares or any check for cash
issuable in the Merger pursuant to the Merger Agreement or in lieu of fractional
shares. If certificates of Common Shares are not delivered herewith, there is
furnished below a guarantee of delivery of such certificates representing Common
Shares from a member of a national securities exchange, a member of the National
Association of Securities Dealers, Inc. or a commercial bank or trust company
having an office in the United States.
Unless otherwise indicated under Special Payment Instructions below,
please issue any certificate for Surviving Corporation Shares and/or any check
issuable in exchange for the Common Shares represented by the certificates
submitted hereby in the name of the registered holder(s) of such Common Shares.
Similarly, unless otherwise indicated under Special Delivery Instructions,
please mail any certificate for Surviving Corporation Shares and/or any check
for cash issuable in exchange for the Common Shares represented by the
certificates submitted hereby to the registered holder(s) of the Common Shares
at the address or addresses shown above.
PLEASE READ CAREFULLY THE ACCOMPANYING INSTRUCTIONS
BOX II
SPECIAL PAYMENT INSTRUCTIONS
(See Instructions D(6) and D(7))
To be completed ONLY if the certificates for Surviving
Corporation Shares are to be registered in the name of, or the checks are
to be made payable to, someone other than the registered
holder(s) of Common Shares.
Name --------------------------------------------------------
(Please Print)
Address -----------------------------------------------------
(Please Print)
-----------------------------------------------------
(Including Zip Code)
-----------------------------------------------------
(Tax Identification or Social Security Number)
BOX III
SPECIAL DELIVERY INSTRUCTIONS
(See Instruction D(8))
To be completed ONLY if the certificates for Surviving
Corporation Shares are to be registered in the name of, or the checks
are to be made payable to, the registered holder(s) of Common
Shares, but are to be sent to someone other than the registered
holder(s) or to an address other than the address of the
registered holder(s) set forth above.
Name --------------------------------------------------------
(Please Print)
Address -----------------------------------------------------
(Please Print)
-----------------------------------------------------
(Including Zip Code)
2
<PAGE>
<PAGE>
BOX IV
- -------------------------------------------------------------------------------
SIGN HERE AND HAVE SIGNATURES GUARANTEED
(See Instructions D(1) and D(7) Concerning Signature Guarantee)
Name(s): ---------------------------------------------------------------------
(Please Print)
Name(s): ---------------------------------------------------------------------
(Please Print)
- -------------------------------------------------------------------------------
Signature(s) of Owner(s)
- -------------------------------------------------------------------------------
Signature(s) of Owner(s)
- -------------------------------------------------------------------------------
Tax Identification or Social Security Number(s))
- -------------------------------------------------------------------------------
Guaranteed
Must be signed by registered holder(s) exactly as name(s) appear(s) on
stock certificate(s) or by person(s) authorized to become registered holder(s)
by certificates and documents transmitted herewith. If signature is by a
trustee, executor, administrator, guardian, officer of a corporation,
attorney-in-fact or any other person acting in a fiduciary capacity, set forth
full title in such capacity and see Instruction D(3).
Dated: -----------------------------------------------------------------, 1998
BOX V
- -------------------------------------------------------------------------------
GUARANTEE OF DELIVERY
(To be Used Only if Certificates are not Surrendered herewith)
The undersigned is a member of a national securities exchange, a member of
the National Association of Securities Dealers, Inc., or a commercial bank or
trust company having an office in the United States; and guarantees to deliver
to the Exchange Agent the certificates for Common Shares to which this Form
relates, duly endorsed in blank or otherwise in form acceptable for transfer on
the books of Centennial, no later than 5:00 p.m. New York City time on the third
Nasdaq trading day after the date of execution of this guarantee of delivery.
- -------------------------------------------------------------------------------
(Firm--Please Print)
- -------------------------------------------------------------------------------
(Authorized Signature)
- -------------------------------------------------------------------------------
(Address)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Area Code and Telephone Number)
- -------------------------------------------------------------------------------
(Contact Name)
3
<PAGE>
<PAGE>
(DO NOT WRITE IN SPACES BELOW)
<TABLE>
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Shares Shares Surviving Certificate Block Shares Check Amount of
Surrendered Accepted Corporation Number Number Converted Number Check
Shares into Cash
- -------------------------------------------------------------------------------------------
===========================================================================================
</TABLE>
DELIVERY PREPARED BY------------------------- CHECKED BY-----------------------
DATE-----------------------------------------
4
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Payer: American Stock Transfer & Trust Company
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Part 1--PLEASE PROVIDE Social Security Number OR
YOUR TIN IN THE BOX AT Employer Identification Number
RIGHT AND CERTIFY BY
SIGNING AND DATING BELOW ---------------------------------------
SUBSTITUTE
----------------------------------------------------------------------------------
Form W-9 Part 2--CERTIFICATION--Under penalties of perjury, I certify that:
Department of the Treasury
Internal Revenue Service (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
Payer's Request for Taxpayer
Identification Number (TIN) (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 (the "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.
CERTIFICATION INSTRUCTIONS--You must cross out item (2) above if
you have been notified by the IRS that you are currently subject
to backup withholding because of underreporting interest or
dividends on your tax return. However, if after being notified by
the IRS that you are subject to backup withholding, you received
another notification from the IRS stating that you are no longer
subject to backup withholding, do not cross out item (2).
SIGNATURE-------------------- DATE ---------------, 1998
Part 3--Awaiting TIN [ ]
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE MERGER. PLEASE REVIEW
THE ENCLOSED "GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9" FOR ADDITIONAL DETAILS.
5
<PAGE>
<PAGE>
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 3
OF SUBSTITUTE FORM W-9.
- -------------------------------------------------------------------------------
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (1) 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 (2)
I intend to mail or deliver an application in the near future. I understand that
if I do not provide a taxpayer identification number by the time of payment, 31%
of all reportable payments made to me will be withheld, but that such amounts
will be refunded to me if I then provide a Taxpayer Identification Number within
sixty (60) days.
Signature -------------------------------------- Date -------------------------
Questions and requests for assistance or additional copies of the
Information Statement/Prospectus or this Form of Election may be directed to the
address set forth below:
American Stock Transfer & Trust Company
40 Wall Street
New York, NY 10005
Call Toll-Free (800) 937-5449 ext. 6820
6
<PAGE>
<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 ("SSNs") have nine digits separated by two
hyphens: i.e. 000-00-0000. Employer identification numbers ("EINs") have nine
digits separated by only one hyphen; i.e. 00-0000000. The table below will help
determine the number to give the payer.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
GIVE THE
FOR THIS TYPE OF ACCOUNT: SOCIAL
SECURITY
NUMBER OF --
- -----------------------------------------------------------------------------------------
<S> <C>
1. Individual The individual
2. Two or more individuals (joint account) The actual owner of
account or, if combined
funds, the first
individual on the
account(1)
3. Custodian account of a minor (Uniform Gift to Minors Act) The minor(2)
4. a. The usual revocable savings trust account (grantor is The grantor-trustee(1)
also trustee)
a. So-called trust account that is not a legal or valid The actual owner(1)
trust under state law
5. Sole proprietorship The owner(3)
<CAPTION>
- -----------------------------------------------------------------------------------------
FOR THIS TYPE OF ACCOUNT: GIVE THE EMPLOYER
IDENTIFICATION
NUMBER OF --
- -----------------------------------------------------------------------------------------
<S> <C>
6. Sole proprietorship The owner(3)
7. A valid trust, estate or pension trust The legal entity(4)
8. Corporate The corporation
9. Association, club, religious, charitable, educational or The organization
other tax-exempt organization
10. Partnership The partnership
11. A broker or registered nominee The broker or nominee
12. Account with the Department of Agriculture in the name of The public entity
a public entity (such as a state or local government,
school district or prison) that receives agricultural
program payments
- -----------------------------------------------------------------------------------------
</TABLE>
(1) List first and circle the name of the person whose number you furnish. If
only one person on a joint account has an SSN, that person's number must be
furnished.
(2) Circle the minor's name and furnish the minor's SSN.
(3) You must show your individual name, but you may also enter your business or
"doing business as" name. You may use either your SSN or EIN (if you have
one).
(4) List first and circle the name of the legal trust, estate or pension trust.
(Do not furnish the taxpayer identification number of the personal
representative or trustee unless the legal entity itself is not designated
in the account title.)
NOTE: If no name is circled when more than one name is listed, the number will
be considered to be that of the first name listed.
7
<PAGE>
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card, or Form
SS-4, Application for Employer Identification Number (for businesses and other
entities), at the local office of the Social Security Administration or the
Internal Revenue Service and apply for a number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
The following is a list of payees exempt from backup withholding and for which
no information reporting is required. For interest and dividends, all listed
payees are exempt except item (9). For broker transactions, payees listed in (1)
through (13) and a person registered under the Investment Advisers Act of 1940
who regularly acts as a broker are exempt. Payments subject to reporting under
sections 6041 and 6041A are generally exempt from backup withholding only if
made to payees described in items (1) through (7), except a corporation that
provides medical and health care services or bills and collects payments for
such services is not exempt from backup withholding or information reporting.
Only payees described in item (2) through (6) are exempt from backup withholding
for barter exchange transactions and patronage dividends.
(1) A corporation.
(2) An organization exempt from tax under section 501(a), or an IRA, or a
custodial account under section 403(b)(7).
(3) The United States or any of its agencies or instrumentalities.
(4) A state, the District of Columbia, a possession of the United States,
or any of their political subdivisions or instrumentalities.
(5) A foreign government or any of its political subdivisions, agencies, or
instrumentalities.
(6) An international organization or any of its agencies or
instrumentalities.
(7) A foreign central bank of issue.
(8) A dealer in securities or commodities required to register in the
United States, the District of Columbia, or a possession of the United
States.
(9) A futures commission merchant registered with the Commodity Futures
Trading Commission.
(10) A real estate investment trust.
(11) An entity registered at all times during the tax year under the
Investment Company Act of 1940.
(12) A common trust fund operated by a bank under section 584(a).
(13) A financial institution.
(14) A middleman known in the investment community as a nominee or who is
listed in the most recent publication of the American Society of
Corporate Secretaries, Inc., Nominee List.
(15) A trust exempt from tax under section 664 or described in section 4947.
<PAGE>
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
-- Payments to nonresident aliens subject to withholding under section 1441.
-- Payments to partnerships not engaged in a trade or business in the United
States and that have at least one nonresident alien partner.
-- Payments of patronage dividends not paid in money.
-- Payments made by certain foreign organizations.
-- Section 404(k) payments made by an ESOP.
Payments of interest not generally subject to backup withholding include the
following:
-- Payments of interest on obligations issued by individuals. Note: You may be
subject to backup withholding if this interest is $600 or more and is paid
in the course of the payer's trade or business and you have not provided
your correct taxpayer identification number to the payer.
-- Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
-- Payments described in section 6049(b)(5) to non-resident aliens.
-- Payments on tax-free covenant bonds under section 1451.
-- Payments made by certain foreign organizations.
EXEMPT PAYEES DESCRIBED ABOVE SHOULD FILE FORM W-9 TO AVOID POSSIBLE ERRONEOUS
BACKUP WITHHOLDING. FILE SUBSTITUTE FORM W-9 WITH THE PAYER, CERTIFY YOUR
TAXPAYER IDENTIFICATION NUMBER ON PART II OF THE FORM, WRITE "EXEMPT" ON THE
FACE OF THE FORM AND SIGN, DATE AND RETURN IT TO THE PAYER.
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 sections 6041, 6041A, 6042, 6044, 6045, 6049,
6050A and 6050N, and their regulations.
PRIVACY ACT NOTICE -- Section 6109 requires most recipients of dividend,
interest or other payments to give taxpayer identification numbers to payers who
must report the payments to the IRS. The IRS uses the numbers for identification
purposes. Payers must be given the numbers whether or not recipients are
required to file tax returns. Payers must generally withhold 31% of taxable
interest, dividend and certain other payments to a payee who does not furnish a
taxpayer identification number to a payer. Certain penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER. -- If you
fail to furnish your correct taxpayer identification number to a payer, you are
subject to a penalty of $50 for each such failure unless your failure is due to
reasonable cause and not to willful neglect.
(2) FAILURE TO REPORT CERTAIN DIVIDEND AND INTEREST PAYMENTS. -- If you fail to
include any portion of an includible payment for interest, dividends or
patronage dividends in gross income, and such failure is found by the Internal
Revenue Service to be due to negligence or disregard of rules or regulations,
you could be subject to a penalty of 20% on any portion of an under-payment
attributable to that failure. However, you will not be subject to this penalty
if it is shown that you acted with reasonable cause and in good faith.
(3) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING. -- If you
make a false statement with no reasonable basis that results in no imposition of
backup withholding, you are subject to a $500 penalty.
(4) 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.
8
<PAGE>
<PAGE>
INSTRUCTIONS
A. Special Conditions.
1. Time in Which to Elect. To be effective, an election pursuant to the
terms and conditions set forth herein (an "Election") on this Form or a
facsimile hereof, accompanied by the above-described certificates representing
Common Shares or a proper guarantee of delivery thereof, must be received by the
Exchange Agent, at the address set forth above, no later than 5:00 p.m., New
York City time, on January 6, 1999 (the "Election Date"). Holders of Common
Shares whose stock certificates are not immediately available may also make an
effective Election by completing this form or a facsimile hereof, having the
Guarantee of Delivery box (BOX V) properly completed and duly executed (subject
to the condition that the certificates for which delivery is thereby guaranteed
are in fact delivered to the Exchange Agent, duly endorsed in blank or otherwise
in form acceptable for transfer on the books of Centennial, no later than 5:00
p.m., New York City time, on the third Nasdaq trading day after the date of
execution of such guarantee of delivery). Each Common Share outstanding at the
effective time of the Merger (the "Effective Time") with respect to which the
Exchange Agent shall have not received an effective Election by 5:00 p.m. on the
Election Date, or which is required to be converted into cash as a result of the
proration procedures set forth in the Information Statement/Prospectus, will be
converted into the right to receive an amount equal to $41.50 in cash from the
Company following the Merger, subject to proration. See Instruction C.
2. Revocation of Election. Any Election may be revoked by the person who
submitted this Form to the Exchange Agent and the certificate(s) for shares
withdrawn by written notice duly executed and received by the Exchange Agent
prior to the Election Date. Such notice must specify the person in whose name
the Common Shares to be withdrawn had been deposited, the number of shares to be
withdrawn, the name of the registered holder thereof, and the serial numbers
shown on the certificate(s) representing the shares to be withdrawn. If an
Election is revoked, and the certificate(s) for shares withdrawn, the Common
Share certificate(s) submitted therewith will be promptly returned by the
Exchange Agent to the person who submitted such certificate(s). After the
Election Date, shares for which an Election has been made may not be withdrawn.
Due to the requirement to obtain regulatory approval of the Merger, a period of
time could elapse between the Election Date and the Effective Time.
3. Termination of Right to Elect. If for any reason the Merger is not
consummated or is abandoned, all Forms will be void and of no effect.
Certificate(s) for Common Shares previously received by the Exchange Agent will
be returned promptly by the Exchange Agent to the person who submitted such
stock certificate(s).
B. Election and Proration Procedures.
A description of the election and proration procedures is set forth in the
Information Statement/Prospectus under "THE MERGER--Non-Cash Election" and "THE
MERGER--Non-Cash Election Procedure." A full statement of the election and
proration procedures is contained in the Merger Agreement and all Elections are
subject to compliance with such procedures. In connection with making any
election, a holder of Common Shares should read carefully, among other matters,
the aforesaid description and statement and the information contained in the
Information Statement/Prospectus under "THE MERGER--Federal Income Tax
Consequences." See also "RISK FACTORS--Risk Factors Relating to the Effects of
the Merger; Receiving Common Stock of the Surviving Corporation in the Merger or
Receiving Cash due to Proration--Non-Cash Election and Proration into Cash;
Possible Dividend Treatment" in the Information Statement/Prospectus for a
discussion of the possibility that the receipt of cash as a result of proration
by a holder who has made a Non-Cash Election may be treated as a dividend as
opposed to a capital gain.
As a result of the proration procedures, holders of Common Shares may
receive Surviving Corporation Shares or cash in amounts which vary from the
amounts such holders elect to receive. Such holders will not be able to change
the number of Surviving Corporation Shares or the amount of cash allocated to
them pursuant to such procedures.
C. Receipt of Surviving Corporation Shares or Checks.
As soon as practicable after the Effective Time of the Merger, the
Exchange Agent will mail certificate(s) for Surviving Corporation Shares and/or
cash payments by check to the holders of Common Shares with respect to the
Common Shares which are included in any effective Election. Holders of Common
Shares who did not make an Election, or failed to make
9
<PAGE>
<PAGE>
an effective Election, with respect to any or all of their shares will receive,
for each such share, the right to receive an amount equal to $41.50 in cash,
subject to proration, as soon as practicable after the certificate(s)
representing such share or shares are submitted together with a letter of
transmittal. As soon as practicable after the Effective Time, the Exchange Agent
will send a letter of transmittal to each holder of Common Shares (other than
holders who have made an effective Non-Cash Election with respect to all of
their shares).
No fractional shares will be issued in connection with the Merger. Each
holder of Common Shares who would otherwise have been entitled to receive a
fraction of a Surviving Corporation Share (after taking into account all Common
Shares submitted by such holder) will receive, in lieu thereof, either (i) an
additional Surviving Corporation Share or (ii) a cash payment (without interest)
equal to such fraction multiplied by $41.50.
D. General.
1. Execution and Delivery. This Form or a facsimile hereof must be
properly filled in, dated and signed in BOX IV, and must be delivered (together
with stock certificates representing the Common Shares as to which the Election
is made or with a duly signed guarantee of delivery of such certificates) to the
Exchange Agent at any of the addresses set forth above.
The method of delivery of all documents is at the option and risk of the
stockholder, but, if sent by mail, registered mail, return receipt requested and
properly insured, is suggested.
2. Inadequate Space. If there is insufficient space on this Form to list
all your stock certificates being submitted to the Exchange Agent, please attach
a separate list.
3. Signatures. The signature (or signatures, in the case of certificates
owned by two or more joint holders) on this Form should correspond exactly with
the name(s) as written on the face of the certificate(s) submitted unless the
Common Shares described on this Form have been assigned by the registered
holder(s), in which event this Form 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 certificates.
If this Form is signed by a person or persons other than the registered
owners of the certificates listed, the certificates must be endorsed or
accompanied by appropriate stock powers, in either case signed exactly as the
name(s) of the registered owner(s) appear on the certificates.
If this Form or any stock certificate(s) or stock power(s) are signed by a
trustee, executor, administrator, guardian, officer of a corporation,
attorney-in-fact or any other person acting in a representative or fiduciary
capacity, the person signing must give such person's full title in such capacity
and appropriate evidence of authority to act in such capacity must be forwarded
with this Form.
4. Partial Elections. If an Election is being made in respect of fewer
than all the shares represented by any certificate being delivered to the
Exchange Agent, the number of shares in respect of which an Election is being
made should be indicated in the box entitled "Shares Elected." In such case,
subject to proration, the remainder of the shares will be exchanged for cash in
the Merger and a new certificate for the Surviving Corporation Shares
represented by the old certificate will be sent to the registered owners as soon
as practicable following the Election Date. All shares represented by
certificates submitted hereunder will be deemed to have been submitted unless
otherwise indicated.
5. Lost or Destroyed Certificates. If your stock certificate(s) has been
either lost or destroyed, please check the box on the front of this Form below
your name and address and the appropriate forms for replacement will be sent to
you. You will then be instructed as to the steps you must take in order to
receive a stock certificate(s) representing Surviving Corporation Shares and/or
any checks in accordance with the Merger Agreement.
6. New Certificates and Checks in Same Name. If all stock certificate(s)
representing Surviving Corporation Shares and all check(s) in respect of
Surviving Corporation Shares are to be registered in, or payable to the order
of, exactly the same name(s) that appears on the certificate(s) representing
Common Shares submitted with this Form, no endorsement of certificate(s) or
separate stock power(s) are required.
10
<PAGE>
<PAGE>
7. New Certificate and Checks in Different Name. If any stock
certificate(s) representing Surviving Corporation Shares or any check(s) in
respect of Common Shares is to be registered in, or payable to the order of, any
name other than exactly the name that appears on the certificate(s) representing
Common Shares submitted herewith, such registration and/or payment shall not be
made by the Exchange Agent unless the certificates submitted are endorsed, BOX
II is completed, and the signature is guaranteed in BOX IV by a member of a
national securities exchange, a member of the National Association of Securities
Dealers, Inc. or a commercial bank (not a savings bank or a savings & loan
association) or trust company having an office in the United States which is a
member in good standing of the Agent's Medallion Program.
8. Special Delivery Instructions. If the checks are to be payable to the
order of, or the certificates for Surviving Corporation Shares are to be
registered in, the name of the registered holder(s) of Common Shares, but are to
be sent to someone other than the registered holder(s) or to an address other
than the address of the registered holder(s), it will be necessary to indicate
such person or address in BOX III.
9. Miscellaneous. A single check in respect of Common Shares and/or a
single stock certificate representing Surviving Corporation Shares will be
issued.
All questions with respect to this Form and the Elections (including,
without limitation, questions relating to the timeliness or effectiveness of
revocation of any Election and computations as to proration) will be determined
by the Exchange Agent, which determination shall be conclusive and binding.
10. 31% Backup Withholding. Under Federal income tax law, a holder who
receives a cash payment pursuant to the Merger may be required to provide the
Exchange Agent (as payer) with such holder's correct taxpayer identification
number ("TIN") on Substitute Form W-9 below. If the holder is an individual, the
TIN is his or her social security number. If the Exchange Agent is not provided
with the correct TIN, such fact will not, in and of itself, cause Common Shares
to be deemed invalidly delivered, but payments that are made by the Exchange
Agent to such holder or other payee with respect to the Merger may be subject to
backup withholding at a rate of 31%. Backup withholding is not an additional
tax. Rather, the tax liability of persons subject to backup withholding will be
reduced by the amount of tax withheld, provided that the required information is
given to the Internal Revenue Service. If withholding results in an overpayment
of taxes, a refund may be obtained from the Internal Revenue Service.
Certain holders (including, among others, corporations (with respect to
most payments) and certain foreign individuals) are not subject to these backup
withholding and reporting requirements. In order for a foreign individual to
qualify as exempt from backup withholding and reporting requirements, the holder
must submit a Form W-8, signed under penalties of perjury, attesting to that
individual's exempt status. A Form W-8 can be obtained from the Exchange Agent.
See the enclosed "Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9" for more instructions.
The box in Part 3 of the Substitute Form W-9 may be checked if the
submitting holder 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 is checked, the
holder or other payee must also complete the Certificate of Awaiting Taxpayer
Identification Number below in order to avoid backup withholding.
Notwithstanding that the box in Part 3 is checked and the Certificate of
Awaiting Taxpayer Identification Number is completed, the Exchange Agent will
withhold 31% on all payments made prior to the time a properly certified TIN is
provided to the Exchange Agent. However, such amounts may be refunded to such
holder if a TIN is provided to the Exchange Agent within 60 days.
The holder is required to give the Exchange Agent the TIN (e.g., social
security number or employer identification number) of the record owner of the
Common Shares or of the last transferee appearing on the transfers attached to,
or endorsed on, the Common Shares. If the Common Shares are in more than one
name or are not in the name of the actual owner, consult the enclosed
"Guidelines for Certification of Taxpayer Identification Number on Substitute
Form W-9" for additional guidance on which number to report.
11. Withholding on Foreign Stockholders. Even if a foreign stockholder has
provided the required Form W-8 certification to avoid backup withholding as
described above, the Exchange Agent will be required to withhold federal income
taxes equal to 30% of the gross cash payments made, for tax purposes, in
redemption of the foreign stockholder's stock (see "THE MERGER--Federal Income
Tax Consequences--Characterization of the Merger for United States Federal
Income Tax
11
<PAGE>
<PAGE>
Purposes" in the Information Statement/Prospectus), payable to a foreign
stockholder or his agent unless the Exchange Agent determines that such payment
is exempt from withholding (or entitled to a reduced rate of withholding) or
that the redemption will qualify as a sale or exchange under Section 302 of the
Internal Revenue Code. See "THE MERGER--Federal Income Tax Consequences--Foreign
Stockholders--Withholding" in the Information Statement/Prospectus for a more
complete discussion of the 30% withholding tax and obtaining an exemption
therefrom. Foreign stockholders are urged to consult their tax advisors
regarding the application of federal income tax withholding, including
eligibility for a withholding tax reduction or exemption and refund procedures.
---------------------------
Questions and requests for assistance or additional copies of this Form
may be obtained from American Stock Transfer & Trust Company, Shareholder
Department by calling (800) 937-5449 ext. 6820 or (718) 921-8200.
12
<PAGE>
<PAGE>
Exhibit 99.2
FORM OF
LETTER OF TRANSMITTAL
TO ACCOMPANY CERTIFICATE(S) FOR SHARES OF CLASS A COMMON STOCK
of
Centennial Cellular Corp.
Surrendered in Connection with the Merger
of
CCW Acquisition Corp.
With and Into
Centennial Cellular Corp.
This Letter of Transmittal is to accompany certificates for shares of Class
A Common Stock, par value $.01 per share ("Common Shares"), of Centennial
Cellular Corp. ("Centennial" or the "Company") if such certificates have NOT
been submitted pursuant to an effective election (a "Non-Cash Election") to
receive shares of common stock of the surviving corporation ("Surviving
Corporation Shares") in connection with the merger (the "Merger") of CCW
Acquisition Corp. ("Acquisition") with and into Centennial. Holders of Common
Shares who have previously made an effective Non-Cash Election (any such holder,
an "Electing Holder") need not submit this Form with respect to the shares
covered by such Non-Cash Election. Each Common Share subject to such Non-Cash
Election will automatically, subject to proration as described in the
Information Statement/Prospectus (as defined below), be converted into the right
to receive Surviving Corporation Shares.
By delivering certificates for Common Shares, the registered holder of such
certificates releases the Company, Acquisition and their respective affiliates,
directors, officers, employees, partners, agents, advisors and representatives,
and their respective successors and assigns, from any and all claims arising
from or in connection with the purchase or ownership of such Common Shares or
the sale of Common Shares or receipt of Surviving Corporation Shares pursuant to
the Merger Agreement (as defined herein).
To: American Stock Transfer & Trust Company, Exchange Agent
<TABLE>
<S> <C> <C>
By Mail: By Facsimile: By Hand or Overnight Courier:
American Stock Transfer (For Eligible Financial American Stock Transfer
& Trust Company Institutions Only) & Trust Company
40 Wall Street (718) 234-5001 40 Wall Street
New York, NY 10005 46th floor
New York, NY 10005
</TABLE>
Confirm by Telephone to:
(718) 921-8200
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS, OR TRANSMISSION OF
THIS LETTER OF TRANSMITTAL VIA A FACSIMILE TRANSMISSION NUMBER, OTHER
THAN AS SET FORTH ABOVE, DOES NOT CONSTITUTE A VALID DELIVERY.
PLEASE READ CAREFULLY THE ACCOMPANYING INSTRUCTIONS
<TABLE>
<CAPTION>
BOX I
- --------------------------------------------------------------------------------
<S> <C> <C>
Shares Submitted
(Attach additional list if necessary)
--------------------------------------------------------
Name and Address of Certificate(s) Total Number of Shares
Registered Holder* Number Represented by Certificate(s)
- -------------------------------------------------------------------------------
--------------------------------------------------------
--------------------------------------------------------
--------------------------------------------------------
--------------------------------------------------------
--------------------------------------------------------
Total Shares
- -------------------------------------------------------------------------------
</TABLE>
* Only certificates registered in a single form may be deposited with this
Letter of Transmittal. If certificates are registered in different forms
(e.g., John R. Doe and J.R. Doe), it will be necessary to fill in, sign and
submit as many separate Letters of Transmittal as there are different
registrations of certificates.
- --------------------------------------------------------------------------------
[ ] Check here if you cannot locate certificates. Upon receipt of this Letter
of Transmittal, the Exchange Agent will contact you directly with
replacement instructions.
<PAGE>
<PAGE>
2
Ladies and Gentlemen:
In connection with the Merger, the undersigned hereby submits the
certificate(s) for shares of Class A Common Stock, par value $.01 per share, of
Centennial ("Common Shares") listed in BOX I. Delivery of the enclosed
certificates shall be effected, and risk of loss of and title to such
certificates shall pass, only upon delivery thereof to you.
It is understood that this Letter of Transmittal is subject to (i) the
terms, conditions and limitations set forth in the Information
Statement/Prospectus, dated December 8, 1998, relating to the Merger
(including all annexes and schedules thereto, and as it may be amended or
supplemented from time to time, the "Information Statement/ Prospectus"),
receipt of which is acknowledged by the undersigned, (ii) the terms of the
Agreement and Plan of Merger, dated as of July 2, 1998, and as amended as of
November 29, 1998, as the same may be amended or supplemented from time to
time (the "Merger Agreement"), a conformed copy of each appears as Appendices
A and B, respectively, to the Information Statement/Prospectus, and (iii) the
accompanying Instructions.
The undersigned represents and warrants to Centennial that the undersigned
has full power and authority to surrender, without restriction, the shares
represented by the certificate(s) surrendered herewith and that Centennial will
acquire good and unencumbered title to the rights represented thereby, free and
clear of all liens, restrictions, charges and encumbrances and not subject to
any adverse claim when payment for such Shares is made by the Exchange Agent to
the undersigned. The undersigned will, upon request, execute any additional
documents Centennial or the Exchange Agent considers necessary or desirable to
complete the surrender of such shares.
By delivering certificates for Common Shares, the registered holder of such
certificates releases the Company, Acquisition and their respective affiliates,
directors, officers, employees, partners, agents, advisors and representatives,
and their respective successors and assigns, from any and all claims arising
from or in connection with the purchase or ownership of such Common Shares or
the sale of Common Shares or receipt of Surviving Corporation Shares pursuant to
the Merger Agreement.
The undersigned authorizes and instructs you, as Exchange Agent, to deliver
such certificates of Common Shares to the Company and to receive on behalf of
the undersigned, in exchange for the Common Shares represented thereby, a check
for the cash into which such shares are converted in the Merger.
Unless otherwise indicated under Special Payment Instructions below, please
issue the check issuable in exchange for the Common Shares represented by the
certificates submitted hereby in the name of the registered holder(s) of such
Common Shares. Similarly, unless otherwise indicated under Special Delivery
Instructions, please mail the check issuable in exchange for the Common Shares
represented by the certificates submitted hereby to the registered holder(s) of
the Common Shares at the address or addresses shown above.
BOX II
SPECIAL PAYMENT INSTRUCTIONS
(See Instructions C(5) and C(6))
To be completed ONLY if the check is to be made payable to someone other than
the registered holder(s) of Common Shares.
Name: ------------------------------------------------------------
(Please Print)
Address: ---------------------------------------------------------
(Please Print)
---------------------------------------------------------
(Including Zip Code)
---------------------------------------------------------
(Tax Identification or Social Security Number)
BOX III
SPECIAL DELIVERY INSTRUCTIONS
(See Instruction C(7))
To be completed ONLY if the check is to be made payable to the registered
holder(s) of Common Shares, but is to be sent to someone other than the
registered holder(s) or to an address other than the address of the
registered holder(s) set forth above.
Name: ------------------------------------------------------------
(Please Print)
Address: ---------------------------------------------------------
(Please Print)
---------------------------------------------------------
(Including Zip Code)
<PAGE>
<PAGE>
3
BOX IV
- --------------------------------------------------------------------------------
SIGN HERE AND HAVE SIGNATURES GUARANTEED
(See Instructions C(1), C(3) and C(6) Concerning Signature Guarantee)
Name(s):
-----------------------------------------------------------------------
(Please Print)
Name(s):
-----------------------------------------------------------------------
(Please Print)
- --------------------------------------------------------------------------------
Signature(s) of owner(s)
- --------------------------------------------------------------------------------
Signature(s) of owner(s)
Must be signed by registered holder(s) exactly as name(s) appear(s) on
stock certificate(s) or by person(s) authorized to become registered holder(s)
by certificates and documents transmitted herewith. If signature is by a
trustee, executor, administrator, guardian, officer of a corporation,
attorney-in-fact or any other person acting in a fiduciary capacity, set forth
full title in such capacity and see Instruction C(3).
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Area Code and Telephone Number(s))
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Tax Identification or Social Security Number(s))
SIGNATURE(S)
GUARANTEED: Dated: , 1998
------------------------------- -----------------
(See Instruction C(6))
- --------------------------------------------------------------------------------
(DO NOT WRITE IN SPACES BELOW)
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
Surviving Shares
Shares Shares Corporation Certificate Block Converted Check Amount of
Surrendered Accepted Shares Number Number Into Cash Number Check
- ------------ --------- ----------- ------------- -------- ----------- -------- ---------
</TABLE>
- --------------------------------------------------------------------------------
DELIVERY PREPARED BY CHECKED BY
---------------------- -------------------------
DATE
------------------------------
<PAGE>
<PAGE>
4
<TABLE>
<CAPTION>
Payer: American Stock Transfer & Trust Company
<S> <C> <C>
- -----------------------------------------------------------------------------------
Part 1--PLEASE PROVIDE Social Security Number OR
YOUR TIN IN THE BOX AT Employer Identification
RIGHT AND CERTIFY BY Number
SIGNING AND DATING BELOW
-------------------------
- -----------------------------------------------------------------------------------
SUBSTITUTE Part 2--CERTIFICATION--Under penalties of perjury, I
certify that:
Form W-9
Department of the Treasury
Internal Revenue Service (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
PAYER'S REQUEST FOR TAXPAYER
IDENTIFICATION NUMBER (TIN) (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 (the "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.
CERTIFICATION INSTRUCTIONS--You must cross out
item (2) above if you have been notified by the
IRS that you are currently subject to backup
withholding because of underreporting interest or
dividends on your tax return. However, if after
being notified by the IRS that you are subject to
backup withholding, you received another
notification from the IRS stating that you are no
longer subject to backup withholding, do not
cross out item (2).
SIGNATURE DATE , 1998
---------------- -------------
PART 3--AWAITING TIN [ ]
- -----------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE MERGER. PLEASE REVIEW
THE ENCLOSED "GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9" FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 3 OF
SUBSTITUTE FORM W-9.
- -------------------------------------------------------------------------------
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (1) 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 (2)
I intend to mail or deliver an application in the near future. I understand that
if I do not provide a taxpayer identification number by the time of payment, 31%
of all reportable payments made to me will be withheld, but that such amounts
will be refunded to me if I then provide a Taxpayer Identification Number within
sixty (60) days.
Signature Date
-------------------------------- -----------------------------
Questions and requests for assistance or additional copies of the
Information Statement/Prospectus or this Form of Election may be directed to the
address set forth below:
American Stock Transfer & Trust Company
40 Wall Street
New York, NY 10005
Call Toll-Free (800) 937-5449 ext. 6820
<PAGE>
<PAGE>
5
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 ("SSNs") have nine digits separated by two
hyphens: i.e. 000-00-0000. Employer identification numbers ("EINs") have nine
digits separated by only one hyphen; i.e. 00-0000000. The table below will help
determine the number to give the payer.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
GIVE THE
FOR THIS TYPE OF ACCOUNT: SOCIAL
SECURITY
NUMBER OF --
- -----------------------------------------------------------------------------------------
<S> <C>
1. Individual The individual
2. Two or more individuals (joint account) The actual owner of
account or, if combined
funds, the first
individual on the
account(1)
3. Custodian account of a minor (Uniform Gift to Minors Act) The minor(2)
4. a. The usual revocable savings trust account (grantor is The grantor-trustee(1)
also trustee)
b. So-called trust account that is not a legal or valid The actual owner(1)
trust under state law
5. Sole proprietorship The owner(3)
<CAPTION>
- -----------------------------------------------------------------------------------------
FOR THIS TYPE OF ACCOUNT: GIVE THE EMPLOYER
IDENTIFICATION
NUMBER OF --
- -----------------------------------------------------------------------------------------
<S> <C>
6. Sole proprietorship The owner(3)
7. A valid trust, estate or pension trust The legal entity(4)
8. Corporate The corporation
9. Association, club, religious, charitable, educational or The organization
other tax-exempt organization
10. Partnership The partnership
11. A broker or registered nominee The broker or nominee
12. Account with the Department of Agriculture in the name of The public entity
a public entity (such as a state or local government,
school district or prison) that receives agricultural
program payments
- -----------------------------------------------------------------------------------------
</TABLE>
(1) List first and circle the name of the person whose number you furnish. If
only one person on a joint account has an SSN, that person's number must be
furnished.
(2) Circle the minor's name and furnish the minor's SSN.
(3) You must show your individual name, but you may also enter your business or
"doing business as" name. You may use either your SSN or EIN (if you have
one).
(4) List first and circle the name of the legal trust, estate or pension trust.
(Do not furnish the taxpayer identification number of the personal
representative or trustee unless the legal entity itself is not designated
in the account title.)
NOTE: If no name is circled when more than one name is listed, the number will
be considered to be that of the first name listed.
<PAGE>
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card, or Form
SS-4, Application for Employer Identification Number (for businesses and other
entities), at the local office of the Social Security Administration or the
Internal Revenue Service and apply for a number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
The following is a list of payees exempt from backup withholding and for which
no information reporting is required. For interest and dividends, all listed
payees are exempt except item (9). For broker transactions, payees listed in (1)
through (13) and a person registered under the Investment Advisers Act of 1940
who regularly acts as a broker are exempt. Payments subject to reporting under
sections 6041 and 6041A are generally exempt from backup withholding only if
made to payees described in items (1) through (7), except a corporation that
provides medical and health care services or bills and collects payments for
such services is not exempt from backup withholding or information reporting.
Only payees described in item (2) through (6) are exempt from backup withholding
for barter exchange transactions and patronage dividends.
(1) A corporation.
(2) An organization exempt from tax under section 501(a), or an IRA, or a
custodial account under section 403(b)(7).
(3) The United States or any of its agencies or instrumentalities.
(4) A state, the District of Columbia, a possession of the United States,
or any of their political subdivisions or instrumentalities.
(5) A foreign government or any of its political subdivisions, agencies, or
instrumentalities.
(6) An international organization or any of its agencies or
instrumentalities.
(7) A foreign central bank of issue.
(8) A dealer in securities or commodities required to register in the
United States, the District of Columbia, or a possession of the United
States.
(9) A futures commission merchant registered with the Commodity Futures
Trading Commission.
(10) A real estate investment trust.
(11) An entity registered at all times during the tax year under the
Investment Company Act of 1940.
(12) A common trust fund operated by a bank under section 584(a).
(13) A financial institution.
(14) A middleman known in the investment community as a nominee or who is
listed in the most recent publication of the American Society of
Corporate Secretaries, Inc., Nominee List.
(15) A trust exempt from tax under section 664 or described in section 4947.
<PAGE>
6
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
-- Payments to nonresident aliens subject to withholding under section 1441.
-- Payments to partnerships not engaged in a trade or business in the United
States and that have at least one nonresident alien partner.
-- Payments of patronage dividends not paid in money.
-- Payments made by certain foreign organizations.
-- Section 404(k) payments made by an ESOP.
Payments of interest not generally subject to backup withholding include the
following:
-- Payments of interest on obligations issued by individuals. Note: You may be
subject to backup withholding if this interest is $600 or more and is paid
in the course of the payer's trade or business and you have not provided
your correct taxpayer identification number to the payer.
-- Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
-- Payments described in section 6049(b)(5) to non-resident aliens.
-- Payments on tax-free covenant bonds under section 1451.
-- Payments made by certain foreign organizations.
EXEMPT PAYEES DESCRIBED ABOVE SHOULD FILE FORM W-9 TO AVOID POSSIBLE ERRONEOUS
BACKUP WITHHOLDING. FILE SUBSTITUTE FORM W-9 WITH THE PAYER, CERTIFY YOUR
TAXPAYER IDENTIFICATION NUMBER ON PART II OF THE FORM, WRITE "EXEMPT" ON THE
FACE OF THE FORM AND SIGN, DATE AND RETURN IT TO THE PAYER.
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 sections 6041, 6041A, 6042, 6044, 6045, 6049,
6050A and 6050N, and their regulations.
PRIVACY ACT NOTICE -- Section 6109 requires most recipients of dividend,
interest or other payments to give taxpayer identification numbers to payers who
must report the payments to the IRS. The IRS uses the numbers for identification
purposes. Payers must be given the numbers whether or not recipients are
required to file tax returns. Payers must generally withhold 31% of taxable
interest, dividend and certain other payments to a payee who does not furnish a
taxpayer identification number to a payer. Certain penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER. -- If you
fail to furnish your correct taxpayer identification number to a payer, you are
subject to a penalty of $50 for each such failure unless your failure is due to
reasonable cause and not to willful neglect.
(2) FAILURE TO REPORT CERTAIN DIVIDEND AND INTEREST PAYMENTS. -- If you fail to
include any portion of an includible payment for interest, dividends or
patronage dividends in gross income, and such failure is found by the Internal
Revenue Service to be due to negligence or disregard of rules or regulations,
you could be subject to a penalty of 20% on any portion of an under-payment
attributable to that failure. However, you will not be subject to this penalty
if it is shown that you acted with reasonable cause and in good faith.
(3) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING. -- If you
make a false statement with no reasonable basis that results in no imposition of
backup withholding, you are subject to a $500 penalty.
(4) 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.
<PAGE>
<PAGE>
7
INSTRUCTIONS
A. Special Conditions.
Holders of Common Shares who (i) declined to make a Non-Cash Election, (ii)
failed to make an effective Non-Cash Election or (iii) made an effective
Non-Cash Election but will not receive Surviving Corporation Shares due to
proration as described in the Information Statement/Prospectus, in each case
with respect to any or all of their shares, will receive in exchange for each
Common Share, the right to receive $41.50 in cash[, except that due to proration
such holders will be required to receive Surviving Corporation Shares in
exchange for approximately [ ]% of their shares for which they did not make an
effective Non-Cash Election].
B. Receipt of Checks in Exchange for Common Shares.
As soon as practicable after the Effective Time, the Exchange Agent will
mail to the registered holder listed in BOX I (or his or her designee listed in
Box II or III), a check from Centennial for an amount equal to $41.50 in cash
with respect to each Common Share which is submitted with any Letter of
Transmittal and not converted due to proration into the right to receive a
Surviving Corporation Share.
No fractional shares will be issued in connection with the Merger. Each
holder of Common Shares who would otherwise have been entitled to receive a
fraction of a Surviving Corporation Share (after taking into account all Common
Shares submitted by such holder) will receive, in lieu thereof, either (i) an
additional Surviving Corporation Share or (ii) a cash payment (without interest)
equal to such fraction multiplied by $41.50.
C. General.
1. Execution and Delivery. This Letter of Transmittal must be properly
filled in, dated and signed in BOX IV, and must be delivered (together with
stock certificates representing the Common Shares being submitted) to the
Exchange Agent at any of the addresses set forth above.
THE METHOD OF DELIVERY OF ALL DOCUMENTS IS AT THE OPTION AND RISK OF THE
STOCKHOLDER, BUT, IF SENT BY MAIL, REGISTERED MAIL, RETURN RECEIPT REQUESTED AND
PROPERLY INSURED, IS SUGGESTED.
2. Inadequate Space. If there is insufficient space on this Form to list
all your stock certificates being submitted to the Exchange Agent, please attach
a separate list.
3. Signatures. The signature (or signatures, in the case of certificates
owned by two or more joint holders) on this Letter of Transmittal should
correspond exactly with the name(s) as written on the face of the certificate(s)
submitted unless the Common Shares described on this Letter of Transmittal have
been assigned by the registered holder(s), in which event this Letter of
Transmittal 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
certificates.
If this Letter of Transmittal is signed by a person or persons other than
the registered owners of the certificates listed, the certificates must be
endorsed or accompanied by appropriate stock powers, in either case signed
exactly as the name(s) of the registered owner(s) appear on the certificates.
If this Letter of Transmittal or any stock certificate(s) or stock power(s)
are signed by a trustee, executor, administrator, guardian, officer of a
corporation, attorney-in-fact or any other person acting in a representative or
fiduciary capacity, the person signing must give such person's full title in
such capacity and appropriate evidence of authority to act in such capacity must
be forwarded with this Letter of Transmittal.
4. Lost or Destroyed Certificates. If your stock certificate(s) has been
either lost or destroyed, please check the box on the front of this Letter of
Transmittal below your name and address and the appropriate forms for
replacement will be sent to you. You will then be instructed as to the steps you
must take in order to receive a check in accordance with the Merger Agreement.
<PAGE>
<PAGE>
8
5. Check in Same Name. If the check issuable in exchange for the shares
represented by the certificate(s) submitted with this Letter of Transmittal is
to be payable to the order of exactly the same name(s) that appears on such
certificate(s), no endorsement of certificate(s) or separate stock power(s) are
required.
6. Check in Different Name. If the check issuable in exchange for the
shares represented by the certificate(s) submitted with this Letter of
Transmittal is to be payable to the order of a name other than exactly the name
that appears on such certificate(s) such exchange shall not be made by the
Exchange Agent unless the certificates submitted are endorsed, BOX II is
completed, and the signature is guaranteed in BOX IV by a member of a national
securities exchange, a member of the National Association of Securities Dealers,
Inc. or a commercial bank (not a savings bank or a savings & loan association)
or trust company having an office in the United States which is a member in good
standing of the Agent's Medallion Program.
7. Special Delivery Instructions. If the check issuable in exchange for the
shares represented by the certificate(s) submitted with this Letter of
Transmittal is to be payable to the order of the registered holder(s) of Common
Shares, but is to be sent to someone other than the registered holder(s) or to
an address other than the address of the registered holders, it will be
necessary to indicate such person or address in BOX III.
8. Miscellaneous. A single check will be issued in exchange for Common
Shares submitted herewith.
All questions with respect to this Letter of Transmittal will be determined
by the Exchange Agent, which determination shall be conclusive and binding.
9. 31% Backup Withholding. Under Federal income tax law, a holder who
receives a cash payment pursuant to the Merger may be required to provide the
Exchange Agent (as payer) with such holder's correct taxpayer identification
number ("TIN") on Substitute Form W-9 below. If the holder is an individual, the
TIN is his or her social security number. If the Exchange Agent is not provided
with the correct TIN, such fact will not, in and of itself, cause Common Shares
to be deemed invalidly delivered, but payments that are made by the Exchange
Agent to such holder or other payee with respect to the Merger may be subject to
backup withholding at a rate of 31%. Backup withholding is not an additional
tax. Rather, the tax liability of persons subject to backup withholding will be
reduced by the amount of tax withheld, provided that the required information is
given to the Internal Revenue Service. If withholding results in an overpayment
of taxes, a refund may be obtained from the Internal Revenue Service.
Certain holders (including, among others, corporations (with respect to
most payments) and certain foreign individuals) are not subject to these backup
withholding and reporting requirements. In order for a foreign individual to
qualify as exempt from backup withholding and reporting requirements, the holder
must submit a Form W-8, signed under penalties of perjury, attesting to that
individual's exempt status. A Form W-8 can be obtained from the Exchange Agent.
See the enclosed "Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9" for more instructions.
The box in Part 3 of the Substitute Form W-9 may be checked if the
submitting holder 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 is checked, the
holder or other payee must also complete the Certificate of Awaiting Taxpayer
Identification Number below in order to avoid backup withholding.
Notwithstanding that the box in Part 3 is checked and the Certificate of
Awaiting Taxpayer Identification Number is completed, the Exchange Agent will
withhold 31% on all payments made prior to the time a properly certified TIN is
provided to the Exchange Agent. However, such amounts may be refunded to such
holder if a TIN is provided to the Exchange Agent within 60 days.
The holder is required to give the Exchange Agent the TIN (e.g., social
security number or employer identification number) of the record owner of the
Common Shares or of the last transferee appearing on the transfers attached to,
or endorsed on, the Common Shares. If the Common Shares are in more than one
name or are not in the name of the actual owner, consult the enclosed
"Guidelines for Certification of Taxpayer Identification Number on Substitute
Form W-9" for additional guidance on which number to report.
<PAGE>
<PAGE>
9
10. Withholding on Foreign Stockholders. Even if a foreign stockholder has
provided the required Form W-8 certification to avoid backup withholding as
described above, the Exchange Agent will be required to withhold federal income
taxes equal to 30% of the gross cash payments made, for tax purposes, in
redemption of the foreign stockholder's stock (see "THE MERGER--Federal Income
Tax Consequences--Characterization of the Merger for United States Federal
Income Tax Purposes" in the Information Statement/Prospectus), payable to a
foreign stockholder or his agent unless the Exchange Agent determines that such
payment is exempt from withholding (or entitled to a reduced rate of
withholding) or that the redemption will qualify as a sale or exchange under
Section 302 of the Internal Revenue Code. See "THE MERGER--Federal Income Tax
Consequences--Foreign Stockholders--Withholding" in the Information Statement/
Prospectus for a more complete discussion of the 30% withholding tax and
obtaining an exemption therefrom. Foreign stockholders are urged to consult
their tax advisors regarding the application of federal income tax withholding,
including eligibility for a withholding tax reduction or exemption and refund
procedures.
------------------------
Additional copies of this Letter of Transmittal may be obtained from the
Exchange Agent by calling (800) 937-5449 ext. 6820 or (718) 921-8200.
<PAGE>
<PAGE>
Exhibit 99.3
FORM OF
LETTER OF TRANSMITTAL
TO ACCOMPANY CERTIFICATE(S) FOR SHARES OF CLASS B COMMON STOCK
of
Centennial Cellular Corp.
Surrendered in Connection with the Merger
of
CCW Acquisition Corp.
With and Into
Centennial Cellular Corp.
This Letter of Transmittal is to accompany certificates for shares of Class
B Common Stock, par value $.01 per share ("Class B Shares"), of Centennial
Cellular Corp. ("Centennial" or the "Company") in connection with the merger
(the "Merger") of CCW Acquisition Corp. ("Acquisition") with and into
Centennial. Each Class B Share will [, subject to proration as described in the
Information Statement/Prospectus (as defined below),] be converted into the
right to receive $41.50 in cash.
By delivering certificates for Class B Shares, the registered holder of
such certificates releases the Company, Acquisition and their respective
affiliates, directors, officers, employees, partners, agents, advisors and
representatives, and their respective successors and assigns, from any and all
claims arising from or in connection with the purchase or ownership of such
Class B Shares or the sale of Class B Shares or receipt of shares of common
stock of the surviving corporation pursuant to the Merger Agreement (as defined
herein).
<TABLE>
To: Centennial Cellular Corp.
<S> <C> <C>
By Mail: By Facsimile: By Hand or Overnight Courier:
(For Eligible Financial
Centennial Cellular Corp. Institions Only) Centennial Cellular Corp.
50 Locust Avenue (203) 972-2013 50 Locust Avenue
New Canaan, CT 06840 New Canaan, CT 06840
Attn: Chief Financial Officer Attn: Chief Financial Officer
</TABLE>
Confirm by Telephone to:
(203) 972-2002
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS, OR TRANSMISSION OF
THIS LETTER OF TRANSMITTAL VIA A FACSIMILE TRANSMISSION NUMBER, OTHER
THAN AS SET FORTH ABOVE, DOES NOT CONSTITUTE A VALID DELIVERY.
PLEASE READ CAREFULLY THE ACCOMPANYING INSTRUCTIONS
<TABLE>
<CAPTION>
BOX I
- --------------------------------------------------------------------------------
Shares Submitted
(Attach additional list if necessary)
------------------------------------------------------
<S> <C> <C>
Name and Address of Certificate(s) Total Number of Shares
Registered Holder* Number Represented by Certificate(s)
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
Total Shares
- --------------------------------------------------------------------------------
</TABLE>
* Only certificates registered in a single form may be deposited with this
Letter of Transmittal. If certificates are registered in different forms
(e.g., John R. Doe and J.R. Doe), it will be necessary to fill in, sign
and submit as many separate Letters of Transmittal as there are different
registrations of certificates.
- --------------------------------------------------------------------------------
[ ] Check here if you cannot locate certificates. Upon receipt of this Letter
of Transmittal, the Company will contact you directly with replacement
instructions.
<PAGE>
<PAGE>
2
Ladies and Gentlemen:
In connection with the Merger, the undersigned hereby submits the
certificate(s) for shares of Class B Common Stock, par value $.01 per share, of
Centennial ("Class B Shares") listed in BOX I. Delivery of the enclosed
certificates shall be effected, and risk of loss of and title to such
certificates shall pass, only upon delivery thereof to you.
It is understood that this Letter of Transmittal is subject to (i) the
terms, conditions and limitations set forth in the Information
Statement/Prospectus, dated December 8, 1998, relating to the Merger
(including all annexes and schedules thereto, and as it may be amended or
supplemented from time to time, the "Information Statement/ Prospectus"),
receipt of which is acknowledged by the undersigned, (ii) the terms of the
Agreement and Plan of Merger, dated as of July 2, 1998, and as amended as of
November 29, 1998, as the same may be amended or supplemented from time to
time (the "Merger Agreement"), a conformed copy of each appears as Appendices
A and B, respectively, to the Information Statement/Prospectus, and (iii) the
accompanying Instructions.
The undersigned represents and warrants to Centennial that the undersigned
has full power and authority to surrender, without restriction, the shares
represented by the certificate(s) surrendered herewith and that Centennial will
acquire good and unencumbered title to the rights represented thereby, free and
clear of all liens, restrictions, charges and encumbrances and not subject to
any adverse claim when payment for such Shares is made by Centennial to the
undersigned. The undersigned will, upon request, execute any additional
documents Centennial considers necessary or desirable to complete the surrender
of such shares.
By delivering certificates for Class B Shares, the registered holder of
such certificates releases the Company, Acquisition and their respective
affiliates, directors, officers, employees, partners, agents, advisors and
representatives, and their respective successors and assigns, from any and all
claims arising from or in connection with the purchase or ownership of such
Class B Shares or the sale of Class B Shares or receipt of shares of common
stock of the surviving corporation pursuant to the Merger Agreement.
Unless otherwise indicated under Special Payment Instructions below, please
issue the check issuable in exchange for the Class B Shares represented by the
certificates submitted hereby in the name of the registered holder(s) of such
Class B Shares. Similarly, unless otherwise indicated under Special Delivery
Instructions, please mail the check issuable in exchange for the Class B Shares
represented by the certificates submitted hereby to the registered holder(s) of
the Class B Shares at the address or addresses shown above.
BOX II
SPECIAL PAYMENT INSTRUCTIONS
(See Instructions C(5) and C(6))
To be completed ONLY if the check is to be made to someone other
than the registered holder(s) of Class B Shares.
Name: ------------------------------------------------------------
(Please Print)
Address: ---------------------------------------------------------
(Please Print)
---------------------------------------------------------
(Including Zip Code)
---------------------------------------------------------
(Tax Identification or Social Security Number)
BOX III
SPECIAL DELIVERY INSTRUCTIONS
(See Instruction C(7))
To be completed ONLY if the check is to be made payable to the registered
holder(s) of Class B Shares, but is to be sent to someone other than the
registered holder(s) or to an address other than the address of the registered
holder(s) set forth above.
Name: ------------------------------------------------------------
(Please Print)
Address: ---------------------------------------------------------
(Please Print)
---------------------------------------------------------
(Including Zip Code)
<PAGE>
<PAGE>
3
BOX IV
- --------------------------------------------------------------------------------
SIGN HERE AND HAVE SIGNATURES GUARANTEED
(See Instructions C(1), C(3) and C(6) Concerning Signature Guarantee)
Name(s):
-----------------------------------------------------------------------
(Please Print)
Name(s):
-----------------------------------------------------------------------
(Please Print)
-----------------------------------------------------------------------
Signature(s) of owner(s)
-----------------------------------------------------------------------
Signature(s) of owner(s)
Must be signed by registered holder(s) exactly as name(s) appear(s) on
stock certificate(s) or by person(s) authorized to become registered holder(s)
by certificates and documents transmitted herewith. If signature is by a
trustee, executor, administrator, guardian, officer of a corporation,
attorney-in-fact or any other person acting in a fiduciary capacity, set forth
full title in such capacity and see Instruction C(3).
-----------------------------------------------------------------------
-----------------------------------------------------------------------
(Area Code and Telephone Number(s))
-----------------------------------------------------------------------
-----------------------------------------------------------------------
(Tax Identification or Social Security Number(s))
SIGNATURE(S)
GUARANTEED: Dated: , 1998
------------------------------------ -------------
(See Instruction C(6))
- --------------------------------------------------------------------------------
(DO NOT WRITE IN SPACES BELOW)
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
Surviving Shares
Shares Shares Corporation Certificate Block Converted Check Amount of
Surrendered Accepted Shares Number Number Into Cash Number Check
- ----------- -------- ----------- ----------- ------ --------- ------ ---------
</TABLE>
DELIVERY PREPARED BY CHECKED BY
----------------------------- -----------------
DATE
------------------------------
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
4
Payer: Centennial Cellular Corp.
- -------------------------------------------------------------------------------------------
<S> <C>
Part 1--PLEASE PROVIDE Social Security Number OR
YOUR TIN IN THE BOX AT Employer Identification Number
RIGHT AND CERTIFY BY
SIGNING AND DATING BELOW
--------------------------
------------------------------------------------------------
SUBSTITUTE
Form W-9 Part 2--CERTIFICATION--Under penalties of perjury, I certify
that:
Department of the Treasury
Internal Revenue Service (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
PAYER'S REQUEST FOR TAXPAYER
IDENTIFICATION NUMBER (TIN) (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
(the "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.
CERTIFICATION INSTRUCTIONS--You must cross out
item (2) above if you have been notified by the
IRS that you are currently subject to backup
withholding because of underreporting interest or
dividends on your tax return. However, if after
being notified by the IRS that you are subject to
backup withholding, you received another
notification from the IRS stating that you are no
longer subject to backup withholding, do not
cross out item (2).
SIGNATURE DATE , 1998
-------------------- ----------------
Part 3--Awaiting TIN [ ]
- ------------------------------ ---------------------------- -------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE MERGER. PLEASE REVIEW
THE ENCLOSED "GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9" FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 3 OF
SUBSTITUTE FORM W-9.
- -------------------------------------------------------------------------------
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (1) 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 (2)
I intend to mail or deliver an application in the near future. I understand that
if I do not provide a taxpayer identification number by the time of payment, 31%
of all reportable payments made to me will be withheld, but that such amounts
will be refunded to me if I then provide a Taxpayer Identification Number within
sixty (60) days.
Signature Date
----------------------------------- ------------------------------
- --------------------------------------------------------------------------------
Questions and requests for assistance or additional copies of the
Information Statement/Prospectus or this Form of Election may be directed to the
address set forth below:
American Stock Transfer & Trust Company
40 Wall Street
New York, NY 10005
Call Toll-Free (800) 937-5449 ext. 6820
<PAGE>
<PAGE>
5
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 ("SSNs") have nine digits separated by two
hyphens: i.e. 000-00-0000. Employer identification numbers ("EINs") have nine
digits separated by only one hyphen; i.e. 00-0000000. The table below will help
determine the number to give the payer.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
GIVE THE
FOR THIS TYPE OF ACCOUNT: SOCIAL
SECURITY
NUMBER OF --
- -----------------------------------------------------------------------------------------
<S> <C>
1. Individual The individual
2. Two or more individuals (joint account) The actual owner of
account or, if combined
funds, the first
individual on the
account(1)
3. Custodian account of a minor (Uniform Gift to Minors Act) The minor(2)
4. a. The usual revocable savings trust account (grantor is The grantor-trustee(1)
also trustee)
b. So-called trust account that is not a legal or valid The actual owner(1)
trust under state law
5. Sole proprietorship The owner(3)
<CAPTION>
- -----------------------------------------------------------------------------------------
FOR THIS TYPE OF ACCOUNT: GIVE THE EMPLOYER
IDENTIFICATION
NUMBER OF --
- -----------------------------------------------------------------------------------------
<S> <C>
6. Sole proprietorship The owner(3)
7. A valid trust, estate or pension trust The legal entity(4)
8. Corporate The corporation
9. Association, club, religious, charitable, educational or The organization
other tax-exempt organization
10. Partnership The partnership
11. A broker or registered nominee The broker or nominee
12. Account with the Department of Agriculture in the name of The public entity
a public entity (such as a state or local government,
school district or prison) that receives agricultural
program payments
- -----------------------------------------------------------------------------------------
</TABLE>
(1) List first and circle the name of the person whose number you furnish. If
only one person on a joint account has an SSN, that person's number must be
furnished.
(2) Circle the minor's name and furnish the minor's SSN.
(3) You must show your individual name, but you may also enter your business or
"doing business as" name. You may use either your SSN or EIN (if you have
one).
(4) List first and circle the name of the legal trust, estate or pension trust.
(Do not furnish the taxpayer identification number of the personal
representative or trustee unless the legal entity itself is not designated
in the account title.)
NOTE: If no name is circled when more than one name is listed, the number will
be considered to be that of the first name listed.
<PAGE>
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card, or Form
SS-4, Application for Employer Identification Number (for businesses and other
entities), at the local office of the Social Security Administration or the
Internal Revenue Service and apply for a number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
The following is a list of payees exempt from backup withholding and for which
no information reporting is required. For interest and dividends, all listed
payees are exempt except item (9). For broker transactions, payees listed in (1)
through (13) and a person registered under the Investment Advisers Act of 1940
who regularly acts as a broker are exempt. Payments subject to reporting under
sections 6041 and 6041A are generally exempt from backup withholding only if
made to payees described in items (1) through (7), except a corporation that
provides medical and health care services or bills and collects payments for
such services is not exempt from backup withholding or information reporting.
Only payees described in item (2) through (6) are exempt from backup withholding
for barter exchange transactions and patronage dividends.
(1) A corporation.
(2) An organization exempt from tax under section 501(a), or an IRA, or a
custodial account under section 403(b)(7).
(3) The United States or any of its agencies or instrumentalities.
(4) A state, the District of Columbia, a possession of the United States,
or any of their political subdivisions or instrumentalities.
(5) A foreign government or any of its political subdivisions, agencies, or
instrumentalities.
(6) An international organization or any of its agencies or
instrumentalities.
(7) A foreign central bank of issue.
(8) A dealer in securities or commodities required to register in the
United States, the District of Columbia, or a possession of the United
States.
(9) A futures commission merchant registered with the Commodity Futures
Trading Commission.
(10) A real estate investment trust.
(11) An entity registered at all times during the tax year under the
Investment Company Act of 1940.
(12) A common trust fund operated by a bank under section 584(a).
(13) A financial institution.
(14) A middleman known in the investment community as a nominee or who is
listed in the most recent publication of the American Society of
Corporate Secretaries, Inc., Nominee List.
(15) A trust exempt from tax under section 664 or described in section 4947.
<PAGE>
6
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
-- Payments to nonresident aliens subject to withholding under section 1441.
-- Payments to partnerships not engaged in a trade or business in the United
States and that have at least one nonresident alien partner.
-- Payments of patronage dividends not paid in money.
-- Payments made by certain foreign organizations.
-- Section 404(k) payments made by an ESOP.
Payments of interest not generally subject to backup withholding include the
following:
-- Payments of interest on obligations issued by individuals. Note: You may be
subject to backup withholding if this interest is $600 or more and is paid
in the course of the payer's trade or business and you have not provided
your correct taxpayer identification number to the payer.
-- Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
-- Payments described in section 6049(b)(5) to non-resident aliens.
-- Payments on tax-free covenant bonds under section 1451.
-- Payments made by certain foreign organizations.
EXEMPT PAYEES DESCRIBED ABOVE SHOULD FILE FORM W-9 TO AVOID POSSIBLE ERRONEOUS
BACKUP WITHHOLDING. FILE SUBSTITUTE FORM W-9 WITH THE PAYER, CERTIFY YOUR
TAXPAYER IDENTIFICATION NUMBER ON PART II OF THE FORM, WRITE "EXEMPT" ON THE
FACE OF THE FORM AND SIGN, DATE AND RETURN IT TO THE PAYER.
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 sections 6041, 6041A, 6042, 6044, 6045, 6049,
6050A and 6050N, and their regulations.
PRIVACY ACT NOTICE -- Section 6109 requires most recipients of dividend,
interest or other payments to give taxpayer identification numbers to payers who
must report the payments to the IRS. The IRS uses the numbers for identification
purposes. Payers must be given the numbers whether or not recipients are
required to file tax returns. Payers must generally withhold 31% of taxable
interest, dividend and certain other payments to a payee who does not furnish a
taxpayer identification number to a payer. Certain penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER. -- If you
fail to furnish your correct taxpayer identification number to a payer, you are
subject to a penalty of $50 for each such failure unless your failure is due to
reasonable cause and not to willful neglect.
(2) FAILURE TO REPORT CERTAIN DIVIDEND AND INTEREST PAYMENTS. -- If you fail to
include any portion of an includible payment for interest, dividends or
patronage dividends in gross income, and such failure is found by the Internal
Revenue Service to be due to negligence or disregard of rules or regulations,
you could be subject to a penalty of 20% on any portion of an under-payment
attributable to that failure. However, you will not be subject to this penalty
if it is shown that you acted with reasonable cause and in good faith.
(3) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING. -- If you
make a false statement with no reasonable basis that results in no imposition of
backup withholding, you are subject to a $500 penalty.
(4) 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.
<PAGE>
<PAGE>
7
INSTRUCTIONS
A. SPECIAL CONDITIONS.
[Due to proration as described in the Information Statement/Prospectus,]
[H]olders of Class B Shares will receive in exchange for each Class B Share the
right to receive $41.50 in cash [, except that such holders will be required to
exchange approximately [ ]% of their Class B Shares for shares of Class A Common
Stock, par value $0.01, of Centennial (the "Common Shares") that will be
converted into the right to receive shares of common stock of the surviving
corporation in connection with the Merger and, upon consummation of the Merger,
will be denominated as Centennial Common Stock].
B. RECEIPT OF CHECKS IN EXCHANGE FOR CLASS B SHARES.
As soon as practicable after the Effective Time, the Company will mail to
the registered holder listed in BOX I (or his or her designee listed in Box II
or III), a check for an amount equal to $41.50 in cash with respect to each
Class B Share which is submitted with any Letter of Transmittal [and not
converted due to proration into the right to receive a share of common stock of
the surviving corporation].
No fractional shares will be issued in connection with the Merger. Each
holder of Class B Shares who would otherwise have been entitled to receive a
fraction of a Surviving Corporation Share (after taking into account all Class B
Shares submitted by such holder) will receive, in lieu thereof [, either (i) an
additional Surviving Corporation Share or (ii)] a cash payment (without
interest) equal to such fraction multiplied by $41.50.
C. GENERAL.
1. Execution and Delivery. This Letter of Transmittal must be properly
filled in, dated and signed in BOX IV, and must be delivered (together with
stock certificates representing the Class B Shares being submitted) to the
Company at any of the addresses set forth above.
THE METHOD OF DELIVERY OF ALL DOCUMENTS IS AT THE OPTION AND RISK OF THE
STOCKHOLDER, BUT, IF SENT BY MAIL, REGISTERED MAIL, RETURN RECEIPT REQUESTED AND
PROPERLY INSURED, IS SUGGESTED.
2. Inadequate Space. If there is insufficient space on this Form to list
all your stock certificates being submitted to the Company, please attach a
separate list.
3. Signatures. The signature (or signatures, in the case of certificates
owned by two or more joint holders) on this Letter of Transmittal should
correspond exactly with the name(s) as written on the face of the certificate(s)
submitted unless the Class B Shares described on this Letter of Transmittal have
been assigned by the registered holder(s), in which event this Letter of
Transmittal 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
certificates.
If this Letter of Transmittal is signed by a person or persons other than
the registered owners of the certificates listed, the certificates must be
endorsed or accompanied by appropriate stock powers, in either case signed
exactly as the name(s) of the registered owner(s) appear on the certificates.
If this Letter of Transmittal or any stock certificate(s) or stock power(s)
are signed by a trustee, executor, administrator, guardian, officer of a
corporation, attorney-in-fact or any other person acting in a representative or
fiduciary capacity, the person signing must give such person's full title in
such capacity and appropriate evidence of authority to act in such capacity must
be forwarded with this Letter of Transmittal.
4. Lost or Destroyed Certificates. If your stock certificate(s) has been
either lost or destroyed, please check the box on the front of this Letter of
Transmittal below your name and address and the appropriate forms for
replacement will be sent to you. You will then be instructed as to the steps you
must take in order to receive a check in accordance with the Merger Agreement.
<PAGE>
<PAGE>
8
5. Check in Same Name. If the check issuable in exchange for the shares
represented by the certificate(s) submitted with this Letter of Transmittal is
to be payable to the order of exactly the same name(s) that appears on such
certificate(s), no endorsement of certificate(s) or separate stock power(s) are
required.
6. Check in Different Name. If the check issuable in exchange for the
shares represented by the certificate(s) submitted with this Letter of
Transmittal is to be payable to the order of a name other than exactly the name
that appears on such certificate(s) such exchange shall not be made by the
Company unless the certificates submitted are endorsed, BOX II is completed, and
the signature is guaranteed in BOX IV by a member of a national securities
exchange, a member of the National Association of Securities Dealers, Inc. or a
commercial bank (not a savings bank or a savings & loan association) or trust
company having an office in the United States which is a member in good standing
of the Agent's Medallion Program.
7. Special Delivery Instructions. If the check issuable in exchange for the
shares represented by the certificate(s) submitted with this Letter of
Transmittal is to be payable to the order of the registered holder(s) of Class B
Shares, but is to be sent to someone other than the registered holder(s) or to
an address other than the address of the registered holders, it will be
necessary to indicate such person or address in BOX III.
8. Miscellaneous. A single check will be issued in exchange for Class B
Shares submitted herewith.
All questions with respect to this Letter of Transmittal will be determined
by the Company, which determination shall be conclusive and binding.
9. 31% Backup Withholding. Under Federal income tax law, a holder who
receives a cash payment pursuant to the Merger may be required to provide the
Company (as payer) with such holder's correct taxpayer identification number
("TIN") on Substitute Form W-9 below. If the holder is an individual, the TIN is
his or her social security number. If the Company is not provided with the
correct TIN, such fact will not, in and of itself, cause Class B Shares to be
deemed invalidly delivered, but payments that are made by the Company to such
holder or other payee with respect to the Merger may be subject to backup
withholding at a rate of 31%. Backup withholding is not an additional tax.
Rather, the tax liability of persons subject to backup withholding will be
reduced by the amount of tax withheld, provided that the required information is
given to the Internal Revenue Service. If withholding results in an overpayment
of taxes, a refund may be obtained from the Internal Revenue Service.
Certain holders (including, among others, corporations (with respect to
most payments) and certain foreign individuals) are not subject to these backup
withholding and reporting requirements. In order for a foreign individual to
qualify as exempt from backup withholding and reporting requirements, the holder
must submit a Form W-8, signed under penalties of perjury, attesting to that
individual's exempt status. A Form W-8 can be obtained from the Company.
See the enclosed "Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9" for more instructions.
The box in Part 3 of the Substitute Form W-9 may be checked if the
submitting holder 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 is checked, the
holder or other payee must also complete the Certificate of Awaiting Taxpayer
Identification Number below in order to avoid backup withholding.
Notwithstanding that the box in Part 3 is checked and the Certificate of
Awaiting Taxpayer Identification Number is completed, the Company will withhold
31% on all payments made prior to the time a properly certified TIN is provided
to the Company. However, such amounts may be refunded to such holder if a TIN is
provided to the Company within 60 days.
The holder is required to give the Company the TIN (e.g., social security
number or employer identification number) of the record owner of the Class B
Shares or of the last transferee appearing on the transfers attached to, or
endorsed on, the Class B Shares. If the Class B Shares are in more than one name
or are not in the name of the actual owner, consult the enclosed "Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9" for
additional guidance on which number to report.
<PAGE>
<PAGE>
9
10. Withholding on Foreign Stockholders. Even if a foreign stockholder has
provided the required Form W-8 certification to avoid backup withholding as
described above, the Company will be required to withhold federal income taxes
equal to 30% of the gross cash payments made, for tax purposes, in redemption of
the foreign stockholder's stock (see "THE MERGER--Federal Income Tax
Consequences--Characterization of the Merger for United States Federal Income
Tax Purposes" in the Information Statement/Prospectus) payable to a foreign
stockholder or his agent unless the Company determines that such payment is
exempt from withholding (or entitled to a reduced rate of withholding) or that
the redemption will qualify as a sale or exchange under Section 302 of the
Internal Revenue Code. See "THE MERGER--Federal Income Tax Consequences--Foreign
Stockholders--Withholding" in the Information Statement/Prospectus for a more
complete discussion of the 30% withholding tax and obtaining an exemption
therefrom. Foreign stockholders are urged to consult their tax advisors
regarding the application of federal income tax withholding, including
eligibility for a withholding tax reduction or exemption and refund procedures.
------------------------
Additional copies of this Letter of Transmittal may be obtained from the
Company by calling (203) 972-2002.
<PAGE>
<PAGE>
Exhibit 99.4
FORM OF
LETTER OF TRANSMITTAL
TO ACCOMPANY CERTIFICATE(S) FOR SHARES OF CONVERTIBLE PREFERRED STOCK
AND SECOND SERIES CONVERTIBLE PREFERRED STOCK
of
Centennial Cellular Corp.
Surrendered in Connection with the Merger
of
CCW Acquisition Corp.
With and Into
Centennial Cellular Corp.
This Letter of Transmittal is to accompany certificates for
shares of Convertible Preferred Stock, par value $.01 per share, of Centennial
Cellular Corp. ("Centennial" or the "Company") and Second Series Convertible
Preferred Stock, par value $.01 per share, of the Company (together, the
"Convertible Preferred Shares") in connection with the merger (the "Merger") of
CCW Acquisition Corp. ("Acquisition") with and into Centennial. Each Convertible
Preferred Share will be converted into the right to receive $41.50 in cash on an
as-converted basis.
By delivering certificates for Convertible Preferred Shares,
the registered holder of such certificates releases the Company, Acquisition and
their respective affiliates, directors, officers, employees, partners, agents,
advisors and representatives, and their respective successors and assigns, from
any and all claims arising from or in connection with the purchase or ownership
of such Convertible Preferred Shares or the sale of such Convertible Preferred
Shares pursuant to the Merger Agreement (as defined herein).
To: Centennial Cellular Corp.
<TABLE>
<S> <C> <C>
By Mail: By Facsimile: By Hand or Overnight Courier:
(For Eligible Financial Institutions Only)
Centennial Cellular Corp. (203) 972-2013 Centennial Cellular Corp.
50 Locust Avenue 50 Locust Avenue
New Canaan, CT 06840 New Canaan, CT 06840
Attn: Chief Financial Officer Attn: Chief Financial Officer
Confirm by Telephone to:
(203) 972-2002
</TABLE>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS, OR TRANSMISSION OF
THIS LETTER OF TRANSMITTAL VIA A FACSIMILE TRANSMISSION NUMBER, OTHER
THAN AS SET FORTH ABOVE, DOES NOT CONSTITUTE A VALID DELIVERY.
PLEASE READ CAREFULLY THE ACCOMPANYING INSTRUCTIONS
<TABLE>
<CAPTION>
BOX I
- -----------------------------------------------------------------------------------------------
Shares Submitted
(Attach additional list if necessary)
--------------------------------------------------------------------
<S> <C> <C>
Name and Address of Certificate(s) Total Number of Shares
Registered Holder* Number Represented by Certificate(s)
- -----------------------------------------------------------------------------------------------
--------------------------------------------------------------------
--------------------------------------------------------------------
--------------------------------------------------------------------
--------------------------------------------------------------------
--------------------------------------------------------------------
Total Shares
- -----------------------------------------------------------------------------------------------
</TABLE>
* Only certificates registered in a single form may be deposited with
this Letter of Transmittal. If certificates are registered in different
forms (e.g., John R. Doe and J.R. Doe), it will be necessary to fill
in, sign and submit as many separate Letters of Transmittal as there
are different registrations of certificates.
[ ] Check here if you cannot locate certificates. Upon receipt of this
Letter of Transmittal, the Company will contact you directly with
replacement instructions.
<PAGE>
<PAGE>
2
Ladies and Gentlemen:
In connection with the Merger, the undersigned hereby submits
the certificate(s) for shares of Convertible Preferred Stock, par value $.01 per
share, of Centennial or shares of Second Series Convertible Preferred Stock, par
value $.01 per share, of Centennial (together, the "Convertible Preferred
Shares") listed in BOX I. Delivery of the enclosed certificates shall be
effected, and risk of loss of and title to such certificates shall pass, only
upon delivery thereof to you.
It is understood that this Letter of Transmittal is subject to
(i) the terms, conditions and limitations set forth in the Information
Statement/Prospectus, dated December 8, 1998, relating to the Merger
(including all annexes and schedules thereto, and as it may be amended or
supplemented from time to time, the "Information Statement/ Prospectus"),
receipt of which is acknowledged by the undersigned, (ii) the terms of the
Agreement and Plan of Merger, dated as of July 2, 1998, and as amended as of
November 29, 1998, as the same may be amended or supplemented from time to
time (the "Merger Agreement"), a conformed copy of each appears as Appendices
A and B, respectively, to the Information Statement/Prospectus, and (iii) the
accompanying Instructions.
The undersigned represents and warrants to Centennial that the
undersigned has full power and authority to surrender, without restriction, the
shares represented by the certificate(s) surrendered herewith and that
Centennial will acquire good and unencumbered title to the rights represented
thereby, free and clear of all liens, restrictions, charges and encumbrances and
not subject to any adverse claim when payment for such Shares is made by
Centennial to the undersigned. The undersigned will, upon request, execute any
additional documents Centennial considers necessary or desirable to complete the
surrender of such shares.
By delivering certificates for Convertible Preferred Shares,
the registered holder of such certificates releases the Company, Acquisition and
their respective affiliates, directors, officers, employees, partners, agents,
advisors and representatives, and their respective successors and assigns, from
any and all claims arising from or in connection with the purchase or ownership
of such Convertible Preferred Shares or the sale of such Convertible Preferred
Shares pursuant to the Merger Agreement.
Unless otherwise indicated under Special Payment Instructions
below, please issue the check issuable in exchange for the Convertible Preferred
Shares represented by the certificates submitted hereby in the name of the
registered holder(s) of such Convertible Preferred Shares. Similarly, unless
otherwise indicated under Special Delivery Instructions, please mail the check
issuable in exchange for the Convertible Preferred Shares represented by the
certificates submitted hereby to the registered holder(s) of the Convertible
Preferred Shares at the address or addresses shown above.
BOX II
- ---------------------------------------------------------
SPECIAL PAYMENT INSTRUCTIONS
(See Instructions C(5) and C(6))
To be completed ONLY if the check is to be made payable
to someone other than the registered holder(s) of
Convertible Preferred Shares.
Name:
-----------------------------------------------
(Please Print)
-----------------------------------------------
(Please Print)
Address:
--------------------------------------------
--------------------------------------------
(Including Zip Code)
--------------------------------------------
(Tax Identification or
Social Security Number)
- --------------------------------------------------------
BOX III
- -----------------------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(See Instruction C(7))
To be completed ONLY if the check is to be made payable to the
registered holder(s) of Convertible Preferred Shares, but is to be sent
to someone other than the registered holder(s) or to an address other
than the address of the registered holder(s) set forth above.
Name:
-----------------------------------------------
(Please Print)
-----------------------------------------------
(Please Print)
Address:
--------------------------------------------
--------------------------------------------
(Including Zip Code)
- -----------------------------------------------------------------------
<PAGE>
<PAGE>
BOX IV
3
- -------------------------------------------------------------------------------
SIGN HERE AND HAVE SIGNATURES GUARANTEED
(See Instructions C(1), C(3) and C(6) Concerning Signature Guarantee)
Name(s):
-----------------------------------------------------------------------
(Please Print)
Name(s):
-----------------------------------------------------------------------
(Please Print)
-----------------------------------------------------------------------
Signature(s) of owner(s)
-----------------------------------------------------------------------
Signature(s) of owner(s)
Must be signed by registered holder(s) exactly as name(s) appear(s) on
stock certificate(s) or by person(s) authorized to become registered holder(s)
by certificates and documents transmitted herewith. If signature is by a
trustee, executor, administrator, guardian, officer of a corporation,
attorney-in-fact or any other person acting in a fiduciary capacity, set forth
full title in such capacity and see Instruction C(3).
-----------------------------------------------------------------------
-----------------------------------------------------------------------
(Area Code and Telephone Number(s))
-----------------------------------------------------------------------
-----------------------------------------------------------------------
(Tax Identification or Social Security Number(s))
SIGNATURE(S)
GUARANTEED:________________________________ Dated: _______________, 1998
(See Instruction C(6))
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(DO NOT WRITE IN SPACES BELOW)
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Shares
Shares Shares Certificate Block Converted Check Amount of
Surrendered Accepted Number Number Into Cash Number Check
- ----------------------------------------------------------------------------------
</TABLE>
- -------------------------------------------------------------------------------
DELIVERY PREPARED BY CHECKED BY
---------------------------- -------------------
DATE
---------------------
<PAGE>
<PAGE>
4
<TABLE>
<CAPTION>
Payer: Centennial Cellular Corp.
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Part 1--PLEASE PROVIDE Social Security Number OR
YOUR TIN IN THE BOX AT Employer Identification Number
RIGHT AND CERTIFY BY
SIGNING AND DATING BELOW ----------------------------------
SUBSTITUTE
-----------------------------------------------------------------------------------
Form W-9 Part 2--CERTIFICATION--UNDER PENALTIES OF PERJURY, I CERTIFY THAT:
Department of the Treasury
Internal Revenue Service (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
PAYER'S REQUEST FOR TAXPAYER
IDENTIFICATION NUMBER (TIN) (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 (the "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.
CERTIFICATION INSTRUCTIONS--You must cross out item (2) above if
you have been notified by the IRS that you are currently subject to backup
withholding because of underreporting interest or dividends on your tax return.
However, if after being notified by the IRS that you are subject to backup
withholding, you received another notification from the IRS stating that you
are no longer subject to backup withholding, do not cross out item (2).
SIGNATURE DATE , 1998
-------------------------------- --------------------------
PART 3--AWAITING TIN [ ]
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE MERGER.
PLEASE REVIEW THE ENCLOSED "GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9" FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 3 OF
SUBSTITUTE FORM W-9.
- -------------------------------------------------------------------------------
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (1) 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 (2)
I intend to mail or deliver an application in the near future. I understand that
if I do not provide a taxpayer identification number by the time of payment, 31%
of all reportable payments made to me will be withheld, but that such amounts
will be refunded to me if I then provide a Taxpayer Identification Number within
sixty (60) days.
Signature Date
---------------------------------------------- -----------------
- -------------------------------------------------------------------------------
Questions and requests for assistance or additional copies of the
Information Statement/Prospectus or this Form of Election may be directed to the
address set forth below:
American Stock Transfer & Trust Company
40 Wall Street
New York, NY 10005
Call Toll-Free (800) 937-5449 ext. 6820
<PAGE>
<PAGE>
5
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 ("SSNs") have nine digits separated by two
hyphens: i.e. 000-00-0000. Employer identification numbers ("EINs") have nine
digits separated by only one hyphen; i.e. 00-0000000. The table below will help
determine the number to give the payer.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
GIVE THE
FOR THIS TYPE OF ACCOUNT: SOCIAL
SECURITY
NUMBER OF --
- -----------------------------------------------------------------------------------------
<S> <C>
1. Individual The individual
2. Two or more individuals (joint account) The actual owner of
account or, if combined
funds, the first
individual on the
account(1)
3. Custodian account of a minor (Uniform Gift to Minors Act) The minor(2)
4. a. The usual revocable savings trust account (grantor is The grantor-trustee(1)
also trustee)
b. So-called trust account that is not a legal or valid The actual owner(1)
trust under state law
5. Sole proprietorship The owner(3)
<CAPTION>
- -----------------------------------------------------------------------------------------
FOR THIS TYPE OF ACCOUNT: GIVE THE EMPLOYER
IDENTIFICATION
NUMBER OF --
- -----------------------------------------------------------------------------------------
<S> <C>
6. Sole proprietorship The owner(3)
7. A valid trust, estate or pension trust The legal entity(4)
8. Corporate The corporation
9. Association, club, religious, charitable, educational or The organization
other tax-exempt organization
10. Partnership The partnership
11. A broker or registered nominee The broker or nominee
12. Account with the Department of Agriculture in the name of The public entity
a public entity (such as a state or local government,
school district or prison) that receives agricultural
program payments
- -----------------------------------------------------------------------------------------
</TABLE>
(1) List first and circle the name of the person whose number you furnish. If
only one person on a joint account has an SSN, that person's number must be
furnished.
(2) Circle the minor's name and furnish the minor's SSN.
(3) You must show your individual name, but you may also enter your business or
"doing business as" name. You may use either your SSN or EIN (if you have
one).
(4) List first and circle the name of the legal trust, estate or pension trust.
(Do not furnish the taxpayer identification number of the personal
representative or trustee unless the legal entity itself is not designated
in the account title.)
NOTE: If no name is circled when more than one name is listed, the number will
be considered to be that of the first name listed.
<PAGE>
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card, or Form
SS-4, Application for Employer Identification Number (for businesses and other
entities), at the local office of the Social Security Administration or the
Internal Revenue Service and apply for a number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
The following is a list of payees exempt from backup withholding and for which
no information reporting is required. For interest and dividends, all listed
payees are exempt except item (9). For broker transactions, payees listed in (1)
through (13) and a person registered under the Investment Advisers Act of 1940
who regularly acts as a broker are exempt. Payments subject to reporting under
sections 6041 and 6041A are generally exempt from backup withholding only if
made to payees described in items (1) through (7), except a corporation that
provides medical and health care services or bills and collects payments for
such services is not exempt from backup withholding or information reporting.
Only payees described in item (2) through (6) are exempt from backup withholding
for barter exchange transactions and patronage dividends.
(1) A corporation.
(2) An organization exempt from tax under section 501(a), or an IRA, or a
custodial account under section 403(b)(7).
(3) The United States or any of its agencies or instrumentalities.
(4) A state, the District of Columbia, a possession of the United States,
or any of their political subdivisions or instrumentalities.
(5) A foreign government or any of its political subdivisions, agencies, or
instrumentalities.
(6) An international organization or any of its agencies or
instrumentalities.
(7) A foreign central bank of issue.
(8) A dealer in securities or commodities required to register in the
United States, the District of Columbia, or a possession of the United
States.
(9) A futures commission merchant registered with the Commodity Futures
Trading Commission.
(10) A real estate investment trust.
(11) An entity registered at all times during the tax year under the
Investment Company Act of 1940.
(12) A common trust fund operated by a bank under section 584(a).
(13) A financial institution.
(14) A middleman known in the investment community as a nominee or who is
listed in the most recent publication of the American Society of
Corporate Secretaries, Inc., Nominee List.
(15) A trust exempt from tax under section 664 or described in section 4947.
<PAGE>
6
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
-- Payments to nonresident aliens subject to withholding under section 1441.
-- Payments to partnerships not engaged in a trade or business in the United
States and that have at least one nonresident alien partner.
-- Payments of patronage dividends not paid in money.
-- Payments made by certain foreign organizations.
-- Section 404(k) payments made by an ESOP.
Payments of interest not generally subject to backup withholding include the
following:
-- Payments of interest on obligations issued by individuals. Note: You may be
subject to backup withholding if this interest is $600 or more and is paid
in the course of the payer's trade or business and you have not provided
your correct taxpayer identification number to the payer.
-- Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
-- Payments described in section 6049(b)(5) to non-resident aliens.
-- Payments on tax-free covenant bonds under section 1451.
-- Payments made by certain foreign organizations.
EXEMPT PAYEES DESCRIBED ABOVE SHOULD FILE FORM W-9 TO AVOID POSSIBLE ERRONEOUS
BACKUP WITHHOLDING. FILE SUBSTITUTE FORM W-9 WITH THE PAYER, CERTIFY YOUR
TAXPAYER IDENTIFICATION NUMBER ON PART II OF THE FORM, WRITE "EXEMPT" ON THE
FACE OF THE FORM AND SIGN, DATE AND RETURN IT TO THE PAYER.
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 sections 6041, 6041A, 6042, 6044, 6045, 6049,
6050A and 6050N, and their regulations.
PRIVACY ACT NOTICE -- Section 6109 requires most recipients of dividend,
interest or other payments to give taxpayer identification numbers to payers who
must report the payments to the IRS. The IRS uses the numbers for identification
purposes. Payers must be given the numbers whether or not recipients are
required to file tax returns. Payers must generally withhold 31% of taxable
interest, dividend and certain other payments to a payee who does not furnish a
taxpayer identification number to a payer. Certain penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER. -- If you
fail to furnish your correct taxpayer identification number to a payer, you are
subject to a penalty of $50 for each such failure unless your failure is due to
reasonable cause and not to willful neglect.
(2) FAILURE TO REPORT CERTAIN DIVIDEND AND INTEREST PAYMENTS. -- If you fail to
include any portion of an includible payment for interest, dividends or
patronage dividends in gross income, and such failure is found by the Internal
Revenue Service to be due to negligence or disregard of rules or regulations,
you could be subject to a penalty of 20% on any portion of an under-payment
attributable to that failure. However, you will not be subject to this penalty
if it is shown that you acted with reasonable cause and in good faith.
(3) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING. -- If you
make a false statement with no reasonable basis that results in no imposition of
backup withholding, you are subject to a $500 penalty.
(4) 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.
<PAGE>
<PAGE>
7
INSTRUCTIONS
A. SPECIAL CONDITIONS.
Holders of Convertible Preferred Shares will receive in exchange for
each Convertible Preferred Share the right to receive $41.50 in cash on an
as-converted basis.
B. Receipt of Checks in Exchange for Convertible Preferred Shares.
As soon as practicable after the Effective Time, the Company will mail
to the registered holder listed in BOX I (or his or her designee listed in Box
II or III), a check for an amount equal to $41.50 in cash with respect to each
Convertible Preferred Share which is submitted with any Letter of Transmittal.
No fractional shares will be issued in connection with the Merger. Each
holder of Convertible Preferred Shares who would otherwise have been entitled to
receive a fraction of a Surviving Corporation Share (after taking into account
all Convertible Preferred Shares submitted by such holder) will receive, in lieu
thereof, a cash payment (without interest) equal to such fraction multiplied by
$41.50.
C. GENERAL.
1. Execution and Delivery. This Letter of Transmittal must be properly
filled in, dated and signed in BOX IV, and must be delivered (together with
stock certificates representing the Convertible Preferred Shares being
submitted) to the Company at any of the addresses set forth above.
THE METHOD OF DELIVERY OF ALL DOCUMENTS IS AT THE OPTION AND RISK OF
THE STOCKHOLDER, BUT, IF SENT BY MAIL, REGISTERED MAIL, RETURN RECEIPT REQUESTED
AND PROPERLY INSURED, IS SUGGESTED.
2. Inadequate Space. If there is insufficient space on this Form to
list all your stock certificates being submitted to the Company, please attach a
separate list.
3. Signatures. The signature (or signatures, in the case of
certificates owned by two or more joint holders) on this Letter of Transmittal
should correspond exactly with the name(s) as written on the face of the
certificate(s) submitted unless the Convertible Preferred Shares described on
this Letter of Transmittal have been assigned by the registered holder(s), in
which event this Letter of Transmittal 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 certificates.
If this Letter of Transmittal is signed by a person or persons other
than the registered owners of the certificates listed, the certificates must be
endorsed or accompanied by appropriate stock powers, in either case signed
exactly as the name(s) of the registered owner(s) appear on the certificates.
If this Letter of Transmittal or any stock certificate(s) or stock
power(s) are signed by a trustee, executor, administrator, guardian, officer of
a corporation, attorney-in-fact or any other person acting in a representative
or fiduciary capacity, the person signing must give such person's full title in
such capacity and appropriate evidence of authority to act in such capacity must
be forwarded with this Letter of Transmittal.
4. Lost or Destroyed Certificates. If your stock certificate(s) has
been either lost or destroyed, please check the box on the front of this Letter
of Transmittal below your name and address and the appropriate forms for
replacement will be sent to you. You will then be instructed as to the steps you
must take in order to receive a check in accordance with the Merger Agreement.
5. Check in Same Name. If the check issuable in exchange for the shares
represented by the certificate(s) submitted with this Letter of Transmittal is
to be payable to the order of exactly the same name(s) that appears on such
certificate(s), no endorsement of certificate(s) or separate stock power(s) are
required.
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8
6. Check in Different Name. If the check issuable in exchange for the
shares represented by the certificate(s) submitted with this Letter of
Transmittal is to be payable to the order of a name other than exactly the name
that appears on such certificate(s) such exchange shall not be made by the
Company unless the certificates submitted are endorsed, BOX II is completed, and
the signature is guaranteed in BOX IV by a member of a national securities
exchange, a member of the National Association of Securities Dealers, Inc. or a
commercial bank (not a savings bank or a savings & loan association) or trust
company having an office in the United States which is a member in good standing
of the Agent's Medallion Program.
7. Special Delivery Instructions. If the check issuable in exchange for
the shares represented by the certificate(s) submitted with this Letter of
Transmittal is to be payable to the order of the registered holder(s) of
Convertible Preferred Shares, but is to be sent to someone other than the
registered holder(s) or to an address other than the address of the registered
holders, it will be necessary to indicate such person or address in BOX III.
8. Miscellaneous. A single check will be issued in exchange for
Convertible Preferred Shares submitted herewith.
All questions with respect to this Letter of Transmittal will be
determined by the Company, which determination shall be conclusive and binding.
9. 31% Backup Withholding. Under Federal income tax law, a holder who
receives a cash payment pursuant to the Merger may be required to provide the
Company (as payer) with such holder's correct taxpayer identification number
("TIN") on Substitute Form W-9 below. If the holder is an individual, the TIN is
his or her social security number. If the Company is not provided with the
correct TIN, such fact will not, in and of itself, cause Convertible Preferred
Shares to be deemed invalidly delivered, but payments that are made by the
Company to such holder or other payee with respect to the Merger may be subject
to backup withholding at a rate of 31%. Backup withholding is not an additional
tax. Rather, the tax liability of persons subject to backup withholding will be
reduced by the amount of tax withheld, provided that the required information is
given to the Internal Revenue Service. If withholding results in an overpayment
of taxes, a refund may be obtained from the Internal Revenue Service.
Certain holders (including, among others, corporations (with respect to
most payments) and certain foreign individuals) are not subject to these backup
withholding and reporting requirements. In order for a foreign individual to
qualify as exempt from backup withholding and reporting requirements, the holder
must submit a Form W-8, signed under penalties of perjury, attesting to that
individual's exempt status. A Form W-8 can be obtained from the Company.
See the enclosed "Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9" for more instructions.
The box in Part 3 of the Substitute Form W-9 may be checked if the
submitting holder 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 is checked, the
holder or other payee must also complete the Certificate of Awaiting Taxpayer
Identification Number below in order to avoid backup withholding.
Notwithstanding that the box in Part 3 is checked and the Certificate of
Awaiting Taxpayer Identification Number is completed, the Company will withhold
31% on all payments made prior to the time a properly certified TIN is provided
to the Company. However, such amounts may be refunded to such holder if a TIN is
provided to the Company within 60 days.
The holder is required to give the Company the TIN (e.g., social
security number or employer identification number) of the record owner of the
Convertible Preferred Shares or of the last transferee appearing on the
transfers attached to, or endorsed on, the Convertible Preferred Shares. If the
Convertible Preferred Shares are in more than one name or are not in the name of
the actual owner, consult the enclosed "Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9" for additional guidance on which
number to report.
10. Withholding on Foreign Stockholders. Even if a foreign stockholder
has provided the required Form W-8 certification to avoid backup withholding as
described above, the Company will be required to withhold federal income taxes
equal to 30% of the gross cash payments made, for tax purposes, in redemption of
the foreign stockholder's stock (see "THE MERGER--Federal Income Tax
Consequences--Characterization of the Merger for United States Federal
<PAGE>
<PAGE>
9
Income Tax Purposes" in the Information Statement/Prospectus) payable to a
foreign stockholder or his agent unless the Company determines that such payment
is exempt from withholding (or entitled to a reduced rate of withholding) or
that the redemption will qualify as a sale or exchange under Section 302 of the
Internal Revenue Code. See "THE MERGER--Federal Income Tax
Consequences--Foreign Stockholders--Withholding" in the Information
Statement/Prospectus for a more complete discussion of the 30% withholding tax
and obtaining an exemption therefrom. Foreign stockholders are urged to consult
their tax advisors regarding the application of federal income tax withholding,
including eligibility for a withholding tax reduction or exemption and refund
procedures.
------------------------------------
Additional copies of this Letter of Transmittal may be obtained from
the Company by calling (203) 972-2002.
<PAGE>
<PAGE>
EXHIBIT 99.5
Centennial Cellular Corp.
50 Locust Avenue
New Canaan, CT 06840
Ladies and Gentlemen:
I hereby consent to the reference to my becoming a director of Centennial
Cellular Corp. (the "Company") in the Registration Statement on Form S-4 of the
Company to which this consent is filed as an exhibit and the Information
Statement/Prospectus included therein.
/s/ Mark T. Gallogly
--------------------------
Mark T. Gallogly
Dated: December 8, 1998
<PAGE>
<PAGE>
EXHIBIT 99.6
Centennial Cellular Corp.
50 Locust Avenue
New Canaan, CT 06840
Ladies and Gentlemen:
I hereby consent to the reference to my becoming a director of Centennial
Cellular Corp. (the "Company") in the Registration Statement on Form S-4 of the
Company to which this consent is filed as an exhibit and the Information
Statement/Prospectus included therein.
/s/ Lawrence H. Guffey
-------------------------
Lawrence H. Guffey
Dated: December 8, 1998
<PAGE>
<PAGE>
EXHIBIT 99.7
Centennial Cellular Corp.
50 Locust Avenue
New Canaan, CT 06840
Ladies and Gentlemen:
I hereby consent to the reference to my becoming a director of Centennial
Cellular Corp. (the "Company") in the Registration Statement on Form S-4 of the
Company to which this consent is filed as an exhibit and the Information
Statement/Prospectus included therein.
/s/ Michael Small
-----------------------
Michael Small
Dated: December 8, 1998
<PAGE>
<PAGE>
EXHIBIT 99.8
Centennial Cellular Corp.
50 Locust Avenue
New Canaan, CT 06840
Ladies and Gentlemen:
I hereby consent to the reference to my becoming a director of Centennial
Cellular Corp. (the "Company") in the Registration Statement on Form S-4 of the
Company to which this consent is filed as an exhibit and the Information
Statement/Prospectus included therein.
/s/ Thomas E. McInerney
--------------------------
Thomas E. McInerney
Dated: December 8, 1998
<PAGE>
<PAGE>
EXHIBIT 99.9
Centennial Cellular Corp.
50 Locust Avenue
New Canaan, CT 06840
Ladies and Gentlemen:
I hereby consent to the reference to my becoming a director of Centennial
Cellular Corp. (the "Company") in the Registration Statement on Form S-4 of the
Company to which this consent is filed as an exhibit and the Information
Statement/Prospectus included therein.
/s/ Anthony J. de Nicola
--------------------------
Anthony J. de Nicola
Dated: December 8, 1998
<PAGE>
<PAGE>
EXHIBIT 99.10
Centennial Cellular Corp.
50 Locust Avenue
New Canaan, CT 06840
Ladies and Gentlemen:
I hereby consent to the reference to my becoming a director of Centennial
Cellular Corp. (the "Company") in the Registration Statement on Form S-4 of the
Company to which this consent is filed as an exhibit and the Information
Statement/Prospectus included therein.
/s/ Rudolph E. Rupert
-------------------------
Rudolph E. Rupert
Dated: December 8, 1998
