SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) OCTOBER 29, 1998
MARCUS CABLE COMPANY, L.L.C.
MARCUS CABLE OPERATING COMPANY, L.L.C.
MARCUS CABLE CAPITAL CORPORATION
MARCUS CABLE CAPITAL CORPORATION II
MARCUS CABLE CAPITAL CORPORATION III
(Exact name of registrants as specified in their charters)
DELAWARE 33-81088 & 33-67390 & 33-93808 75-2337471
DELAWARE 33-81088-01 75-2495706
DELAWARE 33-67390-01 75-2546077
DELAWARE 33-81088-02 75-2546713
DELAWARE 33-93808-01 75-2599586
(State or other (Commission File Number) (I.R.S. Employer
jurisdiction of Identification No.)
incorporation
or organization)
2911 TURTLE CREEK BOULEVARD, SUITE 1300
DALLAS, TEXAS 75219-6257
(Address of principal executive offices) (Zip Code)
(214) 521-7898
(Registrants' telephone number, including area code)
Page 1 of 17
Index to Exhibits on Page 5
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ITEM 5. OTHER EVENTS.
On October 6, 1998, Marcus Cable Properties, Inc. ("Marcus")
entered into a management consulting agreement with Charter
Communications, Inc. ("Charter") pursuant to which Charter will
provide management, marketing and operational assistance to Marcus
and its subsidiaries under the supervision and ultimate control of
Marcus and the holders of the licenses for a period of one year.
In consideration for the management consulting services provided by
Charter, Marcus shall pay to Charter an annual fee equal to 3% of the
gross revenues of the cable systems, plus expenses. Jeffrey A. Marcus
remains as the Chairman of Marcus and Jerald L. Kent, President, CEO and
Director of Charter will become the President and CEO of Marcus.
Thomas P. McMillin, an Executive Vice President and
the CFO, Louis A. Borrelli, Jr., and Executive Vice President and the
COO and Richard A.B. Gleiner, a Senior Vice President and the General
Counsel of Marcus have all resigned. For information regarding
the agreement, reference is made to the attached Exhibit 20.1
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits
20.1 Management Consulting Agreement dated October 6,
1998.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
each of the registrants have duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
MARCUS CABLE COMPANY, L.L.C.
(Registrant)
By: Marcus Cable Properties, L.L.C., its
general partner,
By: Marcus Cable Properties, Inc., its
general partner,
October 29, 1998 By: /s/ John P. Klingstedt, Jr.
John P. Klingstedt, Jr.
Its: Senior Vice President and
Controller of Marcus Cable
Properties, Inc. (Principal
Accounting Officer)
MARCUS CABLE OPERATING COMPANY, L.L.C.
(Registrant)
By: Marcus Cable Company, L.L.C., its general
partner,
By: Marcus Cable Properties, L.L.C., its
general partner,
By: Marcus Cable Properties, Inc., its
general partner,
October 29, 1998 By: /s/ John P. Klingstedt, Jr.
John P. Klingstedt, Jr.
Its: Senior Vice President and
Controller of Marcus Cable
Properties, Inc. (Principal
Accounting Officer)
MARCUS CABLE CAPITAL CORPORATION
(Registrant)
October 29, 1998 By: /s/ John P. Klingstedt, Jr.
John P. Klingstedt, Jr.
Its: Senior Vice President and Controller of
Marcus Cable Capital Corporation
(Principal Accounting Officer)
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MARCUS CABLE CAPITAL CORPORATION II
(Registrant)
October 29, 1998 By: /s/ John P. Klingstedt, Jr.
John P. Klingstedt, Jr.
Its: Senior Vice President and Controller of
Marcus Cable Capital Corporation II
(Principal Accounting Officer)
MARCUS CABLE CAPITAL CORPORATION III
(Registrant)
October 29, 1998 By: /s/ John P. Klingstedt, Jr.
John P. Klingstedt, Jr.
Its: Senior Vice President and Controller of
Marcus Cable Capital Corporation III
(Principal Accounting Officer)
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<TABLE>
INDEX TO EXHIBITS
<CAPTION>
Exhibit Page
Number Description Number
<S> <C> <C>
20.1 Management Consulting Agreement dated
October 6, 1998 6
</TABLE>
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Exhibit 20.1
MANAGEMENT CONSULTING AGREEMENT
THIS MANAGEMENT CONSULTING AGREEMENT, dated as of October 6,
1998, by and between MARCUS CABLE PROPERTIES, INC., a Delaware corporation
("Operator"), and CHARTER COMMUNICATIONS, INC., a __________ Delaware
corporation ("Manager");
W I T N E S S E T H:
WHEREAS, Operator operates and manages cable television systems
(each individually a "System" and collectively the "Systems") in various
markets in the United States (each individually a "Market" and
collectively the "Markets"); and
WHEREAS, affiliates of Operator hold licenses issued by the
Federal Communications Commission ("FCC") and local franchising authorities
("LFA's") authorizing (i) the operation of cable antenna relay systems
used in the operation of the Systems and the offering of cable
television services, and (ii) the operation of the Systems within the
Markets (collectively the "Licenses"); and
WHEREAS, Manager has expertise in the provision and marketing of
cable television systems that Operator believes will assist in the
effective operation of the Systems; and
WHEREAS, Operator wishes Manager to provide management, marketing
and operational assistance, under the supervision and ultimate control
of Operator and the holders of the Licenses and consistent with all
relevant policies and regulations of the FCC and the LFA's, in the
operation of the Systems, so as to serve efficiently Operator's
customers and enhance the value of the Systems; and
WHEREAS, Manager, acting as purchaser of certain services on its
own behalf and in its capacity as Manager of the Systems, can purchase
certain commonly used equipment and services in a more cost-effective
manner than either Operator or Manager can do on its own;
NOW, THEREFORE, in consideration of the foregoing premises and
the mutual covenants herein contained, the parties hereto do hereby agree
as follows:
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1. Defined Terms. As used herein, the following terms shall
have the following meanings:
"Gross Revenues" for any period shall mean the gross revenues for
such period as determined, for purposes of preparation of its financial
statements, in accordance with generally accepted accounting principles,
consistently applied.
"Person" shall mean any individual, corporation, association,
limited liability company, partnership, joint venture, trust, estate or
other entity or organization.
"Reimbursable Expenses" shall mean out-of-pocket costs and
expenses incurred by Manager in performing services hereunder, including,
without limitation, travel expenses and any funds paid or applied by Manager
for the benefit or on behalf of the Systems. The cost of Manager's general
overhead expenses and time charges for employees of Manager shall not
be included in "Reimbursable Expenses."
"Term" shall mean the term of this Agreement as set forth in
Section 8.
2. Management Services. Manager shall provide overall
management and consulting services to Operator in connection with the
management and operation of the Systems, under the ultimate direction and
control of Operator and the holders of the Licenses. In connection therewith,
Manager shall provide the management consulting services necessary to
assist Operator in the oversight and direction of the operation of the
Systems in accordance with good business practices; provided that
Operator shall control the implementation of any such advice received
from Manager and shall be fully responsible for the day-to-day operation
of the Systems. Such management consulting services shall include the
following:
i) Advice and consultation regarding administrative,
bookkeeping, billing, credit, collection, insurance,
purchasing, clerical and such other general services as may
be necessary to the administration of the Systems;
ii) Review of financial performance, subscriber matters, and
performance relative to budget, bank relations, and other
financial policy matters;
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iii) Consultation and advice regarding operational, engineering,
maintenance, inspection, repair, integration support, such
other technical services as may be necessary to the operation
of the Systems, and the continuation of pre-planned upgrades
to the Systems;
iv) Consultation and advice regarding marketing, sales,
advertising and such other promotional services as may be
necessary to the marketing of the Systems' offerings;
v) Consultation and advice regarding the hiring, training and
supervision of personnel to manage and operate the Systems;
vi) Review of performance of the System's general managers and
other personnel;
vii) Consultation and advice regarding procurement and negotiation
of the terms of programming, equipment, and other items
needed for the operation of the Systems;
viii) Consultation and advice in connection with any and all
aspects of the Systems and the day to day operation thereof
and consultation with Operator with respect to the
selection of attorneys, consultants and accountants; and
ix) such other services to Operator as to which Manager and
Operator agree.
3. Joint Purchasing Activity. Operator hereby authorizes
Manager, in connection with Manager's procurement of programming
services, equipment, and other goods and services for other cable
television systems owned or managed by Manager, to procure such items
for the benefit of the Systems when and as requested by Operator,
subject to and in accordance with any terms and conditions specified by
Operator to Manager from time to time.
4. Undertakings by Operator. During the Term, Operator shall
undertake and perform the following responsibilities and obligations.
a. Licenses. Operator shall obtain, maintain, keep in full force
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and effect, and comply with the terms, conditions and requirements
of the Licenses, all other FCC, LFA and other licenses necessary for
the operation of the Systems in the Markets, and in connection
therewith comply with the Communications Act of 1934, all applicable
rules and regulations promulgated thereunder and all applicable
state and local rules and regulations. Operator shall provide to
Manager, upon request, documentary evidence of all reports,
applications, and other filings made by it with the FCC and LFA's.
b. Operating Resources. Operator shall, except as otherwise
agreed to between Manager and Operator, provide the operational
personnel, equipment, funds, and other resources needed to operate
the Systems. Operator acknowledges that Manager is not providing
or required to provide operational personnel, and is acting solely
in a supervisory and advisory capacity.
c. Payment of Expenses. Operator shall pay all costs and
expenses incurred in connection with the ownership and operation of
the Systems, including, without limitation, wages, salaries and
other labor costs, equipment costs, leasing costs, taxes, and third-party
fees. Manager may, but shall not be required to, pay on
behalf of Operator any such amounts that are due and payable but
have not been paid by Operator, and Operator shall, promptly upon
receipt of an invoice therefor from Manager, reimburse Manager for
all amounts so paid.
5. Information. Manager and Operator shall each provide to the
other such reports and information regarding the marketing, technical,
operational, business, and financial condition of the Systems as the
other may from time to time reasonably require.
6. Management Fees. In consideration for the management
consulting services provided by Manager in accordance herewith, Operator
shall pay to Manager an annual management fee equal to three percent
(3%) of the GrossRevenues of the Systems. In addition, Operator shall
reimburse Manager for all Reimbursable Expenses incurred by Manager.
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7. Fee Payment Schedule and Terms.
a. Expense Reimbursement. Manager shall provide Operator with
a quarterly statement of Reimbursable Expenses incurred by Manager,
and shall be reimbursed for Reimbursable Expenses incurred during
such month within 15 days after receipt of the statement therefor.
b. Quarterly Payments. Within 45 days after the end of each
calendar quarter, Operator shall calculate the management fee
payable for such quarter and shall notify Manager of such amount,
together with documentation demonstrating in reasonable detail the
data and methodology underlying calculation of such amount. Manager
shall advise Operator of any dispute with respect to such
calculations within 15 days after receipt of such notice. In the
event of a dispute, any undisputed amounts shall be paid and the
parties shall negotiate in good faith to resolve promptly any such
disputes. Subject to necessary consents from Operator's lending
banks, payment of quarterly management fees shall be due within 10
days after the parties agree on amounts due and payment may be
delayed only as to specific items in dispute.
c. Right to Audit. Operator shall promptly provide to Manager
at Manager's request full and complete documentation maintained by
Operator evidencing all revenues included in the calculation of
Gross Revenues. Manager shall have the right, at Manager's sole
cost and expense, to cause its independent certified public
accountants annually to audit the books and records of Operator
relating to the Systems. Operator shall cooperate with all
reasonable requests and inquiries from such accountants in the
course of the performance of such audit.
d. Late Payment Penalties. In the event that any payments to
Manager become more than fifteen (15) days past due, either due to
a delay in obtaining bank consents or otherwise, Manager shall be
entitled to obtain late charges at the rate of eight percent (8%)
per annum on the amounts past due.
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e. Payment Following Termination. Any amounts due hereunder for
any periods prior to the end of the Term (as hereinafter defined)
shall remain due and payable in accordance with the terms hereof,
notwithstanding such termination.
8. Term.
a. Definition of Term. The term of this Agreement (the "Term")
shall commence on the date hereof and, unless sooner terminated in
accordance herewith or extended by written agreement of Manager and
Operator, shall terminate on the first anniversary hereof.
b. Early Termination. Either party shall have the right to
terminate this Agreement for any reason, without penalty, upon 30
days notice to the other party.
9. Representations and Warranties.
a. Representations and Warranties by Operator. Operator
represents and warrants to Manager as follows:
i) Operator is a corporation duly organized and validly
existing under the laws of the State of Delaware and has all
necessary organizational power and authority to operate the
Systems.
ii) Affiliates of Operator hold the Licenses and are in
compliance with all applicable legal and regulatory conditions and
requirements of the FCC and the LFA's, and the Licenses are in full
force and effect.
iii) This Agreement has been duly authorized by all
necessary corporate action of Operator and constitutes the valid and
binding agreement of Operator, enforceable against Operator in accordance
with its terms, except as enforceability may be limited by laws
governing bankruptcy, insolvency, and similar matters or by general
principles of equity.
iv) This Agreement does not conflict with or constitute a
breach of or default under any law, regulation, or judicial or
administrative order to which Operator is subject, the Certificate
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of Incorporation or Bylaws of Operator, the License, or any
material contract or agreement to which Operator is a party.
b. Representations and Warranties by Manager. Manager represents
and warrants to Operator as follows:
i) Manager is a corporation duly organized and validly
existing under the laws of the State of Delaware, and has all
necessary corporate power and authority to perform its obligations
under this Agreement.
ii) This Agreement has been duly authorized by all
necessary corporate action of Manager, and constitutes the valid and
binding agreement of Manager, enforceable against Manager in accordance
with its terms, except as enforceability may be limited by laws
governing bankruptcy, insolvency, and similar matters or by general
principles of equity.
iii) This Agreement does not conflict with or constitute a
breach of or default under any law, regulation, or judicial or
administrative order to which Manager is subject, the Certificate
of Incorporation or Bylaws of Manager, or any material contract or
agreement to which Manager is a party.
10. Indemnification and Limitation of Liability.
a. Liability of Manager. The Company shall bear any and all
expenses, liabilities, losses and damages resulting from the operation
of the Systems, and Manager and its respective officers, directors,
employees, consultants and stockholders (collectively, the "Indemnified
Persons") shall not, under any circumstances, be held liable therefor,
except that Manager shall be liable for any loss or damage which results
from its own gross negligence or willful misconduct.
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b. Indemnification. Operator shall indemnify and hold the
"Indemnified Persons" harmless from and against any loss, liability,
damage, suit, claim or action, including without limitation any
attorney's fees or legal costs incurred by Operator in the defense
against any such action (collectively, "Losses"), arising out of (i)
the ownership or operation by Operator of any System; (ii) any
debts, obligations, or liabilities of Operator, or (iii) any action
taken by any Indemnified Person, or any failure by any Indemnified
Person, to take any action, in its role as manager of the System,
except to the extent that such action or failure constitutes willful
misconduct or gross negligence on the part of the Indemnified
Person.
c. Officers and Directors of Operator. None of the Officers or
Directors of Operator shall be held liable for any acts or omissions
of Manager.
d. NO CONSEQUENTIAL DAMAGES. NEITHER PARTY HEREUNDER SHALL BE
LIABLE TO THE OTHER FOR LOSS OF BUSINESS OR OTHER CONSEQUENTIAL
DAMAGES ARISING OUT OF ANY BREACH BY SUCH PARTY OF ANY OR ALL OF ITS
OBLIGATIONS UNDER THIS AGREEMENT
11. Assignment.
a. Assignment by Manager. Manager shall not sell, assign,
transfer, convey, or encumber in any way, its rights or obligations
under this Agreement without the prior written consent of Operator,
which consent shall not be unreasonably withheld; provided, however,
that: (i) the foregoing shall not restrict the right of Manager to
perform obligations hereunder through subcontractors, on the
condition that Manager remains fully and directly liable to Operator
for the performance of such obligations, and (ii) the foregoing
shall not apply to the sale or transfer of all or substantially all
of the stock or assets of Manager. Manager shall cause any assignee
to assume its rights and obligations under this Agreement, upon
which event Manager shall have no further liability hereunder;
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provided that such assignee has a net worth at least equal to that
of Manager and has a good business reputation.
b. Assignment by Operator. Operator shall not sell, assign,
transfer, convey, or encumber in any way its rights or obligations
under this Agreement without the prior written consent of Operator;
provided, however, that Operator shall be required to assign its
rights and obligations hereunder to any Person succeeding to
Operator's interest in and to the Licenses, and Operator shall cause
such Person to assume such rights and obligations, upon which event
Operator shall have no further liability hereunder.
12. Notices. All notices hereunder shall be in writing and
shall be deemed effective if given in person, or if delivered by facsimile
transmission or by overnight delivery service maintaining records of
receipt to the addresses listed below:
If to Operator:
Marcus Cable Properties, Inc.
2911 Turtle Creek Blvd., Suite 1300
Dallas, TX 75219
Attn: General Counsel
Facsimile #: (214) 521-3468
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If to Manager:
Charter Communications, Inc.
12444 Powerscourt Drive, Suite 400
St. Louis, MO 63131
Attn: Jerald L. Kent
Facsimile #: (314) 965-8793
with a copy to:
Charter Communications, Inc.
12444 Powerscourt Drive, Suite 400
St. Louis, MO 63131
Attn: Curtis S. Shaw
Facsimile #: (314) 968-8793
or, in each case, to such other address as such party may specify by
notice to the other, given as provided above.
13. Miscellaneous.
a. Exclusive Agreement. The parties hereto agree that this
Agreement are the complete and exclusive statement of the agreements
between the parties hereto, supersede all prior agreements, oral and
written, and all other communication between the parties hereto
relating to the subject matter of this Agreement.
b. Governing Law; Jurisdiction. This Agreement shall be
interpreted under the laws of the State of Missouri, without regard
to the conflicts of laws provisions thereof. Each party consents
to the jurisdiction and venue of the Federal and state courts
located in Missouri for the resolution of any disputes arising under
this Agreement, and, without limitation of any other method of
service of process available under applicable law, consents to
service of process upon it by written notice, given as provided in
Section 12 hereof, in any action brought in connection with such
dispute.
c. Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and, subject to
Section 11, their respective successors and assigns, but is not
intended to and does not create any rights enforceable by any other
Person.
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d. Amendments. No amendment to or modification of the terms of
this Agreement or waiver of any rights hereunder shall be effective
unless in writing and executed by the parties hereto.
e. Relationship of the Parties. Nothing contained herein shall
create any association, partnership, joint venture, or the
relationship of principal and agent between the parties hereto, it
being understood that the relationship of Manager to Operator is
that of independent contractor, and, except as otherwise expressly
provided herein, neither party hereto shall have the authority to
bind the other or the other's representatives in any way.
f. Costs. In any arbitration or litigation arising out of or
connected to this Agreement, the prevailing party shall be entitled
to be reimbursed for such party's reasonable attorneys' fees and
costs.
g. Inconsistent Provisions. In the event that the FCC determines
that any provision of this Agreement is inconsistent with the
Federal Communications Act of 1934, as amended, or the FCC's rules,
regulations or policies (an "Inconsistent Provision"), or if
regulatory or legislative action subsequent to the date hereof
causes any provision of this Agreement to be an Inconsistent
Provision, then the parties shall renegotiate this Agreement in good
faith in order to recast this Agreement in terms that are likely to
cure such defects without materially altering the benefits to be
obtained by any party hereunder. If recasting this Agreement to
resolve such defects is impossible, then this Agreement shall be
deemed to be amended so as to delete any such Inconsistent
Provision.
h. Construction. As used herein, except as the context otherwise
requires, the singular shall include the plural and vice versa,
words of any gender shall include words of any other gender, and
"or" is used in the inclusive sense. Section headings are used
herein for convenience only and do not constitute a part of or
affect the meaning of this Agreement.
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i. Counterparts. This Agreement may be executed in any number
of counterparts, all of which together shall constitute a single
instrument.
IN WITNESS WHEREOF each of the parties hereto has caused this
Agreement to be executed at the hands of its officers, duly authorized
on their behalf, as of the date first written above.
MARCUS CABLE PROPERTIES, INC.
By_______________________________
Jeffrey A. Marcus
Authorized Signatory
CHARTER COMMUNICATIONS, INC.
By_______________________________
Curtis S. Shaw
Senior Vice President
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