SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Date of Report (Date of earliest event reported): August 12, 1998
Clearview Cinema Group, Inc.
(Exact name of registrant as specified in charter)
Delaware 001-13187 22-3338356
(State or other (Commission file (IRS employer
jurisdiction of number) identification no.)
incorporation)
97 Main Street 07928
Chatham, New Jersey (Zip code)
(Address of principal executive
offices)
Registrant's telephone number,
including area code: (973) 377-4646
Item 1. Change in Control of Registrant
On August 13, 1998, Clearview Cinema Group, Inc., a Delaware
corporation (the "Company") announced that it had entered into an Agreement and
Plan of Merger dated August 12, 1998 (the "Merger Agreement") among Cablevision
Systems Corporation, a Delaware corporation ("Cablevision"), CCG Holdings Inc.,
a Delaware corporation and a wholly-owned subsidiary of Cablevision ("CCG
Holdings") and the Company, upon the terms and subject to the conditions of
which the Company will be merged (the "Merger") with CCG Holdings, and the
surviving corporation in the Merger (the "Surviving Corporation") will be a
wholly-owned subsidiary of Cablevision. The Merger Agreement further provides
that the directors of CCG Holdings will be the directors of the Surviving
Corporation until their successors have been duly elected or appointed and
qualified or until their earlier death, resignation or removal in accordance
with the charter and the by-laws of the Surviving Corporation, and the officers
of the Company will be the officers of the Surviving Corporation until their
successors have been duly elected or appointed and qualified or until their
earlier death, resignation or removal in accordance with the charter and the
by-laws of the Surviving Corporation. Subject to certain allocation and
proration provisions contained in Article IV of the Merger Agreement, the Merger
Agreement provides, among other things, that at the Effective Time (as defined
in the Merger Agreement), the holders of shares of the Company's common stock,
$.01 par value per share ("Common Shares"), Class A Preferred Stock, $.01par
value per share ("Class A Preferred Shares"), Class B Nonvoting Redeemable
Cumulative Preferred Stock, $.01 par value per share ("Class B Preferred
Shares") and Class C Preferred Stock, $.01 par value per share ("Class C
Preferred Shares" and, together with the Class A Preferred Shares and Class B
Preferred Shares, the "Preferred Shares" and, together with the Common Shares,
the "Company Securities") of the Company shall be converted into, and become
exchangeable for, at the option of the holder thereof, the applicable Security
Cash Consideration or, other than in respect of Class B Preferred Shares,
Security Share Consideration (each as defined in the Merger Agreement);
PROVIDED, HOWEVER, that if the Average Parent Share Price (as defined in the
Merger Agreement) is less than $72.00, the Company Securities shall be converted
into and only be exchangeable for the applicable Security Cash Consideration.
The Merger Agreement is attached hereto as Exhibit 2.01 and is incorporated by
reference herein in its entirety.
The Common Shares and the Class A Preferred Shares are the only classes
of the Company's securities generally entitled to vote at meetings of
stockholders of the Company. Pursuant to Section 251 of the Delaware General
Corporation Law and the Company's certificate of incorporation, the Merger may
not be consummated unless the Merger Agreement is approved by a majority of the
votes that could be cast by the holders of the outstanding Common Shares and
Class A Preferred Shares, voting together as a single class at a meeting of such
stockholders called to consider and vote upon adoption of the Merger Agreement
(the "Stockholders Meeting"). At any meeting of the Company's stockholders,
Class A Preferred Shares are entitled to a number of votes equal to the number
of Common Shares into which such Class A Preferred Shares are convertible as of
the record date for such meeting. Contemporaneously with the execution and
delivery of the Merger Agreement, and as a condition and inducement to
Cablevision's and CCG Holdings' willingness to enter into the Merger Agreement,
certain holders (the "Stockholders") of Company Securities and warrants to
purchase Common Shares ("Warrants" and together with Company Securities,
"Securities") entered into an agreement (the "Stockholders Agreement") with
Cablevision pursuant to which such Stockholders have agreed,
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among other things, to vote in favor of adoption of the Merger Agreement. The
Stockholders Agreement is attached hereto as Exhibit 2.02 and incorporated by
reference herein in its entirety. The Stockholders Agreement will terminate upon
the earliest to occur of (i) the Effective Time or (ii) the termination of the
Merger Agreement in accordance with its terms. A. Dale Mayo, President and Chief
Executive Officer of the Company, has entered into the Stockholders Agreement
both individually and as voting trustee with respect to various voting trust
agreements between Mr. Mayo and certain stockholders of the Company (the "Voting
Trust Agreements"). As to the 560,802 Common Shares subject to the Voting Trust
Agreements for which Mr. Mayo has voting power, Mr. Mayo has entered into the
Stockholders Agreement with respect to 457,582 of such Common Shares. The
beneficial owners of such 457,582 Common Shares also are parties to the
Stockholders Agreement. The remaining Common Shares subject to the Voting Trust
Agreements are not subject to the Stockholders Agreement. The Voting Trust
Agreements are attached hereto as Exhibits 9.01 through 9.11, and are
incorporated by reference herein in their entirety.
Pursuant to the Stockholders Agreement, each Stockholder has agreed to
vote all of such Securities owned and New Securities (as defined in the
Stockholders Agreement) thereafter beneficially acquired by him (i) in favor of
the adoption of the Merger Agreement (and each other action and transaction
contemplated by the Merger Agreement and the Stockholders Agreement) at every
meeting of the stockholders of the Company at which such matters are considered
and at every adjournment thereof, and (ii) against any action or proposal that
would compete with or could serve to materially compete or interfere with,
delay, discourage, adversely affect or inhibit the timely consummation of the
Merger. Pursuant to the Stockholders Agreement, to the extent such rights arise
as a result of the Merger, the execution of the Stockholders Agreement or the
Merger Agreement or the other transactions contemplated by the Stockholders
Agreement or by the Merger Agreement under the applicable law or the
certificates of designation relating to the Preferred Shares (each, a
"Certificate of Designation"), each Stockholder also agreed to irrevocably waive
certain rights arising as a result of the Merger, including (i) any rights of
appraisal or rights to dissent from the Merger; (ii) any rights to cause the
Company or Cablevision to exercise, convert or exchange any of such
Stockholder's Securities (as defined in the Stockholders Agreement) for shares
of capital stock or other securities or property or assets of Cablevision or the
Company other than pursuant to Article IV of the Merger Agreement, the
Stockholders Agreement or with the prior written consent of Cablevision; (iii)
any rights to require or otherwise cause the Company or Cablevision to redeem
any such Stockholder's Preferred Shares; (iv) any rights to receive preferential
payments or other distributions upon a Liquidation Event, Mandatory Redemption
Event (each as defined in applicable Certificate of Designation in respect to
the Company's Preferred Shares) or other similar events; or (v) any rights to
vote separately as a class of Preferred Shares upon adoption of the Merger
Agreement at a meeting of stockholders of the Company. In addition, each of such
Stockholders has agreed that pursuant to the Merger, at the Effective Time, all
of such Stockholder's Securities shall no longer be outstanding, shall be
canceled and retired and shall cease to exist, and each certificate representing
any such Stockholder's Securities shall, subject to the terms and upon the
conditions of the Merger Agreement, thereafter represent only the right to
receive the applicable Merger Consideration (as defined in the Merger Agreement)
and the right, if any, to receive pursuant to Section 4.2(e) of the Merger
Agreement, cash in lieu of any fractional shares of Class A Common Stock, par
value $.01 per share, of Cablevision into which such Stockholder's Securities
otherwise would have been converted pursuant to Section 4.1(a) of
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the Merger Agreement and any distribution or dividend pursuant to Section 4.2(c)
of the Merger Agreement.
Further, each such Stockholder that beneficially owns Warrants has
severally agreed pursuant to the Stockholders Agreement that upon the written
notice of Cablevision delivered to such Stockholder, such Stockholder will, at
the option and direction of Cablevision set forth in such notice, complete and
provide to the Company the appropriate notice of exercise with respect to such
Stockholder's Warrants and pay the applicable exercise price for such Warrants,
it being understood and agreed that such Stockholder shall only exercise such
number of Warrants as will be required for such Stockholder to acquire the
number of Common Shares specified in Cablevision's notice. Such Stockholder
shall cause such exercise to become effective such that such Stockholder is the
record holder of the Common Shares issuable upon exercise of such Warrants prior
to the record date for the Stockholders Meeting. Each of the Stockholders has
severally agreed that in the event (i) any stock dividend, stock split,
recapitalization, reclassification, combination or exchange of shares of capital
stock of the Company on, of or affecting the Securities of a Stockholder, (ii)
such Stockholder purchases or otherwise acquires beneficial ownership of any
Company Securities after the execution of the Stockholders Agreement, (iii) such
Stockholder voluntarily acquires the right to vote or share in the voting of any
Company Securities other than such Stockholder's Securities, or (iv) such
Stockholder converts any Convertible Preferred Shares (as defined in the
Stockholders Agreement) or exercises any Warrants beneficially owned by such
Stockholder into Common Shares, whether pursuant to Section 7 of the
Stockholders Agreement or otherwise (Company Securities beneficially acquired
pursuant to (i), (ii), (iii) or (iv) being collectively referred to as "New
Securities"), such New Securities shall be subject to the terms of the
Stockholders Agreement to the same extent as if they constituted Securities. The
Stockholders Agreement does not require any Stockholder that owns Convertible
Preferred Shares to convert such Convertible Preferred Shares into Common
Shares.
As of August 11, 1998, there were 2,304,802 Common Shares outstanding and
the 779 Class A Preferred Shares outstanding (owned by a Stockholder party to
the Stockholders Agreement) that are presently convertible into 467,400 Common
Shares. Warrants held by Stockholders party to the Stockholders Agreement are
currently exerciseable for 100,000 Common Shares. Assuming no other outstanding
warrants, options, Preferred Shares or other similar securities of the Company
were exercised or converted into Common Shares, Stockholders party to the
Stockholders Agreement and obligated thereby to vote in favor of the adoption of
the Merger Agreement would have the right to cast approximately 56.3% of the
votes that could be cast on such proposal. As at the date hereof, Cablevision
beneficially owns 47.8% of the Common Shares.
The Securities to which this Form 8-K relates have not been purchased by
Cablevision. According to Cablevision's Schedule 13D filed on August 21, 1998,
Cablevision will obtain the necessary funds to pay for Company Securities
converted into the applicable Security Cash Consideration, either directly or
indirectly, from its subsidiaries, through loans, advances, dividends or from
distributions of funds generated internally and/or obtained from borrowings
under new or existing credit facilities or bank loan agreements. No final
decisions have been made, however, concerning the method Cablevision will employ
to obtain such funds.
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Each of the Stockholders has also severally agreed not to voluntarily
transfer, sell, offer, pledge or otherwise dispose of or encumber ("Transfer")
any of his or her Securities or New Securities prior to the earlier of (a)
immediately following adoption of the Merger Agreement by the Company Requisite
Vote (as defined in the Merger Agreement) or (b) the date the Stockholders
Agreement is terminated in accordance with its terms.
The execution and delivery of the Stockholders Agreement constituted a
change in control under the Indenture, dated as of June 12, 1998 (the
"Indenture"), by and among the Company, the Subsidiary Guarantors (as defined in
the Indenture), and The Bank of New York, a New York banking institution, as
trustee, pursuant to which the Company's 10 7/8% Senior Notes due 2008 (the
"Notes") were issued. As of August 12, 1998, $80,000,000 aggregate principal
amount of Notes was outstanding. The Indenture provides that upon the occurrence
of a Change of Control (as defined in the Indenture) each holder of the Notes
has the right to require the Company to purchase all or any part (equal to
$1,000 or an integral multiple thereof) of such holder's Notes at an offer price
in cash equal to 101% of the aggregate principal amount thereon plus accrued and
unpaid interest and Liquidated Damages (as defined in the Indenture) thereof, if
any, to the date of purchase. Pursuant to the Merger Agreement, Cablevision has
agreed with the Company to purchase any Notes required to be purchased by the
Company pursuant to the Change of Control Offer, subject to the following
conditions: (i) the Company must mail a Notice of Change of Control (the "Notice
of Change of Control") within five business days of August 12, 1998; (ii) the
Change of Control Payment Date (being September 18, 1998 as defined in the
Notice of Change of Control) shall not be more than 30 days from the date such
notice is mailed; and (iii) there shall have been no public disclosure of any
events, conditions, circumstances or other matters relating to the Company or
its subsidiaries, the subject matter of which represents, individually or in the
aggregate, a breach (without giving effect to certain qualifications as to
materiality) of the representations and warranties contained in the Merger
Agreement as of the date thereof, which breaches have had or are reasonably
likely to have, a Company Material Adverse Effect (as defined in the Merger
Agreement) or are reasonably likely to prevent the Company from consummating the
transactions contemplated by the Merger Agreement. On August 19, 1998, the
Company mailed the Notice of Change of Control to all holders of the Notes,
informing such holders of their right to require the Company to purchase the
Notes. The Indenture is attached hereto as Exhibit 4.01 and is incorporated by
reference herein it its entirety.
The Second Amended and Restated Credit Agreement, dated as of June 12,
1998 (the "Credit Agreement") between the Company and The Provident Bank as
agent for the lenders thereunder and the banks and lending institutions set
forth therein (the "Lenders") limits the ability of the Company to purchase any
Notes and provides that certain change of control events with respect to the
Company constitute a default thereunder. Pursuant to a waiver to the Credit
Agreement dated as of August 12, 1998, between The Provident Bank, as agent for
the Lenders and the Company (the "Waiver"), the Lenders agreed to waive any
violation of certain provisions under the Credit Agreement concerning the
Company's corporate existence, limitation on the nature of the Company's
business or Change of Control (as defined in the Credit Agreement) under the
Credit Agreement that might otherwise be deemed to exist solely as a result of
(i) the execution, delivery or performance of the Merger Agreement, (ii) the
completion of the Merger, or (iii) the Company becoming an indirect wholly-owned
subsidiary of Cablevision as a result of the Merger. In the event Cablevision is
not obligated to purchase the Notes, the Company could
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seek the consent of the Lenders to purchase the Notes or attempt to refinance
the borrowings that contain such prohibition. If the Company does not obtain
such a consent or refinance such borrowings, the Company will remain prohibited
from purchasing the Notes. In such case, the Company's failure to purchase
tendered Notes would constitute an Event of Default under the Indenture which
would, in turn, constitute a default under the Credit Agreement. The Credit
Agreement is attached hereto as Exhibit 10.01 and is incorporated by reference
herein in its entirety. The Waiver is attached hereto as Exhibit 10.02 and is
incorporated by reference herein in its entirety.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
2.01 Agreement and Plan of Merger dated as of August 12, 1998 by
and among Clearview Cinema Group, Cablevision Systems
Corporation and its wholly owned subsidiary, CCG Holdings
Inc. (filed herewith).
2.02 Stockholders Agreement dated as of August 12, 1998 by and
among Cablevision Systems Corporation, A. Dale Mayo,
individually and as voting trustee, under certain Voting Trust
Agreements, and Robert G. Davidoff, CMNY Capitol II, L.P.,
CMCO, Inc., MidMark Capital, L.P., Prime Charter Ltd., Brett
E. Marks, John Nelson, F&N Cinema, Inc., Roxbury Cinemas,
Inc., Olde EC, Inc. (f/k/a Emerson Cinemas, Inc.), Michael C.
Rush, Pamela Ferman, Seth Ferman, Craig Zeltner, Clairidge
Cinemas, Inc., Paul Kay, Cindy Kay, and Marshall Capital
Management, Inc. (filed herewith).
4.01 Indenture dated as of June 12, 1998 by and among Clearview
Cinema Group, Inc., its subsidiaries as guarantors, and The
Bank of New York, as Trustee (incorporated by reference to
Exhibit 4.04 to Registration Statement on Form SB-2 (No.
333 - 58463) filed July 2, 1998).
9.01 Voting Trust Agreement by and between Brett E. Marks and A.
Dale Mayo as Voting Trustee, dated December 21, 1994
(incorporated by reference to Exhibit 9.01 to Registration
Statement on Form SB-2 filed May 27, 1997).
9.02 Voting Trust Agreement by and between Michael C. Rush and A.
Dale Mayo as Voting Trustee, dated June 20, 1995 (incorporated
by reference to Exhibit 9.02 to Registration Statement on Form
SB-2 filed May 27, 1997).
9.03 Voting Trust Agreement by and between Emerson Cinema, Inc. and
A. Dale Mayo as Voting Trustee, dated May 29, 1996
(incorporated by reference to Exhibit 9.03 to Registration
Statement on Form SB-2 filed May 27, 1997).
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9.04 Voting Trust Agreement by and among Paul Kay, Cindy Kay and A.
Dale Mayo as Voting Trustee, dated July 31, 1996 (incorporated
by reference to Exhibit 9.04 to Registration Statement on Form
SB-2 filed May 27, 1997).
9.05 Voting Trust Agreement dated as of November 21, 1997 by and
among F&N Cinema, Inc., Roxbury Cinema, Inc. and A. Dale Mayo,
as Trustee (incorporated by reference to Exhibit 9.01 to
Current Report on Form 8-K filed November 21, 1997).
9.06 Voting Trust Agreement dated as of February 13, 1998 by and
between Clairidge Cinemas, Inc., Craig Zeltner, and A. Dale
Mayo, as Trustee (incorporated by reference to Exhibit 9.08 to
Registration Statement on Form SB-2 (No. 333 - 58463) filed
July 2, 1998).
9.07 Voting Trust Agreement dated as of April 30, 1998 by and
among John Nelson, Seth Ferman, Pamela Ferman, Martin
Drescher and A. Dale Mayo, as Trustee (incorporated by
reference to Registration Statement on Form SB-2 (No. 333 -
58463) filed July 2, 1998).
9.08 Voting Trust Agreement dated as of September 1, 1997 by and
among John Nelson and A. Dale Mayo, as Trustee (filed
herewith).
9.09 Voting Trust Agreement dated as of September 1, 1997 by and
among Seth Ferman and A. Dale Mayo, as Trustee (filed
herewith).
9.10 Voting Trust Agreement dated as of September 1, 1997 by and
among Pamela Ferman and A. Dale Mayo, as Trustee (filed
herewith).
9.11 Voting Trust Agreement dated as of September 1, 1997 by and
among Craig Zeltner and A. Dale Mayo, as Trustee (filed
herewith).
10.01 Second Amended and Restated Credit Agreement, dated as of June
12, 1998, by and between Clearview Cinema Group, Inc. and The
Provident Bank (incorporated by reference to Exhibit 10.21 to
Registration Statement on Form SB-2 (No.
333 - 58463) filed July 2, 1998).
10.02 Waiver dated as of August 12, 1998, to Second Amended and
Restated Credit Agreement, dated June 12, 1998, by and between
Clearview Cinema Group, Inc. and The Provident Bank (filed
herewith).
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CLEARVIEW CINEMA GROUP, INC.
By:/s/ A. Dale Mayo
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Name: A. Dale Mayo
Title: Chairman of the Board, President
and Chief Executive Officer
Date: August 27, 1998
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EXHIBIT INDEX
EXHIBIT NO. DOCUMENT
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2.01 Agreement and Plan of Merger dated as of August 12, 1998 by and Filed
among Clearview Cinema Group, Cablevision Systems Corporation and herewith
its wholly owned subsidiary, CCG Holdings Inc.
2.02 Stockholders Agreement dated as of August 12, 1998 by and among Filed
Cablevision Systems Corporation, A. Dale Mayo, individually and as herewith
voting trustee, under certain Voting Trust Agreements, and Robert
G. Davidoff, CMNY Capitol II, L.P., CMCO, Inc., MidMark Capital,
L.P., Prime Charter Ltd., Brett E. Marks, John Nelson, F&N Cinema,
Inc., Roxbury Cinemas, Inc., Olde EC, Inc. (f/k/a Emerson Cinemas,
Inc.), Michael C. Rush, Pamela Ferman, Seth Ferman, Craig Zeltner,
Clairidge Cinemas, Inc., Paul Kay, Cindy Kay, and Marshall Capital
Management, Inc.
4.01 Indenture dated as of June 12, 1998 by and among Clearview Cinema Previously
Group, Inc., its subsidiaries as guarantors, and The Bank of New filed
York, as Trustee (incorporated by references to Exhibit 4.04 to
Registration Statement on Form SB-2 (No. 333 - 58463) filed July
2, 1998).
9.01 Voting Trust Agreement by and between Brett E. Marks and A. Dale Previously
Mayo as Voting Trustee, dated December 21, 1994 (incorporated by filed
reference to Exhibit 9.01 to Registration Statement on Form SB-2
filed May 27, 1997).
9.02 Voting Trust Agreement by and between Michael C. Rush and A. Dale Previously
Mayo as Voting Trustee, dated June 20, 1995 (incorporated by filed
reference to Exhibit 9.02 to Registration Statement on Form SB-2
filed May 27, 1997).
9.03 Voting Trust Agreement by and between Emerson Cinema, Inc. and A. Previously
Dale Mayo as Voting Trustee, dated May 29, 1996 (incorporated by filed
reference to Exhibit 9.03 to Registration Statement on Form SB-2
filed May 27, 1997).
9.04 Voting Trust Agreement by and among Paul Kay, Cindy Kay and A. Previously
Dale Mayo as Voting Trustee, dated July 31, 1996 (incorporated by filed
reference to Exhibit 9.04 to Registration Statement on Form SB-2
filed May 27, 1997).
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9.05 Voting Trust Agreement dated as of November 21, 1997 by and among Previously
F&N Cinema, Inc., Roxbury Cinema, Inc. and A. Dale Mayo, as filed
Trustee (incorporated by reference to Exhibit 9.01 to Current
Report on Form 8-K filed November 21, 1997).
9.06 Voting Trust Agreement dated as of February 13, 1998 by and Previously
between Clairidge Cinemas, Inc., Craig Zeltner and A. Dale Mayo, filed
as Trustee (incorporated by reference to Exhibit 9.08 to
Registration Statement on Form SB-2 (No. 333 - 58463) filed July
2, 1998).
9.07 Voting Trust Agreement dated as of April 30, 1998 by and among Previously
John Nelson, Seth Ferman, Pamela Ferman, Martin Drescher and A. filed
Dale Mayo, as Trustee (incorporated by reference to Registration
Statement on Form SB-2 (No. 333 - 58463) filed July 2, 1998).
9.08 Voting Trust Agreement dated as of September 1, 1997 by and among Filed
John Nelson and A. Dale Mayo, as Trustee. herewith
9.09 Voting Trust Agreement dated as of September 1, 1997 by and among Filed
Seth Ferman and A. Dale Mayo, as Trustee. herewith
9.10 Voting Trust Agreement dated as of September 1, 1997 by and among Filed
Pamela Ferman and A. Dale Mayo, as Trustee. herewith
9.11 Voting Trust Agreement dated as of September 2, 1997 by and among Filed
Craig Zeltner and A. Dale Mayo, as Trustee. herewith
10.01 Second Amended and Restated Credit Agreement, dated as of June 12, Previously
1998, by and between Clearview Cinema Group, Inc. and The filed
Provident Bank (incorporated by references to Exhibit 10.21 to
Registration Statement on Form SB-2 (No. 333 - 58463) filed July
2, 1998).
10.02 Waiver dated as of August 12, 1998, to Second Amended and Restated Filed
Credit Agreement, dated June 12, 1998, by and between Clearview herewith
Cinema Group, Inc. and The Provident Bank.
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