<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D/A
(Amendment No. 1)
Under the Securities Exchange Act of 1934
Sprint Corporation
(Name of Issuer)
PCS Common Stock - Series 1, par value $1.00 per share
(Title of Class of Securities)
852061506
(CUSIP Number)
Stephen M. Brett, Esq.
Executive Vice President
and General Counsel
Tele-Communications, Inc.
5619 DTC Parkway
Englewood, CO 80111
(303) 267-5500
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
December 30, 1998
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D/A, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
The remainder of this cover page should be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
<PAGE>
- -----------------------
CUSIP NO. 852061506
- -----------------------
- ------------------------------------------------------------------------------
NAMES OF REPORTING PERSONS
1 I.R.S. Identification Nos. of Above Persons
Tele-Communications, Inc.
84-1260157
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
2 (a) [_]
(b) [X]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS
4
OO
- ------------------------------------------------------------------------------
CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
5
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Delaware
- ------------------------------------------------------------------------------
7 Sole Voting Power
111,277,868 shares - - Series 2 PCS
NUMBER OF Stock; see Items 1, 4 and 6
SHARES -----------------------------------------------------------
BENEFICIALLY 8 Shared Voting Power 0 shares
OWNED BY
-----------------------------------------------------------
EACH
9 Sole Dispositive Power 0 shares
REPORTING
PERSON -----------------------------------------------------------
Shared Dispositive Power
WITH 10
111,277,868 shares - - Series 2 PCS
Stock; see Items 1, 4 and 6
- ------------------------------------------------------------------------------
11
Aggregate Amount Beneficially Owned by Each Reporting Person
111,277,868 shares
Consists of 98,563,924 shares of Series 2 PCS Stock, presently exercisable
Warrants to purchase an additional 6,291,314 shares of Series 2 PCS Stock,
and 123,314 shares of Series 7 Preferred Stock (which for purposes of this
Report are assumed to be convertible into an aggregate of 6,422,630 shares
of Series 2 PCS Stock). Each share of Series 2 PCS Stock automatically
converts into one share of Series 1 PCS Stock under certain circumstances.
Assumes the conversion of all shares of Series 2 PCS Stock beneficially
owned by the Reporting Person (including all shares of Series 2 PCS Stock
issuable upon exercise of all of such Warrants and upon conversion of all
of such shares of Series 7 Preferred Stock) into the corresponding number
of shares of Series 1 PCS Stock. See Items 1 and 5.
Because the Reporting Person does not have the right to acquire any shares
of Series 1 PCS Stock underlying the shares of Series 2 PCS Stock,
Warrants or shares of Series 7 Preferred Stock described above within
sixty days of the date of this Report, the Reporting Person disclaims
beneficial ownership of all shares of Series 1 PCS Stock underlying such
shares of Series 2 PCS Stock, such Warrants and such shares of Series 7
Preferred Stock. The filing of this Report by the Reporting Person shall
not be construed as an admission that the Reporting Person is the
beneficial owner of any shares of Series 1 PCS Stock.
- ------------------------------------------------------------------------------
12
Check if the Aggregate Amount in Row (11) Excludes Certain Shares [X] The
foregoing amounts exclude any shares of Series 1 PCS Stock held by
executive
Page 2 of 8 pages
<PAGE>
officers and directors of the Reporting Person, if any. The Reporting
Person disclaims beneficial ownership of any shares held by such officers
and directors.
- ------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)
0%
The shares of Series 2 PCS Stock beneficially owned by the Reporting
Person represent approximately 23.5% of the outstanding PCS Stock of the
Company (which class includes the Series 1 PCS Stock, the Series 2 PCS
Stock and the Series 3 PCS Stock), assuming the exercise of all Warrants
to purchase shares of Series 2 PCS Stock initially issued to the Cable
Partners, the conversion of all shares of Series 7 Preferred Stock
initially issued to the Cable Partners into shares of Series 2 PCS Stock,
the issuance of all shares of Series 3 PCS Stock issuable in respect of
the Company's outstanding Class A Common Stock and the issuance of all
shares of Series 1 PCS Stock represented by the Sprint FON Group's "inter-
group interest" in the Sprint PCS Group (including that portion of such
inter-group interest corresponding to the Series 7 Preferred Stock and the
Warrants to purchase Series 2 PCS Stock held by the Cable Partners).
As a result of the Reporting Person's beneficial ownership of such shares
of Series 2 PCS Stock, the Reporting Person may be deemed to beneficially
own an equivalent number of shares of Series 1 PCS Stock; however, the
Reporting Person disclaims beneficial ownership of any shares of Series 1
PCS Stock. Were the Reporting Person deemed to beneficially own such
shares of Series 1 PCS Stock, such shares would represent approximately
39.2% of the outstanding Series 1 PCS Stock, calculated in accordance with
Rule 13d-3 (which rule would require the Reporting Person (i) to assume
the exercise and conversion of all Warrants and all shares of Series 7
Preferred Stock held by the Reporting Person and the conversion of all of
the approximately 111,277,868 shares of Series 2 PCS Stock beneficially
owned by the Reporting Person into the corresponding number of shares of
Series 1 PCS Stock and (ii) to disregard all outstanding shares of Series
2 PCS Stock, Series 3 PCS Stock, the shares of Series 2 PCS Stock issuable
in respect of the Warrants and shares of Series 7 Preferred Stock held by
Cox and Comcast and the shares of Series 3 PCS Stock issuable in respect
of the Company's outstanding Class A Common Stock and all shares
represented by the Sprint FON Group's inter-group interest in the Sprint
PCS Group).
Because each share of Series 2 PCS Stock generally is entitled to one-
tenth of the applicable vote per share of the Series 1 PCS Stock, the
shares of Series 2 PCS Stock beneficially owned by the Reporting Person
represent less than 1% of the outstanding voting power of the Company.
- ------------------------------------------------------------------------------
14 Type of Reporting Person (See Instructions)
CO
- ------------------------------------------------------------------------------
Page 3 of 8 pages
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D/A
(Amendment No. 1)
Statement of
TELE-COMMUNICATIONS, INC.
Pursuant to Section 13(d)
of the Securities Exchange Act of 1934
in respect of
SPRINT CORPORATION
This Report on Schedule 13D/A (Amendment No. 1) relates to the PCS Common
Stock - Series 1, par value $1.00 per share (the "Series 1 PCS Stock"), of
Sprint Corporation, a Kansas corporation (the "Company"). This Report is being
filed by Tele-Communications, Inc., a Delaware corporation ("TCI" or the
"Reporting Person"). This Report supplements and amends the Schedule 13D filed
by the Reporting Person on December 11, 1998 relating to the Series 1 PCS Stock
of the Company (the "Prior Schedule 13D"). Capitalized terms used in this
Report but not otherwise defined in this Amendment No. 1 have the meanings given
to such terms in the Prior Schedule 13D.
ITEM 4. PURPOSE OF TRANSACTION.
Item 4 is hereby supplemented and amended to include the following
information:
TCI, AT&T Corp. and the United States Department of Justice, Antitrust
Division (the "DOJ"), have executed and filed a Stipulation, dated December 30,
1998 (the "Stipulation"), containing a proposed form of final judgment (the
"Proposed Final Judgment"), that the parties thereto propose be entered by the
United States District Court for the District of Columbia in connection with the
proposed AT&T Merger. If, following compliance with the requirements of the
Antitrust Procedures and Penalties Act, 15 U.S.C (S)16, the court approves the
Proposed Final Judgment, a final judgment would be entered on substantially the
same terms as those contained in the Proposed Final Judgment and TCI would be
bound thereby. Notwithstanding the foregoing, the DOJ has reserved the right to
withdraw its consent to the Proposed Final Judgment contained in the Stipulation
at any time prior to the entry of a final judgment by such court. In addition,
the Federal Communications Commission, whose approval also is required to
consummate the AT&T Merger, is not a party to and is not bound by the
Stipulation.
The Proposed Final Judgment requires TCI to transfer, prior to the
consummation of the AT&T Merger, all of the Company Securities beneficially
owned by it to a trustee acceptable to the DOJ (the "Trustee") pursuant to a
form of trust agreement approved by the DOJ (the "Trust Agreement") for the
purpose of accomplishing the divestiture described below and in the Proposed
Final Judgment. The Trustee will not be a director, officer, manager, agent or
employee of AT&T Corp. or Liberty Media Corporation, a Delaware corporation and
a wholly owned subsidiary of TCI that will beneficially own the Company
Securities to be beneficially owned by the Reporting Person following the AT&T
Merger ("Liberty").
The Proposed Final Judgment requires the divestiture by the Trustee on or
before May 23, 2002 of that portion of the Company Securities beneficially owned
by the Reporting Person sufficient to cause the Reporting Person to beneficially
own no more than 10% of the outstanding Series 1 PCS Stock on a fully diluted
basis (assuming the issuance of all shares of Series 1 PCS Stock ultimately
issuable in respect of the applicable securities of Sprint upon the exercise,
conversion or other issuance thereof in accordance with the terms of such
securities). On or before May 23, 2004, the Trustee must divest the remainder of
the Company Securities beneficially owned by the Reporting Person.
Page 4 of 8 pages
<PAGE>
Pursuant to the Proposed Final Judgment, the Trust Agreement will grant the
Trustee the sole right to sell the Company Securities beneficially owned by the
Reporting Person and will provide that all decisions regarding such divestiture
will be made by the Trustee without discussion or consultation with AT&T Corp.
or TCI; however, the Proposed Final Judgment provides that the Trustee shall
consult with the board of directors of Liberty regarding such divestiture (other
than certain directors of Liberty expected to be appointed by AT&T Corp.
following the AT&T Merger and any director, officer or shareholder of Liberty
that owns more than 0.10% of the outstanding common stock of AT&T Corp.). The
Trustee will have the power and authority to accomplish such divestiture only in
a manner reasonably calculated to maximize the value of the Company Securities
beneficially owned by the Reporting Person.
The Proposed Final Judgment provides that the Trustee will be instructed to
not vote the Company Securities beneficially owned by the Reporting Person so
long as such securities are held by the Trustee.
The Proposed Final Judgment also generally prohibits the acquisition by
Liberty of additional Company Securities (other than in connection with the
exercise of Warrants or the conversion of shares of Series 7 Preferred Stock)
without the prior written consent of the DOJ.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS
WITH RESPECT TO THE SECURITIES OF THE ISSUER
Item 6 is hereby supplemented and amended to include the following
information:
The information set forth in Item 4 of this Amendment No. 1 is hereby
incorporated by reference herein.
The summary description of certain provisions of the Stipulation (including
the Proposed Final Judgment) contained in this Amendment No. 1 does not purport
to be complete and is qualified in its entirety by reference to the complete
text of the Stipulation (including the Proposed Final Judgment), which has been
filed as an Exhibit to this Amendment No. 1 and is hereby incorporated by
reference herein.
Page 5 of 8 pages
<PAGE>
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
Item 7 is hereby supplemented and amended to include the following
information:
Exhibit
No. Exhibit
- ------- --------
10.6 Stipulation (including Proposed Final Judgment), dated December 30,
1998, among the United States Department of Justice, Antitrust
Division, AT&T Corp. and Tele-Communications, Inc.
Page 6 of 8 pages
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of his knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
Dated: December 30, 1998
TELE-COMMUNICATIONS, INC.
By: /s/ Stephen M. Brett
--------------------------------
Name: Stephen M. Brett
Title: Executive Vice President
and General Counsel
<PAGE>
EXHIBIT INDEX
Exhibit
No. Exhibit
- ------- -------
10.6 Stipulation (including Proposed Final Judgment), dated December 30,
1998, among the United States Department of Justice, Antitrust
Division, AT&T Corp. and Tele-Communications, Inc.
Page 8 of 8 pages
<PAGE>
EXHIBIT 10.6
------------
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
UNITED STATES OF AMERICA,
Plaintiff, No. 98-3170
__________
(Antitrust)
v.
AT&T CORP. and
TELE-COMMUNICATIONS, INC.,
Defendants.
STIPULATION
It is stipulated by and between the undersigned parties, by their
respective attorneys, that:
A. The Court has jurisdiction over the subject matter of this action and
over each of the parties hereto, and venue of this action is proper in the
District for the District of Columbia.
B. The parties to this Stipulation consent that a Final Judgment in the
form attached may be filed and entered by the Court, upon the motion of any
party or the Court's own motion, at any time after compliance with the
requirements of the Antitrust Procedures and Penalties Act (15 U.S.C. (S) 16),
without further notice to any party or other proceedings, provided that
plaintiff has not withdrawn its consent, which it may do at any time before
entry of the proposed Final Judgment by serving notice on the defendants and by
filing that notice with the Court.
C. Defendants shall abide by and comply with the provisions of the
proposed Final Judgment pending entry of the Final Judgment, and shall, from the
date of the filing of this
<PAGE>
Stipulation, comply with all the terms and provisions of the proposed Final
Judgment as though the same were in full force and effect as an order of the
Court.
D. In the event plaintiff withdraws its consent, as provided in paragraph
(B) above, or if the proposed Final Judgment is not entered pursuant to this
Stipulation, this Stipulation shall be of no effect whatever, and the making of
this Stipulation shall be without prejudice to any party in this or any other
proceeding.
FOR THE PLAINTIFF:
- ------------------------------ -----------------------------
A. DOUGLAS MEDLAMED DONALD J. RUSSELL
Acting Assistant Attorney General Chief
Telecommunications Task Force
- ----------------------------- -----------------------------
CONSTANCE K. ROBINSON PETER A. GRAY
Director of Operations and Merger Enforcement Attorney
Telecommunications Task Force
- ------------------------------
DEBORAH A. ROY
Attorney
Telecommunications Task Force
U.S. Department of Justice
Antitrust Division
1401 H Street, N.W., Suite 8000
Washington, DC 20530
(202) 514-5636
2
<PAGE>
DATED:________________________
FOR THE DEFENDANTS:
- ------------------------------ -------------------------------------
MARC C. ROSENBLUM KATHY FENTON
Vice President-Law Counsel for Tele-Communications, Inc.
AT&T Corp. Jones, Day, Reavis & Pogue
295 North Maple Avenue Suite 700
Room 3244J1 1450 G Street NW
Basking Ridge, New Jersey 07920 Washington, DC 20005
DATED:________________________ DATED:_______________________________
3
<PAGE>
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
UNITED STATES OF AMERICA,
Plaintiff, No. 98-3170
__________
(Antitrust)
v.
AT&T CORP. and
TELE-COMMUNICATIONS, INC.,
Defendants.
FINAL JUDGMENT
WHEREAS, plaintiff, the United States of America, having filed its
Complaint herein on December 30, 1998, and plaintiff and defendants, by their
respective attorneys, having consented to the entry of this Final Judgment
without trial or adjudication of any issue of fact or law herein, and without
this Final Judgment constituting any evidence against or an admission by any
party with respect to any issue of law or fact herein;
AND WHEREAS, defendants have agreed to be bound by the provisions of
this Final Judgment pending its approval by the Court;
AND WHEREAS, the essence of this Final Judgment is certain divestiture
of specific assets and the imposition of related injunctive relief to ensure
that competition is not substantially lessened;
<PAGE>
AND WHEREAS, plaintiff requires LIBERTY MEDIA CORPORATION to make
certain divestitures for the purpose of preventing a lessening of competition
alleged in the Complaint;
AND WHEREAS, defendants have represented to plaintiff that the
divestiture ordered herein can and will be made and that defendants will later
raise no claims of hardship or difficulty as grounds for asking the Court to
modify any of the divestiture provisions contained herein;
AND, THEREFORE, before the taking of any testimony, and without trial
or adjudication of any issue of fact or law herein, and upon consent of the
parties hereto, it is hereby ORDERED, ADJUDGED, and DECREED as follows:
I.
JURISDICTION
This Court has jurisdiction over each of the parties hereto and the
subject matter of this action. The Complaint states a claim upon which relief
may be granted against the defendants under Section 7 of the Clayton Act, as
amended (15 U.S.C. (S) 18).
II.
DEFINITIONS
As used in this Final Judgment:
A. "TCI" means defendant Tele-Communications, Inc., a Delaware
corporation with its headquarters in Englewood, Colorado and includes its
successors and
2
<PAGE>
assigns, its subsidiaries, and the directors, officers, managers, agents and
employees acting for or on behalf of TCI, except for Liberty, its successors and
assigns, its subsidiaries, and the directors, officers, managers, agents and
employees acting for or on behalf of Liberty.
B. "Liberty" means Liberty Media Corporation, a Delaware
corporation, as well as the assets, liabilities and business attributed to the
Liberty Media Group (as defined in the AT&T/TCI Merger Agreement) and its
successors and assigns, its subsidiaries and the directors, officers, managers,
agents and employees acting for or on behalf of Liberty.
C. "Liberty Media Tracking Shares" means the classes of common stock
to be issued by AT&T, referred to as "Liberty Media Tracking Shares" in the
AT&T/TCI Merger Agreement, and any shares of stock issued in respect of any of
the foregoing (including by way of conversion, redemption, reclassification,
distribution, merger, combination, or other similar event).
D. "AT&T" means defendant AT&T Corp., a New York corporation with
its headquarters in New York, New York and includes all of its successors and
assigns, its subsidiaries, and the directors, officers, managers, agents and
employees acting for or on behalf of AT&T, except for Liberty, its successors
and assigns, its subsidiaries, and the directors, officers, managers, agents and
employees acting for or on behalf of Liberty.
E. "AT&T/TCI Merger Agreement" means the Agreement and Plan of
Merger dated as of June 23, 1998, as produced to plaintiff on July 23, 1998,
with respect to the AT&T/TCI Merger.
F. "AT&T/TCI Merger" means the merger of TCI with a subsidiary of
AT&T, as contemplated by the AT&T/TCI Merger Agreement.
3
<PAGE>
G. "AT&T Stock" means all classes of common stock issued by AT&T,
except for Liberty Media Tracking Shares.
H. "Sprint PCS Tracking Stock" means, collectively, (i) the PCS
Common Stock, Series 1, (ii) the PCS Common Stock, Series 2, (iii) the PCS
Common Stock, Series 3, (iv) the shares of Sprint PCS Tracking Stock issuable in
respect of Sprint's outstanding shares of Class A Common Stock, (v) the shares
of Sprint PCS Tracking Stock issuable in respect of any "inter-group interest"
of the "Sprint FON Group" in the "Sprint PCS Group," (vi) the shares of Sprint's
Series 7 Preferred Stock and warrants to purchase shares of Sprint PCS Tracking
Stock issued to TCI, Comcast Corporation ("Comcast") and Cox Communications,
Inc. ("Cox") in connection with the Sprint PCS Restructuring (and the shares of
Sprint PCS Tracking Stock issuable upon my exercise or conversion thereof),
(vii) any other options, warrants or convertible securities exercisable for or
convertible into any shares of Sprint PCS Tracking Stock, and (viii) any shares
of capital stock Sprint issued in respect of any of the foregoing (including by
way of conversion, redemption, reclassification, distribution, merger,
combination, or other similar event).
I. "Liberty's Sprint Holdings" means the Sprint PCS Tracking Stock
acquired by TCI Ventures Group LLC and its subsidiaries in the Sprint PCS
Restructuring and in which Liberty will have a beneficial interest after the
closing of the AT&T/TCI Merger.
J. "Sprint PCS Restructuring" means that series of transactions that
occurred simultaneously on November 23, 1998 in which Sprint Corporation
("Sprint") acquired through a number of mergers all of the outstanding
partnership interests in a number of partnerships
4
<PAGE>
collectively holding all of the assets and businesses known as "Sprint PCS" held
by affiliates of TCI, Cox, and Comcast.
K. "Private sale" means any sale except for sales made through the
public market.
III.
APPLICABILITY
The provisions of this Final Judgment apply to each of the defendants,
its successors and assigns, its subsidiaries, directors, officers, managers,
agents, employees and all other persons in active concert or participation with
any of them who shall have received actual notice of this Final Judgment by
personal service or otherwise, and with respect to Sections IV, V and VI of this
Final Judgment, to the trustee and his or her successors.
IV.
CREATION OF A TRUST
A. TCI is hereby ordered and directed, prior to closing of the
AT&T/TCI Merger, to assign and transfer Liberty's Sprint Holdings to a trustee
for the purpose of accomplishing a divestiture of such holdings in accordance
with the terms of this Final Judgment. The trust agreement shall be in a form
approved by the plaintiff, and its terms shall be consistent with the terms of
this Final Judgment. Defendants shall submit a form of trust agreement to the
plaintiff, who shall communicate to defendants within ten (10) business days its
approval or disapproval of that form. The trustee shall agree to be bound by
this Final Judgment.
5
<PAGE>
B. Prior to the closing of the AT&T/TCI Merger, TCI shall submit the
name of its nominee for trustee to the plaintiff, who within ten (10) business
days shall (i) approve the nominee as trustee, or (ii) request additional names
until a nominee for trustee proposed by Liberty is approved by the plaintiff,
with plaintiff reaching a decision on each nominee within ten (10) business
days. The trustee shall not be a director, officer, manager, agent or employee
of AT&T or Liberty. Defendants shall not consummate the Merger until such time
as the trustee and the trust agreement have been approved by plaintiff, and the
Liberty Sprint Holdings have been transferred to the trust.
V.
DIVESTITURE OF SPRINT PCS INTEREST
A. The trustee is hereby ordered and direct, in accordance with the
terms of this Final Judgment, on or before May 23, 2002, to divest that portion
of Liberty's Sprint Holdings sufficient to cause Liberty to own no more than 10%
of the outstanding shares of Sprint PCS Tracking Stock. On or before May 23,
2004, the trustee shall divest the remainder of Liberty's Sprint Holdings. The
number of outstanding shares of Sprint PCS Tracking Stock for such purposes
shall be calculated on a shares of Series 1 PCS Stock equivalent basis assuming
the issuance of all shares of Series 1 PCS Stock ultimately issuable in respect
of the applicable Sprint PCS Tracking Stock upon the exercise, conversion or
other issuance thereof in accordance with the terms of such securities.
Notwithstanding the provisions of this paragraph, if a motion to terminate this
Final Judgment in which plaintiff has joined has been filed, and is pending
6
<PAGE>
before the Court, the trustee shall not proceed with the divestitures provided
by this paragraph until the motion to terminate the Final Judgment has been
decided by the Court.
B. After Liberty's Sprint Holdings have been transferred to the
trustee, only the trustee shall have the right to sell Liberty's Sprint
Holdings. The trustee shall have the power and authority to accomplish the
divestiture only in a manner reasonably calculated to maximize the value of
Liberty's Sprint Holdings to the holders of the Liberty Media Tracking Shares,
without regard to any costs or benefits to AT&T (including any costs or benefits
of such divestiture to AT&T that may be directly or indirectly transferred to
the holders of the Liberty Media Tracking Shares). However, the trustee may in
accomplishing the divestiture, take into account income or gain tax costs or
benefits for AT&T that flow to the holders of the Liberty Media Tracking
Shares. The trustee shall have the powers provided by the trust agreement and
such other powers as the Court shall doom appropriate.
C. All decisions regarding the divestiture, in whole or in part, of
Liberty's Sprint Holdings shall be made by the trustee without discussion or
consultation with AT&T, with any of the Class A Directors of Liberty, or with
any other officer, director or shareholder of Liberty who individually owns more
than 0.10% of the outstanding shares of AT&T Stock. The trustee shall consult
with the Board of Directors of Liberty, but the Class A Directors of Liberty and
any director, officer, or shareholder of Liberty who owns more than 0.10% of the
outstanding shares of AT&T Stock shall not participate in such consultation.
The decision to divest part or all of the Liberty Sprint Holdings shall be made
by the trustee in his or her sole discretion, except as provided for in Section
V.D. of this Final Judgment. Liberty shall not take any action to block a sale
by the trustee, on any grounds other than the trustee's malfeasance as defined
in the trust
7
<PAGE>
agreement. Where the trustee intends to effect a private sale of part or all of
Liberty's Sprint Holdings, the trustee shall notify Liberty and plaintiff of
that intention. Any objection by Liberty, based on the trustee's malfeasance,
must be made within ten (10) business days of notice from the trustee of an
intention to make a private sale. Subject to Section V.G. of this Final
Judgment, the trustee shall have the power and authority to hire at the cost and
expense of Liberty any investment bankers, attorneys, or other agents reasonably
necessary in the judgment of the trustee to assist in the divestiture, and such
professionals or agents shall be solely accountable to the trustee.
D. The trustee shall not divest part or all of Liberty's Sprint
Holdings in a private sale without a premerger notification form having been
filed pursuant to the Hart-Scott-Rodino Antitrust Improvement Act of 1976 or, if
the private sale is not reportable under the Hart-Scott-Rodino Act, without
obtaining the prior written consent of the plaintiff, which shall be granted or
denied within thirty (30) calendar days of the request for such consent.
E. Defendants shall not provide financing in connection with the
divestiture to the purchaser of any of Liberty's Sprint Holdings required to be
divested by this Final Judgment.
F. Except as provided for in Section V.C. of this Final Judgment,
defendants shall take no action to influence, interfere with or impede the
trustee's accomplishment of the divestiture of Liberty's Sprint Holdings and
Liberty shall, if requested by the trustee, use its best efforts to assist the
trustee in accomplishing the required divestiture, provided that Liberty is not
required to take any action with respect to any of Liberty's non-Sprint PCS
assets or businesses. Subject to a customary confidentiality agreement, the
trustee shall have full and complete access
8
<PAGE>
to the defendant's personnel, books, records, and facilities related to
Liberty's Sprint Holdings. Subject to a customary confidentiality agreement, the
trustee shall permit prospective purchasers of part or all of Liberty's Sprint
Holdings in a private sale to have access to any and all financial or
operational information to which the trustee has access, as may be relevant to
the divestiture required by this Final Judgment.
G. The trustee shall serve at the cost and expense of Liberty and
shall account for all monies derived from the sale of the assets sold by the
trustee and all costs and expenses so incurred. The compensation of the trustee
and of any professionals and agents retained by the trustee shall be reasonable
in light of value of the Liberty Sprint Holdings and based on a fee arrangement
set forth in the trust agreement.
VI.
LIBERTY GOVERNANCE AND ECONOMIC INTEREST
Until the divestitures required by the Final Judgment have been
accomplished:
A. Any economic interest arising in connection with Liberty's Sprint
Holdings, without limitation, and including but not limited to any interest or
dividends earned or net proceeds received upon the disposition of Liberty's
Sprint Holdings, shall be for the sole and exclusive benefit of the holders of
the Liberty Media Tracking Shares. AT&T shall not engage in any transaction
that transfers either directly or indirectly the benefits of Liberty's Sprint
Holdings to any other class of AT&T shareholders or to AT&T. AT&T shall adhere
to the Policy Statement Regarding Liberty Tracking Stock Matters contained in
Exhibit D to the AT&T/TCI Merger Agreement.
9
<PAGE>
B. TCI shall, on or before the consummation of the merger, (i) amend
and restate the certificate of incorporation and bylaws of Liberty to be in
substantially the form set forth in Schedule 2.1(c)(i) of the AT&T/TCI Merger
Agreement and (ii) appoint all of the Class B Directors and the Class C
Directors (as such terms are defined in Schedule 2.1(c)(i) to the AT&T/TCI
Merger Agreement) of Liberty Media Corporation.
C. AT&T shall, on or before the consummation of the AT&T/TCI Merger
or promptly thereafter, form a Capital Stock Committee as described in the Bylaw
Amendment for the Capital Stock Committee set out in Exhibit D of the AT&T/TCI
Merger Agreement and agree to have that Capital Stock Committee have the
responsibilities described in Exhibit D of the AT&T/TCI Merger Agreement.
D. The trustee shall be instructed not be vote Liberty's Sprint
Holdings for so long as they are held in the trust.
E. Liberty shall not purchase additional shares of Sprint PCS
Tracking Stock (other than in connection with the exercise of warrants to
purchase such shares of the conversion of shares of Series 7 Preferred Stock
acquired in the Sprint PCS Restructuring) without the prior written consent of
the plaintiff, which shall act on any request for such consent within thirty
(30) calendar days.
F. Liberty shall not hold or acquire any interest, direct or
indirect, in AT&T's mobile wireless operations without a premerger notification
form having been filed pursuant to the Hart-Scott-Rodino Antitrust Improvement
Act of 1976, or if the acquisition is not reported under the Hart-Scott-Rodino
Act, without obtaining the prior written consent of the plaintiff, which shall
be granted or denied within thirty (30) calendar days of the request for such
consent.
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This paragraph shall not apply to any cumulative holding or acquisition by
Liberty of 1.0% or less of the outstanding shares of AT&T Stock indirectly
through the acquisition of an interest in a third party, with such percentage to
be calculated by multiplying the percentage interest owned by Liberty in such
third party by the third party's interest in AT&T Stock (and such third party's
interest being determined in the same manner, if also held indirectly).
VII.
COMPLIANCE INSPECTION
For the purposes of determining or securing compliance with the Final
Judgment and subject to any legally recognized privilege, from time to time:
A. Duly authorized representatives of the plaintiff, upon written
request of the Attorney General or of the Assistant Attorney General in charge
of the Antitrust Division, and on reasonable notice to defendants made to their
principal offices, shall be permitted:
(1) Access during office hours of defendants to inspect and copy
all books, ledgers, accounts, correspondence, memoranda, and other records and
documents in the possession or under the control of defendants, who may have
counsel present, relating to matters contained in this Final Judgment; and
(2) Subject to the reasonable convenience of defendants and
without restraint or interference from them, to interview, either informally or
on the record, officers, employees, and agents of defendants, who may have
counsel present, regarding any such matters.
B. Upon the written request of the Attorney General or of the
Assistant Attorney General in charge of the Antitrust Division, made to
defendants' principal offices,
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defendants shall submit such written reports, under oath if requested, with
respect to any matter contained in this Final Judgment.
C. No information or documents obtained by the means provided in
this Section VII shall be divulged by a representative of the plaintiff to any
person other than a duly authorized representative of the Executive Branch of
the United States, except in the course of legal proceedings to which the United
States is a party (including grand jury proceedings), or for the purpose of
securing compliance with this Final Judgment, or as otherwise required by law.
D. If at the time information or documents are furnished by
defendants to plaintiff, defendants represent and identify in writing the
material in any such information or documents to which a claim of protection may
be asserted under Rule 26(c)(7) of the Federal Rules of Civil Procedure and
defendants mark each pertinent page of such material, "Subject to claim of
protection under Rule 26(c)(7) of the Federal Rules of Civil Procedure," then
ten (10) calendar days notice shall be given by plaintiff to defendants prior to
divulging such material in any legal proceeding (other than a grand jury
proceeding).
VIII.
REPORTING REQUIREMENT
Until the divestitures have been accomplished as provided for in
Section V. of this Final Judgment, the trustee shall file a report every six
months with the plaintiff, commencing on November 1, 1999, setting forth the
efforts to accomplish the divestitures required by this Final Judgment.
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IX.
RETENTION OF JURISDICTION
Jurisdiction is retained by this Court for the purpose of enabling any
of the parties to this Final Judgment to apply to this Court at any time for
such further orders and directions as may be necessary or appropriate for the
construction or carrying out of this Final Judgment, for the modification of any
of the provisions hereof, for the enforcement of compliance herewith, and for
the punishment of the violations hereof.
X.
TERMINATION
This Final Judgment will expire upon the tenth anniversary of its
entry.
XI.
PUBLIC INTEREST
Entry of this Final Judgment is in the public interest.
Dated:____________________
______________________________________
United States District Judge
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