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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): April 5, 1999
General Instrument Corporation
(Exact name of registrant as specified in its charter)
Delaware 001-12925 36-4134221
(State of incorporation) (Commission File Number) (IRS Employer
Identification No.)
101 Tournament Drive, Horsham, Pennsylvania 19044
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (215) 323-1000.
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Item 5. Other Events.
On April 5, 1999, General Instrument Corporation, a Delaware corporation
(the "Company"), issued a press release announcing the signing of a
definitive agreement to repurchase 5.3 million shares of Company common stock
from two partnerships affiliated with Forstmann Little & Co. The Stock
Disposition Agreement is filed as Exhibit 10.1 hereto and the press release
is filed as Exhibit 99.1 hereto.
The transaction was completed on April 5, 1999.
Item 7. Financial Statements and Exhibits.
Exhibit Description
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10.1 Stock Disposition Agreement, dated as of April 2, 1999, among General
Instrument Corporation, Instrument Partners and Forstmann Little & Co.
Subordinated Debt and Equity Management Buyout Partnership - IV.
99.1 Press Release issued April 5, 1999
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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 hereunto duly authorized.
GENERAL INSTRUMENT CORPORATION
(Registrant)
By: /s/ Robert A. Scott
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Robert A. Scott
Senior Vice President, General Counsel
and Secretary
Date: April 5, 1999
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Exhibit 10.1
STOCK DISPOSITION AGREEMENT
Stock Disposition Agreement, dated as of April 2, 1999 (this
"Agreement"), among General Instrument Corporation, a Delaware corporation (the
"Company"), Instrument Partners, a New York limited partnership ("Instrument
Partners"), and Forstmann Little & Co. Subordinated Debt and Equity Management
Buyout Partnership-IV, a New York limited partnership ("MBO-IV"; and together
with Instrument Partners, the "Selling Stockholders").
WHEREAS, Instrument Partners is the owner of 11,547,008 shares of the
Company's common stock, par value $.01 per share (the "Common Stock"), and
MBO-IV is the owner of 10,161,657 shares of Common Stock; and
WHEREAS, the Company desires to purchase from Instrument Partners, and
Instrument Partners desires to sell to the Company, 2,819,111 of its shares of
Common Stock; and the Company desires to purchase from MBO-IV, and MBO-IV
desires to sell to the Company, 2,480,889 of its shares of Common Stock (such
Instrument Partners and MBO-IV shares of Common Stock, the "Shares"); and
WHEREAS, contemporaneously with the execution and delivery of this
Agreement, the Selling Stockholders are entering into an agreement (the "Other
Agreement") to sell 10 million of their other shares of Common Stock to Liberty
Media Corporation, a Delaware corporation ("Liberty Media").
NOW, THEREFORE, in consideration of the mutual covenants and
undertakings contained herein, and on the terms and subject to the conditions
set forth herein, the parties hereto, each representing to the others that its
execution, delivery and performance of this Agreement has been fully and duly
authorized, agree as follows:
SECTION 1 - DEFINITIONS
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1.1 SPECIFIC DEFINITIONS. As used in this Agreement, the following
terms shall have the meanings set forth below:
"BUSINESS DAY" - any day other than a Saturday, a Sunday or a day on
which banks in New York City are authorized or obligated by law or
executive order to close.
"CLOSING" - the closing of the purchase and sale of the Shares.
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"CLOSING DATE" - the date on which the Closing occurs.
"GOVERNMENTAL ENTITY" - any federal, state or local judicial,
legislative, executive or regulatory authority.
Other terms are defined elsewhere in this Agreement and, unless otherwise
indicated, shall have such meanings throughout this Agreement.
SECTION 2 - PURCHASE AND SALE
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2.1 PURCHASE AND SALE OF SHARES. On the terms and subject to the
conditions, and in reliance on the representations and warranties, set forth
herein, at the Closing the Selling Stockholders shall sell and transfer to the
Company, and the Company shall purchase from the Selling Stockholders, the
Selling Stockholders' Shares (2,819,111 Shares in the case of Instrument
Partners, and 2,480,889 Shares in the case of MBO-IV), at a cash purchase price
equal to $28.00 per Share (the "Purchase Price"). The aggregate Purchase Price
is $148,400,000.
2.2 CLOSING; DELIVERY AND PAYMENT.
(a) The Closing shall take place at the offices of Fried, Frank, Harris,
Shriver & Jacobson, One New York Plaza, New York, New York, or at such other
place as the Selling Stockholders and the Company shall agree, at 9:00 a.m.
(eastern standard time) on April 5, 1999 (provided that the conditions set forth
in Sections 4.1(c), 4.1(d)(i), 4.2(c) and 4.2(e)(i) hereof shall have been
satisfied) or as soon thereafter as practicable after such conditions have been
satisfied.
(b) On the Closing Date, each of the Selling Stockholders shall deliver to
the Company such instruments of transfer, in form and substance reasonably
satisfactory to the Company, as shall be sufficient to transfer its Shares to
the Company, and in exchange therefor (and upon receipt of confirmation from the
Company's transfer agent of its receipt of the instruments of transfer to be
delivered to it) the Company shall pay to each of the Selling Stockholders the
aggregate Purchase Price for the Shares sold by such Selling Stockholders in
immediately available funds to the accounts designated by such Selling
Stockholders.
SECTION 3 - REPRESENTATIONS AND WARRANTIES
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3.1 BY THE PARTIES. Instrument Partners and MBO-IV each represents and
warrants to the Company, and the Company represents and warrants to Instrument
Partners and MBO-IV, as follows:
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(a) It has all necessary authority for the execution, delivery and
performance of this Agreement by it; it has duly executed and delivered this
Agreement; and this Agreement is a valid and legally binding agreement,
enforceable against it in accordance with its terms, assuming the due execution
and delivery by the other parties; and
(b) The performance of this Agreement by it will not violate or conflict
with any law, regulation, order or agreement, or, to the extent applicable, such
party's charter or organic documents, and such party is not required to obtain
any governmental approvals or third party consents to enter into and perform its
obligations pursuant to this Agreement. Such execution and performance does not
and will not constitute a default under any agreement or obligation binding on
it or result in the forfeiture or loss of any rights or assets by it except as
specifically provided for in this Agreement.
3.2 BY THE SELLING STOCKHOLDERS. Each of the Selling Stockholders
represents and warrants to the Company that (a) it is the owner of 11,547,008
shares of Common Stock (in the case of Instrument Partners) and 10,161,657
shares of Common Stock (in the case of MBO-IV), (b) the Shares to be sold
hereunder by it are owned, and will at the Closing be conveyed to the Company,
by such Selling Stockholder free and clear of any liens, charges or encumbrances
and (c) upon delivery of its Shares, and payment therefor pursuant hereto, good
and valid title to its Shares will pass to the Company (assuming that the
Company is without notice of any adverse claim, as defined in the Uniform
Commercial Code as adopted in the State of New York (the "Code") and is
otherwise a bona fide purchaser for the purposes of the Code).
3.3 NO OTHER WARRANTIES. Except as expressly set forth in this Agreement,
no party is relying on any express or implied representations or warranties
relating to any party or to the consummation of the transactions contemplated
hereby. Except as and to the extent expressly set forth in this Agreement, each
party hereto hereby disclaims all liability and responsibility for any statement
or information made or communicated (orally or in writing) to any other party
hereto or any affiliate, representative or agent thereof (including without
limitation any opinion, information or advice by any officer, director,
consultant, affiliate, representative or agent of the disclaiming party).
SECTION 4 - CONDITIONS TO THE PARTIES' OBLIGATIONS TO CLOSE
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4.1 CONDITIONS TO THE OBLIGATIONS OF INSTRUMENT PARTNERS AND MBO-IV TO
CLOSE. The obligations of Instrument Partners and MBO-IV to consummate the
transactions contemplated by this Agreement are subject to the satisfaction (or
waiver) of the following conditions:
(a) NO INJUNCTIONS. There shall not be in effect any statute, regulation,
order, decree or judgment of any Governmental Entity that makes illegal or
enjoins or prevents in any material respect the consummation of the transactions
contemplated by this Agreement.
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(b) REPRESENTATIONS. All representations made by the Company in Article III
hereof shall be true and correct in all material respects at and as of the
Closing Date.
(c) LIBERTY MEDIA RIGHT OF FIRST REFUSAL. Liberty Media (as assignee of TCI
Ventures Group, LLC), shall have waived in writing its rights of first refusal,
with respect to the transactions contemplated by this Agreement, under the
letter agreement, dated August 1, 1998 (the "Letter Agreement"), among TCI
Ventures Group, LLC, Instrument Partners, MBO-IV, the Company and the other
party thereto, and the Selling Stockholders shall have received a copy of such
written waiver.
(d) OTHER AGREEMENT. (i) All conditions to the consummation of the
transactions contemplated by the Other Agreement shall have been satisfied or
waived and the parties thereto shall be fully prepared to consummate the
transactions contemplated thereby; and (ii) the transactions contemplated by the
Other Agreement shall have been consummated contemporaneously with the
consummation of the transactions contemplated by this Agreement.
4.2 CONDITIONS TO THE OBLIGATIONS OF THE COMPANY TO CLOSE. The obligations
of the Company to consummate the transactions contemplated by this Agreement are
subject to the satisfaction (or waiver) of the following conditions:
(a) NO INJUNCTIONS. There shall not be in effect any statute, regulation,
order, decree or judgment of any Governmental Entity that makes illegal or
enjoins or prevents in any material respect the consummation of the transactions
contemplated by this Agreement.
(b) REPRESENTATIONS. All representations made by Instrument Partners and
MBO-IV in Article III hereof shall be true and correct in all material respects
at and as of the Closing Date.
(c) LIBERTY MEDIA RIGHT OF FIRST REFUSAL. Liberty Media (as assignee of TCI
Ventures Group, LLC), shall have waived in writing its rights of first refusal,
with respect to the transactions contemplated by this Agreement, under the
Letter Agreement, and the Company shall have received a copy of such written
waiver.
(d) FAIRNESS OPINION. The opinion previously delivered to the board of
directors of the Company by Merrill Lynch & Co., that the Purchase Price is fair
to the Company from a financial point of view, shall not have been withdrawn or
adversely modified.
(e) OTHER AGREEMENT. (i) All conditions to the consummation of the
transactions contemplated by the Other Agreement shall have been satisfied or
waived and the parties thereto shall be fully prepared to consummate the
transactions contemplated thereby; and (ii) the transactions contemplated by the
Other Agreement shall have been consummated contemporaneously with the
consummation of the transactions contemplated by this Agreement.
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(f) RULE 144 SALE. Instrument Partners or MBO-IV shall have entered into an
arrangement with Goldman Sachs & Co. to sell at least 4 million of their shares
of Common Stock (other than the Shares and the shares subject to the Other
Agreement) under Rule 144 of the Securities Act of 1933, as amended, and the
Company shall have received evidence of such arrangement reasonably satisfactory
to it.
(g) FORSTMANN RESIGNATION. Theodore J. Forstmann shall have resigned his
position as a Director of the Company.
(h) PROXY. Instrument Partners and MBO-IV shall have executed and delivered
to the Company an irrevocable proxy (in the form of Exhibit A hereto) to vote
9.57 million of the shares of Common Stock held by them on March 31, 1999, the
record date for the Company's 1999 annual meeting of stockholders, at such
annual meeting .
SECTION 5 - TERMINATION
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5.1 TERMINATION. This Agreement may be terminated at any time prior to the
Closing:
(a) by written agreement of the Selling Stockholders and the Company;
(b) either by the Selling Stockholders or by the Company, by written notice
of such termination to the other, if the Closing shall not have been consummated
on or prior to 2:00 p.m. eastern standard time (in the case of a termination by
the Selling Stockholders), or on or prior to 5:00 p.m. eastern standard time (in
the case of a termination by the Company), on April 5, 1999;
(c) either by the Selling Stockholders or by the Company if any court of
competent jurisdiction or other competent Governmental Entity shall have by
statute, rule, regulation, order, decree or injunction or other action
permanently restrained, enjoined or otherwise prohibited any of the transactions
contemplated by this Agreement.
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SECTION 6 - MISCELLANEOUS
6.1 NOTICES. All notices or other communications hereunder shall be
deemed to have been duly given and made if in writing and if served by personal
delivery upon the party for whom it is intended, if delivered registered or
certified mail, return receipt requested, or by a national courier service, if
sent by facsimile transmission, provided that the facsimile transmission is
promptly confirmed by telephone confirmation thereof, or on the third day after
posting in the United States postage prepaid if sent by registered or certified
mail, return receipt requested, to the person at the address set forth below, or
such other address as may be designated in writing hereafter, in the same
manner, by such person:
To the Company:
General Instrument Corporation
101 Tournament Drive
Horsham, Pennsylvania 19044
Attention: Robert A. Scott, Esq.
Senior Vice President, General Counsel and Secretary
Tel: (215) 323-1000
Fax: (215) 323-1293
To Instrument Partners or MBO-IV:
c/o Forstmann Little & Co.
767 Fifth Avenue
New York, New York 10153
Attention: Winston W. Hutchins
Tel: (212) 355-5656
Fax: (212) 759-9059
6.2 AMENDMENT; WAIVER. Any provision of this Agreement may be amended
or waived if, and only if, such amendment or waiver is in writing and signed, in
the case of any amendment, by the parties hereto, or in the case of a waiver, by
the party against whom the waiver is to be effective. No failure or delay by any
party in exercising any right, power or privilege hereunder shall operate as a
waiver thereof nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein provided shall be cumulative and,
except as otherwise provided herein, shall not be exclusive of any rights or
remedies provided by law.
6.3 ASSIGNMENT. No party to this Agreement may assign any of its rights
or obligations under this Agreement without the consent of the other parties
hereto.
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6.4 ENTIRE AGREEMENT. This Agreement (which includes the Exhibit
hereto) contains the entire agreement among the parties hereto with respect to
the subject matter hereof and supersedes all prior agreements and
understandings, oral or written, between or among them with respect to such
matters, and any written agreement of the parties that expressly provides that
it is not superseded by this Agreement.
6.5 PARTIES IN INTEREST. This Agreement shall inure to the benefit of
and be binding upon the parties hereto and their respective successors and
permitted assigns. Nothing in this Agreement, express or implied, is intended to
confer upon any person other than the parties hereto, and their successors or
permitted assigns, any rights or remedies under or by reason of this Agreement.
6.6 GOVERNING LAW: SUBMISSION TO JURISDICTION; SELECTION OF FORUM. THIS
AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. Each party
hereto agrees that it shall bring any action or proceeding in respect of any
claim arising out of or related to this Agreement or the transactions contained
in or contemplated by this Agreement, whether in tort or contract or at law or
in equity, exclusively in the United States District Court for the Southern
District of New York or the Supreme Court of the state of New York for the
County of New York, and solely in connection with claims arising under this
Agreement or the transactions contained in or contemplated by this Agreement (i)
irrevocably submits to the exclusive jurisdiction of such courts, (ii) waives
any objection that such courts are an inconvenient forum or do not have
jurisdiction over any party hereto and (iii) agrees that
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service of process upon such party in any such action or proceeding shall be
effective if notice is given in accordance with Section 6.1 of this Agreement.
6.7 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, and all of which shall
constitute one and the same Agreement.
6.8 FURTHER ASSURANCES. Each party hereto shall (at its expense) take
such actions and execute and deliver such other documents, certifications and
further assurances as the other parties hereto may reasonably request in order
to carry out the purposes of this Agreement.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first written above.
GENERAL INSTRUMENT CORPORATION
By: /s/ Robert A. Scott
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Name: Robert A. Scott
Title: Senior Vice President,
General Counsel & Secretary
INSTRUMENT PARTNERS
By: FLC XXII Partnership, general partner
By: /s/ Steven B. Klinsky
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Name: Steven B. Klinsky
Title: General Partner
FORSTMANN LITTLE & CO. SUBORDINATED
DEBT AND EQUITY MANAGEMENT BUYOUT
PARTNERSHIP-IV
By: FLC XXIX Partnership, L.P., general partner
By: /s/ Steven B. Klinsky
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Name: Steven B. Klinsky
Title: General Partner
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EXHIBIT A
IRREVOCABLE PROXY
FOR THE
1999 ANNUAL MEETING OF STOCKHOLDERS
OF GENERAL INSTRUMENT CORPORATION
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April __, 1999
The undersigned hereby irrevocably appoint Geoffrey S. Roman and
Richard C. Smith and each or either of them their attorneys and agents, with
full power of substitution, to vote as Proxy for the undersigned as herein
stated at the 1999 Annual Meeting of Stockholders of General Instrument
Corporation (the "Company"), and at any adjournments thereof, according to the
number of votes the undersigned would be entitled to vote with respect to 9.57
million of their shares of common stock of the Company (comprised of 5,090,357
of Instrument Partners' shares, and 4,479,643 of Forstmann Little & Co.
Subordinated Debt and Equity Management Buyout Partnership-IV's shares) if
personally present on the matters set forth below and in accordance with their
discretion on any other matters that may properly come before the meeting or any
adjournments thereof.
FOR election as Class II directors of the nominees recommended by the
Board of Directors of the Company.
FOR any proposal to approve the Company's 1999 Long-Term Incentive
Plan.
FOR ratification of the appointment by the Board of Directors of the
Company of Deloitte & Touche LLP as independent auditor for the Company
for the 1999 fiscal year.
This proxy is coupled with an interest and is irrevocable.
FORSTMANN LITTLE & CO. SUBORDINATED DEBT
INSTRUMENT PARTNERS AND EQUITY MANAGEMENT BUYOUT PARTNERSHIP-IV
By: FLC XXII Partnership, By: FLC XXIX Partnership, L.P.,
general partner general partner
By: By:
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Name: Name:
Title: General Partner Title: General Partner
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EXHIBIT 99.1
FOR IMMEDIATE RELEASE
INVESTOR CONTACT: Dario Santana
VP, Investor Relations
215-323-1213
MEDIA CONTACT: Sharon Corbitt
Director, Communications
215-323-1873
GENERAL INSTRUMENT TO REPURCHASE 5.3 MILLION SHARES AS FORSTMANN LITTLE
CONCLUDES ITS EIGHT YEAR INVESTMENT
LIBERTY MEDIA CORPORATION TO PURCHASE 10 MILLION GI SHARES
FROM FORSTMANN LITTLE
HORSHAM, PA. (APRIL 5, 1999) -- General Instrument Corporation (NYSE: GIC) today
announced that it has signed a definitive agreement to repurchase 5.3 million
shares of General Instrument common stock owned by two partnerships affiliated
with Forstmann Little & Co. for $148.4 million.
In a separate transaction, Liberty Media Corporation (NYSE: LMG.A and
LMG.B) has agreed to purchase 10 million GI shares from the Forstmann Little
partnerships for $280 million. In addition, General Instrument expects Forstmann
Little will soon sell additional GI shares in a block transaction that will
reduce its ownership interest in GI to approximately 1%.
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Subject to the satisfaction of certain closing conditions, General Instrument
expects both its repurchase and Liberty Media's purchase to be completed today.
In connection with the transactions announced today, Theodore J.
Forstmann, who has served as a director of General Instrument and its
predecessors since 1990, has resigned from the Company's board of directors.
"These transactions mark the end of a tremendously successful
eight-and-one-half-year association between GI and Forstmann Little," said
Edward D. Breen, Chairman and Chief Executive Officer of General Instrument.
"This relationship has brought us through many changes in our industry and in
our company, and we thank Forstmann Little for the contributions its partners
have made to our success. In particular, we thank Ted Forstmann for being a
driving force in making GI the world leader it is today," he added.
The purchase by Liberty Media Corporation, together with its present
holdings, increases Liberty Media's ownership interest in General Instrument to
approximately 18% of currently outstanding shares (and to approximately 20.5%
assuming the exercise of currently vested warrants to purchase General
Instrument common stock) and makes Liberty Media the largest stockholder of
General Instrument. "We see Liberty Media's investment as a strong endorsement
of broadband technology and GI's leadership in its development," said Breen.
General Instrument Corporation (NYSE: GIC) is a leading worldwide provider of
integrated and interactive broadband access solutions, teaming with its business
partners to lead the convergence of the Internet, telecommunications and video
entertainment industries.
This press release contains "forward-looking" information and, accordingly, the
cautionary statements contained in Exhibit 99, under the caption
"Forward-Looking Information" in General Instrument Corporation's Annual Report
on Form 10-K for the year ended December 31, 1998, are incorporated herein by
reference. Actual results might differ materially from those projected in the
forward-looking statements.
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