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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(B) OR 12(G) OF THE
SECURITIES EXCHANGE ACT OF 1934
_______________
PRIMESTAR, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 84-1441684
(State of incorporation or organization) (I.R.S. Employer Identification No.)
8085 SOUTH CHESTER, SUITE 300
ENGLEWOOD, COLORADO 80112
(Address of principal executive offices) (Zip Code)
If this form relates to the registration If this form relates to the
of a class of securities pursuant registration of a class of
to Section 12(b) of the Exchange Act and securities pursuant to Section
is effective pursuant to General 12(g) ofthe Exchange Act and is
Instruction A.(c), please check the effective pursuant to General
following box. [_] Instruction A.(d), please check
the following box. [X]
Securities Act registration statement file number to which this form
relates: 333-45835
Securities to be registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of Each Exchange on Which
to be so Registered Each Class is to be Registered
----------------------- --------------------------------
NONE NONE
Securities to be registered pursuant to Section 12(g) of the Act:
CLASS A COMMON STOCK, $.01 PAR VALUE PER SHARE
(Title of Class)
CLASS B COMMON STOCK, $.01 PAR VALUE PER SHARE.
(Title of Class)
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ITEM 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED.
-------------------------------------------------------
The securities to be registered hereby are the Class A Common Stock,
$.01 par value per share, of PRIMESTAR, Inc. (the "Registrant") and the Class B
Common Stock, $.01 par value per share, of the Registrant (collectively, the
"PRIMESTAR Stock").
Reference is made to Amendment No. 1 to the Registration Statement on
Form S-4 of the Registrant, as filed with the Securities and Exchange Commission
on February 9, 1998, Registration No. 333-45835 (the "Form S-4 Registration
Statement"). The Form S-4 Registration Statement relates to the offering and
sale by the Registrant of shares of PRIMESTAR Stock to be issued in connection
with the proposed merger of the Registrant and TCI Satellite Entertainment,
Inc., subject to regulatory approval and other conditions, as described in the
Form S-4 Registration Statement (the "TSAT Merger"). The Registrant has applied
for inclusion of the PRIMESTAR Stock on The National Market tier of The Nasdaq
Stock Market under the symbols "PSTRA" and "PSTRB," respectively, to be
effective upon the closing of the TSAT Merger.
For a description of the PRIMESTAR Stock and the other capital stock
of the Registrant, please see the information set forth under the caption
"DESCRIPTION OF NEW PRIMESTAR CAPITAL STOCK" in the Proxy Statement/Prospectus
which forms a part of the Form S-4 Registration Statement, as filed with the
Securities and Exchange Commission on February 12, 1998, pursuant to Rule 424(b)
under the Securities and Exchange Act of 1934, which information is incorporated
herein by reference. For convenience of reference, a copy of such information
is filed as Annex A hereto.
ITEM 2. EXHIBITS
--------
The following exhibits are filed as part of this Registration
Statement on Form 8-A (in addition to Annex A attached hereto):
1. Form of Restated Certificate of Incorporation of PRIMESTAR, Inc.
(Incorporated herein by reference to Exhibit 3.1 of the Form S-4
Registration Statement).
2. Form of Bylaws of PRIMESTAR, Inc. (Incorporated herein by reference to
Exhibit 3.2 of the Form S-4 Registration Statement).
3. Specimen Stock Certificate for the Class A Common Stock, $.01 par value per
share, of PRIMESTAR, Inc. (Incorporated herein by reference to Exhibit 4.3
of the Form S-4 Registration Statement).
4. Specimen Stock Certificate for the Class B Common Stock, $.01 par value per
share, of PRIMESTAR, Inc. (Incorporated herein by reference to Exhibit 4.4
of the Form S-4 Registration Statement).
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5. Form of Stockholders Agreement among PRIMESTAR, Inc., Time Warner
Entertainment Company, L.P. ("TWE"), Advance/Newhouse Partnership
("Newhouse"), Comcast Corporation ("Comcast"), Cox Communications, Inc.
("Cox"), MediaOne of Delaware, Inc. ("MediaOne"), GE American
Communications, Inc. ("GE Americom") and John C. Malone (Incorporated
herein by reference to Exhibit 2.13 of the Form S-4 Registration
Statement).
6. Form of Registration Rights Agreement among PRIMESTAR, Inc., TWE, Newhouse,
Comcast, Cox, MediaOne, GE Americom and John C. Malone (Incorporated
herein by reference to Exhibit 2.14 of the Form S-4 Registration
Statement).
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange Act
of 1934, the registrant has duly caused this registration statement to be signed
on its behalf by the undersigned, thereto duly authorized.
PRIMESTAR, INC.
By: /s/ Kenneth G. Carroll
------------------------
Kenneth G. Carroll
President
Date: March 5, 1998
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ANNEX A
DESCRIPTION OF NEW PRIMESTAR CAPITAL STOCK
GENERAL
The following description of New PRIMESTAR's capital stock is intended as a
summary only, does not purport to be complete and is subject to, and qualified
in its entirety by reference to, the applicable provisions of the DGCL and to
the New PRIMESTAR Charter and the New PRIMESTAR Bylaws. The complete text of
the forms of the New PRIMESTAR Charter and the New PRIMESTAR Bylaws are
attached as Appendices E and F, respectively, to this Proxy
Statement/Prospectus.
New PRIMESTAR will be authorized to issue 1,430,000,000 shares of capital
stock, of which (i) 850,000,000 shares will be of a class designated as New
PRIMESTAR Class A Common Stock, (ii) 50,000,000 shares will be of a class
designated as New PRIMESTAR Class B Common Stock, (iii) 30,000,000 shares will
be of a class designated as New PRIMESTAR Class C Common Stock,
(iv) 150,000,000 shares will be of a class designated as New PRIMESTAR Class D
Common Stock and (v) 350,000,000 shares will be of a class designated as New
PRIMESTAR Preferred Stock, issuable in series.
Upon consummation of the Restructuring Transaction, New PRIMESTAR estimates
that there will be approximately 175,200,000 shares of New PRIMESTAR Class A
Common Stock, 8,500,000 shares of New PRIMESTAR Class B Common Stock and
13,800,000 shares of New PRIMESTAR Class C Common Stock outstanding. TSAT will
own 100% of such shares of New PRIMESTAR Class B Common Stock and
approximately 36% of such shares of New PRIMESTAR Class A Common Stock. If the
TSAT Merger is consummated, all such shares owned by TSAT will be canceled,
and (i) each outstanding share of TSAT Series B Common Stock on the TSAT
Closing Date will be converted into the right to receive one share of New
PRIMESTAR Class B Common Stock, and (ii) each outstanding share of TSAT Series
A Common Stock on such date will be converted into the right to receive one
share of New PRIMESTAR Class A Common Stock. See "THE RESTRUCTURING
AGREEMENT--Consideration to be Received in the Restructuring Transaction" and
"THE TSAT MERGER AGREEMENT--Consideration to be Received in the TSAT Merger."
No shares of New PRIMESTAR Class D Common Stock or New PRIMESTAR Preferred
Stock will be issued in connection with the Restructuring Transaction or the
TSAT Merger. If the ASkyB Transaction is consummated, New PRIMESTAR will file
a certificate of designation establishing a series of New PRIMESTAR Preferred
Stock to be designated as New PRIMESTAR Convertible Preferred Stock. The ASkyB
Agreement provides for the issuance of a number of shares of New PRIMESTAR
Convertible Preferred Stock having an aggregate stated liquidation value equal
to the remainder ASkyB Valuation, minus the aggregate original principal
amount of the New PRIMESTAR Convertible Subordinated Notes.
COMMON STOCK
The rights of holders of New PRIMESTAR Class A Common Stock, New PRIMESTAR
Class B Common Stock, New PRIMESTAR Class C Common Stock and New PRIMESTAR
Class D Common Stock are identical except as provided below. All of the shares
of New PRIMESTAR Common Stock issued pursuant to the Restructuring Transaction
and the TSAT Merger will be validly issued, fully paid and nonassessable.
VOTING
Holders of New PRIMESTAR Class A Common Stock are entitled to one vote for
each share of such stock held, holders of New PRIMESTAR Class B Common Stock
are entitled to ten votes for each share of such stock held and holders of New
PRIMESTAR Class C Common Stock are entitled to ten votes for each share of
such stock held, on all matters presented to such stockholders. Holders of New
PRIMESTAR Class D Common Stock are not entitled to any voting rights with
respect to such shares, except as may be required by law. Except as otherwise
required by applicable law or the New PRIMESTAR Charter (including, without
limitation, the provisions of the New PRIMESTAR Charter with respect to the
election of Class B Directors and Class C Directors and stockholder
supermajority rights), and subject to the rights of holders of any series of
New PRIMESTAR Preferred Stock that may be issued from time to time, the
holders of shares of New PRIMESTAR Voting Common
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Stock vote as a single class on all matters with respect to which a vote of
the stockholders of New PRIMESTAR is required under applicable law, the New
PRIMESTAR Charter or the New PRIMESTAR Bylaws or on which a vote of
stockholders is otherwise duly called for by New PRIMESTAR. Holders of shares
of New PRIMESTAR Voting Common Stock are not entitled to cumulative voting
rights.
DIVIDENDS AND OTHER DISTRIBUTIONS
Except as otherwise provided below, and subject to the rights, if any, of
the holders of shares of any series of New PRIMESTAR Preferred Stock, holders
of shares of New PRIMESTAR Class A Common Stock, holders of shares of New
PRIMESTAR Class B Common Stock, holders of shares of New PRIMESTAR Class C
Common Stock and holders of shares of New PRIMESTAR Class D Common Stock are
entitled to receive equal dividends or other distributions per share, and
whenever a dividend or other distribution is paid to the holders of any such
class of New PRIMESTAR Common Stock, New PRIMESTAR will also pay to the
holders of each such other class of New PRIMESTAR Common Stock a dividend or
other distribution per share equal to the dividend or other distribution per
share paid to the holders of such class of New PRIMESTAR Common Stock.
Dividends and other distributions in cash, stock or property will be payable
only as and when declared by the New PRIMESTAR Board from time to time out of
assets or funds of New PRIMESTAR legally available therefor.
If at any time a dividend or other distribution (collectively, a "share
distribution") payable in shares of any class of New PRIMESTAR Common Stock or
any other securities of New PRIMESTAR or of any other corporation,
partnership, limited liability company, trust or other legal entity is to be
made with respect to any class of New PRIMESTAR Common Stock, such share
distribution may be declared and paid only as follows, and share distributions
declared and paid as follows will be deemed to be equal distributions for
purposes of the previous paragraph:
(i) a share distribution consisting of (A) shares of New PRIMESTAR Class
A Common Stock (or Convertible Securities (as defined below) that are
convertible into, exchangeable for or evidence the right to purchase shares
of New PRIMESTAR Class A Common Stock), on an equal per share basis to
holders of New PRIMESTAR Class A Common Stock, New PRIMESTAR Class B Common
Stock, New PRIMESTAR Class C Common Stock and (B) on an equal per share
basis, shares of New PRIMESTAR Class D Common Stock (or non-voting
Convertible Securities that are convertible into, exchangeable for or
evidence the right to purchase shares of New PRIMESTAR Class D Common
Stock) to holders of New PRIMESTAR Class D Common Stock; provided, that if
Convertible Securities are so distributed with respect to any such class of
New PRIMESTAR Common Stock, then Convertible Securities shall be so
distributed with respect to each such class of New PRIMESTAR Common Stock,
and the Convertible Securities so distributed shall not differ in any
respect other than their relative voting rights and related differences in
designation, conversion and share distribution provisions;
(ii) a share distribution consisting of (A) shares of New PRIMESTAR Class
A Common Stock (or Convertible Securities that are convertible into,
exchangeable for or evidence the right to purchase shares of New PRIMESTAR
Class A Common Stock) to holders of New PRIMESTAR Class A Common Stock and
(B) on an equal per share basis, shares of New PRIMESTAR Class B Common
Stock (or Convertible Securities that are convertible into, exchangeable
for or evidence the right to purchase shares of New PRIMESTAR Class B
Common Stock) to holders of New PRIMESTAR Class B Common Stock and (C) on
an equal per share basis, shares of New PRIMESTAR Class C Common Stock (or
Convertible Securities that are convertible into, exchangeable for or
evidence the right to purchase shares of New PRIMESTAR Class C Common
Stock) to holders of New PRIMESTAR Class C Common Stock and (D) on an equal
per share basis, shares of New PRIMESTAR Class D Common Stock (or
Convertible Securities that are convertible into, exchangeable for or
evidence the right to purchase shares of New PRIMESTAR Class D Common
Stock) to holders of New PRIMESTAR Class D Common Stock; provided that if
Convertible Securities are so distributed with respect to any such class of
New PRIMESTAR Common Stock, then Convertible Securities shall be so
distributed with respect to each such class of New PRIMESTAR Common Stock,
and the Convertible Securities so distributed shall not differ in any
respect other than their relative voting rights and related differences in
designation, conversion and share distribution provisions; or
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(iii) a share distribution consisting of shares of any class or series of
securities of New PRIMESTAR or any other corporation, partnership, limited
liability company, trust or other legal entity other than New PRIMESTAR
Class A Common Stock, New PRIMESTAR Class B Common Stock, New PRIMESTAR
Class C Common Stock or New PRIMESTAR Class D Common Stock (and other than
Convertible Securities that are convertible into, exchangeable for or
evidence the right to purchase shares of New PRIMESTAR Class A Common
Stock, New PRIMESTAR Class B Common Stock, New PRIMESTAR Class C Common
Stock or New PRIMESTAR Class D Common Stock), either (x) on the basis of a
distribution of identical securities, on an equal per share basis, to
holders of New PRIMESTAR Class A Common Stock, New PRIMESTAR Class B Common
Stock, New PRIMESTAR Class C Common Stock and New PRIMESTAR Class D Common
Stock (provided, that holders of New PRIMESTAR Class D Common Stock shall
receive non-voting securities (or non-voting Convertible Securities that
are convertible into, exchangeable for or evidence the right to purchase
non-voting securities)); or (y) on the basis of a distribution of one class
or series of securities to holders of New PRIMESTAR Class A Common Stock
and, on an equal per share basis, one class or series of securities to
holders of New PRIMESTAR Class B Common Stock and, on an equal per share
basis, one class or series of securities to holders of New PRIMESTAR Class
C Common Stock and, on an equal per share basis, one class or series of
securities to holders of New PRIMESTAR Class D Common Stock; provided that
the securities so distributed (and, if applicable, the securities into
which the distributed securities are convertible or for which they are
exchangeable or which they evidence the right to purchase) do not differ in
any respect other than their relative voting rights and related differences
in designation, conversion and share distribution provisions; and provided,
further, that (1) holders of shares of New PRIMESTAR Class A Common Stock
receive a class or series of securities having no more than one vote per
share (or Convertible Securities that are convertible into, exchangeable
for or evidence the right to purchase securities with no more than one vote
per share), (2) holders of shares of New PRIMESTAR Class D Common Stock
receive a class or series of securities that are non-voting (or non-voting
Convertible Securities that are convertible into, exchangeable for or
evidence the right to purchase non-voting securities (provided, that such
Convertible Securities may be convertible into, exchangeable for or
evidence the right to purchase voting securities with no more than one vote
per share on the same terms as the New PRIMESTAR Class D Common Stock is
convertible into New PRIMESTAR Class A Common Stock as provided in the
applicable provisions of the New PRIMESTAR Charter)), (3) holders of shares
of New PRIMESTAR Class B Common Stock receive a class or series of
securities having a number of votes per share equal to that of the class or
series of securities distributed pursuant to clause (4) below (which shall
in no event exceed ten votes per share) and having class voting rights
identical to those for the shares of New PRIMESTAR Class B Common Stock as
provided in the applicable provisions of the New PRIMESTAR Charter (or
Convertible Securities that are convertible into, exchangeable for or
evidence the right to purchase securities having a number of votes per
share equal to that of the class or series of securities distributed
pursuant to clause (4) below (which shall in no event exceed ten votes per
share) and having class voting rights identical to those for the shares of
New PRIMESTAR Class B Common Stock as provided in the applicable provisions
of the New PRIMESTAR Charter), and (4) holders of shares of New PRIMESTAR
Class C Common Stock receive a class or series of securities having a
number of votes per share equal to that of the class or series of
securities distributed pursuant to clause (3) above (which shall in no
event exceed ten votes per share) and having class voting rights identical
to those for the shares of New PRIMESTAR Class C Common Stock as provided
in the applicable provisions of the New PRIMESTAR Charter (or Convertible
Securities that are convertible into, exchangeable for or evidence the
right to purchase securities having a number of votes per share equal to
that of the class or series of securities distributed pursuant to clause
(3) above (which shall in no event exceed ten votes per share) and having
class voting rights identical to those for the shares of New PRIMESTAR
Class C Common Stock as provided in the applicable provisions of the New
PRIMESTAR Charter); provided, that if Convertible Securities are so
distributed with respect to any such class of New PRIMESTAR Common Stock,
then Convertible Securities shall be so distributed with respect to each
such class of New PRIMESTAR Common Stock, and the Convertible Securities so
distributed shall not differ in any respect other than their relative
voting rights and related differences in designation, conversion and share
distribution provisions.
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The term "Convertible Securities" means any securities of New PRIMESTAR
(other than any class of New PRIMESTAR Common Stock) that are convertible
into, exchangeable for or evidence the right to purchase any shares of any
class of New PRIMESTAR Common Stock, whether upon conversion, exercise,
exchange, pursuant to anti-dilution provisions of such securities or
otherwise.
The New PRIMESTAR Board will determine its dividend policy with respect to
the New PRIMESTAR Common Stock based on New PRIMESTAR's results of operations,
financial condition, capital requirements and other circumstances, including
restrictions that may be contained in agreements pursuant to which New
PRIMESTAR borrows funds. It is the New PRIMESTAR Board's present intention to
retain cash for the operations of New PRIMESTAR and it is anticipated that
cash dividends will not be paid on the New PRIMESTAR Common Stock in the
foreseeable future. The payment by New PRIMESTAR of dividends on and
repurchases by New PRIMESTAR of its capital stock will be subject to certain
restrictions, including those contained in the Indentures relating to the
Notes and the Bank Credit Facility, both of which will be assumed by New
PRIMESTAR in connection with the Restructuring Transaction. Future loan
agreements may contain similar restrictions. See "THE ROLL-UP PLAN--Financing
in Connection with the Restructuring Transaction."
STOCK SPLITS, SUBDIVISIONS, COMBINATIONS AND RECLASSIFICATIONS
In the case of any split, subdivision, combination or reclassification of
shares of New PRIMESTAR Class A Common Stock, New PRIMESTAR Class B Common
Stock, New PRIMESTAR Class C Common Stock or New PRIMESTAR Class D Common
Stock (other than share distributions described above under the subheading "--
Dividends and Other Distributions"), the shares of each other such class of
New PRIMESTAR Common Stock will also be split, subdivided, combined or
reclassified, in each case so that the numbers of shares of New PRIMESTAR
Class A Common Stock, New PRIMESTAR Class B Common Stock, New PRIMESTAR Class
C Common Stock and New PRIMESTAR Class D Common Stock outstanding immediately
following such split, subdivision, combination or reclassification will bear
the same relationship to one another as do the numbers of shares of New
PRIMESTAR Class A Common Stock, New PRIMESTAR Class B Common Stock, New
PRIMESTAR Class C Common Stock and New PRIMESTAR Class D Common Stock
outstanding immediately prior to such split, subdivision, combination or
reclassification.
CONVERSION
Optional Conversion. Each share of New PRIMESTAR Class B Common Stock is
convertible, at the option of its holder, into one share of New PRIMESTAR
Class A Common Stock at any time. Each share of New PRIMESTAR Class C Common
Stock is convertible, at the option of its holder, into one share of New
PRIMESTAR Class B Common Stock at any time. Shares of New PRIMESTAR Class A
Common Stock and New PRIMESTAR Class D Common Stock are not convertible at any
time except, in the case of New PRIMESTAR Class D Common Stock, as provided
under "--Mandatory and Automatic Conversion."
Mandatory and Automatic Conversion. Each issued and outstanding share of New
PRIMESTAR Class C Common Stock will, without any further act on the part of
the holder thereof or New PRIMESTAR, be mandatorily and automatically
converted into one share of New PRIMESTAR Class B Common Stock upon the tenth
anniversary of the Effective Date.
Each issued and outstanding share of New PRIMESTAR Class D Common Stock
will, without any further act on the part of the holder thereof or New
PRIMESTAR, be mandatorily and automatically converted into one share of New
PRIMESTAR Class A Common Stock upon transfer of such share to any person other
than ASkyB, News Corp. or any of their respective affiliates.
BOARD OF DIRECTORS
Number of Members. The New PRIMESTAR Board will consist of eleven members
until the Class C Termination Date, which is the earlier to occur of (i) the
tenth anniversary of the Effective Date and (ii) the date
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on which the New PRIMESTAR Class C Common Stock voting as a class will not be
entitled to elect a specified number of directors to the New PRIMESTAR Board
as provided below. On and after the Class C Termination Date, the New
PRIMESTAR Board will consist of not less than three members, the exact number
of which will from time to time be determined by resolution of the New
PRIMESTAR Board.
Class B Directors. So long as at least 80% of the shares of New PRIMESTAR
Class B Common Stock outstanding on the Effective Date remain outstanding, the
New PRIMESTAR Class B Common Stock voting as a class will be entitled to elect
three Class B Directors to the New PRIMESTAR Board. So long as less than 80%
but at least 60% of the shares of New PRIMESTAR Class B Common Stock
outstanding on the Effective Date remain outstanding, the New PRIMESTAR Class
B Common Stock voting as a class will be entitled to elect two Class B
Directors. So long as less than 60% but at least 40% of the shares of New
PRIMESTAR Class B Common Stock outstanding on the Effective Date remain
outstanding, the New PRIMESTAR Class B Common Stock voting as a class will be
entitled to elect one Class B Director. The right of the New PRIMESTAR Class B
Common Stock voting as a class to elect a specified number of Class B
Directors will terminate upon the earlier to occur of (x) the date on which
less than 40% of the shares of New PRIMESTAR Class B Common Stock outstanding
on the Effective Date remain outstanding and (y) the Class C Termination Date.
Class C Directors. So long as at least 80% of the shares of New PRIMESTAR
Class C Common Stock outstanding on the Effective Date remain outstanding, the
New PRIMESTAR Class C Common Stock voting as a class will be entitled to elect
the lesser of (x) six Class C Directors to the New PRIMESTAR Board and (y) the
number of Class C Directors determined by adding the then applicable
Individual Class C Stockholder Caps (as defined below). So long as less than
80% but at least 66.7% of the shares of New PRIMESTAR Class C Common Stock
outstanding on the Effective Date remain outstanding, the New PRIMESTAR Class
C Common Stock voting as a class will be entitled to elect the lesser of (x)
five Class C Directors and (y) the number of Class C Directors determined by
adding the then applicable Individual Class C Stockholder Caps. So long as
less than 66.7% but at least 53.4% of the shares of New PRIMESTAR Class C
Common Stock outstanding on the Effective Date remain outstanding, the New
PRIMESTAR Class C Common Stock voting as a class will be entitled to elect the
lesser of (x) four Class C Directors and (y) the number of Class C Directors
determined by adding the then applicable Individual Class C Stockholder Caps.
So long as less than 53.4% but at least 40.1% of the shares of New PRIMESTAR
Class C Common Stock outstanding on the Effective Date remain outstanding, the
New PRIMESTAR Class C Common Stock voting as a class will be entitled to elect
the lesser of (x) three Class C Directors and (y) the number of Class C
Directors determined by adding the then applicable Individual Class C
Stockholder Caps. In the event that less than 40.1% of the shares of New
PRIMESTAR Class C Common Stock outstanding on the Effective Date remain
outstanding, the New PRIMESTAR Class C Common Stock voting as a class will not
be entitled to elect a specified number of Class C Directors. The "Individual
Class C Stockholder Caps" as of any date of determination will be as follows
(for purposes of this definition, TWE and Newhouse together with their
respective affiliates, will collectively be deemed to be a single Class C
Stockholder, and Class C Stockholders that are affiliates of one another will
collectively be deemed to be a single Class C Stockholder): (A) three Class C
Directors in respect of any Class C Stockholder that is the record holder on
such date of determination of a number of shares of New PRIMESTAR Class C
Common Stock equal to 80% or more of the aggregate number of shares of New
PRIMESTAR Class C Common Stock held of record by TWE and Newhouse on the
Effective Date; (B) two Class C Directors in respect of any Class C
Stockholder that is the record holder on such date of determination of a
number of shares of New PRIMESTAR Class C Common Stock that is less than 80%
of the aggregate number of shares of New PRIMESTAR Class C Common Stock held
of record by TWE and Newhouse on the Effective Date but greater than or equal
to 160% of the number of shares of New PRIMESTAR Class C Common Stock held of
record by the Smallest C (as defined below) on the Effective Date; and (C) one
Class C Director in respect of any Class C Stockholder that is the record
holder on such date of determination of a number of shares of New PRIMESTAR
Class C Common Stock that is less than 160% but greater than or equal to 80%
of the number of shares of New PRIMESTAR Class C Common Stock held of record
by the Smallest C on the Effective Date. "Smallest C" means any one of
MediaOne (together with its affiliates),
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Cox and Comcast, being the beneficial owner of the lowest number of
outstanding shares of New PRIMESTAR Class C Common Stock among such persons as
of the Effective Date.
Common Directors. The New PRIMESTAR Voting Common Stock voting together as a
single class will be entitled to elect such number of Common Directors to the
New PRIMESTAR Board as shall equal the total number of directors minus the
number of Class B Directors and Class C Directors that the New PRIMESTAR Class
B Common Stock and the New PRIMESTAR Class C Common Stock will respectively be
entitled to elect at any time as provided under "--Class B Directors" and "--
Class C Directors" above. The New PRIMESTAR Board will consist exclusively of
Common Directors on and after the Class C Termination Date. Prior to the Class
C Termination Date, the New PRIMESTAR Board's nominees for election as Common
Directors will be approved by the affirmative vote of 83% of the Class B
Directors and the Class C Directors then in office. On and after the Class C
Termination Date, the New PRIMESTAR Board's nominees for election as Common
Directors will be approved by a simple majority of the New PRIMESTAR Board.
Removal of Directors. Directors may be removed from office with "cause" (as
defined in the New PRIMESTAR Charter) only upon the affirmative vote of, prior
to the Class C Termination Date, the holders of record of at least 83%, and on
and after the Class C Termination Date, the holders of record of at least 66
2/3%, of the total voting power of the then outstanding shares of New
PRIMESTAR Voting Common Stock voting together as a single class. Directors may
be removed from office without "cause" only upon the affirmative vote of (i)
in the case of Class B Directors, the holders of record of at least 66 2/3% of
the total voting power of the then outstanding shares of New PRIMESTAR Class B
Common Stock voting separately as a class, (ii) in the case of Class C
Directors, the holders of record of at least 66 2/3% of the total voting power
of the then outstanding shares of New PRIMESTAR Class C Common Stock voting
separately as a class and (iii) in the case of Common Directors, prior to the
Class C Termination Date, the holders of record of at least 83%, and on and
after the Class C Termination Date, the holders of record of at least 66 2/3%,
of the total voting power of the then outstanding shares of New PRIMESTAR
Voting Common Stock voting together as a single class.
Filling of Newly Created Directorships and Vacancies. Any newly created
directorship for a Class B Director or vacancy in the office of a Class B
Director will be filled either by (A) the affirmative vote of a majority of
the remaining Class B Directors or of the sole remaining Class B Director, as
the case may be or (B) if the vacancy or newly created directorship has not
been filled pursuant to (A) above, the holders of at least a majority of the
total voting power of the then outstanding New PRIMESTAR Class B Common Stock
voting separately as a class. Any newly created directorship for a Class C
Director or vacancy in the office of a Class C Director will be filled solely
by the affirmative vote of holders of at least 66 2/3% of the total voting
power of the then outstanding shares of New PRIMESTAR Class C Common Stock
voting separately as a class. Any newly created directorship for a Common
Director or vacancy in the office of a Common Director will be filled solely
by the affirmative vote of 83% of the Class B Directors and the Class C
Directors then in office if such newly created directorship is created or such
vacancy occurs prior to the Class C Termination Date or by the affirmative
vote of a majority of the remaining directors then in office (even though less
than a quorum) or by the sole remaining Common Director, as the case may be,
if such newly created directorship is created or such vacancy occurs on or
after the Class C Termination Date. Any director elected as provided above to
fill a newly created directorship or vacancy will serve the same remaining
term as that of his or her predecessor, if applicable, and until his or her
successor has been elected and has qualified.
Preferred Stock. Anything contained herein to the contrary notwithstanding,
the provisions of the New PRIMESTAR Charter with respect to the number of
directors constituting the New PRIMESTAR Board, the removal of directors and
the filling of vacancies are in each case subject to the rights of holders of
any series of New PRIMESTAR Preferred Stock that may be created and
outstanding from time to time after the Closing of the Restructuring
Transaction.
LIQUIDATION RIGHTS
In the event of a liquidation, dissolution or winding up of New PRIMESTAR,
whether voluntary or involuntary, after payment or provision for payment of
the debts and liabilities of New PRIMESTAR and subject
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to the prior payment in full of or provision for the preferential or other
amounts to which any series of New PRIMESTAR Preferred Stock outstanding at
any time may be entitled, holders of shares of New PRIMESTAR Common Stock will
be entitled to receive all assets and funds of New PRIMESTAR available for
distribution to the holders of shares of New PRIMESTAR Common Stock, pro rata
in accordance with the numbers of such shares held by such holders,
respectively, without regard to class.
MERGERS
In the event of any merger, consolidation, purchase or acquisition of
property or stock or other reorganization in which any consideration is to be
received by holders of shares of New PRIMESTAR Class A Common Stock, holders
of shares of New PRIMESTAR Class B Common Stock, holders of shares of New
PRIMESTAR Class C Common Stock or holders of shares of New PRIMESTAR Class D
Common Stock, holders of each such class of New PRIMESTAR Common Stock will
receive the same consideration on a per share basis.
Notwithstanding the previous paragraph, if any consideration received by
holders of New PRIMESTAR Class A Common Stock, holders of New PRIMESTAR Class
B Common Stock, holders of New PRIMESTAR Class C Common Stock and holders of
New PRIMESTAR Class D Common Stock in connection with a merger, consolidation,
purchase or acquisition of property or stock or other reorganization will
consist of securities (or Convertible Securities that are convertible into,
exchangeable for or evidence the right to purchase other securities), and such
securities (or Convertible Securities) do not differ in any respect other than
their relative voting rights and related differences in designation,
conversion and share distribution provisions:
(i) holders of shares of New PRIMESTAR Class B Common Stock and holders
of shares of New PRIMESTAR Class C Common Stock may receive, on an equal
per share basis, voting securities with up to ten times the number of votes
per share as those voting securities to be received by holders of shares of
New PRIMESTAR Class A Common Stock and with respective class voting rights
corresponding to those for shares of New PRIMESTAR Class B Common Stock and
New PRIMESTAR Class C Common Stock as provided in the New PRIMESTAR Charter
(or Convertible Securities that are convertible into, exchangeable for or
evidence the right to purchase voting securities with up to ten times the
number of votes per share as those voting securities issuable upon the
conversion, exchange or exercise of the Convertible Securities to be
received by holders of shares of New PRIMESTAR Class A Common Stock and
with respective class voting rights corresponding to those for shares of
New PRIMESTAR Class B Common Stock and New PRIMESTAR Class C Common Stock
as provided in the New PRIMESTAR Charter; provided that holders of shares
of New PRIMESTAR Class B Common Stock and holders of shares of New
PRIMESTAR Class C Common Stock will receive securities that do not differ
in any respect other than differences corresponding to the differences
between the New PRIMESTAR Class B Common Stock and New PRIMESTAR Class C
Common Stock as provided in the New PRIMESTAR Charter; and
(ii) holders of shares of New PRIMESTAR Class D Common Stock may receive
non-voting securities (or non-voting Convertible Securities that are
convertible into, exchangeable for or evidence the right to purchase other
non-voting securities).
NO PREEMPTIVE RIGHTS
Holders of shares of New PRIMESTAR Common Stock are not entitled to
preemptive rights.
SUPERMAJORITY VOTING RIGHTS
In addition to any other vote required under the New PRIMESTAR Charter or by
applicable law, until the Class C Termination Date, the affirmative vote of
the holders of record of (i) a majority of the total voting power of the then
outstanding shares of New PRIMESTAR Class B Common Stock and (ii) 83% of the
total voting power of the then outstanding shares of New PRIMESTAR Class C
Common Stock, in each case voting separately as a class, is required in order
for New PRIMESTAR to effect (a) the amendment, alteration or repeal
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of any provision of the New PRIMESTAR Charter (subject to certain limited
exceptions); (b) the amendment, alteration or repeal of any provision of the
New PRIMESTAR Bylaws (subject to certain exceptions, the amendment, alteration
or repeal of which requires either (1) a simple majority vote of the New
PRIMESTAR Board or (2) the affirmative vote of the holders of record of a
majority of the total voting power of the then outstanding New PRIMESTAR
Voting Common Stock voting together as a single class); (c) except as
otherwise provided in Section 253 of the DGCL (or any successor provision
thereto), the merger or consolidation of New PRIMESTAR or any of its
Subsidiaries (as defined below) with or into any person (except the TSAT
Merger and except a merger between direct or indirect wholly-owned
subsidiaries of New PRIMESTAR or a merger between a direct or indirect wholly-
owned subsidiary of New PRIMESTAR and New PRIMESTAR if New PRIMESTAR is the
surviving entity of such merger and there is no change in any class or series
of outstanding capital stock of New PRIMESTAR nor any amendment to the New
PRIMESTAR Charter); (d) (x) the disposition, directly or indirectly, by New
PRIMESTAR (or by one or more direct or indirect subsidiaries thereof) by sale,
merger, new issuances or otherwise to a person other than New PRIMESTAR or a
direct or indirect wholly-owned subsidiary of New PRIMESTAR of shares of the
capital stock of one or more direct or indirect Subsidiaries of New PRIMESTAR
or (y) the disposition, directly or indirectly, by New PRIMESTAR (or by one or
more direct or indirect subsidiaries thereof) by sale, merger or otherwise
(other than to New PRIMESTAR or a direct or indirect wholly-owned subsidiary
of New PRIMESTAR), in any transaction or series of transactions outside the
ordinary course of the business of New PRIMESTAR, of all or substantially all
the assets of New PRIMESTAR and its Subsidiaries on a consolidated basis,
except for pledges, grants of security interests, security deeds, mortgages or
similar encumbrances securing bona fide indebtedness; (e) the dissolution or
liquidation of New PRIMESTAR; (f) the authorization or issuance by New
PRIMESTAR of shares of any class of capital stock with more than one vote per
share, securities convertible into or exchangeable for shares of any such
series or class of capital stock or options, warrants or other rights to
acquire such capital stock or securities, subject to certain exceptions; and
(g) the voluntary bankruptcy of New PRIMESTAR. In addition, whether before or
after the Class C Termination Date, the affirmative vote of the holders of
record of at least 66 2/3% of the total voting power of the then outstanding
New PRIMESTAR Voting Common Stock voting together as a single class is
required in order for New PRIMESTAR to effect the foregoing actions, except
the actions described in clauses (f) and (g), for which no stockholder vote
shall be required, unless otherwise required pursuant to the New PRIMESTAR
Charter or applicable law. "Subsidiary" of New PRIMESTAR means (i) a
corporation in which New PRIMESTAR, directly or indirectly, owns capital stock
having a majority of the voting power of such corporation's capital stock to
elect directors under ordinary circumstances and (ii) any partnership, limited
liability company, trust or other legal entity (other than a corporation) in
which New PRIMESTAR, directly or indirectly, has (x) a majority ownership
interest or (y) the power to elect or direct the election of a majority of the
members of the governing body of such entity.
In addition to the foregoing, (i) the amendment, alteration or repeal of any
provision of the terms of the New PRIMESTAR Class B Common Stock requires the
affirmative vote of the holders of record of a majority of the total voting
power of the then outstanding shares of New PRIMESTAR Class B Common Stock,
voting separately as a class, and the affirmative vote of the holders of
record of, prior to the Class C Termination Date, 83%, and on and after the
Class C Termination Date, a majority, of the total voting power of the then
outstanding shares of New PRIMESTAR Class C Common Stock, voting separately as
a class and (ii) the amendment, alteration or repeal of any provision of the
terms of the New PRIMESTAR Class C Common Stock requires the affirmative vote
of the holders of record of, prior to the Class C Termination Date, 83%, and
on and after the Class C Termination Date, a majority, of the total voting
power of the then outstanding shares of New PRIMESTAR Class C Common Stock,
voting separately as a class. However, the New PRIMESTAR Charter provides
that, without the affirmative vote of the holders of record of a majority of
the total voting power of the then outstanding shares of New PRIMESTAR Class B
Common Stock, voting separately as a class, the terms of the New PRIMESTAR
Class C Common Stock may not be amended or altered to (x) increase the number
of votes per share of New PRIMESTAR Class C Common Stock over the number of
votes per share of New PRIMESTAR Class B Common Stock, (y) provide for a
preference of the New PRIMESTAR Class C Common Stock relative to the New
PRIMESTAR Class B Common Stock as to payment of dividends or on a liquidation
or dissolution of New PRIMESTAR or (z) exempt the New PRIMESTAR Class C Common
Stock but not the
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New PRIMESTAR Class B Common Stock from the provisions of the New PRIMESTAR
Charter relating to restrictions on ownership of shares of New PRIMESTAR
Common Stock.
PREFERRED STOCK
The New PRIMESTAR Charter expressly authorizes the New PRIMESTAR Board to
provide for the issuance of all or any shares of the New PRIMESTAR Preferred
Stock in one or more series and to fix for each series the number of shares
constituting such series and such voting powers, full or limited, or no voting
powers, and such designations, preferences and relative, participating,
optional or other special rights and such qualifications, limitations or
restrictions thereof as shall be stated and expressed in the resolution or
resolutions adopted by the New PRIMESTAR Board providing for the issuance of
such series.
CONVERTIBLE PREFERRED STOCK
It is expected that the New PRIMESTAR Convertible Preferred Stock will have
a stated liquidation value of $10,000 per share, and that an aggregate of
120,000 shares of New PRIMESTAR Convertible Preferred Stock will be authorized
for issuance in connection with the ASkyB Transaction, if that transaction is
consummated. The New PRIMESTAR Convertible Preferred Stock will rank senior to
the New PRIMESTAR Common Stock with respect to dividend rights and rights upon
dissolution, liquidation or winding up.
The holders of New PRIMESTAR Convertible Preferred Stock, in preference to
the holders of shares of capital stock ranking junior to the New PRIMESTAR
Convertible Preferred Stock as to dividends, will be entitled to receive
cumulative dividends at the annual rate of 5% of the liquidation value of such
shares, payable quarterly, to the extent of funds legally available therefor.
Dividends will accrue on the New PRIMESTAR Convertible Preferred Stock on a
daily basis, whether or not earned or declared, from the date of original
issue of such shares. If any dividend is not declared and paid in full when
due, in accordance with the terms of this series, then the dividend rate will
increase to an annual rate of 6.5% of the liquidation value and such increased
dividend rate will continue in effect until all accrued and unpaid dividends
on the New PRIMESTAR Convertible Preferred Stock will have been paid in full;
provided that when all accrued and unpaid dividends on the New PRIMESTAR
Convertible Preferred Stock have been so paid in full, the dividend rate will
thereafter revert to the original rate. Prior to the fourth anniversary of the
closing of the ASkyB Transaction (the "Reset Date"), New PRIMESTAR may, at its
option, make any dividend payment to holders of record of the New PRIMESTAR
Convertible Preferred Stock in cash or in shares of the New PRIMESTAR Class D
Common Stock or in any combination of cash and such shares; provided that any
such dividend payable in shares to any person other than ASkyB, News Corp. or
any of their respective affiliates will be paid in shares of New PRIMESTAR
Class A Common Stock. From and after the Reset Date, all dividend payments
will be made solely in cash.
Upon the dissolution, liquidation or winding up of New PRIMESTAR, holders of
shares of New PRIMESTAR Convertible Preferred Stock will be entitled to
receive and be paid out of the assets of New PRIMESTAR available for
distribution to stockholders, (x) first, an amount equal to any accrued but
unpaid dividends on the New PRIMESTAR Convertible Preferred Stock, and (y)
second, an amount equal to the liquidation value thereof, which amounts will
be paid (i) before any payment or distribution will be made on or with respect
to any class of stock ranking junior to the New PRIMESTAR Convertible
Preferred Stock upon a dissolution, liquidation or winding up of New
PRIMESTAR; (ii) on a pari passu basis with any class or series of preferred
stock which, by its terms, ranks pari passu with the New PRIMESTAR Convertible
Preferred Stock upon a dissolution, liquidation or winding up of New
PRIMESTAR; and (iii) after any class or series of preferred stock which, by
its terms, ranks senior to the New PRIMESTAR Convertible Preferred Stock upon
a dissolution, liquidation or winding up of New PRIMESTAR.
The New PRIMESTAR Convertible Preferred Stock will have no voting rights,
except as required by applicable law, and except that the affirmative vote of
the holders of at least a majority of the outstanding shares of the New
PRIMESTAR Convertible Preferred Stock will be necessary to issue any
additional shares of New PRIMESTAR Convertible Preferred Stock.
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The New PRIMESTAR Convertible Preferred Stock will be redeemable at the
option of New PRIMESTAR, in whole at any time after the Reset Date and in part
from time to time after the Reset Date for a redemption price per share equal
to the Liquidation Preference (as defined below) thereof on such redemption
date. New PRIMESTAR shall redeem the New PRIMESTAR Convertible Preferred Stock
on the tenth anniversary of the closing of the ASkyB Transaction for a
redemption price per share equal to the Liquidation Preference thereof on such
redemption date. The "Liquidation Preference" of a share of the New PRIMESTAR
Convertible Preferred Stock as of any date in question means an amount equal
to the sum of (i) the stated liquidation value of $10,000 per share, plus (ii)
for purposes of determining redemption payments, an amount equal to all unpaid
cumulative dividends accrued on such share, whether or not such unpaid
dividends have been earned or declared or there are any unrestricted funds of
New PRIMESTAR legally available for the payment of dividends.
Each share of New PRIMESTAR Convertible Preferred Stock will be convertible,
at the option of its holder, at any time and from time to time into the number
of shares of New PRIMESTAR Class D Common Stock (or New PRIMESTAR Class A
Common Stock, if the holder of the shares to be converted is any person other
than ASkyB, News Corp. or any of their respective affiliates) equal to (x) the
aggregate liquidation value of the shares to be converted divided by (y) the
conversion price then in effect with respect to the New PRIMESTAR Convertible
Preferred Stock. No fractional shares of New PRIMESTAR Class D Common Stock
(or New PRIMESTAR Class A Common Stock, as the case may be) or scrip will be
issued upon conversion of the New PRIMESTAR Convertible Preferred Stock. A
holder otherwise entitled to a fractional share will receive cash, in an
amount equal to the same fraction of the then current value of a share of New
PRIMESTAR Convertible Preferred Stock (as determined in good faith by the New
PRIMESTAR Board). Upon conversion of shares of New PRIMESTAR Convertible
Preferred Stock, the rights of the holder of the shares so converted, as a
holder thereof, will cease. The initial conversion price with respect to the
New PRIMESTAR Convertible Preferred Stock will be the Conversion Price (as
defined in the ASkyB Agreement). See "THE ASKYB TRANSACTION--The ASkyB
Agreement--Consideration to be Received in the ASkyB Transaction." The
conversion price will be subject to adjustment in the case of certain
corporate transactions as provided in the certificate of designation for the
New PRIMESTAR Convertible Preferred Stock, and will be reduced on the Reset
Date to 120% of the current market price of the New PRIMESTAR Class A Common
Stock on the Reset Date, if such reset conversion price would be less than the
conversion price otherwise in effect.
In the event that New PRIMESTAR (i) pays a dividend or distribution on the
outstanding New PRIMESTAR Common Stock in shares of New PRIMESTAR Class A
Common Stock, (ii) subdivides the outstanding New PRIMESTAR Class A Common
Stock, (iii) combines the outstanding shares of New PRIMESTAR Class A Common
Stock into a smaller number of shares of New PRIMESTAR Common Stock or (iv)
issues by reclassification of the New PRIMESTAR Class A Common Stock (whether
pursuant to a merger or consolidation or otherwise) any other shares of New
PRIMESTAR, then the holder of any shares of New PRIMESTAR Convertible
Preferred Stock (or the transferee of such holder, as the case may be)
surrendered for conversion after the record date for, or effective date of (as
the case may be), such event, will have the right thereafter to receive upon
conversion of such shares of New PRIMESTAR Convertible Preferred Stock (or
upon conversion of the shares of New PRIMESTAR Class D Common Stock issuable
upon the conversion of such shares of New PRIMESTAR Convertible Preferred
Stock, as the case may be) the aggregate number and kind of shares of capital
stock of New PRIMESTAR which such holder (or transferee) would have been
entitled to receive in respect of such dividend, distribution, subdivision or
reclassification if such shares of New PRIMESTAR Convertible Preferred Stock
had been converted immediately prior to the record date for, or effective date
of (as the case may be), such event, and the conversion price will be
appropriately adjusted. In addition, in the event of a reorganization, merger,
consolidation or disposition of assets of New PRIMESTAR, pursuant to which
cash or shares of stock or other securities, property or assets of New
PRIMESTAR, or a successor or transferee or affiliate thereof, are to be
received by or distributed to the holders of New PRIMESTAR Class A Common
Stock, then the holders of New PRIMESTAR Convertible Preferred Stock (or the
transferee of such holder, as the case may be) will have the right thereafter
to receive, upon conversion of such shares of New PRIMESTAR Convertible
Preferred Stock (or upon conversion of the shares of New PRIMESTAR Class D
Common Stock issuable upon the conversion of such shares of New PRIMESTAR
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Convertible Preferred Stock, as the case may be) the number of shares of stock
or other securities, property or assets of New PRIMESTAR, or a successor or
transferee or affiliate thereof, or cash receivable upon or as a result of
such reorganization, merger, consolidation or disposition of assets by a
holder of the number of shares of New PRIMESTAR Class A Common Stock equal to
the number of shares of New PRIMESTAR Class A Common Stock into which such
shares of New PRIMESTAR Convertible Preferred Stock may be converted.
Holders of New PRIMESTAR Convertible Preferred Stock will be entitled to
certain preemptive rights if New PRIMESTAR issues common stock, or securities
convertible into or exercisable or exchangeable for shares of common stock, at
below market value, at a time when New PRIMESTAR does not have a class of
securities registered pursuant to Section 12 of the Exchange Act, but will not
otherwise be entitled to any preemptive rights.
The holders of shares of New PRIMESTAR Convertible Preferred Stock will be
entitled to certain registration rights as provided in the ASkyB Registration
Rights Agreement. See "THE ASKYB TRANSACTION--Registration Rights."
LIMITATION ON DIRECTORS' LIABILITY; INDEMNIFICATION
The New PRIMESTAR Charter provides that, to the fullest extent permitted by
the DGCL as it presently exists or may hereafter be amended, no director will
be personally liable to New PRIMESTAR or any of its stockholders for monetary
damages for breach of fiduciary duty as a director. Under existing Delaware
law, directors would not be liable except (i) for any breach of the director's
duty of loyalty to New PRIMESTAR or its stockholders, (ii) for acts or
omissions not in good faith or that involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the DGCL (involving the
payment of an unlawful dividend), or (iv) for any transaction from which the
director derived improper personal benefit. While the New PRIMESTAR Charter
provides directors with protection from awards for monetary damages for breach
of their duty of care, it does not eliminate such duty. Accordingly, the New
PRIMESTAR Charter will have no effect on the availability of equitable
remedies, such as an injunction or rescission, based on a director's breach of
his or her duty of care.
Delaware law contains provisions permitting and, in some situations,
requiring Delaware corporations, such as New PRIMESTAR, to provide
indemnification to their officers and directors for losses and litigation
expenses incurred in connection with their service to the corporation in those
capacities. The New PRIMESTAR Charter requires New PRIMESTAR to indemnify and
hold harmless, to the fullest extent permitted by applicable law as it
presently exists or may hereafter be amended, any person that was or is made
or is threatened to be made a party or is otherwise involved in any action,
suit or proceeding, whether civil, criminal, administrative or investigative
(collectively, a "Proceeding"), by reason of the fact that such person is or
was a director or officer of New PRIMESTAR or, while a director or officer of
New PRIMESTAR, is or was serving at the request of New PRIMESTAR as a
director, officer, employee or agent of another corporation or of a
partnership, joint venture, trust, enterprise or nonprofit entity, including
service with respect to employee benefit plans, against all liability and loss
suffered and expenses (including attorneys' fees) reasonably incurred by such
person. The New PRIMESTAR Charter also requires New PRIMESTAR to indemnify or
make advances (pursuant to the following sentence) to a person in connection
with a Proceeding (or part thereof) initiated by such person only if the
initiation of such Proceeding (or part thereof) was authorized by the New
PRIMESTAR Board. The New PRIMESTAR Charter further requires New PRIMESTAR,
subject to the last sentence of this paragraph, to pay the expenses (including
attorneys' fees) incurred by any person that is or was a director or officer
of New PRIMESTAR or, while a director or officer of New PRIMESTAR, is or was
serving at the request of New PRIMESTAR as a director, officer, employee or
agent of another corporation or of a partnership, joint venture, trust,
enterprise or nonprofit entity, in defending any Proceeding in advance of its
final disposition upon receipt of an undertaking by such person to repay all
amounts advanced if it should be ultimately determined that such person is not
entitled to indemnification. If a claim for indemnification or advancement of
expenses is not paid in full within 60 calendar days after a written claim
therefor has been received by New PRIMESTAR, the claimant may file suit to
recover the unpaid amount of such claim and, if successful in whole or in
part, will be entitled to be paid the expense of prosecuting such claim. In
any such action, New PRIMESTAR will have
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the burden of proving that the claimant was not entitled to the requested
indemnification or payment of expenses under applicable law.
The New PRIMESTAR Charter provides that such right of indemnification and
advancement of expenses will, unless otherwise provided when authorized or
ratified, continue as to a person who has ceased to be a director, officer,
employee or agent of New PRIMESTAR or other person indemnified as provided
above and will inure to the benefit of the heirs, executors and administrators
of such person.
The New PRIMESTAR Charter provides that the indemnification rights stated
therein are not exclusive of any other rights that a person may have or may in
the future acquire under any statute, provision of the New PRIMESTAR Charter,
the New PRIMESTAR Bylaws, agreement, vote of stockholders or resolution of
disinterested directors or otherwise. The New PRIMESTAR Charter further states
that no amendment, modification or repeal of the above-described provisions of
the New PRIMESTAR Charter will adversely affect any right or protection of any
person under such provisions of the New PRIMESTAR Charter in respect of any
act or omission occurring prior to the time of such amendment, modification or
repeal.
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