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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 18, 1997
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K/A
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): JUNE 11, 1997
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INTERNATIONAL FAMILY
ENTERTAINMENT, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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DELAWARE 001-11121 541522360
(STATE OR OTHER JURISDICTION (COMMISSION FILE NUMBER) (IRS EMPLOYER
OF INCORPORATION) IDENTIFICATION NO.)
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2877 GUARDIAN LANE, VIRGINIA BEACH, VIRGINIA 23452
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INC. AREA CODE: (757) 459-6422
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ITEM 5. OTHER EVENTS.
On June 11, 1997, International Family Entertainment, Inc. (the "Company")
entered into an Agreement and Plan of Merger (the "Merger Agreement") with Fox
Kids Worldwide, Inc., a Delaware Corporation ("FKWW"), and Fox Kids Merger
Corporation, a Delaware corporation and a wholly-owned subsidiary of FKWW ("FKW
Sub"), providing for the merger (the "Merger") of FKW Sub into the Company, as
the surviving corporation, pursuant to which each share of Common Stock (as
defined below) of the Company issued and outstanding immediately prior to the
effective time of the Merger (other than shares owned by FKWW, FKW Sub or the
Company, or any of their respective subsidiaries, or by stockholders who have
validly perfected their appraisal rights under the Delaware General Corporation
Law) will be converted into the right to receive a cash payment equal to $35 per
share, without interest, subject to adjustment as provided in the Merger
Agreement. A copy of the Merger Agreement is attached hereto as Exhibit 1.1 and
incorporated herein by reference. The Robertson Sellers (as defined below), The
Christian Broadcasting Network, Inc., a Virginia corporation ("CBN"), and Regent
University, a Virginia corporation ("Regent"), who collectively hold a majority
of the outstanding voting power of the Company's Common Stock, approved the
Merger by written consent delivered to the Company on June 11, 1997 following
the execution of the Merger Agreement.
Concurrently with the execution of the Merger Agreement,
(i) (a) M.G. "Pat" Robertson ("Pat Robertson"), individually and as trustee
of each of the Robertson Remainder Unitrust, the Gordon P. Robertson Irrevocable
Trust, the Elizabeth F. Robinson Irrevocable Trust and the Ann R. Lablanc
Irrevocable Trust; Lisa N. Robertson and Timothy B. Robertson, as joint tenants;
and Timothy B. Robertson ("Tim Robertson"), individually, as trustee of each of
the Timothy and Lisa Robertson Children's Trust and the Timothy B. Robertson
Charitable Trust and as custodian for his children (collectively, the "Robertson
Sellers"), (b) CBN and (c) Regent have each entered into a Stock Purchase
Agreement (collectively, the "Stock Purchase Agreements") with FKWW providing
for the sale to FKWW of an aggregate of 15,587,427 shares of Class B common
stock, par value $0.01 per share (the "Class B Stock")(including 5,000,000
shares of Class B Stock issuable upon conversion of all of the Company's
outstanding Class A common stock, par value $0.01 per share (the "Class A
Stock"), held by certain of the Robertson Sellers and 1,250,000 shares of Class
B Stock issuable upon the exercise of options held by Pat Robertson and Tim
Robertson) for $35 per share in cash, subject to adjustment in the same manner
as the Merger Consideration; and
(ii) Liberty IFE, Inc. ("LIFE"), a Colorado corporation and a wholly owned
subsidiary of Liberty Media Corporation, a Delaware corporation, which holds
7,088,732 shares of Class C non-voting Common Stock, par value $0.01 per share,
of the Company (the "Class C Stock" and, together with the Class A Stock and
Class B Stock, the "Common Stock") and $23,000,000 aggregate principal amount of
6% Convertible Secured Notes due 2004 of the Company (the "Convertible Notes"),
convertible into 2,587,500 shares of Class C Stock, has entered into a
Contribution and Exchange Agreement (the "Contribution Agreement") with FKWW
pursuant to which LIFE has agreed to contribute such shares of Class C Stock and
Convertible Notes to FKWW in exchange for shares of a new series of preferred
stock of FKWW, in a transaction intended to constitute a tax free exchange. The
FKWW preferred stock will be exchangeable at the holder's option, upon the
happening of certain events, into shares of a new series of preferred stock of
News Publishing Australia Limited ("NPAL"), the primary U.S. holding company for
The News Corporation Limited, a corporation organized and existing under the
laws of South Australia ("News Corp."). Each series of preferred stock will have
a liquidation preference of $35.00 per share or share equivalent of Class C
Stock, subject to adjustment in the same manner as the Merger Consideration,
plus $6.33 million representing interest income foregone on the Convertible
Notes and partial compensation for certain tax consequences, and shall be
entitled to receive cumulative dividends at a rate of 8.5% per annum of the
liquidation price, payable quarterly, increasing to 11% if any quarterly
dividend is not declared and paid in full when due.
News Corp., which indirectly holds 49.9 percent of the voting rights of
FKWW and has the right to designate 50% of its board of directors, has entered
into guarantees for the benefit of the Company, the Robertson Sellers, CBN and
Regent guaranteeing the performance of FKWW's and FKW Sub's obligations
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under the Merger Agreement and respective Stock Purchase Agreements, and,
together with NPAL, has entered into a Funding Agreement with LIFE supporting
the obligations of FKWW and NPAL under the preferred stock issuable to LIFE. A
copy of the Guaranty, dated as of June 11, 1997, of FKWW's and FKWW Sub's
obligations under the Merger Agreement is attached hereto as Exhibit 1.2 and
incorporated herein by reference.
Consummation of the Merger and the closings under each of the Stock
Purchase Agreements and the Contribution Agreement are subject to the
satisfaction of certain conditions, including expiration or termination of all
applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976 (the "HSR Act"). Although the purchase by FKWW of Common Stock held
by the Robertson Sellers, CBN and Regent, pursuant to the Stock Purchase
Agreements, and the contribution by LIFE to FKWW of Class C Stock and
Convertible Notes, pursuant to the Contribution and Exchange Agreement, are
expected to occur prior to the Merger, consummation of the Merger is not
conditioned upon the consummation of these transactions. In any event, the
Merger will not be consummated until the expiration of twenty days from the date
a definitive information statement pursuant to Section 14(c) of the Securities
Exchange Act of 1934, as amended, is first sent or given to the Company's
stockholders.
In connection with the execution of the Stock Purchase Agreements and the
Merger Agreement,
(i) all parties to that certain Amended and Restated Shareholder Agreement
dated as of September 1, 1995 (the "Shareholder Agreement"), previously filed as
Exhibit 2(c) to the Company's Current Report on Form 8-K dated December 15,
1995, including the Company, have executed an agreement (the "Termination to
Shareholder Agreement"), a copy of which is attached hereto as Exhibit 2.1 and
incorporated herein by reference, terminating the Shareholder Agreement upon the
terms and conditions set forth therein;
(ii) the Company and CBN have entered into an amendment (the "Amendment No.
1 to Program Time Agreement"), a copy of which is attached hereto as Exhibit 3.1
and incorporated herein by reference, clarifying and amending that certain
Program Time Agreement dated as of January 5, 1990, previously filed with the
Company's Registration Statement (No. 33-45967) on Form S-1 under the Securities
Act of 1933, as amended; and
(iii) the Company and Satellite Services, Inc. ("SSI") have entered into a
letter agreement (the Amended Affiliation Agreement"), amending that certain
Affiliation Agreement dated as of December 28, 1989, previously filed with the
Company's Registration Statement (No. 33-45967) on Form S-1 under the Securities
Act of 1933, as amended.
A Press Release announcing the actions described above was issued by the
Company on June 11, 1997 and is attached hereto as Exhibit 5.1 and incorporated
herein by reference.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
Exhibits:
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4.1 Amended Affiliation Agreement, dated June 11, 1997, between the Company and
SSI. (Confidential treatment has been requested with respect to certain
omitted information contained in such exhibit pursuant to Rule 24b-2 of the
Securities Exchange Act of 1934, as amended, and, in accordance therewith,
such omitted information has been filed separately with the Commission in
connection with an application for confidential treatment.)
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Company has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
INTERNATIONAL FAMILY ENTERTAINMENT,
INC.
By: /s/ DAVID R. HUMPHREY
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David R. Humphrey
Dated: August 19, 1997
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EXHIBIT INDEX
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SEQUENTIAL
EXHIBIT PAGE
NO. DEFINITION NUMBER
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4.1 Amended Affiliation Agreement, dated June 11, 1997, between the Company and
Satellite Services, Inc. (Confidential treatment has been requested with
respect to certain omitted information contained in such exhibit pursuant
to Rule 24b-2 of the Securities Exchange Act of 1934, as amended, and, in
accordance therewith, such omitted information has been filed separately
with the Commission in connection with an application for confidential
treatment.)
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EXHIBIT 4.1
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED
FOR SPECIFIED PORTIONS OF THIS DOCUMENT
INDEX OF OMITTED INFORMATION FOR WHICH
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED
1. In Section 1, titled "Carriage Guarantee," the omitted
information for which confidential treatment has been
requested, and that has been replaced by an asterisk, are
numerical percentage values.
2. In Section 3, titled "Content Restrictions," the omitted
information for which confidential treatment has been
requested, and that has been replaced by an asterisk, are
specific programming content restrictions to which the parties
to the Agreement have agreed.
THE SPECIFIED MATERIAL HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION
IN CONNECTION WITH AN APPLICATION FOR CONFIDENTIAL TREATMENT.
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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR THE OMITTED PORTIONS OF THIS
DOCUMENT
June 11, 1997
VIA FACSIMILE
Louis A. Isakoff, Esq.
Senior Vice President and General Counsel
International Family Entertainment, Inc.
P. O. Box 2050
Virginia Beach, VA 23450-2050
Re: Affiliation Agreement dated as of December 28, 1989 (the
"Agreement"), by and between Satellite Services, Inc.
("Affiliate") and The Family Channel ("FAM"), a division of
International Family Entertainment, Inc. ("IFE"), as amended
by an Amendment dated as of January 1, 1994 (the "First
Amendment") and a Letter of Amendment dated May 16, 1996 (the
"Second Amendment")
Dear Lou:
This Letter of Amendment (the "Third Amendment") shall amend the
above-referenced Agreement. Terms not defined in this Third Amendment shall have
the definitions given to them in the Agreement or the Second Amendment, as
appropriate. In consideration of the mutual promises herein contained and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, FAM and Affiliate agree as follows:
1. Carriage Guarantee. Section 3(a) of the Agreement is hereby amended
by deleting the language that begins with the words "Notwithstanding the
foregoing. . ." and continuing through the end of Section 3(a) as it appears in
the Agreement (but not deleting the language added to Section 3(a) by means of
the Second Amendment) and adding in lieu thereof the following:
Notwithstanding the foregoing and Section 7(g) hereof, during the Term,
Affiliate shall meet the following penetration requirements for
carriage of the FAM Service:
(1) The total of FAM Subscribers shall be no less than *
% of the number of Basic Subscribers (as defined
below) in cable television systems that meet, as of
the time compliance is tested, the System
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* Material has been omitted and filed separately with the Commission in
connection with an application for confidential treatment.
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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR THE OMITTED PORTIONS OF THIS
DOCUMENT
qualifications of Exhibit A hereto and either: (A)
are carrying the FAM Service on the date hereof; or
(B) are acquired by Affiliate or
an affiliate of Affiliate after the date hereof and
are carrying the FAM Service on the date of
acquisition. "Basic Subscribers" shall mean, with
respect to each System, the total number of
subscribers receiving video programming services in
such System, excluding any subscriber receiving
solely the "lifeline" level of service and/or pay or
pay-per-view services. "Lifeline" shall have the
definition set forth in Exhibit B to the Second
Amendment. Affiliate may exclude from the foregoing
calculation any System that is sold or divested by
Affiliate or an affiliate of Affiliate after the date
hereof or ceases to meet the System Qualifications of
Exhibit A hereto.
(2) The penetration of the FAM Service in any System that
meets the System qualifications of Exhibit A hereto
and is carrying the FAM Service shall, during the
Term, be no less than * % of the number of Basic
Subscribers in such System; provided, however, that
if the penetration of the FAM Service in any System
is less than *% on the date hereof, Affiliate shall
not be obligated to reposition the FAM Service in
such System during the Term. In addition, if the
penetration of the FAM Service in any System
hereafter acquired by Affiliate or an affiliate of
Affiliate is less than *%, Affiliate shall not be
obligated to reposition the FAM Service in such
System during the Term, and such System will be
excluded from *% calculation set forth in
subparagraph (1) above.
(3) Notwithstanding the foregoing, nothing herein shall
obligate Affiliate or any affiliate of Affiliate to
launch or carry the FAM Service in any System that
fails, now or in the future, to meet the System
qualifications of Exhibit A hereto, or that meets the
System qualifications of Exhibit A hereto and is not
carrying the FAM Service on the later of the date
hereof or the date of acquisition of the System.
(4) The Systems shall distribute the FAM Service on a
full-time basis only; provided, however, that any
System which distributes the FAM Service on a
part-time basis as of the date hereof or on the date
of acquisition of such System, whichever is later,
shall have
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* Material has been omitted and filed separately with the Commission in
connection with an application for confidential treatment.
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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR THE OMITTED PORTIONS OF
THIS DOCUMENT
the right to continue distributing the Service on a
part-time basis during the Term of this Agreement.
2. Combining Satellite and Cable Distribution. Section 3(c) of the
Agreement shall be amended by adding at the end thereof the following:
FAM and Affiliate expressly agree that, notwithstanding any other
provision of this Agreement to the contrary, Affiliate may deliver the
FAM Service to its Subscribers by any of the technologies provided for
herein and/or in more than one such technology. Without limiting the
foregoing and notwithstanding the second sentence of Section 2(a)
hereof, Affiliate is expressly authorized to distribute the FAM
Service to customers who receive the FAM Service and other video
programming services from a combination of satellite and terrestrial
distribution modalities. The Fees set forth in Section 7(a)(I) hereof
shall apply to any such FAM Subscriber and Affiliate shall be required
to pay only one Fee for any FAM Subscriber, even if that FAM
Subscriber receives the FAM Service via more than one technology.
Notwithstanding the foregoing, if a subscriber receives the FAM
Service via a distribution modality for which the subscriber pays a
separate fee from any fee paid to a distribution modality affiliated
with Affiliate, the foregoing provision shall not eliminate
Affiliate's obligation to pay Fees for such subscriber under this
Agreement.
3. Content Restrictions. The words "sports series and specials," shall
be deleted from Section 2(e) and Section 6(b) of the Agreement and a new Section
6(d) shall be added to the Agreement, as follows:
(d) Notwithstanding any other provision hereof, in particular
Section 2(e) hereof and the foregoing provisions of this Section 6, the
FAM Service shall not contain *
4. Effective Date. This Agreement shall be effective on the earlier to
occur of (i) the Closing of the Contribution under the Contribution and Exchange
Agreement by and among Liberty Media Corporation, Liberty IFE, Inc., and Fox
Kids Worldwide, Inc., dated June 6, 1997, and (ii) the Effective Time of the
Merger (as defined in the Merger Agreement by and among For Kids Worldwide,
Inc., Fox Kids Merger Corporation, and International Family Entertainment, Inc.,
dated June 6, 1997.) If not effective prior to such time, this Amendment shall
terminate upon the expiration or termination of the Merger Agreement in
Accordance with its terms.
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* Material has been omitted and filed separately with the Commission in
connection with an application for confidential treatment.
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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR THE OMITTED PORTIONS OF THIS
DOCUMENT
If the foregoing accurately reflects your understanding, please so
indicate by executing this Third Amendment in the space indicated and returning
it to me.
Very truly yours,
/s/ Jedd S. Palmer
President, Satellite Services, Inc.
ACCEPTED AND AGREED TO
FOR THE FAMILY CHANNEL AND FOR
INTERNATIONAL FAMILY ENTERTAINMENT, INC.
THIS 11th DAY OF MAY, 1997:
By: /s/ Timothy Robertson
Name: Timothy Robertson
Title: President and CEO
