SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report: February 17, 1999
United International Holdings, Inc.
(Exact Name of Registrant as Specified in Charter)
Delaware 0-21974 84-1116217
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification #)
incorporation)
4643 South Ulster Street, Suite 1300, Denver, CO 80237
(Address of Principal Executive Office)
(303) 770-4001
(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS.
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UPC Initial Public Offering. On February 17, 1999, United Pan-Europe
Communications N.V. ("UPC"), a subsidiary of United International Holdings, Inc.
("UIH"), closed the initial public offering of its ordinary shares. Following
this initial public offering, the Registrant owns approximately 60% of UPC.
UPC's ordinary shares trade on the Amsterdam Stock Exchange under the symbol
"UPC" and American Depositary Shares representing UPC's ordinary shares trade on
the Nasdaq National Market under the symbol "UPCOY."
Recent Transactions and Agreements with UPC. Prior to the initial public
offering, UIH sold to UPC, in exchange for a total of 11,285,604 of UPC's
ordinary shares, UIH's interests in (a) the Monor (b) Tara programming joint
venture, and (c) IPS programming joint venture.
Subject to certain limitations, beginning February 11, 2000, UIH may require UPC
to file a registration statement under the Securities Act of 1933 (the "Act")
with respect to all or a portion of UIH's ordinary shares or ADSs, and UPC is
required to use its best efforts to effect such registration, subject to certain
conditions and limitations. UPC is not obligated to effect more than three of
these demand registrations using forms other than Form S-3 or F-3, as the case
may be. UIH may demand registration of such securities an unlimited number of
times on Form S-3 or F-3, as the case may be, except that UPC is not required to
register UIH's ordinary shares on Form S-3 more than once in any six-month
period. UIH also has the right to have its ordinary shares included in any
registration statement UPC proposes to file under the Act except that, among
other conditions, the underwriters of any such offering may limit the number of
shares included in such registration. UPC has also granted UIH rights comparable
to those described above with respect to the listing or qualification of the
ordinary shares held by UIH on the Amsterdam Stock Exchange or on any other
exchange and in any other jurisdiction where UPC previously has taken action to
permit the public sale of its securities.
UIH incurs certain overhead and other expenses at the corporate level on behalf
of UPC and its other operating companies. These include expenses not readily
allocable among the operating companies, such as accounting, financial
reporting, investor relations, human resources, information technology,
equipment procurement and testing expenses, corporate offices lease payments and
costs associated with corporate finance activities. UIH also incurs direct costs
for its operating companies such as travel and salaries for UIH employees
performing services on behalf of its respective operating companies. UPC and UIH
are parties to a management service agreement, with an initial term through
2009, pursuant to which UIH will continue to perform these services for UPC.
Under the management service agreement, UPC will pay UIH a fixed amount each
month as its portion of such unallocated expenses. This fixed amount is
initially $300,000 per month. After the first year of the management services
agreement, the fixed amount may be adjusted from time to time by UIH to allocate
these corporate level expenses among UIH's operating companies, including UPC,
taking into account the relative size of the operating companies and their
estimated use of UIH resources. In addition, UPC will continue to reimburse UIH
for costs incurred by UIH that are directly attributable to UPC.
UPC and UIH are also parties to a secondment agreement that specifies the basis
upon which UIH may second certain of its employees to UPC. UIH's secondment of
employees to UPC helps UPC attract and retain U.S. citizens and other employees
who want U.S. benefit plans, without creating a separate U.S. employment
subsidiary. UPC generally is responsible for all costs incurred by UIH with
respect to any seconded employee's employment and severance. UIH may terminate a
seconded employee's employment if the employee's conduct constitutes willful
misconduct that is materially injurious to UIH.
UIH and UPC have agreed that so long as UIH holds 50% or more of UPC's
outstanding ordinary shares, (1) UIH will not pursue any video services,
telephone or Internet access business in Europe or Israel or any programming or
Internet content business specifically directed to the European or the Israeli
markets, unless it has first presented such business opportunity to UPC and UPC
has elected not to pursue such business opportunity, and (2) UPC will not pursue
any video services, telephone or Internet access business in Saudi Arabia or
other markets outside of Europe and the Middle East in which UIH then operates
unless UPC has first presented such business opportunity to UIH and UIH has
elected not to pursue such business opportunity.
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UPC has also agreed to sell to UIH, upon request, all or any portion of the UIH
Class A Common Stock held by UPC at a price based upon the trading price of such
stock during a specified period prior to sale. UIH and UPC have also agreed that
UPC will provide audited financial statements to UIH in such form and with
respect to such periods as shall be necessary or appropriate to permit UIH to
comply with its reporting obligations as a publicly traded company and that UPC
will not change its accounting principles without UIH's prior consent. UPC has
consented to the public disclosure by UIH of all matters deemed necessary or
appropriate by UIH in its sole discretion to satisfy the disclosure obligations
of UIH or any affiliate thereof under the United States federal securities laws
or to avoid potential liability thereunder. UPC has also agreed to indemnify UIH
against all liabilities UIH may incur in connection with UIH's indemnification
obligations under the UPC initial public offering underwriting agreement.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
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(c) EXHIBITS
10.1 Form of Master Seconded Employee Services Agreement (1)
10.2 Form of UIH Registration Rights Agreement (2)
10.3 Form of UIH Management Services Agreement (1)
10.4 Agreement dated as of February 11, 1999 between UIH and UPC (3)
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(1) Incorporated by reference from Amendment No. 8 to UPC's Form S-1/A
Registration Statement filed by UPC, dated February 10, 1999 (File No.
333-67895).
(2) Incorporated by reference from Amendment No. 6 to UPC's Form S-1/A
Registration Statement filed by UPC, dated February 4, 1999 (File No.
333-67895)
(3) Incorporated by reference to UPC's Annual Report on Form 10-K for the year
ended December 31, 1998 (File No. 000-25365)
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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 of the
undersigned thereunto duly authorized.
UNITED INTERNATIONAL HOLDINGS, INC.
DATE: April 15, 1999 By: /s/ Valerie L. Cover
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Valerie L. Cover
Vice President and Controller
