<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
Under the Securities Exchange Act of 1934
TV Guide, Inc. (formerly named United Video Satellite Group, Inc.)
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(Name of Issuer)
Class A Common Stock, $.01 par value
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(Title of Class of Securities)
87307Q109
-------------------------------------
(CUSIP Number)
Charles Y. Tanabe, Esq.
Senior Vice President and General Counsel
Liberty Media Corporation
8101 East Prentice Avenue
Englewood, CO 80111
(303) 721-5400
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(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
March 1, 1999
---------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition that is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the
following box [_].
Note. Schedules filed in paper format shall include a signed original and
five copies of the schedule, including all exhibits. See Rule 13d-7(b) for
other parties to whom copies are to be sent.
(Continued on following pages)
(Page 1 of 21 Pages)
- ---------------
/*/The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter the
disclosures provided in a prior cover page.
The information required in the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
<PAGE>
================================================================================
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Liberty Media Corporation
84-1288730
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [_]
(b) [X]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
00
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(d) or 2(e)
[_]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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7 SOLE VOTING POWER
NUMBER OF 66,534,108 SHARES/1/
SHARES BENEFICIALLY OWNED BY -------------------------------------
EACH
REPORTING 8 SHARED VOTING POWER
PERSON 0
WITH -------------------------------------
9 SOLE DISPOSITIVE POWER
66,534,108 SHARES/1/
-------------------------------------
10 SHARED DISPOSITIVE POWER
0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
66,534,108 SHARES/1/
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12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES /2/
[X]
- -------------------------------------------------------------------------------
- ----------------------------
/1/ Includes 37,496,588 shares of Class A Common Stock issuable upon
conversion of a like number of shares of Class B Common Stock. See Item 5.
/2/ Excludes shares beneficially held by directors and executive officers of
the reporting person and shares beneficially owned by The News Corporation
Limited. See Item 5.
Page 2 of 21 Pages
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
Approximately 43.8%/3/
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14 TYPE OF REPORTING PERSON
CO
===============================================================================
- -------------------------
/3/ Assumes conversion of all outstanding shares of Class B Common Stock into
Class A Common Stock. Because each share of Class B Common Stock is
generally entitled to ten votes per share, the Reporting Person owns equity
securities of the Issuer representing approximately 48.9% of the voting
power of the Issuer (assuming no conversion of the Class B Common Stock).
See Item 5.
Page 3 of 21 Pages
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Statement of
LIBERTY MEDIA CORPORATION
Pursuant to Section 13(d) of the Securities Exchange Act of 1934
in respect of
TV Guide, Inc. (formerly named United Video Satellite Group, Inc.)
Item 1. Security and Issuer.
This Statement on Schedule 13D (this "Statement") relates to the Class A
Common Stock, par value $.01 per share ("Class A Common Stock"), of TV Guide,
Inc., a Delaware corporation (the "Issuer"). The principal executive offices of
the Issuer are at 7140 South Lewis Avenue, Tulsa, Oklahoma 74136-5422. Prior to
March 1, 1999, the Issuer's name was United Video Satellite Group, Inc.
Pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, as
amended, (the "Exchange Act"), this Statement also relates to the shares of
Class A Common Stock issuable upon conversion of shares of the Class B Common
Stock, $.01 par value per share (the "Class B Common Stock" and together with
the Class A Common Stock, the "Common Stock"), of the Issuer. At the option of
the holder, each share of Class B Common Stock is convertible into one share of
Class A Common Stock. The shares of Class A Common Stock are not convertible
into shares of Class B Common Stock. The holders of Class A Common Stock and
Class B Common Stock generally vote together as a single class with respect to
all matters voted on by the stockholders of the Issuer. The holders of the
Class B Common Stock are entitled to 10 votes per share and the holders of the
Class A Common Stock are entitled to one vote per share.
Page 4 of 21 Pages
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Item 2. Identity and Background.
This Statement is being filed by Liberty Media Corporation, a Delaware
corporation ("Liberty" or the "Reporting Person"). The Reporting Person's
principal business address is 8101 East Prentice Avenue, Englewood, Colorado
80111.
Prior to March 9, 1999, Liberty was controlled by Tele-Communications,
Inc., a Delaware corporation ("TCI"), which through TCI UVSG, Inc. a Delaware
corporation and indirect subsidiary of TCI ("TCI UVSG"), beneficially owned
29,037,520 shares of Class A Common Stock and 24,746,588 shares of Class B
Common Stock. At the time, 16,664,226 shares of Class A Common Stock and
24,746,588 shares of Class B Common Stock were attributed to TCI's TCI Ventures
Group and 12,373,294 shares of Class A Common Stock were attributed to TCI's
Liberty Media Group. Through Liberty, TCI also beneficially owned the 12,750,000
shares of Class B Common Stock acquired by Liberty on March 1, 1999 in the
Netlink Transaction (as defined in Item 3), which at the time were attributed to
TCI's Liberty Media Group. TCI, as the corporate parent entity of the Reporting
Person, had previously filed a Statement on Schedule 13D reporting its
beneficial ownership of shares of Class A Common Stock and Class B Common Stock
on February 2, 1996, which was amended and supplemented by Amendment No. 1 filed
on January 14, 1998, was restated in its entirety by Amendment No. 2 filed on
July 13, 1998 and was further amended and supplemented by Amendment No. 3 filed
on July 13, 1998 (the "TCI Schedule 13D"). TCI's principal business address is
5619 DTC Parkway, Englewood, Colorado 80111. TCI is principally engaged through
its subsidiaries and affiliates in the acquisition, development and operation of
cable television systems throughout the United States.
As a result of an internal restructuring in which the ownership of TCI UVSG
was transferred to Liberty and the consummation on March 9, 1999 of the merger
(the "AT&T Merger") of a wholly owned subsidiary of AT&T Corp., a New York
corporation ("AT&T") with and into TCI, Liberty succeeded to the beneficial
ownership of the shares of Class A Common Stock and Class B Common Stock
beneficially owned by TCI.
In the AT&T Merger, (i) TCI became a wholly owned subsidiary of AT&T, (ii)
the businesses and assets of the Liberty Media Group and TCI Ventures Group of
TCI were combined and (iii) the holders of TCI's Liberty Media Group common
stock and TCI Ventures Group common stock received in exchange for their shares
a new class of common stock of AT&T intended to reflect the results of AT&T's
"Liberty Media Group". Following the AT&T Merger, AT&T's "Liberty Media Group"
consists of the assets and businesses of TCI's Liberty Media Group and its TCI
Ventures Group prior to the AT&T Merger, except for certain assets which were
transferred to TCI's "TCI Group" in connection with the AT&T Merger, and the
"AT&T Common Stock Group" consists of all of the other assets and businesses of
AT&T. AT&T's principal business address is 32 Avenue of the Americas, New York,
New York 10013. AT&T is principally engaged in the business of providing voice,
data and video communications services to large and small businesses, consumers
and government entities in the United States and internationally.
Page 5 of 21 Pages
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The Board of Directors and management of the Reporting Person manages the
business and affairs of the Reporting Person, including, but not limited to,
making determinations regarding the disposition and voting of the shares of
Class A Common Stock and Class B Common Stock beneficially owned by Liberty
(collectively, the "Shares"). Although the Reporting Person is a wholly owned
subsidiary of AT&T, a majority of the Reporting Person's Board of Directors
consists of individuals designated by TCI prior to the AT&T Merger. If these
individuals or their designated successors cease to constitute a majority of the
Reporting Person's Board of Directors, the Reporting Person will transfer all of
its assets and businesses to a new entity. Although this new entity would be
owned substantially by AT&T, it would continue to be managed (including with
respect to the voting and disposition of the Shares) by management of the
Reporting Person prior to such transfer of assets.
As a result, the Reporting Person, acting through its Board of Directors
and management, will have the power to determine how the Shares will be voted
and, subject to the limitations of the Delaware General Corporation law, will
have the power to dispose of the Shares, and thus is considered the beneficial
owner of the Shares for purposes of Section 13(d) of the Exchange Act.
The Liberty Media Group, principally through the Reporting Person, is
engaged in (i) the production, acquisition and distribution through all
available formats and media of branded entertainment, educational and
informational programming and software, including multimedia products, (ii)
electronic retailing, direct marketing, advertising sales related to programming
services, infomercials and transaction processing, (iii) international cable
television distribution, telephony and programming, (iv) satellite
communications and (v) investments in wireless domestic telephony and other
technology ventures.
Schedule 1 attached to this Statement contains the following information
concerning each director, executive officer or controlling person of the
Reporting Person: (i) name and residence or business address, (ii) principal
occupation or employment; and (iii) the name, principal business and address of
any corporation or other organization in which such employment is conducted.
Schedule 1 is incorporated herein by reference.
To the knowledge of the Reporting Person, each of the persons named on
Schedule 1 (the "Schedule 1 Persons") is a United States citizen, except for
David J.A. Flowers, who is a Canadian citizen. During the last five years,
neither the Reporting Person nor any of the Schedule 1 Persons (to the knowledge
of the Reporting Person) has been convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors). During the last five years,
neither the Reporting Person nor any of the Schedule 1 Persons (to the knowledge
of the Reporting Person) has been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and, as a result of such
proceeding, is or was subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to, federal
or state securities laws or finding any violation with respect to such laws.
Page 6 of 21 Pages
<PAGE>
Schedule 2 attached to this Statement contains the following information
which has been provided to the Reporting Person by AT&T concerning each
director, executive officer or controlling person of AT&T: (i) name and
residence or business address, (ii) principal occupation or employment; and
(iii) the name, principal business and address of any corporation or other
organization in which such employment is conducted. Schedule 2 is incorporated
herein by reference.
Based upon information provided to the Reporting Person by AT&T, (i) to the
knowledge of AT&T, each of the persons named on Schedule 2 (the "Schedule 2
Persons") is a United States citizen, (ii) during the last five years, neither
AT&T nor any of the Schedule 2 Persons (to the knowledge of AT&T) has been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors), and (iii) during the last five years, neither AT&T nor any of the
Schedule 2 Persons (to the knowledge of AT&T) has been a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction and,
as a result of such proceeding, is or was subject to a judgment, decree or final
order enjoining future violations of, or prohibiting or mandating activities
subject to, federal or state securities laws or finding any violation with
respect to such laws.
The foregoing summary of the terms of the AT&T Merger is qualified in its
entirety by references to the text of the Agreement and Plan of Restructuring
and Merger, dated June 23, 1998, among AT&T, Italy Merger Corp. and TCI, a copy
of which has been incorporated by reference as Exhibit 7(a), and to the text of
the AT&T/TCI Proxy Statement/Prospectus, a copy of which has been incorporated
by reference as Exhibit 7(b).
Item 3. Source and Amount of Funds or Other Consideration.
The Reporting Person currently beneficially owns, directly and through
subsidiaries, a total of 29,037,520 shares of Class A Common Stock and
37,496,588 shares of Class B Common Stock. See Item 2. For information
relating to TCI's acquisitions of beneficial ownership of shares of Class A
Common Stock and Class B Common Stock prior to March 1, 1999, see the TCI
Schedule 13D. The balance of the Shares, consisting of 12,750,000 shares of
Class A Common Stock, were acquired by Liberty on March 1, 1999 in consideration
of the sale by Liberty to the Issuer of all of the capital stock of (i)
Telluride Cablevision, Inc., a Delaware corporation ("Telluride"), (ii) LMC
Netlink Corporation, a Colorado corporation ("LMC Netlink") and (iii) Westlink,
Inc., a Colorado corporation ("Westlink") (the "Netlink Transaction").
Telluride, LMC Netlink and Westlink are each general partners of Netlink USA, a
Colorado general partnership ("Netlink USA"). Netlink USA owns an approximately
40% membership interest in Superstar/Netlink Group LLC, a Delaware limited
liability company and owns and operates certain other assets and businesses,
including the business of providing certain programming services to certain
satellite master antenna television operations and the business of distributing
on a wholesale basis the signals of the broadcast stations known as the "Denver
6."
Page 7 of 21 Pages
<PAGE>
The Netlink Transaction was effected pursuant to an Amendment and Restated
Stock Purchase Agreement (the "Restated Agreement"), effective as of May 18,
1998, between Liberty and the Issuer, which amended and restated the provisions
of the Stock Purchase Agreement, dated as of May 18, 1998, between Liberty and
the Issuer that was described in the TCI 's Schedule 13D. The foregoing
description of the Netlink Transaction is qualified in its entirety by the terms
and conditions of the Restated Agreement, a copy of which is incorporated by
reference as Exhibit 7(c) to this Statement and is hereby incorporated herein
by reference.
Item 4. Purpose of Transaction.
Pursuant to (i) a Share Exchange Agreement, effective as of June 10, 1998,
among News America Incorporated, TVG Holdings, Inc. ("Holdings") and Issuer (the
"Share Exchange Agreement"), (ii) the letter agreement, effective as of June 10,
1998, among The News Corporation Limited ("News Corp."), TCI and the Issuer (the
"Parent Agreement") and (iii) the letter agreement, dated February 23, 1999,
among News Corp., TCI and the Issuer (the "Equalization Letter" and,
collectively with the Share Exchange Agreement and the Parent Agreement, the
"News Acquisition Agreements"), on March 1, 1999, following the closing of the
Netlink Transaction, the Issuer acquired from Holdings, a subsidiary of News
Corp., all of the outstanding stock of News America Publications Inc. and TVSM,
Inc., publishers of TV Guide magazine and other television program listing
guides, in exchange for an aggregate of 29,037,520 shares of Class A Common
Stock, 37,496,580 shares of Class B Common Stock and approximately $671 million
net in cash (after giving effect to the offset of the approximately $129 million
in price for 6,534,108 shares of Class A Common Stock purchased by Holdings
pursuant to the Parent Agreement and the Equalization Letter against the $800
million cash consideration paid by the Issuer pursuant to the Share Exchange
Agreement).
As a condition precedent to the closing of the transactions contemplated by
the Share Exchange Agreement, (i) the Issuer and TCI entered into a Termination
Agreement, dated as of March 1, 1999 (the "Termination Agreement"), terminating
the Stockholder Agreement between them dated as of January 25, 1996, and (ii)
TCI, TCI UVSG, Liberty, News Corp., Holdings and the Issuer entered into the
Stockholders Agreement described in Item 6.
In connection with the Stockholders Agreement described in Item 6 and the
closing of the transactions contemplated by the News Acquisition Agreements, the
Board of Directors of the Issuer (the "Issuer Board") amended and restated the
bylaws of the Issuer to fix the number of the Issuer's directors at ten, to
provide for an Office of the Chairman and to provide that the approval of any
action by the Issuer Board requires the affirmative vote of at least seven of
the ten directors, except for the removal of any officer of the Issuer, which
requires approval of six of the ten directors. The Office of the Chairman is
responsible for overseeing the three primary business units of the Issuer that
were formed upon the closing of the transactions: TV Guide Magazine Group, TV
Guide Entertainment Group and the United Video Group.
Page 8 of 21 Pages
<PAGE>
In connection with the closing of the transactions contemplated by the News
Acquisition Agreements, Anthea Disney, Chairman and Chief Executive Officer of
News America Publishing Group, a division of News Corp., was appointed to the
position of Chairman and Chief Executive Officer of the Issuer, and Joachim
Kiener, President and Chief Operating Officer of News America Publishing Group,
was named President of the Issuer and Chairman and Chief Executive Officer of
the TV Guide Magazine Group. Ms. Disney and Mr. Kiener will also serve as
members of the Office of the Chairman, along with Peter C. Boylan III, Executive
Vice President of the Issuer and Chairman and Chief Executive Officer of the TV
Guide Entertainment Group and the United Video Group. Messrs. Kiener and Boylan
will each report to Ms. Disney.
In addition, pursuant to the Stockholders Agreement, TCI, Liberty, TCI
UVSG, News Corp. and Holdings have agreed that each stockholder or group of
related stockholders that are party to such Agreement shall be entitled to
designate one member of the Issuer Board for each 12.5% of the Class B Common
Stock owned by such stockholder or group, and the other parties to such
Agreement would vote their shares of Class A Common Stock and Class B Common
Stock in favor of the election of such designees as director. Based on their
relative share ownership following the closing of the transactions contemplated
by the News Acquisition Agreements, each of TCI UVSG and Holdings is entitled to
designate four members of the Issuer Board. The eight members so designated will
then appoint two persons who are independent directors within the meaning of the
rules of The Nasdaq Stock Market. The four directors designated by Holdings are
Ms. Disney, Mr. Kiener, Chase Carey, an Executive Director and Co-Chief
Operating Officer of News Corp., and Peter Chernin, an Executive Director,
President and Chief Operating Officer of News Corp. The four directors
designated by TCI UVSG are Mr. Boylan, Robert R. Bennett and Gary S. Howard,
each of whom is currently a director, and Charles Y. Tanabe, who currently
serves as Senior Vice President and General Counsel of Liberty. The new
directors (Ms. Disney and Messrs. Kiener, Carey, Chernin and Tanabe) took office
without stockholder action on or about March 29, 1999.
Further, pursuant to the amended and restated bylaws of the Issuer, the
Executive Committee of the Issuer Board will have four members, all of whom are
to be designated by the holders of the Class B Common Stock, with such powers as
may be delegated to it by the unanimous consent of the entire Issuer Board. In
accordance with the Stockholders Agreement, the four members of the Executive
Committee will initially consist of two members designated by TCI UVSG and two
members designated by Holdings.
The foregoing descriptions of the Parent Agreement, the Equalization
Letter, the Termination Agreement, the Stockholders Agreement and the amended
and restated bylaws of the Issuer are qualified in their entirety by the terms
of such documents, which have been included or incorporated by reference as
Exhibits 7(d), 7(e), 7(f), 7(g) and 7(h), respectively, to this Statement and
are incorporated herein by reference.
Page 9 of 21 Pages
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The Reporting Person intends to continuously review its investment in the
Issuer, and may in the future determine to (i) acquire additional securities of
the Issuer, through open market purchases, private agreements or otherwise, (ii)
dispose of all or a portion of the securities of the Issuer owned by it or (iii)
take any other available course of action, which could involve one or more of
the types of transactions or have one or more of the results described in the
last paragraph of this Item 4. Notwithstanding anything contained herein, the
Reporting Person specifically reserves the right to change its intention with
respect to any or all of such matters. In reaching any decision as to its
course of action (as well as to the specific elements thereof), the Reporting
Person currently expects that it would take into consideration a variety of
factors, including, but not limited to, the Issuer's business and prospects,
other developments concerning the Issuer and the cable television and
entertainment programming industries generally, other business opportunities
available to the Reporting Person, other developments with respect to the
business of the Reporting Person, general economic conditions and money and
stock market conditions, including the market price of the securities of the
Issuer.
Other than as set forth in this Statement, the Reporting Person has no
present plans or proposals which relate to or would result in:
(a) The acquisition by any person of additional securities of the issuer,
or the disposition of securities of the Issuer;
(b) An extraordinary corporate transaction such as a merger,
reorganization or liquidation, involving the Issuer or any of its
subsidiaries;
(c) A sale or transfer of a material amount of assets of the Issuer or of
any of its subsidiaries;
(d) Any change in the present board of directors or management of the
Issuer, including any plans or proposals to change the number or term
of directors or to fill any existing vacancies on the board;
(e) Any material change in the present capitalization or dividend policy
of the Issuer;
(f) Any other material change in the Issuer's business or corporate
structure;
(g) Changes in the Issuer's charter, bylaws or instruments corresponding
thereto or other actions which may impede the acquisition of control
of the Issuer by any person;
(h) A class of securities of the Issuer to be delisted from a national
securities exchange or to cease to be authorized to be quoted in an
inter-dealer quotation system of a registered national securities
association;
Page 10 of 21 Pages
<PAGE>
(i) A class of equity securities of the Issuer becoming eligible for
termination of registration pursuant to Section 12(g)(4) of the
Exchange Act; or
(j) Any action similar to any of those enumerated in this Item.
Item 5. Interest in Securities of the Issuer.
(a) The Reporting Person currently beneficially owns 29,037,520 shares of
Class A Common Stock (assuming no conversion of the Class B Common Stock the
Reporting Person owns) and 37,496,588 shares of Class B Common Stock. Based
upon the number of shares reflected as outstanding as of March 2, 1999 in the
Issuer's information statement pursuant to Section 4(f) of the Exchange Act (the
"Information Statement"), the shares of the Issuer's securities beneficially
owned by the Reporting Person represent approximately 37.7% of the Class A
Common Stock (approximately 43.8% assuming conversion of all outstanding Class B
Common Stock into Class A Common Stock), 50% of the Class B Common Stock, and
approximately 48.9% of the combined voting power of the Class A Common Stock and
the Class B Common Stock voting together as a single class. The foregoing
amounts exclude any shares beneficially owned by the Schedule 1 Persons or by
News Corp. and Holdings as described below and the Reporting Person disclaims
beneficial ownership of any of such shares.
The aggregate number and percentage of shares of Class A Common Stock
beneficially owned by the Schedule 1 Persons (to Liberty's knowledge) are set
forth on Schedule 3 attached hereto and incorporated herein by reference. Based
upon information provided to the Reporting Person by AT&T, to the knowledge of
AT&T, none of the Schedule 2 Persons has any interest in any securities of the
Issuer.
To Liberty's knowledge, based upon the number of shares reflected as
outstanding as of March 2, 1999 in the Information Statement, the shares of
Issuer's securities beneficially owned by News Corp. and Holdings represent
approximately 37.7% of the Class A Common Stock (approximately 43.8% assuming
the conversion of all outstanding Class B Common Stock into Class A Common
Stock), 50% of the Class B Common Stock, and approximately 48.9% of the combined
voting power of the Class A Common Stock and the Class B Common Stock voting
together as a single class.
By virtue of the Stockholders Agreement, the Reporting Person, together
with News Corp. and Holdings may be deemed to constitute a "group" for the
purpose of Rule 13d-5 promulgated under the Exchange Act. Nothing contained in
this Statement shall constitute an admission that the Reporting Person and such
persons constitute a "group" for such purposes. News Corp. and Holdings
collectively beneficially own the same number of shares of Class A Common Stock
and Class B Common Stock as the Reporting Person does. Accordingly, based upon
the number of shares reflected as outstanding as of March 2, 1999 in the
Information Statement, the shares of the Company's securities beneficially owned
by the Reporting Person combined with those beneficially owned by News Corp. and
Holdings represent approximately
Page 11 of 21 Pages
<PAGE>
75.5% of the Class A Common Stock (approximately 87.6% assuming the conversion
of all outstanding Class B Common Stock into Class a Common Stock), 100% of the
Class B Common Stock, and approximately 97.7% of the combined voting power of
the Class a Common Stock and Class B Common Stock voting together as a single
class. As a result of the voting power associated with the shares of Class B
Common Stock and as the sole holders of the Class B Common Stock, News Corp.,
Holdings and the Reporting Person may be deemed to share control of the Issuer.
However, neither the Reporting Person, on the one hand, nor News Corp. and
Holdings, on the other hand, have the ability to affirmatively direct the
management of the Issuer without the concurrence of the other.
(b) Except as described in Item 6, the Reporting Person has sole power to
vote and dispose of all of the Shares.
To the knowledge of Liberty each person listed on Schedule 3 has the sole
power to vote and dispose of all shares of Class A Common Stock indicated on
such Schedule as beneficially owned by such person.
(c) Except as described in Item 3, neither Liberty nor, to the knowledge of
Liberty, any of the Schedule 1 Persons has executed any transaction in shares of
Class A Common Stock or Class B Common Stock during the past 60 days. Based
upon information provided to the Reporting Person by AT&T, to the knowledge of
AT&T, none of the Schedule 2 Persons has executed any transactions in shares of
Class A Common Stock or Class B Common Stock during the past 60 days.
(d) No other person has the right to receive or the power to direct the
receipt of dividends from, or the proceeds from the sale of, the Shares.
To the knowledge of Liberty no person not listed on Schedule 3 has the
right to receive or the power to direct the receipt of dividends from, or the
proceeds from the sale of, shares of the Class A Common Stock owned by any
person listed on Schedule 3.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships With Respect
to Securities of the Issuer.
On March 1, 1999, TCI, Liberty, TCI UVSG, News Corp., Holdings and the
Issuer entered into the Stockholders Agreement, which provides that, among other
things, for so long as a stockholder or group of related stockholders is
entitled to designate at least one director to the Issuer Board, the other
stockholder or group of related stockholders shall be subject to certain
restrictions on its ability to sell any of its shares of Class A or Class B
Common Stock to an unaffiliated third party or to convert any of its shares of
Class B Common Stock to shares of Class A Common Stock unless it first offers
such shares for sale to the non-transferring party. If
Page 12 of 21 Pages
<PAGE>
the non-transferring party elects not to purchase such shares, the transferring
party will convert any Class B Common Stock to be sold into Class A Common Stock
prior to such sale unless such Class B Common Stock is to be sold to a third
party that has offered to purchase at least 12.5% of the aggregate number of
shares of Class B Common Stock outstanding. Pursuant to the Stockholders
Agreement, so long as there continues to be at least two stockholders or groups
of related stockholders that each own in the aggregate 30% or more of the
outstanding Class B Common Stock, such stockholders or the members of each such
stockholder group will vote their shares on all matters submitted to a vote of
the Issuer's stockholders only as shall be mutually agreed upon by such
stockholders or stockholder groups and, if they are unable to agree on how to
vote with respect to any such proposal, they will each be obligated to vote
against such proposal. Under the Stockholders Agreement, a stockholder or group
of related stockholders is entitled to designate one director for each 12.5% of
the outstanding shares of Class B Common Stock owned by such party (rounded to
the nearest 12.5%, with more than 6.25% being rounded up, and 6.25% or less
being rounded down), and the other stockholders or group of related stockholders
will vote or cause to be voted all shares owned by such party for the election
of such designee(s) as director. In addition, the Stockholders' Agreement
provides for certain registration rights with respect to the resale of the Class
A Common Stock owned by stockholders that are parties to the Stockholders
Agreement. Pursuant to the Stockholders Agreement, the Parent (as defined in
such Agreement) of each stockholder or group of related stockholders that is
entitled to designate at least one director to the Issuer Board pursuant to the
Stockholders Agreement agrees with and for the benefit of the Parent of each
other stockholder or group of related stockholders that is so entitled to
designate at least one director to the Issuer Board that, for so long as there
are at least two such stockholders or stockholder groups, the Issuer will,
subject to certain limited exceptions, be the exclusive vehicle through which
such Parent, directly or indirectly through its controlled affiliates, conducts
program guide businesses (print, electronic or otherwise) worldwide. Currently,
TCI and News Corp. are each Parents within the meaning of the Stockholders
Agreement. Any description of the Stockholders Agreement in this Item 6 is
qualified in it entirety by the terms thereof, which are hereby incorporated
herein by reference.
Page 13 of 21 Pages
<PAGE>
Item 7. Materials to be Filed as Exhibits.
Exhibit No. Exhibit
(a) Agreement and Plan of Restructuring and Merger, dated as of June 23,
1998, among AT&T Corp., Italy Merger Corp. and Tele-Communications,
Inc. (incorporated by reference to Appendix A to the AT&T/TCI Proxy
Statement/Prospectus that forms a part of the Registration Statement
on Form S-4 of AT&T (File No. 333-70279) filed on January 8, 1999 (the
"AT&T Registration Statement")).
(b) AT&T/TCI Proxy Statement/Prospectus (incorporated by reference to the
AT&T Registration Statement).
(c) Amended and Restated Stock Purchase Agreement between the Issuer and
Liberty, effective as of May 18, 1998 (the "Restated Agreement"),
incorporated by reference to Appendix I of the Proxy Statement on
Schedule 14A of the Issuer (File No. 000-22662) filed on January 21,
1999.
(d) Letter Agreement, effective as of June 10, 1998, among TCI, News Corp.
and the Issuer (the "Parent Agreement"), incorporated by reference to
Exhibit 10.1 to the report on Form 8-K of the Issuer (File No. 000-
22662) filed on March 16, 1999.
(e) Letter Agreement, dated February 23, 1999, among News Corp., TCI and
the Issuer (the "Equalization Letter").
(f) Termination Agreement, dated March 1, 1999, between TCI and the Issuer
(the "Termination Agreement").
(g) Stockholders' Agreement, dated as of March 1, 1999, among Holdings,
News Corp., TCI UVSG, Liberty, TCI and the Issuer (the "Stockholders
Agreement").
(h) Amended and Restated Bylaws of the Issuer, incorporated by reference
to Exhibit 3.2 of the report on Form 10-K of the Issuer (File No.
000-22662) filed on March 31, 1999.
Page 14 of 21 Pages
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: April 2, 1999.
LIBERTY MEDIA CORPORATION
By: /s/ Vivian J. Carr
Name: Vivian J. Carr
Title: Vice President
Page 15 of 21 Pages
<PAGE>
SCHEDULE 1
DIRECTORS AND EXECUTIVE OFFICERS
OF
LIBERTY MEDIA CORPORATION
The name and present principal occupation of each director and executive
officer of Liberty Media Corporation ("Liberty") are set forth below. The
business address for each person listed below is c/o Liberty Media Corporation,
8101 East Prentice Avenue, Suite 500, Englewood, Colorado 80111. All executive
officers and directors listed on this Schedule 1 are United States citizens,
except for David J.A. Flowers, who is a Canadian citizen.
Name Principal Occupation
- ---- --------------------
John C. Malone Chairman of the Board and Director of Liberty; Director
of AT&T Corp.
Robert R. Bennett President, Chief Executive Officer and Director of
Liberty
Gary S. Howard Executive Vice President, Chief Operating Officer of
Liberty
Leo J. Hindery, Jr. Director of Liberty; President and Chief Executive
Officer, AT&T Broadband and Internet Services
Daniel E. Somers Director of Liberty; Senior Executive Vice President and
Chief Financial Officer of AT&T Corp.
John C. Petrillo Director of Liberty; Executive Vice President, Corporate
Strategy and Business Development of AT&T Corp.
Larry E. Romrell Director of Liberty; Consultant to Tele-Communications,
Inc.
Jerome H. Kern Director of Liberty
Paul A. Gould Director of Liberty; Managing Director of Allen & Co.
David B. Koff Senior Vice President and Assistant Secretary of Liberty
Charles Y. Tanabe Senior Vice President, General Counsel and Assistant
Secretary of Liberty
Peter Zolintakis Senior Vice President of Liberty
Vivian J. Carr Vice President and Secretary of Liberty
Kathryn S. Douglass Vice President and Controller of Liberty
David J.A. Flowers Vice President and Treasurer of Liberty
David A. Jensen Vice President of Liberty
Page 16 of 21 Pages
<PAGE>
Name Principal Occupation
- ---- --------------------
Gary Blaylock Vice President of Liberty
Page 17 of 21 Pages
<PAGE>
SCHEDULE 2
DIRECTORS AND EXECUTIVE OFFICERS
OF
AT&T CORP.
The name and present principal occupation of each director and executive
officer of AT&T Corp. are set forth below. The business address for each person
listed below is c/o AT&T Corp., 295 North Maple Avenue, Basking Ridge, New
Jersey 07920. All executive officers and directors listed on this Schedule 2
are United States citizens.
<TABLE>
<CAPTION>
Name Title
- ---- -----
<S> <C>
C. Michael Armstrong Chairman of the Board, Chief Executive Officer and Director
Kenneth T. Derr Director; Chief Executive Officer of Chevron Corporation
M. Kathryn Eickhoff Director; President of Eickhoff Economics, Inc.
Walter Y. Elisha Director; Chairman and Chief Executive Officer of Springs
Industries, Inc.
George M. C. Fisher Director; Chairman and Chief Executive Officer of Eastman Kodak
Company
Donald V. Fites Director; Chairman and Chief Executive Officer of Caterpillar, Inc.
Ralph S. Larsen Director; Chairman and Chief Executive Officer of Johnson &
Johnson
John C. Malone Director; Chairman of the Board of Liberty Media Corporation
Donald F. McHenry Director; President of IRC Group
Michael I. Sovern Director; President Emeritus and Chancellor Kent Professor of Law
at Columbia University
Sanford I. Weill Director; Chairman and Co-CEO of Citigroup Inc.
Thomas H. Wyman Director; Senior Advisor of SBC Warburg, Inc.
John D. Zeglis President and Director
Harold W. Burlingame Executive Vice President, Merger & Joint Venture Integration
James Cicconi Executive Vice President-Law & Governmental Affairs and General
Counsel
Mirian Graddick Executive Vice President, Human Resources
</TABLE>
Page 18 of 21 Pages
<PAGE>
<TABLE>
<CAPTION>
Name Title
- ---- -----
<S> <C>
Daniel R. Hesse Executive Vice President and President & CEO, AT&T Wireless
Services
Leo J. Hindery, Jr. President and Chief Executive Officer, AT&T Broadband and
Internet Services
Frank Anna Executive Vice President and President, AT&T Network Services
Michael G. Keith Executive Vice President and President, AT&T Business Services
H. Eugene Lockhart Executive Vice President, Chief Marketing Officer
Richard J. Martin Executive Vice President, Public Relations and Employee
Communication
David C. Nagel President, AT&T Labs & Chief Technology Officer
John C. Petrillo Executive Vice President, Corporate Strategy and Business
Development
Richard Roscitt Executive Vice President and President & CEO, AT&T Solutions
D.H. Schulman Executive Vice President and President, AT&T Consumer Long
Distance and Segment Marketing
Daniel E. Somers Senior Executive Vice President and Chief Financial Officer
</TABLE>
Page 19 of 21 Pages
<PAGE>
SCHEDULE 3
BENEFICIAL OWNERSHIP OF THE ISSUER'S CLASS A COMMON STOCK BY DIRECTORS AND
EXECUTIVE OFFICERS OF
LIBERTY MEDIA CORPORATION
<TABLE>
<CAPTION>
Name of Amount and Nature of
Beneficial Owner Beneficial Ownership Percent of Class
- --------------------- -------------------------------------------------- ----------------
<S> <C> <C>
Robert R. Bennett Options to purchase 6,000 shares of Class A *
Common Stock
Leo J. Hindery, Jr. Options to purchase 30,000 shares of Class A *
Common Stock
Gary S. Howard Options to purchase 80,000 shares of Class A *
Common Stock
Larry E. Romrell Options to purchase 18,000 shares of Class A *
Common Stock
</TABLE>
* Less than one percent
Page 20 of 21 Pages
<PAGE>
EXHIBIT INDEX
Exhibit No. Exhibit
- ----------- -------
7(a) Agreement and Plan of Restructuring and Merger, dated as of June
23, 1998, among AT&T Corp., Italy Merger Corp. and Tele-
Communications, Inc. (incorporated by reference to Appendix A to
the AT&T/TCI Proxy Statement/Prospectus that forms a part of the
Registration Statement on Form S-4 of AT&T (File No. 333-70279)
filed on January 8, 1999 (the "AT&T Registration Statement")).
7(b) AT&T/TCI Proxy Statement/Prospectus (incorporated by reference to
the AT&T Registration Statement).
7(c) Amended and Restated Stock Purchase Agreement between the Issuer
and Liberty, effective as of May 18, 1998 (the "Restated
Agreement"), incorporated by reference to Appendix I of the Proxy
Statement on Schedule 14A of the Issuer (File No. 000-22662)
filed on January 21, 1999.
7(d) Letter Agreement, effective as of June 10, 1998, among TCI, News
Corp. and the Issuer (the "Parent Agreement"), incorporated by
reference to Exhibit 10.1 to the report on Form 8-K of the Issuer
(File No. 000-22662) filed on March 16, 1999.
7(e) Letter Agreement, dated February 23, 1999, among News Corp., TCI
and the Issuer (the "Equalization Letter").
7(f ) Termination Agreement, dated March 1, 1999, between TCI and the
Issuer (the "Termination Agreement").
7(g) Stockholders' Agreement, dated as of March 1, 1999, among
Holdings, News Corp., TCI UVSG, Liberty, TCI and the Issuer (the
"Stockholders Agreement").
7(h) Amended and Restated Bylaws of the Issuer, incorporated by
reference to Exhibit 3.2 of the report on Form 10-K of the
Issuer (File No. 000-22662) filed on March 31, 1999.
Page 21 of 21 Pages
<PAGE>
EXHIBIT 7(e)
The News Corporation Limited
1211 Avenue of the Americas
New York, New York 10036
February 23, 1999
Tele-Communications, Inc.
5619 DTC Parkway
Englewood, Colorado 80111
United Video Satellite Group, Inc.
7140 S. Lewis Avenue
Tulsa, Oklahoma 74136-5422
Ladies and Gentlemen:
Reference is made to the letter agreement, effective as of June 10, 1998, among
The News Corporation Limited ("News Corp."), Tele-Communications, Inc. ("TCI")
and United Video Satellite Group, Inc. ("UVSG") (the "Parent Agreement"), and to
the Share Exchange Agreement, effective as of June 10, 1998, among News America
Incorporated, TVG Holdings, Inc. ("Holdings"), and UVSG (the "Share Exchange
Agreement"). Unless otherwise defined herein, the terms used herein shall have
the meanings ascribed to them in the Share Exchange Agreement.
The parties acknowledge that pursuant to Section 9 of the Parent Agreement, News
Corp. may be obligated to acquire, directly or indirectly through a subsidiary,
6,534,108 shares of Class A Common Stock of UVSG (the "Equalization Shares") on
or about the 90th day following the Closing, and that, at News Corp.'s option,
UVSG would be obligated to sell the Equalization Shares to News Corp. or its
subsidiary at a price of $20 per share. UVSG has requested that News Corp. or
its subsidiary purchase the Equalization Shares from UVSG on the Closing Date in
lieu of a later date, and has agreed upon a transaction adjustment related
thereto. Further, News Corp. desires that Holdings purchase the Equalization
Shares on such terms. Accordingly, the parties agree as follows:
1. Issuance and Payment for the Equalization Shares. On the Closing
------------------------------------------------
Date, UVSG shall issue to Holdings the Equalization Shares, and News Corp. shall
cause Holdings to pay to UVSG $128,909,652, which represents the aggregate price
of the Equalization Shares of $130,682,160, less a transaction adjustment of
$1,772,508.
2. Representation of News Corp. News Corp. represents and warrants that
---------------------------
immediately after giving effect to the receipt by Holdings on the Closing Date
of the
<PAGE>
Equalization Shares pursuant hereto and the shares of Class A Common Stock
pursuant to Section 2(a) of the Share Exchange Agreement, the aggregate number
of shares of Class A Common Stock owned by News Corp. and its subsidiaries will
be 29,037,520 shares.
3. Representation of TCI. TCI represents and warrants that on the
---------------------
Closing Date, the aggregate number of shares of Class A Common Stock owned by
TCI and its subsidiaries will be 29,037,520 shares.
4. Notice. UVSG hereby confirms and acknowledges that News Corp. has
------
satisfied any and all notice obligations under Section 9 of the Parent Agreement
with respect to UVSG's issuance of the Equalization Shares.
5. Satisfaction of Obligations. The parties confirm and acknowledge that,
---------------------------
assuming the accuracy of the representations made in Section 2 and 3 hereof,
upon the delivery of the Equalization Shares by UVSG to Holdings upon receipt of
the purchase price therefor in accordance with the terms hereof, UVSG will have
satisfied its obligations under Section 9 of the Parent Agreement.
6. Entire Agreement. This letter agreement, the Parent Agreement, the
----------------
Share Exchange Agreement and that certain letter agreement between TCI and News
Corp. (entered into in connection with the execution of the Parent Agreement),
effective as of June 10, 1998, relating to "TVGOS Intellectual Property,"
contain, and are intended as, a complete statement of all of the terms of the
arrangements between the parties with respect to the matters provided for herein
and therein, and supersede any previous agreements and understandings between
the parties with respect to those matters.
<PAGE>
If the foregoing accurately reflects our agreement, please sign the
enclosed duplicate of this agreement in the space provided below and return the
same to the undersigned.
Very truly yours,
THE NEWS CORPORATION LIMITED
By:/s/ Arthur M. Siskind
------------------------------------------
Name: Arthur M. Siskind
Title: Senior Executive Vice President
and Group General Counsel
Accepted and Agreed:
TELE-COMMUNICATIONS, INC.
By:/s/ Stephen M. Brett
------------------------------------
Name: Stephen M. Brett
Title: Executive Vice President,
Secretary and General Counsel
UNITED VIDEO SATELLITE GROUP, INC.
By:/s/ Peter C. Boylan III
------------------------------------
Name: Peter C. Boylan III
Title: President and Chief
Operating Officer
<PAGE>
EXHIBIT 7.(F)
TERMINATION AGREEMENT
---------------------
THIS TERMINATION AGREEMENT is entered into as of March 1, 1999,
between UNITED VIDEO SATELLITE GROUP, INC., a Delaware corporation ("UVSG"), and
----
TELE-COMMUNICATIONS, INC., a Delaware corporation ("TCI").
---
W I T N E S S E T H :
= - - - - - - - - -
WHEREAS, pursuant to a Stockholder Agreement (the "Stockholder
-----------
Agreement"), dated as of January 25, 1996 between UVSG and TCI, UVSG and TCI
- ---------
agreed to certain voting obligations and restrictions with respect to the TCI
Equity Securities (as defined in the Stockholder Agreement), all on the terms
and subject to the conditions set forth therein; and
WHEREAS, UVSG has entered into that certain Share Exchange Agreement
effective as of June 10, 1998, by and among UVSG, News America Incorporated and
TVG Holdings, Inc. relating to UVSG's acquisition of all of the capital stock of
News America Publications Inc. and TVSM, Inc. (the "Share Exchange Agreement");
------------------------
and
WHEREAS, it is a condition precedent to the closing of the
transactions contemplated by the Share Exchange Agreement that UVSG and TCI
terminate the Stockholder Agreement; and
WHEREAS, the parties hereto desire to terminate the Stockholder
Agreement as of the date hereof.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the mutual receipt and legal sufficiency of which the
parties hereto hereby acknowledge, the parties hereby agree as follows:
1. The Stockholder Agreement is hereby terminated effective as of
the date hereof, and, accordingly, neither party thereto shall have any further
rights or obligations thereunder.
2. This Agreement may be executed in counterparts, each of which
shall be an original of this Agreement but all of which, taken together, shall
constitute one and the same Agreement.
3. This Agreement shall be governed by, and construed in accordance
with, the internal laws of the State of Delaware.
<PAGE>
IN WITNESS WHEREOF, UVSG and TCI have duly executed and delivered this
Termination Agreement as of the day and year first above written.
UNITED VIDEO SATELLITE GROUP, INC.
By: /s/ Peter C. Boylan III
---------------------------------------------
Name: Peter C. Boylan III
Title: President and Chief Executive Officer
TELE-COMMUNICATIONS, INC.
By: /s/ Stephen M. Brett
-----------------------------------------------
Name: Stephen M. Brett
Title: Executive Vice President, Secretary and
General Counsel
<PAGE>
EXHIBIT 7(g)
STOCKHOLDERS' AGREEMENT
among
TVG Holdings, Inc.
The News Corporation Limited
TCI UVSG, Inc.
Liberty Media Corporation
Tele-Communications, Inc.
United Video Satellite Group, Inc.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C> <C>
SECTION 1 DEFINITIONS; CERTAIN GENERAL MATTERS................................... 1
1.1 Certain Defined Terms.................................................. 1
---------------------
1.2 Voting; Written Consent................................................ 8
-----------------------
SECTION 2 BOARD OF DIRECTORS..................................................... 8
2.1 Composition............................................................ 8
-----------
2.2 Removal................................................................ 8
-------
2.3 Vacancies.............................................................. 9
---------
2.4 Board of Directors Vote................................................ 9
-----------------------
2.5 Conflicting Charter or Bylaw Provisions................................ 10
---------------------------------------
2.6 Conflicts of Interest.................................................. 10
---------------------
SECTION 3 NON-COMPETE............................................................ 10
SECTION 4 TRANSFERS AND CONVERSIONS.............................................. 11
4.1 Transfer Restrictions Generally........................................ 11
---------------------
4.2 Transfers to Affiliates................................................ 11
---------------------
4.3 Right of First Offer................................................... 12
---------------------
4.4 Right of First Refusal................................................. 14
----------------------
4.5 Terms and Conditions of Sales Pursuant to Sections 4.3 and 4.4......... 21
--------------------------------------------------------------
4.6 Transferee Stockholders................................................ 23
-----------------------
4.7 Qualifying Transfer.................................................... 23
------------------
4.8 Tag-Along Right........................................................ 24
---------------
SECTION 5 STOCKHOLDER VOTE....................................................... 25
SECTION 6 LEGEND................................................................. 25
SECTION 7 REGISTRATION........................................................... 26
7.1 Demand Registrations................................................... 26
--------------------
(a) Requests for Registration.............................................. 26
-------------------------
(b) Number of Demand Registrations......................................... 27
------------------------------
(c) Restrictions on Registrations.......................................... 27
-----------------------------
(d) Underwriting........................................................... 27
------------
(e) Shelf Registration..................................................... 28
------------------
(f) Allocation Among Eligible Holders...................................... 28
---------------------------------
(g) Inclusion of Shares by the Corporation................................. 29
--------------------------------------
7.2 Lockup Agreements...................................................... 29
-----------------
7.3 Registration Procedures................................................ 29
-----------------------
7.4 Expenses............................................................... 31
--------
7.5 Obligations of Requesting Holders Participating in Demand Registration. 31
----------------------------------------------------------------------
7.6 Indemnification and Contribution....................................... 32
--------------------------------
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
Page
<S> <C> <C>
SECTION 8 MISCELLANEOUS......................................................... 34
8.1 Waivers............................................................... 34
-------
8.2 Specific Performance.................................................. 34
--------------------
8.3 Remedies Cumulative................................................... 34
-------------------
8.4 Attorneys' Fees....................................................... 35
---------------
8.5 Execution............................................................. 35
---------
8.6 Notices............................................................... 35
-------
8.7 Severability.......................................................... 37
------------
8.8 Entire Agreement...................................................... 37
----------------
8.9 Binding Effect........................................................ 38
--------------
8.10 Governing Law......................................................... 38
-------------
8.11 Interpretation........................................................ 38
--------------
8.12 Parties............................................................... 38
-------
</TABLE>
ii
<PAGE>
STOCKHOLDERS' AGREEMENT
THIS STOCKHOLDERS' AGREEMENT, dated as of March 1, 1999, is by and among
TVG Holdings, Inc., a Delaware corporation ("News Holdings"), The News
Corporation Limited, a South Australia, Australia corporation ("News Corp."),
TCI UVSG, Inc., a Delaware corporation ("TCI Holdings"), Liberty Media
Corporation, a Delaware corporation, Tele-Communications, Inc., a Delaware
corporation ("TCI"), and United Video Satellite Group, Inc., a Delaware
corporation (the "Corporation"). News Holdings and TCI Holdings are sometimes
collectively referred to herein as the "Initial Stockholders," and each as an
"Initial Stockholder."
RECITALS
A. The Initial Stockholders, in the aggregate, own a majority of the
issued and outstanding shares of Class A Common Stock, par value $.01 per share,
of the Corporation ("Class A Common Stock"), and all of the issued and
outstanding shares of Class B Common Stock, par value $.01 per share, of the
Corporation ("Class B Common Stock" and, together with the Class A Common Stock,
the "Common Stock").
B. The Stockholders desire to express their agreement regarding, among
other matters, their voting and transfer of their shares of Common Stock, upon
the terms and conditions hereinafter provided.
Therefore, in consideration of their mutual promises contained herein, and
intending to be legally bound, the parties agree as follows:
SECTION 1 DEFINITIONS; CERTAIN GENERAL MATTERS
1.1 Certain Defined Terms. As used in this Agreement, the following
---------------------
terms shall have the meanings set forth below.
Affiliate: with respect to any Person, any other Person
that directly or indirectly through one or more
intermediaries Controls, is Controlled by, or is
under common Control with, such Person. For
purposes of this Agreement, neither the
Corporation nor any Person Controlled by the
Corporation shall be deemed to be an Affiliate
of any Stockholder or Participant.
Affiliated Group: with respect to any Person, the Parent of such
Person and each Subsidiary of such Parent
(including such Person).
<PAGE>
Agreement: this Stockholders' Agreement, as amended from
time to time in accordance with its terms.
AT&T Merger: the acquisition of TCI by AT&T Corp. by merger.
AT&T Tracking Stock: a class or series of common stock of AT&T Corp.
that following the AT&T Merger is intended to
track the performance of a group of assets of
AT&T that include its indirect interest in the
Corporation.
Board: the Board of Directors of the Corporation.
Business Day: any day other than a Saturday, Sunday or a day
on which banking institutions in Denver,
Colorado, New York, New York or Tulsa, Oklahoma
are required or authorized to be closed.
Closing Price: of a share of Common Stock on any Trading Day,
(i) the last reported sale price, regular way,
for a share of Class A Common Stock on such
Trading Day as reported on the principal
national securities exchange on which the Class
A Common Stock is listed or admitted for trading
or (ii) if the Class A Common Stock is not
listed or admitted for trading on any national
securities exchange, the last reported sale
price, regular way, for a share of Class A
Common Stock on such Trading Day as reported on
The Nasdaq Stock Market, or (iii) if the Class A
Common Stock is not listed or admitted to
trading on any national securities exchange or
The Nasdaq Stock Market, the average of the
highest bid and lowest asked prices for a share
of Class A Common Stock on such Trading Day in
the domestic over-the-counter market as reported
by the National Quotation Bureau Incorporated,
or any similar successor organization.
Commission: the Securities and Exchange Commission (and any
successor to the functions of such agency).
Control: the ability to direct or cause the direction
(whether through the ownership of voting
securities, by contract or otherwise) of the
management and policies of a Person or to
control (whether affirmatively or negatively and
whether through the ownership of voting
securities, by contract or otherwise) the
2
<PAGE>
decision of such Person to engage in the
particular conduct at issue.
Controlled Affiliate: with respect to any Person, any other Person
that the first Person directly or indirectly
through one or more intermediaries Controls.
For purposes of this Agreement, neither the
Corporation nor any Person Controlled by the
Corporation shall be deemed to be a Controlled
Affiliate of any Stockholder or Participant.
Eligible Stockholder: as of any relevant date, a Stockholder that
then is (or is a member of a Stockholder Group
that then is) entitled to designate at least
one director, but excluding, for purposes of
Section 4, the First Offer Stockholder or
First Refusal Stockholder, as applicable, and
the members of their respective Stockholder
Groups.
Governmental Approval: any consent, approval or authorization of,
notice to declaration of, or filing with, any
Governmental Authority, including expiration
or early termination of all applicable waiting
periods under the HSR Act.
Governmental Authority: means any court, administrative agency or
commission or other governmental agency or
instrumentality, domestic or foreign, or any
arbitrator, of competent jurisdiction.
HSR Act: The Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended, and the rules and
regulations promulgated thereunder.
Independent Director: a director who is unaffiliated with the
Corporation or any Participant and is an
"independent director" within the meaning of
the Nasdaq National Market eligibility
standards set forth in Marketplace Rule
4460(c) of the National Association of
Securities Dealers Manual, as amended, or any
successor rule thereto, or any similar rule of
any securities exchange which in the future
may become the principal market for the Class
A Common Stock of the Corporation.
Indirect Transfer: a Transfer of common stock or other equity
interests of a Stockholder or of a Person of
which such Stockholder is a direct or indirect
Subsidiary to any
3
<PAGE>
Person after giving effect to which the Person
that was such Stockholder's Parent prior to
such Transfer is no longer its Parent;
provided, however, that none of the
-------- -------
following shall be deemed an Indirect Transfer
provided that the new Parent (if any) of the
affected Stockholder becomes a party to this
Agreement as a Participant: (i) a Transfer in
which the holders of voting securities of the
Person that was such Stockholder's Parent
prior to such Transfer beneficially own voting
securities representing fifty percent (50%) or
more of the voting power of the Person that is
such Stockholder's Parent immediately after
such Transfer, (ii) in the case of TCI
Holdings or any other Subsidiary of Liberty
that is a Stockholder, any of the following
that occurs after the AT&T Merger, (x) a
Transfer in which Liberty ceases to be a
Subsidiary of TCI but remains a Subsidiary of
AT&T, (y) a Transfer that is made pursuant to
the Liberty Contribution or (z) a Transfer in
which the holders of AT&T Tracking Stock prior
to such Transfer beneficially own voting
securities representing fifty percent (50%) or
more of the voting power of the Person that is
such Stockholder's Parent immediately after
such Transfer, or (iii) a Transfer in
connection with the sale or other disposition
(including by way of merger, consolidation or
share exchange) of all or substantially all of
the assets of the Parent of such Stockholder.
Liberty: prior to the Liberty Contribution, if any,
Liberty Media Corporation, a Delaware
corporation, and after the Liberty
Contribution, if any, Liberty Media Group LLC,
a Delaware limited liability company, and in
each case any successor (by merger,
consolidation, Transfer or otherwise) to all
or substantially all of Liberty's business and
assets.
Liberty Contribution: the contribution of the assets of Liberty
Media Corporation to Liberty Media Group LLC
pursuant to that certain Contribution
Agreement to be entered into by Liberty Media
Corporation, Liberty Media Group LLC, Liberty
Management LLC and AT&T in connection with the
AT&T Merger.
Lien: means, with respect to any asset, (i) any
mortgage, deed of trust, lien, pledge, charge,
security interest,
4
<PAGE>
easement, covenant, right-of-way, restriction,
equity or encumbrance of any nature whatsoever
in or on such asset, (ii) the interest of a
vendor or a lessor under any conditional sale
agreement, capital lease or title retention
agreement relating to such asset and (iii) in
the case of securities, any purchase option,
call or similar right of a third party with
respect to such securities or any limitation
on the voting rights of such securities.
Market Transaction: a Transfer of shares of Class A Common Stock
in a public offering pursuant to a
registration statement, or in a transaction
with a broker, specialist or market maker, at
a price based on the trading prices of the
Class A Common Stock payable in cash.
Minimum Number: as of any relevant date, 12.5% of the number
of shares of Class B Common Stock outstanding
on such date.
NDS Business: the provision by News Digital Systems plc and
its subsidiaries of technology relating to
electronic program guides solely in
conjunction with the development and sale of
encryption and conditional access services for
television and data broadcasting.
Parent: with respect to any Person as of any relevant
date, such Person if it is its own ultimate
parent entity (within the meaning of the HSR
Act) or if it has no ultimate parent entity
that is a corporation, limited liability
company or partnership; otherwise "Parent"
means such ultimate corporate, limited
liability company or partnership parent
entity; provided, however, that (i) for so
-------- -------
long as News Holdings or any other
Subsidiary of News Corp. that is a Stockholder
is a Subsidiary of News Corp., News Corp.
shall be deemed the Parent of such Stockholder
notwithstanding any change in the stock
ownership of News Corp., (ii) for so long as
TCI Holdings or any other Subsidiary of TCI or
Liberty that is a Stockholder is a Subsidiary
of TCI, TCI shall be deemed the Parent of such
Stockholder notwithstanding any change in the
stock ownership of TCI, (iii) following the
AT&T Merger, if, at any time that TCI Holdings
or any other Subsidiary of Liberty is a
Stockholder, Liberty ceases to be a Subsidiary
of TCI but continues to be a Subsidiary of
AT&T,
5
<PAGE>
Liberty shall be deemed the Parent of TCI
Holdings or such other Subsidiary of Liberty
that is a Stockholder, provided that, in such
case, TCI shall continue to be deemed a
Participant for purposes of Section 3 for so
long as Liberty and TCI are Subsidiaries of
AT&T and Liberty is or is deemed to be the
Parent of a Stockholder, and (iv) following
the Liberty Contribution, Liberty shall be
deemed the Parent of TCI Holdings and any
other Subsidiary of Liberty that is a
Stockholder, provided that, in such case, TCI
shall continue to be deemed a Participant for
purposes of Section 3 for so long as all of
the following conditions are met: (x) TCI is a
Subsidiary of AT&T, (y) a Subsidiary of AT&T
is a member of Liberty and (z) a Subsidiary of
Liberty is a Stockholder.
Parent Agreement: that certain Parent Agreement, dated as of
June 10, 1998, among the Corporation, TCI and
News Corp.
Participants: with respect to any Stockholder (or
Stockholder Group), the Parent of such
Stockholder (or the members of such
Stockholder Group) or such Stockholder if it
is its own Parent. A Participant shall be
deemed to be "related" or "relating" to a
------ --------
Stockholder (or Stockholder Group) if it is a
Parent of such Stockholder (or the members of
such Stockholder Group).
Person: any individual, corporation, partnership,
limited liability company, joint venture,
business association or other entity.
Private Approval: means any consent, approval or authorization
of, notice to, declaration of or filing with,
any Person other than a Governmental
Authority.
Securities Act: the Securities Act of 1933, as amended, and
the rules and regulations of the Commission
promulgated thereunder.
Significant Interest: as to any Transfer of Class B Common Stock by
any Stockholder Group in any single
transaction or series of related transactions,
a number of shares of Class B Common Stock
that represents more than 50% of the number of
such shares held by such Stockholder
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Group immediately prior to such Transfer (or
the first Transfer of such series).
Stockholder: each Initial Stockholder for so long as it
owns shares of Class B Common Stock and any
Person that hereafter becomes a party to this
Agreement pursuant to Section 4.6, for so long
as it owns shares of Class B Common Stock.
Stockholder Group: (i) any Stockholder none of the other members
of the Affiliated Group of which is a
Stockholder and (ii) any group of two or more
Stockholders that are members of the same
Affiliated Group.
Subsidiary: of any Person (the "first Person") means any
other Person a majority of the voting power of
the outstanding voting interests of which are
owned by the first Person and/or one or more
Subsidiaries of the first Person; provided,
--------
however, that (i) for purposes of Section 3
-------
hereof, a Person shall not be deemed to be a
Subsidiary of a Participant unless the
Participant Controls such Person, and (ii) in
each case, such other Person shall be deemed
to be a Subsidiary of the first Person only
for so long as such ownership and, if
applicable, Control exists.
Trading Day: a day on which the principal national
securities exchange on which the Class A
Common Stock is listed or admitted to trading,
or The Nasdaq Stock Market if the Class A
Common Stock is not listed or admitted to
trading on any national securities exchange,
as applicable, is open for the transaction of
business (unless such trading shall have been
suspended for the entire day) or, if the Class
A Common Stock is not listed or admitted to
trading on any national securities exchange or
The Nasdaq Stock Market, any Business Day.
Transfer: to sell, exchange, assign or transfer.
1.2 Voting; Written Consent.
-----------------------
(a) Any agreement by the Stockholders herein to vote their shares
of Common Stock in a certain manner shall be deemed, in each instance, to
include an agreement by each Stockholder to take all actions within its control
necessary to call, or cause the Corporation and the
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appropriate officers and directors of the Corporation to call, as promptly as
practicable, a special or annual meeting of stockholders or to act by written
consent.
(b) When any action is required to be taken by a Stockholder pursuant
to this Agreement, such Stockholder shall take all steps within its control
necessary to implement such action, including executing or causing to be
executed, as promptly as practicable, a consent in writing in lieu of an annual
or special meeting of stockholders pursuant to Section 228 of the Delaware
General Corporation Law or any successor statute thereto ("DGCL") to effect such
stockholder action.
SECTION 2 BOARD OF DIRECTORS
2.1 Composition. At the time of the execution of this Agreement, the
-----------
Board consists of 10 persons, four of whom have been designated on the date
hereof by News Holdings and four of whom have been designated by TCI Holdings.
The remaining two directors, each of whom qualifies as an Independent Director,
were appointed to the Board by the eight directors so designated by the Initial
Stockholders. After the date hereof, unless otherwise agreed by all Eligible
Stockholders, the Board shall continue to consist of ten persons and each
Stockholder Group shall be entitled to designate one individual to serve as a
director for each 12.5% of the outstanding shares of Class B Common Stock owned
in the aggregate by the members of such Stockholder Group (rounded to the
nearest 12.5%, with more than 6.25% being rounded up and 6.25% or less being
rounded down, subject to Sections 4.7 and 4.8). The Board shall designate all
other directors (at least two of whom shall qualify as Independent Directors).
The Stockholder Groups shall make their designations of individuals to serve as
directors prior to each annual meeting of the stockholders of the Corporation in
a manner that is consistent with the Corporation's Certificate of Incorporation
and Bylaws, and any applicable rules and regulations of the Commission and the
principal stock exchange or association on which the Common Stock is listed.
Each Stockholder shall vote all shares of Common Stock owned by it for the
election to the Board of the Persons designated to be directors in accordance
with this Agreement. Any period during which a Stockholder Group is entitled to
designate at least one director pursuant to this Agreement shall be referred to
herein as such Stockholder Group's "Director Eligibility Period."
---------------------------
2.2 Removal. Each Stockholder shall vote all shares of Common Stock
-------
owned by it for the removal from the Board (with or without cause) of any
director who was designated by a Stockholder Group as contemplated by the first
sentence of Section 2.1 or pursuant to this Agreement, if the Stockholder Group
that so designated such director (i) requests such removal by notice to the
other Stockholders or (ii) unless such Stockholder Group has theretofore
complied with the following sentence, ceases to hold a number of shares of Class
B Common Stock that entitles such Stockholder Group to designate the number of
directors previously designated by such Stockholder Group (except that upon any
such reduction in its ownership of shares of Class B Common Stock, such
Stockholder Group shall be entitled to identify a number of directors who shall
not be removed pursuant to this clause (ii) equal to the number of directors
that such Stockholder Group is then entitled to designate pursuant to Section
2.1). A Stockholder Group that ceases to hold a number of shares of Class B
Common Stock that entitles such Stockholder Group to designate the number of
directors previously designated by such Stockholder Group shall cause the
resignation of a number of the directors designated by such Stockholder Group
such that the remaining number
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of designees of such Stockholder Group serving on the Board is equal to the
number of directors that such Stockholder Group is entitled to designate
pursuant to Section 2.1. No director shall be removed from the Board prior to
the expiration of his or her term except for cause or pursuant to this Section
2.2.
2.3 Vacancies. If, as a result of death, disability, retirement,
---------
resignation, removal (with or without cause) or otherwise there shall exist or
occur any vacancy on the Board:
(a) the Stockholder Group entitled to designate (pursuant to Section
2.1, 4.7 or 4.8) the director whose death, disability, retirement, resignation
or removal resulted in such vacancy (other than a Stockholder Group that was
required to cause such resignation) may designate another individual to fill
such vacancy and to serve as a director of the Corporation;
(b) in the case of an Independent Director, the remaining directors
serving on the Board shall designate another individual who if elected would
qualify as an Independent Director to fill such vacancy and to serve as a
director of the Corporation; and
(c) in all other cases, the Stockholder Group that, subject to Section
4.7, is then entitled to designate a greater number of directors under Section
2.1 than the number of directors currently serving on the Board who were
designated by such Stockholder Group may designate another individual to fill
such vacancy and to serve as a director of the Corporation (or if more than one
Stockholder Group is then entitled to designate a greater number of directors,
then each such Stockholder Group may make such designation according to the
number of additional directors that each such Stockholder Group is so entitled
to designate).
Each Stockholder shall vote its respective shares of Common Stock in
favor of the individual designated in accordance with the preceding sentence to
fill such vacancy.
2.4 Board of Directors Vote.
-----------------------
(a) Unless otherwise agreed by the Eligible Stockholders, any
action taken by the Board shall require the affirmative vote of at least seven
of the ten members of the Board; provided, however, that the removal of the
-------- -------
Chief Executive Officer, the President or any Executive Vice President of the
Corporation shall require the affirmative vote of at least six of the ten
members of the Board.
(b) Pursuant to the Bylaws of the Corporation, the Board shall
create an Executive Committee comprised of four of the directors designated by
the Stockholders pursuant to this Agreement. Two directors designated by each of
the Initial Stockholders shall be the initial members of the Executive
Committee. Thereafter the composition of the Executive Committee will be such
that directors designated by a Stockholder Group pursuant to this Agreement will
represent as nearly as may be practicable the same percentage of the four
members of the Executive Committee as they do of the members of the Board
designated by the Eligible Stockholders pursuant to this Agreement. The
Executive Committee shall have such duties and powers (without further action of
the Board) as shall be delegated to such committee from time to time by the
unanimous vote of the
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entire Board; provided, however, that such Executive Committee shall have the
-------- -------
authority to act only by the unanimous vote of the four members of such
committee.
2.5 Conflicting Charter or Bylaw Provisions. Each Stockholder shall
---------------------------------------
vote its shares of Common Stock, and shall take all other necessary actions
within its control necessary, to ensure that the Corporation's Certificate of
Incorporation and Bylaws, as each may be amended from time to time, facilitate
and do not at any time conflict with the provisions of this Agreement.
2.6 Conflicts of Interest. TCI Holdings agrees that it shall cause
---------------------
the directors designated by it to abstain from any decision by the Board to
cause the Corporation to take or refrain from taking any action to enforce its
rights under the Amended and Restated Stock Purchase Agreement between the
Corporation and Liberty, effective as of May 18, 1998. News Holdings agrees
that it shall cause the directors designated by it to abstain from any decision
by the Board to cause the Corporation to take or refrain from taking any action
to enforce its rights under the Share Exchange Agreement among News America
Incorporated, News Holdings and the Corporation, effective as of June 10, 1998.
SECTION 3 NON-COMPETE
Each Participant hereby covenants and agrees with and for the sole
benefit of each other Participant and its related Stockholder Group that the
Corporation will be the exclusive vehicle through which such Participant,
directly or indirectly through its Subsidiaries or Controlled Affiliates,
conducts program guide businesses (print, electronic or otherwise), whether
within or outside the United States, other than the NDS Business; provided,
--------
however, that the provisions of this sentence shall apply only during the
- -------
Director Eligibility Period of the Stockholder Group that is related to such
Participant and only for so long as at least two Participants continue to be
obligated by the covenant made in this sentence. The provision of program
guides to customers of the multichannel video programming delivery ("MVPD")
systems of a Participant or a Subsidiary or Controlled Affiliate of a
Participant shall not be deemed to be the conduct of a program guide business by
such Participant or any of its Subsidiaries or Controlled Affiliates in
violation of its covenant made in this Section 3 regardless of the source of
such program guide, but shall be subject to any contrary provision of any
affiliation or carriage agreement between such Participant, Subsidiary or
Controlled Affiliate, on the one hand, and the Corporation or any of its
Subsidiaries, on the other hand. The parties hereto acknowledge that as of June
10, 1998, the effective date of the Share Exchange Agreement among News America
Incorporated, News Holdings and the Corporation and of the related Parent
Agreement among TCI, News Corp. and the Corporation, British Sky Broadcasting
Group Plc ("BSkyB") was not a Controlled Affiliate of News Corp. News Corp.
agrees, however, that for so long as it is bound by this Section 3, it will vote
or cause to be voted all shares of stock of BSkyB owned by it directly or
through one or more of its subsidiaries against any transactions that would
result in BSkyB conducting any guide business (print, electronic or otherwise),
whether within or outside the United States (other than the provision of guides
to customers of its MVPD systems), to the extent that any such matters are
submitted to a vote of stockholders of BSkyB.
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<PAGE>
SECTION 4 TRANSFERS AND CONVERSIONS
4.1 Transfer Restrictions Generally.
-------------------------------
(a) During a Stockholder Group's Director Eligibility Period,
without the prior written consent of such Stockholder Group, no Stockholder and
no holder of Class A Common Stock that is a party to this Agreement may Transfer
all or any of its shares of Common Stock, and no Indirect Transfer may occur
with respect to such Stockholder or holder (each a "Restricted Holder"), in each
case except in compliance with Section 4.2, 4.3, 4.4 or 4.8 of this Agreement,
and only if the requirements of Section 4.6, if applicable, have also been
satisfied. Any Transfer of shares of Common Stock that is subject to the
preceding sentence shall, unless made in compliance with the preceding sentence,
be null and void, and of no effect. During a Stockholder Group's Director
Eligibility Period, without the prior written consent of such Stockholder Group,
no other Stockholder may convert any shares of Class B Common Stock into shares
of Class A Common Stock except in compliance with Section 4.3 or 4.4, as
applicable, of this Agreement.
(b) Except as expressly permitted by this Agreement, each
Stockholder shall, from and after the date hereof, (i) be the record and
beneficial owner of such shares of Common Stock indicated in the Corporation's
records as being owned by such Stockholder and (ii) have sole voting power with
respect to such Stockholder's shares of Common Stock and will not grant any
proxy with respect to such shares, enter into any voting trust or other voting
agreement or arrangement with respect to such shares or grant any other rights
to vote such shares; provided, however, that the foregoing shall not be
-------- -------
construed to limit the ability of a Stockholder to enter into agreements with
respect to the voting of its shares of Common Stock pending a sale of such stock
permitted by Section 4.4 or 4.8 or to enter into agreements not inconsistent
with this Agreement that restrict such Stockholder's ability to transfer shares
of Common Stock.
(c) The Corporation agrees not to record any Transfer or
conversion of the Common Stock by any Restricted Holder in the stock transfer
books of the Corporation unless the Transfer or conversion complies with all
provisions of this Agreement.
4.2 Transfers to Affiliates. Any Restricted Holder may Transfer all
-----------------------
or any of the shares of Common Stock owned by it to another member of the
Affiliated Group of which such Restricted Holder is a member, provided that, in
each case, the transferee assumes, jointly and severally with the transferor if
less than all of such shares are transferred, the obligations of the transferor
under this Agreement and becomes a party to this Agreement in accordance with
Section 4.6.
4.3 Right of First Offer.
--------------------
(a) If a Restricted Holder (the "First Offer Stockholder")
desires to Transfer all or any portion of the shares of Class A Common Stock
owned by it or issuable upon conversion of shares of Class B Common Stock owned
by it in a Market Transaction, the First Offer Stockholder shall first submit a
written offer (the "Market Offer") to sell the shares so proposed to be sold
(the "Market Shares") to each other stockholder that is an Eligible Stockholder
(the "Market Rightsholders") at a price per share (the "Market Price") payable
in cash equal to the average of the
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<PAGE>
Closing Prices per share of the Class A Common Stock for the five consecutive
Trading Days ending on the Trading Day immediately preceding the date of the
Market Offer (except as otherwise provided in Section 4.5(a)(iii)), and
otherwise on the terms and conditions contained in this Agreement. The Market
Offer shall set forth the aggregate number of Market Shares proposed to be sold
and the number of such shares that would be issued upon conversion of shares of
Class B Common Stock owned by the First Offer Stockholder (such shares of Class
B Common Stock being the "Conversion Shares"), whether such Market Transaction
will be effected through a broker, specialist or market maker or in a registered
public offering and the Market Price. If the Market Transaction is to be
effected in a registered public offering, any other Restricted Holder that
intends to exercise its right under Section 7.1(a) to include any of its shares
of Class A Common Stock in such registered public offering shall submit a Market
Offer with respect to such shares to each Eligible Stockholder within three
Business Days of its receipt of the first Market Offer. A Restricted Holder
referred to in the immediately preceding sentence shall not be entitled to
exercise the rights of a Market Rightsholder with respect to such first Market
Offer.
(i) If a Market Rightsholder desires to accept all or any portion
of the Market Offer, such Market Rightsholder (a "Market Electing Holder")
shall notify the First Offer Stockholder in writing of its intention to
acquire Market Offer Shares and the number of such shares it desires to
acquire and deliver a copy of such notice to each other Market
Rightsholder, such notice to be given (x) in the case of a proposed Market
Transaction to be effected through a broker, specialist or market maker,
within three Business Days of receipt of such Market Offer and (y) in the
case of a proposed registered public offering of Market Shares, within five
Business Days of receipt of the Market Offer.
(ii) If the Market Electing Holders have elected to acquire, in
the aggregate, either (x) all of the Market Shares or (y) a number of
Market Shares that is equal to or greater than the number of Conversion
Shares but less than the number of Market Shares, then the Market Electing
Holders shall have the right to acquire, in the case of clause (x), all but
not less than all of the Market Shares or, in the case of clause (y), all
but not less than all of the Conversion Shares (such shares that the Market
Electing Holders have the right to acquire, the "Allocable Market Shares"),
allocated among them as follows (or in such other manner as the Market
Electing Holders may agree):
(A) the Allocable Market Shares shall be allocated among the
Market Electing Holders pro rata (based on the number of shares of
Class B Common Stock owned by each of them) until all of the
Conversion Shares and then, if applicable, any remaining Allocable
Market Shares have been allocated or any Market Electing Holder has
been allocated the number of Conversion Shares or the number of Market
Shares, as the case may be, that it desires to acquire, as specified
in its notice to the First Offer Stockholder;
(B) if all Allocable Market Shares are not allocated
pursuant to paragraph (A) or any prior application of this paragraph
(B), any Allocable Market Shares that were not so allocated shall be
allocated (with Conversion Shares being allocated first) among the
Market Electing Holders (other than any Market Electing Holder that
has been allocated the number of Conversion
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<PAGE>
Shares and, if applicable, other Market Shares that it desires to
acquire, as specified in its notice to the First Offer Stockholder)
pro rata (based on the number of shares of Class B Common Stock owned
by each of them); and
(C) if all Allocable Market Shares are not allocated
pursuant to paragraph (A) and any prior application of paragraph (B),
then any Allocable Market Shares that were not so allocated shall be
allocated by continuing to apply paragraph (B) as required (with the
Conversion Shares being allocated before any balance of the Allocable
Market Shares).
(b) (i) If the Market Offer is not accepted in full as provided in
Section 4.3(a), the First Offer Stockholder shall have the right to sell the
Market Shares, other than any Allocable Market Shares, beginning on the day
following the last day to accept the Market Offer and (ii) if the purchase of
the Allocable Market Shares is not consummated within the period set forth in
Section 4.5(a) for any reason other than a breach by the First Offer Stockholder
of any of its covenants, representations or warranties that are a condition to
consummation of such purchase, the First Offer Stockholder shall have the right
to sell the Allocable Market Shares beginning on the day following the last day
of the period set forth in Section 4.5(a)(iii) (the applicable of the dates
determined in accordance with clauses (i) and (ii) of this sentence being the
"Free-to-Market Date"), in each case in a Market Transaction and after
conversion of any Conversion Shares into Class A Common Stock. Any Transfer
permitted by the preceding sentence shall be completed by (i) if the Market
Transaction was to be effected through a broker, specialist or market maker, the
fifth Trading Day after the Free-to-Market Date or (ii) if the Market Shares
were to be sold in a registered public offering, the later of (x) the fifth
Trading Day following the Free-to-Market Date or (y) the tenth Trading Day
following the applicable of (A) the date on which the registration statement
filed by the Corporation with respect to such shares becomes effective or (B)
the date on which such registration statement is withdrawn, provided, in the
--------
case of this clause (y), that either (1) prior to or within five Trading Days
after the Free-to-Market Date, the First Offer Stockholder delivers a Demand
Notice pursuant to Section 7.1(a) with respect to the registration of the Market
Shares or Allocable Market Shares, as the case may be (after conversion of any
Conversion Shares) or (2) if another stockholder gives a Demand Notice within
such five Trading Day period, then the First Offer Stockholder timely submits a
written request in response to the corresponding Corporation Notice pursuant to
Section 7.1(a) with respect to the registration of the Market Shares or
Allocable Market Shares, as the case may be (after conversion of any Conversion
Shares). If the First Offer Stockholder has not completed the Transfer of
shares of Class A Common Stock permitted by this Section 4.3(b) during the
applicable period referred to above, the procedures set forth in this Section
4.3 shall be repeated with respect to the Transfer of the balance of such
shares.
4.4 Right of First Refusal.
----------------------
(a) If a stockholder that is a party to this Agreement (the
"First Refusal Stockholder") or its Parent shall receive at any time a bona fide
offer in writing, which the First Refusal Stockholder or its Parent proposes to
accept (a "Bona Fide Offer"), from a Person that is not a member of the
Affiliated Group that includes such First Refusal Stockholder (the "Proposed
Transferee"), to acquire all or any portion of the shares of Common Stock owned
by the First Refusal Stockholder (the "First Refusal Shares"), other than in a
Market Transaction, or to effect an Indirect
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Transfer (in which case the "First Refusal Shares" shall be all the shares of
Common Stock owned by the First Refusal Stockholder), the First Refusal
Stockholder shall deliver to each other stockholder that is an Eligible
Stockholder (the "First Refusal Rightsholders") a notice containing a copy of
the Bona Fide Offer, the identity of the Proposed Transferee and its Parent and
an offer to sell the First Refusal Shares to the First Refusal Rightsholders (a
"First Refusal Offer") on the following terms and otherwise on the terms and
conditions contained in this Agreement: (i) if the Bona Fide Offer contemplates
a purchase of the First Refusal Shares by the Proposed Transferee for
consideration consisting solely of cash, then the First Refusal Stockholder's
offer shall be to sell the First Refusal Shares for cash in an amount equal to
the purchase price specified in, and otherwise on the terms and conditions
contained in, the Bona Fide Offer, and (ii) if the Bona Fide Offer contemplates
an acquisition of the First Refusal Shares by the Proposed Transferee for
consideration any portion of which is not cash or if the Bona Fide Offer
contemplates an Indirect Transfer, then (except as otherwise provided in Section
4.4(e)) the First Refusal Stockholder's offer shall be to sell the First Refusal
Shares for cash in an amount equal to (x) the amount of any cash consideration
plus the fair market value of the noncash consideration or (y) the fair market
value of the First Refusal Shares, as applicable (in each case as determined
pursuant to Section 4.4(c)) and otherwise on the terms and conditions contained
in the Bona Fide Offer. The First Refusal Offer shall specify the price at which
the First Refusal Shares are offered, as provided in the preceding sentence. The
First Refusal Rightsholders shall enter into an appropriate confidentiality
agreement reasonably requested by the First Refusal Stockholder with respect to
the Bona Fide Offer.
(i) If a First Refusal Rightsholder desires to accept all or any
portion of the First Refusal Offer, such First Refusal Rightsholder (a
"First Refusal Electing Holder") shall, within five Business Days of
receipt of such First Refusal Offer, notify the First Refusal Stockholder
in writing of its intention to acquire First Refusal Shares and the number
of such shares it desires to acquire, and deliver a copy of such notice to
each other First Refusal Rightsholder.
(ii) If the First Refusal Electing Holders have elected to
acquire, in the aggregate, all of the First Refusal Shares, then the First
Refusal Electing Holders shall have the right to acquire all the First
Refusal Shares, allocated among them as follows (or in such manner as the
First Refusal Electing Holders may agree), with any shares of Class B
Common Stock included in the First Refusal Shares being allocated first:
(A) the First Refusal Shares shall be allocated among the
First Refusal Electing Holders pro rata (based on the number of shares
of Class B Common Stock owned by each of them) until all of the First
Refusal Shares have been allocated or any First Refusal Electing
Holder has been allocated the number of First Refusal Shares that it
desires to acquire, as specified in its notice to the First Refusal
Stockholder, as it may have been amended pursuant to clause (iii);
(B) if all First Refusal Shares are not allocated pursuant
to paragraph (A) or any prior application of this paragraph (B), any
First Refusal Shares that were not allocated pursuant to paragraph (A)
or any prior application of this paragraph (B) shall be allocated
among the First Refusal Electing Holders (other than any First Refusal
Electing Holder that has been allocated the number of First Refusal
14
<PAGE>
Shares that it desires to acquire, as specified in its notice to the
First Refusal Stockholder, as it may have been amended pursuant to
clause (iii)) pro rata (based on the number of shares of Class B
Common Stock owned by each of them); and
(C) if all First Refusal Shares are not allocated pursuant
to paragraph (A) and any prior application of paragraph (B), any First
Refusal Shares that were not allocated pursuant to paragraph (A) and
any prior application of paragraph (B) shall be allocated by
continuing to apply paragraph (B) as required.
(iii) If the First Refusal Electing Holders have elected to
acquire, in the aggregate, less than all of the First Refusal Shares, then
the First Refusal Stockholder shall so notify the First Refusal Electing
Holders and:
(A) each First Refusal Electing Holder shall have the right,
by written notice given to the First Refusal Stockholder (with a copy
of such notice to each other First Refusal Electing Holder) within two
Business Days after its receipt of the notice from the First Refusal
Stockholder pursuant to this clause (iii) to amend its notice to
increase the number of First Refusal Shares that it elects to
purchase;
(B) if, after giving effect to any amendment to any First
Refusal Electing Holder's notice pursuant to this clause (iii), the
First Refusal Electing Holders have elected to acquire, in the
aggregate, all of the First Refusal Shares, then the First Refusal
Electing Holders shall have the right to acquire all the First Refusal
Shares, allocated among them in accordance with clause (ii); and
(C) if, after giving effect to all amendments to the First
Refusal Electing Holders' notices pursuant to this clause (iii), the
First Refusal Electing Holders have elected to acquire, in the
aggregate, less than all of the First Refusal Shares, then the First
Refusal Stockholder's offer of the First Refusal Shares shall be
deemed rejected as of the last day for a First Refusal Electing Holder
to amend its notice pursuant to this clause (iii).
(b) If (i) the First Refusal Offer is rejected or deemed rejected as
provided in Section 4.4(a), or (ii) the purchase of the First Refusal Shares is
not consummated within the period set forth in Section 4.5(a) for any reason
other than a breach by the First Refusal Stockholder of any of its covenants,
representations or warranties that are a condition to consummation of such
purchase, then the First Refusal Stockholder shall have the right, beginning on
the applicable of (x) the day following the date that the First Refusal Offer is
rejected or deemed rejected or (y) the day following the last day of the period
set forth in Section 4.5(a)(iii) (the applicable of such dates being the "Free-
to-Sell Date"), to enter into a binding agreement to sell all of the First
Refusal Shares to, or to effect the Indirect Transfer with, the Proposed
Transferee, as contemplated by the Bona Fide Offer and on terms and conditions
no less favorable in the aggregate to the First Refusal Stockholder (and, in
the case of an Indirect Transfer, its Parent) than those set forth in the Bona
Fide Offer, and to sell all of the First Refusal Shares to, or to effect the
Indirect Transfer with, the Proposed Transferee, as applicable, pursuant to such
agreement. Any Transfer or Indirect Transfer of First Refusal Shares permitted
by the preceding sentence shall be consummated within ninety days after
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the Free-to Sell Date or such longer period as may have been specified in the
Bona Fide Offer (subject to extension for a maximum of ninety additional days to
the extent required to obtain all required Governmental and Private Approvals).
The First Refusal Stockholder shall, as promptly as practicable and prior to the
closing of such Transfer or Indirect Transfer, provide to the First Refusal
Rightsholders a copy of the binding agreement for such transaction so as to
permit the First Refusal Rightsholders to confirm for themselves that the terms
and conditions of such sale or Indirect Transfer are not less favorable in the
aggregate to the First Refusal Stockholder (and, in the case of an Indirect
Transfer, its Parent) than those set forth in the Bona Fide Offer. If the
Transfer or Indirect Transfer, as applicable, of the First Refusal Shares
permitted by this Section 4.4(b) has not been consummated during the applicable
period referred to above, the procedure set forth in this Section 4.4 shall be
repeated with respect to any subsequent proposed Transfer or Indirect Transfer
of Common Stock by the First Refusal Stockholder.
(c) Before delivering a First Refusal Offer pursuant to Section 4.4(a)
in response to a Bona Fide Offer that contemplates (i) a sale of the First
Refusal Shares in conjunction with other assets, (ii) an acquisition of the
First Refusal Shares by the Proposed Transferee for consideration any portion of
which is not cash or (iii) an Indirect Transfer, the First Refusal Stockholder
and the Eligible Stockholders shall cause (A) if the Bona Fide Offer
contemplates a sale of the First Refusal Shares in conjunction with other
assets, the total consideration specified in the Bona Fide Offer to be allocated
between the First Refusal Shares and such other assets, (B) if the Bona Fide
Offer contemplates an acquisition of the First Refusal Shares by the Proposed
Transferee for consideration any portion of which is not cash or if the Bona
Fide Offer contemplates an Indirect Transfer, the fair market value of the
noncash consideration or of the First Refusal Shares, as applicable, to be
determined, in each case pursuant to this Section 4.4(c):
(i) The First Refusal Stockholder shall deliver to each Eligible
Stockholder a notice stating that the First Refusal Stockholder intends to
deliver a First Refusal Offer to which this Section 4.4 applies and
identifying an appraiser (the "First Appraiser") who has been retained by
the First Refusal Stockholder to allocate the total consideration specified
in the Bona Fide Offer or to conduct an appraisal of the noncash
consideration or of the First Refusal Shares, as applicable, pursuant to
this Section 4.4(c). Within ten Business Days after its receipt of the
First Refusal Stockholder's notice pursuant to the preceding sentence, the
Eligible Stockholder that, together with the other members of its
Affiliated Group, owns the greatest number of shares of Class B Common
Stock, shall send a notice to the First Refusal Stockholder and the other
Eligible Stockholders identifying a second appraiser (the "Second
Appraiser") who shall be retained by the First Refusal Stockholder to make
such allocation or conduct such appraisal, as applicable, pursuant to this
Section 4.4(c); provided that if such Eligible Stockholder fails to so
designate the Second Appraiser, then the First Appraiser shall make such
allocation or conduct such appraisal on its own.
(ii) The First Appraiser and the Second Appraiser shall submit
their independent determinations of the amount of consideration allocable
to the First Refusal Shares or the fair market value of the noncash
consideration or of the First Refusal Shares, as applicable, within thirty
days after the date on which the Second Appraiser is retained. If the
respective determinations of the First Appraiser and the Second Appraiser
vary by less
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than ten percent of the higher determination, the amount of consideration
allocable to the First Refusal Shares or the fair market value of the
noncash consideration or of the First Refusal Shares, as applicable, for
purposes of Section 4.4(a), shall be the average of the two determinations.
(iii) If the respective determinations of the First Appraiser and
the Second Appraiser vary by ten percent or more of the higher
determination, the two appraisers shall promptly designate a third
appraiser (the "Third Appraiser"), who shall be retained by the First
Refusal Stockholder to make an allocation or conduct an appraisal pursuant
to this Section 4.4(c). The First Appraiser and the Second Appraiser shall
be instructed not to, and no party to this Agreement or any member of its
Affiliated Group shall, provide any information to the Third Appraiser as
to the determinations of the First Appraiser and the Second Appraiser or
otherwise influence the Third Appraiser's determination in any way. The
Third Appraiser shall submit its determination of the amount of
consideration allocable to the First Refusal Shares or the fair market
value of the noncash consideration or of the First Refusal Shares, as
applicable, within thirty days after the date on which the Third Appraiser
is retained. If a Third Appraiser is retained, the amount of consideration
allocable to the First Refusal Shares or the fair market value of the
noncash consideration or of the First Refusal Shares, as applicable, for
purposes of Section 4.4 shall equal the average of the two closest of the
three determinations, except that, if the difference between the highest
and middle determinations is no more than 105% and no less than 95% of the
difference between the middle and lowest determinations, then the amount of
consideration allocable to the First Refusal Shares or the fair market
value of the noncash consideration or of the First Refusal Shares, as
applicable, for purposes of Section 4.4(a) shall equal the middle
determination.
(iv) Any appraiser retained pursuant to this Section 4.4(c)
shall be nationally recognized as being qualified and experienced in the
appraisal of assets comparable to the First Refusal Shares and, if
applicable, any other assets proposed to be sold pursuant to the Bona Fide
Offer and shall not be an Affiliate of any party to this Agreement. All
fees and expenses of any appraiser retained pursuant to this Section 4.4(c)
shall be paid by the First Refusal Stockholder, provided that if the First
Refusal Offer is accepted in full, the First Refusal Electing Holders (pro
rata based on the number of First Refusal Shares each is acquiring) shall,
at the closing of the purchase of the First Refusal Shares by the First
Refusal Electing Holders, pay an additional amount to the First Refusal
Stockholder equal in the aggregate to one-half the fees and expenses of
such appraisers.
(v) In determining the fair market value of the noncash
consideration or of the First Refusal Shares, if applicable, each appraiser
retained pursuant to this Section 4.4(c) shall:
(A) assume that the fair market value of the applicable
asset is the price at which the asset would change hands between a
willing buyer and a willing seller, neither being under any compulsion
to buy or sell and each having reasonable knowledge of all relevant
facts;
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(B) assume that the applicable asset would be sold for cash;
and
(C) use valuation techniques then prevailing in the relevant
industry.
(d) If the First Refusal Shares do not include at least the Minimum
Number of shares of Class B Common Stock, or if the Proposed Transferee refuses
to become a party to this Agreement as required by this Section 4.4(d), then
prior to transferring the First Refusal Shares to, or effecting the Indirect
Transfer with, as applicable, a Person that is not an Eligible Stockholder, the
First Refusal Stockholder shall convert all shares of Class B Common Stock
included in the First Refusal Shares to Class A Common Stock. The conversion of
shares of Class B Common Stock to Class A Common Stock pursuant to the foregoing
sentence shall not be subject to the provisions of Section 4.1. If the First
Refusal Shares include at least the Minimum Number of shares of Class B Common
Stock, then the First Refusal Stockholder shall have the right to Transfer such
shares of Class B Common Stock to a Proposed Transferee that is not an Eligible
Stockholder or permit the Indirect Transfer, as applicable, without converting
such shares to Class A Common Stock so long as (i) in the case of a Transfer of
the First Refusal Shares, the Proposed Transferee assumes the obligations of the
First Refusal Stockholder under this Agreement with respect to such shares and
becomes a party to this Agreement in accordance with Section 4.6, and (ii) in
the case of an Indirect Transfer, the Proposed Transferee, upon taking control
of the First Refusal Stockholder, causes the First Refusal Stockholder to
confirm in writing in accordance with Section 4.6 the continuing validity and
effectiveness of its obligations under this Agreement, and (iii) in each case,
the Parent of such Stockholder becomes a party to this Agreement as a
Participant. If the Proposed Transferee receives only shares of Class A Common
Stock, then neither it nor its Parent shall be required to become a party to
this Agreement. In the case of an Indirect Transfer after giving effect to
which the First Refusal Stockholder owns only shares of Class A Common Stock,
the First Refusal Stockholder may elect to continue to be a party to this
Agreement for so long as it owns shares of Class A Common Stock, but shall not
be obligated to, by delivering to the Corporation and the Stockholders written
confirmation thereof in accordance with Section 4.6, in which event such
stockholder shall continue to be subject to the restrictions of this Section 4
and Section 6 and entitled to the benefits of Section 7 in accordance with the
terms of such Sections.
(e) Notwithstanding anything to the contrary in Section 4.4(a), if the
Bona Fide Offer contemplates a transaction that is tax free to the First Refusal
Stockholder or its Parent, as applicable, in whole or to the extent of noncash
consideration received in such transaction, then the First Refusal Stockholder
may require as a condition of its First Refusal Offer that, subject to the
conditions described below, the First Refusal Electing Holder offer it the
option of either Transferring the First Refusal Shares for cash in a taxable
transaction as contemplated by Section 4.4(a) (an "All Cash Transaction") or
effecting a Tax Free Alternative as provided in this Section 4.4(e).
(i) A "Tax Free Alternative" for this purpose means a transaction
(x) in which all or a portion of the consideration to be received by the
First Refusal Stockholder or its Parent, as applicable, is noncash, (y)
that is tax free to the recipient in whole or to the extent of the noncash
consideration received and, in any event, will not result in any tax
liability or loss of tax benefits to the First Refusal Stockholder or its
Parent, as
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applicable, that is more than a de minimis amount greater than that which
would be incurred or lost in the transaction contemplated by the Bona Fide
Offer and (z) in which the noncash consideration is Publicly Traded Stock
(as defined in clause (v) below), the value of which, when added to the
amount of any cash consideration to be paid in the transaction, is at least
equal to the amount of cash that would have been paid for the First Refusal
Shares in the All Cash Transaction. A transaction in which the First
Refusal Electing Holder or its Parent would be required to acquire any
assets or assume any liabilities that it would not have been required to
acquire or assume in the All Cash Transaction shall not constitute a Tax
Free Alternative, except that a transaction in which the First Refusal
Electing Holder, its Parent or another member of its Affiliated Group would
acquire the First Refusal Stockholder (or another member of its Affiliated
Group through which its Parent owns its interest in such First Refusal
Stockholder) (the "Acquired Stockholder") may constitute a Tax Free
Alternative notwithstanding the foregoing if the Acquired Stockholder has
no material assets or liabilities other than its interest in the First
Refusal Shares and its obligations under or pursuant to this Agreement and
the stock of the Acquired Stockholder is not subject to any Liens other
than pursuant to this Agreement.
(ii) A First Refusal Stockholder that desires to exercise its
right to require the option for a Tax Free Alternative shall, in its First
Refusal Offer, propose a structure (the "Proposed Structure") for the
transaction that it reasonably believes satisfies the requirements of a Tax
Free Alternative as specified in clause (i) above and is otherwise
consistent with the requirements of this Section 4.4 and Section 4.5.
(iii) In its response to the First Refusal Offer, a First Refusal
Electing Holder shall either offer the First Refusal Stockholder the option
of engaging in the transaction described in the First Refusal Offer in lieu
of cash, or the option of engaging in an alternative transaction proposed
by the First Refusal Electing Holder in lieu of cash, which transaction
meets the requirements specified above for a Tax Free Alternative (as
evidenced in the case of clause (y) of the definition of Tax Free
Alternative, by an opinion of counsel for the First Refusal Electing Holder
addressed to and reasonably acceptable to the First Refusal Stockholder)
and is otherwise consistent with the requirements of this Section 4.4 and
Section 4.5 (an "Alternative Structure").
(iv) Within five Business Days of receipt by the First Refusal
Stockholder of notice from a First Refusal Electing Holder of its
acceptance of the First Refusal Offer, the First Refusal Stockholder shall
notify the First Refusal Electing Holder of whether it desires an All Cash
Transaction or the Tax Free Alternative. If the First Refusal Stockholder
elects a Tax Free Alternative, the Transfer or Indirect Transfer of the
First Refusal Shares shall be effected in accordance with the Proposed
Structure; provided, however, that if an Alternative Structure was proposed
-------- -------
which does not result in the creation of restrictions or limitations
applicable to the First Refusal Stockholder or its Parent, as applicable,
which are, in the good faith, reasonable judgment of the First Refusal
Stockholder, more onerous to it than those which would result in the
Proposed Structure, then the transaction will be consummated in accordance
with the Alternative Structure.
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(v) The requirement to offer the First Refusal Stockholder a Tax
Free Alternative shall not apply (x) if there is more than one First
Refusal Electing Holder, unless all such First Refusal Electing Holders are
members of the same Affiliated Group, or (y) if none of the First Refusal
Electing Holder, its Parent, and the Subsidiaries through which such Parent
owns such First Refusal Electing Holder have any outstanding class or
series of capital stock that is Publicly Traded Stock. "Publicly Traded
Stock", for purposes of this Section 4.4(e) means capital stock of an
issuer, or depositary receipts (such as ADRs) evidencing an interest in
capital stock of an issuer, that is publicly traded on a national
securities exchange or national securities association (domestic or
foreign) that has at least the same general degree of liquidity as (A) if
the First Refusal Stockholder or its Parent, as applicable, would have
received publicly traded equity securities in the transaction contemplated
by the Bona Fide Offer, such securities or (B) if the Bona Fide Offer did
not contemplate the receipt of publicly traded equity securities, the Class
A Common Stock (in each case, determined by reference to the ability of the
First Refusal Stockholder or its Parent to dispose of such securities,
including the trading volume of such securities and the percentage
ownership by the First Refusal Stockholder or its Parent of the issuer of
such securities). If a Tax Free Alternative is effected, the First Refusal
Electing Holder shall (or shall cause the issuer of such Publicly Traded
Stock to) provide the First Refusal Stockholder or its Parent, as
applicable, with registration rights related to such Publicly Traded Stock
equivalent to those provided with respect to the Class A Common Stock
pursuant to this Agreement. The value of any Publicly Traded Stock for
purposes of clause (z) of the definition of Tax Free Alternative shall
equal on a per share (or per ADR) basis the average of (1) the average for
the five consecutive Trading Days ending on the Trading Day immediately
preceding the closing of the transaction in accordance with Section 4.5 of,
and (2) the average for the five consecutive Trading Days ending on the
Trading Day immediately preceding the date of the First Refusal Offer of,
the last reported sale prices for a share of Publicly Traded Stock (or ADR)
on each such Trading Day (or if no such sale is reported for any Trading
Day, the average of the highest bid and lowest asked prices for a share (or
ADR) on such Trading Day) on the principal national securities exchange or
national securities association on which the Publicly Traded Stock is
listed or admitted for trading.
4.5 Terms and Conditions of Sales Pursuant to Sections 4.3 and 4.4.
--------------------------------------------------------------
(a) Any purchase and sale of Common Stock to another Stockholder
pursuant to Section 4.3 or 4.4 shall be subject to the following terms and
conditions (in addition to, in the case of a purchase and sale pursuant to
Section 4.4, the terms and conditions of the Bona Fide Offer):
(i) The First Offer Stockholder and First Refusal Stockholder
(each, a "Transferring Stockholder") shall represent and warrant that the
Market Electing Holders or First Refusal Electing Holders (each, a
"Purchasing Stockholder"), as the case may be, will receive good and valid
title to the Allocable Market Shares or First Refusal Shares, as applicable
(each, the "Offered Shares"), free and clear of all Liens, of any nature
whatsoever except for Governmental and Private Approvals required for
Transfers of shares of Common Stock generally and except in the case of
First Refusal Shares for any Liens that the Bona Fide Offer contemplated
that the First Refusal Shares would be acquired subject to.
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<PAGE>
(ii) The closing of the purchase and sale shall be subject to the
satisfaction of the following conditions:
(A) all applicable waiting periods under the HSR Act shall
have expired or been terminated;
(B) all Governmental and Private Approvals expressly
required with respect to the transactions to be consummated at such
closing shall have been obtained, to the extent the failure to obtain
such approvals would prevent the Transferring Stockholder from
performing any of its material obligations under the transaction
documents or would result in any material adverse change in, or
material adverse effect on, the Corporation;
(C) there shall be no preliminary or permanent injunction or
other order by any court of competent jurisdiction restricting,
preventing or prohibiting the consummation of the transactions to be
consummated at such closing; and
(D) the representation and warranty of the Transferring
Stockholder contemplated by clause (i) of this sentence shall be true
and correct at the closing of such sale with the same force and effect
as if then made.
(iii) Unless otherwise agreed by the applicable parties, the
closing of any direct or indirect purchase and sale of Common Stock
pursuant to Section 4.3 or 4.4 shall take place at the principal executive
offices of the Company at 10:00 a.m. local time on a Business Day selected
by the Stockholders that will be purchasers at such closing, provided that
such closing shall occur as promptly as practicable, and in any event (x)
in the case of a Market Offer with respect to a proposed Market Transaction
to be effected through a broker, specialist or market maker, within two
Business Days after the last day to accept such Offer (subject to extension
as provided in the following sentence), (y) in the case of a First Refusal
Offer with respect to a Bona Fide Offer that specifies a period of time
within which closing of the transaction contemplated by such Bona Fide
Offer shall occur, within such specified period following the acceptance in
full of such Offer (provided that if notification under the HSR Act would
be required and the period specified in such Bona Fide Offer is shorter
than the period determined in accordance with clause (z) below, then clause
(z) shall apply to such Offer in lieu of this clause (y)) and (z) in the
case of any other Offer, within twenty Business Days after acceptance in
full of such Offer, subject in the case of this clause (z) to extension for
a maximum of ninety additional days to the extent required to obtain all
required Governmental Approvals. Notwithstanding the foregoing, in the
case of a Market Offer with respect to a proposed Market Transaction to be
effected through a broker, specialist or market maker, if any of the Market
Shares are to be issued upon conversion of Conversion Shares and the
acquisition of such Conversion Shares by the Purchasing Stockholder would
require notification under the HSR Act, then the date by which the closing
of such purchase shall occur shall be subject to extension for up to a
maximum of ninety additional days to the extent required to satisfy the
closing condition set forth in Section 4.5(a)(ii)(A); provided, however,
-------- -------
that in the event of any such extension, the purchase price per share
payable by the
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Purchasing Stockholder shall be equal to the average of the Closing Prices
per share of the Class A Common Stock for the five consecutive Trading Days
ending on the Trading Day immediately preceding the closing date; provided,
--------
further, however, that if the purchase price determined in accordance with
------- -------
the preceding proviso clause is less than the Market Price contemplated by
the Market Offer, then the Transferring Stockholder shall have the right to
withdraw its offer and terminate the sale of the Offered Shares unless the
Purchasing Stockholder agrees to pay the higher Market Price per share.
(iv) Unless otherwise agreed by the applicable parties or
provided in Section 4.4(e), the purchase price shall be payable by wire
transfer of same day funds or by certified or cashier's check, as specified
by the Transferring Stockholder. Except as otherwise provided in Section
4.4(e), the Transferring Stockholder shall deliver to each Purchasing
Stockholder a certificate or certificates evidencing the Offered Shares
being purchased by it, duly endorsed for transfer to such Purchasing
Stockholder against payment of such purchase price. The Purchasing
Stockholders shall be severally, but not jointly, responsible and liable
for the purchase of their respective portions of the Offered Shares;
provided, however, that the Transferring Stockholder shall not be obligated
-------- -------
to consummate the sale of any Offered Shares unless the sale of all Offered
Shares is then being consummated.
(b) In furtherance of the rights set forth in Sections 4.3 and 4.4,
the Corporation and each other Eligible Stockholder agrees that, on reasonable
notice following the delivery of an Offer, at reasonable times and without
interfering with the business or operations of the Corporation, it will use
commercially reasonable efforts to assist the Transferring Stockholder and its
Parent and, if the Transfer or Indirect Transfer is to or with another
Stockholder, the Purchasing Stockholder and its Parent, if applicable, in
obtaining all necessary Governmental and Private Approvals to any Transfer or
Indirect Transfer of the Offered Shares, including making qualified personnel
available for attending hearings and meetings respecting any consents, approvals
and authorizations required for such Transfer and, at the request of the
Transferring Stockholder, making all filings with, and giving all notices to,
third parties and Governmental Authorities that may be necessary or reasonably
required to be made or given by the Corporation or such Stockholders in order to
effect the contemplated Transfers. The Transferring Stockholder shall reimburse
the Corporation and such other Eligible Stockholders for any out-of-pocket
expenses incurred by them in connection with the foregoing actions; provided,
--------
however, that in the case of a Transfer to a Purchasing Stockholder pursuant to
- -------
a Market Offer, such Purchasing Stockholder shall be responsible for such
reimbursement and, in the case of a Transfer to a Purchasing Stockholder
pursuant to a First Refusal Offer, unless the Bona Fide Offer provides
otherwise, the Transferring Stockholder and the Purchasing Stockholder shall
each be responsible for one-half such expenses. Subject to the other provisions
of this Section 4, no Stockholder shall take any action to delay, impair or
impede the receipt of any required consents, approvals or authorizations.
"Commercially reasonable efforts" as used in this Section 4 shall not require
any party to undertake extraordinary or unreasonable measures to obtain any
consents, approvals or other authorizations, including requiring such party to
make any material expenditures (other than normal filing fees or the like) or to
accept any material changes in the terms of the contract, license or other
instrument for which a consent, approval or authorization is sought.
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4.6 Transferee Stockholders. Any transferee of a Transferring
-----------------------
Stockholder required to become a party to this Agreement pursuant to Section 4.2
or 4.4(d) shall execute and deliver to the Corporation (which shall promptly
send notice thereof to the stockholders that are parties to this Agreement) an
agreement substantially in the form of Exhibit A to be bound as a party to this
Agreement. No further action by the Corporation, such transferee or the parties
hereto shall be required for such person to become a party to this Agreement.
Following any Indirect Transfer permitted by this Agreement, the stockholder
with respect to which such Indirect Transfer has occurred shall confirm to the
Corporation and the Stockholders in writing the continuing validity and
effectiveness of its obligations under this Agreement if required by Section
4.4(d) or if such stockholder has elected to continue to be so bound as
permitted by such Section.
4.7 Qualifying Transfer. In the event that pursuant to a Transfer of
-------------------
Class B Common Stock made in accordance with the provisions of this Agreement (a
"Qualifying Transfer") any transferee that was not a Stockholder or member of a
Stockholder Group immediately prior to such Transfer acquires 12.5% or more of
the outstanding shares of Class B Common Stock (a "Director Eligible
Transferee"), such Director Eligible Transferee shall be entitled, upon the
consummation of the acquisition of such shares of Class B Common Stock, to
designate one representative as a director on the Board for each 12.5% of the
outstanding shares of Class B Common Stock acquired by such Director Eligible
Transferee pursuant to such Qualifying Transfer (with more than 6.25% rounded up
to the nearest 12.5% if (but only if) the resulting number of directors that the
Director Eligible Transferee would be entitled to designate does not exceed the
number of directors that the Transferring Stockholder's Stockholder Group is
required to cause to resign in accordance with Section 2.2). In the event that
pursuant to a Qualifying Transfer, a Stockholder Group acquires a sufficient
number of additional shares of Class B Common Stock that after giving effect to
such acquisition such Stockholder Group would be entitled pursuant to Section
2.1 (before giving effect to the reference therein to this Section 4.7) to
designate a greater number of directors than the number of directors currently
serving on the Board that were designated by such Stockholder Group (such
Stockholder Group's "Current Designees"), then upon the consummation of the
acquisition of such shares of Class B Common Stock, such Stockholder Group shall
be entitled to designate such number of additional Persons (each an "Additional
Director") to serve as directors that when added to its Current Designees will
equal one director for each 12.5% of the outstanding shares of Class B Common
Stock owned by such Stockholder Group, with more than 6.25% being rounded up and
6.25% or less being rounded down, except that no such rounding up shall occur if
the resulting number of Additional Directors that such Stockholder Group would
be entitled to designate would exceed the number of directors that the
Transferring Stockholder's Stockholder Group is required to cause to resign in
accordance with Section 2.2.
4.8 Tag-Along Right.
---------------
(a) If a First Refusal Stockholder proposes to Transfer to a
Proposed Transferee, in any one transaction or series of related transactions,
First Refusal Shares that include a Significant Interest, then the First Refusal
Stockholder shall make provision whereby each First Refusal Rightsholder that
elects to participate in such sale as provided below (each Rightsholder making
such election, a "Participating Stockholder") will have the right, if the First
Refusal Offer is rejected or deemed rejected as provided in Section 4.4(a) and
the sale by the First Refusal Stockholder to the Proposed Transferee is to
occur, to sell to the Proposed Transferee, as a condition
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to such sale, at the same price per share and on the same terms and conditions
provided for in the Bona Fide Offer for such sale by the First Refusal
Stockholder, up to the number of shares of Class B Common Stock that is equal to
the product of (i) the number of shares of Class B Common Stock subject to the
Bona Fide Offer, multiplied by (ii) a fraction, the numerator of which is the
total number of shares of Class B Common Stock owned by such Participating
Stockholder at the time of the Bona Fide Offer, and the denominator of which is
the sum of the total number of shares of Class B Common Stock owned by all
Participating Stockholders and the First Refusal Stockholder at the time of the
Bona Fide Offer. If any First Refusal Rightsholder wishes to exercise its right
pursuant to the preceding sentence, it shall deliver to the First Refusal
Stockholder a written election to exercise such right, which election shall
state the number of shares of Class B Common Stock such First Refusal
Rightsholder desires to sell and shall be delivered to the First Refusal
Stockholder within five Business Days of such First Refusal Rightsholder's
receipt of the First Refusal Offer. The Participating Stockholders may
participate in the sale of Common Stock to the Proposed Transferee pursuant to
this Section 4.8 without first complying with Section 4.4. The number of shares
of Class B Common Stock that the First Refusal Stockholder may sell to the
Proposed Transferee shall be reduced by the number of shares being sold by the
Participating Stockholders pursuant to this Section 4.8(a).
(b) If any First Refusal Rightsholder exercises its rights pursuant to
Section 4.8(a) in connection with a Qualifying Transfer, the Director Eligible
Transferee in such Qualifying Transfer shall be entitled to designate the same
number of directors that it would have been entitled to designate had it
purchased the shares of Class B Common Stock solely from the Transferring
Stockholder and, if the aggregate number of directors the Transferring
Stockholder and the Participating Stockholders are required to cause to resign
pursuant to Section 2.2 hereof is less than such number, then the Transferring
Stockholder or a Participating Stockholder (determined as provided below) shall
be required to cause an additional designee to resign in order to permit the
Director Eligible Transferee to designate the number of directors which it is
entitled to designate as a result of such Qualifying Transfer. If the number of
directors that the Transferring Stockholder or a Participating Stockholder would
be entitled to designate following the Qualifying Transfer includes a director
as a result of rounding up to the nearest 12.5% in accordance with Section 2.1
(without regard to the reference therein to this Section 4.8) (a "Rounding
Stockholder"), then the Rounding Stockholder whose percentage of the Class B
Common Stock after giving effect to the Qualifying Transfer when divided by 12.5
yields a number that includes a decimal that is closer to .5 than any other
Rounding Stockholder's percentage of the Class B Common Stock shall be the
Stockholder required to cause an additional designee to resign in accordance
with the preceding sentence. If more than one Rounding Stockholder would be
required to cause an additional designee to resign in accordance with the
preceding sentence and one of such Rounding Stockholders is the Transferring
Stockholder, then the Transferring Stockholder shall be the Stockholder required
to cause an additional designee to resign in accordance with this Section
4.8(b).
SECTION 5 STOCKHOLDER VOTE
Except as otherwise specifically provided herein, for so long as there
continues to be at least two Stockholder Groups the members of each of which own
in the aggregate thirty percent or more of the outstanding Class B Common Stock
(each such Stockholder Group, a "Shared Control Group"), the members of each
such Shared Control Group shall vote the shares of Common Stock
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<PAGE>
owned by them with respect to any proposal submitted to a vote of stockholders
of the Corporation only as shall be mutually agreed upon by such members and the
members of each other Shared Control Group. In the absence of any such mutual
agreement, the members of each Shared Control Group shall vote their shares of
Common Stock against such proposal. The provisions of this Section 5 shall
terminate at such time as there first is either no Stockholder Group the members
of which own in the aggregate at least thirty percent of the outstanding Class B
Common Stock or only one such Stockholder Group.
SECTION 6 LEGEND
Each certificate evidencing any of the shares of Common Stock owned by
a stockholder that is a party to this Agreement shall bear a legend
substantially as follows:
"The shares represented by this certificate are subject to
restrictions on transfer and may not be sold, exchanged,
assigned, transferred or otherwise disposed of except in
accordance with and subject to all the terms and conditions of a
certain Stockholders' Agreement, dated as of _______, 1999, a
copy of which the Corporation will furnish to the holder of this
certificate upon request and without charge."
Upon surrender to the Corporation of certificates evidencing shares of
Class A Common Stock transferred in compliance with this Agreement, other than
to a stockholder who is a party to this Agreement, the Corporation shall reissue
such certificates to the owner thereof without such legend. In the event of an
Indirect Transfer effected in compliance with this Agreement after giving effect
to which the affected stockholder and the members of its Affiliated Group own
only shares of Class A Common Stock and have not elected to continue to be bound
by this Agreement as contemplated by Section 4.4(d), then upon surrender to the
Corporation of the certificates evidencing such shares of Class A Common Stock,
the Corporation shall reissue such certificates to the affected stockholder
without such legend. Upon termination of this Agreement and surrender to the
Corporation of certificates evidencing shares of Class A Common Stock or Class B
Common Stock, the Corporation shall reissue such certificates to the owner
thereof without such legend.
SECTION 7 REGISTRATION
7.1 Demand Registrations.
--------------------
(a) Requests for Registration. At any time after the date which
-------------------------
is six months after the date of this Agreement, any stockholder of the
Corporation which is a party to this Agreement may request that the Corporation
effect the registration under the Securities Act for sale in the manner
specified in such request of all or part of its shares of Class A Common Stock
(including shares of Class A Common Stock issuable upon conversion of shares of
Class B Common Stock), provided that such stockholder has given a Market Offer
--------
with respect to such shares pursuant to Section 4.3. Such request shall be made
by furnishing written notice thereof (a "Demand Notice") to the Corporation
setting forth the number of shares of Class A Common Stock requested to be
registered and such stockholder's preferred method of distribution. Within ten
days after receipt of any Demand Notice, the Corporation shall give written
notice of such Demand Notice to all other
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stockholders who are parties to this Agreement. Following receipt of notice from
the Corporation of a Demand Notice (the "Corporation Notice"), each such other
stockholder may give the Corporation a written request to include any or all of
such stockholder's Class A Common Stock (including shares of Class A Common
Stock issuable upon conversion of shares of Class B Common Stock) in the
registration described in the Corporation Notice, provided that such written
--------
request is given within ten days after the date on which the Corporation Notice
is given (with such request stating (i) the number of shares of Class A Common
Stock to be so included, (ii) such other stockholder's preferred method of
distribution of such shares and (iii) any other information that the Corporation
Notice reasonably requests be included in such notice from such stockholder),
and provided, further, that such stockholder has given a Market Offer with
-------- -------
respect to such shares pursuant to Section 4.3. All registrations requested
pursuant to this Section 7.1 are referred to herein as "Demand Registrations"
and all stockholders requesting registration of their shares pursuant to this
Section 7.1(a) are referred to herein as "Requesting Holders". The Corporation
shall not be required to effect a Demand Registration unless the aggregate
number of shares of Class A Common Stock demanded to be so registered and as to
which the Market Offer has not been accepted in accordance with Section 4.3(a)
is at least one percent of the number of shares of Class A Common Stock then
outstanding (the "Minimum Condition"). If the Minimum Condition is met, then,
subject to Sections 7.1(b), 7.1(c) and 7.1(f) below, the Corporation shall, as
soon as practicable following the last day that notice of acceptance of the
applicable Market Offer may be given in accordance with Section 4.3(a)(i), file
with the Commission and use all commercially reasonable efforts to cause to
become effective as promptly as practicable, a registration statement on a form
applicable to the sale of securities to the general public which shall cover the
shares of Class A Common Stock requested to be registered pursuant to such
Demand Notices. The Corporation shall not be required to effect any Demand
Registration for a stockholder after such time as such stockholder and the other
members of its Affiliated Group are able to sell all shares of Class A Common
Stock (including shares of Class A Common Stock issuable upon conversion of
shares of Class B Common Stock) owned by them without restriction (including any
volume limitation) under the Securities Act.
(b) Number of Demand Registrations. Once a Demand Registration has
------------------------------
been effected, the Corporation shall not be obligated to register Class A Common
Stock pursuant to another Demand Registration prior to the expiration of twelve
months from the date on which the previous Demand Registration was declared
effective; provided, however, that a registration will not count as a Demand
-------- -------
Registration unless it has become effective, and such effectiveness has been
maintained under the Securities Act (and not subject to any stop order,
injunction or other order or requirement of the Commission or other Governmental
Authority for any reason) for the period specified in Section 7.3(a). Each
Requesting Holder may, before any registration statement becomes effective,
withdraw its shares of Class A Common Stock from inclusion therein if the terms
of the proposed distribution are not satisfactory to such Requesting Holder. If
after giving effect to such withdrawal or withdrawals of shares from a Demand
Registration the Minimum Condition would no longer be satisfied, then such
registration statement shall be withdrawn. A registration that is withdrawn
prior to effectiveness at the request of the Requesting Holders that demanded
such Demand Registration will not count as a Demand Registration.
(c) Restrictions on Registrations. The Corporation may postpone for
-----------------------------
up to 90 days after its receipt of a Demand Notice the filing of a registration
statement for a Demand Registration if the Corporation reasonably believes that
such Demand Registration would have a
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material adverse effect on any proposal or plan by the Corporation or any of its
Subsidiaries to engage in any financing, acquisition of assets (other than in
the ordinary course of business) or any merger, consolidation, tender offer or
other significant transaction and notifies the Requesting Holders in writing of
such postponement; provided that the Corporation shall have the right to so
--------
postpone such filing or effectiveness only one time during any period of twelve
consecutive months.
(d) Underwriting.
------------
(i) Subject to Section 7.1(e), the distribution of the Class A Common
Stock covered by the Demand Registration shall be effected by means of a firm
commitment underwriting, and the right of any Requesting Holder to registration
pursuant to this Section 7 shall be conditioned upon such Requesting Holder's
participation in such underwriting and the inclusion of such Requesting Holder's
Class A Common Stock in the underwriting (unless otherwise mutually agreed by a
majority in interest of the other Requesting Holders) to the extent provided
herein. The Corporation (together with all Requesting Holders proposing to
distribute their Class A Common Stock through such underwriting) shall enter
into an underwriting agreement in customary form with a managing underwriter of
nationally recognized standing selected for such underwriting by the Corporation
with the approval of the Requesting Holder that has included the largest number
of shares in the Demand Registration, such approval not to be withheld
unreasonably. No Requesting Holder may participate in any Demand Registration
unless such Requesting Holder (A) agrees to sell its Class A Common Stock on the
basis provided in such underwriting agreement and (B) completes and executes all
questionnaires, powers of attorney, indemnities and other documents required
under the terms of such underwriting agreement.
(ii) Notwithstanding any other provision of this Section 7,
if the managing underwriter advises the Corporation and the Requesting Holders
in writing that marketing factors require a limitation of the number of shares
to be underwritten, then the managing underwriter may exclude shares requested
to be included in such Demand Registration. The number of shares of Class A
Common Stock that may be included in the Demand Registration and underwriting
shall be allocated among the Requesting Holders in accordance with the
provisions of Section 7.1(f). No Class A Common Stock excluded from the
underwriting by reason of the managing underwriter's marketing limitation shall
be included in such Demand Registration.
(iii) If any Requesting Holder participating in a Demand
Registration disapproves of the terms of the underwriting, such person may elect
to withdraw therefrom by written notice to the Corporation, the managing
underwriter and the other Requesting Holders. If by such withdrawal a greater
number of shares of Class A Common Stock held by other Requesting Holders may be
included in such Demand Registration (up to the maximum of any limitation
imposed by the managing underwriter), then the Corporation shall offer to all
Requesting Holders participating in the Demand Registration the right to include
additional shares of Class A Common Stock, which additional shares shall be
allocated among the Eligible Holders who have requested registration in
accordance with the provisions of Section 7.1(f).
(e) Shelf Registration. If at the time of a Demand Notice, the
------------------
Corporation is eligible to file a registration statement on Form S-3 (or any
equivalent successor form), then Requesting Holders who hold at least 51% of the
shares of Class A Common Stock which are to be
27
<PAGE>
included in a Demand Registration may request that the Demand Registration be
effected pursuant to a shelf registration under Rule 415 of the Securities Act
(or successor rule or regulation); provided, however, that (i) if the
-------- -------
Corporation shall reasonably determine, after consultation with an independent
investment banking firm of nationally recognized standing, that such method of
distribution would adversely affect the public market for the Class A Common
Stock, then the Corporation shall not be obligated to effect the Demand
Registration pursuant to such method of distribution, (ii) during the term of
any such shelf registration, the Corporation may require from time to time that
the Requesting Holders refrain from selling pursuant to such registration
statement under the circumstances, in the manner and for the time period
described in Section 7.1(c), and (iii) the Corporation shall not be required to
keep such shelf registration statement effective for a period greater than
twelve months.
(f) Allocation Among Eligible Holders. If the managing underwriter
---------------------------------
imposes a limit on the number of shares of Class A Common Stock to be included
in the Demand Registration, then each Requesting Holder shall have the right to
include in such Demand Registration up to its pro rata share (based on the ratio
that the number of shares of Class A Common Stock proposed to be sold by it
bears to the total number of shares of Class A Common Stock proposed to be sold
by all Requesting Holders) of the maximum number of shares permitted by the
managing underwriter to be included in the Demand Registration (the "Maximum
Amount").
(g) Inclusion of Shares by the Corporation. If the managing
--------------------------------------
underwriter has not limited the number of shares of Class A Common Stock to be
underwritten or if the number of shares which the Requesting Holders have
requested to be registered is less than the Maximum Amount, then the Corporation
may include securities for its own account or for the account of others in such
Demand Registration if the managing underwriter so agrees and if the number of
shares of Class A Common Stock held by Requesting Holders which would otherwise
have been included in such Demand Registration and underwriting will not thereby
be limited. The inclusion of such shares shall be on the same terms as the
registration of shares held by the Requesting Holders. In the event that the
managing underwriter excludes some of the securities to be registered, the
securities to be sold for the account of the Corporation and any other holders
shall be excluded in their entirety prior to the exclusion of any shares of
Class A Common Stock of the Requesting Holders.
7.2 Lockup Agreements. Each Requesting Holder agrees not to effect
-----------------
any public sale or other distribution of Class A Common Stock during the seven
days prior to the effective date of any Demand Registration or during the 180-
day period (or such shorter period as the managing underwriter may require)
beginning on such effective date (except in either case as part of such Demand
Registration), unless the managing underwriter otherwise agrees. The
Corporation agrees not to effect any public sale or other distribution of Class
A Common Stock during the seven days prior to the effective date of any Demand
Registration or during the 180-day period (or such shorter period as the
managing underwriter may require) beginning on such effective date (except in
either case as part of such Demand Registration or pursuant to registrations on
Form S-8 or any successor form), unless the managing underwriter otherwise
agrees; provided, however, that such restriction shall not extend to the
-------- -------
issuance or distribution of shares of Class A Common Stock upon conversion of
convertible securities. Each Requesting Holder understands that stop transfer
instructions may be given to the Corporation's transfer agent to prevent
transfers restricted by this Section 7.2 during the applicable period of such
restriction.
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<PAGE>
7.3 Registration Procedures. Whenever the Corporation is obligated
-----------------------
by the provisions of this Agreement to effect a registration of any shares of
Class A Common Stock under the Securities Act, the Corporation shall use
commercially reasonable efforts to effect such registration so as to permit the
sale of the shares of Class A Common Stock covered thereby in accordance with
the intended method of disposition thereof, and pursuant thereto the Corporation
will as expeditiously as possible:
(a) prepare and file with the Commission a registration statement with
respect to such shares and use all commercially reasonable efforts to cause such
registration statement to become and remain effective for such period as may be
reasonably necessary to effect the sale of such securities, not to exceed ninety
days (or, in the case of a shelf registration pursuant to Section 7.1(e), twelve
months);
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective
until the sooner to occur of the sale of all such shares or the ninetieth day
following the effective date of such registration statement (or, in the case of
a shelf registration pursuant to Section 7.1(e), the day twelve months following
the effective date) and comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such registration
statement during such period in accordance with the intended methods of
disposition by the sellers thereof set forth in such registration statement;
(c) furnish to each Requesting Holder participating in such Demand
Registration and the underwriters such number of copies of such registration
statement (with exhibits), each amendment and supplement thereto, the prospectus
included in such registration statement (including each preliminary prospectus)
and each supplement thereto and such other documents as such seller or
underwriters may reasonably request in order to facilitate the sale of the
shares being sold;
(d) use all reasonable efforts to register or qualify the shares being
sold under such other securities or blue sky laws of such jurisdictions in the
United States as any seller reasonably requests, to the extent such registration
or qualification may be required by applicable law, and do any and all other
acts and things which may be reasonably necessary or advisable to enable such
seller to consummate the disposition in such jurisdictions of the shares owned
by such seller; provided, however, that the Corporation will not be required to
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(i) qualify generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this subparagraph, (ii) conform its
capitalization or the composition of its assets to the securities or blue sky
laws of such jurisdictions, (iii) consent to general service of process in any
such jurisdiction, (iv) take any action that would subject it to service of
process in suits other than those arising out of the offer and sale of the
shares registered by the Demand Registration, or (v) to subject itself to
taxation in any jurisdiction where it has not theretofore done so;
(e) cause all such shares to be listed or authorized for quotation on
each securities exchange or automated quotation system on which similar
securities issued by the Corporation are then listed or quoted;
29
<PAGE>
(f) notify each seller of such shares promptly after it shall receive
notice thereof, of the time when such registration statement (or any post-
effective amendment thereto) has become effective and, when the filing of a
post-effective amendment to such registration statement or a supplement to any
prospectus forming part of such registration statement is required, when the
same is filed;
(g) notify each seller of such shares of any request by the Commission
for the amending or supplementing of such registration statement or prospectus
or for additional information;
(h) prepare and file with the Commission, promptly upon the request of
any seller of such shares, any amendments or supplements to such registration
statement or prospectus which, in the opinion of counsel selected by the holders
of a majority of the shares being registered, is required under the Securities
Act in connection with the distribution of shares by such seller;
(i) notify each seller of shares when the Corporation becomes aware of
the happening of any event as a result of which the prospectus (as then in
effect) contains any untrue statement of a material fact or omits to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, and prepare and
promptly file with the Commission each amendment or supplement to such
registration statement or prospectus as may be necessary to correct any
statements or omissions if, at the time when a prospectus relating to such
securities is required to be delivered under the Securities Act, any event shall
have occurred as the result of which any such registration statement or
prospectus as then in effect would include an untrue statement of a material
fact or omit to state any material fact necessary to make the statements
therein, in the light of the circumstances in which they were made, not
misleading;
(j) advise each seller of such shares, promptly after it shall receive
notice or obtain knowledge thereof, of the issuance of any stop order by the
Commission suspending the effectiveness of such registration statement or the
initiation or threatening of any proceeding for such purpose and promptly use
commercially reasonable efforts to prevent the issuance of any stop order or to
obtain its withdrawal if such stop order should be issued; and
(k) if applicable, make available to the seller of such shares a
consolidated earnings statement (which need not be audited) satisfying the
provisions of Section 11(a) of the Securities Act beginning within six months
after the effective date of each registration statement, which statements shall
cover the 12-month period described in such Section 11(a), provided, however,
-------- -------
that the Corporation shall be deemed to have complied with this clause (k) if it
has complied with Rule 158 promulgated under the Securities Act.
7.4 Expenses. Each Requesting Holder that participates in a Demand
--------
Registration (including a Demand Registration that is withdrawn prior to
becoming effective) shall pay all underwriting discounts and commissions and any
transfer taxes attributable to the sale of such Requesting Holder's shares, the
fees and expenses of counsel for such Requesting Holder, and any other out-of-
pocket expenses of such Requesting Holder incurred in connection with its
participation in such Demand Registration. The Corporation shall pay all
expenses connected with the registration
30
<PAGE>
or qualification of such shares for sale, including the registration fee,
listing fees, the fees of its counsel and accountants and any printing costs. To
the extent that the Corporation has included shares in a Demand Registration
pursuant to Section 7.1(g), the Corporation shall pay all underwriting discounts
and commissions and any transfer taxes attributable to the sale of such shares
so included by the Corporation.
7.5 Obligations of Requesting Holders Participating in Demand
---------------------------------------------------------
Registration. Each Requesting Holder agrees to furnish to the Corporation such
- ------------
written information concerning such Requesting Holder as may reasonably be
requested by the Corporation which is necessary in connection with any Demand
Registration, and each Requesting Holder agrees to otherwise cooperate with the
Corporation in connection with any Demand Registration. Each Requesting Holder
participating in a Demand Registration agrees to comply with all applicable laws
relating to the offer and sale of the Class A Common Stock, including, to the
extent applicable, Regulation M under the Securities Exchange Act of 1934, as
amended.
7.6 Indemnification and Contribution.
--------------------------------
(a) In the event that the Corporation effects a registration of any
shares owned by a Requesting Holder, such Requesting Holder shall indemnify and
hold the Corporation, and each of its directors and officers and each person, if
any, who controls the Corporation within the meaning of the federal securities
laws (the "Corporation Indemnified Parties") harmless against all losses,
liabilities and expenses of any nature whatsoever which the Corporation
Indemnified Parties may incur as a result of or arising out of or based upon any
untrue statement or alleged untrue statement of a material fact contained in the
registration statement filed by the Corporation, including any prospectus
contained in such registration statement, and any amendment or supplement
thereto (including post-effective amendments) or as a result of or arising out
of or based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, which untrue statement or omission or alleged untrue statement or
omission was made in such registration statement, including any prospectus
contained in such registration statement, and any amendment or supplement
thereto (including post-effective amendments) in reliance upon and in conformity
with information furnished in writing by or on behalf of such Requesting Holder
for inclusion therein; provided, however, that such Requesting Holder shall not
-------- -------
be liable to the extent that the losses, liabilities or expenses arise out of or
are based upon (i) the use by the Corporation or another Requesting Holder that
is not a member of its Affiliated Group of any prospectus after such time as the
obligation of the Corporation to keep the same effective and current has expired
or (ii) the use by the Corporation or another Requesting Holder that is not a
member of its Affiliated Group of any prospectus after such time as such
Requesting Holder has advised the Corporation that the filing of a post-
effective amendment or supplement thereto is required with respect to any
information contained in such prospectus concerning such Requesting Holder,
except such prospectus as so amended or supplemented.
(b) In the event that the Corporation effects a registration of any
shares owned by a Requesting Holder, the Corporation shall indemnify and hold
such Requesting Holder, and each of its directors and officers and each person,
if any, who controls the Requesting Holder within the meaning of the federal
securities laws (the "Stockholder Indemnified Parties") harmless
31
<PAGE>
against all losses, liabilities and expenses of any nature whatsoever which such
Stockholder Indemnified Parties may incur as a result of or arising out of or
based upon any untrue statement or alleged untrue statement of a material fact
contained in the registration statement filed by the Corporation, including any
prospectus contained in such registration statement, and any amendment or
supplement thereto (including post-effective amendments) or as a result of or
arising out of or based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, provided, however, that the Corporation will not be liable
-------- -------
in any such case to the extent that the losses, liabilities or expenses arise
out of or are based upon (i) any untrue statement or omission or alleged untrue
statement or omission made in such registration statement, including any
prospectus contained in such registration statement, and any amendment or
supplement thereto (including post-effective amendments) in reliance upon and in
conformity with information furnished in writing by or on behalf of such
Requesting Holder to the Corporation for inclusion therein, (ii) the use by such
Requesting Holder of any prospectus after such time as the obligation of the
Corporation to keep the same effective and current has expired, or (iii) the use
by such Requesting Holder of any prospectus after such time as the Corporation
has advised the Requesting Holder that the filing of a post-effective amendment
or supplement thereto is required, except such prospectus as so amended or
supplemented.
(c) With respect to the indemnities provided above in this Section
7.6, an indemnified party shall, with respect to any claim made against such
indemnified party, notify the indemnifying party in writing of the nature of the
claim as soon as practicable but not more than ten days after the indemnified
party shall have received notice of the assertion thereof before any court or
governmental authority. The failure by an indemnified party to give notice as
provided in the foregoing sentence shall not relieve the indemnifying party of
its obligations under this section except to the extent that the indemnifying
party is damaged solely as a result of the failure to give notice. Upon receipt
of notice by an indemnifying party from an indemnified party of the assertion of
any such claim, the indemnifying party shall employ counsel reasonably
acceptable to the indemnified party and shall assume the defense of such claim.
The indemnified party shall have the right to employ separate counsel and to
participate in (but not control) any such action, but the fees and expenses of
such counsel shall be the expense of such indemnified party unless (i) the
employment of counsel by such indemnified party has been authorized by the
indemnifying party, (ii) the indemnified party shall have been advised by its
counsel in writing that there is a conflict of interest between the indemnifying
party and the indemnified party in the conduct of the defense of such action (in
which case the indemnifying party shall not have the right to direct the defense
of such action on behalf of the indemnified party) or (iii) the indemnifying
party shall not in fact have employed counsel to assume the defense of such
action, in each of which cases the fees and expenses of such counsel shall be at
the expense of the indemnifying party. The indemnifying party shall not, in
connection with any one action or proceeding or separate but substantially
similar or related actions or proceedings in the same jurisdiction arising out
of the same general allegations or circumstances, be liable for the reasonable
fees and expenses of more than one separate firm of attorneys (together with
appropriate local counsel) at any time for such indemnified party or parties and
controlling persons thereof, which firm shall be designated by the indemnified
party that had the largest number of shares included in the applicable
registration statement. An indemnifying party shall not be liable for any
settlement of an action effected without its written consent (which consent
shall not be unreasonably withheld). No indemnifying party will consent to
entry of any judgment or enter into any settlement which does not
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<PAGE>
include as an unconditional term thereof the giving by the claimant or plaintiff
to such indemnified party of a release from all liability in respect of such
action.
(d) If the indemnification provided for in this Section 7.6 is
unavailable to an indemnified party other than by reason of such indemnified
party's failure to comply with the first sentence of paragraph (c) of this
Section 7.6, then each applicable indemnifying party, in lieu of indemnifying
such indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities in
such proportion as is appropriate to reflect the relative fault of the
Requesting Holder(s) on the one hand and of the Corporation on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative fault of the Requesting Holder(s) on the one hand
and of the Corporation on the other shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Requesting Holder(s) or by the Corporation and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The amount paid or payable by a
party as a result of the losses, claims, damages and liabilities referred to
above shall be deemed to include, subject to the limitations set forth in
Section 7.6(c), any legal or other fees or expenses reasonably incurred by such
party in connection with investigating or defending any action or claim.
(e) Each of the Requesting Holders and the Corporation agrees that it
would not be just and equitable if contribution pursuant to Section 7.6(d) were
determined by pro rata allocation or any other method of allocation which does
not take account of the equitable considerations referred to in Section 7.6(d).
Notwithstanding the provisions of this Section 7.6, each Requesting Holder shall
not be required to contribute any amount in excess of the amount by which the
total price at which the shares were offered to the public exceeds the amount of
any damages which such Requesting Holder has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
SECTION 8 MISCELLANEOUS
8.1 Waivers. No course of dealing will be deemed to amend or
-------
discharge any provision of this Agreement. No delay in the exercise of any
right will operate as a waiver of such right. No single or partial exercise of
any right will preclude its further exercise. A waiver of any right on any one
occasion will not be construed as a bar to, or waiver of, any such right on any
other occasion.
8.2 Specific Performance. In the event of a breach or a threatened
--------------------
breach by any party to this Agreement of its obligations under this Agreement,
any party injured or to be injured by such breach, in addition to being entitled
to exercise all rights granted by law, including, without limitation, recovery
of damages, will be entitled to specific performance of its rights under this
Agreement. The parties agree that the provisions of this Agreement shall be
specifically enforceable, it being agreed by the parties that (i) any remedy at
law, including monetary damages, for breach of
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<PAGE>
any such provision will be inadequate compensation for any loss, and (ii) any
defense in any action for specific performance that a remedy at law would be
adequate is waived.
8.3 Remedies Cumulative. The rights and remedies set forth in this
-------------------
Agreement are cumulative, and are not intended to be exclusive of any right or
remedy provided in this Agreement, by law, in equity or otherwise. Except as
provided in this Agreement, all legal remedies (such as monetary damages) as
well as all equitable remedies (such as specific performance) will be available
for any breach or threatened breach of any provision of this Agreement.
8.4 Attorneys' Fees. If any stockholder that is a party to this
---------------
Agreement or the Corporation retains counsel for the purpose of enforcing or
preventing the breach or any threatened breach of any provision of this
Agreement or for any other remedy relating to it, then the prevailing party will
be entitled to be reimbursed by the non-prevailing party for all costs and
expenses reasonably so incurred (including reasonable attorneys' fees, costs of
bonds and fees and expenses for expert witnesses).
8.5 Execution. This Agreement may be signed in counterparts or with
---------
detachable signature pages. Each counterpart will be considered an original
instrument, but all of them in the aggregate will constitute one agreement.
8.6 Notices. All notices and other communications hereunder shall be
-------
in writing and shall be delivered personally, telecopied (if receipt of which is
confirmed by the person to whom sent), sent by a nationally recognized overnight
delivery service or mailed by registered or certified mail (if return receipt is
requested) to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice) (notice shall be deemed given
upon receipt, if delivered personally, by overnight delivery service or by
telecopy, or on the third business day following mailing, if mailed):
(a) If to UVSG, to it at:
7140 S. Lewis Avenue
Tulsa, Oklahoma 74136-5422
Attention: President
(with a copy similarly addressed to the Legal Department)
Telephone: (918) 488-4993
Telecopier: (918) 488-4928
with copies to:
Baker & Botts, L.L.P.
599 Lexington Avenue
New York, New York 10022
Attention: Elizabeth M. Markowski
Telephone: (212) 705-5000
Telecopier: (212) 705-5125
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(b) If to TCI, to it at:
5619 DTC Parkway
Englewood, Colorado 80111
Attention: General Counsel
Telephone: (303) 267-4800
Telecopier: (303) 488-3245
with a copy to:
TCI UVSG, Inc.
5619 DTC Parkway
Englewood, Colorado 80111
Attention: President
Telephone: (303) 267-5360
Telecopier: (303) 488-3268
- and -
Baker & Botts, L.L.P.
599 Lexington Avenue
New York, New York 10022
Attention: Elizabeth M. Markowski
Telephone: (212) 705-5000
Telecopier: (212) 705-5125
(c) If to TCI Holdings, to it at:
5619 DTC Parkway
Englewood, Colorado 80111
Attention: President
Telephone: (303) 267-5360
Telecopier: (303) 488-3268
with a copy to:
Baker & Botts, L.L.P.
599 Lexington Avenue
New York, New York 10022
Attention: Elizabeth M. Markowski
Telephone: (212) 705-5000
Telecopier: (212) 705-5125
(d) If to Liberty, to it at:
8101 East Prentice, #500
35
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Englewood, Colorado 80111
Attention: General Counsel
Telephone: (303) 721-5440
Telecopier: (303) 721-5443
with a copy to:
Baker & Botts, L.L.P.
599 Lexington Avenue
New York, New York 10022
Attention: Elizabeth M. Markowski
Telephone: (212) 705-5000
Telecopier: (212) 705-5125
(e) If to News Corp. or News Holdings, to it at:
c/o News America Incorporated
1211 Avenue of the Americas
New York, New York 10036
Attention: Arthur M. Siskind
Senior Executive Vice President
and Group General Counsel
Telephone: (212) 852-7007
Telecopier: (212) 768-2029
with a copy to:
Squadron, Ellenoff, Plesent & Sheinfeld, LLP
551 Fifth Avenue
New York, New York 10176
Attention: Jeffrey W. Rubin
Telephone: (212) 476-8224
Telecopier: (212) 697-6686
8.7 Severability. Wherever possible each provision of this Agreement
------------
will be interpreted in such manner as to be effective and valid under applicable
law. However, if for any reason any one or more of the provisions of this
Agreement are held to be invalid, illegal or unenforceable in any respect, such
action will not affect any other provision of this Agreement. In such event,
this Agreement will be construed as if such invalid, illegal or unenforceable
provision had never been contained in it.
8.8 Entire Agreement. This Agreement and the Parent Agreement
----------------
contain the entire agreement and understanding of the stockholders that are
parties to this Agreement and the Corporation concerning its subject matter.
36
<PAGE>
8.9 Binding Effect. This Agreement is binding upon, and inures to
--------------
the benefit of, the Participants, the stockholders that are parties to this
Agreement, their permitted transferees and the Corporation.
8.10 Governing Law. This Agreement shall be governed by the laws of
-------------
the State of New York applied to contracts made and wholly performed in such
State, without regard to principles governing conflicts of law. Any action to
enforce any provision of this Agreement may be brought only in a court in the
State of New York or in the United States District Court for the Southern
District of New York. Each party agrees to submit to the general jurisdiction
of such courts and to accept service of process at its address for notices
pursuant to this Agreement in any such action or proceeding brought in any such
court and hereby waives any claim that such action or proceeding brought in any
such court has been brought in an inconvenient forum.
8.11 Interpretation. As used herein, except as the context may
--------------
otherwise require, "include," "includes" and "including" are deemed to be
followed by "without limitation" whether or not they are in fact followed by
such words or words of like import; "hereof," "herein," "hereunder" and
comparable terms refer to the entirety hereof and not to any particular article,
section or other subdivision hereof or attachment hereto; references to any
gender include the other; the singular includes the plural and vice versa;
references to any agreement or other document or to any statute or regulation
are to such agreement, document, statute or regulation as amended and
supplemented from time to time (and, in the case of a statute or regulation, to
any successor provisions); and references to "Article," "Section" or another
subdivision or to "Exhibit" are to an article, section or subdivision of, or to
an Exhibit to, this Agreement. Any reference in this Agreement to a "day" or
number of "days" (without the explicit qualification of "Business") shall be
interpreted as a reference to a calendar day or number of calendar days. If any
action or notice is to be taken or given on or by a particular calendar day, and
such calendar day is not a Business Day, then such action or notice shall be
deferred until, or may be taken or given on, the next Business Day.
8.12 Parties. A stockholder who ceased to be a Stockholder upon the
-------
Transfer or conversion of its Class B Common Stock shall continue to be a party
to this Agreement for purposes of Sections 4, 6 and 7 so long as it owns shares
of Class A Common Stock, except (i) as otherwise provided in the last sentence
of Section 4.4(d) and (ii) that if such stockholder and the members of its
Affiliated Group own only shares of Class A Common Stock, then such stockholder
may elect to cease to be a party to this Agreement by giving written notice to
such effect to the Corporation and each Stockholder, which notice shall state
that such stockholder and the members of its Affiliated Group thereby
irrevocably waive any and all rights under Section 7 (other than Section 7.6).
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first above written.
TVG HOLDINGS, INC.
By:/s/ Lawrence A. Jacobs
--------------------------------
Name: Lawrence A. Jacobs
Title: Senior Vice President
TCI UVSG, INC.
By:/s/ Stephen M. Brett
-----------------------------------
Name: Stephen M. Brett
Title: Vice President
TELE-COMMUNICATIONS, INC.
By:/s/ Stephen M. Brett
-----------------------------------
Name: Stephen M. Brett
Title: Executive Vice President,
Secretary and General Counsel
LIBERTY MEDIA CORPORATION
By:/s/ Stephen M. Brett
------------------------------------
Name: Stephen M. Brett
Title: Vice President
THE NEWS CORPORATION LIMITED
By:/s/ Arthur R. Siskind
------------------------------------
Name: Arthur R. Siskind
Title: Director
UNITED VIDEO SATELLITE GROUP, INC.
By:/s/ Peter C. Boylan III
--------------------------------------
Name: Peter C. Boylan III
Title: President and Chief Operating
Officer
38
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EXHIBIT A
Transferee's Agreement
As a Transferee of stock in United Video Satellite Group, Inc., a Delaware
corporation, the undersigned agrees to be bound as a party to that certain
Stockholders Agreement dated as of _____________ (which, as it has been amended
to the date hereof, is hereby incorporated by reference).
Name of Transferee: ___________________
___________________________ Address _______________________________________
Date
_______________________________________
Taxpayer ID Number _____________________
Telephone Number ______________________
Fax Number _____________________________
39
