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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. ____)*
Gemstar -- TV Guide International, Inc.
________________________________________________________________________________
(Name of Issuer)
Common Stock, par value $.01 per share
________________________________________________________________________________
(Title of Class of Securities)
36866W 10 6
_______________________________________________________________
(CUSIP Number)
Charles Y. Tanabe, Esq.
Senior Vice President and General Counsel
Liberty Media Corporation
9197 South Peoria Street
Englewood, Colorado 80112
(720) 875-5400
________________________________________________________________________________
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
July 12, 2000
_______________________________________________________________
(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 which is the subject of this Schedule 13D, and is filing this
schedule because of (S)(S)240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the
following box [_].
Note: Schedules filed in paper format shall include a signed original and five
copes of the schedule, including all exhibits. See(S)240.13d-7 for other parties
to whom copies are to be sent.
* 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
disclosures provided in a prior cover page.
The information required on 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 of 22 Pages
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SCHEDULE 13D
CUSIP NO. 36866W 10 6
-----------------
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NAMES OF REPORTING PERSONS
1 I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (entities only).
Liberty Media Corporation
84-1288730
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)
2 (a) [_]
(b) [X]
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SEC USE ONLY
3
------------------------------------------------------------------------------
SOURCE OF FUNDS (See Instructions)
4
OO
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
5
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CITIZENSHIP OR PLACE OF ORGANIZATION
6
Delaware
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SOLE VOTING POWER
7
NUMBER OF
87,465,738 shares
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
OWNED BY See Item 5(b) and Item 6.
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING
87,465,738 shares
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
See Item 5(b) and Item 6.
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
87,465,738
------------------------------------------------------------------------------
CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [_]
12
(See Instructions)
------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
Approximately 21.3%
------------------------------------------------------------------------------
TYPE OF REPORTING PERSON (See Instructions)
14
CO
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Page 2 of 22 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
GEMSTAR - TV GUIDE INTERNATIONAL, INC.
Item 1. Security and Issuer.
The class of securities to which this Statement on Schedule 13D (this
"Statement") relates is the Common Stock, par value $.01 per share (the "Common
Stock"), of Gemstar - TV Guide International, Inc., a Delaware corporation (the
"Issuer" or "Gemstar"). The Issuer's principal executive offices are located at
135 North Los Robles Avenue, Suite 800, Pasadena, California 91101.
Item 2. Identity and Background.
The Statement is being filed by Liberty Media Corporation, a Delaware
corporation ("Liberty" or the "Reporting Person"), whose principal business
address is 9197 South Peoria Street, Englewood, Colorado 80112. Liberty TVGIA,
Inc., a Delaware corporation ("LTVGIA") and a wholly-owned subsidiary of
Liberty, and Liberty UVSG, Inc., a Colorado corporation ("LUVSG") and a wholly-
owned subsidiary of Liberty, are the registered holders of the shares of Common
Stock beneficially owned by Liberty (the "Shares").
Prior to March 9, 1999, Liberty was controlled by Tele-Communications,
Inc., a Delaware corporation ("TCI"). As a result of 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: (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 that were transferred to TCI's "TCI Group" in
connection with the AT&T Merger, the "AT&T Wireless Group" consists of the
assets of the wireless operations of AT&T, and the "AT&T Common Stock Group"
consists of all of the other assets and businesses of AT&T. AT&T's
Page 3 of 22 Pages
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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.
On March 10, 2000, in connection with certain restructuring transactions,
TCI was converted into a Delaware limited liability company, of which AT&T is
the sole member, and renamed AT&T Broadband, LLC ("AT&T Broadband"). AT&T
Broadband's principal business address is 9197 South Peoria Street, Englewood,
Colorado 80112. AT&T Broadband is principally engaged through its subsidiaries
and affiliates in the acquisition, development and operation of cable television
systems throughout the United States.
The Board of Directors and management of the Reporting Person manage the
business and affairs of the Reporting Person, including, but not limited to,
making determinations regarding the disposition and voting of the Shares.
Although Liberty is a wholly owned subsidiary of AT&T, a majority of Liberty'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 Liberty's Board of Directors, Liberty 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 Liberty 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 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 Liberty) 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)
Page 4 of 22 Pages
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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.
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 reference to the text of the Agreement and Plan of Restructuring and
Merger, dated as of June 23, 1998, among AT&T, Italy Merger Corp. and TCI, a
copy of which has been incorporated by reference as Exhibit 7(a) to this
Statement, 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) to this Statement.
Item 3. Source and Amount of Funds or Other Consideration.
Pursuant to an Agreement and Plan of Merger, dated as of October 4, 1999
and as amended, by and among TV Guide, Inc., a Delaware corporation ("TVG"), the
Issuer and G Acquisition Subsidiary Corp., a wholly owned subsidiary of the
Issuer ("Sub"), on July 12, 2000, Sub merged (the "Merger") with and into TVG
with TVG being the surviving corporation. As a result of the Merger, TVG
(which prior to the Merger had been a public company) became a wholly owned
subsidiary of the Issuer. The Issuer then changed its name to "Gemstar - TV
Guide International, Inc." Pursuant to the Merger each issued and outstanding
share of TVG's Class A and Class B common stock was converted into 0.6573 of a
share of Common Stock. Prior to the Merger, the Reporting Person beneficially
owned 25,500,000 shares of TVG's Class B common stock through LTVGIA and
58,075,040 shares of TVG's Class A common stock and 49,493,176 shares of TVG's
Class B common stock through LUVSG. Pursuant to the Merger, the Reporting
Person became the beneficial owner of 87,465,738 shares of Common Stock,
16,761,150 shares of which are owned of record by LTVGIA and 70,704,588 shares
of which are owned of record by LUVSG.
Page 5 of 22 Pages
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Item 4. Purpose of Transaction.
See Item 3 and Item 6 which are incorporated by reference herein.
Subject to the foregoing, the Reporting Person intends to continuously
review its investment in the Issuer, and may in the future determine (i) to
acquire additional securities of the Issuer, through open market purchases and
private agreements, (ii) to dispose of all or a portion of the securities of the
Issuer owned by it in the market, in privately negotiated transactions or
otherwise or (iii) to 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 next 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
following: the Issuer's business and prospects; other developments concerning
the Issuer and its businesses generally; other business opportunities available
to the Reporting Person; developments with respect to the business of the
Reporting Person; changes in law and government regulations; 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 being delisted from a national
securities exchange or ceasing to be authorized to be quoted in an inter-dealer
quotation system of a registered national securities association;
Page 6 of 22 Pages
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(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 paragraph.
Item 5. Interest in Securities of the Issuer.
(a) The Reporting Person beneficially owns 87,465,738 shares of Common
Stock. The Reporting Person presently beneficially owns, through its control of
LTVGIA, 16,761,150 shares of Common Stock, and the Reporting Person presently
beneficially owns, through its control of LUVSG, 70,704,588 shares of Common
Stock. Assuming 410,609,553 shares of Common Stock are outstanding as of the
date hereof, which outstanding share number is calculated based on the number of
shares of Common Stock outstanding as of July 19, 2000 as reported by the Issuer
and TVG to the Reporting Person, the Shares beneficially owned by the Reporting
Person represent approximately 21.3% of the issued and outstanding shares of
Common Stock.
Except as described on Schedule 3, which is incorporated herein, to the
knowledge of the Reporting Person, none of the Schedule 1 Persons and none of
the Schedule 2 Persons beneficially owns any shares of Common Stock.
(b) Except as described in Item 6 below, the Reporting Person has the
power to direct the voting of the Shares and to direct the disposition of the
Shares. LTVGIA and LUVSG, as the record owners of the Shares, may be deemed to
share the power to vote or direct the voting of the Shares, and the power to
dispose or direct the disposition of the Shares, with the Reporting Person.
(c) No transactions have been effected by the Reporting Person during the
past 60 days.
(d) None.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships With Respect
to Securities of the Issuer.
The arrangements described below exist with respect to the Common Stock.
BYLAWS OF THE ISSUER
Pursuant to the bylaws of the Issuer (the "Bylaws"), the Issuer's Board of
Directors (the "Board") consists of 12 directors, six of which are TVG Directors
(as such term is defined in the Bylaws). Two of the TVG Directors are TVG
Independent Directors (as such term is defined in the Bylaws). Prior to the
Merger, TVG designated the six TVG Directors. The other six directors on the
Board were designated by the Board prior to the Merger. Pursuant to the Bylaws
(and as described in greater detail below):
Page 7 of 22 Pages
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(1) two of the four members of the Board's Executive Committee are TVG
Directors;
(2) two of the five members of the Board's Compensation Committee are
Independent Directors (as such term is defined in the Bylaws) selected by the
TVG Director Committee (as such term is defined in the Bylaws);
(3) two of the three members of the Board's Special Committee are TVG
Directors;
(4) two of the four members of the Board's Audit Committee are TVG
Directors;
(5) there shall be a TVG Director Committee of the Board comprised of all
of the TVG Directors who are not the TVG Independent Directors.
Pursuant to the Stockholders' Agreement (defined below), the Reporting
Person will be able to appoint three of the TVG Directors and has appointed
three of the existing TVG Directors. The three TVG Directors appointed by the
Reporting Person are: (a) Peter C. Boylan III, a co-President and co-Chief
Operating Officer of the Issuer, who serves as a TVG Director on the Executive
Committee, the Special Committee and the TVG Director Committee, (b) Robert R.
Bennett, the chief executive officer and a director of the Reporting Person, who
serves as a TVG Director on the Compensation Committee and the TVG Director
Committee and (c) J. David Wargo, who is a TVG Independent Director and serves
on the Audit Committee.
Vacancies. Vacancies on the Board will be filled by the majority vote of
---------
the directors present and voting at a meeting of the Board duly called and held
at which a quorum is present or by unanimous written consent of the directors.
However, expiring directorships or vacancies on the Board will be filled by the
GS Director Committee (as such term is defined in the Bylaws), in the case of
the directors designated by the Board prior to the Merger and their successors,
and by the TVG Director Committee, in the case of the TVG Directors and their
successors, until the fifth anniversary of the completion of the Merger.
Chairman. Until the earlier of the fifth anniversary of the completion of
--------
the Merger and the date Mr. Yuen ceases to be Chief Executive Officer of
Gemstar, Mr. Yuen will be Chairman of the Board so long as he is a director.
Thereafter, until the third annual Board meeting following (1) the date Mr. Yuen
ceases to be Chief Executive Officer of Gemstar or, if later, (2) the fifth
anniversary of the completion of the Merger, the Chairman of the Board will be
elected by a majority vote or unanimous written consent of TVG Directors or
their successors.
Tie Votes. Except for the matters delegated to the Compensation Committee,
---------
the Audit Committee or the Special Committee of the Board, matters identified in
the Bylaws as "fundamental decisions" and matters that require approval by
supermajority vote of stockholders, if a matter is brought before the Board and
if there is a tie vote with respect to such matter, then the exclusive power to
approve or disapprove that matter will generally be exercised by the Tie-
breaking Committee of the Board (of which Mr. Yuen will be the sole member)
until the earlier of the fifth anniversary of the completion of the Merger and
the date Mr. Yuen ceases to be Chief
Page 8 of 22 Pages
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Executive Officer of Gemstar. Thereafter, until the third annual Board meeting
following (1) the date Mr. Yuen ceases to be Chief Executive Officer of Gemstar
or, if later, (2) the fifth anniversary of the completion of the Merger, the TVG
Director Committee will generally have the ability to resolve tie votes.
Notwithstanding the foregoing, no committee of directors will have the
power to resolve a tie vote of the Board until the fifth anniversary of the
completion of the Merger if Mr. Yuen ceases to be Chief Executive Officer of
Gemstar because of his death or disability.
Committees. The Board has the following committees:
----------
(1) The Executive Committee: The Executive Committee consists of four
-----------------------
directors and acts by majority vote of the quorum which is present or by
unanimous written consent. The members of the Executive Committee include each
of the following who are directors: the Chief Executive Officer; the Chief
Financial Officer (but if the Chief Financial Officer is not a director selected
by the Board prior to the Merger or a successor to such director, then, until
the earlier of the fifth anniversary of the completion of the Merger and the
date Mr. Yuen ceases to be Chief Executive Officer of Gemstar, a director
designated by the GS Director Committee or a successor to such director will be
a member of the Executive Committee instead of the Chief Financial Officer); and
two TVG Directors. The Executive Committee will have, to the extent permitted
by law, and until the third annual Board meeting following (1) the date Mr. Yuen
ceases to be Chief Executive Officer of Gemstar or, if later, (2) the fifth
anniversary of the completion of the Merger, all powers of the Board with
respect to matters related to the operations of Gemstar and its subsidiaries
between Board meetings, except: as otherwise determined by the Board; with
respect to any matter that is delegated to a different committee of directors;
with respect to matters itemized in the Bylaws as "fundamental decisions" or
that require approval by supermajority vote of stockholders; or with respect to
(1) any acquisition by Gemstar or any person controlled by Gemstar of any
business or assets if the amount involved exceeds $25 million, (2) any sale,
lease, exchange or other disposition, pledge or encumbrance of assets or of all
or a part of any business of Gemstar or any person controlled by Gemstar if the
amount involved exceeds $25 million, and (3) the incurrence by Gemstar or any
person controlled by Gemstar of indebtedness in excess of $50 million in any
fiscal year. If a matter is brought before the Executive Committee and if there
is a tie vote with respect to such matter, then the exclusive power to approve
or disapprove that matter will generally be exercised by the Tie-breaking
Committee (of which Mr. Yuen will be the sole member) until the earlier of the
fifth anniversary of the completion of the Merger and the date Mr. Yuen ceases
to be Chief Executive Officer of Gemstar. Thereafter, until the third annual
Board meeting following (1) the date Mr. Yuen ceases to be Chief Executive
Officer of Gemstar or, if later, (2) the fifth anniversary of the completion of
the Merger, the TVG Director Committee will generally have the ability to
resolve tie votes. Notwithstanding the foregoing, no committee of directors will
have the power to resolve a tie vote of the Executive Committee until the fifth
anniversary of the completion of the Merger if Mr. Yuen ceases to be Chief
Executive Officer of Gemstar because of his death or disability. Only the Chief
Executive Officer of Gemstar may call a meeting of the Executive Committee until
the earlier of the fifth anniversary of the completion of the Merger and the
date Mr. Yuen ceases to be Chief Executive Officer of Gemstar. Thereafter, the
Chief Executive Officer or any two members of the Executive Committee may call a
meeting.
Page 9 of 22 Pages
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(2) The Compensation Committee: The Compensation Committee consists of
--------------------------
five directors and acts by majority vote of all its members or by unanimous
written consent. The members of the Compensation Committee include two
Independent Directors (as defined in the Bylaws) designated by the Board prior
to the Merger and their successors, two TVG Directors who are Independent
Directors and the Chief Executive Officer of Gemstar (provided he or she is a
director). The Chief Executive Officer of Gemstar is the chairman of the
Compensation Committee. Except with respect to matters itemized in the Bylaws as
"fundamental decisions" or that require approval by supermajority vote of
stockholders, the Compensation Committee is empowered to make all decisions with
respect to the compensation and other terms of employment of any executive
officer of Gemstar or any of its subsidiaries, or any other officer or employee
of Gemstar or any of its subsidiaries. Notwithstanding the foregoing, unless
otherwise determined by at least seven of the twelve directors, the Compensation
Committee's authority to grant stock options or other stock based compensation
is limited, on a cumulative basis from the completion of the Merger, to 2% of
the outstanding shares of Common Stock on a fully diluted basis immediately
after the completion of the Merger. Further, not more than 1% of the outstanding
shares of Common Stock on a fully diluted basis immediately after the completion
of the Merger may be granted, awarded or issued in the aggregate to officers of
Gemstar or any person controlled by Gemstar who directly report to the Chief
Executive Officer.
(3) The Special Committee: The Special Committee consists of three
---------------------
members and acts by majority vote of all its members or by unanimous written
consent other than with respect to matters itemized in the Bylaws as
"fundamental decisions" or that require approval by supermajority vote of
stockholders. The members of the Special Committee include the Chief Executive
Officer (provided he or she is a director) and two TVG Directors or their
successors. The Special Committee will have authority to determine matters
related to the relationship between Gemstar and "service providers" as
contemplated by the Bylaws.
(4) The Audit Committee: The Audit Committee consists of four members and
-------------------
will act by majority vote of all its members or by unanimous written consent and
has all powers normally accorded to an audit committee other than with respect
to matters itemized in the Bylaws as "fundamental decisions" or that require
approval by supermajority vote of stockholders. The members of the Audit
Committee include the Chief Financial Officer, one GS Independent Director (as
such term is defined in the Bylaws) and the two TVG Independent Directors.
(5) The GS Director Committee: The GS Director Committee consists of all
-------------------------
GS Directors other than the GS Independent Directors and acts by majority vote
of all its members or by unanimous written consent. The GS Director Committee
has the right to: appoint the Chairman of the Board (which will be Mr. Yuen so
long as he is a director) until the earlier of the fifth anniversary of the
completion of the Merger and the date Mr. Yuen ceases to be Chief Executive
Officer of Gemstar; nominate directors to fill expiring directorships held by GS
Directors until the fifth anniversary of the completion of the Merger; and fill
vacancies with respect to the directorships held by GS Directors until the fifth
anniversary of the completion of the Merger. The Board may not dissolve the GS
Director Committee or modify its duties or composition without the approval of
at least ten of the twelve members of the Board until the earlier of the fifth
anniversary of the completion of the Merger and the date Mr. Yuen ceases to
Page 10 of 22 Pages
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be Chief Executive Officer of Gemstar. If Mr. Yuen should cease being the Chief
Executive Officer before the fifth anniversary of the completion of the Merger
as a result of his death or disability, then until the fifth anniversary of the
completion of the Merger the Board may dissolve the GS Director Committee or
modify its duties or composition with the approval of nine of the twelve members
of the Board.
(6) The TVG Director Committee: The TVG Director Committee consists of all
--------------------------
TVG Directors other than the TVG Independent Directors and acts by majority vote
of all its members or by unanimous written consent. The TVG Director Committee
will have the right to: nominate directors to fill expiring directorships held
by TVG Directors until the fifth anniversary of the completion of the Merger;
fill vacancies with respect to the directorships held by TVG Directors until the
fifth anniversary of the completion of the Merger; and resolve tie votes of the
Board and Executive Committee as described above. The Board may not dissolve the
TVG Director Committee or modify its duties or composition without the approval
of at least ten of the twelve members of the Board until the third annual board
of directors' meeting following (1) the date Mr. Yuen ceases to be Chief
Executive Officer of Gemstar or, if later, (2) the fifth anniversary of the
completion of the Merger.
(7) The Tie-breaking Committee: The Tie-breaking Committee consists of Mr.
--------------------------
Yuen as Chairman of the Board and will exist until the earlier of the fifth
anniversary of the completion of the Merger and the date Mr. Yuen ceases to be
Chief Executive Officer of Gemstar. During such time, the Tie-breaking Committee
will have the power to resolve tie votes of the Board and the Executive
Committee as described above. During such time, the Board may not dissolve the
Tie-breaking Committee or modify its duties or composition.
Quorum. A majority of the total number of Board members will constitute a
------
quorum, except that six of the twelve Board members will constitute a quorum at
a duly called Board meeting where either all GS Directors or all TVG Directors
fail to attend such meeting.
Voting. Generally, directors present at any meeting at which a quorum is
------
present may act by majority vote. However, matters itemized in the Bylaws as
"fundamental decisions" will require the approval of at least seven of the
twelve Board members and certain other matters require the approval of at least
nine of the twelve Board members.
Executive Officers. Henry C. Yuen will be Chief Executive Officer of
------------------
Gemstar for five years after the completion of the Merger unless he earlier dies
or resigns or his employment is terminated for disability as permitted by, or
for "cause" within the meaning of, his existing employment agreement. Until the
earlier of the fifth anniversary of the completion of the Merger and the date
Mr. Yuen ceases to be Chief Executive Officer of Gemstar, Mr. Yuen will be
Chairman of the Board so long as he is a director of Gemstar.
The foregoing discussion of the Bylaws is qualified in its entirety by
reference to the complete text of the Bylaws, which is incorporated by reference
herein.
STOCKHOLDERS' AGREEMENT AMONG SIGNIFICANT STOCKHOLDERS
Page 11 of 22 Pages
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Pursuant to a Stockholders' Agreement, dated as of October 4, 1999 (the
"Stockholders' Agreement") which became effective on July 12, 2000, by and among
the Reporting Person, The News Corporation Limited ("News Corp."), Henry Yuen
(the Chief Executive Officer of the Issuer) and the Issuer, the Reporting Person
has entered into the agreements with respect to the Common Stock described
below. The description of the Stockholders' Agreement is subject to and
qualified in its entirety by reference to the full text of the Stockholders'
Agreement which is an exhibit to this Statement and is incorporated by reference
herein. The Reporting Person disclaims beneficial ownership of those securities
of the Issuer beneficially owned by News Corp. and Mr. Yuen.
Directors: Pursuant to the Stockholders' Agreement, Henry C. Yuen and
---------
designees of Mr. Yuen, Liberty and News Corp. have agreed (1) to vote for, or to
use their best efforts to cause their respective designees on the Board to vote
for, Mr. Yuen's election as a director and appointment as Chairman of the Board
and Chief Executive Officer until the earlier of the fifth anniversary of the
completion of the Merger and the date Mr. Yuen ceases to be Chief Executive
Officer of the Issuer other than as a result of his termination without cause
and (2) to vote for the election to the Board of five other persons (including
two independent directors) designated by Mr. Yuen until the earlier of the fifth
anniversary of the completion of the Merger and the date Mr. Yuen ceases to be
Chief Executive Officer of the Issuer other than as a result of his termination
without cause, provided that if Mr. Yuen should die or become disabled during
such five-year period Liberty and News Corp. have each agreed, for the remainder
of the five-year period, to continue to vote for the election to the Board of
the directors formerly designated by Mr. Yuen or their successors (including Mr.
Yuen's successor) and to vote against their removal except for cause.
For so long as Liberty and News Corp. are committed to vote for Mr. Yuen
and his designees, Mr. Yuen has agreed to vote his shares of Common Stock for
the election to the Board of three designees of Liberty (including one
independent director) and three designees of News Corp. (including one
independent director).
Each of Liberty's and News Corp.'s right to designate directors generally
shall be reduced by one director upon the transfer of 90% or more of its
respective shares of Common Stock, but if the transfer of any of such shares is
from one to the other then the total number of directors Liberty and News Corp.
have the right to designate will not be reduced. Liberty and News Corp. have the
right to allocate designees to the Board between one another as they may agree
in connection with any transfer of shares among Liberty, News Corp. and their
respective controlled related parties.
Officers:
--------
Henry C. Yuen. Liberty and News Corp. will use their respective best
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efforts to cause their designees to the Board to vote for Mr. Yuen's election as
Chairman of the Board and Chief Executive Officer of Gemstar during the five-
year period following the completion of the Merger and against any removal or
diminution of Mr. Yuen's responsibilities during such period (provided that the
Issuer does not have the right to terminate Mr. Yuen's employment for
Page 12 of 22 Pages
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disability pursuant to his employment agreement or that "cause," within the
meaning of his employment agreement, does not exist for termination of such
employment).
Elsie Ma Leung. Liberty and News Corp. will use their respective best
--------------
efforts to cause their designees to the Board to vote for the election of Elsie
Ma Leung, a co-President, co-Chief Operating Officer and the Chief Financial
Officer of the Issuer (and any successors to her offices) as co-President, co-
Chief Operating Officer, a member of the Office of the Chief Executive and Chief
Financial Officer of the Issuer during the five-year period following the
completion of the Merger and against any removal or diminution of Ms. Leung's
responsibilities during such period (provided that "cause," within the meaning
of Mr. Yuen's employment agreement, does not exist for termination of such
employment).
Joachim Kiener and Peter C. Boylan III. Mr. Yuen will vote, and will use
--------------------------------------
his best efforts to cause his designees to the Board to vote, for the election
of Joachim Kiener and Peter C. Boylan III (and the successors to their
respective offices) as co-Presidents and co-Chief Operating Officers of the
Issuer and as members of the Office of the Chief Executive during the five-year
period following the completion of the Merger and against any removal or
diminution of their responsibilities during such period (provided that "cause,"
within the meaning of Mr. Yuen's employment agreement, does not exist for
termination of such employment).
Standstill: Each of Mr. Yuen, Liberty and News Corp. agree, provided that
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their respective designees to the Board continue to be elected and appointed
directors, that until the earlier of the fifth anniversary of the completion of
the Merger and the date Mr. Yuen ceases to be Chief Executive Officer of Gemstar
other than as a result of his termination without cause, they will not:
(1) make a public offer to acquire all or part of the Issuer, except in
certain cases where another unaffiliated person has made an offer for a
comparable percentage of the Issuer (for purposes of this provision, AT&T Corp.
and its affiliates generally are not deemed to be affiliates of Liberty);
(2) solicit proxies for the election of directors or make any stockholder
proposal, except in certain cases;
(3) act in concert with other stockholders or become a group within the
meaning of applicable rules of the Securities and Exchange Commission, other
than with each other and parties controlled by each other and except in
connection with making a permitted competing offer for the Issuer;
(4) transfer shares of Common Stock to any person who would, to the
knowledge of such party, be an "Acquiring Person" within the meaning of the
Issuer's rights agreement (i.e., a person whose ownership of Common Stock is
such as to cause the share purchase rights issued under the rights agreement to
become exercisable); or
(5) seek to challenge the legality of the foregoing provisions of the
Stockholders' Agreement.
Page 13 of 22 Pages
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Registration Rights: At any time after the date which is six months
-------------------
after July 12, 2000 and before the tenth anniversary of July 12, 2000, either
Liberty or News Corp. (or transferees of their Common Stock) may request that
the Issuer effect a registration of all or part of their shares of Common
Stock. The Issuer will not be required to effect a demand registration unless
the aggregate number of shares of Common Stock demanded to be registered is at
least 1% of the number of shares of Common Stock then outstanding, in which case
the Issuer must use all commercially reasonable efforts to cause a registration
statement to become effective for the sale of such shares.
Notwithstanding the foregoing, the Issuer will not be required to
effect any demand registration after such time as Liberty or News Corp. (or
transferees of their Common Stock), as the case may be, is able to sell all of
its respective Common Stock without restriction. In addition, once a demand
registration has been effected, the Issuer is not obligated to register shares
pursuant to a demand registration before the expiration of twelve months from
the date on which the previous demand registration statement was declared
effective. The Issuer may postpone for up to 90 days the filing of a
registration statement if it reasonably believes that such a registration
statement would have a material adverse effect on its ability to engage in any
financing, acquisition of assets or any merger, consolidation, tender offer or
other significant transaction. However, the Issuer is not permitted to so
postpone a demand registration more than once in any period of twelve
consecutive months.
Under the Stockholders' Agreement, the Issuer has agreed to pay all
expenses, other than underwriting discounts and commissions and any transfer
taxes, connected with the registration or qualification of the shares subject to
the first two demand registrations and the Issuer's legal and accounting
expenses for subsequent registrations.
Under the Stockholders' Agreement, demand registrations may be
effected by means of an underwritten offering or, in certain cases, pursuant to
a delayed or continuous offering under applicable rules of the Securities and
Exchange Commission.
Under the Stockholders' Agreement, the Issuer has agreed to indemnify
the parties requesting a demand registration against certain liabilities that
may arise in connection with any offer and sale of Common Stock, including
liabilities under the Securities Act of 1933, as amended, and to contribute to
payments that such parties may be required to make in respect of any such offer
and sale. The Stockholders' Agreement also provides that parties requesting a
demand registration will indemnify the Issuer, its directors and officers and
each person which controls the Issuer against certain liabilities, including
liabilities under the Securities Act of 1933, as amended, for certain actions
arising from the offer and sale of shares of Common Stock under the demand
registration.
Rights of First Refusal: Under the Stockholders' Agreement, Mr. Yuen
-----------------------
may not transfer shares of Common Stock which he owns, except for limited
transfers as specified in the Stockholders' Agreement, unless he first offers
such shares to each of Liberty and News Corp. Any purchases of Common Stock from
Mr. Yuen by Liberty or News Corp. will not cause a triggering event under the
Issuer's rights agreement.
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The foregoing discussion of the Stockholders' Agreement is qualified
in its entirety by reference to the complete text of the Stockholders'
Agreement, which is incorporated by reference herein.
RIGHTS PLAN OF THE ISSUER
In connection with the Merger, the Issuer amended and restated its
existing rights agreement, dated July 10, 1998 as amended ("Rights Plan"), with
American Stock Transfer & Trust Company, in order to make the Rights Plan
inapplicable to the Merger and the transactions contemplated thereby, including
the Stockholders' Agreement. The Rights Plan was amended in connection with the
Merger to exempt each of Liberty and its controlled related parties and News
Corp. and its controlled related parties from the definition of Acquiring Person
(as such term is defined in the Rights Plan). If, however, Liberty or News Corp.
or their respective controlled related parties acquires beneficial ownership of
any additional shares of Common Stock, then such person would be an Acquiring
Person unless the beneficial ownership resulted from any of the following:
(1) the right to acquire or acquisition of additional shares by
Liberty, News Corp. or any of their respective controlled related parties from
each other or from Henry C. Yuen;
(2) the acquisition by Liberty, News Corp. or any of their respective
controlled related parties of additional shares which do not exceed, in the
aggregate, the number of shares of Common Stock transferred by Mr. Yuen before
or after the completion of the Merger to persons other than Liberty, News Corp.
or any of their respective controlled related parties in certain transactions
permitted by the Stockholders' Agreement;
(3) the grant or exercise of employee or director options; and
(4) any agreement, arrangement or understanding among Liberty, News
Corp. or any of their respective controlled related parties with respect to
voting, holding, acquiring or disposing of beneficial ownership of Common Stock.
The definition of Acquiring Person was also modified in certain
respects to make it less likely that someone would inadvertently become an
Acquiring Person.
The amendments to the Rights Plan also modify the definition of
beneficial ownership so that Mr. Yuen, Liberty and its controlled related
parties, and News Corp. and its controlled related parties will not be deemed to
beneficially own any of the shares of Common Stock owned by each other as a
result of any of the transactions expressly contemplated by the Merger,
including the Stockholders' Agreement.
The foregoing discussion of the Rights Plan is qualified in its
entirety by reference to the complete text of the Rights Plan, which is
incorporated by reference herein.
Page 15 of 22 Pages
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Item 7. Materials to be Filed as Exhibits.
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 Corp. (File No. 333-
70279), filed on January 8, 1999 (the "AT&T Registration
Statement"))
Exhibit 7(b) AT&T/TCI Proxy Statement/Prospectus (incorporated by reference to
the AT&T Registration Statement)
Exhibit 7(c) Bylaws (incorporated by reference to Exhibit 99.2 to the Current
Report on Form 8-K of the Issuer dated July 21, 2000 (Commission
file number 0-26878).
Exhibit 7(d) Stockholders' Agreement (incorporated by reference to Exhibit
99.9 to the Current Report on Form 8-K of the Issuer dated
February 7, 2000 (Commission file number 0-26878).
Exhibit 7(e) Rights Plan (incorporated by reference to Exhibit 99.1 to the
Current Report on Form 8-K of the Issuer dated July 21, 2000
(Commission file number 0-26878).
Page 16 of 22 Pages
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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: July 21, 2000
LIBERTY MEDIA CORPORATION
By: /s/ Charles Y. Tanabe
---------------------------------------
Name: Charles Y. Tanabe
Title: Senior Vice President and General
Counsel
Page 17 of 22 Pages
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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,
9197 South Peoria Street, Englewood, Colorado 80112. 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.
<TABLE>
<CAPTION>
Name Title
---------------------------- -----------------------------------------------------------------------------------
<S> <C>
John 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 and Director of Liberty
Paul A. Gould Director of Liberty; Managing Director of Allen & Company Incorporated
Harold R. Handler Director of Liberty, Of Counsel with Simpson Thacher & Bartlett
Jerome H. Kern Director of Liberty; Chairman of the Board and Chief Executive Officer of On
Command Corporation
Frank J. Macchiarola Director of Liberty, President of Saint Francis College
Michael T. Ricks Director of Liberty; Finance Executive, Retired of MediaOne Group, Inc.
Larry E. Romrell Director of Liberty; Consultant to AT&T Broadband LLC (f/k/a Tele-Communications,
Inc.)
David B. Koff Senior Vice President and Assistant Secretary of Liberty
Charles Y. Tanabe Senior Vice President, General Counsel and Assistant Secretary of Liberty
Carl E. Vogel Senior Vice President of Liberty
Peter Zolintakis Senior Vice President of Liberty
Vivian J. Carr Vice President and Secretary of Liberty
David J.A. Flowers Vice President and Treasurer of Liberty
Kathryn Scherff Vice President and Controller of Liberty
</TABLE>
Page 18 of 22 Pages
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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; Chairman of the Board, Retired, of Chevron Corporation
M. Kathryn Eickhoff Director; President of Eickhoff Economics Incorporated
Walter Y. Elisha Director; Chairman of the Board and Chief Executive Officer, Retired, of
Springs Industries, Inc.
George M. C. Fisher Director; Chairman of the Board of Eastman Kodak Company
Donald V. Fites Director; Chairman of the Board, Retired, of Caterpillar, Inc.
Amos B. Hostetter, Jr. Director; Chairman of the Board of Pilot House Associates
Ralph S. Larsen Director; Chairman of the Board 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 The IRC Group LLC
Louis A. Simpson Director; President and Chief Executive Officer of Capital Operations
of GEICO Corp.
Michael I. Sovern Director; President Emeritus and Chancellor Kent Professor of Law at
Columbia University
Sanford I. Weill Director; Chairman of the Board and CEO of Citigroup Inc.
John D. Zeglis Director; Chairman and Chief Executive Officer of AT&T Wireless Group
James W. Cicconi General Counsel and Executive Vice President-Law & Government Affairs
</TABLE>
Page 19 of 22 Pages
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<TABLE>
<CAPTION>
Name Title
---- -----
<S> <C>
Nicholas S. Cyprus Vice President and Controller
Mirian M. Graddick Executive Vice President, Human Resources
Frank Ianna Executive Vice President and President, AT&T Network Services
Richard J. Martin Executive Vice President, Public Relations and Employee Communication
David C. Nagel President of, AT&T Labs; Chief Technology Officer
Charles H. Noski Senior Executive Vice President and Chief Financial Officer
John C. Petrillo Executive Vice President, Corporate Strategy and Business Development
Richard R. Roscitt Executive Vice President and President of AT&T Business Services
Daniel E. Somers President and CEO of AT&T Broadband
</TABLE>
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SCHEDULE 3
The Reporting Person disclaims beneficial ownership of the
securities listed on this Schedule 3.
Name Shares and Options to Purchase Shares Beneficially Owned
---- --------------------------------------------------------
Robert R. Bennett Options to purchase 39,438 shares of Common Stock
Gary S. Howard Options to purchase 262,920 shares of Common Stock
Larry E. Romrell Options to purchase 39,438 shares of Common Stock
J. David Wargo Options to purchase 39,438 shares of Common Stock
Charles Y. Tanabe 131 shares of Common Stock
Amos Hostetter 35,700 shares of Common Stock
Charles H. Noski 880 shares of Common Stock
Page 21 of 22 Pages
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EXHIBIT INDEX
Exhibit No. Description
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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 Corp. (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) Bylaws (incorporated by reference to Exhibit 99.2 to the
Current Report on Form 8-K of the Issuer dated July 21, 2000
(Commission file number 0-26878).
7(d) Stockholders' Agreement (incorporated by reference to Exhibit
99.9 to the Current Report on Form 8-K of the Issuer dated
February 7, 2000 (Commission file number 0-26878).
7(e) Rights Plan (incorporated by reference to Exhibit 99.1 to the
Current Report on Form 8-K of the Issuer dated July 21, 2000
(Commission file number 0-26878).
Page 22 of 22 Pages
