UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
(RULE 13d-101)
UNDER THE SECURITIES EXCHANGE ACT OF 1934
UnitedGlobalCom, Inc.
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(Name of Issuer)
Class A Common Stock, par value $0.01 per share
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(Title of Class of Securities)
91324750
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(CUSIP Number)
Elizabeth M. Markowski
Senior Vice President
Liberty Media Corporation
12300 Liberty Blvd.
Englewood, Colorado 80112
(720) 875-5400
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(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
September 30, 1999
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(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 20 Pages)
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*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 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).
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
OO
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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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NUMBER OF 7 SOLE VOTING POWER
SHARES 23,013,354*
BENEFICIALLY ----------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH - 0 -
REPORTING ----------------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
23,013,354*
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10 SHARED DISPOSITIVE POWER
- 0 -
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
23,013,354*
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12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[X]**
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
Approximately 21.3%***
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14 TYPE OF REPORTING PERSON
CO
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* Includes 9,859,336 shares of the Issuer's Class A Common Stock issuable upon
conversion of shares of the Issuer's Class B Common Stock held by the Reporting
Person.
** The Reporting Person may be deemed to be a member of a group with the other
parties to the Merger Agreement described in this Statement. The Reporting
Person disclaims being a member of any such group and disclaims having
beneficial ownership of any securities of the Issuer held be any such other
party.
*** As of August 31, 2001, the Issuer had outstanding 86,030,256 shares of its
Class A Common Stock and 19,027,134 shares of its Class B Common Stock according
to representations and warranties made in the Merger Agreement described in this
Statement. On December 3, 2001, the Issuer sold an aggregate of 11,991,018 newly
issued shares of its Class A Common Stock to an affiliate of the Reporting
Person. Each share of the Issuer's Class B Common Stock is convertible into one
share of the Issuer's Class A Common Stock at the election of the holder without
consideration. Each share of the Issuer's Class A Common Stock has one vote per
share, and each share of the Issuer's Class B Common Stock has ten votes per
share. Accordingly, the Reporting Person beneficially owns approximately 21.3%
of the Issuer's outstanding Class A Common Stock and 38.8% of the Issuer's
outstanding voting power.
Page 2 of 20
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
UNITEDGLOBALCOM, INC.
ITEM 1. SECURITY AND ISSUER.
This Statement on Schedule 13D (this "Statement") is being filed by
Liberty Media Corporation, a Delaware corporation (the "Reporting Person" or
"Liberty"), with respect to shares (the "Shares") of Class A Common Stock, par
value $0.01 per share (the "United Class A Common Stock"), of UnitedGlobalCom,
Inc., a Delaware corporation (the "Issuer" or "United"). The Issuer's principal
executive offices are located at 4643 South Ulster Street, #1300, Denver
Colorado 80237.
ITEM 2. IDENTITY AND BACKGROUND.
The principal business address of the Reporting Person and each of its
subsidiaries described below is 12300 Liberty Boulevard, Englewood, Colorado
80112.
The Reporting Person owns interests in a broad range of video
programming, communications and Internet businesses in the United States,
Europe, South America and Asia with some of the most recognized and respected
brands. These brands include Encore, STARZ!, Discovery, Fox, USA, QVC, AOL, CNN,
TBS, Motorola and Sprint PCS.
Schedule 1 attached to this Statement contains the following
information concerning each director, executive officer and 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.
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 (to the knowledge of the Reporting Person) any
of the Schedule 1 Persons has been convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors). During the last five years, neither
the Reporting Person nor (to the knowledge of the Reporting Person) any of the
Schedule 1 Persons has been a party to a civil proceeding of a judicial or
administrative body of competent
Page 3 of 20
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.
ITEM 3. SOURCE AND AMOUNT OF FUNDS AND OTHER CONSIDERATION
On September 30, 1999, Liberty purchased 4,929,668 shares of the
Issuer's Class B Common Stock, par value $.01 per share (the "United Class B
Common Stock"), in a privately negotiated transaction, from Apollo Cable
Partners, L.P., then a major stockholder of United, and Lawrence F. DeGeorge and
Lawrence J. DeGeorge, then members of United's board of directors, for a
purchase price of $100 per share. Each share of United Class B Common Stock is
convertible into one share of United Class A Common Stock at the election of the
holder without consideration. On November 30, 1999, the Issuer effected a
2-for-1 stock split, as a result of which Liberty received an additional
4,929,668 shares of United Class B Common Stock. Liberty's shares of United
Class B Common Stock are registered in the name of Liberty Global, Inc., a
subsidiary of Liberty ("Liberty Global").
On June 26, 2000, Liberty purchased 345,000 shares of United Class A
Common Stock on the open market at the prices set forth on Schedule 2 to this
statement. On June 27, 2000, Liberty purchased 250,000 shares of United Class A
Common Stock on the open market at the prices set forth on Schedule 2 to this
Statement. These shares are registered in the name of Liberty Global.
On February 23, 2001, Liberty Global purchased 568,000 shares of United
Class A Common Stock on the open market at the prices set forth on Schedule 2 to
this Statement.
On December 3, 2001, in connection with Liberty's execution of the
Merger Agreement described in Item 4, a subsidiary of Liberty purchased (a)
11,976,048 shares of United Class A Common Stock for an aggregate purchase price
of $20 million (the "Note Shares"), and (b) 14,970 shares of United Class A
Common Stock for an aggregate purchase price of $25,000 from the Issuer in
privately negotiated transactions.
Liberty obtained the funds to make the purchases described above from
its available cash.
ITEM 4. PURPOSE OF TRANSACTION.
The purpose of the transactions described in Item 3 was to increase
Liberty's ownership interest in United.
On December 3, 2001, Liberty, Liberty Media International, Inc., a
subsidiary of Liberty ("LMI"), Liberty Global, United, New UnitedGlobalCom, Inc.
("New United"), United/New United Merger Sub, Inc., a wholly owned subsidiary of
New United ("Merger Sub"), and several major stockholders of United (the
"Founders") entered into an Agreement and Plan of Restructuring and Merger (the
"Merger Agreement"). Pursuant to the terms, and subject to the conditions, of
the Merger Agreement, on the closing date the following transactions will occur:
(a) Liberty will contribute, or cause to be contributed, the Note Shares and all
of the shares of United Class B Common Stock owned by it to New United in
exchange for an equal number of
Page 4 of 20
shares of the Class C Common Stock, par value $0.01 per share, of New United
("New United Class C Common Stock"), (b) the Founders will contribute, by means
of a merger of several limited liability companies wholly owned by the Founders,
all of the shares of United Class B Common Stock held by them to New United in
exchange for an equal number of shares of New United's Class B Common Stock, par
value $0.01 per share ("New United Class B Common Stock"), (c) immediately after
the contributions described in (a) and (b), Merger Sub will merge with and into
United, with United as the surviving entity in such merger (the "Merger"),
resulting in United becoming a subsidiary of New United and each share of United
Class A Common Stock and United Class B Common Stock then outstanding (other
than any such shares held by New United) being converted into one share of New
United's Class A Common Stock, par value $0.01 per share ("New United Class A
Common Stock"), and (d) immediately following the Merger, Liberty will
contribute, or cause to be contributed, to New United (i) exchangeable notes
issued by United Pan-Europe Communications, N.V. ("UPC"), a subsidiary of
United, and one of UPC's subsidiaries, (ii) certain debt securities issued by
UPC and (iii) $200 million in cash, in exchange for additional shares of New
United Class C Common Stock.
The New United Class C Common Stock, all of which will be held by
Liberty and its affiliates, will be entitled to ten votes per share and will
vote together with the New United Class A and Class B Common Stock on all
matters other than the election of directors. The New United Class A Common
Stock will be entitled to one vote per share and the New United Class B Common
Stock will be entitled to ten votes per share. The New United Class C Common
Stock, voting as a separate class, will be entitled to elect four members of New
United's twelve member board of directors. The New United Class A and Class B
Common Stock, voting as a single class, will be entitled to elect the remaining
eight members of New United's board of directors. Following the Merger, and
based upon the Reporting Person's current ownership of United Class A Common
Stock, the Reporting Person will beneficially own New United Class C Common
Stock and New United Class A Common Stock representing approximately 76% of the
economic interest in New United and approximately 94% of the voting power of New
United on all matters other than the election of directors. By virtue of its
beneficial ownership of New United Class C Common Stock, Liberty will be
entitled to elect four members of New United's board of directors and the
holders of the New United Class A and Class B Common Stock will be entitled to
elect the remaining eight members of New United's board of directors. New United
will hold securities representing approximately 99.5% of the economic and voting
interest in United (except in the election of directors) and entitling New
United to elect one-half of the directors of United. Certain Founders will hold
securities representing the remaining approximately 0.5% economic and voting
interest in United (except in the election of directors) and entitling such
Founders to elect the other one-half of United's directors. Under the
certificate of incorporation of New United, New United will not be permitted to
take action with respect to any of the following matters without the consent of
a majority of the directors elected by the holders of Class C Common Stock:
- the acquisition or disposition of assets or issuance of equity
securities in any twelve-month period exceeding 30% of New
United's market capitalization (excluding a sale, by merger or
otherwise, by New United of all or substantially all of its
assets or a reorganization of entities affiliated with New
United, provided that the holders of New United Class C Common
Stock are treated equally with holders of New United
Page 5 of 20
Class B Common Stock and all holders of New United Class B
Common Stock are treated equally);
- the issuance of any shares of New United Class C Common Stock
(other than pursuant to certain proportional purchase rights
of the holders) or the issuance of any options exercisable for
New United Class B Common Stock in excess of three million
shares in the aggregate;
- the replacement of New United's Chief Executive Officer with
anyone other than Michael T. Fries, John F. Riordan, Gene W.
Schneider and Mark L. Schneider;
- any amendment to New United's certificate of incorporation or
bylaws that would adversely affect the rights of holders of
New United Class B Common Stock or New United Class C Common
Stock or any of their respective affiliates;
- any material transaction between New United and any of its
officers or directors or family members or affiliates of such
persons, other than employment contracts entered into in the
normal course of business;
- an amendment to the certificate of incorporation of United
that would adversely affect the rights of new United or the
holders of New United Class C Common Stock prior to the
exchange of all shares of United Class A Common Stock for New
United Class A Common Stock pursuant to a certain exchange
agreement contemplated by the Merger Agreement;
- any issuance of preferred stock of United other than as
contemplated by the Merger Agreement;
- any disposition of or waiver of rights with respect to any
indebtedness of UPC held by New United; or
- any change in New United's principal accounting firm.
The foregoing description of the Merger Agreement is qualified in its
entirety by reference to the text of the Merger Agreement which is incorporated
herein by reference as Exhibit 7(a) hereto.
At the closing of the Merger, the Reporting Person will enter into the
Stockholders Agreement and Standstill Agreement described in Item 6 of this
Statement, the forms of which are attached as exhibits to the Merger Agreement.
The Merger Agreement provides that, pending the closing of the Merger or
termination of the Merger Agreement, the parties will abide by the terms
provided for the Stockholders Agreement and Standstill Agreement as if all
references therein to New United were references to United and all references to
New United Class C Common Stock were references to United Class B Common Stock;
except that (a) the maximum percentage of United Common Stock that Liberty and
its controlled affiliates will be permitted to acquire thereunder, on a fully
diluted basis, will be limited to the sum of (i) the percentage beneficially
owned by them immediately after the execution and delivery of the
Page 6 of 20
Merger Agreement (including that represented by the Note Shares and the other
shares of United Class A Common Stock purchased by a subsidiary of Liberty from
United on December 3, 2001), plus (ii) the percentage represented by any shares
acquired by them from (x) other parties to the Stockholders Agreement, including
United, and (y) pursuant to a release agreement, dated February 22, 2001, among
UPC, United, Liberty and LMI (the "UPC Release"), plus (iii) the percentage
represented by an additional 20 million shares; and (b) the Note Shares and any
shares acquired by Liberty and its controlled affiliates in reliance on clause
(a)(iii) above will not be exchangeable for shares of United Class B Common
Stock pursuant to the share exchange right provided for in the Stockholders
Agreement. Further, pending the closing of the Merger or termination of the
Merger Agreement, Liberty and its affiliates will be entitled to vote their
shares of United common stock in their full discretion with respect to any
action or transaction that would have required the approval of the directors
elected by the holders of New United Class C Common Stock if taken by New United
or that would be inconsistent with the provisions of the Merger Agreement. If
the Merger Agreement is terminated prior to closing, then the parties will
negotiate in good faith to enter into a stockholders agreement similar to the
Stockholders Agreement and a standstill agreement similar to the Standstill
Agreement, modified as described in the second sentence of this paragraph. The
Stockholders Agreement and Standstill Agreement, the forms of which are
incorporated into this Statement as Exhibits 7(b) and 7(c) respectively, and the
descriptions thereof in Item 6 are hereby incorporated by reference into this
Item 4.
The Reporting Person intends to continuously review its investment in
the Issuer, and may in the future (subject to the terms of the Merger Agreement)
determine to (1) acquire additional securities of the Issuer, through open
market purchases, private agreements or otherwise, (2) dispose of all or a
portion of its interest in the Issuer or (3) 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: (A) the Issuer's business and prospects; (B) other developments
concerning the Issuer and its businesses generally; (C) other business
opportunities available to the Reporting Person; (D) developments with respect
to the business of the Reporting Person; (E) changes in law and government
regulations; (F) general economic conditions; and (G) money and stock market
conditions, including the market price of the securities of the Issuer.
Other than as set forth in this Statement (including the exhibits
hereto) or as contemplated or permitted by the agreements described herein, the
Reporting Person has no specific plans or proposals which relate to or would
result in:
- the acquisition by any person of additional securities of the
Issuer, or the disposition of securities of the Issuer;
- an extraordinary corporate transaction such as a merger,
reorganization or liquidation, involving the Issuer or any of
its subsidiaries;
Page 7 of 20
- a sale or transfer of a material amount of assets of the
Issuer or of any of its subsidiaries;
- 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;
- any material change in the present capitalization or dividend
policy of the Issuer;
- any other material change in the Issuer's business or
corporate structure;
- 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;
- 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;
- 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
- any action similar to any of those enumerated in this
paragraph.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) The Reporting Person presently beneficially owns 23,013,354 shares
of United Class A Common Stock, which includes 9,859,336 shares of United Class
A Common Stock issuable upon conversion of shares of the United Class B Common
Stock held by the Reporting Person. As of August 31, 2001, the Issuer had
outstanding 86,030,256 shares of United Class A Common Stock (including
5,569,240 shares of United Class A Common Stock held by UPC, but not including
35,708 shares of United Class A Common Stock held by the Issuer as treasury
shares) and 19,027,134 shares of United Class B Common Stock according to
representations and warranties made by the Issuer in the Merger Agreement. Each
share of United Class B Common Stock is convertible into one share of United
Class A Common Stock at the election of the holder without consideration. Each
share of United Class A Common Stock has one vote per share, and each share of
United Class B Common Stock has ten votes per share. Accordingly, the Reporting
Person beneficially owns approximately 21.3% of the outstanding United Class A
Common Stock and 38.8% of the Issuer's outstanding voting power.
Except as described on Schedule 3, which is incorporated herein, to the
knowledge of the Reporting Person, none of the Schedule 1 Persons beneficially
owns any shares of United Class A Common Stock.
The Reporting Person may be deemed to be a member of a group with the
other parties to the Merger Agreement. The Reporting Person disclaims being a
member of any such group and disclaims beneficial ownership of any securities of
the Issuer held by any such other party.
Page 8 of 20
(b) Except as described in Item 4 above and Item 6 below, the Reporting
Person has the sole power to direct the voting of the Shares and to direct the
disposition of the Shares.
(c) The information included in Items 3 and 6 is hereby incorporated by
reference into this Item 5(c).
(d) None.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
(a) Merger Agreement
The information regarding the Merger Agreement included in Item 4 of
this Statement and the text of the Merger Agreement incorporated herein as
Exhibit 7(a) are hereby incorporated by reference into this Item 6(a).
(b) Stockholders Agreement
At the closing of the Merger, New United, Liberty and Liberty Global
(together with their permitted transferees, the "Liberty Parties") and certain
Founders (together with their permitted transferees, the "Founder Parties") will
enter into a Stockholders Agreement, the material terms of which include the
following:
Limitations on Conversion. Until such time as the provisions of certain
outstanding indentures of United that require United to offer to repurchase
the bonds issued thereunder upon a change of control of United are rendered
inapplicable (either by redemption of the bonds , defeasance in accordance
with the terms of the indentures, waiver or amendment) or such a change of
control occurs , other than as a result of a breach of the Standstill Agreement
by Liberty, the Liberty Parties will not convert any shares of New United Class
C Common Stock into New United Class A Common Stock if, after giving effect to
the conversion, the Liberty Parties would have more than 50% of the combined
voting power of the New United Class A Common Stock and New United Class B
Common Stock outstanding or would have more voting power than the New United
Class A Common Stock and New United Class B Common Stock owned by the Founder
Parties. This limitation on the Liberty Parties' right to convert will
terminate if any person or group other than the Founders acquires either 50% of
the total voting power of New United or more voting power than that held by the
Founder Parties and will not apply to conversions made by the Liberty Parties
in connection with a sale or hedging transaction or any related pledges of
their shares.
Change of Control Covenants. Subject to specified exceptions for
governmental licenses, New United will not take or permit any action that would
result in it being subject to any
Page 9 of 20
covenants restricting the ability of United, New United or any of their
affiliates to effect a change of control, other than such covenants contained in
certain existing indentures to which United is currently subject, unless any
such change of control involving or caused by the action of any Liberty Party
(other than a tranfer of control, if control were obtained, by a Liberty Party
to a third party) is exempted from the application and effects of any such
restrictive covenants. New United will not take or permit any action to extend
or perpetuate the existing change of control covenants beyond the maturity date
of the bonds issued under its outstanding indentures.
Rights of First Offer. Subject to specified exceptions, no Liberty
Party may transfer any shares of New United Class B or Class C Common Stock
except to permitted transferees, or convert any such shares to New United Class
A Common Stock, unless it first offers the Founders the opportunity to purchase
the shares, and no Founder Party may transfer any shares of New United Class B
Common Stock except to permitted transferees, or convert any such shares to New
United Class A Common Stock, unless it first offers the Liberty Parties the
opportunity to purchase the shares. If either the Liberty Parties or the Founder
Parties decline to exercise their right of first offer, then the party proposing
to transfer shares of New United Class B or Class C Common Stock to a third
party must convert the shares to New United Class A Common Stock immediately
prior to such transfer, unless, in the case of a proposed transfer by the
Founder Parties, the number of shares being transferred by all Founder Parties
to the same transferee represents at least a majority of all shares of New
United Class B Common Stock owned by the Founder Parties, their permitted
transferees, and any other person that the Founder Parties have designated to
purchase shares from the Liberty Parties pursuant to the Founder Parties' right
of first offer. Prior to any event that permits the conversion of New United
Class C Common Stock into New United Class B Common Stock, the number of shares
that the Liberty Parties may transfer to a third party, when taken together with
the number of shares of New United Class A Common Stock previously transferred
to a third party following their conversion from New United Class B or Class C
Common Stock, shall not exceed the number of shares of New United Class A Common
Stock acquired after the closing of the Merger from parties other than New
United (including upon conversion of New United Class C Common Stock) and the
Founder Parties, plus the number of shares of New United Class A Common Stock
that the Liberty Parties receive in the Merger upon conversion of any United
Class A Common Stock acquired after the execution and delivery of the Merger
Agreement.
Permitted Transfers. The Liberty Parties and Founder Parties may
transfer their shares to permitted transferees without having to first offer
them to any other party. The Founder Parties' permitted transferees include
other Founders, family members and heirs of the Founders and partnerships or
trusts owned by or for the benefit of the Founders. The Liberty Parties'
permitted transferees include Liberty and any entity controlled by Liberty. The
parties may pledge their shares of New United Class B Common Stock in loan and
hedging transactions; provided that the applicable pledgee does not become a
registered holder of the shares and agrees to comply with the right of first
offer provisions of the Stockholders Agreement, with shortened notice and
exercise periods, in connection with any foreclosure on the pledged shares.
Pledges of the Founders' shares that were in existence prior to May 25, 2001 are
also allowed under the agreement.
Tag-Along Rights. If the Liberty Parties propose to transfer a majority
of their shares of New United Class B and Class C Common Stock to persons other
than permitted transferees, and
Page 10 of 20
the Founder Parties do not purchase such shares, then the Founder Parties will
be entitled to transfer a proportionate amount of their shares of New United
Class B Common Stock to the same purchaser on no less favorable terms. If the
Founder Parties propose to transfer a majority of their shares of New United
Class B Common Stock to persons other than permitted transferees, and the
Liberty Parties do not purchase such shares, then the Liberty Parties will be
entitled to transfer a proportionate amount of their New United Class A, Class B
and/or Class C Common Stock to the same purchaser on no less favorable terms.
Drag-Along Rights. If the Founder Parties propose to transfer a
majority of their New United Class B Common Stock to an unaffiliated third party
that is not a permitted transferee, and the Liberty Parties do not purchase such
shares, then the Founder Parties can require the Liberty Parties to transfer to
the same transferee on terms no less favorable than those on which the Founder
Parties transfer their shares, at the election of the Liberty Parties, either
(i) all of their shares of New United Class B and Class C Common Stock, (ii) all
of their New United common stock or (iii) a proportionate amount of each class
of New United common stock that they own; provided that the Liberty Parties will
be required to transfer all of their New United common stock if, in connection
with the proposed transfer by the Founder Parties, Mr. Gene W. Schneider, G.
Schneider Holdings, Co., The Gene W. Schneider Family Trust, Mr. Mark L.
Schneider and The MLS Family Partnership LP propose to transfer all shares of
New United common stock beneficially owned by them, which shares of common stock
include shares of New United Class B Common Stock representing at least 40% of
the greater of the number of shares of New United Class B Common Stock owned by
them on the date of the Stockholders Agreement and the number of shares of
United Class B Common Stock owned by them on June 25, 2000.
Exchange of Shares. New United will, on request, permit Liberty and its
affiliates to exchange any shares of New United Class A Common Stock owned by
them for shares of New United Class C Common Stock, or, following the conversion
of Class C Common Stock, Class B Common Stock, on a one-for-one basis. New
United will, upon request and subject to applicable laws, permit Liberty and its
affiliates to exchange any shares of capital stock of UPC, and any other
affiliate of New United (which shares were acquired from UPC or such affiliate),
for shares of New United Class C Common Stock or, following the conversion of
the Class C Common Stock, Class B Common Stock. Without limiting the generality
of the foregoing, at anytime after UPC is entitled to convert shares of its
Series 1 Convertible Preference Shares held by Liberty to UPC ordinary shares,
(i) Liberty will be entitled to exchange such shares for New United Class C
Common Stock or, following the conversion of the Class C Common Stock, Class B
Common Stock, and (ii) New United will be entitled to call such shares from
Liberty in exchange for shares of New United Class C Common Stock or, following
the conversion of the Class C Common stock, Class B Common Stock, provided such
exchange is tax-free to Liberty, in either case on terms specified in the
Stockholders Agreement.
Termination. The tag-along provisions and the drag-along provisions
terminate on June 25, 2010, unless the Stockholders Agreement is terminated
earlier. The Stockholders Agreement will terminate as to any Liberty Party or
Founder Party the voting power of whose equity securities is reduced below 10%
of the voting power of United such party held on June 25, 2000. The Stockholders
Agreement will terminate in its entirety on the first to occur of (a) all of the
Founders and their permitted transferees or Mr. Gene W. Schneider and Mr. Mark
L. Schneider
Page 11 of 20
and their permitted transferees (other than the other Founders) holding less
than 40% of the greater of the number of shares of New United Class B Common
Stock owned by them on the date of the Stockholders Agreement and the number of
shares of United Class B Common Stock owned by them on June 25, 2000 (assuming
for such purpose that any shares transferred by such persons to a Liberty Party
continue to be owned by such person) or (b) the transfer by the Founder Parties
of a majority of their New United Class B Common Stock to one or more Liberty
Parties or one or more unaffiliated third parties.
The foregoing description of the Stockholders Agreement is qualified in
its entirety by reference to the form of the Stockholders Agreement, which is
included in the Merger Agreement as exhibit 7.7 thereto and is incorporated
herein by reference as Exhibit 7(b) hereto. The Merger Agreement is incorporated
by reference as Exhibit 7(a) hereto.
(c) Standstill Agreement
At the closing of the Merger, New United, Liberty and Liberty Global
will enter into a Standstill Agreement, the material terms of which include the
following:
Limitation on Acquiring Securities. The Liberty Parties will not
acquire common stock of New United in an amount that would cause their
percentage of the total common stock of New United outstanding, on a
fully-diluted basis, to exceed the greater of (a) the sum of (i) the percentage
beneficially owned by them immediately after the closing of the transactions
contemplated by the Merger Agreement, plus (ii) the percentage represented by
any shares acquired by them from (x) other parties to the Stockholders
Agreement, including New United, and (y) from UPC pursuant to the UPC Release,
plus (iii) the percentage represented by an additional 25 million shares;
provided that the number determined by clauses (a)(i) and (a)(iii) shall not
exceed 81%, and (b) the sum of 81% plus the percentage determined by clause
(a)(ii)(x). Liberty will not solicit offers for New United from persons other
than Liberty Parties or Founders or call a meeting of stockholders or seek
amendments to New United's bylaws without the consent of New United's board of
directors. Liberty will not be in breach of the restrictions on its maximum
share ownership if its share ownership exceeds the maximum percentage specified
solely because of any action taken by New United in respect of which no Liberty
Party takes any action other than in its capacity as a holder of equity
securities of New United, including, for example, a tender offer by New United
to acquire shares of its common stock that Liberty elects not to accept or the
issuance of a dividend by New United payable in cash or stock that the Liberty
Parties elect to receive in stock.
Appraisal; Voting Rights. No Liberty Party will exercise appraisal
rights as to any matter. Liberty will cause its shares to be present at meetings
of New United stockholders so as to be counted for quorum purposes. Except for
certain matters as to which Liberty or the directors elected by the holders of
New United Class C Common Stock have approval rights, whether under the New
United certificate of incorporation, the Standstill Agreement or other agreement
entered into in connection with the Merger Agreement, or which, pursuant to the
bylaws of New United are required to be approved by the board of directors prior
to being submitted to the stockholders (in any such case, if such approval has
not been obtained), Liberty will vote its shares of common stock on all matters
submitted to a vote of stockholders, other than the election or removal of
directors or a merger, sale or similar transaction involving New
Page 12 of 20
United, either as recommended by New United's board of directors or in the same
proportion as all other holders of common stock of New United. Liberty will vote
its shares of New United common stock against any merger, consolidation,
recapitalization, dissolution or sale of all or substantially all of New
United's assets not approved by New United's board of directors.
Until such time as the provisions of certain outstanding indentures of
United that require United to offer to repurchase the bonds issued thereunder
upon a change of control of United are rendered inapplicable (either by
redemption of the applicable bonds, defeasance in accordance with the terms of
the indentures, waiver or amendment) or a change of control occurs , other than
as a result of a breach of the Standstill Agreement by Liberty, Liberty will
vote its shares in the election of directors in its sole discretion.
Following such time (unless, in the case of the occurrence of a change
of control as to which a defeasance or waiver of the change of control
restrictions has not occurred, more than $200 million remains outstanding under
certain specified indentures), Liberty will be entitled to nominate four members
of New United's board of directors or, if greater, a number equal to at least
33-1/3% of New United's board of directors, and the Founder Parties will be
entitled to nominate the same number of directors. New United's board of
directors will nominate the remaining members of the board of directors. The
Liberty Parties will then be obligated to vote their shares of common stock of
New United in favor of such nominees to the board of directors and, unless
requested to do so by the Founders, will not vote to remove any board members
nominated by the Founders except for cause.
Limitations on Issuing High Vote Securities. New United will not issue
any New United Class B Common Stock or other equity security having more votes
per share than New United Class A Common Stock, or rights to acquire any such
securities, other than to Liberty Parties and their controlled affiliates,
except that New United may issue up to an aggregate of 3 million shares of New
United Class B Common Stock upon exercise of options outstanding at the time of
the closing of the Merger or subsequently issued options, and New United may,
on a majority vote of its board of directors, issue preferred stock convertible
into New United Class B Common Stock (but with no other conversion rights, no
voting rights other than as are customary in preferred stocks and no special
rights), provided that such preferred stock cannot be so converted prior to
such time as United is no longer subject to the change of control provisions of
the indentures described above, and the total number of shares of New United
Class B Common Stock issuable upon conversion of such options and preferred
stock must be less than the number of shares that would, if issued after such
time as United is no longer subject to such change of control provisions in
such indentures, entitle the Liberty Parties to exercise the purchase rights
described below.
Limitations on Transfer. No Liberty Party may transfer any equity
securities of New United, unless the transfer is (i) to Liberty or a controlled
affiliate of Liberty that is or becomes a party to the Standstill Agreement,
(ii) to one more underwriters in connection with a public offering (iii) to
one or more Founders or purchasers designated thereby pursuant to the right of
first offer provisions of the Stockholders Agreement, provided that any such
transferee, if other than a Founder, becomes subject to the Stockholders
Agreement and, if other than a Founder or
Page 13 of 20
permitted transferee of a Founder, the Standstill Agreement, (iv) pursuant to
the tag-along and drag-along provisions of the Stockholders Agreement, (v)
otherwise made in accordance with the provisions of the Stockholders Agreement;
provided that if the transfer is to a non-affiliate, the transferring Liberty
Party has no reason to believe that any person or group would obtain more than
ten percent of New United's voting power in the election of directors as a
result of the transfer. The Liberty Parties may pledge their equity securities
to financial institutions in connection with loan and hedging transactions that
comply with the Stockholders Agreement.
Offers for New United. If any person makes an offer to (i) acquire
equity securities of New United from New United or one or more of its
stockholders by public offer, (ii) acquire all or substantially all of New
United's assets or (iii) effect a merger, consolidation, share exchange or
similar transaction, New United will give Liberty notice of such offer promptly
upon receipt thereof, or, if giving such notice would violate any applicable law
or agreement, promptly after public announcement of such offer. In no event will
New United give Liberty notice of such an offer less than 10 days prior to
accepting it. If New United does not reject such an offer within 5 days, then
any Liberty Party or its affiliates may propose a competing offer to New
United's board of directors, and the board of directors will in the exercise of
its fiduciary duties consider in good faith waiving any provision of the
Standstill Agreement that would restrict actions that might be taken by a
Liberty Party or its affiliates in support of such a competing offer.
If New United proposes to sell all or substantially all of its assets,
effect a merger, consolidation, share exchange or similar transaction or issue
New United Class B Common Stock in an amount that would not trigger Liberty's
purchase rights described below, then New United will give Liberty notice of
such proposal and will give Liberty an opportunity to propose an alternative
transaction to New United's board of directors.
Purchase Right. If, following such time as United is no longer subject
to the change of control provisions of the indentures described above under
"Appraisal; Voting Rights," New United issues equity securities having more
votes per share than the New United Class A Common Stock and such issuance,
together with any prior issuance of high vote securities as to which the
Liberty Parties did not have purchase rights, results in the voting power of
the Liberty Parties' equity securities being reduced below 90% of their voting
power prior to such issuance or the first such issuance, the Liberty Parties
will be entitled to acquire a number of additional shares of New United Class B
Common Stock from New United that would restore the Liberty Parties' voting
power to 100% of what it was prior to such issuance or the first such issuance
(whichever is greater). Liberty may acquire such New United Class B Common
Stock by purchasing it from New United for cash or other form of consideration
acceptable to New United and/or by exchanging shares of New United Class A
Common Stock on a one-for-one basis. The Liberty Parties will not be entitled
to the foregoing purchase rights in respect of any issuance of New United Class
B Common Stock in an amount such that, immediately following such issuance, the
persons who were holders of equity securities immediately prior to such
issuance then hold less than 30 percent of the voting power of New United's
outstanding equity securities in the election of directors generally.
Preemptive Right. If, at any time after the signing of the Standstill
Agreement, New United proposes to issue any New United Class A Common Stock or
rights to acquire New United Class A Common Stock, the Liberty Parties will have
the right, but not the obligation, to
Page 14 of 20
purchase a portion of such issuance sufficient to maintain their then existing
equity percentage in New United on terms at least as favorable as those given to
any third party purchasers. This preemptive right will not apply to (i) the
issuance of New United Class A Common Stock or rights to acquire New United
Class A Common Stock in connection with the acquisition of a business from a
third party not affiliated with New United or any Founder that is directly
related to the then existing business of New United and its subsidiaries, (ii)
the issuance of options to acquire New United Class A Common Stock to employees
pursuant to employee benefit plans approved by New United's board of directors
(such options and all shares issued pursuant thereto not to exceed 10% of New
United's outstanding common stock), (iii) equity securities issued as a dividend
on all equity securities or upon a subdivision or combination of all outstanding
equity securities, or (iv) equity securities issued upon the exercise of rights
outstanding as of the closing of the Merger or as to the issuance of which the
Liberty Parties had the right to exercise their preemptive rights.
Termination. The Standstill Agreement will terminate on June 25, 2010,
except for the restrictions on New United's ability to issue additional high
vote securities and the Liberty Parties' purchase and preemptive rights;
provided that the Agreement will terminate in its entirety upon termination of
the Stockholders Agreement.
The foregoing description of the Standstill Agreement is qualified in
its entirety by reference to the form of the Standstill Agreement, which is
included in the Merger Agreement as exhibit 7.10 thereto and is incorporated
herein by reference as Exhibit 7(c) hereto. The Merger Agreement has been
incorporated herein by reference as Exhibit 7(a) to this Statement.
Page 15 of 20
ITEM 7. MATERIALS TO BE FILED AS EXHIBITS.
Exhibit 7(a) Agreement and Plan of Restructuring and Merger among UnitedGlobalCom, Inc.,
New UnitedGlobalCom, Inc., United/New United Merger Sub, Inc., Liberty
Media Corporation, Liberty Media International, Inc., and Liberty Global, Inc,
dated December 3, 2001 (incorporated by reference to Exhibit 7(c)(1) to the
Current Report on Form 8-K of the Reporting Person filed December 5, 2001
(Commission file number 001-16615)).
Exhibit 7(b) Form of Stockholders Agreement among UnitedGlobalCom, Inc., a Delaware
corporation formerly known as New UnitedGlobalCom, Inc., Liberty Media
Corporation, Liberty Global, Inc. and certain other stockholders of
UnitedGlobalCom, Inc., which is included as Exhibit 7.7 to the Agreement and
Plan of Restructuring and Merger among UnitedGlobalCom, Inc. New
UnitedGlobalCom, Inc., United/New United Merger Sub, Inc., Liberty Media
Corporation, Liberty Media International, Inc., and Liberty Global, Inc, dated
December 3, 2001 (incorporated by reference to Exhibit 7(c)(1) to the Current
Report on Form 8-K of the Reporting Person dated December 5, 2001
(Commission file number 001-16615)).
Exhibit 7(c) Form of Standstill Agreement among UnitedGlobalCom, Inc., Liberty Media
Corporation and Liberty Global, Inc., which is included as Exhibit 7.10 to the
Agreement and Plan of Restructuring and Merger among UnitedGlobalCom, Inc.
New UnitedGlobalCom, Inc., United/New United Merger Sub, Inc., Liberty
Media Corporation, Liberty Media International, Inc., and Liberty Global, Inc,
dated December 3, 2001 (incorporated by reference to Exhibit 7(c)(1) to the
Current Report on Form 8-K of the Reporting Person dated December 5, 2001
(Commission file number 001-16615)).
Page 16 of 20
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: December 11, 2001
LIBERTY MEDIA CORPORATION
By: /s/ Elizabeth M. Markowski
--------------------------------------
Name: Elizabeth M. Markowski
Title: Senior Vice President
Page 17 of 20
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, 12300 Liberty Boulevard, 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.
Name Title
---- -----
John C. Malone Chairman of the Board and Director of Liberty
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
Donne F. Fisher Director of Liberty; President; Fisher Capital Partners Ltd.
Jerome H. Kern Director of Liberty; Consultant, Kern Consulting, LLC
Larry E. Romrell Director of Liberty
David J.A. Flowers Senior Vice President and Treasurer of Liberty
Elizabeth M. Markowski Senior Vice President of Liberty
Charles Y. Tanabe Senior Vice President, General Counsel and Secretary of
Liberty
Peter N. Zolintakis Senior Vice President of Liberty
Christopher W. Shean Vice President and Controller of Liberty
Page 18 of 20
SCHEDULE 2
Open Market Purchases of
United Class A Common Stock by
the Reporting Person and its Subsidiaries Referenced in Item 3 of this Statement
DATE SHARES PURCHASED PRICE PER SHARE
---- ---------------- ---------------
06/26/00 25,000 $49.6250
06/26/00 10,000 $49.7500
06/26/00 5,000 $49.9375
06/26/00 60,000 $50.0000
06/26/00 25,000 $50.3125
06/26/00 35,000 $49.7500
06/26/00 50,000 $49.8750
06/26/00 40,000 $50.0000
06/26/00 25,000 $50.1250
06/26/00 50,000 $50.2500
06/26/00 20,000 $50.6250
06/27/00 50,000 $50.6250
06/27/00 20,000 $49.9375
06/27/00 50,000 $50.0000
06/27/00 30,000 $50.2500
06/27/00 50,000 $50.3125
06/27/00 15,000 $50.3750
06/27/00 35,000 $50.5000
02/23/01 10,000 $14.7500
02/23/01 89,000 $14.8125
02/23/01 20,000 $14.8750
02/23/01 21,000 $14.9375
02/23/01 35,000 $15.0000
02/23/01 200,000 $15.0219
02/23/01 16,000 $15.0625
02/23/01 75,000 $15.0625
02/23/01 24,000 $15.1250
02/23/01 3,000 $15.1875
02/23/01 75,000 $15.2500
Page 19 of 20
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
---- --------------------------------------------------------
John C. Malone Options to purchase 60,832 shares of United Class A Common Stock
Robert R. Bennett 100,000 shares of United Class A Common Stock
Paul A. Gould 70,000 shares of United Class A Common Stock
Page 20 of 20
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
----------- -----------
7(a) Agreement and Plan of Restructuring and Merger among UnitedGlobalCom, Inc.,
New UnitedGlobalCom, Inc., United/New United Merger Sub, Inc., Liberty
Media Corporation, Liberty Media International, Inc., and Liberty Global, Inc,
dated December 3, 2001 (incorporated by reference to Exhibit 7(c)(1) to the
Current Report on Form 8-K of the Report Person dated December 5, 2001
(Commission file number 001-16615)).
7(b) Form of Stockholders Agreement among UnitedGlobalCom, Inc., a Delaware
corporation formerly known as New UnitedGlobalCom, Inc., Liberty Media
Corporation, Liberty Global, Inc. and certain other stockholders of
UnitedGlobalCom, Inc., which is included as Exhibit 7.7 to the Agreement and
Plan of Restructuring and Merger among UnitedGlobalCom, Inc. New
UnitedGlobalCom, Inc., United/New United Merger Sub, Inc., Liberty Media
Corporation, Liberty Media International, Inc., and Liberty Global, Inc,
dated December 3, 2001 (incorporated by reference to Exhibit 7(c)(1) to the
Current Report on Form 8-K of the Reporting Person dated December 5, 2001
(Commission file number 001-16615)).
7(c) Form of Standstill Agreement among UnitedGlobalCom, Inc., Liberty Media
Corporation and Liberty Global, Inc., which is included as Exhibit 7.10 to the
Agreement and Plan of Restructuring and Merger among UnitedGlobalCom, Inc.
New UnitedGlobalCom, Inc., United/New United Merger Sub, Inc., Liberty
Media Corporation, Liberty Media International, Inc., and Liberty Global, Inc,
dated December 3, 2001 (incorporated by reference to Exhibit 7(c)(1) to the
Current Report on Form 8-K of the Reporting Person dated December 5, 2001
(Commission file number 001-16615)).