-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SvqWvZZxwg2R+mdNufvLt3LryH6OpNoUcUQfCg3zys21+ZiUk08iW/S9NesxxGLd +SER3lKra6GIASYE0Gfafw== 0001104659-03-025950.txt : 20031113 0001104659-03-025950.hdr.sgml : 20031113 20031113060239 ACCESSION NUMBER: 0001104659-03-025950 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20031113 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: UNITEDGLOBALCOM INC CENTRAL INDEX KEY: 0001134061 STANDARD INDUSTRIAL CLASSIFICATION: CABLE & OTHER PAY TELEVISION SERVICES [4841] IRS NUMBER: 841602895 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-77983 FILM NUMBER: 03995704 BUSINESS ADDRESS: STREET 1: 4643 SOUTH ULSTER STREET SUITE 1300 CITY: DENVER STATE: CO ZIP: 80237 BUSINESS PHONE: 3037704001 FORMER COMPANY: FORMER CONFORMED NAME: NEW UNITEDGLOBALCOM INC DATE OF NAME CHANGE: 20010208 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: LIBERTY MEDIA CORP /DE/ CENTRAL INDEX KEY: 0001082114 STANDARD INDUSTRIAL CLASSIFICATION: CABLE & OTHER PAY TELEVISION SERVICES [4841] IRS NUMBER: 841288730 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 12300 LIBERTY BLVD. CITY: ENGLEWOOD STATE: CO ZIP: 80112 BUSINESS PHONE: 7208755400 MAIL ADDRESS: STREET 1: 12300 LIBERTY BLVD. CITY: ENGLEWOOD STATE: CO ZIP: 80112 SC 13D/A 1 a03-4914_1sc13da.htm SC 13D/A

SEC 1746
(11-02)


Potential persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.

 

 

UNITED STATES

OMB APPROVAL

 

SECURITIES AND EXCHANGE
COMMISSION

OMB Number:
3235-0145

 

Washington, D.C. 20549

Expires: December 31, 2005

 

SCHEDULE 13D/A

Estimated average burden hours per response. . 11

Under the Securities Exchange Act of 1934
(Amendment No. 3)*

UNITEDGLOBALCOM, INC.

(Name of Issuer)

 

Class A Common Stock, par value $0.01 per share

(Title of Class of Securities)

 

913247 50 8

(CUSIP Number)

 

Elizabeth M. Markowski

Senior Vice President

Liberty Media Corporation

12300 Liberty Boulevard

Englewood, Colorado 80112

(720) 875-5400

(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)

 

November 12, 2003

(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.


*The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter the disclosures provided in a prior cover page.

The information required in the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934, (the “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).

 



 

CUSIP No.  913247 50 8

 

 

1.

Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only).
Liberty Media Corporation
84-1288730

 

 

2.

Check the Appropriate Box if a Member of a Group (See Instructions)

 

 

(a)

[   ]

 

 

(b)

[X]

 

 

3.

SEC Use Only

 

 

4.

Source of Funds (See Instructions)
OO

 

 

5.

Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)  [   ]

 

 

6.

Citizenship or Place of Organization
Delaware

 

Number of
Shares
Beneficially
Owned by
Each
Reporting
Person With

7.

Sole Voting Power
296,002,376 shares(1)

 

8.

Shared Voting Power
11,448,696 shares(2),(3)

 

9.

Sole Dispositive Power
296,002,376 shares(1)

 

10.

Shared Dispositive Power
11,448,696 shares(2),(3)

 


(1) Includes 293,264,206 shares of the Issuer’s Class A Common Stock issuable upon conversion of shares of the Issuer’s Class C Common Stock beneficially owned by the Reporting Person.

(2) Includes 9,859,336 shares of Issuer’s Class A Common Stock issuable upon conversion of shares of the Issuer’s Class C Common Stock beneficially owned by the Reporting Person.

(3) The Reporting Person may be deemed to share beneficial ownership of 1,589,360 shares of the Issuer’s Class A Common Stock and 9,859,336 shares of the Issuer’s Class C Common Stock held by Liberty International B-L LLC with BCI International Investments, LLC.

 

2



 

 

11.

Aggregate Amount Beneficially Owned by Each Reporting Person
307,451,072 shares(4)

 

 

12.

Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)  [ X ](5)

 

 

13.

Percent of Class Represented by Amount in Row (11)
75.28%(6)

 

 

14.

Type of Reporting Person (See Instructions)
CO

 


(4) Includes 303,123,542 of the Issuer’s Class A Common Stock issuable upon conversion of shares of the Issuer’s Class C Common Stock beneficially owned by the Reporting Person.

(5) The Reporting Person may be deemed to be a member of a group with the other parties to the Stockholders Agreement described in, and attached as an exhibit to, the Original Statement on Schedule 13D of the Reporting Person filed with the Securities and Exchange Commission on February 26, 2002.  The Reporting Person disclaims being a member of any such group and disclaims having beneficial ownership of any securities of the Issuer held by any such other party.

(6) According to the Definitive Proxy Statement on Schedule 14A, filed by the Issuer on October 21, 2003, at October 20, 2003 the Issuer had 105,310,451 shares of Class A Common Stock, 8,198,016 shares of Class B Common Stock and 303,123,542 shares of Class C Common Stock outstanding. 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 C Common Stock is convertible into one share of the Issuer’s Class B Common Stock or Class A Common Stock at the election of the holder without consideration. The indicated percentage has been calculated assuming that all outstanding shares of the Issuer’s Class C Common Stock, all of which shares are beneficially owned by the Reporting Person, have been converted into an equal number of shares of the Issuer’s Class A Common Stock. Because the Reporting person does not beneficially own any shares of the Issuer’s Class B Common Stock, the indicated percentage has been calculated assuming that no shares of the Issuer’s Class B Common Stock have been converted into shares of the Issuer’s Class A Common Stock.

 

3



 

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

SCHEDULE 13D/A

 

Amendment No. 3 to

 

Statement of

 

LIBERTY MEDIA CORPORATION

 

Pursuant to Section 13(d) of the Securities Exchange Act of 1934

in respect of

 

UNITEDGLOBALCOM, INC.

 

This amended statement on Schedule 13D/A (this “Amendment”) amends the Statement on Schedule 13D originally filed by Liberty Media Corporation, a Delaware corporation (“Liberty” or the “Reporting Person”), with the Securities and Exchange Commission (the “Commission”) on February 26, 2002 (the “Original Statement”), as amended by Amendment No. 1 on Schedule 13D/A filed by the Reporting Person with the Commission on February 28, 2003 (“Amendment No. 1”) and Amendment No. 2 on Schedule 13D/A filed by the Reporting Person with the Commission on August 21, 2003 (“Amendment No. 2”), and relates to the shares (the “Shares”) of Class A Common Stock, par value $0.01 per share (the “Class A Common Stock”), of UnitedGlobalCom, Inc., a Delaware corporation (the “Issuer” or “United”).  The Original Statement, Amendment No. 1 and Amendment No. 2 are collectively referred to as the “Statement.”  Items 2, 3, 6 and 7 of, and Schedules 1 and 2 to, the Statement are hereby amended as set forth below.  Capitalized terms not defined herein have the meanings given to such terms in the Statement.

 

Item 2.

Identity and Background

Item 2 of the Statement is hereby amended and supplemented by adding the following information thereto:

The principal business address of the Reporting Person is 12300 Liberty Boulevard, Englewood, Colorado 80112. 

The Reporting Person is a holding company that, through its ownership of interests in subsidiaries and other entities, 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)

 

4



 

satellite communications, and (v) investments in wireless domestic telephony and other technology ventures.

Schedule 1 attached to this Amendment 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.

Of the Shares and the shares of United Class C Common Stock described herein as beneficially owned by the Reporting Person or its subsidiaries, 1,589,360 Shares and 9,859,336 shares of United Class C Common Stock are beneficially owned by Liberty International B-L LLC, a Delaware limited liability company (“Holding LLC”), an indirect subsidiary in which the Reporting Person owns a 79% interest.

To the knowledge of the Reporting Person, each of the persons named on Schedule 1 (the “Schedule 1 Persons”) is a United States citizen, except for David J.A. Flowers, who is a Canadian citizen.

During the last five years, neither the Reporting Person nor any of the Schedule 1 Persons (to the knowledge of the Reporting Person) has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors).  During the last five years, neither the Reporting Person nor any of the Schedule 1 Persons (to the knowledge of the Reporting Person) has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and, as a result of such proceeding, is or was subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

 

Item 3.

Source and Amount of Funds or Other Consideration

Item 3 of the Statement is hereby amended and supplemented by adding the following information thereto:

The information contained in Item 6 of this Amendment is hereby incorporated by reference herein.

 

Item 6.

Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer

Item 6 of the Statement is hereby amended and supplemented by adding the following:

Waiver Letter.

On October 6, 2003, United and one of its subsidiaries commenced an offer (as amended as described below, the “Exchange Offer”) to acquire all of the outstanding shares of common stock, par value $0.01 per share (“UGCE Common Stock”), of UGC Europe, Inc., a Delaware corporation (“UGCE”), not already owned by United or its subsidiaries in exchange for shares of United Class A Common Stock.  In its public filings regarding the Exchange Offer,

 

5



 

United has indicated that, following the completion of the Exchange Offer, a subsidiary of United will effect a short-form merger (the “Merger”) pursuant to which any and all remaining stockholders of UGCE will receive the same consideration as received by holders of shares of UGCE Common Stock tendering such shares in the Exchange Offer.  On November 12, 2003, United gave public notice of an amendment to the Exchange Offer.

As previously disclosed, pursuant to the Standstill Agreement, the Liberty Parties have certain preemptive rights with respect to the issuance of United Class A Common Stock, which allow the Liberty Parties upon the exercise of such rights to purchase a portion of such issuance sufficient to maintain their then existing equity percentage in United.  The issuance of shares of United Class A Common Stock pursuant to the Exchange Offer and the Merger triggers the Liberty Parties’ preemptive rights under the Standstill Agreement.

On November 12, 2003, the Reporting Person entered into a letter agreement (the “Waiver Letter”) with United, pursuant to which, the Reporting Person, on behalf of the Liberty Parties, agreed, subject to the completion of the Exchange Offer, that the Liberty Parties may, but are not obligated to, exercise their preemptive rights to purchase up to an aggregate number of shares of United Class A Common Stock (the “Preemption Shares”) equal to the number of shares of United Class A Common Stock sufficient to permit the Liberty Parties to hold a number of shares of common stock of United equal to 55% (or in certain cases up to 60%) of the total number of shares of outstanding common stock of United immediately following such issuance of shares of United Class A Common Stock upon consummation of the Exchange Offer and Merger, assuming for purposes of calculating such percentage that the transactions contemplated by the Share Exchange Agreement have been consummated.  Pursuant to the Waiver Letter, the Reporting Person, on behalf of each of the Liberty Parties, waived the Liberty Parties’ preemptive right under the Standstill Agreement to acquire any shares of United Class A Common Stock in connection with the Exchange Offer and Merger in excess of the number of Preemption Shares determined in accordance with the Waiver Letter.  The per share purchase price for the Preemption Shares will be equal to the quotient of (i) the arithmetic average of the volume weighted average prices for a share of UGCE Common Stock on the principal United States securities exchange or The Nasdaq Stock Market on which UGCE Common Stock trades, as reported by Bloomberg, L.P., for each of the three consecutive full trading days ending on and including the last full trading day immediately prior to publication of notice of the acceptance of shares of UGCE Common Stock for exchange in the Exchange Offer divided by (ii) 10.3, subject to appropriate and equitable adjustment for any stock splits, reverse splits, stock dividends or similar events after the date of the Waiver Letter affecting the United Class A Common Stock or the UGCE Common Stock.  The aggregate purchase price for the Preemption Shares will be paid (x) first, by the surrender of all or a portion of loans owed by a subsidiary of the Issuer to a subsidiary of the Reporting Person and (y) second, with cash from the Reporting Person’s working capital.

The Waiver Letter also provides that the Liberty Parties’ preemptive rights under the Standstill Agreement will survive the termination of the Standstill Agreement, and amends the preemptive rights provision, effective from and after the date of termination of the Standstill Agreement, to provide that, subject to the exceptions set forth in the Standstill Agreement, if at any time United issues, grants or sells any United Class A Common Stock or rights to acquire United Class A Common Stock, the Liberty Parties shall have the right, but not the obligation, to acquire from United a portion of such issuance for a purchase price determined in accordance therewith up to an amount sufficient to permit the Liberty Parties to hold a number of shares of common stock of United equal to the lesser of (x) 55% of the total outstanding shares of common stock of United and (y) the percentage of the total outstanding Common Stock of United represented by the common stock held by the Liberty Parties immediately prior to such issuance.

The foregoing description of the Waiver Letter is qualified in its entirety by reference to the text of the Waiver Letter, a copy of which is incorporated by reference as Exhibit 7(l) hereto, which is hereby incorporated by reference into this Item 6.

 

6



 

Item 7.

Material to Be Filed as Exhibits

The following documents are filed as exhibits to this Amendment:

 

Exhibit No.

 

Exhibit

 

 

 

7(l)

 

Letter Agreement, dated as of November 12, 2003, by and between Liberty Media Corporation and UnitedGlobalCom, Inc.

 

7



 

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: November 13, 2003

 

 

 

 

LIBERTY MEDIA CORPORATION

 

 

 

 

 

By:

/s/ Elizabeth M. Markowski

 

 

Elizabeth M. Markowski
Senior Vice President

 

8



 

Schedule 1 of the Statement is hereby amended to read in its entirety as follows:

 

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 are set forth below.  Unless otherwise noted, the business address for each person listed below is c/o Liberty Media Corporation, 12300 Liberty Boulevard, Englewood, Colorado 80112.  To the knowledge of Liberty Media Corporation, 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 and Business Address
(if applicable)

 

Principal Occupation and Principal Business
(if applicable)

 

 

 

John C. Malone

 

Chairman of the Board and Director of Liberty

 

 

 

Robert R. Bennett

 

President, Chief Executive Officer and
Director of Liberty

 

 

 

Donne F. Fisher
9781 Meridian Blvd., #200
Englewood, Colorado 80112

 

Director of Liberty; President of Fisher Capital
Partners, Ltd.

 

 

 

Paul A. Gould
711 5th Avenue, 8th Floor
New York, New York 10022

 

Director of Liberty; Managing Director of
Allen & Company Incorporated

 

 

 

Gary S. Howard

 

Executive Vice President, Chief Operating
Officer and Director of Liberty

 

 

 

Jerome H. Kern
9033 East Easter Place, Suite 205
Centennial, Colorado  80112

 

Director of Liberty; Consultant, Kern
Consulting LLC

 

 

 

David E. Rapley

 

Director of Liberty

 

 

 

M. LaVoy Robison
1727 Tremont Place
Denver, Colorado  80202

 

Director of Liberty; Executive Director and a
Board Member of the Anschutz Foundation

 

 

 

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

 

 

 

Albert E. Rosenthaler

 

Senior Vice President of Liberty

 

 

 

Christopher W. Shean

 

Senior Vice President and Controller of
Liberty

 

 

 

Charles Y. Tanabe

 

Senior Vice President, General Counsel and
Secretary of Liberty

 

9



 

Schedule 2 of the Statement is hereby amended to read in its entirety as follows:

 

SCHEDULE 2

 

The Reporting Person disclaims beneficial ownership of the securities listed on this Schedule 2.

 

Name

 

Shares and Options to Purchase Shares Beneficially Owned

 

 

 

Robert R. Bennett

 

147,916 shares of United Class A Common Stock, which includes beneficial ownership of 47,916 shares of United Class A Common Stock, which may be acquired within 60 days after November 1, 2003, pursuant to stock options.

 

 

 

Paul A. Gould

 

70,000 shares of United Class A Common Stock.

 

 

 

Gary S. Howard

 

47,916 shares of United Class A Common Stock, which may be acquired within 60 days after November 1, 2003, pursuant to stock options.

 

 

 

John C. Malone

 

167,498 shares of United Class A Common Stock, which may be acquired within 60 days after November 1, 2003, pursuant to stock options.

 

10


EX-7.(L) 3 a03-4914_1ex7dl.htm EX-7.(L)

Exhibit 7(1)

 

LIBERTY MEDIA CORPORATION

12300 Liberty Boulevard

Englewood, Colorado 80112

 

 

November 12, 2003

 

UnitedGlobalCom, Inc.

4643 South Ulster Street

Suite 1300

Denver, Colorado 80237

 

Ladies and Gentlemen:

 

                On October 6, 2003, UnitedGlobalCom, Inc., a Delaware corporation (“UGC”), published notice that it and one of its wholly-owned subsidiaries had commenced an offer to acquire all the outstanding shares of Common Stock, par value $0.01 per share (“UGCE Common Stock”), of UGC Europe, Inc., a Delaware corporation (“UGCE”), not already owned by UGC or its subsidiaries in exchange for shares of the Class A Common Stock, par value $0.01 per share (“UGC Class A Stock”), of UGC, on the specified terms and conditions.  On November 12, 2003, the board of directors of UGC resolved to amend such offer for the outstanding UGCE Common Stock to raise the exchange ratio in such offer to 10.3:1 and to make it a nonwaivable condition that UGC receive tenders of a sufficient number of shares of UGCE Common Stock so that, after consummation of the offer, UGC and its subsidiaries shall own at least 90% of the total number of shares of UGCE Common Stock, on a fully-diluted basis (as so amended, the “Exchange Offer”).   Following the Exchange Offer, if it is successful, a subsidiary of UGC and UGCE will effect a short-form merger (the “Merger”) pursuant to which any and all remaining stockholders of UGCE will receive the same number of shares of UGC Class A Stock received by holders of shares UGCE Common Stock tendering such shares in the Exchange Offer.

 

                Pursuant to Section 7B of the Standstill Agreement, dated January 30, 2002 (the “Standstill Agreement”), among UGC, Liberty Media Corporation, a Delaware corporation (“Liberty Media”), Liberty Global, Inc., a Delaware corporation (“Liberty Global”), and Liberty UCOMA, LLC, a Delaware limited liability company (“Liberty UCOMA”), Liberty Media, Liberty Global, Liberty UCOMA and BCI International Investments, LLC, a Delaware limited liability company controlled by Liberty (collectively, the “Liberty Parties”), are entitled to certain preemptive rights with respect to the issuance of UGC Class A Stock in the Exchange Offer and Merger.  The purpose of this letter is to set forth certain agreements among the parties hereto relating to such preemptive rights.  It is a condition to the board of directors’ authorization of the Exchange Offer that UGC obtain the agreement of the Liberty Parties to the amendments to and partial waivers of the terms of the Standstill Agreement contained herein.  Capitalized terms used, but not defined, herein shall have the respective meanings ascribed thereto in the Standstill Agreement, as amended hereby.

 

1



 

                1.             Partial Waiver of Preemptive Rights; Exercise of Rights; Purchase Price.  Conditioned upon compliance with the terms of this letter and conditioned upon the Exchange Offer being consummated on the terms described in the first paragraph hereof and otherwise as set forth in the public filings of UGC related to such Exchange Offer on the date hereof, the parties hereby agree as follows:

 

                (a)           The Liberty Parties hereby waive the delivery of an Issuance Notice prior to the issuance of shares of UGC Class A Stock upon consummation of the Exchange Offer and Merger.  In lieu of such Issuance Notice, UGC shall deliver the Modified Issuance Notice (as defined below) as specified in this letter.

 

                (b)           In connection with the Exchange Offer and Merger, the Liberty Parties may, but will not be required to, exercise their preemptive rights set forth in Section 7B of the Standstill Agreement to purchase at the per share Purchase Price (as defined below) up to an aggregate number of shares of UGC Class A Stock (the “Preemption Shares”) equal to the greater of (i) such number of shares of UGC Class A Stock sufficient to permit the Liberty Parties to hold a number of Liberty Party Equity Securities equal to 55% of the total number of shares of outstanding Common Stock immediately following such issuance of shares of UGC Class A Stock upon consummation of the Exchange Offer and Merger, assuming for purposes of calculating such percentage that the transactions contemplated by the Share Exchange Agreement, dated August 18, 2003, among Liberty Media and certain stockholders of UGC have been consummated and that all Rights, if any, constituting Class A Securities held by the Liberty Parties or to be issued, granted or sold in the Exchange Offer or Merger have been duly converted, exchanged or exercised in full (whether or not then convertible, exchangeable or exercisable) and (ii) the lesser of (x) such number of shares of UGC Class A Stock equal to the quotient of (1) the sum of the aggregate principal amount of the LBTW Loans (as defined below) plus all accrued but unpaid interest thereon to and including the date of the consummation of the preemptive purchase divided by (2) the per share Purchase Price of the UGC Class A Stock and (y) such number of shares of UGC Class A Stock sufficient to permit the Liberty Parties to hold a number of Liberty Party Equity Securities equal to 60% of the total number of shares of outstanding Common Stock immediately following such issuance of shares of UGC Class A Stock upon consummation of the Exchange Offer and Merger, assuming for purposes of calculating such percentage that the transactions contemplated by the Share Exchange Agreement, dated August 18, 2003, among Liberty Media and certain stockholders of UGC have been consummated and that all Rights, if any, constituting Class A Securities held by the Liberty Parties or to be issued, granted or sold in the Exchange Offer or Merger have been duly converted, exchanged or exercised in full (whether or not then convertible, exchangeable or exercisable).  The Liberty Parties hereby waive their preemptive right to acquire any shares of UGC Class A Stock in connection with the Exchange Offer and Merger in excess of the number of Preemption Shares determined in accordance with the preceding sentence.  For purposes of this letter, “LBTW Loans” means the following promissory notes executed by UGCH Finance, Inc., a Delaware corporation, as borrower, in favor of LBTW I, Inc., a Colorado corporation, as lender: (1) Note dated January 30, 2002, in the principal amount of $17,270,536.90, (2) Note dated January 31, 2002, in the principal amount of $2,082,000, (3) Note dated February 1, 2002, in the principal amount of $6,696,000, (4) Note dated February 4, 2002, in the principal amount

 

2



 

 of $34,759,200, (5) Note dated February 5, 2002, in the principal amount of $36,417,600, and (6) Note dated February 28, 2002, in the principal amount of $5,502,519.61.

 

                (c)           For purposes hereof, the term “Purchase Price” means the quotient of (i) the arithmetic average of the volume weighted average prices for a share of UGCE Common Stock on the principal United States securities exchange or The Nasdaq Stock Market on which UGCE Common Stock trades, as reported by Bloomberg, L.P., for each of the three consecutive full Trading Days ending on and including the last full Trading Day immediately prior to publication of notice of the acceptance of shares of UGCE Common Stock for exchange in the Exchange Offer divided by (ii) 10.3, subject to appropriate and equitable adjustment for any stock splits, reverse splits, stock dividends or similar events after the date of this letter affecting the UGC Class A Stock or the UGCE Common Stock.   For purposes of this letter, “Trading Day” means, with respect to any security, a day on which the principal United States securities exchange on which such security is listed or admitted to trading, or The Nasdaq Stock Market if such security is not listed or admitted to trading on any such securities exchange, as applicable, is open for the transaction of business (unless such trading shall have been suspended for the entire day).  The aggregate Purchase Price for the Preemption Shares will be paid (x) first, by the surrender of all or the applicable portion of the LBTW Loans and (y) second, to the extent that the surrender of all of such LBTW Loans is insufficient to pay the aggregate Purchase Price for the full exercise of the Liberty Parties’ preemptive rights, as modified hereby, cash.  The value of the LBTW Loans so surrendered shall be equal to the sum of the aggregate principal amount of the LBTW Loans, or portion thereof, surrendered plus all accrued but unpaid interest thereon as of the date of the consummation of the preemptive purchase.

 

                (d)           Notwithstanding any of the notice provisions set forth in Section 7B of the Standstill Agreement, within two Trading Days following the publication of notice of the acceptance of shares of UGCE Common Stock for exchange in the Exchange Offer, UGC shall give notice to the Liberty Parties notifying them of such fact and specifying the number of shares of UGC Class A Stock to be issued in the Exchange Offer and Merger, the Purchase Price and a calculation of the number of shares of UGC Class A Stock Liberty is entitled to purchase pursuant to its preemptive rights under the Standstill Agreement as modified by this Paragraph 1 and of the Purchase Price (the “Modified Issuance Notice”).  Any Liberty Party may exercise its rights to purchase all or any of the Preemption Shares by giving written notice (a “Modified Preemption Notice”) to that effect to United within ten Trading Days following such date that the Liberty Parties receive the Modified Issuance Notice.  Failure to deliver a Preemption Notice within such period will constitute a waiver of the preemption rights granted by Section 7B of the Standstill Agreement, as partially waived and modified by this letter, as to the issuance of Class A Securities in the Exchange Offer. The closing of the purchase by the Liberty Parties of the Preemption Shares will be held at Liberty’s executive offices at, unless the Liberty Parties specify an earlier time in a notice given to United, 10:00 a.m. local time on the later of the date of the closing of the Merger or ten Trading Days following the date of the Modified Preemption Notice.

 

                2.             Amendment of Preemptive Rights.  In consideration of the Liberty Parties’ agreement to waive in part and amend their preemptive rights under Section 7B of the Standstill Agreement with respect to the Exchange Offer and Merger, UGC hereby agrees that,

 

3



 

 notwithstanding anything set forth in the Standstill Agreement, the Liberty Parties’ preemptive rights under Section 7B of the Standstill Agreement (and the related definitions in Section 1 of the Standstill Agreement) shall survive the termination of the Standstill Agreement, provided that from and after the date the Standstill Agreement otherwise terminates, Sections 1 and 7B of the Standstill Agreement will be  amended as follows:

 

                (a)           The following definition shall be added to Section 1 thereof:

 

Trading Day. With respect to any security, means a day on which the principal United States securities exchange on which such security is listed or admitted to trading, or The Nasdaq Stock Market if such security is not listed or admitted to trading on any such securities exchange, as applicable, is open for the transaction of business (unless such trading shall have been suspended for the entire day).”

                (b)           Clause (a) of Section 7B shall be amended to read in its entirety as follows:

 

                “(i)          If United at any time issues, grants or sells any Class A Securities, the Liberty Parties shall have the right, subject to applicable legal requirements (which United will use its best commercially reasonable efforts to cause to be satisfied or waived), but not the obligation, to acquire from United a portion of such Class A Securities up to an amount sufficient to permit the Liberty Parties to hold a number of Liberty Party Equity Securities equal to the lesser of (x) 55% of the total outstanding Common Stock and (y) the percentage of the total outstanding Common Stock represented by the Liberty Parties’ Equity Securities immediately prior to the issuance of such Class A Securities, assuming for purposes of calculating such percentages that all Rights, if any, constituting Class A Securities held by the Liberty Parties or to be issued, granted or sold in such transaction have been duly converted, exchanged or exercised in full (whether or not then convertible, exchangeable or exercisable).

 

                (ii)           If United issues, grants or sells any Class A Securities, or desires to issue, grant or sell any Class A Securities, it will give written notice (an “Issuance Notice”) thereof to the Liberty Parties within the time periods noted below stating the number of Class A Securities issued, granted or sold, or proposed to be issued, granted or sold, as applicable; the date such Class A Securities were or are proposed to be issued, granted or sold; the total per share consideration received or proposed to be received by United upon issue, grant or sale of such Class A Securities; any other material terms of the transaction; and, if applicable, the arithmetic average of the volume weighted average prices for a share of Class A Stock on the principal United States securities exchange or The Nasdaq Stock Market (an “Exchange”) on which Class A Stock trades, as reported by Bloomberg, L.P., for each of the five consecutive full Trading Days immediately prior to the date of the first public announcement of the transaction, including the terms thereof, in which such Class A Securities are proposed to be issued, granted or sold and each of the five consecutive full Trading Days beginning on and including the date of such announcement (if such date is a Trading Day, otherwise

 

4



 

 beginning on and including the next following full Trading Day) (the “Applicable VWAP”).

 

                (iii)          The Issuance Notice shall be given by United (x) if the Class A Securities are issued, granted or sold in whole or in part for consideration other than cash at a time when the Class A Stock is listed or admitted for trading on an Exchange (“Publicly Traded”), two Business Days following such issue, grant or sale, (y) if the Class A Securities are issued, granted or sold for consideration consisting wholly of cash at a time when the Class A Stock is Publicly Traded, not less than five Trading Days prior to the date that such issuance, grant or sale is consummated and (z) if the Class A Securities are issued, granted or sold at a time when the Class A Stock is not Publicly Traded, no more than 60 days nor less than 20 days prior to the date such issuance, grant or sale is consummated.

 

                (iv)          Any Liberty Party may exercise its rights under this Section 7B by giving written notice (a “Preemption Notice”) to that effect to United within the time periods noted below, which notice shall specify the maximum number of Class A Securities that such Liberty Party elects to purchase.  To be effective, the Preemption Notice shall be given by a Liberty Party (x) if the Class A Securities are issued, granted or sold in whole or in part for consideration other than cash at a time when the Class A Stock is Publicly Traded, within five Business Days following such date that the Liberty Parties receive the applicable Issuance Notice, (y) if the Class A Securities are issued, granted or sold for consideration consisting wholly of cash at a time when the Class A Stock is Publicly Traded, at any time prior to the date that such issuance, grant or sale is consummated, provided that if the applicable Issuance Notice was received by the Liberty Parties less than five Trading Days prior to such issuance, grant or sale, then within five Trading Days following the date the Liberty Parties receive the applicable Issuance Notice, and (z) if the Class A Securities are issued, granted or sold at a time when the Class A Stock is not Publicly Traded, at any time prior to the date that such issuance, grant or sale is consummated, provided that if the applicable Issuance Notice was received by the Liberty Parties less than 20 days prior to such issuance, then within 20 days following such date that the Liberty Parties receive the applicable Issuance Notice.   Failure to deliver a Preemption Notice within the applicable period noted above will constitute a waiver of the rights granted by this Section 7B as to the particular issuance of Class A Securities specified in the Issuance Notice.”

 

                (c)           Clause (b) of Section 7B shall be amended (i) to replace clause (ii) thereof in its entirety and (ii) to add a new clause (iii), each as follows:

 

“(ii) in the case of a proposed issuance, grant or sale of Class A Securities consisting of Class A Stock in whole or in part for consideration other than cash, if the Class A Stock is Publicly Traded, the consideration per share will be the Applicable VWAP, and (iii) in all other cases, the consideration per share will be

 

5



 

 the amount of cash and the fair market value of the other consideration per share to be received by United.”

 

                3.             Intended Beneficiaries.  Each of the Liberty Parties is an intended beneficiary of this letter.

 

6



 

 

 

 

 

 

 

 

 

 

 

 

 

LIBERTY MEDIA CORPORATION

 

 

 

 

(on behalf of each of the Liberty Parties)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By:

/s/ Elizabeth M. Markowski

 

 

 

 

 

Name:

Elizabeth M. Markowski

 

 

 

 

Title:

Senior Vice President

 

 

 

 

 

 

 

 

Accepted and agreed:

 

 

 

 

 

 

 

 

 

 

 

 

 

UNITEDGLOBALCOM, INC.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By:

/s/ Michael T. Fries

 

 

 

 

 

Name:

Michael T. Fries

 

 

 

 

 

Title:

President

 

 

 

 

 

 

 

 

 

 

 

 

 

 

cc:

UnitedGlobalCom, Inc., General Counsel

 

 

 

 

Holme Roberts & Owen LLP, W. Dean Salter

 

 

 

 

 

 

 

 

 

 

 

 

7


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