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| DTV > SEC Filings for DTV > Form 8-K on 2-Oct-2009 | All Recent SEC Filings |
2-Oct-2009
Entry into a Material Definitive Agreement, Other Events, Financial Statements
Amendment No 2. to the Agreement and Plan of Merger
On October 2, 2009, The DIRECTV Group, Inc. ("DIRECTV") and Liberty Media Corporation ("Liberty") and certain subsidiaries of DIRECTV and certain subsidiaries of Liberty entered into Amendment No. 2 (the "Merger Agreement Amendment") to that certain Agreement and Plan of Merger, dated as of May 3, 2009 (as amended, the "Merger Agreement"), by and among Liberty, Liberty Entertainment, Inc. ("LEI"), DIRECTV, DIRECTV ("Holdings"), DTVG One, Inc. and DTVG Two, Inc.
The Merger Agreement Amendment, among other things, provides for the following:
º •
º a new termination date of December 29, 2009;
º •
º that the split-off of LEI by Liberty may not happen until the first to
occur of (i) all of the conditions precedent set forth in Article VII
of the Merger Agreement, other than those conditions precedent set
forth in the Merger Agreement relating to the completion of the
split-off and the Malone Contribution (as defined in the Merger
Agreement) and those conditions precedent that by their nature are to
be satisfied at closing, shall have been satisfied or, to the extent
permitted under the terms of the Merger Agreement, waived and the
parties to the Merger Agreement shall have confirmed that the closing
will occur subject only to the satisfaction of those conditions
precedent relating to the completion of the split-off and the Malone
Contribution (as defined in the Merger Agreement) and those conditions
that by their nature are to be satisfied at closing and (ii) the
termination of the Merger Agreement;
º •
º certain changes to the Merger Agreement and the form of amended and
restated certificate of incorporation and by-laws of Holdings to
implement the terms of the Stipulation of Settlement (as further
described below); and
º •
º amendments to the Reorganization Agreement, the Services Agreement and
certain schedules to the Merger Agreement.
The foregoing description of the Merger Agreement Amendment is only a summary, does not purport to be complete and is qualified in its entirety by reference to (i) the Merger Agreement Amendment, which is attached as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference, (ii) Amendment No. 1 to the Merger Agreement, which is filed as Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on July 30, 2009 (the "July 30, 2009 8-K") and (iii) the Merger Agreement, which is filed as Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on May 4, 2009 (the "May 4, 2009 8-K").
Amendment No. 2 to the Voting and Right of First Refusal Agreement
On October 2, 2009, LEI, DIRECTV, Holdings, Dr. John C. Malone, Mrs. Leslie Malone, The Tracy L. Neal Trust A and The Evan D. Malone Trust A (each a "Malone", and collectively the "Malones") entered into Amendment No. 2 (the "Malone Agreement Amendment") to that certain Voting and Right of First Refusal Agreement, dated as of May 3, 2009, by and among LEI, DIRECTV, Holdings, John C. Malone, Leslie Malone, The Tracy L. Neal Trust A and The Evan D. Malone Trust A (as amended, the "Malone Agreement"). The Malone Agreement Amendment amends certain defined terms for tax-related purposes.
The foregoing description of the Malone Agreement Amendment is only a summary, does not purport to be complete and is qualified in its entirety by reference to (i) the Malone Agreement Amendment, which is attached as Exhibit 10.2 to this Current Report on Form 8-K and is incorporated herein by reference, (ii) Amendment No. 1 to the Malone Agreement, which is filed as
Exhibit 10.2 to the July 30, 2009 8-K, and (iii) the Malone Agreement, which is filed as Exhibit 10.3 to the May 4, 2009 8-K.
DIRECTV and Liberty have reached an agreement in principle with the plaintiffs (the "Settlement") in the multiple purported class action complaints pending against DIRECTV, Liberty and the DIRECTV board of directors in the Delaware Court of Chancery that were brought on behalf of the public stockholders of DIRECTV alleging, among other things, that the members of the DIRECTV board of directors breached their fiduciary duties in approving the Merger Agreement (the "Delaware Action"). The Settlement will be memorialized in a Stipulation and Agreement of Compromise, Settlement and Release (the "Stipulation of Settlement") to be executed by DIRECTV, Liberty and the plaintiffs in the Delaware Action. In the event that final court approval of the Stipulation of Settlement is not obtained by June 30, 2010 (the "Approval Deadline"), the terms of the Stipulation of Settlement and the related changes to the Holdings amended and restated certificate of incorporation and by-laws, with certain limited exceptions, will become null and void.
The Settlement contemplates certain changes to the terms of the mergers and the transaction agreements as follows:
º •
º the Merger Agreement will be amended to add a provision to the amended
and restated certificate of incorporation of Holdings to the effect
that any future merger, consolidation or sale of all or substantially
all of the assets which requires stockholder approval but provides for
payment of per share consideration to be made to the holders of
Holdings Class B common stock that is different in form or amount from
the per share consideration to be paid to holders of Holdings Class A
common stock will require a separate vote of holders of Holdings
Class A common stock (almost entirely non-Malone holders at the time
of the mergers), voting as a separate class;
º •
º the elimination of certain provisions in the amended and restated
certificate of incorporation of Holdings that were intended to
exculpate the directors and officers of Holdings who also serve as
directors or officers of other entities for any potential breach of
fiduciary duty arising out of the allocation of business opportunities
not presented to such persons in their capacity as directors or
officers of Holdings;
º •
º the Malones' ability to seek control of Holdings through future
purchases of Holdings common stock will be restricted by their
agreement to a 3-year standstill (the "Malone Standstill") commencing
upon the completion of the mergers. The Stipulation of Settlement will
provide that the Malones may, however, acquire shares of Holdings
Class A common stock: (i) pursuant to the Merger Agreement, (ii) from
another Malone, (iii) pursuant to the grant, exercise or vesting of
any equity incentive awards, (iv) as a result of any stock dividend,
stock split or other distribution so long as such dividend or
distribution is made on a pro rata basis to all holders of Holdings
common stock, (v) pursuant to the exercise of any rights, warrants or
other securities issued or distributed to all holders of Holdings
common stock on a pro rata basis, (v) received in exchange for shares
of Holdings Class B common stock so long as the aggregate voting power
of the Malones (as a group) does not increase as a result of such
exchange, (vii) upon the redemption of Holdings Class B common stock
following the death of Mr. Malone in accordance with the provisions of
the Holdings amended and restated certificate of incorporation and
(viii) commencing on the first anniversary of the effective time of
the split-off, in an amount not to exceed 1% of the fully diluted
shares outstanding immediately following the effective time of the
mergers; provided that the Malones will not acquire more than 50% of
the number of shares permitted to be acquired pursuant to this
clause (viii) prior to the second anniversary of the effective time of
the split-off and provided further that shares acquired by any Malone
pursuant
º •
º that the Merger Agreement and the disclosure thereof in the Holdings'
proxy statement/prospectus will be amended (and will remain in effect
regardless of whether or not final court approval of the Stipulation
of Settlement is obtained by the Approval Deadline) to reflect that
DIRECTV will not waive the condition that in order to consummate the
mergers, DIRECTV must receive the prior approval of a majority of the
outstanding shares of DIRECTV common stock held by persons other than
Liberty or its affiliates, its directors or officers, Mr. Malone or
any affiliate of Mr. Malone;
º •
º that the organizational documents of Holdings will provide holders of
10% or more of the outstanding shares of Holdings Class A common stock
with the right to call a special meeting;
º •
º that the Holdings by-laws will provide that a majority of the board of
directors be Qualifying Directors and that at least 50% of the audit
committee, compensation committee and any special transaction
committee established by the board of directors be comprised of
Qualifying Directors. Such requirements cannot be amended without
either (i) the approval of the board of directors of Holdings (which
must include the unanimous approval of the Qualifying Directors then
serving on the board of directors of Holdings) or (ii) the approval of
the holders of a majority of the outstanding Holdings Class A common
stock (other than shares held by the Malones); provided, however that
no such amendment by the board of directors pursuant to the preceding
clause (i) may be made prior to the third anniversary of the mergers.
A "Qualifying Director" is a director who (i) is not currently, and
within the last five years has not been, employed by Holdings or a
Holdings affiliate, (ii) has not received during any 12-month period
in the last three years more than $50,000 in direct compensation from
Holdings or a Holdings affiliate (excluding director and committee
fees, bona fide expense reimbursements, payments arising solely from
investments in securities of Holdings or a Holdings affiliate,
payments in respect of a pension or other form of deferred
compensation for prior service pursuant to plans or arrangements of
Holdings or a Holdings affiliate), (iii) is neither currently employed
as an executive officer, nor is an affiliate, of a company that
provides advisory services to Holdings or a Holdings affiliate that
has received more than $250,000 from Holdings or such affiliate during
any 12-month period in the last two years, (iv) is neither currently
employed as an executive officer, nor is an affiliate, of (x) a
customer or supplier of Holdings or a Holdings affiliate that has made
payments to, or received payments from, Holdings or such affiliate
that exceed the greater of $200,000 or 1% of such other company's
consolidated gross revenues in the most recent full fiscal year or
(y) a debtor or creditor of Holdings or a Holdings affiliate where the
amount owed to or by Holdings or such affiliate exceeds the greater of
$200,000 or 1% of such company's assets, determined at the end of the
most recently completed fiscal year of such other company, (v) is
neither currently employed as an executive officer nor an affiliate of
a not-for-profit entity (including charitable organizations) that
receives annual contributions from Holdings or a Holdings affiliate
that exceed $200,000, (vi) is not, and for the past five years has not
been, an executive officer of a for-profit company in which the CEO or
another executive officer of Holdings serves on the board, and
(vii) is not an immediate family member of an individual who has had
any of the relationships described above within the time periods
described above;
º •
º that the Holdings proxy statement/prospectus filed in connection with
the Merger Agreement will be amended (and will remain in effect
regardless of whether or not final court approval is
º •
º that the provisions in the first, third and sixth bullet points,
including the Malone Standstill referred to in the third bullet point,
terminate upon the earliest to occur of (i) Mr. Malone's death and
(ii) the time at which the Malones, in the aggregate, do not own
shares of Holdings Class B common stock representing at least 10% of
the combined voting power of Holdings Class A common and Holdings
Class B common stock.
The amendments to the Merger Agreement contemplated by the Settlement are reflected in the Merger Agreement Amendment. The revised disclosure to the Holdings proxy statement/prospectus contemplated by the Settlement is reflected in the proxy statement/prospectus filed with the SEC on October 2, 2009.
(d) Exhibits.
10.1 Amendment No. 2, dated as of October 2, 2009, to the
Agreement and Plan of Merger, dated as of May 3,
2009, by and among Liberty Media Corporation, Liberty
Entertainment, Inc., The DIRECTV Group, Inc.,
DIRECTV, DTVG One, Inc. and DTVG Two, Inc.
10.2 Amendment No. 2, dated as of October 2, 2009, to the
Voting and Right of First Refusal Agreement, dated as
of May 3, 2009, by and among Liberty
Entertainment, Inc., The DIRECTV Group, Inc.,
DIRECTV, Dr. John C. Malone, Mrs. Leslie Malone, The
Tracy L. Neal Trust A and The Evan D. Malone Trust A.
IMPORTANT ADDITIONAL INFORMATION FILED WITH THE SEC
Nothing in this communication shall constitute a solicitation to buy or an
offer to sell shares of Liberty Entertainment, Inc., DIRECTV, The DIRECTV
Group, Inc. or any of the Liberty Media tracking stocks. The offer and sale of
shares in the proposed business combination with Liberty Entertainment, Inc.
will only be made pursuant to one or more effective registration statements.
Investors and security holders are urged to carefully read the registration
statements of Liberty Entertainment, Inc. and DIRECTV filed with the SEC,
including the proxy statement/prospectuses contained therein, because they
contain important information about these transactions. Investors and security
holders are able to obtain free copies of the registration statements and the
proxy statements/prospectuses and other documents filed with the SEC by Liberty
Entertainment, Inc., DIRECTV, Liberty Media Corporation and The DIRECTV
Group, Inc., as the case may be, through the web site maintained by the SEC at
www.sec.gov. In addition, investors and security holders will be able to obtain
free copies of the Registration Statements and the Proxy Statements/Prospectuses
from Liberty Media Corporation by contacting Liberty Media Corporation, 12300
Liberty Boulevard, Englewood, Colorado 80112, Attention: Investor Relations,
Telephone (720) 875-5408 or from The DIRECTV Group, Inc. by contacting The
DIRECTV Group, Inc., 2230 E. Imperial Highway, El Segundo, CA 90245, Attn:
Investor Relations, Telephone (310) 964-0808.
PARTICIPANTS IN A SOLICITATION
The directors and executive officers of The DIRECTV Group, Inc. and other persons may be deemed to be participants in the solicitation of proxies in respect of proposals to approve the transactions. Information regarding the directors and executive officers of each of The DIRECTV Group, Inc. and DIRECTV and other participants in the proxy solicitation and a description of their respective direct and indirect interests, by security holdings or otherwise are available in the proxy materials filed with the SEC.
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