-----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, FZeyauL0vSjOtqCoJkg6aqkcMUifbesVmaV9QsSamVB+Fiaa7741/1MVK1z0BDXA PZjkoDnmfHp8Eky07u/cnA== /in/edgar/work/0000950130-00-005376/0000950130-00-005376.txt : 20001011 0000950130-00-005376.hdr.sgml : 20001011 ACCESSION NUMBER: 0000950130-00-005376 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20001010 GROUP MEMBERS: K. RUPERT MURDOCH GROUP MEMBERS: SKY GLOBAL NETWORKS INC GROUP MEMBERS: THE NEWS CORPORATION LTD. SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: GEMSTAR TV GUIDE INTERNATIONAL INC CENTRAL INDEX KEY: 0000923282 STANDARD INDUSTRIAL CLASSIFICATION: [3651 ] IRS NUMBER: 954782077 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: SEC FILE NUMBER: 005-50973 FILM NUMBER: 736623 BUSINESS ADDRESS: STREET 1: 135 NORTH LOS ROBLES AVE STREET 2: STE 800 CITY: PASADENA STATE: CA ZIP: 91101 BUSINESS PHONE: 8187925700 MAIL ADDRESS: STREET 1: 135 N LOS ROBLES AVE STREET 2: STE 800 CITY: PASADENA STATE: CA ZIP: 91101 FORMER COMPANY: FORMER CONFORMED NAME: GEMSTAR INTERNATIONAL GROUP LTD DATE OF NAME CHANGE: 19940518 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: SKY GLOBAL NETWORKS INC CENTRAL INDEX KEY: 0001116612 STANDARD INDUSTRIAL CLASSIFICATION: [4841 ] FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 1211 AVENUE OF THE AMERICAS CITY: NEW YORK STATE: NY ZIP: 10036 MAIL ADDRESS: STREET 1: 1211 AVENUE OF THE AMERICAS CITY: NEW YORK STATE: NY ZIP: 10036 SC 13D/A 1 0001.txt AMENDMENT NO.1 TO SCHEDULE 13D SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D/A (Rule 13d-101) Under the Securities Exchange Act of 1934 (Amendment No. 1) Gemstar -- TV Guide International, Inc. ------------------------------------------------------------ (Name of Issuer) Common Stock, par value $.01 per share ----------------------------------------- (Title of Class of Securities) 36866W 10 6 (CUSIP Number) Arthur M. Siskind, Esq. The News Corporation Limited 1211 Avenue of the Americas New York, New York 10036 (212) 852-7000 ----------------------- With copies to: Jeffrey W. Rubin, Esq. Squadron, Ellenoff, Plesent & Sheinfeld, LLP 551 Fifth Avenue New York, New York 10176 (212) 661-6500 (Name Address and Telephone Number of Person Authorized to Receive Notices and Communications) September 27, 2000 ----------------------------------------------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition 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 31 pages) ___________________________ *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter the disclosures provided in a prior cover page. The information required 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) The News Corporation Limited - ------------------------------------------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [_] (b) [X] - ------------------------------------------------------------------------------------------------------------------- 3 SEC USE ONLY - ------------------------------------------------------------------------------------------------------------------- 4 SOURCE OF FUNDS OO - ------------------------------------------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) |_| - ------------------------------------------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION South Australia, Australia - ------------------------------------------------------------------------------------------------------------------ NUMBER OF 7 SOLE VOTING POWER SHARES BENEFICIALLY OWNED BY 87,465,736 shares EACH --------------------------------------------------------------------------------- REPORTING 8 SHARED VOTING POWER PERSON See Item 5(b) and Item 6. --------------------------------------------------------------------------------- 9 SOLE DISPOSITIVE POWER 87,465,736 shares --------------------------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER See Item 5(b) and Item 6. - ------------------------------------------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 87,465,736 - ------------------------------------------------------------------------------------------------------------------- 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [_] - ------------------------------------------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) Approximately 21.4% - ------------------------------------------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON CO ===================================================================================================================
=================================================================================================================== 1 NAMES OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) K. Rupert Murdoch - ------------------------------------------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [_] (b) [X] - ------------------------------------------------------------------------------------------------------------------- 3 SEC USE ONLY - ------------------------------------------------------------------------------------------------------------------- 4 SOURCE OF FUNDS OO - ------------------------------------------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [_] - ------------------------------------------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION United States of America - ------------------------------------------------------------------------------------------------------------------ NUMBER OF 7 SOLE VOTING POWER SHARES BENEFICIALLY OWNED BY 87,465,736 shares EACH --------------------------------------------------------------------------------- REPORTING 8 SHARED VOTING POWER PERSON See Item 5(b) and Item 6. --------------------------------------------------------------------------------- 9 SOLE DISPOSITIVE POWER 87,465,736 shares --------------------------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER See Item 5(b) and Item 6. - ------------------------------------------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 87,465,736 - ------------------------------------------------------------------------------------------------------------------- 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [_] - ------------------------------------------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) Approximately 21.4% - ------------------------------------------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON IN ===================================================================================================================
=================================================================================================================== 1 NAMES OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Sky Global Networks, Inc. - ------------------------------------------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [_] (b) [X] - ------------------------------------------------------------------------------------------------------------------- 3 SEC USE ONLY - ------------------------------------------------------------------------------------------------------------------- 4 SOURCE OF FUNDS OO - ------------------------------------------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [_] - ------------------------------------------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - ------------------------------------------------------------------------------------------------------------------ NUMBER OF 7 SOLE VOTING POWER SHARES BENEFICIALLY OWNED BY 87,465,736 shares EACH --------------------------------------------------------------------------------- REPORTING 8 SHARED VOTING POWER PERSON See Item 5(b) and Item 6. --------------------------------------------------------------------------------- 9 SOLE DISPOSITIVE POWER 87,465,736 shares --------------------------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER See Item 5(b) and Item 6. - ------------------------------------------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 87,465,736 - ------------------------------------------------------------------------------------------------------------------- 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [_] - ------------------------------------------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) Approximately 21.4% - ------------------------------------------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON CO ===================================================================================================================
SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D/A (Amendment No. 1) Pursuant to Section 13(d) of the Securities Exchange Act of 1934 in respect of GEMSTAR - TV GUIDE INTERNATIONAL, INC. This Amendment No. 1 (this "Amendment") to the Statement on Schedule 13D (the "Statement") relates to the Common Stock, par value $.01 per share (the "Common Stock"), of Gemstar - TV Guide International, Inc., a Delaware corporation (the "Issuer" or "Gemstar"). This Amendment amends and supplements the Statement originally filed on July 24, 2000, with the Securities and Exchange Commission by The News Corporation Limited ("News Corporation"), K. Rupert Murdoch and Sky Global Networks, Inc. ("SGN" and collectively with News Corporation and Mr. Murdoch, the "Reporting Persons"). Unless otherwise defined herein, capitalized terms used herein shall have the meanings ascribed thereto in the Statement. Item 4. Purpose of Transaction. Item 4 is amended and restated to read in its entirety as follows: News Corporation and Liberty Media Corporation ("Liberty") have agreed that, subject to certain conditions, SGN and another subsidiary of News Corporation will acquire all of the shares of the Common Stock that are beneficially owned by Liberty, pursuant to a letter agreement dated September 27, 2000 (including the summary of proposed terms incorporated therein, the "Letter Agreement"), a copy of which is filed as Exhibit 7(f) hereto and which is incorporated by reference herein. In addition, Liberty has agreed that upon the consummation of such acquisition it will cause persons designated by News Corporation to replace Liberty's designees to the Board of Directors of the Issuer. See Item 3 and Item 6, which are incorporated by reference herein. Subject to the foregoing, the Reporting Persons intend to continuously review their investment in the Issuer, and may in the future determine (i) to acquire additional securities of the Issuer, through open market purchases and private agreements, (ii) to dispose of all or a portion of the securities of the Issuer owned by them in the market, in privately negotiated transactions or otherwise or (iii) to take any other available course of action, which could result in any of the events or circumstances referred to in the next paragraph of this Item 4. Notwithstanding anything contained herein, the Reporting Persons specifically reserve the right to change their intentions with respect to any or all of such matters. In reaching any decision as to their course of action (as well as to the specific elements thereof), the Reporting Persons currently expect that they would take into consideration a variety of factors, including, but not limited to, the following: the Issuer's business and prospects; other developments concerning the Issuer and their businesses generally; other business opportunities available to the Reporting Page 5 of 31 Pages Persons; developments with respect to the business of the Reporting Persons; changes in law and government regulations; general economic conditions; and market conditions, including the market price of the securities of the Issuer. Other than as set forth herein, the Reporting Persons have no current plan or proposal which relates to, or would result in, any of the events or circumstances enumerated in subparagraphs (a) through (j) of Item 4 of Schedule 13D. Item 5. Interest in Securities of the Issuer. Item 5 is amended and restated to read in its entirety as follows: The Reporting Persons beneficially own 87,465,736 shares of Common Stock through SGN. Assuming 409,182,000 shares of Common Stock are outstanding as of the date hereof, which outstanding share number is calculated based on the number of shares of Common Stock outstanding as of July 31, 2000 as reported by the Issuer, the Shares beneficially owned by the Reporting Persons represent approximately 21.4% of the issued and outstanding shares of Common Stock. Upon consummation of the transactions contemplated by the Letter Agreement, the Reporting Persons will collectively beneficially own 87,465,736 additional shares (approximately 21.4%) of Common Stock. To the knowledge of the Reporting Persons, except as set forth in this Statement, none of the Schedule 1 Persons beneficially owns any shares of Common Stock. Except as described in Item 6, the Reporting Persons have the sole power to vote and dispose of all shares of Common Stock to which this Statement relates. Except as set forth in this Statement, no transactions have been effected by the Reporting Persons during the past 60 days. Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer. Item 6 is amended and restated to read in its entirety as follows: The arrangements described below exist with respect to the Common Stock. BYLAWS OF THE ISSUER Pursuant to the bylaws of the Issuer (the "Bylaws"), the Issuer's Board of Directors (the "Board") consists of 12 directors, six of which are TVG Directors (as such term is defined in the Bylaws). Two of the TVG Directors are TVG Independent Directors (as such term is defined in the Bylaws). Prior to the Merger, TVG designated the six TVG Directors. The other six directors on the Board were designated by the Board prior to the Merger. Pursuant to the Bylaws (and as described in greater detail below): (1) two of the four members of the Board's Executive Committee are TVG Directors; Page 6 of 31 Pages (2) two of the five members of the Board's Compensation Committee are Independent Directors (as such term is defined in the Bylaws) selected by the TVG Director Committee (as such term is defined in the Bylaws); (3) two of the three members of the Board's Special Committee are TVG Directors; (4) two of the four members of the Board's Audit Committee are TVG Directors; (5) there shall be a TVG Director Committee of the Board comprised of all of the TVG Directors who are not the TVG Independent Directors. Pursuant to the Stockholders' Agreement (defined below), the Reporting Persons will be able to appoint three of the TVG Directors and has appointed three of the existing TVG Directors. The three TVG Directors appointed by the Reporting Persons are: (a) Joachim Kiener, co-President, co-Chief Operating Officer and a member of the Office of the Chief Executive of the Issuer, who serves as a TVG Director on the Executive Committee, the Special Committee and the TVG Director Committee, (b) Chase Carey, Executive Director and Co-Chief Operating Officer of News Corporation, who serves as a TVG Director on the Compensation Committee and the TVG Director Committee and (c) Nicholas Donatiello, Jr., who is a TVG Independent Director and serves on the Audit Committee. Vacancies. Vacancies on the Board will be filled by the majority vote of --------- the directors present and voting at a meeting of the Board duly called and held at which a quorum is present or by unanimous written consent of the directors. However, expiring directorships or vacancies on the Board will be filled by the GS Director Committee (as such term is defined in the Bylaws), in the case of the directors designated by the Board prior to the Merger and their successors, and by the TVG Director Committee, in the case of the TVG Directors and their successors, until the fifth anniversary of the completion of the Merger. Chairman. Until the earlier of the fifth anniversary of the completion of -------- the Merger and the date Mr. Yuen ceases to be Chief Executive Officer of Gemstar, Mr. Yuen will be Chairman of the Board so long as he is a director. Thereafter, until the third annual Board meeting following (1) the date Mr. Yuen ceases to be Chief Executive Officer of Gemstar or, if later, (2) the fifth anniversary of the completion of the Merger, the Chairman of the Board will be elected by a majority vote or unanimous written consent of TVG Directors or their successors. Tie Votes. Except for the matters delegated to the Compensation Committee, --------- the Audit Committee or the Special Committee of the Board, matters identified in the Bylaws as "fundamental decisions" and matters that require approval by supermajority vote of stockholders, if a matter is brought before the Board and if there is a tie vote with respect to such matter, then the exclusive power to approve or disapprove that matter will generally be exercised by the Tie- breaking Committee of the Board (of which Mr. Yuen will be the sole member) until the earlier of the fifth anniversary of the completion of the Merger and the date Mr. Yuen ceases to be Chief Executive Officer of Gemstar. Thereafter, until the third annual Board meeting following (1) the date Mr. Yuen ceases to be Chief Executive Officer of Gemstar or, if later, (2) the fifth anniversary of the completion of the Merger, the TVG Director Committee will generally have the ability to resolve tie votes. Page 7 of 31 Pages Notwithstanding the foregoing, no committee of directors will have the power to resolve a tie vote of the Board until the fifth anniversary of the completion of the Merger if Mr. Yuen ceases to be Chief Executive Officer of Gemstar because of his death or disability. Committees. The Board has the following committees: ---------- (1) The Executive Committee: The Executive Committee consists of four ----------------------- directors and acts by majority vote of the quorum which is present or by unanimous written consent. The members of the Executive Committee include each of the following who are directors: the Chief Executive Officer; the Chief Financial Officer (but if the Chief Financial Officer is not a director selected by the Board prior to the Merger or a successor to such director, then, until the earlier of the fifth anniversary of the completion of the Merger and the date Mr. Yuen ceases to be Chief Executive Officer of Gemstar, a director designated by the GS Director Committee or a successor to such director will be a member of the Executive Committee instead of the Chief Financial Officer); and two TVG Directors. The Executive Committee will have, to the extent permitted by law, and until the third annual Board meeting following (1) the date Mr. Yuen ceases to be Chief Executive Officer of Gemstar or, if later, (2) the fifth anniversary of the completion of the Merger, all powers of the Board with respect to matters related to the operations of Gemstar and its subsidiaries between Board meetings, except: as otherwise determined by the Board; with respect to any matter that is delegated to a different committee of directors; with respect to matters itemized in the Bylaws as "fundamental decisions" or that require approval by supermajority vote of stockholders; or with respect to (1) any acquisition by Gemstar or any person controlled by Gemstar of any business or assets if the amount involved exceeds $25 million, (2) any sale, lease, exchange or other disposition, pledge or encumbrance of assets or of all or a part of any business of Gemstar or any person controlled by Gemstar if the amount involved exceeds $25 million, and (3) the incurrence by Gemstar or any person controlled by Gemstar of indebtedness in excess of $50 million in any fiscal year. If a matter is brought before the Executive Committee and if there is a tie vote with respect to such matter, then the exclusive power to approve or disapprove that matter will generally be exercised by the Tie-breaking Committee (of which Mr. Yuen will be the sole member) until the earlier of the fifth anniversary of the completion of the Merger and the date Mr. Yuen ceases to be Chief Executive Officer of Gemstar. Thereafter, until the third annual Board meeting following (1) the date Mr. Yuen ceases to be Chief Executive Officer of Gemstar or, if later, (2) the fifth anniversary of the completion of the Merger, the TVG Director Committee will generally have the ability to resolve tie votes. Notwithstanding the foregoing, no committee of directors will have the power to resolve a tie vote of the Executive Committee until the fifth anniversary of the completion of the Merger if Mr. Yuen ceases to be Chief Executive Officer of Gemstar because of his death or disability. Only the Chief Executive Officer of Gemstar may call a meeting of the Executive Committee until the earlier of the fifth anniversary of the completion of the Merger and the date Mr. Yuen ceases to be Chief Executive Officer of Gemstar. Thereafter, the Chief Executive Officer or any two members of the Executive Committee may call a meeting. (2) The Compensation Committee: The Compensation Committee consists of -------------------------- five directors and acts by majority vote of all its members or by unanimous written consent. The members of the Compensation Committee include two Independent Directors (as defined in the Bylaws) designated by the Board prior to the Merger and their successors, two TVG Directors who are Independent Directors and the Chief Executive Officer of Gemstar (provided he or she is a director). The Chief Executive Officer of Gemstar is the chairman of the Compensation Committee. Except with respect to matters itemized in the Bylaws as "fundamental decisions" or Page 8 of 31 Pages that require approval by supermajority vote of stockholders, the Compensation Committee is empowered to make all decisions with respect to the compensation and other terms of employment of any executive officer of Gemstar or any of its subsidiaries, or any other officer or employee of Gemstar or any of its subsidiaries. Notwithstanding the foregoing, unless otherwise determined by at least seven of the twelve directors, the Compensation Committee's authority to grant stock options or other stock based compensation is limited, on a cumulative basis from the completion of the Merger, to 2% of the outstanding shares of Common Stock on a fully diluted basis immediately after the completion of the Merger. Further, not more than 1% of the outstanding shares of Common Stock on a fully diluted basis immediately after the completion of the Merger may be granted, awarded or issued in the aggregate to officers of Gemstar or any person controlled by Gemstar who directly report to the Chief Executive Officer. (3) The Special Committee: The Special Committee consists of three members --------------------- and acts by majority vote of all its members or by unanimous written consent other than with respect to matters itemized in the Bylaws as "fundamental decisions" or that require approval by supermajority vote of stockholders. The members of the Special Committee include the Chief Executive Officer (provided he or she is a director) and two TVG Directors or their successors. The Special Committee will have authority to determine matters related to the relationship between Gemstar and "service providers" as contemplated by the Bylaws. (4) The Audit Committee: The Audit Committee consists of four members and ------------------- will act by majority vote of all its members or by unanimous written consent and has all powers normally accorded to an audit committee other than with respect to matters itemized in the Bylaws as "fundamental decisions" or that require approval by supermajority vote of stockholders. The members of the Audit Committee include the Chief Financial Officer, one GS Independent Director (as such term is defined in the Bylaws) and the two TVG Independent Directors. (5) The GS Director Committee: The GS Director Committee consists of all ------------------------- GS Directors other than the GS Independent Directors and acts by majority vote of all its members or by unanimous written consent. The GS Director Committee has the right to: appoint the Chairman of the Board (which will be Mr. Yuen so long as he is a director) until the earlier of the fifth anniversary of the completion of the Merger and the date Mr. Yuen ceases to be Chief Executive Officer of Gemstar; nominate directors to fill expiring directorships held by GS Directors until the fifth anniversary of the completion of the Merger; and fill vacancies with respect to the directorships held by GS Directors until the fifth anniversary of the completion of the Merger. The Board may not dissolve the GS Director Committee or modify its duties or composition without the approval of at least ten of the twelve members of the Board until the earlier of the fifth anniversary of the completion of the Merger and the date Mr. Yuen ceases to be Chief Executive Officer of Gemstar. If Mr. Yuen should cease being the Chief Executive Officer before the fifth anniversary of the completion of the Merger as a result of his death or disability, then until the fifth anniversary of the completion of the Merger the Board may dissolve the GS Director Committee or modify its duties or composition with the approval of nine of the twelve members of the Board. (6) The TVG Director Committee: The TVG Director Committee consists of all -------------------------- TVG Directors other than the TVG Independent Directors and acts by majority vote of all its members or by unanimous written consent. The TVG Director Committee will have the right to: nominate directors to fill expiring directorships held by TVG Directors Page 9 of 31 Pages until the fifth anniversary of the completion of the Merger; fill vacancies with respect to the directorships held by TVG Directors until the fifth anniversary of the completion of the Merger; and resolve tie votes of the Board and Executive Committee as described above. The Board may not dissolve the TVG Director Committee or modify its duties or composition without the approval of at least ten of the twelve members of the Board until the third annual board of directors' meeting following (1) the date Mr. Yuen ceases to be Chief Executive Officer of Gemstar or, if later, (2) the fifth anniversary of the completion of the Merger. (7) The Tie-breaking Committee: The Tie-breaking Committee consists of Mr. -------------------------- Yuen as Chairman of the Board and will exist until the earlier of the fifth anniversary of the completion of the Merger and the date Mr. Yuen ceases to be Chief Executive Officer of Gemstar. During such time, the Tie-breaking Committee will have the power to resolve tie votes of the Board and the Executive Committee as described above. During such time, the Board may not dissolve the Tie-breaking Committee or modify its duties or composition. Quorum. A majority of the total number of Board members will constitute a ------ quorum, except that six of the twelve Board members will constitute a quorum at a duly called Board meeting where either all GS Directors or all TVG Directors fail to attend such meeting. Voting. Generally, directors present at any meeting at which a quorum is ------ present may act by majority vote. However, matters itemized in the Bylaws as "fundamental decisions" will require the approval of at least seven of the twelve Board members and certain other matters require the approval of at least nine of the twelve Board members. Executive Officers. Henry C. Yuen will be Chief Executive Officer of ------------------ Gemstar for five years after the completion of the Merger unless he earlier dies or resigns or his employment is terminated for disability as permitted by, or for "cause" within the meaning of, his existing employment agreement. Until the earlier of the fifth anniversary of the completion of the Merger and the date Mr. Yuen ceases to be Chief Executive Officer of Gemstar, Mr. Yuen will be Chairman of the Board so long as he is a director of Gemstar. The foregoing discussion of the Bylaws is qualified in its entirety by reference to the complete text of the Bylaws, which is incorporated by reference herein. STOCKHOLDERS' AGREEMENT AMONG SIGNIFICANT STOCKHOLDERS Pursuant to a Stockholders' Agreement, dated as of October 4, 1999 (the "Stockholders' Agreement") which became effective on July 12, 2000, by and among News Corporation, Liberty Media Corporation ("Liberty"), Henry Yuen (the Chief Executive Officer of the Issuer) and the Issuer, News Corporation entered into the agreements with respect to the Common Stock described below. The description of the Stockholders' Agreement is subject to and qualified in its entirety by reference to the full text of the Stockholders' Agreement which is an exhibit to this Statement and is incorporated by reference herein. The Reporting Persons disclaim beneficial ownership of those securities of the Issuer beneficially owned by Liberty and Mr. Yuen. Directors: Pursuant to the Stockholders' Agreement, Henry C. Yuen and --------- designees of Mr. Yuen, Liberty and News Corporation have agreed (1) to vote for, or to use their best efforts to cause their respective designees on the Board to vote for, Mr. Yuen's election as a director and appointment as Chairman of the Board and Chief Executive Officer until the earlier of the fifth anniversary of the completion of the Merger and the date Mr. Yuen ceases to be Chief Executive Officer of the Issuer other than as a result of his termination without cause and (2) to vote for the election to the Board of five other persons (including two independent directors) designated by Mr. Yuen until the earlier of the fifth anniversary of the completion of the Merger and the date Mr. Yuen ceases to be Chief Executive Page 10 of 31 Pages Officer of the Issuer other than as a result of his termination without cause, provided that if Mr. Yuen should die or become disabled during such five-year period Liberty and News Corporation have each agreed, for the remainder of the five-year period, to continue to vote for the election to the Board of the directors formerly designated by Mr. Yuen or their successors (including Mr. Yuen's successor) and to vote against their removal except for cause. For so long as Liberty and News Corporation are committed to vote for Mr. Yuen and his designees, Mr. Yuen has agreed to vote his shares of Common Stock for the election to the Board of three designees of Liberty (including one independent director) and three designees of News Corporation (including one independent director). Each of Liberty's and News Corporation's right to designate directors generally shall be reduced by one director upon the transfer of 90% or more of its respective shares of Common Stock, but if the transfer of any of such shares is from one to the other then the total number of directors Liberty and News Corporation have the right to designate will not be reduced. Liberty and News Corporation have the right to allocate designees to the Board between one another as they may agree in connection with any transfer of shares among Liberty, News Corporation and their respective controlled related parties. Officers: - -------- Henry C. Yuen. Liberty and News Corporation will use their respective best ------------- efforts to cause their designees to the Board to vote for Mr. Yuen's election as Chairman of the Board and Chief Executive Officer of Gemstar during the five- year period following the completion of the Merger and against any removal or diminution of Mr. Yuen's responsibilities during such period (provided that the Issuer does not have the right to terminate Mr. Yuen's employment for disability pursuant to his employment agreement or that "cause," within the meaning of his employment agreement, does not exist for termination of such employment). Elsie Ma Leung. Liberty and News Corporation will use their respective best -------------- efforts to cause their designees to the Board to vote for the election of Elsie Ma Leung (and any successors to her offices) as co-President, co-Chief Operating Officer, a member of the Office of the Chief Executive and Chief Financial Officer of the Issuer during the five-year period following the completion of the Merger and against any removal or diminution of Ms. Leung's responsibilities during such period (provided that "cause," within the meaning of Mr. Yuen's employment agreement, does not exist for termination of such employment). Joachim Kiener and Peter C. Boylan III. Mr. Yuen will vote, and will use -------------------------------------- his best efforts to cause his designees to the Board to vote, for the election of Joachim Kiener and Peter C. Boylan III (and the successors to their respective offices) as co-Presidents and co-Chief Operating Officers of the Issuer and as members of the Office of the Chief Executive during the five-year period following the completion of the Merger and against any removal or diminution of their responsibilities during such period (provided that "cause," within the meaning of Mr. Yuen's employment agreement, does not exist for termination of such employment). Page 11 of 31 Pages Standstill: Each of Mr. Yuen, Liberty and News Corporation agree, provided ---------- that their respective designees to the Board continue to be elected and appointed directors, that until the earlier of the fifth anniversary of the completion of the Merger and the date Mr. Yuen ceases to be Chief Executive Officer of Gemstar other than as a result of his termination without cause, they will not: (1) make a public offer to acquire all or part of the Issuer, except in certain cases where another unaffiliated person has made an offer for a comparable percentage of the Issuer; (2) solicit proxies for the election of directors or make any stockholder proposal, except in certain cases; (3) act in concert with other stockholders or become a group within the meaning of applicable rules of the Securities and Exchange Commission, other than with each other and parties controlled by each other and except in connection with making a permitted competing offer for the Issuer; (4) transfer shares of Common Stock to any person who would, to the knowledge of such party, be an "Acquiring Person" within the meaning of the Issuer's rights agreement (i.e., a person whose ownership of Common Stock is such as to cause the share purchase rights issued under the rights agreement to become exercisable); or (5) seek to challenge the legality of the foregoing provisions of the Stockholders' Agreement. Registration Rights: At any time after the date which is six months after ------------------- July 12, 2000 and before the tenth anniversary of July 12, 2000, either Liberty or News Corporation (or transferees of their Common Stock) may request that the Issuer effect a registration of all or part of their shares of Common Stock. The Issuer will not be required to effect a demand registration unless the aggregate number of shares of Common Stock demanded to be registered is at least 1% of the number of shares of Common Stock then outstanding, in which case the Issuer must use all commercially reasonable efforts to cause a registration statement to become effective for the sale of such shares. Notwithstanding the foregoing, the Issuer will not be required to effect any demand registration after such time as Liberty or News Corporation (or transferees of their Common Stock), as the case may be, is able to sell all of its respective Common Stock without restriction. In addition, once a demand registration has been effected, the Issuer is not obligated to register shares pursuant to a demand registration before the expiration of twelve months from the date on which the previous demand registration statement was declared effective. The Issuer may postpone for up to 90 days the filing of a registration statement if it reasonably believes that such a registration statement would have a material adverse effect on its ability to engage in any financing, acquisition of assets or any merger, consolidation, tender offer or other significant transaction. However, the Issuer is not permitted to so postpone a demand registration more than once in any period of twelve consecutive months. Under the Stockholders' Agreement, the Issuer has agreed to pay all expenses, other than underwriting discounts and commissions and any transfer taxes, connected with the registration Page 12 of 31 Pages or qualification of the shares subject to the first two demand registrations and the Issuer's legal and accounting expenses for subsequent registrations. Under the Stockholders' Agreement, demand registrations may be effected by means of an underwritten offering or, in certain cases, pursuant to a delayed or continuous offering under applicable rules of the Securities and Exchange Commission. Under the Stockholders' Agreement, the Issuer has agreed to indemnify the parties requesting a demand registration against certain liabilities that may arise in connection with any offer and sale of Common Stock, including liabilities under the Securities Act of 1933, as amended, and to contribute to payments that such parties may be required to make in respect of any such offer and sale. The Stockholders' Agreement also provides that parties requesting a demand registration will indemnify the Issuer, its directors and officers and each person which controls the Issuer against certain liabilities, including liabilities under the Securities Act of 1933, as amended, for certain actions arising from the offer and sale of shares of Common Stock under the demand registration. Rights of First Refusal: Under the Stockholders' Agreement, Mr. Yuen may ----------------------- not transfer shares of Common Stock which he owns, except for limited transfers as specified in the Stockholders' Agreement, unless he first offers such shares to each of Liberty and News Corporation Any purchases of Common Stock from Mr. Yuen by Liberty or News Corporation will not cause a triggering event under the Issuer's rights agreement. The foregoing discussion of the Stockholders' Agreement is qualified in its entirety by reference to the complete text of the Stockholders' Agreement, which is incorporated by reference herein. RIGHTS PLAN OF THE ISSUER In connection with the Merger, the Issuer amended and restated its existing rights agreement, dated July 10, 1998 as amended ("Rights Plan"), with American Stock Transfer & Trust Company, in order to make the Rights Plan inapplicable to the Merger and the transactions contemplated thereby, including the Stockholders' Agreement. The Rights Plan was amended in connection with the Merger to exempt each of Liberty and its controlled related parties and News Corporation and its controlled related parties from the definition of Acquiring Person (as such term is defined in the Rights Plan). If, however, Liberty or News Corporation or their respective controlled related parties acquires beneficial ownership of any additional shares of Common Stock, then such person would be an Acquiring Person unless the beneficial ownership resulted from any of the following: (1) the right to acquire or acquisition of additional shares by Liberty, News Corporation or any of their respective controlled related parties from each other or from Henry C. Yuen; (2) the acquisition by Liberty, News Corporation or any of their respective controlled related parties of additional shares which do not exceed, in the aggregate, the number of shares of Common Stock transferred by Mr. Yuen before or after the completion of the Merger to persons other than Liberty, News Corporation or any of their respective controlled related parties in certain transactions permitted by the Stockholders' Agreement; Page 13 of 31 Pages (3) the grant or exercise of employee or director options; and (4) any agreement, arrangement or understanding among Liberty, News Corporation or any of their respective controlled related parties with respect to voting, holding, acquiring or disposing of beneficial ownership of Common Stock. The definition of Acquiring Person was also modified in certain respects to make it less likely that someone would inadvertently become an Acquiring Person. The amendments to the Rights Plan also modify the definition of beneficial ownership so that Mr. Yuen, Liberty and its controlled related parties, and News Corporation and its controlled related parties will not be deemed to beneficially own any of the shares of Common Stock owned by each other as a result of any of the transactions expressly contemplated by the Merger, including the Stockholders' Agreement. The foregoing discussion of the Rights Plan is qualified in its entirety by reference to the complete text of the Rights Plan, which is incorporated by reference herein. AGREEMENT TO ACQUIRE SHARES OF COMMON STOCK FROM LIBERTY News Corporation and Liberty have agreed that, subject to certain conditions, SGN and another subsidiary of News Corporation will acquire all of the shares of the Common Stock that are beneficially owned by Liberty, pursuant to the Letter Agreement. The Letter Agreement requires News Corporation and Liberty to negotiate in good faith and enter into definitive agreements (the "Definitive Agreements") with respect to the transactions contemplated by the Letter Agreement. The failure of the parties to execute the Definitive Agreements will not affect the binding effect or enforceability of the Letter Agreement. In addition, Liberty has agreed to assign to News Corporation all of its rights under the Stockholders' Agreement (and, in connection therewith, cause persons designated by News Corporation to replace Liberty's designees to the Board). The parties agreed that the acquisition of Common Stock will be effected in the manner, on the terms and for the consideration set forth in the Letter Agreement. Each of News Corporation and Liberty has agreed in the Letter Agreement to take all actions as may be required to consummate the transactions on the terms and conditions set forth in the Letter Agreement, including commercially reasonable efforts to procure required waivers and approvals. If, notwithstanding the foregoing, the NPAL/LUVSG Merger (as defined in the Letter Agreement) is not completed before June 22, 2001, then either News Corporation or Liberty may terminate its obligations under the Letter Agreement, unless the reason the NPAL/LUVSG Merger was not completed was a breach by the party seeking to terminate. Item 7. Materials to be Filed as Exhibits. Item 7 is amended and restated to read in its entirety as follows: Exhibit 7(a) Bylaws (incorporated by reference to Exhibit 99.2 to the Current Report on Form 8-K of the Issuer dated July 21, 2000 (Commission file number 0-26878)). Page 14 of 31 Pages Exhibit 7(b) Stockholders' Agreement (incorporated by reference to Exhibit 99.9 to the Current Report on Form 8-K of the Issuer dated February 7, 2000 (Commission file number 0-26878)). Exhibit 7(c) Rights Plan (incorporated by reference to Exhibit 99.1 to the Current Report on Form 8-K of the Issuer dated July 21, 2000 (Commission file number 0-26878)). Exhibit 7(d) Joint Filing Agreement among the Reporting Persons. Exhibit 7(e) Power of Attorney, dated July 24, 2000, by News Corporation, SGN and K. Rupert Murdoch. Exhibit 7(f) Letter Agreement, dated September 27, 2000, between News Corporation and Liberty. Page 15 of 31 Pages SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and correct. Dated: October 7, 2000 THE NEWS CORPORATION LIMITED By: /s/ Arthur M. Siskind -------------------------------- Name: Arthur M. Siskind Title: Executive Director Page 16 of 31 Pages 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: October 7, 2000 * ----------------------------- K. Rupert Murdoch *By: /s/ Arthur M. Siskind ------------------------ Arthur M. Siskind Attorney-in-Fact Page 17 of 31 Pages SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and correct. Dated: October 7, 2000 SKY GLOBAL NETWORKS, INC. By: /s/ Arthur M. Siskind ---------------------------- Name: Arthur M. Siskind Title: Senior Executive Vice President Page 18 of 31 Pages Schedule 1 is hereby amended and restated to read in its entirety as follows: Schedule 1 - ---------- Directors, Executive Officers and Controlling Persons of the Reporting Persons.
Principal Business or Organization in Which Such Name Principal Occupation and Business Address Employment is Conducted - ---- ------------------------------------------ ----------------------- K. Rupert Murdoch Chairman and Chief Executive of News Corporation; News Corporation Director of News Publishing Australia Limited ("NPAL"); Director of News International, plc; Director of News Limited; Director of News America Incorporated ("NAI"); Director and Chairman of SGN; Director of Satellite Television Asian Region Limited ("STAR TV"); Director and Chairman of British Sky Broadcasting Group plc ("BSkyB"); Director, Chairman and Chief Executive Officer of Fox Entertainment Group, Inc. ("FEG"); Director of Fox Family Worldwide, Inc. ("FFW"); Director of Philip Morris Companies Inc. ("Phillip Morris") 1211 Avenue of the Americas New York, New York 10036 Geoffrey C. Bible Non Executive Director of News Corporation; Philip Morris Chairman and Chief Executive Officer of Philip Morris; Director of New York Stock Exchange, Inc. 120 Park Avenue New York, New York 10017 Chase Carey Executive Director and Co-Chief Operating Officer News Corporation of News Corporation; Director, President and Chief Operating Officer of NAI; Director and Co-Chief Operating Officer of FEG; Chairman and Chief Executive Officer of Fox Television; President and Chief Executive Officer of SGN; Director of STAR TV; Director of NDS Group plc ("NDS")
Page 19 of 31 Pages
Principal Business or Organization in Which Such Name Principal Occupation and Business Address Employment is Conducted - ---- ------------------------------------------ ----------------------- Director of FFW; Director of Gemstar; Director of Gateway, Inc.; Director of Colgate University. 1211 Avenue of the Americas New York, New York 10036 Peter Chernin Executive Director, President and Chief Operating News Corporation Officer of News Corporation; Director, Chairman and Chief Executive Officer of NAI ; Director, President and Chief Operating Officer of FEG; Director of SGN; Director of Tickets.com, Inc.; Director of E*TRADE Group, Inc. 10201 West Pico Boulevard Los Angeles, CA 90035 Kenneth E. Cowley(1) Non Executive Director of News Corporation; News Corporation Executive Director of Ansett Australia Holdings Limited; Director of Commonwealth Bank of Australia. 2 Holt Street Sydney, New South Wales 2010 Australia David F. DeVoe Executive Director, Senior Executive Vice News Corporation President and Chief Financial Officer and Finance Director of News Corporation; Director and Senior Executive Vice President of NAI; Director, Senior Executive Vice President and Chief Financial Officer of FEG; Director of STAR TV; Director of BSkyB; Director and Acting Chief Financial Officer of SGN; Director of NDS. 1211 Avenue of the Americas New York, New York 10036 Roderick I. Eddington(2) Non Executive Director of News Corporation; Chief British Airways Executive of British Airways plc ("British Airways") c/o 2 Holt Street Sydney, New South Wales 2010 Australia
- ------------------------ 1 Citizen of Australia 2 Citizen of Australia Page 20 of 31 Pages
Principal Business or Organization in Which Such Name Principal Occupation and Business Address Employment is Conducted - ---- ------------------------------------------ ----------------------- Aatos Erkko(3) Non Executive Director of News Corporation; Sanoma Chairman of Sanoma WSOY Corporation ("Sanoma"), a privately owned media company in Finland. P.O. Box 144 SF00101 Helsinki, Finland Andrew S.B. Knight(4) Non Executive Director of News Corporation; News Corporation c/o News International plc 1 Virginia Street London E1 9XN England Lachlan K. Murdoch Executive Director, Senior Executive Vice News Corporation President and Deputy Chief Operating Officer of News Corporation; Chairman and Director of Queensland Press Limited; Director, Chairman, and Chief Executive of News Limited; Director of SGN; Deputy Chairman of STAR TV; Director of Beijing PDN Xinren Information Technology Company Ltd; Director of One.tel Limited; Director of FOXTEL Management Pty Ltd.; Director of OmniSky Corporation 1211 Avenue of the Americas New York, New York 10036 James R. Murdoch Executive Vice President of News Corporation; STAR TV Director of SGN; Director, Chairman and Chief Executive Officer of Star TV; Director of NDS; Director of YankeeNets L.L.C.; Chairman of Rawkus Entertainment LLP; 8th Floor, One Harbourfront 18 Tak Fung Street Hunghom, Kowloon, Hong Kong
- -------------------------- 3 Citizen of Finland 4 Citizen of United Kingdom Page 21 of 31 Pages
Principal Business or Organization in Which Such Name Principal Occupation and Business Address Employment is Conducted - ---- ------------------------------------------ ----------------------- Thomas J. Perkins Non Executive Director of News Corporation; Senior Kleiner Perkins Partner at Kleiner Perkins Caufield & Byers ("Kleiner Perkins"); Director of Compaq Computer Corporation; 4 Embarcadero Center Suite 3520 San Francisco, CA 94111 Bert C. Roberts, Jr. Non Executive Director of News Corporation; MCI Chairman of MCI Worldcom, Inc. ("MCI"); 1801 Pennsylvania Avenue, N.W. Washington, D.C. 20006 Stanley S. Shuman Non Executive Director of News Corporation; Allen & Company Executive Vice President and Managing Director of Allen & Company Incorporated ("Allen & Company"); Director of NAI; Director of Bayou Steel Corporation; Director of Six Flags, Inc.; Director of Western Multiplex Corporation; 711 Fifth Avenue New York, New York 10176 Arthur M. Siskind Executive Director, Senior Executive Vice News Corporation President and Group General Counsel of News Corporation; Director of BSkyB; Director and Senior Executive Vice President of NAI; Director, Senior Executive Vice President and General Counsel of FEG; Director of STAR TV; Director and Senior Executive Vice President of SGN; Director of NDS 1211 Avenue of the Americas New York, New York 10036
Page 22 of 31 Pages EXHIBIT INDEX Exhibit No. Description - ----------- ----------- 7(a) Bylaws (incorporated by reference to Exhibit 99.2 to the Current Report on Form 8-K of the Issuer dated July 21, 2000 (Commission file number 0-26878)). 7(b) Stockholders' Agreement (incorporated by reference to Exhibit 99.9 to the Current Report on Form 8-K of the Issuer dated February 7, 2000 (Commission file number 0-26878)). 7(c) Rights Plan (incorporated by reference to Exhibit 99.1 to the Current Report on Form 8-K of the Issuer dated July 21, 2000 (Commission file number 0-26878)). 7(d) Joint Filing Agreement among the Reporting Persons. 7(e) Power of Attorney, dated July 24, 2000, by News Corporation, SGN and K. Rupert Murdoch. 7(f) Letter Agreement, dated September 27, 2000, between News Corporation and Liberty. Page 23 of 31 Pages EX-99.7(F) 2 0002.txt LETTER AGREEMENT, DATED SEPTEMBER 27, 2000 EXHIBIT 7(F) The News Corporation Limited 1211 Avenue of the Americas New York, New York 10036 September 27, 2000 Liberty Media Corporation 9197 South Peoria Street Englewood, Colorado 80112 Gentlemen: This letter confirms the terms and conditions of our agreement and understanding regarding the transactions described in the Summary of Proposed Terms attached hereto (the "Summary" and together herewith, this "Letter"). Capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Summary. Following the execution and delivery of this Letter, the parties shall negotiate in good faith and enter into definitive agreements (the "Definitive Agreements") with respect to the transactions contemplated by this Letter (the "Proposed Transactions"). The Definitive Agreements will include (a) the terms contained in the Summary, (b) mutually agreed representations and warranties, including, without limitation, (i) representations and warranties of Liberty relating to the Gemstar Stock and the DTH Interests being directly or indirectly transferred, including good and valid title and no liens or restrictions with respect to same (except as may be created by TNCL or SGN), and representations and warranties of Liberty with respect to the capital stock of LUVSG, LTVGIA and other subsidiaries of Liberty being directly or indirectly transferred, including that the same are duly authorized, validly issued, fully paid, nonassessable and free of preemptive rights and liens and restrictions (except as may be created Page 24 of 31 Pages Liberty Media Corporation September 27, 2000 Page 2 by TNCL or SGN), (ii) similar representations and warranties of TNCL and SGN, as the case may be, with respect to the ADRs and SGN Stock, respectively, being issued, including that the same are duly authorized and, when issued in the applicable Proposed Transaction, will be validly issued, fully paid, nonassessable and free of preemptive rights and liens and restrictions not created by Liberty, (iii) representations and warranties of Liberty confirming that none of LUVSG, LTVGIA or any of the other subsidiaries of Liberty being directly or indirectly transferred to SGN, NPAL or any other affiliate of TNCL, have any assets other than Gemstar Shares or DTH Interests, as the case may be, or any liabilities other than pursuant to shareholder or investor agreements or the like related thereto to which TNCL or any of its affiliates are also party thereto, and (iv) a representation and warranty by SGN substantially to the same effect as the "10b-5 representation" made to the underwriters of the Qualified SGN IPO, and (c) covenants and conditions, including, without limitation, (x) the receipt of any waiver or approval, or the expiration of any time period, that may be required under applicable law or regulation, or under the requirements of any applicable stock exchange (including, without limitation, the Australian Stock Exchange), in order to consummate the Proposed Transactions, and (y) the receipt of any waiver or approval from any person (other than a party hereto or their respective affiliates) necessary for the applicable transfer of the DTH Interests in accordance with the Summary. Except as required by law or regulation or the requirements of applicable stock exchanges, no public disclosure or publicity concerning the subject matter hereof will be made without the approval of each of the parties hereto. The parties hereto will issue a joint press release upon the execution and delivery of this Letter. Page 25 of 31 Pages Liberty Media Corporation September 27, 2000 Page 3 Each party hereto shall pay its own expenses (including fees and expenses of legal counsel, investment bankers, brokers or other representatives or consultants) in connection with the Proposed Transactions (whether or not consummated). Each party agrees to take all such actions as may be required to consummate the Proposed Transactions on the terms and conditions set forth in this Letter, including using commercially reasonable efforts to procure each required waiver, approval and expiration of time period. If, notwithstanding the foregoing, the NPAL/LUVSG Merger is not completed before June 22, 2001, then either party may terminate its obligations under this Letter, unless the reason the NPAL/LUVSG Merger was not completed was a breach by the party seeking to terminate. The parties will in good faith cooperate to prepare one or more Definitive Agreements to the extent necessary and appropriate to give effect to the provisions of this Letter, but the failure of the parties to execute and deliver such Definitive Agreement(s) will not affect the binding effect or enforceability of this Letter. Page 26 of 31 Pages Liberty Media Corporation September 27, 2000 Page 4 Please indicate your agreement with the foregoing by signing a copy of this letter in the space provided and returning it to the undersigned. Sincerely, THE NEWS CORPORATION LIMITED BBy: /s/ Lawrence A. Jacobs ------------------------------ Name: Lawrence A. Jacobs Title: Senior Vice President Accepted and Agreed: LIBERTY MEDIA CORPORATION By: /s/ Charles Y. Tanabe ---------------------------- Name: Charles Y. Tanabe Title: Senior Vice President Page 27 of 31 Pages TNCL/SGN/LIBERTY TRANSACTIONS SUMMARY OF PROPOSED TERMS A. Acquisition by NPAL of Gemstar Shares held by Liberty Subsidiaries - --------------------------------------------------------------------- 1. News Publishing Australia Limited ("NPAL"), a subsidiary of The News Corporation Limited ("TNCL"), will acquire all of the 70,704,588 shares of the Common Stock, par value $.01 per share ("Gemstar Stock"), of Gemstar-TV Guide International, Inc. ("Gemstar") held by Liberty UVSG, Inc. ("LUVSG"), a subsidiary of Liberty Media Corporation ("Liberty"). Such acquisition will be effected through a tax-free forward subsidiary merger pursuant to which LUVSG will merge with and into NPAL (the "NPAL/LUVSG Merger"). The consideration for the Gemstar Stock acquired in the NPAL/LUVSG Merger will be American Depository Receipts ("ADRs") representing Preferred Limited Voting Ordinary Shares of TNCL. Liberty will receive 1.7179 ADRs in exchange for each share of Gemstar Stock held by LUVSG. 2. Upon completion of the NPAL/LUVSG Merger, Liberty will agree, solely for the benefit of TNCL and its controlled affiliates, to continue to be subject to the non-compete obligations described in the Stockholders' Agreement, dated as of October 4, 1999, by and among TNCL, Liberty, Henry C. Yuen and Gemstar International Group Limited (the "Stockholders' Agreement"), until the expiration of such obligations in accordance with their terms, but determined as if the Liberty Designees (as defined in the Stockholders' Agreement) continued to serve on Gemstar's Board of Directors after the Closing Date. Upon completion of the NPAL/LUVSG Merger, Liberty shall assign to TNCL all of its rights under the Stockholders' Agreement, and, in connection therewith, Liberty and TNCL shall cause persons designated by TNCL to replace the Liberty Designees on Gemstar's Board of Directors. B. Acquisition by SGN of Gemstar Shares and Interests in the Latin American DTH ---------------------------------------------------------------------------- Platform Businesses held by Liberty Subsidiaries ------------------------------------------------ 1. Subject to consummation of the NPAL/LUVSG Merger, Sky Global Networks, Inc. ("SGN") will acquire all of the 16,761,150 shares of Gemstar Stock held by Liberty TVGIA, Inc. ("LTVGIA"), a subsidiary of Liberty. Such acquisition will be effected through a tax-free merger of LTVGIA into a subsidiary of SGN, or through some other mutually agreeable transaction (the "SGN/LTVGIA Transaction"). The consideration for the Gemstar Stock acquired in the SGN/LTVGIA Transaction will be shares of Class A Common Stock, par value $.01 per share ("SGN Stock") of SGN. 2. Subject to the consummation of an initial public offering of SGN Stock in which the gross proceeds from the sale of SGN Stock is not less than $1 billion, excluding proceeds of the sale to Liberty contemplated hereby (a "Qualified SGN IPO"), SGN will acquire Liberty's 10% interest in each of Innova S. de R.L., Sky Multi-County Partners, NetSat Servicos Ltda, DTH Techo Partners and Sky Latin Page 28 of 31 Pages America Partners (collectively, the "DTH Interests"). The acquisition of the DTH Interests will be effected through tax-free (for U.S. federal income tax purposes) mergers of subsidiaries of SGN with U.S. "C" corporation subsidiaries of Liberty (that directly or indirectly hold the DTH Interests), or through some other mutually agreeable transaction (collectively, the "SGN/DTH Transaction"), it being agreed that the parties will use reasonable best efforts to effect the SGN/DTH Transaction in such a manner that it will be tax-free under foreign tax laws. The consideration for the DTH Interests acquired in the SGN/DTH Transaction will be shares of SGN Stock. In connection with the closing of the SGN/DTH Transaction, TNCL will cause one or more of its affiliates to reimburse Liberty for any and all mandatory cash contributions made by Liberty's affiliates in respect of the DTH Interests between the date of this Letter and the date of the closing of the SGN/DTH Transaction, together with interest on each such contribution from the date thereof to the date of payment at the rate of 8% per annum. 3. The closing of the SGN/LTVGIA Transaction and the SGN/DTH Transaction (collectively, the "SGN Closing") will be subject to and will occur concurrently with the consummation of a Qualified SGN IPO. TNCL agrees that at the SGN Closing, the assets and liabilities of SGN (the "Base Assets and Liabilities") will consist of: (a) the assets and liabilities (excluding liabilities due to or preferred stock held by TNCL or any of its subsidiaries) set forth in the registration statement on Form S-1 of SGN (Registration No. 333-39672) filed June 20, 2000 (the "S-1"), including Star Television Limited; (b) indebtedness for borrowed money and preferred stock (valued at its liquidation value), including indebtedness due to or preferred stock held by TNCL or any of its subsidiaries, equal to $3 billion (which indebtedness and preferred stock will be on reasonable arms-length terms); (c) the assets to be acquired from Liberty pursuant to the NPAL/LUVSG Merger (which will be owned, directly or indirectly, by SGN), the SGN/LTVGIA Transaction and the SGN/DTH Transaction[; and (d) any assets received by SGN in connection with a transaction in which the Base Percentage (as defined in paragraph 6 hereof) is adjusted in accordance with paragraph 6 hereof]. 4. As between Liberty and its affiliates, on the one hand, and TNCL, SGN and their affiliates on the other hand, at the time of the closing of the SGN/DTH Transaction, [TNCL and Liberty and their respective affiliates will cease to be bound by or subject to any channel put agreements referred to in any of the agreements relating to the entities in which the DTH Interests are held,] and Liberty and its affiliates will cease to be bound by or subject to any of the non-compete, must carry or program service supply obligations referred to in any of the agreements relating to the entities in which the DTH Interests are held. 5. Subject to adjustment as set forth below, at the SGN Closing, Liberty will receive shares of SGN Stock representing 4.76% of SGN's common equity on a fully-diluted basis (not including options to be issued to employees prior to the Qualified SGN IPO) (the "Base Percentage"). Page 29 of 31 Pages 6. If between the date hereof and the SGN Closing, SGN issues shares of SGN Stock (a "Dilutive Equity Issue") other than pursuant to the capitalization of SGN with the Base Assets and Liabilities, the Base Percentage shall be adjusted as follows: a. For each Dilutive Equity Issue, the Base Percentage shall be adjusted in accordance with the following formula: adjusted Base Percentage = current Base Percentage - (current Base Percentage x P), where P = the percentage interest of SGN issued [(on a post-issuance basis)] in the Dilutive Equity Issue (on a fully diluted basis, not including options to be issued to employees prior to the Qualified SGN IPO) b. Adjustments of the Base Percentage shall be made successively for all Dilutive Equity Issues consummated by SGN between the date hereof and the effective date of the SGN Closing. c. Notwithstanding anything to the contrary set forth herein, TNCL agrees that prior to the consummation of a Qualified SGN IPO, SGN will not issue or agree to issue shares of SGN Stock (or securities convertible into or exercisable or exchangeable for shares of SGN Stock, other than employee stock options) (i) to TNCL or any of its affiliates or (ii) to any other person or entity unless the [economic] [pricing] terms of the transaction with such unaffiliated acquiror of such shares or securities are no more favorable to the acquiror than those applicable to Liberty's acquisition of SGN Stock at the SGN Closing. 7. If the aggregate amount of indebtedness for borrowed money and preferred stock of SGN as of the effective date of the SGN Closing is more or less than $3 billion, TNCL and Liberty shall agree to a reasonable adjustment in the Base Percentage to reflect the increase or decrease in the value of SGN in light of such reduced or increased indebtedness. C. Backup LTVGIA Transaction - ----------------------------- If a Qualified SGN IPO does not occur by the date that is 14 months after the date of the letter of which this Summary is a part (the "Letter"), (i) neither Liberty nor SGN shall be under any obligation to consummate the SGN/DTH Transaction, and (ii) Liberty and TNCL will effect a transaction (the "Backup LTVGIA Transaction") in which Liberty will receive 1.7179 ADRs for each share of Gemstar Stock held by LTVGIA. The Backup LTVGIA Transaction will be effected through a tax-free forward subsidiary merger of LTVGIA with and into NPAL. D. Investment by Liberty of $500 million in SGN in exchange for SGN Stock - -------------------------------------------------------------------------- 1. Subject to the condition that the NPAL/LUVSG Merger has been consummated, prior to the closing of a Qualified SGN IPO, Liberty will purchase from SGN shares of SGN Stock for an aggregate purchase price of $500,000,000 (the "SGN Page 30 of 31 Pages Investment Transaction"). The number of shares of SGN Stock that Liberty will receive for the consideration paid in the SGN Investment Transaction will be determined by dividing $500,000,000 by the price per share that SGN Stock is offered to the public in a Qualified SGN IPO. 2. If a Qualified SGN IPO does not occur by the date that is 9 months after the date of the Letter, neither Liberty nor SGN shall be under any obligation to consummate the SGN Investment Transaction. E. Lock-Ups and Registration Rights - ------------------------------------ 1. Liberty will agree to a two year lock-up agreement with respect to the ADRs received by it and a one year lock-up agreement with respect to the shares of SGN Stock received by it. Such lock-up agreements will prohibit any transaction (including a derivative transaction) relating to the ADRs or the SGN Stock, provided that, as to 25% of the ADRs, derivative transactions will be permitted on the same terms as are permitted under the Registration and Lock-Up Agreement dated as of July 15, 1999 between TNCL and Liberty (the "Sports Net Agreement"), commencing 12 months after the closing of the NPAL/LUVSG Merger. Liberty will also agree to enter into customary lock-up agreements with respect to such ADRs and shares of SGN Stock at the request of any managing underwriters engaged in connection with a public offering of securities for TNCL or SGN; provided that in no event will any lock-up period applicable to Liberty under such agreements exceed 90 days or, if shorter, the shortest lock-up period applicable to TNCL or SGN or any of the principal stockholders of TNCL or SGN, as applicable. 2. Subject to such lock-up agreements, (i) TNCL shall grant Liberty registration rights with respect to the ADRs pursuant to a registration rights agreement (the "TNCL Registration Rights Agreement") with terms that are substantially the same as those set forth in the Sports Net Agreement, and (ii) SGN shall grant Liberty registration rights with respect to the shares of SGN Stock pursuant to a registration rights agreement with substantially equivalent terms to the TNCL Registration Rights Agreement. Page 31 of 31 Pages -----END PRIVACY-ENHANCED MESSAGE-----