SCHEDULE 14C
(RULE 14C-101)
INFORMATION STATEMENT PURSUANT TO SECTION 14(C) OF THE SECURITIES
EXCHANGE ACT OF 1934
Check the appropriate box:
/X/ Preliminary Information Statement / / Confidential, for use of the
Commission (as permitted by Rule
14c-5(d)(2))
/ / Definitive Information Statement
USA NETWORKS, INC.
(Name of Registrant as Specified in Its Charter)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee
is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
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(4) Date filed:
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[LOGO]
152 WEST 57TH STREET
42ND FLOOR
NEW YORK, NEW YORK 10019
---------------------------
INFORMATION STATEMENT
---------------------------
November 8, 2001
Dear Stockholders:
We are amending our restated certificate of incorporation in the following
respects, the first of which is to increase our authorized number of shares of
preferred stock from 15,000,000 to 100,000,000. The amendment will also provide
that future increases or decreases in the authorized shares of preferred stock,
or any class or series thereof, will require the approval only of the
outstanding voting power of the Company, not a separate vote of the holders of
preferred stock (so long as such decrease does not reduce the number of
preferred shares of any series below the number then outstanding).
Separately, Article XIII of our restated certificate of incorporation
contains provisions relating to restrictions in the Communications Act of 1934,
as amended (including the rules and regulations promulgated thereunder),
limiting the foreign ownership of our capital stock. Because the Company no
longer controls any entities that own broadcast television stations in the
United States, such provisions are no longer relevant and therefore we are also
amending our restated certificate of incorporation to delete in its entirety
Article XIII thereof.
This Information Statement more fully describes the terms and conditions of
the proposed amendment to our restated certificate of incorporation, sometimes
referred to in this Information Statement as the charter amendment. You are
urged to read this Information Statement thoroughly.
Our Board of Directors has adopted a resolution that sets forth and declares
advisable the charter amendment. In addition, under a stockholders agreement,
each of Universal Studios, Inc., a subsidiary of Vivendi Universal S.A., and
Liberty Media Corporation has granted to Barry Diller an irrevocable proxy over
all Company securities owned by Universal, Liberty and their affiliates for all
matters except for a fundamental change, which requires the consent of each of
Mr. Diller, Universal and Liberty. As to matters that constitute a fundamental
change (which includes the charter amendment), the proxies are only effective
upon the receipt of the consent of Mr. Diller, Universal and Liberty, which
consent the Company has obtained. As a result, Mr. Diller, through shares owned
by him as well as those owned by Liberty and Vivendi Universal, controls 71.5%
of the combined voting power of our common stock and Class B common stock, which
is sufficient for stockholder approval of the charter amendment. Mr. Diller has
signed a written stockholder's consent approving the proposed charter amendment.
As a result, no action is required on your part. WE ARE NOT ASKING YOU FOR A
PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
Our common stock will continue to trade on the Nasdaq National Market under
the trading symbol "USAI."
This Information Statement is being mailed on or about November 19, 2001, to
holders of record on November 9, 2001, of shares of our common stock and
Class B common stock.
We intend to take all necessary action to effect the charter amendment on or
after December [__], 2001 (20 days from the date of the mailing of this
Information Statement).
TABLE OF CONTENTS
PAGE
--------
Questions and Answers About the Charter Amendment........... 2
The Charter Amendment....................................... 4
Interests of Certain Persons in the Charter Amendment....... 7
Security Ownership of Certain Beneficial Owners and
Management................................................ 8
Additional Information...................................... 14
Exhibit A: Charter Amendment................................ A-1
QUESTIONS AND ANSWERS ABOUT THE CHARTER AMENDMENT
Q. WHY ARE YOU AMENDING THE CHARTER OF USA NETWORKS, INC.?
A. We are amending our restated certificate of incorporation to increase our
authorized number of shares of preferred stock from 15,000,000 to
100,000,000. In connection with our proposed acquisition of a controlling
interest in Expedia, Inc., we have agreed, among other things, to issue to
Expedia stockholders 13,125,000 shares of our preferred stock, subject to
the terms and conditions of the acquisition agreement. If we complete the
Expedia transaction, only 1,875,000 shares of preferred stock would be
authorized and unissued. The increase in authorized preferred stock will
permit USA in the future to issue shares of its preferred stock without
requiring further approval from USA's stockholders and will provide USA with
greater flexibility in structuring transactions that involve the issuance of
preferred stock. In addition, the amendment to allow future increases or
decreases in the amount of authorized preferred stock, or the number of
shares of any class or series of preferred stock, so long as the holders of
a majority of the voting power of USA's stock approve the amendment, will
permit USA to further amend the charter in this respect without the separate
vote of the holders of preferred stock.
Separately, Article XIII of our restated certificate of incorporation
contains provisions relating to restrictions in the Communications Act of
1934, as amended (including the rules and regulations promulgated
thereunder), limiting the foreign ownership of our capital stock. Because
the Company no longer controls any entities that own broadcast television
stations in the United States, these provisions are no longer relevant and
therefore we are also amending our restated certificate of incorporation to
delete in its entirety Article XIII of our charter.
Q. WILL MY SHARES OF USA STOCK BE AFFECTED BY THE CHARTER AMENDMENT?
A. No. You will continue to own the same number of shares of USA stock
immediately before and after the charter amendment.
Q: IS MY VOTE NEEDED TO APPROVE THE CHARTER AMENDMENT?
A. No. The Delaware General Corporation Law allows stockholders to act by
written consent instead of holding a meeting, unless prohibited by the
company's certificate of incorporation. Our restated certificate of
incorporation does not prohibit stockholder action by written consent. Under
a stockholders agreement among Barry Diller, Universal Studios, Inc. (a
subsidiary of Vivendi Universal S.A. ("Universal")), Liberty Media
Corporation ("Liberty") and the Company, Barry Diller currently beneficially
owns or has the right to vote 71.5% of the outstanding voting power of the
Company, which is sufficient for stockholder approval of the amendment.
Because Mr. Diller, Universal and Liberty have agreed to this amendment, and
Mr. Diller has signed a written stockholder's consent approving the proposed
charter amendment, no action is required on your part. APPROVAL OF THE
CHARTER AMENDMENT HAS BEEN OBTAINED WITHOUT THE VOTE OF ANY OTHER
STOCKHOLDER. See "The Charter Amendment--Stockholder Action" on page 5.
Q. WHAT IS THE TAX IMPACT OF THE CHARTER AMENDMENT TO ME?
A. None. Your shares are not being sold or exchanged in connection with the
charter amendment, so there is no taxable transaction related to your
shares. See "The Charter Amendment--Material Federal Income Tax
Consequences" on page 6.
Q. AM I ENTITLED TO DISSENTER'S RIGHTS IN CONNECTION WITH THE CHARTER
AMENDMENT?
A. No appraisal rights are available under the Delaware General Corporation Law
in
2
connection with the proposed charter amendment. See "The Charter
Amendment--Dissenters' Rights of Appraisal" on page 6.
Q. WHEN DO YOU EXPECT THE CHARTER AMENDMENT TO TAKE EFFECT?
A. We expect the charter amendment to take effect on or after December [__],
2001 (20 calendar days from the date of the mailing of this Information
Statement). The charter amendment will become effective whether or not we
complete the Expedia transaction.
Q. WHOM CAN I CALL WITH QUESTIONS ABOUT THE CHARTER AMENDMENT?
A. You should contact our Investor Relations Department by phone at
(212) 314-7400, or by E-mail at ir@usanetworks.com, with any questions about
the charter amendment.
3
THE CHARTER AMENDMENT
TO UNDERSTAND THE PROPOSED CHARTER AMENDMENT FULLY, YOU SHOULD READ
CAREFULLY THIS ENTIRE DOCUMENT AND THE DOCUMENTS TO WHICH WE HAVE REFERRED YOU.
SEE "WHERE YOU CAN FIND ADDITIONAL INFORMATION" ON PAGE 14. A COPY OF THE
CHARTER AMENDMENT IS ATTACHED AS EXHIBIT A TO THIS INFORMATION STATEMENT AND IS
INCORPORATED HEREIN BY REFERENCE.
OFFICES OF THE COMPANY
The principal executive office of USA Networks, Inc. is located at 152 West
57th Street, New York, New York 10019.
BACKGROUND AND BOARD ACTION
Our Board of Directors has approved the acquisition of a controlling
interest in Expedia, Inc. In connection with the proposed acquisition, we have
agreed, among other things, to issue to stockholders of Expedia 13,125,000
shares of our preferred stock, subject to the terms and conditions of the
acquisition agreement. If we complete the Expedia transaction, only 1,875,000
shares of preferred stock would be authorized and unissued.
Our Board of Directors has adopted a resolution that sets forth and declares
advisable the proposed amendment to our restated certificate of incorporation.
The amendment will increase the number of authorized shares of our preferred
stock from 15,000,000 to 100,000,000. The amendment also provides that future
increases or decreases in the authorized shares of preferred stock, or any class
or series thereof, will require the approval only of the outstanding voting
power of USA, not a separate vote of the holders of preferred stock (so long as
such decrease does not reduce the number of preferred shares of any series below
the number then outstanding).
In addition, on August 21, 2001, the Company completed the disposition of
all of its broadcast television stations. As a result of this disposition, the
provisions of Article XIII of our charter relating to restrictions in the
Communications Act of 1934, as amended (including the rules and regulations
promulgated thereunder), limiting the foreign ownership of our capital stock are
no longer relevant. Therefore, the amendment also deletes in its entirety
Article XIII of our restated certificate of incorporation.
AMENDMENT TO RESTATED CERTIFICATE OF INCORPORATION
Our restated certificate of incorporation currently authorizes 1,600,000,000
shares of common stock, par value $.01 per share, 400,000,000 shares of Class B
common stock, par value $.01 per share, and 15,000,000 shares of preferred
stock, par value $.01 per share. As of September 30, 2001, 313,953,890 shares of
common stock and 63,033,452 shares of Class B common stock were issued and
outstanding. None of our preferred stock is issued and outstanding.
On or after December [__], 2001 (20 days after the date of the mailing of
this Information Statement), we will amend our restated certificate of
incorporation. The amendment will:
- increase the authorized shares of our preferred stock from 15,000,000 to
100,000,000;
- eliminate the separate class vote that holders of preferred stock would
otherwise have to change the number of authorized shares of preferred
stock; and
- remove the foreign ownership limitations set forth in our restated
certificate of incorporation.
4
INCREASE IN NUMBER OF AUTHORIZED PREFERRED SHARES
The charter amendment will increase the number of authorized shares of our
preferred stock from 15,000,000 to 100,000,000. There will be no change to the
number of authorized shares of common stock and Class B common stock as a result
of the charter amendment. The increase in authorized preferred stock will permit
USA in the future to issue shares of its preferred stock without requiring
further approval from USA's stockholders and will provide USA with greater
flexibility in structuring future transactions that involve the issuance of
preferred stock.
ELIMINATION OF SEPARATE CLASS VOTE OF THE PREFERRED SHARES
The amendment will also provide that future increases or decreases in the
authorized shares of preferred stock, or any class or series thereof, will
require the approval only of the outstanding voting power of USA, not a separate
vote of the holders of preferred stock (so long as such decrease does not reduce
the number of preferred shares of any class or series below the number then
outstanding).
The amendment to allow future increases or decreases in the amount of
authorized preferred stock, or the number of shares of any class or series of
preferred stock, so long as the holders of a majority of the voting power of the
Company's stock approve the amendment, will permit the Company to further amend
the charter in this respect without the separate vote of the holders of the
preferred stock.
REMOVAL OF FOREIGN OWNERSHIP RESTRICTIONS
Separately, Article XIII of our restated certificate of incorporation
contains provisions relating to restrictions in the Communications Act of 1934,
as amended (including the rules and regulations promulgated thereunder),
limiting the foreign ownership of our capital stock. Because the Company no
longer controls any entities that own broadcast television stations in the
United States, these provisions are no longer relevant and therefore we are also
amending our restated certificate of incorporation to delete in its entirety
Article XIII of our charter.
The charter amendment will become effective whether or not we complete the
Expedia transaction.
STOCKHOLDER ACTION
Section 228 of the Delaware General Corporation Law permits stockholders to
approve any action that would be taken at any annual or special meeting without
a meeting by written consent of the holders of the minimum number of votes that
would be necessary to authorize the action at a meeting. Under a stockholders
agreement, each of Universal Studios, Inc., a subsidiary of Vivendi Universal
S.A., and Liberty Media Corporation has granted to Mr. Diller an irrevocable
proxy over all Company securities owned by Universal, Liberty and their
affiliates for all matters except for a fundamental change, which requires the
consent of each of Mr. Diller, Universal and Liberty. As to matters that
constitute a fundamental change (which includes the charter amendment), the
proxies are only effective upon the receipt of the consent of Mr. Diller,
Universal and Liberty, which consent the Company has obtained. As a result,
Mr. Diller, through shares owned by him as well as those owned by Liberty and
Vivendi Universal, controls 71.5% of the combined voting power of our common
stock and Class B common stock, which is sufficient for stockholder approval of
the amendment. Mr. Diller has signed a written stockholder's consent approving
the proposed charter amendment. As a result, no action is required on your part.
APPROVAL OF THE CHARTER AMENDMENT HAS BEEN OBTAINED WITHOUT THE VOTE OF ANY
OTHER STOCKHOLDER.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A
PROXY.
5
TIMING
The charter amendment will be effected by the filing of an amendment to our
restated certificate of incorporation with the Secretary of State of the State
of Delaware on or after December [__], 2001 (20 days after the date of the
mailing of this Information Statement). The charter amendment will take effect
upon such filing.
INTERESTS OF CERTAIN PERSONS IN THE CHARTER AMENDMENT
The Company believes that the interests of our officers and directors in the
proposed charter amendment are not different from the interests of our
stockholders generally in the proposed charter amendment. See page 7 of this
Information Statement.
MATERIAL FEDERAL INCOME TAX CONSEQUENCES
The charter amendment will not be a taxable transaction to our stockholders
as the outstanding shares of our common stock and Class B common stock are not
being sold or exchanged in connection with the charter amendment. The charter
amendment will not have material adverse tax consequences to us.
DISSENTERS' RIGHTS OF APPRAISAL
No appraisal rights are or will be available under the Delaware General
Corporation Law in connection with the proposed charter amendment.
PREFERRED STOCK
The charter amendment will increase the number of authorized shares of
preferred stock. No shares of preferred stock are being issued as a result of
this amendment. The terms, including dividend or interest rates, conversion
prices, voting rights, redemption prices, maturity dates and similar matters of
any preferred stock, when and if issued, will be determined by our Board of
Directors pursuant to our restated certificate of incorporation. The Company has
no present intent to issue any of the additional preferred stock to be
authorized by the amendment.
VOTING SECURITIES
We have two classes of common stock outstanding, common stock and Class B
common stock. The rights of the holders of common stock and Class B common stock
are substantially identical, except with respect to voting, conversion, and
certain other matters. Except as otherwise required by applicable law and our
restated certificate of incorporation, each share of common stock entitles its
holder to one vote and each share of Class B common stock entitles its holder to
ten votes on all matters submitted to a vote or for the consent of stockholders.
Except as otherwise required by applicable law and our restated certificate of
incorporation, the common stock and the Class B common stock vote together as a
single class on all matters submitted to a vote or for the consent of
stockholders. We have also authorized preferred stock, none of which is issued
and outstanding.
In connection with our proposed acquisition of Expedia, Inc., USA has agreed
to issue shares of a new class of preferred stock. We refer you to the Amended
and Restated Agreement and Plan of Recapitalization and Merger, by and among the
Company, Expedia, Inc., Taipei, Inc., Microsoft Corporation and Microsoft
E-Holdings, Inc., dated as of July 15, 2001, attached as Annex A to the
preliminary registration statement on Form S-4 filed by the Company on
August 22, 2001 with the SEC for more information on this pending transaction.
Shares of our common stock are traded on the Nasdaq National Market under
the symbol "USAI." On November [__], 2001, the most recent practicable day
before the printing of this Information Statement, our common stock closed at
$______ per share.
6
INTERESTS OF CERTAIN PERSONS IN THE CHARTER AMENDMENT
Our officers and directors only own common stock and, in some cases,
Class B common stock. Because no shares of our preferred stock are issued and
outstanding and because no shares of preferred stock are being issued as a
result of the charter amendment, we are not aware of any interests of our
officers and directors that are in addition to, or different from, the interests
of our stockholders generally in the charter amendment relating to the preferred
shares.
In connection with USA's acquisition of USA Networks and the domestic
television production and distribution business of Universal in 1998, Universal
received the right to designate four of our directors. The current Universal
designees are Messrs. Edgar Bronfman, Jr., Philippe Germond, Pierre Lescure and
Jean-Marie Messier. Universal is a subsidiary of Vivendi Universal, S.A., a
foreign corporation.
7
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
USA NETWORKS, INC. COMMON STOCK
The following table presents, as of September 30, 2001, information relating
to the beneficial ownership of USA's common stock by (1) each person known by
USA to own beneficially more than 5% of the outstanding shares of USA's common
stock, (2) each director of USA, (3) each of the Chief Executive Officer and the
four other most highly compensated executive officers of USA who served in such
capacities as of September 30, 2001 (the "Named Executive Officers"), and
(4) all executive officers and directors of USA as a group. The table also
presents, as of September 30, 2001, information relating to the beneficial
ownership of shares of Class A common stock of Hotel Reservations
Network, Inc., a subsidiary of USA ("HRN"), shares of Class A common stock of
Styleclick, Inc., a subsidiary of USA ("Styleclick"), and shares of Class B
common stock of Ticketmaster, a subsidiary of USA ("TM"), by (1) each director
of USA, (2) each of the Named Executive Officers, and (3) all executive officers
and directors of USA as a group.
Unless otherwise indicated, beneficial owners listed here may be contacted
at USA's corporate headquarters address, 152 West 57th Street, New York, New
York 10019. For each listed person, the number of shares of USA common stock,
HRN Class A common stock, Styleclick Class A common stock, TM Class B common
stock and percent of each such class listed assumes the conversion of any shares
of USA Class B common stock, HRN Class B common stock, Styleclick Class B common
stock and TMCS Class A common stock owned by such person, but does not assume
the conversion of those shares owned by any other person. Shares of USA Class B
common stock may at the option of the holder be converted on a one-for-one basis
into shares of USA common stock. Shares of HRN Class B common stock may at the
option of the holder be converted on a one-for-one basis into shares of HRN
Class A common stock. Shares of Styleclick Class B common stock may at the
option of the holder be converted on a one-for-one basis into shares of
Styleclick Class A common stock. Shares of TM Class A common stock may at the
option of the holder be converted on a one-for-one basis into shares of TM
Class B common stock. Under the rules of the Securities and Exchange Commission,
a person is deemed to be a beneficial owner of a security if that person has or
shares voting power, which includes the power to vote or to direct the voting of
such security, or investment power, which includes the power to dispose of or to
direct the disposition of such security. A person is also deemed to be the
beneficial owner of any securities of which that person has the right to acquire
beneficial ownership within 60 days. Under these rules, more than one person may
be deemed to be a beneficial owner of the same securities and a person may be
deemed to be a beneficial owner of securities as to which that person has no
economic interest. For each listed person, the number of shares and percent of
class listed includes shares of USA common stock, HRN Class A common stock,
Styleclick Class A common stock and TM Class B common stock that may be acquired
by such person upon exercise of stock options that are or will be exercisable
within 60 days of September 30, 2001.
The percentage of votes for all classes of USA common stock is based on one
vote for each share of USA common stock and ten votes for each share of USA
Class B common stock. These figures do not include any unissued shares of USA
common stock or USA Class B common stock issuable upon conversion of Liberty's
Home Shopping Network, Inc. ("Holdco") shares and USANi LLC shares beneficially
owned by Liberty and Vivendi Universal. The percentage of votes for all classes
of HRN common stock is based on one vote for each share of HRN Class A common
stock and 15 votes for each share of HRN Class B common stock. The percentage of
votes for all classes of Styleclick common stock is based on one vote for each
share of Styleclick Class A common stock and 15 votes for each share of
Styleclick Class B common stock. The percentage of votes for all classes of TM
common
8
stock is based on 15 votes for each share of TM Class A common stock and one
vote for each of TM Class B common stock.
PERCENT OF
NUMBER OF PERCENT OF VOTES
NAME AND ADDRESS OF BENEFICIAL OWNER TITLE OF CLASS SHARES CLASS (ALL CLASSES)
------------------------------------ ----------------------- ----------- ---------------------- ----------------------
Capital Research & Management Co.... USA common 21,988,530(1) 7.2% 2.2%
333 South Hope Street
Los Angeles, CA 90071
Liberty Media Corporation........... USA common 74,442,234(2) 19.7% 55.2%
12300 Liberty Boulevard
Englewood, CO 80112
Vivendi Universal S.A............... USA common 31,611,308(3) 8.4% 16.1%
42, Avenue Friedland
75380 Paris cedex 08/France
Barry Diller........................ USA common 155,445,880(2)(4) 36.6% 72.9%
HRN Class A --(5) * *
Styleclick Class A --(6) * *
TM Class B --(7) * *
Paul Allen.......................... USA common 28,022,360(8) 8.9% 3.0%
HRN Class A -- * *
Styleclick Class A -- * *
TM Class B 105,622(9) * *
Robert R. Bennett................... USA common 26,096(22) * *
HRN Class A --
Styleclick Class A --
TM Class B --
Edgar J. Bronfman, Jr. ............. USA common -- * *
HRN Class A -- * *
Styleclick Class A -- * *
TM Class B -- * *
Anne M. Busquet..................... USA common 17,332(10) * *
HRN Class A -- * *
Styleclick Class A -- * *
TM Class B -- * *
Julius Genachowski.................. USA common 97,841(11) * *
HRN Class A -- * *
Styleclick Class A -- * *
TM Class B 700 * *
Philippe Germond.................... USA common -- * *
HRN Class A -- * *
Styleclick Class A -- * *
TM Class B -- * *
9
PERCENT OF
NUMBER OF PERCENT OF VOTES
NAME AND ADDRESS OF BENEFICIAL OWNER TITLE OF CLASS SHARES CLASS (ALL CLASSES)
------------------------------------ ----------------------- ----------- ---------------------- ----------------------
Dara Khosrowshahi................... USA common 227,872(12) * *
HRN Class A 26,047(13) * *
Styleclick Class A -- * *
TM Class B 500 * *
Victor A. Kaufman................... USA common 1,082,000(14) * *
HRN Class A -- * *
Styleclick Class A -- * *
TM Class B -- * *
Donald R. Keough.................... USA common 203,008(15) * *
HRN Class A -- * *
Styleclick Class A -- * *
TM Class B -- * *
Georg Kofler........................ USA common 800,000(16) * *
HRN Class A -- * *
Styleclick Class A -- * *
TM Class B -- * *
Marie-Josee Kravis.................. USA common -- * *
HRN Class A -- * *
Styleclick Class A -- * *
TM Class B -- * *
Pierre Lescure...................... USA common -- * *
HRN Class A -- * *
Styleclick Class A -- * *
TM Class B -- * *
John C. Malone...................... USA common --(22) * *
HRN Class A --
Styleclick Class A --
TM Class B --
Jean-Marie Messier.................. USA common -- * *
HRN Class A -- * *
Styleclick Class A -- * *
TM Class B -- * *
William D. Savoy.................... USA common 58,332(17) * *
HRN Class A -- * *
Styleclick Class A -- * *
TM Class B 14,166(18) * *
Gen. H. Norman Schwarzkopf.......... USA common 167,332(19) * *
HRN Class A -- * *
Styleclick Class A -- * *
TM Class B -- * *
10
PERCENT OF
NUMBER OF PERCENT OF VOTES
NAME AND ADDRESS OF BENEFICIAL OWNER TITLE OF CLASS SHARES CLASS (ALL CLASSES)
------------------------------------ ----------------------- ----------- ---------------------- ----------------------
Michael Sileck...................... USA common 90,000(20) * *
HRN Class A -- * *
Styleclick Class A -- * *
TM Class B -- * *
Diane Von Furstenberg............... USA common 13,332(21) *
HRN Class A --(21) * *
Styleclick Class A --(21) * *
TM Class B --(21) * *
All executive officers and directors
as a group (19 persons)............. USA common 186,251,385 43.6% 75.8%
HRN Class A 26,047 * *
Styleclick Class A -- * *
TM Class B 120,988 * *
------------------------
* The percentage of shares beneficially owned does not exceed 1% of the class.
(1) Based upon information filed with the Securities and Exchange Commission by
Capital Research & Management Co. as of December 31, 2000.
(2) Consists of 24,838,738 shares of USA common stock and 756,644 shares of USA
Class B common stock held by Liberty and 44 shares of USA common stock held
collectively by the BDTV Entities and 8,000,000, 31,236,444, 8,010,364 and
1,600,000 shares of USA Class B common stock held by BDTV Inc., BDTV
II Inc., BDTV III Inc. and BDTV IV Inc. (collectively, the "BDTV Entities"),
respectively. Does not include 77,394,771 shares of USA common stock or
1,596,544 shares of USA class B common stock issuable upon conversion of
Holdco shares and USANi LLC shares beneficially owned by Liberty.
Mr. Diller owns all of the voting stock of the BDTV Entities and Liberty
owns all of the non-voting stock, which non-voting stock represents in
excess of 99% of the equity of the BDTV Entities. Pursuant to a stockholders
agreement among Liberty, Universal, Vivendi Universal (as the successor to
The Seagram Company Ltd.), the parent of Universal, USA and Mr. Diller (the
"Stockholders Agreement"), Mr. Diller generally has the right to vote all of
the shares of USA common stock and USA Class B common stock held by Liberty
and the BDTV Entities.
(3) Consists of 18,181,308 shares of USA common stock and 13,430,000 shares of
USA Class B common stock held by Vivendi Universal. Does not include
135,591,530 shares of USA common stock or 146,570,000 shares of USA class B
common stock issuable upon conversion of USANi LLC shares beneficially owned
by Vivendi Universal. Pursuant to the Stockholders Agreement, Mr. Diller
generally has the right to vote all of the shares of USA common stock and
USA Class B common stock held by Vivendi Universal.
(4) Consists of 2,209,908 shares of USA common stock owned by Mr. Diller,
options to purchase 47,120,888 shares of USA common stock granted under
USA's stock option plans, 61,542 shares of USA common stock held by a
private foundation as to which Mr. Diller disclaims beneficial ownership, 44
shares of USA common stock and 48,846,808 shares of USA Class B common stock
held by the BDTV Entities, 24,838,738 shares of USA common stock and 756,644
shares of USA Class B common stock which are held by Liberty, and 18,181,308
shares of USA common stock and 13,430,000 shares of USA Class B common
stock, which are held by Universal and otherwise beneficially owned by
Vivendi Universal, as to which Mr. Diller has general voting authority under
the Stockholders Agreement. Excludes options to purchase 13,332 shares of
USA common stock held by Ms. Von Furstenberg, as to which Mr. Diller
disclaims beneficial ownership.
11
(5) Excludes 38,999,100 shares of HRN Class B common stock owned by USA, as to
which Mr. Diller disclaims beneficial ownership. These shares are
convertible into an equal number of shares of HRN Class A common stock.
(6) Excludes 23,153,713 shares of Styleclick Class B common stock owned by USA,
as to which Mr. Diller disclaims beneficial ownership. These shares are
convertible into an equal number of shares of Styleclick Class A common
stock.
(7) Excludes 42,480,143 shares of TM Class A common stock and 53,302,401 shares
of TM Class B common stock owned by USA, as to which Mr. Diller disclaims
beneficial ownership. The shares of TM Class A common stock are convertible
into an equal number of shares of TM Class B common stock.
(8) Consists of 27,954,028 shares of USA common stock and options to purchase
68,332 shares of USA common stock granted under USA's stock option plans.
(9) Consists of 95,622 shares of TM Class B common stock held by Mr. Allen and
10,000 shares of TM Class B common stock held by Vulcan Ventures, Inc.
(10) Consists of 4,000 shares of USA common stock and options to purchase 13,332
shares of USA common stock granted under USA's stock option plans.
(11) Consists of 12,841 shares of USA common stock, 25,000 shares of USA
restricted stock and options to purchase 60,000 shares of USA common stock
granted under USA's stock option plans.
(12) Consists of 4,122 shares of USA common stock, 55,000 shares of USA
restricted stock and options to purchase 168,750 shares of USA common stock
granted under USA's stock option plans.
(13) Consists of options to purchase 26,047 shares of HRN Class A common stock
granted under HRN's stock option plans.
(14) Consists of 45,000 shares of USA restricted stock and options to purchase
1,037,000 shares of USA common stock granted under USA's stock option plans.
(15) Consists of 84,676 shares of USA common stock and options to purchase
118,332 shares of USA common stock granted under USA's stock option plans.
Excludes 3,079,056 shares of USA common stock beneficially owned, as of
August 31, 2001, by Allen & Co., for which Mr. Keough serves as Chairman.
Mr. Keough disclaims beneficial ownership of such shares.
(16) Consists of options to purchase 800,000 shares of USA common stock granted
under USA's stock plans.
(17) Consists of 10,000 shares of USA common stock and options to purchase
48,332 shares of USA common stock granted under USA's stock option plans.
(18) Consists of 10,000 shares of TM Class B common stock and options to
purchase 4,166 shares of TM Class B common stock granted under TM's stock
option plans.
(19) Consists of options to purchase 167,332 shares of USA common stock granted
under USA's stock option plans.
(20) Consists of 15,000 shares of USA restricted stock and options to purchase
75,000 shares of USA common stock granted under USA's stock option plans.
(21) Consists of options to purchase 13,332 shares of USA common stock granted
under USA's stock option plans. Excludes shares beneficially owned by
Mr. Diller, as to which Ms. Von Furstenberg disclaims beneficial ownership.
(22) Mr. Bennett and Mr. Malone became directors of USA on October 25, 2001.
12
USA NETWORKS, INC. CLASS B COMMON STOCK
The following table presents, as of September 30, 2001, information relating
to the beneficial ownership of USA's Class B common stock:
NAME AND ADDRESS OF BENEFICIAL OWNER NUMBER OF SHARES PERCENT OF CLASS
------------------------------------ ---------------- ----------------
Barry Diller(1) ....................................... 63,033,452 100%
c/o USA Networks, Inc.
152 West 57th Street
New York, NY 10019
Liberty Media Corporation(1)(2) ....................... 49,603,452 78.7%
12300 Liberty Boulevard
Englewood, CO 80112
BDTV Entities(2) ...................................... 48,846,808 77.5%
(includes BDTV INC.,
BDTV II INC., BDTV III INC.
and BDTV IV INC.)
8800 West Sunset Boulevard
West Hollywood, CA 90069
Vivendi Universal S.A.(1)(3) .......................... 13,430,000 21.3%
42, Avenue de Friedland
75380 Paris cedex 08/France
------------------------
(1) These figures do not include shares of Class B common stock issuable upon
conversion of Liberty's Holdco shares and shares of USA Class B common stock
issuable upon conversion of Vivendi Universal's USANi LLC shares.
(2) Liberty holds 756,644 shares of USA Class B common stock and the BDTV
Entities hold 48,846,808 shares of USA Class B common stock. Mr. Diller owns
all of the voting stock of the BDTV Entities and Liberty owns all of the
non-voting stock, which non-voting stock represents in excess of 99% of the
equity of the BDTV Entities. Pursuant to the Stockholders Agreement,
Mr. Diller generally has the right to vote all of the shares of USA Class B
common stock held by Liberty and the BDTV Entities.
(3) Mr. Diller generally votes all of the shares held by Vivendi Universal under
the terms of the Stockholders Agreement.
13
ADDITIONAL INFORMATION
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
This Information Statement and the other documents incorporated in this
Information Statement by reference contain "forward-looking statements" within
the meaning of the securities laws. The "forward-looking statements" include,
among other things, statements relating to our anticipated financial
performance, business prospects, new developments, new merchandising strategies
and similar matters, and/or statements preceded by, followed by or that include
the words "believes," "could," "expects," "anticipates," "estimates," "intends,"
"projects," or similar expressions. We have based these forward-looking
statements on our current expectations and projections about future events,
based on the information currently available to us. For those statements, we
claim the protection of the safe harbor for forward-looking statements contained
in the Private Securities Litigation Reform Act of 1995. These forward-looking
statements are subject to risks, uncertainties and assumptions, that may affect
the operations, performance, development and results of our business. You are
cautioned not to place undue reliance on these forward-looking statements, which
speak only as of the date stated, or if no date is stated, as of the date of
this Information Statement. You should understand that the following important
factors, in addition to those discussed in the documents incorporated in this
document by reference, could affect our future results and could cause those
results to differ materially from those expressed in such forward-looking
statements:
- material adverse changes in economic conditions generally or in our
markets;
- future regulatory and legislative actions and conditions affecting our
operating areas;
- competition from others;
- successful integration of our divisions' management structures;
- product demand and market acceptance;
- the ability to protect proprietary information and technology or to obtain
necessary licenses on commercially reasonable terms;
- material changes in inflation;
- the ability to expand into and successfully operate in foreign markets;
- obtaining and retaining key executives and employees; and
- other risks and uncertainties as may be detailed from time to time in our
public announcements and filings with the Securities and Exchange
Commission.
We undertake no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or any other
reason. In light of these risks, uncertainties and assumptions, the
forward-looking events discussed in this Information Statement may not occur.
WHERE YOU CAN FIND MORE INFORMATION
The SEC allows us to "incorporate by reference" information that we file
with it, which means that we can disclose important information to you by
referring to those documents. The information incorporated by reference is an
important part of this Information Statement, and the information that we file
later with the SEC will automatically update and supersede this information. We
incorporate by reference the following documents that we have filed with the
SEC:
- Annual Report on Form 10-K for the year ended December 31, 2000;
- Quarterly Report on Form 10-Q for the quarter ended March 31, 2001;
14
- Quarterly Report on Form 10-Q for the quarter ended June 30, 2001;
- Current Report on Form 8-K filed January 10, 2001;
- Current Report on Form 8-K filed February 1, 2001;
- Current Report on Form 8-K filed March 6, 2001;
- Current Report on Form 8-K filed April 25, 2001;
- Current Report on Form 8-K filed June 6, 2001;
- Current Report on Form 8-K filed June 7, 2001;
- Current Report on Form 8-K filed June 27, 2001;
- Current Report on Form 8-K filed July 16, 2001;
- Current Report on Form 8-K filed July 23, 2001;
- Current Report on Form 8-K filed July 25, 2001;
- Current Report on Form 8-K filed September 18, 2001;
- Current Report on Form 8-K filed October 2, 2001;
- Current Report on Form 8-K filed October 24, 2001;
- Current Report on Form 8-K filed October 30, 2001; and
- Current Report on Form 8-K filed October 31, 2001.
We are also incorporating by reference additional documents that we may file
with the SEC pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
between the date of this Information Statement and the date we complete the
proposed charter amendment. You may request a copy of these filings at no cost,
by writing or telephoning us at the following address and phone number:
USA Networks, Inc.
Attn.: Investor Relations Department
152 West 57th Street
New York, NY 10019
Telephone: (212) 314-7400
15
EXHIBIT A
CHARTER AMENDMENT
RESOLVED, that, pursuant to Section 242 of the Delaware General Corporation
Law, the Board of Directors hereby deems it advisable that the reference in
Article IV of the Amended and Restated Certificate of Incorporation of the
Corporation (the "Charter") to "fifteen million (15,000,000) shares of $.01 par
value Preferred Stock" be amended by deleting the entirety thereof and replacing
it with "one hundred million (100,000,000) shares of $.01 par value Preferred
Stock."
RESOLVED FURTHER, that, pursuant to Section 242 of the Delaware General
Corporation Law, the Board of Directors hereby deems it advisable that the
following sentence be added to the end of Part D of Article IV of the Charter
entitled "Preferred Stock":
"Pursuant to subsection 242(b) of the Delaware General Corporation Law,
the number of authorized shares of Preferred Stock or any class or series
thereof may be increased or decreased (but not below the number of shares
thereof then outstanding) by the affirmative vote of the holders of a
majority of the voting power of the Corporation entitled to vote
irrespective of such subsection."
RESOLVED FURTHER, that, pursuant to Section 242 of the Delaware General
Corporation Law, the Board of Directors hereby deems it advisable that
Article XIII of the Charter be deleted in its entirety.
A-1