Exhibit 7(g)
STOCKHOLDERS' AGREEMENT
This Stockholders' Agreement (this "Agreement") is made as of March 9,
1999, by and among Xxxx X. Xxxxxx ("Xxxxxx"); Xxx X. Xxxxxxx, Xx. ("Hindery");
and The Xxxxx Xxxx Hindery 1989 Trust (the "Xxxxx Trust").
In consideration of the mutual promises and covenants contained in this
Agreement, and intending to be legally bound, the parties agree as follows:
ARTICLE I: DEFINITIONS
1.1 Definitions. The following terms, when used in this Agreement, will have
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the meanings set forth below.
Affiliate: of a Person is any other Person that Controls, is
Controlled by or is under common Control with such
Person.
Affiliate Offer: a bona fide written offer from an Affiliate of any
member of the Stockholder Group to purchase or otherwise
acquire all or part of the Liberty Shares owned by one
or more members of the Stockholder Group.
AT&T: AT&T Corp., a New York corporation.
AT&T Transaction: the transactions contemplated by the Agreement and Plan
of Restructuring and Merger dated as of June 23, 1998,
by and among AT&T, Italy Merger Corp., and Tele-
Communications, Inc.
Business Day: any day that is not a Saturday, a Sunday or a day on
which banking institutions in New York, New York,
Denver, Colorado or San Francisco, California are
required or authorized to be closed.
Control: the power to elect a majority of the directors (or
similar officials) of a Person or to direct or cause the
direction of the management and policies of a Person,
whether by the ownership of voting interests, by
contract or otherwise.
Fair Market Value: the cash price at which a willing seller would sell and
a willing buyer would buy specified property, both
having full
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knowledge of the relevant facts and being under no
compulsion to buy or sell, in an arm's-length
transaction without unusual time constraints.
HSR Act: the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended.
Liberty Class A Stock: the Class A Liberty Media Group Common Stock of
AT&T having a par value of $1.00 per share.
Liberty Class B Stock: the Class B Liberty Media Group Common Stock of AT&T
having a par value of $1.00 per share.
Liberty Shares: the 662,889 shares of Liberty Class B Stock acquired by
Hindery pursuant to the AT&T Transaction and the 194,507
shares of Liberty Class B Stock acquired by the Xxxxx
Trust pursuant to the AT&T Transaction, and any other
securities issued in exchange for any of the foregoing
(except shares of Liberty Class A Stock exchanged for
Liberty Class B Stock as provided in Article III), that
are held by or for the benefit of any member of the
Stockholder Group from time to time.
Xxxxxx Election Notice: as defined in Section 3.2(a).
Material Consent: the consent, waiver or authorization of, or filing with,
any Person the lack of which reasonably could be
expected to result in (a) material liability to the
Offeror or the Purchaser if a purchase of Liberty Shares
by Xxxxxx pursuant to Article III is consummated or (b)
either the Offeror or the Purchaser being deprived of
all or a material part of the benefits incident to the
purchase and sale of Liberty Shares pursuant to Article
III.
Person: any natural person, corporation, partnership, trust,
unincorporated organization, association, limited
liability company or other entity.
Stockholder Group: Hindery, the Xxxxx Trust, any Person that is a trustee
or beneficiary of the Trust from time to time, and each
Transferee.
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Third Party Offer: a bona fide written offer from a prospective purchaser
that is not an Affiliate of any member of the
Stockholder Group to purchase all or a portion of the
Liberty Shares.
Trading Price: the average of the daily market prices of one Liberty
Share for 25 consecutive Business Days commencing 30
Business Days before the date on which Xxxxxx gives a
Xxxxxx Election Notice. The daily market price of a
Liberty Share on any Business Day will be (a) the last
sale price on such day on the principal stock exchange
on which Liberty Shares are then listed or admitted to
trading or (b) if no sale takes place on such date on
that exchange, the average of the reported closing bid
and asked prices on such day as officially noted on that
exchange. The Trading Price will be appropriately
adjusted to reflect the effects of any stock dividend,
stock split, reclassification or combination affecting
Liberty Shares as a class, the record date or ex-
dividend date of which occurs during the period in which
the Trading Price is to be determined or thereafter
prior to the closing of the purchase of Liberty Shares
for which the calculation of the Trading Price is
required to be made.
Transfer: with respect to any property, a sale, exchange,
transfer, assignment, pledge, grant of a security
interest in or other disposition of all or any interest,
of record or beneficially, in such property (whether
voluntary, involuntary or by operation of law).
Transferee: a Person to whom a Transfer of Liberty Shares is
made in compliance with this Agreement.
ARTICLE II: VOTING ARRANGEMENTS
Each member of the Stockholder Group agrees to exercise all of the voting
and consent rights associated with the Liberty Shares owned by such Person on
all matters as to which such voting or consent rights are required or permitted
to be exercised as Xxxxxx directs. Each member of the Stockholder Group will
execute and deliver to Xxxxxx such proxies and other instruments and documents
as Xxxxxx may request from time to time to give effect to or to evidence the
rights granted in this Article II.
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ARTICLE III: TRANSFER RESTRICTIONS
3.1 Liberty Share Transfers. No member of the Stockholder Group will Transfer
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any of the Liberty Shares, or any interest therein, held by it or of which it is
a beneficial owner except to the extent specifically permitted by this Article
III. Any Transfer of Liberty Shares or an interest therein other than as
specifically permitted by this Article III will be void and of no effect. The
restrictions on, and obligations with respect to, Transfers of Liberty Shares
set forth in this Agreement will be in addition to, and not in lieu of, any
other restrictions or obligations imposed by applicable law or set forth in any
instrument or agreement by which the Liberty Shares or any member of the
Stockholder Group is bound.
3.2 Right of First Refusal.
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(a) A member of the Stockholder Group may Transfer all or any portion of
the Liberty Shares held or beneficially owned by it to an Affiliate or to a
Person that is not an Affiliate only after complying with the provisions of this
Section 3.2. No member of the Stockholder Group may Transfer any record or
beneficial interest in any Liberty Share separately from all of the legal and
beneficial interests in such Liberty Share, except to the extent necessary for
the Liberty Shares to be held of record by any trust or for Liberty Shares to be
distributed to beneficiaries of any trust to the extent permitted by Section
3.3. If any member of the Stockholder Group wishes to sell on the NASDAQ
National Market System or on any national securities exchange (an "Open Market
Sale"), or receives and wishes to accept a Third Party Offer or an Affiliate
Offer for, or wishes to contribute to an entity qualified under Section
501(c)(3) of the Internal Revenue Code of 1986, as amended (a "Charitable
Contribution"), all or any portion of the Liberty Shares held or beneficially
owned by it (the "Offered Shares"), that Person (the "Offeror") must first offer
to Xxxxxx the opportunity to purchase the Offered Shares. The offer will be
made by notice (an "Offer Notice") given by the Offeror to Xxxxxx (a)
accompanied (i) in the case of a Third Party Offer, by a copy of the Third Party
Offer that specifically identifies the Person making the Third Party Offer and,
to the extent known to the Offeror, each Person that directly or indirectly
Controls such Person, (ii) in the case of an Affiliate Offer, by a notice that
specifically identifies the Affiliate making the Affiliate Offer and each Person
that directly or indirectly Controls such Affiliate, or (iii) in the case of a
Charitable Contribution, by a notice identifying the charitable organization to
which the Offeror desires to transfer Offered Shares, and (b) in any case
stating the Offeror's bona fide intention to Transfer the Offered Shares in an
Open Market Sale or pursuant to the Third Party Offer, Affiliate Offer, or
Charitable Contribution. The Offeror will provide such additional information
as may reasonably be requested by Xxxxxx to evaluate the terms of the
prospective Transfer. Xxxxxx may elect to purchase all or a portion of the
Offered Shares by giving notice of such election to the Offeror (the "Xxxxxx
Election Notice") within 20 days after his receipt of the Offer Notice (the
"Xxxxxx Election Period").
(b) The consideration payable by Xxxxxx for each Offered Share that Xxxxxx
has elected to purchase, at Xxxxxx'x election will be either (i) one share of
Liberty Class A Stock (or that number of shares of Liberty Class A Stock, or
shares of any successor class or series of stock issued in
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replacement of Liberty Class A Stock, into which one Liberty Share is
convertible at the time of determination) or (ii) if the Offered Shares are the
subject of a Third Party Offer, cash in an amount equal to the consideration
payable for one Liberty Share pursuant to the Third Party Offer, and if the
Offered Shares are to be sold in an Open Market Sale or are the subject of an
Affiliate Offer, cash in an amount equal to the Trading Price; provided,
however, that if the Offered Shares are to be Transferred as a Charitable
Contribution, the consideration payable by Xxxxxx for the Offered Shares will be
determined under paragraph (b)(i) and Xxxxxx will not have the right to elect to
pay the consideration determined under paragraph (b)(ii) for such Offered
Shares. Xxxxxx will indicate in the Xxxxxx Election Notice whether he elects to
pay the purchase price in cash or shares of Liberty Class A Stock. To the extent
the consideration proposed to be paid for Liberty Shares in a Third Party Offer
consists of property other than cash, if Xxxxxx elects to purchase Offered
Shares for cash he will pay an amount equal to the Fair Market Value of such
property.
(c) For purposes of this Article III, the Fair Market Value of the non-
cash consideration proposed to be paid for Liberty Shares in a Third Party Offer
will be determined by agreement of the Offeror and Xxxxxx. If they cannot agree
on such Fair Market Value within 10 Business Days after a Xxxxxx Election Notice
is given, such Fair Market Value will be determined by an appraiser acceptable
to the Offeror and Xxxxxx. If they are unable to agree on a single appraiser
within 10 Business Days after a Xxxxxx Election Notice is given (the "Selection
Period"), the Offeror and Xxxxxx each will select an appraiser by giving notice
to each other of such appraiser's identity within 10 Business Days after the end
of the Selection Period. The Offeror and Xxxxxx each will cause the appraiser
they have selected to determine the Fair Market Value of the non-cash
consideration in question and to submit a written report of its determination
within 30 Business Days after the appraiser is selected. If the higher of the
two appraisals is equal to or less than 120% of the lower appraisal, the average
of the two will be the Fair Market Value of the non-cash consideration. If the
higher of the two appraisals is more than 120% of the lower appraisal, the two
appraisers will appoint a third appraiser within 10 Business Days and cause the
third appraiser to submit a written report of its determination of the Fair
Market Value of the non-cash consideration within 30 Business Days after such
appraiser's selection. Such third appraiser will not be informed of the
determinations of the other two appraisers. If three appraisals are necessary,
then the average of the two appraisals in which the Fair Market Values are
closest together will be deemed the Fair Market Value of the non-cash
consideration or, if the highest and lowest appraisal differ from the middle
appraisal by equal amounts, then the middle appraisal will be deemed the Fair
Market Value. Any appraiser appointed pursuant to this Section 3.2(c) will be a
nationally-recognized investment banking firm. The Offeror and Xxxxxx will pay
the fees and costs of the appraisers appointed by them. The Offeror and Xxxxxx
will share equally the fees and costs of any third appraiser appointed pursuant
to this Section 3.2 (c).
(d) Unless the Offeror and Xxxxxx otherwise agree, the closing of any
purchase of Liberty Shares pursuant to this Section 3.2 will be held at the
principal corporate offices of Liberty Media Corporation at 10:00 a.m. local
time on the later of (i) the day that is 20 days after the Xxxxxx Election
Notice is given and (ii) two Business Days after the parties have obtained all
Material Consents. If a purchase of Liberty Shares pursuant to this Section 3.2
requires any filing under the
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HSR Act, the requirement for obtaining that consent for purposes of this Section
3.2 will be deemed satisfied if the applicable waiting period under the HSR Act
has expired or has been terminated without the receipt of a notice of objection
or the commencement or threat of litigation by a government entity to restrain
the consummation of the purchase of the Liberty Shares to be purchased. The
Offeror and Xxxxxx will cooperate to prevent any inconsistency between any HSR
Act filings they are required to make and will furnish to each other such
information and reasonable assistance as the other may reasonably request in
connection with such filings and any request by a governmental agency for
additional information. Each party to this Agreement covenants to and with the
other parties that it will use its reasonable best efforts to obtain any
Material Consent required to consummate any purchase of Liberty Shares by Xxxxxx
pursuant to this Article III as promptly as practicable.
(e) At the closing of any purchase and sale of the Offered Shares by
Xxxxxx, (i) Xxxxxx will pay the purchase price in the form in which Xxxxxx has
elected to make such payment pursuant to Section 3.2(b) and (ii) the Offeror
will transfer to Xxxxxx all of the record and beneficial interests in the
Offered Shares to be purchased, free and clear of all liens, claims and
encumbrances, and will deliver such bills of sale, assignments and other
agreements and instruments to Xxxxxx, and will take all such other reasonable
actions at and after the closing as Xxxxxx may request, to effectively vest the
Offered Shares to be purchased in Xxxxxx.
(f) If any Material Consent cannot be obtained within 12 months after the
date a Xxxxxx Election Notice is given, the Xxxxxx Election Notice will be
deemed rescinded and the Offeror may Transfer the Offered Shares (i) in an Open
Market Sale on such terms as are generally available on such markets if a
proposed Open Market Sale by the Offeror gave rise to the right of first refusal
pursuant to this Section 3.2, (ii) pursuant to a Charitable Contribution, or
(iii) to the Person that made the Third Party Offer or Affiliate Offer for the
consideration and upon the terms and conditions set forth in the Third Party
Offer or Affiliate Offer (or, if the Person that made the Third Party Offer or
Affiliate Offer no longer wishes to purchase the Offered Shares, in an Open
Market Sale on such terms as are generally available on such markets) if a Third
Party Offer or Affiliate Offer gave rise to the right of first refusal pursuant
to this Section 3.2, in any case for a period of 60 days beginning on the day
after the first anniversary of the date the Xxxxxx Election Notice was given,
provided that the Offered Shares so Transferred are first converted into Liberty
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Class A Stock. Upon such conversion the Liberty Class A Stock so converted will
not again be subject to the right of first refusal provisions of this Section
3.2 prior to the Transfer of such stock within the 60-day period as permitted by
this paragraph (f). If the Offered Shares are not so Transferred during such
60-day period, the Offeror's right to Transfer such Offered Shares will again be
subject to the provisions of this Section 3.2.
(g) If Xxxxxx does not elect to purchase all of the Offered Shares, the
Offeror will be free for a period of 60 days after the end of the Xxxxxx
Election Period to Transfer the Offered Shares that Xxxxxx has not elected to
purchase in an Open Market Sale on such terms as are generally available on such
markets, pursuant to a Charitable Contribution, or to the Person that made the
Third Party Offer or Affiliate Offer for the consideration and upon the terms
and conditions set forth
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in the Third Party Offer or Affiliate Offer, as applicable. If those Offered
Shares are not so Transferred during such 60-day period, the Offeror's right to
Transfer such Offered Shares will again be subject to the provisions of this
Section 3.2.
(h) If any Offeror entitled to Transfer Offered Shares during a 60-day
period pursuant to paragraph (f) or (g) is precluded from Transferring all of
the Offered Shares such Offeror otherwise would be entitled to Transfer solely
because of restrictions imposed by Rule 144 under the Securities Act of 1933, as
amended, on the volume of securities that may be sold within a three-month
period, such Offeror may Transfer the Offered Shares the Offeror is precluded by
Rule 144 from Transferring during an additional period of 90 days, beginning on
the day after the end of the 60-day Transfer period permitted by paragraphs (f)
and (g).
(i) Except for the conversion of Offered Shares into Liberty Class A Stock
pursuant to paragraph (f), any member of the Stockholder Group who wishes to
convert any Liberty Shares of which such Person is the holder or beneficial
owner into Liberty Class A Stock will first offer to Xxxxxx the opportunity to
purchase such Liberty Shares, which will be treated as Offered Shares that are
subject to the provisions of Section 3.2(a). If Xxxxxx gives a Xxxxxx Election
Notice with respect to all or any portion of such Offered Shares, the
consideration payable upon the purchase of such Offered Shares will be the
Trading Price, payable in the form elected by Xxxxxx as described in Section
3.2(b).
3.3 Distributions to Beneficiaries. Notwithstanding any other provision of
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this Agreement, any trust that holds Liberty Shares may distribute to any Person
that is a beneficiary of such trust from time to time the number of Liberty
Shares that are beneficially owned by such Person, provided that such Person
complies with the provisions of Section 3.5.
3.4 Other Permitted Transfers. Notwithstanding any other provision of this
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Agreement, subject to the provisions of Section 3.5, any member of the
Stockholder Group may (a) pledge all or part of the Liberty Shares of which such
Person is the legal or beneficial owner to US Bank or any other lending
institution as security for a loan, or (b) Transfer all or part of the Liberty
Shares owned by such Person to any spouse, parent, child, grandchild or sibling
of such Person or to any trust or other investment vehicle established primarily
for the benefit of any of the foregoing persons or their heirs, provided that
prior to a Transfer permitted by clause (a) or (b) the member of the Stockholder
Group making the Transfer causes the Transferee to provide a written certificate
establishing that the Transfer qualifies as a private placement of the Liberty
Shares to be Transferred under applicable securities laws and as to the
Transferee's investment intent with respect to such Liberty Shares.
3.5 Other Conditions to Transfer. Any Person (other than Xxxxxx) to whom
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Liberty Shares are permitted by this Article III to be Transferred must (except
in the case of a Transfer of Shares pursuant to Section 3.2(g)), prior to such
Transfer, agree in writing to be bound by the terms of this Agreement as a
member of the Stockholder Group if such Person is not already a party hereto and
all references to the "Stockholder Group" in this Agreement will be deemed to
include the Transferee with respect to any Liberty Shares that are Transferred
to such Transferee. No member of the
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Stockholder Group will make any Transfer of Liberty Shares that would violate
U.S. federal or state securities laws.
ARTICLE IV: MISCELLANEOUS
4.1 Stock Certificate Legend. All certificates representing Liberty Shares
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will bear a legend in substantially the following form:
"The shares represented by this certificate may not be sold,
transferred or encumbered except in accordance with the terms of a
Stockholders' Agreement, dated as of March 9, 1999, a copy of which is
on file with the Company."
If an Offeror Transfers all or part of the Offered Shares to a Transferee as
permitted by Section 3.2(f) or 3.2(g), the Transferee of such Offered Shares
will be issued a new certificate evidencing such Offered Shares without the
legend set forth above (other than, in the case of Liberty Shares Transferred
pursuant to Section 3.4, the portion of such legend referring to the
restrictions imposed by this Agreement) upon the receipt by AT&T of evidence
satisfactory to it and its legal counsel that the Offered Shares are registered
or that such sale will comply with Rule 144 or 145 under the Securities Act of
1933, as amended, and any applicable state securities laws, and upon
satisfaction of the transfer procedures normally applicable to the Liberty
Shares.
4.2 Termination. This Agreement will terminate upon the earliest to occur of
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(a) the death of Xxxxxx, or (b) April 30, 2008. The termination of this
Agreement will not affect the rights and obligations of the parties accrued
prior to such termination.
4.3 Notices. All notices, requests, demands and other communications required
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or permitted to be made pursuant to this Agreement will be in writing and will
be deemed to have been given if delivered in person or by courier, sent by
telecopy or sent by United States certified or registered mail, prepaid,
addressed as follows:
To Xxxxxx at:
Liberty Media Corporation
0000 X. Xxxxxxxx Xxx.
Xxxxxxxxx, XX 00000
Telecopy: (000) 000-0000
with a copy to the same address, Attention: Xxxxxxx X. Xxxxxx, Esq.
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To Hindery at:
Tele-Communications, Inc.
0000 XXX Xxxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Telecopy: (000) 000-0000
To the Xxxxx Trust at:
The Xxxxx Xxxx Hindery 1989 Trust
Xxxxxxx X. Xxxxxxx, Trustee
Farallon Real Estate Services Company, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Telecopy: (000) 000-0000
with a copy in the case of Hindery or the Xxxxx Trust to:
Pillsbury Madison & Sutro LLP
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxx, Esq.
Telecopy: (000) 000-0000
Any party may change the address to which notices are required to be sent
by giving notice of such change in the manner provided in this Section. Any
notice delivered personally or by courier will be deemed to be received on the
date of delivery; any notice sent by telecopy will be deemed to be received upon
confirmation of transmission by person or machine; and any notice so mailed will
be deemed to be received on the date shown on the return receipt (evidence of
rejection of delivery or inability to deliver because of a changed address of
which no notice was given pursuant to the provisions of this Agreement will be
deemed to be a receipt).
4.4 Modification; Waiver. This Agreement may be modified or terminated by
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mutual agreement only by a writing signed by all the parties, and no provision
or condition herein may be waived other than by a writing signed by the party
waiving such provision or condition.
4.5 Headings. Article and Section headings in this Agreement are for the sole
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purpose of convenient reference and in no way define, limit or prescribe the
scope or intent of this Agreement or any part hereof, and such headings will not
be considered in interpreting or construing this Agreement.
4.6 Assignment. Any rights exercisable by Xxxxxx under this Agreement may be
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exercised by any designee of Xxxxxx. Except as provided in the preceding
sentence, no party will assign any of
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its rights under this Agreement or delegate its duties hereunder unless it
obtains the prior written consent of the other parties, which consent may be
withheld at each such party's absolute discretion.
4.7 Specific Performance. The parties acknowledge that Xxxxxx would be
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irreparably damaged if any member of the Stockholder Group violates or breaches
its obligations under Article II or Article III, and that in either case money
damages would be an inadequate remedy for such breach or violation.
Accordingly, each member of the Stockholder Group agrees that the provisions of
Article II and Article III will be specifically enforceable by Xxxxxx, and that
Xxxxxx will be entitled to temporary and permanent injunctive relief and other
equitable remedies, at his sole election, to enforce such provisions. Such
rights of enforcement will be without prejudice to any other right or remedy
available to Xxxxxx.
4.8 Counterparts. This Agreement may be executed in any number of
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counterparts, each of which may be deemed to be an original, and all of which
taken together will constitute one instrument.
4.9 Governing Law. THIS AGREEMENT WILL BE GOVERNED BY THE LAWS OF THE STATE OF
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DELAWARE, WITHOUT REGARD TO ANY CONFLICTS OF LAWS RULES.
4.10 Other. This Agreement constitutes the entire agreement of the parties
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regarding the subject matter hereof, and all prior or contemporaneous
agreements, understandings, representations and statements, oral or written, are
hereby merged into this Agreement. This Agreement will be binding upon and
inure to the benefit of the parties and, subject to the limitations set forth in
Section 4.6, their respective successors and assigns. The provisions of this
Agreement are for the exclusive benefit of the parties and their permitted
successors and assigns, and no other Person is intended to be a third party
beneficiary or to have any rights by virtue of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
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Xxxx X. Xxxxxx
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Xxx X. Xxxxxxx, Xx.
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THE XXXXX XXXX HINDERY 1989 TRUST
By:
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Xxxxxxx X. Xxxxxxx, Trustee
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