SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. (AMEND))*
EXPEDIA, INC.
(NAME OF ISSUER)
COMMON STOCK, PAR VALUE $.001 PER SHARE
(TITLE OF CLASS OF SECURITIES)
30212P105
(CUSIP NUMBER)
CHARLES Y. TANABE, ESQ. PAMELA S. SEYMON, ESQ.
SENIOR VICE PRESIDENT AND GENERAL COUNSEL WACHTELL, LIPTON, ROSEN & KATZ
LIBERTY MEDIA CORPORATION 51 WEST 52ND STREET
12300 LIBERTY BOULEVARD NEW YORK, NEW YORK 10019
ENGLEWOOD, CO 80112 (212) 403-1000
(720) 875-5400
(Name, Address and Telephone Number of Persons Authorized to receive Notices
and Communications)
AUGUST 9, 2005
(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 which 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. |_|
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).
----------
* NOTE: 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 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 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).
2 of 19
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1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
LIBERTY MEDIA CORPORATION
----------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP(a) |_|
(b) |X|
----------------------------------------------------------------------
3 SEC USE ONLY
----------------------------------------------------------------------
4 SOURCE OF FUNDS
NOT APPLICABLE
----------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) |_|
----------------------------------------------------------------------
6 CITIZENSHIP OR PLACE ORGANIZATION
DELAWARE
----------------------------------------------------------------------
7 SOLE VOTING POWER
NONE; SEE ITEM 5
NUMBER OF
----------------------------------------------------------
SHARES 8 SHARED VOTING POWER
90,074,192 SHARES
BENEFICIALLY
----------------------------------------------------------
OWNED BY 9 SOLE DISPOSITIVE POWER
NONE; SEE ITEM 5
EACH
----------------------------------------------------------
REPORTING 10 SHARED DISPOSITIVE POWER
90,074,192 SHARES
PERSON WITH
----------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
90,074,192 SHARES
----------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES |X|
EXCLUDES SHARES BENEFICIALLY OWNED BY THE
EXECUTIVE OFFICERS AND DIRECTORS OF LIBERTY AND
SHARES BENEFICIALLY OWNED BY DIANE VON
FURSTENBERG, MR. DILLER'S SPOUSE.
----------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
25.4%.
ASSUMES (1) CONVERSION OF ALL SHARES OF CLASS B COMMON STOCK
BENEFICIALLY OWNED BY THE REPORTING PERSONS INTO SHARES OF
COMMON STOCK, AND (2) THE EXERCISE OF OPTIONS TO PURCHASE
19,027,097 SHARES OF COMMON STOCK WHICH ARE CURRENTLY
EXERCISABLE BY MR. DILLER. BECAUSE EACH SHARE OF CLASS B
COMMON STOCK GENERALLY IS ENTITLED TO TEN VOTES PER SHARE AND
EACH SHARE OF COMMON STOCK IS ENTITLED TO ONE VOTE PER SHARE,
THE REPORTING PERSONS MAY BE DEEMED TO BENEFICIALLY OWN EQUITY
SECURITIES OF THE COMPANY REPRESENTING APPROXIMATELY 54.7% OF
THE VOTING POWER OF THE COMPANY. SEE ITEM 5.
----------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
CO
----------------------------------------------------------------------
3 of 19
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1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
BARRY DILLER
----------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP(a) |_|
(b) |X|
----------------------------------------------------------------------
3 SEC USE ONLY
----------------------------------------------------------------------
4 SOURCE OF FUNDS
NOT APPLICABLE
----------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) |_|
----------------------------------------------------------------------
6 CITIZENSHIP OR PLACE ORGANIZATION
UNITED STATES
----------------------------------------------------------------------
7 SOLE VOTING POWER
NONE; SEE ITEM 5
NUMBER OF
----------------------------------------------------------
SHARES 8 SHARED VOTING POWER
90,074,192 SHARES
BENEFICIALLY
----------------------------------------------------------
OWNED BY 9 SOLE DISPOSITIVE POWER
NONE; SEE ITEM 5
EACH
----------------------------------------------------------
REPORTING 10 SHARED DISPOSITIVE POWER
90,074,192 SHARES
PERSON WITH
----------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
90,074,192 SHARES
----------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES |X|
EXCLUDES SHARES BENEFICIALLY OWNED BY THE
EXECUTIVE OFFICERS AND DIRECTORS OF LIBERTY AND
SHARES BENEFICIALLY OWNED BY DIANE VON
FURSTENBERG, MR. DILLER'S SPOUSE.
----------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
25.4%.
ASSUMES (1) CONVERSION OF ALL SHARES OF CLASS B COMMON STOCK
BENEFICIALLY OWNED BY THE REPORTING PERSONS INTO SHARES OF
COMMON STOCK, AND (2) THE EXERCISE OF OPTIONS TO PURCHASE
19,027,097 SHARES OF COMMON STOCK WHICH ARE CURRENTLY
EXERCISABLE BY MR. DILLER. BECAUSE EACH SHARE OF CLASS B
COMMON STOCK GENERALLY IS ENTITLED TO TEN VOTES PER SHARE AND
EACH SHARE OF COMMON STOCK IS ENTITLED TO ONE VOTE PER SHARE,
THE REPORTING PERSONS MAY BE DEEMED TO BENEFICIALLY OWN EQUITY
SECURITIES OF THE COMPANY REPRESENTING APPROXIMATELY 54.7% OF
THE VOTING POWER OF THE COMPANY. SEE ITEM 5.
----------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
IN
----------------------------------------------------------------------
4 of 19
----------------------------------------------------------------------
1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
BDTV INC.
----------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP(a) |_|
(b) |X|
----------------------------------------------------------------------
3 SEC USE ONLY
----------------------------------------------------------------------
4 SOURCE OF FUNDS
NOT APPLICABLE
----------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) |_|
----------------------------------------------------------------------
6 CITIZENSHIP OR PLACE ORGANIZATION
DELAWARE
----------------------------------------------------------------------
7 SOLE VOTING POWER
NONE; SEE ITEM 5
NUMBER OF
----------------------------------------------------------
SHARES 8 SHARED VOTING POWER
90,074,192 SHARES
BENEFICIALLY
----------------------------------------------------------
OWNED BY 9 SOLE DISPOSITIVE POWER
NONE; SEE ITEM 5
EACH
----------------------------------------------------------
REPORTING 10 SHARED DISPOSITIVE POWER
90,074,192 SHARES
PERSON WITH
----------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
90,074,192 SHARES
----------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES |X|
EXCLUDES SHARES BENEFICIALLY OWNED BY THE
EXECUTIVE OFFICERS AND DIRECTORS OF LIBERTY AND
SHARES BENEFICIALLY OWNED BY DIANE VON
FURSTENBERG, MR. DILLER'S SPOUSE.
----------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
25.4%.
ASSUMES (1) CONVERSION OF ALL SHARES OF CLASS B COMMON STOCK
BENEFICIALLY OWNED BY THE REPORTING PERSONS INTO SHARES OF
COMMON STOCK, AND (2) THE EXERCISE OF OPTIONS TO PURCHASE
19,027,097 SHARES OF COMMON STOCK WHICH ARE CURRENTLY
EXERCISABLE BY MR. DILLER. BECAUSE EACH SHARE OF CLASS B
COMMON STOCK GENERALLY IS ENTITLED TO TEN VOTES PER SHARE AND
EACH SHARE OF COMMON STOCK IS ENTITLED TO ONE VOTE PER SHARE,
THE REPORTING PERSONS MAY BE DEEMED TO BENEFICIALLY OWN EQUITY
SECURITIES OF THE COMPANY REPRESENTING APPROXIMATELY 54.7% OF
THE VOTING POWER OF THE COMPANY. SEE ITEM 5.
----------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
CO
----------------------------------------------------------------------
5 of 19
----------------------------------------------------------------------
1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
BDTV II INC.
----------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP(a) |_|
(b) |X|
----------------------------------------------------------------------
3 SEC USE ONLY
----------------------------------------------------------------------
4 SOURCE OF FUNDS
NOT APPLICABLE
----------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) |_|
----------------------------------------------------------------------
6 CITIZENSHIP OR PLACE ORGANIZATION
DELAWARE
----------------------------------------------------------------------
7 SOLE VOTING POWER
NONE; SEE ITEM 5
NUMBER OF
----------------------------------------------------------
SHARES 8 SHARED VOTING POWER
90,074,192 SHARES
BENEFICIALLY
----------------------------------------------------------
OWNED BY 9 SOLE DISPOSITIVE POWER
NONE; SEE ITEM 5
EACH
----------------------------------------------------------
REPORTING 10 SHARED DISPOSITIVE POWER
90,074,192 SHARES
PERSON WITH
----------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
90,074,192 SHARES
----------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES |X|
EXCLUDES SHARES BENEFICIALLY OWNED BY THE
EXECUTIVE OFFICERS AND DIRECTORS OF LIBERTY AND
SHARES BENEFICIALLY OWNED BY DIANE VON
FURSTENBERG, MR. DILLER'S SPOUSE.
----------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
25.4%.
ASSUMES (1) CONVERSION OF ALL SHARES OF CLASS B COMMON STOCK
BENEFICIALLY OWNED BY THE REPORTING PERSONS INTO SHARES OF
COMMON STOCK, AND (2) THE EXERCISE OF OPTIONS TO PURCHASE
19,027,097 SHARES OF COMMON STOCK WHICH ARE CURRENTLY
EXERCISABLE BY MR. DILLER. BECAUSE EACH SHARE OF CLASS B
COMMON STOCK GENERALLY IS ENTITLED TO TEN VOTES PER SHARE AND
EACH SHARE OF COMMON STOCK IS ENTITLED TO ONE VOTE PER SHARE,
THE REPORTING PERSONS MAY BE DEEMED TO BENEFICIALLY OWN EQUITY
SECURITIES OF THE COMPANY REPRESENTING APPROXIMATELY 54.7% OF
THE VOTING POWER OF THE COMPANY. SEE ITEM 5.
----------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
CO
----------------------------------------------------------------------
6 of 19
----------------------------------------------------------------------
1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
BDTV III INC.
----------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP(a) |_|
(b) |X|
----------------------------------------------------------------------
3 SEC USE ONLY
----------------------------------------------------------------------
4 SOURCE OF FUNDS
NOT APPLICABLE
----------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) |_|
----------------------------------------------------------------------
6 CITIZENSHIP OR PLACE ORGANIZATION
DELAWARE
----------------------------------------------------------------------
7 SOLE VOTING POWER
NONE; SEE ITEM 5
NUMBER OF
----------------------------------------------------------
SHARES 8 SHARED VOTING POWER
90,074,192 SHARES
BENEFICIALLY
----------------------------------------------------------
OWNED BY 9 SOLE DISPOSITIVE POWER
NONE; SEE ITEM 5
EACH
----------------------------------------------------------
REPORTING 10 SHARED DISPOSITIVE POWER
90,074,192 SHARES
PERSON WITH
----------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
90,074,192 SHARES
----------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES |X|
EXCLUDES SHARES BENEFICIALLY OWNED BY THE
EXECUTIVE OFFICERS AND DIRECTORS OF LIBERTY AND
SHARES BENEFICIALLY OWNED BY DIANE VON
FURSTENBERG, MR. DILLER'S SPOUSE.
----------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
25.4%.
ASSUMES (1) CONVERSION OF ALL SHARES OF CLASS B COMMON STOCK
BENEFICIALLY OWNED BY THE REPORTING PERSONS INTO SHARES OF
COMMON STOCK, AND (2) THE EXERCISE OF OPTIONS TO PURCHASE
19,027,097 SHARES OF COMMON STOCK WHICH ARE CURRENTLY
EXERCISABLE BY MR. DILLER. BECAUSE EACH SHARE OF CLASS B
COMMON STOCK GENERALLY IS ENTITLED TO TEN VOTES PER SHARE AND
EACH SHARE OF COMMON STOCK IS ENTITLED TO ONE VOTE PER SHARE,
THE REPORTING PERSONS MAY BE DEEMED TO BENEFICIALLY OWN EQUITY
SECURITIES OF THE COMPANY REPRESENTING APPROXIMATELY 54.7% OF
THE VOTING POWER OF THE COMPANY. SEE ITEM 5.
----------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
CO
----------------------------------------------------------------------
7 of 19
----------------------------------------------------------------------
1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
BDTV IV INC.
----------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP(a) |_|
(b) |X|
----------------------------------------------------------------------
3 SEC USE ONLY
----------------------------------------------------------------------
4 SOURCE OF FUNDS
NOT APPLICABLE
----------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) |_|
----------------------------------------------------------------------
6 CITIZENSHIP OR PLACE ORGANIZATION
DELAWARE
----------------------------------------------------------------------
7 SOLE VOTING POWER
NONE; SEE ITEM 5
NUMBER OF
----------------------------------------------------------
SHARES 8 SHARED VOTING POWER
90,074,192 SHARES
BENEFICIALLY
----------------------------------------------------------
OWNED BY 9 SOLE DISPOSITIVE POWER
NONE; SEE ITEM 5
EACH
----------------------------------------------------------
REPORTING 10 SHARED DISPOSITIVE POWER
90,074,192 SHARES
PERSON WITH
----------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
90,074,192 SHARES
----------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES |X|
EXCLUDES SHARES BENEFICIALLY OWNED BY THE
EXECUTIVE OFFICERS AND DIRECTORS OF LIBERTY AND
SHARES BENEFICIALLY OWNED BY DIANE VON
FURSTENBERG, MR. DILLER'S SPOUSE.
----------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
25.4%.
ASSUMES (1) CONVERSION OF ALL SHARES OF CLASS B COMMON STOCK
BENEFICIALLY OWNED BY THE REPORTING PERSONS INTO SHARES OF
COMMON STOCK, AND (2) THE EXERCISE OF OPTIONS TO PURCHASE
19,027,097 SHARES OF COMMON STOCK WHICH ARE CURRENTLY
EXERCISABLE BY MR. DILLER. BECAUSE EACH SHARE OF CLASS B
COMMON STOCK GENERALLY IS ENTITLED TO TEN VOTES PER SHARE AND
EACH SHARE OF COMMON STOCK IS ENTITLED TO ONE VOTE PER SHARE,
THE REPORTING PERSONS MAY BE DEEMED TO BENEFICIALLY OWN EQUITY
SECURITIES OF THE COMPANY REPRESENTING APPROXIMATELY 54.7% OF
THE VOTING POWER OF THE COMPANY. SEE ITEM 5.
----------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
CO
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8 of 19
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
STATEMENT OF
LIBERTY MEDIA CORPORATION,
BARRY DILLER,
BDTV INC.,
BDTV II INC.,
BDTV III INC.
AND
BDTV IV INC.
Pursuant to Section 13(d) of the Securities Exchange Act of 1934 in respect of
EXPEDIA, INC.
Information contained herein with respect to each Reporting Person
and its executive officers, directors and controlling persons is given solely by
such Reporting Person, and no other Reporting Person has responsibility for the
accuracy or completeness of information supplied by such other Reporting Person.
ITEM 1. SECURITY AND ISSUER
This Report on Schedule 13D relates to the common stock, par value
$.001 per share (the "Common Stock"), of Expedia, Inc., a Delaware corporation
("Expedia" or the "Company"). The Company's principal executive offices are
located at 3150 139th Avenue SE, Bellevue, Washington 98005.
ITEM 2. IDENTITY AND BACKGROUND
This Report is filed by Liberty Media Corporation, a Delaware
corporation ("Liberty"), Mr. Barry Diller ("Mr. Diller"), BDTV INC., a
Delaware corporation ("BDTV"), BDTV II INC., a Delaware corporation ("BDTV
II"), BDTV III INC., a Delaware corporation ("BDTV III"), and BDTV IV INC., a
Delaware corporation ("BDTV IV" and, together with BDTV, BDTV II and BDTV
III, the "BDTV Entities") (each, a "Reporting Person"). Liberty, Mr. Diller
and the BDTV Entities constitute a "group" for purposes of Rule 13d-5 under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), with
respect to their respective beneficial ownership of the Common Stock and are
collectively referred to as the "Reporting Group."
The Reporting Group is filing this Report to report its acquisition
of beneficial ownership of shares of Common Stock and Class B common stock, par
value $.001 per share (the "Class B Common Stock"), of the Company in connection
with the spin-off by IAC/InterActiveCorp, a Delaware company ("IAC"), of the
Company to the shareholders of IAC on August 9, 2005, following which the
Company became an independent public company (the "Spin-off").
LIBERTY
Liberty is a holding company which, through its ownership of
interests in subsidiaries and other companies, is primarily engaged in the
electronic retailing, media, communications and entertainment industries in the
United States, Europe and Asia. The business address and principal office of
Liberty is 12300 Liberty Boulevard, Englewood, Colorado 80112.
Annex A attached to this Report on Schedule 13D contains the
following information concerning each director, executive officer and
controlling person of Liberty: (a) the name and residence or business address;
(b) the principal occupation or employment and (c) the name, principal business
and address of any corporation or
9 of 19
other organization in which such employment is conducted. Annex A is
incorporated herein by reference. To the knowledge of Liberty, all persons
listed on Annex A (the "Annex A Persons") are United States citizens, except for
David J.A. Flowers, who is a Canadian citizen. During the last five years,
neither Liberty nor, to the knowledge of Liberty, any of the Annex A Persons has
been (i) convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors) or (ii) a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and, as a result of such
proceeding, is or was subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to federal
or state securities laws or finding any violation with respect to such laws.
MR. DILLER
Mr. Diller is the Chairman and Chief Executive Officer of IAC and the
Chairman and senior executive of Expedia. IAC operates leading and diversified
businesses in sectors being transformed by the internet, online and
offline...IAC's mission is to harness the power of interactivity to make daily
life easier and more productive for people all over the world. Expedia is a
travel services company, operating through a diversified portfolio of brands,
including Expedia.com, Hotels.com, Hotwire, Expedia Corporate Travel, Classic
Custom Vacations and a range of other domestic and international brands and
businesses. Mr. Diller's business address is, c/o IAC at 152 West 57th Street,
New York, New York 10019. During the last five years, Mr. Diller has not been
(i) convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors) or (ii) a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and, as a result of such
proceeding, is or was subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to federal
or state securities laws or finding any violation with respect to such laws. Mr.
Diller is a citizen of the United States.
THE BDTV ENTITIES
The business address and principal offices of the BDTV Entities is
c/o IAC at 152 West 57th Street, New York, New York 10019. The BDTV Entities are
companies formed by Liberty and Mr. Diller to hold securities of IAC. In
connection with the Spin-off, Liberty and Mr. Diller agreed that the BDTV
Entities would also hold the securities of the Company to be issued in the
Spin-off.
Annex B attached to this Report on Schedule 13D contains the
following information concerning each director, executive officer and
controlling person of each of the BDTV Entities: (a) the name and residence or
business address, (b) the principal occupation or employment and (c) the name,
principal business and address of any corporation or other organization in which
such employment is conducted. Annex B is incorporated herein by reference. To
the knowledge of each of the BDTV Entities, each of the persons named on Annex B
(the "Annex B Persons"), is a United States citizen. During the last five
years, none of the BDTV Entities nor any of the Annex B Persons (to the
knowledge of each of the BDTV Entities) has been (i) convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors) or (ii) a
party to a civil proceeding of a judicial or administrative body of competent
jurisdiction and, as a result of such proceeding, is or was subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to federal or state securities laws or finding
any violation with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
The Reporting Persons acquired beneficial ownership of shares of
Common Stock and Class B Common Stock of the Company on August 9, 2005 in
connection with the Spin-off.
The information contained in Items 5 and 6 of this Report on Schedule
13D is hereby incorporated by reference herein.
ITEM 4. PURPOSE OF THE TRANSACTION
The information contained in Items 5 and 6 of this Report on Schedule
13D is hereby incorporated by reference herein.
10 of 19
Depending on market conditions and other factors, and subject to any
restrictions described in Items 5 and 6 or contained in the agreements attached
as Exhibits hereto, the Reporting Persons or their respective subsidiaries may
purchase additional shares of Common Stock in the open market or in private
transactions. Alternatively, depending on market conditions and other factors,
and subject to any restrictions described in Items 5 or 6 or contained in the
agreements attached as Exhibits hereto, the Reporting Persons or their
respective subsidiaries may sell all or some of their shares of Common Stock
(including, in the case of Liberty, (i) its interest in the BDTV Entities and
(ii) in connection with certain hedging transactions it may engage in as
described in Item 6, in each case, subject to certain specified limitations).
Subject to the foregoing and except as described in Items 5 and 6 or
contained in the agreements attached as Exhibits hereto, (i) Liberty does not
have and, to the best of Liberty's knowledge, none of its directors or officers
have, any plans or proposals that relate to or would result in any of the
actions set forth in clauses (a) through (j) of Item 4, and (ii) neither Barry
Diller, nor any of the BDTV Entities, nor any of the directors or officers of
the BDTV Entities, have any plans or proposals that relate to or would result in
any of the actions set forth in clauses (a) through (j) of Item 4, except that,
in the case of Mr. Diller, Mr. Diller may dispose of shares of Common Stock to
satisfy the exercise price and tax withholding obligations in connection with
the exercise of employee stock options.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
The information contained in Items 6 of, and Rows (7) through (10) of
the cover pages to, this Report on Schedule 13D is hereby incorporated by
reference herein.
(a)-(b) After giving effect to the Spin-off, the members of the
Reporting Group beneficially own 64,474,194 shares of Common Stock (assuming the
exercise of options to purchase 19,027,097 shares of Common Stock which are
currently exercisable by Mr. Diller) and 25,599,998 shares of Class B Common
Stock, which shares constitute 19.6% of the outstanding shares of Common Stock
and 100% of the outstanding shares of Class B Common Stock. Assuming the
conversion of all of the Reporting Group's shares of Class B Common Stock into
Common Stock, the Reporting Group would beneficially own 25.4% of the
outstanding Common Stock (calculated in accordance with Rule 13d-3). Because
each share of Class B Common Stock generally is entitled to ten votes per share,
each share of Common Stock is entitled to one vote per share and each share of
outstanding preferred stock is entitled to two votes per share, the Reporting
Persons may be deemed to beneficially own equity securities of the Company
representing approximately 54.7% of the voting power of the Company. The
foregoing beneficial ownership amounts exclude shares of Common Stock
beneficially owned by the executive officers and directors of Liberty and shares
of Common Stock beneficially owned by Diane Von Furstenberg, Mr. Diller's
spouse, as to which Mr. Diller disclaims beneficial ownership. The foregoing
beneficial ownership amounts are based on there being outstanding as of the
close of business on August 9, 2005 310,376,215 shares of Common Stock,
25,599,998 shares of Class B Common Stock and 846 shares of preferred stock,
which share numbers were provided to the Reporting Group by the Company. Mr.
Diller holds an irrevocable proxy granted by Liberty, pursuant to which Mr.
Diller has the right to vote the Company's securities held by Liberty and its
affiliates, subject to certain limitations.
Robert R. Bennett, President and a Director of Liberty, owns 13,048
shares of Common Stock.
(c) None.
(d) Not applicable.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS, OR RELATIONSHIPS WITH
RESPECT TO THE SECURITIES OF THE ISSUER
The information contained in Item 5 of this Report on Schedule 13D is
hereby incorporated by reference herein.
11 of 19
On August 9, 2005, in connection with the Spin-off, Expedia entered
into a Governance Agreement with Liberty and Mr. Diller (the "Governance
Agreement").
On August 9, 2005, Liberty and Mr. Diller entered into a Stockholders
Agreement (the "Stockholders Agreement," together with the "Governance
Agreement," the "Agreements").
The following is a summary of the material terms of the Agreements.
The following descriptions do not purport to cover all the provisions of the
Agreements, are qualified in their entirety by reference to the Agreements,
which are filed as Exhibits 2 and 3 hereto, and are incorporated into this
report by reference.
THE GOVERNANCE AGREEMENT
REPRESENTATION OF LIBERTY ON THE EXPEDIA BOARD OF DIRECTORS
Under the terms of the Governance Agreement:
o Liberty has the right to nominate up to two directors of Expedia so
long as Liberty beneficially owns at least 33,651,963 equity
securities of Expedia (so long as Liberty's ownership percentage is at
least equal to 15% of the total equity securities of Expedia);
o Liberty has the right to nominate one director of Expedia so long as
Liberty beneficially owns at least 22,434,642 equity securities of
Expedia (so long as Liberty owns at least 5% of the total equity
securities of Expedia); and
o Expedia will use its reasonable best efforts to cause one of Liberty's
designees to be a member of a committee of the board of directors of
Expedia and, to the extent the person designated by Liberty would
qualify as a member of the compensation committee of the board of
directors of Expedia under applicable tax and securities laws and
regulations, Expedia will seek to have that person appointed to the
compensation committee of Expedia.
Pursuant to the terms of the Governance Agreement, Expedia will cause
each director that Liberty nominates to be included in the slate of nominees
recommended by the Board of Directors of Expedia to the stockholders of Expedia
for election as directors at each annual meeting of the stockholders of Expedia
and will use all reasonable efforts to cause the election of each such director
including soliciting proxies in favor of the election of such persons. Liberty
has the right to designate a replacement director to the board of Expedia in
order to fill any vacancy of a director previously designated by Liberty.
CONTINGENT MATTERS
The Governance Agreement lists certain actions that require the prior
consent of Liberty and Mr. Diller before Expedia can take any such action.
For so long as:
o in the case of Liberty, Liberty owns at least 29,912,856 equity
securities and at least 5% of the total equity securities of Expedia
(the "Liberty Condition"); and
o in the case of Mr. Diller, he owns at least 5,000,000 common shares
(including options to purchase common shares, whether or not then
exercisable), continues to serve as Chairman of Expedia and has not
become disabled (the "Diller Condition," and together with the Liberty
Condition, the "Consent Conditions"),
Expedia has agreed that, without the prior approval of Liberty and/or Mr.
Diller, as applicable, it will not engage in any transaction that would result
in Liberty or Mr. Diller having to divest any part of their interests in Expedia
or
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any other material assets, or that would render any such ownership illegal or
would subject Mr. Diller or Liberty to any fines, penalties or material
additional restrictions or limitations.
In addition, for so long as the Consent Conditions apply, if
Expedia's "total debt ratio" (as defined in the Governance Agreement ) equals or
exceeds 4:1 over a twelve-month period, Expedia may not take any of the
following actions without the prior approval of Liberty and/or Mr. Diller:
o acquire or dispose of any assets, issue any debt or equity securities,
repurchase any debt or equity securities, or incur indebtedness, if
the aggregate value of such transaction or transactions (alone or in
combination) during any six month period equals 10% or more of
Expedia's market capitalization;
o voluntarily commence any liquidation, dissolution or winding up of
Expedia or any material subsidiary of Expedia;
o make any material amendments to the certificate of incorporation or
bylaws of Expedia;
o engage in any line of business other than online and offline travel
services and products, or other businesses engaged in by Expedia as of
the date of determination;
o adopt any stockholder rights plan that would adversely affect Liberty
or Mr. Diller, as applicable; or
o grant additional consent rights to a stockholder of Expedia.
PREEMPTIVE RIGHTS
In the event that Expedia issues or proposes to issue any shares of
Common Stock or Class B Common Stock (with certain limited exceptions) including
shares issued upon exercise, conversion or exchange of options, warrants and
convertible securities, Liberty will have preemptive rights that entitle it to
purchase a number of common shares so that Liberty will maintain the identical
ownership interest in Expedia (subject to certain adjustments) that Liberty had
immediately prior to such issuance or proposed issuance (but not in excess of a
specified percentage). Any purchase by Liberty will be allocated between Common
Stock and Class B Common Stock in the same proportion as the issuance or
issuances giving rise to the preemptive right, except to the extent that Liberty
opts to acquire shares of Common Stock in lieu of shares of Class B Common
Stock.
REGISTRATION RIGHTS
Liberty and Mr. Diller are entitled to customary, transferable
registration rights with respect to Common Stock owned by them. Liberty is
entitled to four demand registration rights and Mr. Diller is entitled to three
demand registration rights. Expedia will pay the costs associated with such
registrations (other than underwriting discounts, fees and commissions). Expedia
will not be required to register shares of its Common Stock if a stockholder
could sell the shares in the quantities proposed to be sold at such time in one
transaction under Rule 144 of the Securities Act or under another comparable
exemption from registration.
TERMINATION
Generally, the Governance Agreement will terminate:
o with respect to Liberty, at such time that Liberty beneficially owns
equity securities representing less than 5% of the total equity
securities of Expedia; and
o with respect to Mr. Diller, at the later of (1) the date Mr. Diller
ceases to be the Chairman of Expedia or becomes disabled and (2) the
date Mr. Diller no longer holds a proxy to vote the shares of Liberty
(as described below).
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THE STOCKHOLDERS AGREEMENT
GENERAL
Mr. Diller holds an irrevocable proxy with respect to all securities
of Expedia beneficially owned by Liberty on all matters submitted to a
stockholder vote or by which the stockholders may act by written consent, except
for Contingent Matters with respect to which Liberty has not consented, so long
as Mr. Diller continues to own at least 5,000,000 common shares (including
options). The proxy will generally remain in effect until the earlier of (1) Mr.
Diller no longer serving as Chairman of Expedia and (2) Mr. Diller becoming
disabled. Under certain limited circumstances, including a breach by Mr. Diller
of certain provisions of the applicable agreement, the proxy may terminate
sooner. In addition, the Stockholders Agreement provides for the suspension of
the proxy if Mr. Diller cannot vote due to mental or physical disability.
Liberty and Mr. Diller will vote against any Contingent Matter with
respect to Expedia if Mr. Diller and Liberty do not approve the Contingent
Matter (and continue to have veto rights with respect to the Contingent Matter
under the Governance Agreement). Mr. Diller will also vote all securities of
Expedia over which he has voting control in favor of the Liberty designees to
the board of directors of Expedia.
RESTRICTIONS ON TRANSFERS
Until the later of (1) the date Mr. Diller no longer serves as
Chairman of Expedia and (2) the date Mr. Diller no longer holds the proxy to
vote Liberty's shares of Expedia described above (or upon Mr. Diller becoming
disabled, if that occurs first), and subject to the other provisions of the
Stockholders Agreement, neither Liberty nor Mr. Diller can transfer shares of
Common Stock or Class B Common Stock, other than:
o transfers by Mr. Diller to pay taxes relating to the granting, vesting
and/or exercise of stock options to purchase Common Stock of Expedia;
o transfers to each party's respective affiliates;
o pledges relating to financings, subject to certain conditions; and
o transfers of options or Common Stock in connection with "cashless
exercises" of Mr. Diller's options to purchase shares of Common Stock.
The restrictions on transfer are subject to a number of exceptions
(which exceptions are generally subject to the rights of first refusal described
below):
o either of Liberty or Mr. Diller may transfer common shares to an
unaffiliated third party, subject to tag-along rights described below;
o either of Liberty or Mr. Diller may transfer common shares so long as,
in the case of Mr. Diller, he continues to beneficially own at least
2,200,000 common shares (including stock options) and, in the case of
Liberty, Liberty continues to beneficially own 2,000,000 common
shares, and in the case of a transfer of an interest in, or of any of
the common shares held by, specified entities referred to as the "BDTV
Limited Entities," after such transfer, Liberty and Mr. Diller
collectively control at least 50.1% of the total voting power of
Expedia; and
o either of Liberty or Mr. Diller may transfer common shares so long as
the transfer complies with the requirements of Rule 144 or Rule 145
under the Securities Act, and, in the case of a transfer of an
interest in, or of any of the common shares held by, the BDTV Limited
Entities, after such transfer, Liberty and Mr. Diller collectively
control at least 50.1% of the total voting power of Expedia.
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TAG-ALONG RIGHTS
Each of Mr. Diller and Liberty will be entitled to a right to
"tag-along" (i.e., participate on a pro rata basis) on sales by the other of
common shares to any third party. Liberty will not have a tag-along right in
the event of:
o sales by Mr. Diller of up to 2,000,000 common shares within any
rolling twelve-month period;
o transfers by Mr. Diller to pay taxes relating to the granting, vesting
and/or exercise of stock options to purchase shares of Common Stock or
transfers in connection with "cashless exercises" of Mr. Diller's
options to purchase shares of Common Stock;
o specified "brokers' transactions," as defined under the Securities
Act, which we refer to as "market sales;" or
o generally, when Mr. Diller no longer serves as Chairman of Expedia.
Mr. Diller will not have a tag-along right with respect to hedging
transactions and stock lending transactions related thereto effected by Liberty,
in each case meeting certain requirements, or market sales by Liberty.
TRANSFERS OF SHARES OF CLASS B COMMON STOCK
Each of Mr. Diller and Liberty has a right of first refusal in the
case of a proposed transfer by the other of shares of Class B Common Stock of
Expedia to a third party.
If either Liberty or Mr. Diller proposes to transfer shares of Class
B Common Stock, the other will be entitled to swap any shares of Common Stock it
or he owns for such shares of Class B Common Stock (subject to the rights of
first refusal described above). To the extent there remain shares of Class B
Common Stock that the selling stockholder would otherwise transfer to a third
party, such shares must first be converted into shares of Common Stock. This
restriction does not apply to, among other specified transfers, transfers among
the parties and their affiliates.
BDTV ENTITY ARRANGEMENTS
In connection with the Spin-off, Mr. Diller and Liberty agreed
that the BDTV Entities would hold shares of Common Stock and Class B Common
Stock received by each BDTV Entity as a result of the Spin-off. Mr. Diller and
Liberty will continue to have substantially similar arrangements with respect to
the voting control and ownership of the equity of each BDTV Entity, which
together hold a substantial majority of the shares of Class B Common Stock.
These arrangements effectively provide that Mr. Diller controls the voting of
Company securities held by these entities, other than with respect to certain
actions by the Company, and Liberty retains substantially all of the equity
interest in such entities. Liberty may purchase Mr. Diller's nominal equity
interest in these entities for a fixed price.
TERMINATION
Mr. Diller's and Liberty's rights and obligations under the
Stockholders Agreement generally terminate at such time as, in the case of Mr.
Diller, he no longer beneficially owns at least 2,200,000 common shares
(including stock options) and, in the case of Liberty, Liberty no longer
beneficially owns at least 2,000,000 common shares. Liberty's tag-along rights
and obligations terminate at such time as Liberty ceases to beneficially own at
least 5% of the total equity securities of Expedia. In calculating Liberty's
beneficial ownership of common shares of IAC, Liberty will be deemed to own all
common shares held by the BDTV Entities.
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In addition, Mr. Diller's rights under the Stockholders Agreement
will terminate upon the later of (1) the date Mr. Diller ceases to serve as
Chairman of Expedia or becomes disabled and (2) the date Mr. Diller no longer
holds a proxy to vote the shares of Expedia owned by Liberty.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
1. Joint Filing Agreement, by and among Liberty Media Corporation, a Delaware
corporation, Mr. Barry Diller, BDTV INC., a Delaware corporation, BDTV II
INC., a Delaware corporation, BDTV III INC., a Delaware corporation, and
BDTV IV INC., a Delaware corporation, dated as of August 19, 2005.
2. Governance Agreement, by and among Expedia, a Delaware corporation,
Liberty Media Corporation, a Delaware corporation and Mr. Barry Diller,
dated as of August 9, 2005.
3. Stockholders Agreement, by and between Liberty Media Corporation, a
Delaware corporation, and Mr. Barry Diller, dated as of August 9, 2005.
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SIGNATURES
After reasonable inquiry and to the best of his or her knowledge and
belief, each of the undersigned certifies that the information in this statement
is true, complete and correct.
Dated: August 19, 2005
LIBERTY MEDIA CORPORATION
By: /s/ Charles Y. Tanabe
---------------------------------
Name: Charles Y. Tanabe
Title: Senior Vice President
BARRY DILLER
By: /s/ Barry Diller
---------------------------------
BDTV INC., BDTV II INC.,
BDTV III INC., BDTV IV INC.
By: /s/ Barry Diller
---------------------------------
Name: Barry Diller
Title: President
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INDEX TO EXHIBITS
1. Joint Filing Agreement, by and among Liberty Media Corporation, a Delaware
corporation, Mr. Barry Diller, BDTV INC., a Delaware corporation, BDTV II
INC., a Delaware corporation, BDTV III INC., a Delaware corporation, and
BDTV IV INC., a Delaware corporation, dated as of August 19, 2005.
2. Governance Agreement, by and among Expedia, a Delaware corporation,
Liberty Media Corporation, a Delaware corporation and Mr. Barry Diller,
dated as of August 9, 2005.
3. Stockholders Agreement, by and between Liberty Media Corporation, a
Delaware corporation, and Mr. Barry Diller, dated as of August 9, 2005.
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ANNEX A
DIRECTORS AND EXECUTIVE OFFICERS OF LIBERTY MEDIA CORPORATION
The name and present principal occupation of each director and executive
officer of Liberty Media Corporation are set forth below. Unless otherwise
noted, the business address for each person listed below is c/o Liberty Media
Corporation, 12300 Liberty Boulevard, Englewood, Colorado 80112. To the
knowledge of Liberty Media Corporation, all executive officers and directors
listed on this Annex A are United States citizens, except for David J.A.
Flowers, who is a Canadian citizen.
Name and Business PRINCIPAL OCCUPATION AND PRINCIPAL
Address BUSINESS (IF APPLICABLE)
(IF APPLICABLE)
John C. Malone Chief Executive Officer and Chairman of
the Board and Director of Liberty
Robert R. Bennett President and Director of Liberty
Donne F. Fisher Director of Liberty; President of Fisher Capital
9781 Meridian Blvd., #200 Partners, Ltd.
Englewood, Colorado 80112
Paul A. Gould Director of Liberty; Managing Director of
711 5th Avenue, 8th Floor Allen & Company Incorporated
New York, New York 10022
David E. Rapley Director of Liberty
M. LaVoy Robison Director of Liberty; Executive Director and a
1727 Tremont Place Board Member of the Anschutz Foundation
Denver, Colorado 80202
Larry E. Romrell Director of Liberty
David J.A. Flowers Senior Vice President and Treasurer of Liberty
Albert E. Rosenthaler Senior Vice President of Liberty
Christopher W. Shean Senior Vice President and Controller of Liberty
Charles Y. Tanabe Senior Vice President, General Counsel and
Secretary of Liberty
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ANNEX B
Set forth below is the name, business address, principal occupation
or employment and citizenship of each director and executive officer of BDTV,
BDTV II, BDTV III and BDTV IV.
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Name and Business Principal Occupation Citizenship
Address and Principal
Business of
Organization in which
such Business is
Conducted
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Mr. Diller Mr. Diller is the Chairman and United States.
Chief Executive Officer of
c/o IAC/InterActiveCorp IAC, the Chairman and
152 West 57th Street, senior executive of Expedia
New York New York 10019 and the President
and Secretary of each
BDTV Entity.
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