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UNITED STATES |Expires: |
SECURITIES AND EXCHANGE COMMISSION | December 31, 2005|
Washington, D.C. 20549 |Estimated Average |
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SCHEDULE 13D/A
Under the Securities Exchange Act of 1934
(Amendment No. 1)*
Crown Media Holdings, Inc.
------------------------------------------------------------
(Name of Issuer)
Class A Common Stock, par value $.01 per share
------------------------------------------------------------
(Title of Class and Securities)
228411 10 4
------------------------------------------------------------
(CUSIP Number)
Charles Y. Tanabe, Esq.
Senior Vice President and General Counsel
Liberty Media Corporation
12300 Liberty Boulevard
Englewood, Colorado 80112
(720) 875-5400
------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
March 11, 2003
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(Date of Event which Requires
Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition that is the subject of this Schedule 13D, and is
filing this schedule because of Sections 240.13d-1(e), 240.13d-1(f) or
240.13d-1(g), check the following box. [ ]
Note: Schedules filed in paper format shall include a signed original and
five copies of the schedule, including all exhibits. See Section
240.13d-7 for other parties to whom copies are to be sent.
1
---------------
* 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 ("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).
2
SCHEDULE 13D
CUSIP No. 228411 10 4
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1. NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (entities only)
Liberty Media Corporation, 84-1288730
-----------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
(a) [ X ](1)
(b) [ ]
-----------------------------------------------------------------
3. SEC USE ONLY
-----------------------------------------------------------------
4. SOURCE OF FUNDS* (See Instructions)
OO
-----------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
-----------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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7. SOLE VOTING POWER
NUMBER OF 0
SHARES ---------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY 83,817,071(2) shares of Class A common
EACH stock
REPORTING ---------------------------------------------
PERSON 9. SOLE DISPOSITIVE POWER
WITH 0
---------------------------------------------
10. SHARED DISPOSITIVE POWER
--------
1 Beneficial ownership is disclaimed with respect to certain
securities of the Issuer. See footnotes 2 and 3 below.
3
83,817,071(2)
-----------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
89,529,096(2) (3) shares of Class A common stock
-----------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (See Instructions) [ ]
-----------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
85.7%(2) (3)
-----------------------------------------------------------------
14. TYPE OF REPORTING PERSON (See Instructions)
CO
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--------
2 The amount reported includes 30,670,422 shares of Class B
Common Stock that are held by Hallmark Entertainment Investments
Co. and are convertible at the option of Hallmark Entertainment
Investments Co. into an equivalent number of shares of Class A
Common Stock and 53,146,649 shares of Class A Common Stock that
are held by Hallmark Entertainment Investments Co. that are
deemed to be beneficially owned pursuant to Rule 13d-5(b)(1).
Beneficial ownership of these 30,670,422 shares of Class B Common
Stock and 53,146,649 shares of Class A Common Stock is
disclaimed. The amount has been calculated assuming conversion
of the shares of Class B Common Stock referred to above and using
the number of shares of Class A Common Stock and Class B Common
Stock outstanding on January 7, 2003.
3 The amount reported includes 5,712,025 shares of Class A
Common Stock that are severally beneficially owned by VISN
Management Corp. and JP Morgan Partners (BHCA), L.P. that are
deemed to be beneficially owned pursuant to Rule 13d-5(b)(1).
Beneficial ownership of these shares is disclaimed.
4
CUSIP No. 228411 10 4
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1. NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (entities only)
Liberty Crown, Inc.
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
(a) [ X ](1)
(b) [ ]
-----------------------------------------------------------------
3. SEC USE ONLY
-----------------------------------------------------------------
4. SOURCE OF FUNDS* (See Instructions)
OO
-----------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
-----------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
-----------------------------------------------------------------
7. SOLE VOTING POWER
NUMBER OF 0
SHARES ---------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY
EACH 83,817,071(2)
----------------
1 Beneficial ownership is disclaimed with respect to certain
securities of the Issuer. See footnotes 2 and 3 below.
2 The amount reported includes 30,670,422 shares of Class B
Common Stock that are held by Hallmark Entertainment Investments
Co. and are convertible at the option of Hallmark Entertainment
Investments Co. into an equivalent number of shares of Class A
Common Stock and 53,146,649 shares of Class A Common Stock that
are held by Hallmark Entertainment Investments Co. that are
deemed to be beneficially owned pursuant to Rule 13d-5(b)(1).
Beneficial ownership of these 30,670,422 shares of Class B Common
Stock and 53,146,649 shares of Class A Common Stock is
(continued)
5
REPORTING --------------------------------------------
PERSON 9. SOLE DISPOSITIVE POWER
WITH
0
--------------------------------------------
10. SHARED DISPOSITIVE POWER
83,817,071(2)
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11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
89,529,096(2) (3) shares of Class A common stock
-------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (See Instructions) [ ]
-------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
85.7%(2) (3)
-------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON (See Instructions)
CO
-------------------------------------------------------------------------------
2 (continued)
disclaimed. The amount has been calculated assuming conversion
of the shares of Class B Common Stock referred to above and using
the number of shares of Class A Common Stock and Class B Common
Stock outstanding on January 7, 2003.
3 The amount reported includes 5,712,025 shares of Class A
Common Stock that are severally beneficially owned by VISN
Management Corp. and JP Morgan Partners (BHCA), L.P. that are
deemed to be beneficially owned pursuant to Rule 13d-5(b)(1).
Beneficial ownership of these shares is disclaimed.
6
Amendment No. 1 to
Statement on Schedule 13D
This Schedule 13D/A Amendment No. 1 hereby amends the Schedule 13D
filed by Liberty Media Corporation with the Securities and Exchange Commission
on May 19, 2000 (as amended, the "Schedule 13D" or the "Statement"), relating
to shares of Class A Common Stock, $.01 par value per share of Crown Media
Holdings, Inc., a Delaware corporation.
Item 1 Security and Issuer
Item 1 is hereby amended and restated to replace the
previously disclosed information with the following information:
This Statement relates to shares of Class A common stock,
par value $0.01 per share (the "Class A Common Stock"), of Crown
Media Holdings, Inc., a Delaware corporation (the "Issuer"). The
Issuer's principal executive offices are located at 6430 S.
Fiddlers Green Circle, Suite 500, Greenwood Village, Colorado
80111.
Pursuant to Rule 13d-3 under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), this Schedule 13D also
relates to the equivalent number of shares of Class A Common
Stock issuable upon conversion of shares of the Class B common
stock, par value $0.01 per share ("Class B Common Stock", and
collectively with the Class A Common Stock, the "Common Stock")
of the Issuer. Holders of Class A Common Stock are entitled to
one vote for each share held, and holders of Class B Common Stock
are entitled to ten votes for each share held, on all matters
presented to stockholders.
Item 2 Identity and Background.
Item 2 is hereby amended and restated to replace the
previously disclosed information with the following information:
This Schedule 13D is being filed by Liberty Media
Corporation ("Liberty"), a Delaware corporation and Liberty
Crown, Inc. ("Liberty Crown"), a Delaware corporation and a
wholly owned subsidiary of Liberty (Liberty and Liberty Crown,
together, the "Reporting Persons"). Liberty and Liberty Crown
each has its principal executive office at 12300 Liberty
Boulevard, Englewood, Colorado 80112. The principal business of
Liberty is the ownership of interests in a broad range of video
programming, broadband distribution, interactive technology
7
services and communications businesses in the United States,
Europe, South America and Asia. The principal business of
Liberty Crown is the ownership of its interest in the Issuer and
its interest in Hallmark Entertainment Investments Co. ("HEIC").
The prior Schedule 1 to this Statement is hereby deleted in
its entirety and is replaced by the Schedule 1 attached hereto
and incorporated herein by reference which contains the following
information concerning each director, executive officer and
controlling person of Liberty: (i) name; (ii) residence or
business address; (iii) present principal occupation or
employment and the name, principal business and address of any
corporation or other organization in which such employment is
conducted; and (iv) citizenship.
The prior Schedule 2 to this Statement is hereby deleted in
its entirety and is replaced by the Schedule 2 attached hereto
and incorporated herein by reference which contains the following
information concerning each director, executive officer and
controlling person of Liberty Crown: (i) name; (ii) residence or
business address; (iii) present principal occupation or
employment and the name, principal business and address of any
corporation or other organization in which such employment is
conducted; and (iv) citizenship.
During the last five years, none of the Reporting Persons,
nor, to the knowledge of the Reporting Persons, any of the
persons listed on Schedule 1 and Schedule 2 hereto, (1) has been
convicted in a criminal proceeding (excluding traffic violations
or similar misdemeanors) or (2) has been a party to a civil
proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is 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
Item 3 is hereby amended and supplemented to include the
following information:
Liberty holds the Common Stock and the interests in Hallmark
Entertainment Investments Co. (as described below) through its
wholly owned subsidiary Liberty Crown. On December 18, 2001,
Liberty Crown donated 88,184 shares of Class A Common Stock to
Volunteers of America of Colorado in a gift transaction.
8
HEIC Contribution Agreement. Liberty Crown contributed
9,416,746 shares of Class A Common Stock to HEIC on March 11,
2003 pursuant to a Contribution Agreement dated as of March 11,
2003 (the "HEIC Contribution Agreement") by and among HEIC,
Hallmark Entertainment Holdings, Inc. ("Hallmark Entertainment
Holdings"), Liberty Crown, VISN Management Corp. ("VISN") and JP
Morgan Partners (BHCA), L.P. ("JPM"). Pursuant to the HEIC
Contribution Agreement, each of the parties other than HEIC
contributed shares of Class A Common Stock and/or Class B Common
Stock in exchange for Class A common stock, par value $.01 ("HEIC
Class A Common Stock"), of HEIC and Class B common stock, par
value $.01 ("HEIC Class B Common Stock", and collectively with
the HEIC Class A Common Stock, the "HEIC Common Stock"), of HEIC,
respectively. The foregoing summary of the terms of the HEIC
Contribution Agreement is qualified in its entirety by reference
to the full text of the Contribution Agreement that is filed as
Exhibit 7(c) to this Statement and is incorporated herein by
reference.
Item 4 Purpose of Transaction
Item 4 is hereby amended and supplemented to include the
following information:
HEIC Contribution Agreement. On March 11, 2003, Liberty
Crown transferred (the "HEIC Contribution")9,416,746 shares of
Class A Common Stock to HEIC pursuant to the HEIC Contribution
Agreement in exchange for 9,417 shares of HEIC Class A Common
Stock (or 17.7% of the outstanding shares of HEIC Class A Common
Stock). Also pursuant to the Contribution Agreement, Hallmark
Entertainment Holdings contributed its entire equity interest in
the Issuer, comprised of 39,259,480 shares of Class A Common
Stock and 30,670,422 shares of Class B Common Stock, in exchange
for 39,260 shares of HEIC Class A Common Stock (or 73.9% of the
outstanding shares of HEIC Class A Common Stock) and 30,670
shares of HEIC Class B Common Stock (or 100% of the outstanding
shares of HEIC Class B Common Stock), VISN contributed 633,803
shares of Class A Common Stock in exchange for 634 shares of HEIC
Class A Common Stock (or 1.2% of the outstanding shares of HEIC
Class A Common Stock); and JPM contributed 3,836,620 shares of
Class A Common Stock in exchange for 3,837 shares of HEIC Class A
Common Stock (or 7.2% of the outstanding shares of HEIC Class A
Common Stock). As a result of the transactions contemplated by
the HEIC Contribution Agreement, the Issuer will be included in
the consolidated federal tax return of Hallmark Cards, Inc
("Hallmark Cards"). Pursuant to a tax sharing agreement between
Hallmark Cards and the Issuer, Hallmark Cards will pay the Issuer
an amount based on the benefits realized by Hallmark Cards as a
9
result of consolidation, 75% of such amount in cash on a
quarterly basis and the balance as the Issuer becomes a taxpayer,
which is expected to provide the Issuer with substantial
additional funding for the next few years. Under the tax sharing
agreement, at Hallmark Cards' option, the balance payable to the
Issuer may be applied as an offset against amounts owed by the
Issuer to any member of the Hallmark consolidated group under any
loan, line of credit or other payable, subject to any limitations
under any loan indentures or contracts restricting such offsets.
Stockholders Agreement Amendment. On March 11, 2003, in
connection with the HEIC Contribution Agreement, each of VISN and
DirecTV Enterprises, Inc. ("DirecTV") entered into a Consent and
Waiver (the "Stockholders Agreement Waiver") to the Second
Amended and Restated Stockholders Agreement (as amended, the
"Stockholders Agreement") that was entered into on August 30,
2001 among Hallmark Entertainment, Inc., Liberty, Liberty Crown,
VISN, JPM, DirecTV and the Issuer. On March 5, 2003, the Board
of directors of the Issuer increased the size of its Board of
Directors from 11 to 15. Pursuant to the Stockholders Agreement
Waiver, 12 members of the Board of Directors are to be nominated
by HEIC (one of which must be the Chief Executive Officer of the
Issuer), one member is to be nominated by VISN and at least two
independent members are to be nominated by the Issuer's Board of
Directors. The foregoing summary of the terms of the
Stockholders Agreement Waiver is qualified in its entirety by
reference to the full text of the Stockholders Agreement Waiver
that is filed as Exhibit 7(d) hereto and hereby incorporated by
reference.
Item 5. Interest in Securities of the Issuer
Item 5 is hereby amended and restated in its entirety to
replace the previously disclosed information with the following
information:
(a) Liberty may be deemed to beneficially own the Class A
Common Stock deemed to be owned by Liberty Crown. All
of the shares reported as beneficially owned by Liberty
Crown are included in the shares reported as
beneficially owned by Liberty.
Hallmark Cards, Hallmark Entertainment Holdings, HEIC,
Liberty Crown, VISN and JPM may be deemed to have
formed a group in connection with the execution of the
HEIC Contribution Agreement and the consummation of the
transactions contemplated thereunder. Pursuant to Rule
13d-5(b)(1), each member of the group is deemed to
10
beneficially own all shares of Common Stock held by
each member of the group. HEIC currently owns
30,670,422 shares of Class B Common Stock and HEIC,
VISN and JPM beneficially own 53,146,649, 5,704,225 and
7,800 shares of Class A Common Stock respectively.
Consequently, assuming conversion of all outstanding
shares of Class B Common Stock, each Reporting Person
could be deemed to beneficially own 89,529,096 shares
of Class A Common Stock or 85.7% of the shares of Class
A Common Stock. However, each Reporting Person hereby
disclaims beneficial ownership with respect to shares
of Common Stock directly beneficially owned by each of
HEIC, VISN and JPM.
Except as described in the preceding paragraphs, to the
knowledge of the Reporting Persons, none of the persons
named on Schedule 1 to this Statement (the "Schedule 1
Persons") and none of the persons named on Schedule 2
to this Statement (the "Schedule 2 Persons")
beneficially owns any shares of Class A Common Stock.
(b) The shares of Class A Common Stock and Class B Voting
Stock reported on in this statement are subject to
shared voting and disposition as noted in Item 6.
(c) Except for the disposition by Liberty Crown of
9,416,746 shares of Class A Common Stock pursuant to
the HEIC Contribution Agreement, no transactions in the
shares of Class A Common Stock have been effected by
the Reporting Persons or, to the knowledge of the
Reporting Persons, by any of the Schedule 1 Persons or
Schedule 2 Persons during the past 60 days.
(d) Not applicable.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or
Relationships with Respect to Securities of the Issuer.
Item 6 is hereby amended and restated in its entirety to
replace the previously disclosed information with the following
information:
Stockholders Agreement. The Stockholders Agreement, as amended,
provides that the Issuer's Board of Directors will consist of not
less than 15 directors, with 12 nominated by HEIC and one
nominated by VISN and two independent directors who will not be
11
officers or employees of any of the parties or their affiliates
and will be nominated by the Board of Directors. The rights of
the parties to nominate a director will terminate on the later of
(1) such party beneficially owning less than 5% of the Common
Stock then outstanding or (2) such party ceasing to beneficially
own at least 75% of the Common Stock such party owned immediately
following the Issuer's IPO.
In addition, the Stockholders Agreement provides that, in
the event Hallmark Entertainment Holdings proposes to transfer
20% or more of the outstanding Common Stock to an unaffiliated
third party, each other party to the Stockholders Agreement will
have the right to participate on the same terms in that
transaction with respect to the proportionate number of such
other party's shares.
Under the Stockholders Agreement, HEIC has the right to
require the Issuer on four occasions, and the other parties, as a
group, have the right to require the Issuer on two occasions, to
register for sale the shares of the Common Stock they hold, so
long as the number of shares they require the Issuer to register
in each case is at least 7% of the Common Stock then outstanding.
HEIC and the other parties also have an unlimited number of
"piggy back" registration rights.
The Stockholders Agreement also provides that the Issuer
will be obligated to pay all expenses that result from the
registration of HEIC's and the other parties' Common Stock under
the Stockholders Agreement, other than registration and filing
fees, attorneys fees, underwriter fees or expenses and
underwriting discounts and commissions. The Issuer also agreed
to indemnify such parties against any liabilities that may result
from their sale of Common Stock, including liabilities under
certain securities laws.
Under the Stockholders Agreement, the Issuer also agreed
that, for so long as (1) the Issuer or any of its affiliates are
entitled to have a representative on the Crown Media United
States, LLC ("CMUS")(formerly known as Odyssey Holdings, L.L.C.)
governance committee, and (2) VISN and certain of its affiliates
either (a) are entitled to nominate or designate a member of the
Issuer's Board of Directors or (b) beneficially own any preferred
interests in CMUS, then neither the Issuer nor any of its
affiliates will, without the written consent of the member of the
Issuer's Board of Directors nominated by VISN or a representative
of the National Interfaith Cable Coalition, Inc., vote in favor
of:
12
o any specified change in, or action described in the CMUS amended and
restated company agreement that relates to VISN's preferred interest in
CMUS or that relates to VISN's rights to programming on the CMUS Network
or its programming budget;
o any repayment or redemption of specified equity interests in CMUS;
o any transfer of all or substantially all of CMU assets or any business
combination involving CMUS where CMUS is not the surviving entity, unless
the transferee assumes specified obligations under the CMUS amended and
restated company agreement until the later of the fifth anniversary of
the IPO or the second anniversary of the transfer or business
combination;
o the dissolution of CMUS, except in connection with a complete
liquidation;
o any transfer of all or substantially all of CMU assets to, or any
business combination involving CMUS with, the Issuer or any of its
affiliates, or any other material transaction with the Issuer or any of
its affiliates, unless the Issuer complies with specified restrictions
relating to any financial benefit the Issuer receives from the
transaction that is more than what the Issuer would have received had the
transaction been on an arm's- length basis or on commercially reasonable
terms; or
o any amendment to CMUS' amended and restated company agreement that would
result in none of the Issuer or its affiliates having the right to
consent to take any of the actions listed in the above bullet points or
impact specified VISN's obligations under the CMUS amended and restated
company agreement or specified interests with respect to VISN's preferred
interests in CMUS.
In addition, the Issuer has agreed not to transfer any of
its interests in CMUS unless the transfer is conditioned on the
requirement that the transferee assume the Issuer's obligations
described above. Under the terms of the Stockholders Agreement,
the transferee's obligations will generally expire on the later
of (1) the fifth anniversary of the IPO, (2) the second
anniversary of the transfer or (3) the repayment of VISN's
13
preferred interest in CMUS, except that the obligations of the
transferee will expire upon dissolution of CMUS.
The foregoing summary is qualified in its entirety by
reference to the text of the Stockholders Agreement which is
filed as Exhibit 7(a) hereto and the Stockholders Agreement
Waiver which is filed as Exhibit 7(d) hereto, each of which is
hereby incorporated by reference.
In connection with the HEIC Contribution, each of Liberty,
Liberty Crown and JPM acknowledged that it has no further rights
under the Stockholders Agreement.
HEIC Stockholders Agreement. Liberty Crown is a party to
the Stockholders Agreement, dated as of March 11, 2003, (the
"HEIC Stockholders Agreement") by and among HEIC, Hallmark
Entertainment Holdings, Liberty Crown, VISN and JPM. The HEIC
Stockholders Agreement provides that HEIC's Board of Directors
will consist of three Class I Directors having one vote each and
six Class II Directors having two votes each. Hallmark
Entertainment Holdings has the right to nominate six Class II
Directors and one Class I Director and each of Liberty Crown and
JPM have the right to nominate one Class I Director. The rights
of the parties to nominate directors will terminate on the later
of (1) such party beneficially owning less than 2.5% of HEIC's
common stock then outstanding or (2) such party ceasing to
beneficially own at least 75% of the common stock specified for
such party (which is equal to the number of shares such party
held as of the date of the HEIC Stockholders' Agreement)
appropriately adjusted for stock splits, dividends or
combinations of shares of HEIC Common Stock. For so long as it
owns at least 75% of the shares it held as of the date of the
HEIC Stockholders' Agreement (as appropriately adjusted for stock
splits, dividends or combinations of shares of HEIC Common
Stock), VISN will be entitled to designate a non-voting observer
to HEIC's Board of Directors.
In addition, the HEIC Stockholders Agreement provides that,
in the event Hallmark Entertainment Holdings proposes to transfer
20% or more of the outstanding HEIC Common Stock in a single
transaction or series of related transactions occurring during a
6-month period or within a longer period if pursuant to a single
agreement, each other party to the HEIC Stockholders Agreement
other than HEIC will have the right to participate on the same
terms in that transaction with respect to the proportionate
number of such other party's shares of HEIC and the Issuer (as
adjusted).
14
Under the HEIC Stockholders Agreement, HEIC also agreed
that, for so long as any party is entitled to nominate a director
to the HEIC board of directors, HEIC may not take the following
actions without the consent of all stockholders entitled to
nominate a director to the HEIC board of directors:
o any amendment or repeal of, or addition to HEIC certificate of
incorporation;
o issuance or redemption of capital stock of HEIC or securities exercisable
or convertible into such capital stock;
o any spin-off, merger, consolidation or other business combination of HEIC
(other than arising out of or related to a merger, consolidation or other
business combination involving the Issuer);
o the dissolution, liquidation or conversion of HEIC;
or
o any sale, pledge or distribution or other transfer of shares of Common
Stock, except in a merger, consolidation, tender offer, exchange offer or
other business combination involving the Issuer and approved in
accordance with the terms of the Stockholders Agreement.
At any meeting of the stockholders of the Issuer or action by written
consent of the Issuer stockholders, the board of directors of HEIC shall cause
HEIC to vote its shares of Class A Common Stock and Class B Common Stock as
directed by Hallmark Entertainment Holdings subject to certain exceptions. The
HEIC Stockholders Agreement also provides that Hallmark Entertainment Holdings
and its affiliates will not agree to any spin-off, merger, tender offer,
exchange offer, consolidation or other business combination of HEIC or the
Issuer in connection with which Hallmark Entertainment Holdings or any of its
affiliates is entitled to registration rights with respect to any non-cash
consideration it receives, unless, with respect to the non- cash consideration
it receives, each other Stockholder of HEIC receives registration rights with
terms no less favorable in any material respect than those received by
Hallmark Entertainment Holdings or any of its affiliates.
Under the HEIC Stockholders Agreement, each of Liberty
15
and JPM will be entitled to designate one of the directors
nominated by HEIC to the Issuer's board of directors.
The HEIC Stockholders Agreement also limits certain affiliate
transactions with the parties to the HEIC Stockholders Agreement and with the
Issuer, the Issuer's subsidiaries and any affiliate of Hallmark Entertainment
Holdings. With respect to such affiliate transactions with an aggregate value
of not more than $35 million, approval is required by a majority of the
independent directors of the Issuer's Board of Directors With respect to such
affiliate transactions with an aggregate value of more than $35 million,
approval is required by a majority of the members of the Issuer's Board of
Directors that are not nominated by any affiliate of Hallmark Entertainment
Holdings; provided, that for this purpose the nominees designated by Liberty
Crown and JPM in accordance with the previous paragraph are not treated as
having been nominated by Hallmark Entertainment Holdings.
The foregoing summary is qualified in its entirety by
reference to the text of the HEIC Stockholders Agreement
that is filed as Exhibit 7(c) hereto and hereby incorporated
by reference.
HEIC Contribution Agreement. See Items 3 and 4 above
for a summary of the HEIC Contribution Agreement.
Item 7 Material to be Filed as Exhibits
------ --------------------------------
Exhibit No. Exhibit
----------- -------
(a) Second Amended and Restated Stockholders
Agreement, dated as of August 30, 2001,
by and among Hallmark Entertainment,
Inc., Liberty Media Corporation, Liberty
Crown, Inc., VISN Management Corp., JP
Morgan Partners (BHCA), L.P., DIRECTV
Enterprises, Inc. and Crown Media
Holdings, Inc. (previously filed as
Exhibit 10.6 to the Quarterly Report on
Form 10-Q of Crown Media Holdings, Inc,
Commission File No.000-30700, filed on
November 13, 2001 and incorporated
herein by reference)
(b) Contribution Agreement, dated as of
March 11, 2003, by and among Hallmark
Entertainment Investments, Co., Hallmark
Entertainment Holdings, Inc., Liberty
16
Crown, Inc., VISN Management Corp., and
JP Morgan Partners (BHCA), L.P.
(c) Stockholders Agreement, dated as of
March 11, 2003, by and among Hallmark
Entertainment Investments, Co., Hallmark
Entertainment Holdings, Inc., Liberty
Crown, Inc., VISN Management Corp. and
JP Morgan Partners (BHCA), L.P.
(d) Form of Consent and Waiver, dated as of
March 11, 2003, to the Second Amended
and Restated Stockholders Agreement
17
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true, complete
and correct.
Dated: March 11, 2003
LIBERTY MEDIA CORPORATION
By: /s/ Charles Y. Tanabe
------------------------------
Name: Charles Y. Tanabe
Title: Senior Vice President
LIBERTY CROWN, INC.
By: /s/ Charles Y. Tanabe
------------------------------
Name: Charles Y. Tanabe
Title: Senior Vice President
18
SCHEDULE 1 OF THE STATEMENT IS HEREBY AMENDED AND RESTATED
TO READ IN ITS ENTIRETY AS FOLLOWS:
SCHEDULE 1
DIRECTORS AND EXECUTIVE OFFICERS OF LIBERTY MEDIA
CORPORATION
The name and present principal occupation of each
director and executive officer of Liberty Media Corporation
("Liberty") are set forth below. The principal business of
Liberty is the ownership of interests in a broad range of
video programming, broadband distribution, interactive
technology services and communications businesses in the
United States, Europe, South America and Asia. 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
the Reporting Persons, all executive officers and directors
listed on this Schedule 1 are United States citizens, except
for David J.A. Flowers, who is a Canadian citizen.
Principal Occupation and
Name and Business Address Principal Business (if
(if applicable) applicable)
------------------------- ------------------------
John C. Malone Chairman of the Board and
Director of Liberty
Robert R. Bennett President, Chief Executive
Officer and Director of
Liberty
Donne F. Fisher Director of Liberty;
9781 Meridian Blvd., #200 President of Fisher Capital
Englewood, Colorado 80112 Partners, Ltd., a venture
capital partnership
Paul A. Gould Director of Liberty;
711 5th Avenue, 8th Floor Managing Director of Allen
New York, New York 10022 & Company Incorporated, an
investment banking services
company
Gary S. Howard Executive Vice President,
Chief Operating Officer and
Director of Liberty
19
Jerome H. Kern Director of Liberty;
4600 S. Syracuse St. Consultant, Kern Consulting
Denver, Colorado 80237 LLC, a consulting company
Kim Magness Director of Liberty
David E. Rapley Director of Liberty
Larry E. Romrell Director of Liberty
David J.A. Flowers Senior Vice President and
Treasurer of Liberty
Elizabeth M. Markowski Senior Vice President of
Liberty
Albert E. Rosenthaler Senior Vice President of
Liberty
Christopher S. Shean Senior Vice President and
Controller of Liberty
Charles Y. Tanabe Senior Vice President,
General Counsel and
Secretary of Liberty
20
SCHEDULE 2 OF THE STATEMENT IS HEREBY AMENDED AND RESTATED TO READ IN
ITS ENTIRETY AS FOLLOWS:
SCHEDULE 2
DIRECTORS AND EXECUTIVE OFFICERS OF LIBERTY CROWN, INC.
The name and present principal occupation of each director and
executive officer of Liberty Crown, Inc. ("Liberty Crown") are set forth
below. The principal business of Liberty Crown is the ownership of its
interest in the Crown Media Holdings, Inc. and its interest in Hallmark
Entertainment Investments Co. 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 the Reporting
Persons, all executive officers and directors listed on this Schedule 2 are
United States citizens, except for David J.A. Flowers, who is a Canadian
citizen.
Principal Occupation and
Name and Business Address Principal Business (if
(if applicable) applicable)
------------------------- ------------------------
John C. Malone Chairman of the Board and
Director of Liberty and
Liberty Crown
Robert R. Bennett President, Chief Executive
Officer and Director of
Liberty and Liberty Crown
Gary S. Howard Executive Vice President,
Chief Operating Officer and
Director of Liberty and
Liberty Crown
David J.A. Flowers Senior Vice President and
Treasurer of Liberty and
Liberty Crown
Elizabeth M. Markowski Senior Vice President of
Liberty and Liberty Crown
Albert E. Rosenthaler Senior Vice President of
Liberty and Liberty Crown
21
Christopher W. Shean Senior Vice President and
Controller of Liberty and
Liberty Crown
Charles Y. Tanabe Senior Vice President,
General Counsel and
Secretary of Liberty and
Liberty Crown
22