Excerpts: Liberty Interactive Corporation, Schedule 13D/A
- Names of Reporting Persons: John C. Malone
- The Voting Agreement, dated as of April 4, 2017 (the “Voting Agreement”), by and among Liberty Interactive Corporation (the “Issuer”), General Communication, Inc. (“GCI”), John C. Malone (“Mr. Malone”) and Mr. Malone’s wife, Mrs. Leslie Malone (“Mrs. Malone” and together with Mr. Malone, the “Malones”), contains provisions relating to the voting of the Series B Liberty Ventures common stock (“LVNTB”) beneficially owned by the Malones. In addition, the Voting Agreement contains certain transfer restrictions on such shares. Mr. Malone expressly disclaims the existence of, and membership in, a group with any of the other parties to the Voting Agreement.
- In February 1998, in connection with the settlement of certain legal proceedings relative to the Estate of Bob Magness, the late founder and former Chairman of the Board of Tele-Communications, Inc. (“TCI”), TCI entered into a call agreement (the “Call Agreement”) with the Malones. In connection with the acquisition by AT&T Corp. (“AT&T”) of TCI, TCI assigned to Liberty Media LLC (now known as Liberty Interactive LLC) its rights under the Call Agreement. The Issuer succeeded to these rights in a corporate restructuring in 2006. As a result, the Issuer has the right, upon Mr. Malone’s death and in certain other circumstances, to acquire QVCB shares and LVNTB shares owned by Mr. Malone, Mrs. Malone and certain trusts for the benefit of his children (together, the “Malone Group”). The Call Agreement also prohibits the Malone Group from disposing of their QVCB shares and LVNTB shares, except for certain exempt transfers (such as transfers to related parties or public sales of up to an aggregate of 5% of their shares of QVCB after conversion to shares of QVCA and shares of LVNTB after conversion to shares of LVNTA) and except for a transfer made in compliance with the Issuer’s call rights.
- Includes 458,946 shares of QVCB and 66,683 shares of LVNTB held by two trusts which are managed by an independent trustee, of which the beneficiaries are Mr. Malone’s adult children. Mr. Malone has no pecuniary interest in the trusts, but he retains the right to substitute assets held by the trusts. Mr. Malone disclaims beneficial ownership of the shares held by the trusts.
- At the option of the holder, each share of QVCB is convertible into one share of QVCA and each share of LVNTB is convertible into one share of LVNTA. Each share of QVCB and LVNTB is entitled to 10 votes, whereas each share of QVCA and LVNTA is entitled to one vote. Accordingly, Mr. Malone may be deemed to beneficially own voting equity securities representing approximately 37.7% of the voting power with respect to a general election of directors of the Issuer, based on the number of shares outstanding specified above in Note 9. See Item 5.
- On the business day immediately following the Auto Conversion Effective Time, the Issuer and LI LLC will contribute to GCI Liberty its entire equity interest in Liberty Broadband Corporation, Charter Communications, Inc. and LendingTree, Inc., together with the Evite operating business and certain other assets and liabilities (including, subject to certain conditions, the Issuer’s equity interest in FTD Companies, Inc.), in exchange for (a) the issuance to LI LLC of (i) a number of shares of Reclassified GCI Class A Common Stock and a number of shares of Reclassified GCI Class B Common Stock equal to the number of outstanding shares of LVNTA and LVNTB outstanding on the closing date of the Contribution, respectively, (ii) certain exchangeable debentures and (iii) cash and (b) the assumption of certain liabilities by GCI Liberty (the “Contribution”, and the date and time of the Contribution, the “Contribution Effective Time”).
Source: Liberty Interactive Corporation