Item 1.01. Entry into a Material Definitive Agreement
On January 11, 2013 at 5:00 p.m., New York City time (the Effective Time), Starz (formerly known as Liberty Media Corporation, the Company) completed its previously announced spin-off (the Spin-Off) of its former wholly-owned subsidiary Liberty Media Corporation (formerly known as Liberty Spinco, Inc., Spinco).
The Spin-Off was accomplished by the distribution (the Distribution) by the Company of a dividend of (i) one share of Spincos Series A common stock for each outstanding share of the Companys Series A Liberty Capital common stock as of 5:00 p.m., New York City time, on January 10, 2013 (such date and time, the Record Date) and (ii) one share of Spincos Series B common stock for each outstanding share of the Companys Series B Liberty Capital common stock as of the Record Date. As a result of the Spin-Off, Spinco is an independent, publicly traded company and its principal businesses and assets include the Companys former consolidated subsidiaries Atlanta National League Baseball Club, Inc. and TruePosition, Inc., equity affiliates Sirius XM Radio Inc. and Live Nation Entertainment, Inc. and minority investments in public companies such as Barnes & Noble, Inc., Time Warner Inc., Time Warner Cable Inc. and Viacom Inc. Additionally, in connection with the Spin-Off, the Companys subsidiary Starz, LLC distributed an aggregate of approximately $1.8 billion in cash to Spinco, a portion of which was distributed to Spinco prior to the Spin-Off. The businesses and assets that remain at the Company following the Spin-Off consist of the premium movie service provider Starz, LLC and its subsidiaries.
Several agreements were entered into in connection with the Spin-Off (the Spin-Off Agreements):
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a Reorganization Agreement, dated as of January 10, 2013, by and between the Company and Spinco, which provides for, among other things, the principal corporate transactions required to effect the Spin-Off, certain conditions to the Spin-Off and provisions governing the relationship between the Company and Spinco with respect to and resulting from the Spin-Off;
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a Tax Sharing Agreement, dated as of January 11, 2013, between the Company and Spinco, which governs the allocation of taxes, tax benefits, tax items and tax-related losses between the Company and Spinco;
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a Services Agreement, dated as of January 11, 2013, by and between the Company and Spinco, which governs the provision by Spinco to the Company and by the Company to Spinco of specified services and benefits following the Spin-Off;
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a Facilities Sharing Agreement, dated as of January 11, 2013, by and between the Company and Liberty Property Holdings, Inc. (a subsidiary of Spinco, LPH), pursuant to which the Company shares office facilities with Spinco;
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two Aircraft Time Sharing Agreements, each dated as of January 11, 2013, by and between the Company and Spinco, which govern the lease for each of two aircraft from Spinco to the Company and the provision of fully qualified flight crew for all operations on a periodic, non-exclusive time sharing basis; and
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a Lease Agreement, dated as of January 11, 2013, by and between LPH, Starz, LLC, and, for the limited purposes described therein, Starz Entertainment, LLC, pursuant to which Starz, LLC will lease its headquarters building from LPH for a period of ten years, with successive five-year renewal periods at the option of Starz, LLC.
The section of the Information Statement filed as Exhibit 99.1 to Amendment No. 3 to Spincos Registration Statement on Form 10, filed with the Securities and Exchange Commission on December 26, 2012 (File No. 001-35707) (the Form 10), entitled Certain Relationships and Related Party TransactionsRelationships Between Spinco and Liberty Media/Starz and/or Liberty Interactive, which describes the material terms of the Spin-Off Agreements, is incorporated herein by reference. These descriptions are qualified in their entirety by reference to the full text of the Spin-Off Agreements, which are filed as Exhibits 2.1, 10.1, 10.2, 10.3, and 10.4 and 10.5, respectively, to this Current Report on Form 8-K.
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