AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 13, 2002
REGISTRATION NO. 333-
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
USA INTERACTIVE
(Exact name of Registrant as specified in its charter)
DELAWARE 59-2712887
(State or other jurisdiction (I.R.S. Employer
of incorporation or Identification Number)
organization)
152 WEST 57TH STREET
NEW YORK, NEW YORK 10019
(212) 314-7300
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
JULIUS GENACHOWSKI, ESQ.
EXECUTIVE VICE PRESIDENT,
GENERAL COUNSEL AND SECRETARY
USA INTERACTIVE
152 WEST 57TH STREET
NEW YORK, NEW YORK 10019
(212) 314-7300
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent For Service)
------------------------------
With a Copy to:
J. D. WEINBERG, ESQ.
COVINGTON & BURLING
1330 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10019
(212) 841-1000
------------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: As soon as
practicable after this registration statement becomes effective, assuming the
Registrant elects to pay a portion of the consideration for the Interval
acquisition described below in shares of the Registrant's common stock, which
election has not yet been made and is in the Registrant's sole discretion. See
the "Explanatory Note" on the following page.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box: / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box: /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering: / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: / /
------------------------------
CALCULATION OF REGISTRATION FEE
PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED(1) REGISTERED PRICE PER SECURITY OFFERING PRICE FEE
Common Stock, $0.01 par value................ 11,805,555(2) $24.48(3) $289,000,000(4) $26,588(5)
(1) This registration statement relates to the resale by the selling
stockholders named herein of the shares of common stock, par value $0.01 per
share, of the Registrant ("USA common stock") listed above that may be
issued, at the Registrant's sole election, in connection with the
acquisition by the Registrant of Interval Acquisition Corp., as described in
the accompanying prospectus. See the "Explanatory Note" on the following
page.
(2) Based upon the estimated maximum number of shares of USA common stock that
may be issued in connection with the Interval acquisition, if the Registrant
determines to exercise its election to pay a portion of the consideration
for the acquisition with USA common stock, which determination has not yet
been made. See the "Explanatory Note" on the following page.
(3) Estimated solely for purposes of calculating the registration fee pursuant
to 457(c) of the Securities Act of 1933, based on $24.48, the average of the
high and low prices of USA common stock quoted on The Nasdaq National Market
on June 11, 2002.
(4) Estimated solely for purposes of calculating the registration fee pursuant
to 457(c) of the Securities Act of 1933, based on the proposed maximum
offering price per security and the number of shares of USA common stock
being registered.
(5) Calculated by multiplying 0.000092 by the proposed maximum aggregate
offering price.
------------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
EXPLANATORY NOTE
PURSUANT TO THE AGREEMENT AND PLAN OF MERGER FOR THE INTERVAL ACQUISITION
DESCRIBED IN THE ACCOMPANYING PROSPECTUS, THE REGISTRANT HAS THE RIGHT TO ELECT,
AT ITS SOLE DISCRETION, TO PAY THE CONSIDERATION FOR THE INTERVAL ACQUISITION
ALL IN CASH OR BOTH IN CASH AND SHARES OF USA COMMON STOCK. IN CONNECTION WITH
THE INTERVAL ACQUISITION, THE REGISTRANT AND THE SELLING STOCKHOLDERS NAMED IN
THE ACCOMPANYING PROSPECTUS ENTERED INTO A REGISTRATION RIGHTS AGREEMENT
PURSUANT TO WHICH THE REGISTRANT IS REQUIRED TO FILE THIS REGISTRATION
STATEMENT. THE FILING OF THIS REGISTRATION STATEMENT DOES NOT REFLECT ANY
DETERMINATION BY THE REGISTRANT AS TO WHETHER IT WILL ISSUE SHARES OF USA COMMON
STOCK IN THE INTERVAL ACQUISITION. THE REGISTRANT'S ELECTION MAY BE MADE AT ANY
TIME PRIOR TO THE CLOSING OF THE INTERVAL ACQUISITION, AND THE REGISTRANT DOES
NOT EXPECT TO MAKE ITS ELECTION UNTIL SHORTLY BEFORE THE CLOSING OF THE INTERVAL
ACQUISITION.
THIS REGISTRATION STATEMENT AND THE ACCOMPANYING PROSPECTUS HAVE BEEN
WRITTEN TO COVER THE RESALE OF USA COMMON STOCK ISSUED IN THE EVENT THAT THE
REGISTRANT ELECTS TO USE STOCK IN CONNECTION WITH THE CLOSING OF THE INTERVAL
ACQUISITION RATHER THAN ALL CASH CONSIDERATION. IN THE EVENT THAT THE REGISTRANT
ELECTS NOT TO ISSUE ANY SHARES OF USA COMMON STOCK IN CONNECTION WITH THE
CLOSING OF THE INTERVAL ACQUISITION, THE REGISTRANT WILL FILE AN AMENDMENT OR
APPLICATION WITH THE SECURITIES AND EXCHANGE COMMISSION TO DEREGISTER THE USA
COMMON STOCK COVERED BY, OR WITHDRAW, THIS REGISTRATION STATEMENT.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THESE
SECURITIES MAY NOT BE SOLD UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED JUNE 13, 2002
PROSPECTUS
[LOGO]
11,805,555 SHARES OF USA COMMON STOCK
------------------
EXPLANATORY NOTE: THIS PROSPECTUS HAS BEEN WRITTEN TO COVER THE RESALE OF
SHARES OF COMMON STOCK, PAR VALUE $0.01 PER SHARE ("USA COMMON STOCK"), OF USA
INTERACTIVE (FORMERLY USA NETWORKS, INC.) ("USA") ISSUABLE IN THE EVENT THAT USA
ELECTS TO USE USA COMMON STOCK AS PARTIAL CONSIDERATION FOR THE ACQUISITION OF
INTERVAL ACQUISITION CORP. ("INTERVAL"), RATHER THAN ALL CASH CONSIDERATION,
WHICH ELECTION HAS NOT BEEN MADE. PURSUANT TO THE AGREEMENT AND PLAN OF MERGER,
DATED MAY 30, 2002, AMONG USA, INTERVAL, I EXCHANGE MERGER CORP. ("MERGER SUB")
AND THE SELLING STOCKHOLDERS NAMED IN THIS PROSPECTUS IN THE SECTION "SELLING
STOCKHOLDERS" (THE "SELLING STOCKHOLDERS"), USA HAS THE RIGHT TO ELECT, AT ITS
SOLE DISCRETION, TO PAY THE CONSIDERATION FOR THE INTERVAL ACQUISITION ALL IN
CASH OR BOTH IN CASH AND SHARES OF USA COMMON STOCK. IN CONNECTION WITH THE
INTERVAL ACQUISITION, USA AND THE SELLING STOCKHOLDERS ENTERED INTO A
REGISTRATION RIGHTS AGREEMENT PURSUANT TO WHICH USA IS REQUIRED TO FILE A
REGISTRATION STATEMENT WITH THE SECURITIES AND EXCHANGE COMMISSION THAT CONTAINS
THIS PROSPECTUS. THE FILING OF THE REGISTRATION STATEMENT DOES NOT REFLECT ANY
DETERMINATION BY USA AS TO WHETHER IT WILL ISSUE SHARES OF USA COMMON STOCK IN
THE INTERVAL ACQUISITION. USA'S ELECTION MAY BE MADE AT ANY TIME PRIOR TO THE
CLOSING OF THE INTERVAL ACQUISITION, AND USA DOES NOT EXPECT TO MAKE ITS
ELECTION UNTIL SHORTLY BEFORE THE CLOSING OF THE INTERVAL ACQUISITION. IN THE
EVENT THAT USA ELECTS NOT TO ISSUE ANY SHARES OF USA COMMON STOCK IN CONNECTION
WITH THE CLOSING OF THE INTERVAL ACQUISITION, USA WILL FILE AN AMENDMENT OR
APPLICATION WITH THE SECURITIES AND EXCHANGE COMMISSION TO DEREGISTER THE USA
COMMON STOCK COVERED BY, OR WITHDRAW, THE REGISTRATION STATEMENT.
This prospectus relates to the resale of up to 11,805,555 shares of USA
common stock that the Selling Stockholders may offer from time to time. The USA
common stock being offered by this prospectus was acquired by the Selling
Stockholders in connection with USA's acquisition of Interval.
USA will not receive any proceeds from the sale of USA common stock by the
Selling Stockholders.
Subject to the restrictions described in this prospectus, the Selling
Stockholders (directly, or through agents or dealers designated from time to
time) may sell the USA common stock being offered by this prospectus from time
to time on terms to be determined at the time of sale. The prices at which these
stockholders may sell the shares will be determined by the prevailing market
price for the shares. This offering will not be underwritten. To the extent
required, the number of shares of USA common stock to be sold, purchase price,
public offering price, the names of any such agent or dealer and any applicable
commission or discount with respect to a particular offering will be set forth
in an accompanying prospectus supplement. The aggregate proceeds to the Selling
Stockholders from the sale of the USA common stock being offered by this
prospectus will be the purchase price thereof less the aggregate agents' or
dealers' commissions and discounts, if any, and other expenses of distribution
not borne by USA. The Selling Stockholders will pay all applicable stock
transfer taxes, brokerage commissions, discounts or commissions and fees of the
Selling Stockholders' counsel. USA has agreed to pay certain expenses in
connection with the filing of the registration statement, of which this
prospectus is a part, with the Securities and Exchange Commission, and to
indemnify the Selling Stockholders against certain liabilities, including
certain liabilities under the Securities Act of 1933, as amended (the
"Securities Act"), in connection with the registration and offering of the USA
common stock being offered by this prospectus. See "PLAN OF DISTRIBUTION" on
page 6.
The Selling Stockholders and any agents, dealers or broker-dealers that
participate with the Selling Stockholders in the distribution of the USA common
stock being offered by this prospectus may be deemed to be "underwriters" within
the meaning of the Securities Act, and any commissions received by them and any
profit on the resale of the securities purchased by them may be deemed to be
underwriting commissions or discounts under the Securities Act.
USA common stock is quoted on The Nasdaq National Market under the symbol
"USAI." On June 12, 2002, the last reported sale price of USA common stock was
$24.70 per share.
SEE "RISK FACTORS" BEGINNING ON PAGE 4 TO READ ABOUT FACTORS YOU SHOULD
CONSIDER IN CONNECTION WITH PURCHASING USA COMMON STOCK.
---------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES IN ANY JURISDICTION WHERE SUCH AN
OFFER OR SOLICITATION WOULD BE ILLEGAL.
The date of this prospectus is , 2002
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we are filing with
the Securities and Exchange Commission (the "SEC") on behalf of the Selling
Stockholders utilizing a "shelf" registration process. Under this shelf process,
the Selling Stockholders may, from time to time over approximately the next
year, sell the shares of USA common stock being offered under this prospectus in
one or more offerings (subject to the restrictions described in this
prospectus).
This prospectus provides you with a general description of the securities
that the Selling Stockholders may offer. To the extent required, the number of
shares of USA common stock to be sold, purchase price, public offering price,
the names of any such agent or dealer and any applicable commission or discount
with respect to a particular offering by any Selling Stockholder will be set
forth in an accompanying prospectus supplement. You should read both this
prospectus and any prospectus supplement together with the additional
information described in the section "WHERE YOU CAN FIND MORE INFORMATION" on
page 2.
You should rely only on the information provided in this prospectus and in
any prospectus supplement, including the information incorporated by reference.
We have not authorized anyone to provide you with different information. The
Selling Stockholders are not offering the USA common stock being offered under
this prospectus in any state where the offer is not permitted. You should not
assume that the information in this prospectus, or any supplement to this
prospectus, is accurate at any date other than the date indicated on the cover
page of these documents.
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING INFORMATION
This prospectus and the SEC filings that are incorporated by reference into
this prospectus contain "forward-looking statements" within the meaning of the
securities laws. These forward-looking statements include, but are not limited
to, statements relating to our anticipated financial performance, business
prospects, new developments, new merchandising strategies and similar matters,
and/or statements preceded by, followed by or that include the words "believes,"
"could," "expects," "anticipates," "estimates," "intends," "plans," "projects,"
"seeks," or similar expressions. We have based these forward-looking statements
on our current expectations and projections about future events, based on the
information currently available to us. For those statements, we claim the
protection of the safe harbors for forward-looking statements contained in the
Private Securities Litigation Reform Act of 1995. These forward-looking
statements are subject to risks, uncertainties and assumptions, including those
described in the section "RISK FACTORS," that may affect the operations,
performance, development and results of our business. You are cautioned not to
place undue reliance on these forward-looking statements, which speak only as of
the date stated, or if no date is stated, as of the date of this prospectus.
You should understand that the following important factors, in addition to
those discussed in the documents incorporated in this prospectus by reference,
could affect our future results and could cause those results to differ
materially from those expressed in such forward-looking statements:
- material adverse changes in economic conditions generally or in our
markets;
- future regulatory and legislative actions and conditions affecting our
operating areas;
- competition from others;
- successful integration of our divisions' management structures;
- product demand and market acceptance;
- the ability to protect proprietary information and technology or to obtain
necessary licenses on commercially reasonable terms;
- the ability to expand into and successfully operate in foreign markets;
- obtaining and retaining key executives and employees; and
- other risks and uncertainties as may be detailed from time to time in our
public announcements and filings with the SEC.
We undertake no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or any other
reason. In light of these risks, uncertainties and assumptions, the
forward-looking events discussed in this prospectus may not occur.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and other
information with the SEC under the Exchange Act. You may read and copy this
information at the SEC's public reference room at 450 Fifth Street, N.W., Room
1024, Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further
information on the public reference room. Our SEC filings are also available to
you free of charge at the SEC's website at www.sec.gov.
As allowed by SEC rules, this prospectus does not contain all the
information you can find in the registration statement or the exhibits to the
registration statement. The SEC allows us to "incorporate by reference"
information into this prospectus, which means that we can disclose important
information to you by referring you to another document filed separately with
the SEC. The information incorporated by reference is deemed to be part of this
prospectus, except for any information superseded by information contained
directly in this prospectus. Information that we subsequently file with the SEC
will automatically update this prospectus. This prospectus incorporates by
reference the documents set forth below that we have previously filed with the
SEC. These documents contain important information about our company and its
financial condition.
1. Annual Report on Form 10-K for the year ended December 31, 2001, filed
on April 1, 2002.
2. Quarterly Report on Form 10-Q for the quarter ended March 31, 2002,
filed on May 15, 2002.
3. Definitive proxy statement filed on April 30, 2002.
4. Definitive proxy statement filed on March 25, 2002.
5. Current Reports on Form 8-K and amendments thereto filed on January 8,
2002; two filed on January 29, 2002; January 30, 2002; February 12, 2002;
February 26, 2002; March 1, 2002; March 4, 2002; March 15, 2002;
March 27, 2002; April 24, 2002; May 17, 2002; May 22, 2002; May 24, 2002;
two filed on June 3, 2002; and June 5, 2002.
All documents filed by USA with the SEC pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act after the date of this prospectus and prior to
the termination of the offering are incorporated by reference into this
prospectus.
You may request free copies of any or all of these filings by writing or
telephoning us at the following address:
USA Interactive
152 West 57th Street
New York, New York 10019
(212) 314-7300
Attention: Corporate Secretary
Information contained on our website is not part of this prospectus. You
should rely only on the information contained in this prospectus. We have not
authorized anyone to provide you with information different from that contained
in this prospectus. The information contained in this prospectus is accurate
only as of the date of this prospectus and, with respect to material
incorporated herein by reference, the dates of such referenced material.
2
SUMMARY
THIS SUMMARY HIGHLIGHTS SELECTED INFORMATION FROM THIS PROSPECTUS AND MAY
NOT CONTAIN ALL THE INFORMATION THAT MAY BE IMPORTANT TO YOU. TO UNDERSTAND THE
TERMS OF THE USA COMMON STOCK BEING OFFERED BY THIS PROSPECTUS, YOU SHOULD READ
THIS ENTIRE PROSPECTUS AND THE DOCUMENTS IDENTIFIED UNDER THE CAPTION "WHERE YOU
CAN FIND MORE INFORMATION." IN THIS PROSPECTUS, THE TERMS "USA", "WE" AND "OUR"
REFER TO USA INTERACTIVE (FORMERLY USA NETWORKS, INC.) AND OUR SUBSIDIARIES,
EXCEPT WHERE IT IS CLEAR THAT SUCH TERMS MEAN ONLY USA INTERACTIVE.
USA INTERACTIVE
USA (Nasdaq: USAI) is focused on integrating interactive assets across
multiple lines of business. We believe USA is a leader in integrated
interactivity, including ticketing, online travel, online dating, electronic
retailing, teleservices and other interactive commerce services. USA consists of
Home Shopping Network (including HSN International and HSN Interactive);
Ticketmaster (Nasdaq: TMCS), which operates Ticketmaster, Ticketmaster.com,
Citysearch and Match.com; Expedia, Inc. (Nasdaq: EXPE); Hotels.com (Nasdaq:
ROOM); TV Travel Group Limited; Electronic Commerce Solutions; Precision
Response Corporation; and Styleclick.
On May 7, 2002, USA contributed all of its entertainment businesses to
Vivendi Universal Entertainment LLLP (the "VUE transaction"), a new joint
venture controlled by Vivendi Universal, S.A. ("Vivendi"). Immediately following
such transaction, USA was renamed USA Interactive.
USA's business is primarily focused on its electronic commerce and
interactive/information service businesses, and USA expects that it will
actively seek to grow those businesses, including through acquisitions. Any such
acquisitions could involve the issuance of additional USA securities or cash or
a combination of securities and cash. In addition, USA is no longer required to
obtain the consent of Vivendi, Liberty Media Corporation ("Liberty") or
Mr. Diller as USA stockholders for any such acquisitions regardless of the size
of such acquisitions except in the event that USA is highly leveraged, in which
case each of Mr. Diller and Liberty will have the right to consent to specified
contingent matters involving USA. USA is continually reviewing, and often in
discussions with third parties regarding, such possible growth opportunities,
including transactions in the online and offline travel services and
commerce-related areas.
USA is incorporated under the laws of the State of Delaware. USA's executive
offices are located at 152 West 57th Street, New York, New York 10019 and our
telephone number is (212) 314-7300.
RECENT DEVELOPMENTS
On June 3, 2002, USA announced that it had delivered to the board of
directors of each of Expedia, Inc., Ticketmaster and Hotels.com a letter
pursuant to which USA proposed to acquire the minority interest in each of these
subsidiaries that it did not already own. Each of the boards of these
subsidiaries has since formed special committees comprised of all of its
disinterested directors to review USA's proposal. Following the announcement by
USA of the proposals, a number of complaints against USA and the boards of
directors of these subsidiaries were filed in Delaware with respect to
Ticketmaster and Hotels.com, California with respect to Ticketmaster and
Washington with respect to Expedia, Inc. The complaints generally allege the
transaction would be a breach of duty and that the indicated exchange ratio is
unfair. Each of the complaints seeks, among other things, injunctive relief
against consummation of the transaction and damages in an unspecified amount.
The time for defendants to respond to the complaints has not yet elapsed. USA
believes the allegations are without merit and intends to defend the actions
vigorously. There can be no assurance that USA will acquire the minority
interests in any of these subsidiaries or of the terms upon which any such
acquisitions would be made.
3
RISK FACTORS
AN INVESTMENT IN OUR SECURITIES INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD
CONSIDER THE FOLLOWING FACTORS CAREFULLY BEFORE DECIDING TO PURCHASE OUR
SECURITIES. ADDITIONAL RISKS NOT PRESENTLY KNOWN TO US OR THAT WE CURRENTLY DEEM
IMMATERIAL MAY ALSO IMPAIR OUR BUSINESS OPERATIONS.
WE DEPEND ON OUR KEY PERSONNEL
We are dependent upon the continued contributions of our senior corporate
management, particularly Mr. Diller, and certain key employees for our future
success. Mr. Diller is our Chairman of the Board and Chief Executive Officer.
Mr. Diller does not have an employment agreement with us, although he has been
granted options to purchase a substantial number of shares of USA common stock.
If Mr. Diller no longer serves in his positions at USA, our business, as
well as the market price of USA common stock, could be substantially adversely
affected. We cannot assure you that we will be able to retain the services of
Mr. Diller or any other of our members of senior management or key employees.
WE ARE CONTROLLED BY MR. DILLER AND IN HIS ABSENCE, WILL BE CONTROLLED BY
LIBERTY
Mr. Diller, through entities he controls, currently beneficially owns or has
the right to vote 100% of the shares of our Class B common stock, par value
$0.01 per share, which is sufficient to control the outcome of any matter
submitted to a vote or for the consent of our shareholders with respect to which
holders of USA common stock, USA Class B common stock and USA preferred stock
vote together as a single class. Mr. Diller, subject to the terms of an amended
and restated stockholders agreement, dated as of December 16, 2001 (the
"Stockholders Agreement"), among Universal Studios, Liberty, Mr. Diller, USA and
Vivendi, effectively controls the outcome of all matters submitted to a vote or
for the consent of our stockholders (other than with respect to the election by
the holders of USA common stock of 25% of the members of our board of directors
(rounded up to the nearest whole number) and certain matters as to which a
separate class vote of the holders of USA common stock or USA preferred stock is
required under Delaware law).
Under the Stockholders Agreement, each of Mr. Diller and Liberty has the
right to consent to certain contingent matters in the event that USA is highly
leveraged. We cannot assure you that Mr. Diller and Liberty will agree in the
future on any transaction or action relating to a contingent matter at a time
when USA is highly leveraged, in which case we would not be able to engage in
such transaction or take such action.
Upon Mr. Diller's permanent departure from USA, generally, Liberty would be
able to control USA through its ownership of its USA Class B common stock.
USE OF PROCEEDS
All of the USA common stock being offered under this prospectus is being
sold by the Selling Stockholders. USA will not receive any proceeds from the
sale of USA common stock by the Selling Stockholders.
SELLING STOCKHOLDERS
SELLING STOCKHOLDERS
The following table sets forth each Selling Stockholder, together with
(1) the maximum number of shares of USA common stock that will be beneficially
owned by such Selling Stockholder immediately following USA's acquisition of
Interval and (2) the number of shares of USA common stock registered
4
for sale hereby, in each case assuming the full 11,805,555 shares which may be
offered hereby are issued by us to them at that time. The USA common stock being
offered under this prospectus is being offered for the account of the Selling
Stockholders.
SHARES OF USA SHARES OF USA
COMMON STOCK SHARES OF USA COMMON STOCK
BENEFICIALLY OWNED COMMON STOCK BENEFICIALLY OWNED
SELLING STOCKHOLDER PRIOR TO THE OFFERING(1) BEING OFFERED(2) AFTER THE OFFERING
------------------- ------------------------ ---------------- ------------------
BancBoston Investments, Inc................ 767,789.00 767,789.00 *
Stuart L. Bell Declaration of Trust dated
5/20/99.................................. 149,294.90 149,294.90 *
Stuart L. Bell and Susan S. Bell 1999
Children's Trust......................... 71,444.45 71,444.45 *
Laurence H. Bloch.......................... 38,389.45 38,389.45 *
Carlson Companies, Inc..................... 976,626.62 976,626.62 *
Central Florida Investments, Inc........... 235,037.46 235,037.46 *
William Carl Drew.......................... 72,325.29 72,325.29 *
First Union Merchant Banking 1998, LLC..... 614,231.21 614,231.21 *
David C. Gilbert........................... 112,557.00 112,557.00 *
Thomas B. Hunter, III...................... 19,194.73 19,194.73 *
Hyatt Vacation Ownership, Inc.............. 976,626.62 976,626.62 *
Jeanette E. Marbert........................ 209,529.60 209,529.60 *
Marriott Ownership Resorts, Inc............ 1,552,474.30 1,552,474.30 *
Richard D. Michaels Revocable Trust dated
12/2/00.................................. 7,677.88 7,677.88 *
Robert A. Miller........................... 36,853.87 36,853.87 *
Adeline S. Morrison........................ 19,194.73 19,194.73 *
Craig M. Nash(3)........................... 1,023,462.70 1,023,462.70 *
The Northwestern Mutual Life Insurance
Company.................................. 614,231.21 614,231.21 *
Paul W. Rishell............................ 192,177.58 192,177.58 *
Heather A. Steans.......................... 35,830.15 35,830.15 *
Jennifer W. Steans......................... 35,830.15 35,830.15 *
Robin M. Steans............................ 35,830.15 35,830.15 *
Westin Vacation Exchange Company........... 246,781.82 246,781.82 *
Willis Stein & Partners, L.P.(4)........... 3,762,164.13 3,762,164.13 *
------------------------
* Because the Selling Stockholders may sell all or a portion of the USA common
stock that is being offered pursuant to this prospectus, the number of
shares of USA common stock that will be owned by each Selling Stockholder
upon termination of this offering cannot be determined.
(1) The number of shares beneficially owned is subject to adjustment and will
not be finally determined until the closing of the acquisition.
(2) The registration statement of which this prospectus forms a part will also
cover any additional shares of USA common stock which become issuable in
connection with the shares registered for sale hereby by reason of any stock
dividend, stock split, recapitalization or other similar transaction.
(3) Includes 552,808.88 shares owned by CDMM Investments, L.P., a limited
partnership, of which CDMM Investments, Inc. is the general partner.
Craig M. Nash is the President, sole director and sole shareholder of CDMM
Investments, Inc.
5
(4) Willis Stein & Partners, L.L.C. is the general partner of Willis & Stein,
L.P. and has the power to vote shares held by Willis & Stein, L.P., but
disclaims beneficial ownership of the shares.
We have filed a registration statement with the SEC, of which this
prospectus forms a part, with respect to the resale of the USA common stock
subject to this prospectus from time to time under Rule 415 under the Securities
Act. The USA common stock being offered under this prospectus is being
registered to permit public secondary trading of such USA common stock. Subject
to the restrictions described in this prospectus, the Selling Stockholders may
offer the USA common stock being offered under this prospectus for resale from
time to time. In addition, subject to the restrictions described in this
prospectus, the Selling Stockholders identified above may sell, transfer or
otherwise dispose of all or a portion of the USA common stock being offered
under this prospectus in transactions exempt from the registration requirements
of the Securities Act. See "PLAN OF DISTRIBUTION."
USA'S RELATIONSHIPS WITH THE SELLING STOCKHOLDERS
Pursuant to the agreement and plan of merger, Merger Sub was merged with and
into Interval at the closing of the transactions contemplated thereby, with the
separate corporate existence of Merger Sub ceasing and Interval continuing as
the surviving corporation. The Selling Stockholders and the other holders of
Interval shares or rights to acquire Interval shares received cash and/or shares
of USA common stock in exchange for their Interval shares or rights to acquire
Interval shares.
The USA common stock issued to the Selling Stockholders in connection with
the Interval acquisition, all of which is being offered under this prospectus,
were issued pursuant to an exemption from the registration requirements of the
Securities Act.
In connection with the agreement and plan of merger, we and the Selling
Stockholders entered into a registration rights agreement, pursuant to which we
granted registration rights relating to the USA common stock being offered under
this prospectus. Pursuant to that registration rights agreement, USA filed a
registration statement, of which this prospectus is a part, with respect to the
USA common stock subject to this prospectus on June 13, 2002. The registration
rights agreement is filed as an exhibit to that registration statement and
incorporated herein by reference.
As a result of USA's acquisition of Interval, W. Carl Drew, David C.
Gilbert, Jeanette E. Marbert, Paul W. Rishell and Craig M. Nash, each a Selling
Stockholder, have become employees of a subsidiary of USA. In connection with
USA's acquisition of Interval, Messrs. Drew, Gilbert and Nash and Ms. Marbert
have entered into a stock purchase and stockholders' agreement with USA and
Interval pursuant to which they have purchased shares of Interval. In the
ordinary course of business, USA and some of our subsidiaries may be parties to
various commercial arrangements with Marriott Ownership Resorts, Inc., Carlson
Companies, Inc. and the Northwestern Mutual Life Insurance Company, each a
Selling Stockholder, or parties to which they may be related, all of which
arrangements were negotiated on an arm's-length basis and none of which are
material to USA.
PLAN OF DISTRIBUTION
METHOD OF SALE
Subject to the restrictions contained in the agreement and plan of merger
and the registration rights agreement, the Selling Stockholders may sell the USA
common stock being offered under this prospectus directly to other purchasers,
or to or through broker-dealers or agents, in separate transactions or in a
single transaction. To the extent required, the number of shares of USA common
stock to be sold, purchase price, public offering price, the names of any such
agent or dealer and any applicable commission or discount with respect to a
particular offering will be set forth in an accompanying prospectus supplement.
6
Subject to the restrictions described in this prospectus, the shares of USA
common stock being offered under this prospectus may be sold from time to time
by the Selling Stockholders in any of the following ways:
- The USA common stock may be sold through a broker or brokers, acting as
principals or agents. Transactions through broker-dealers may include
block trades in which brokers or dealers will attempt to sell the USA
common stock as agent but may position and resell the block as principal
to facilitate the transaction. The USA common stock may be sold through
dealers or agents or to dealers acting as market makers. Broker-dealers
may receive compensation in the form of discounts, concessions, or
commissions from the Selling Stockholders and/or the purchasers of the USA
common stock for whom such broker-dealers may act as agents or to whom
they sell as principal, or both (which compensation as to a particular
broker-dealer might be in excess of customary commissions).
- The USA common stock may be sold on any national securities exchange or
quotation service on which the USA common stock may be listed or quoted at
the time of sale, in the over-the-counter market, or in transactions
otherwise than on such exchanges or services or in the over-the-counter
market.
- The USA common stock may be sold in private sales directly to purchasers.
The Selling Stockholders may enter into hedging transactions with
counterparties (including broker-dealers), and the counterparties may engage in
short sales of the USA common stock in the course of hedging the positions they
assume with the Selling Stockholders, including, without limitation, in
connection with distribution of the USA common stock by such counterparties.
Such counterparties may receive compensation in the form of underwriting
discounts, concessions or commissions from the Selling Stockholders or the
purchasers of the USA common stock for whom they may act as agents. In addition,
the Selling Stockholders may sell short the USA common stock, and in such
instances, this prospectus may be delivered in connection with such short sales
and the USA common stock offered hereby may be used to cover such short sales.
The Selling Stockholders may also enter into option or other transactions with
counterparties that involve the delivery of the USA common stock to the
counterparties, who may then resell or otherwise transfer such USA common stock.
The Selling Stockholders may also loan or pledge the USA common stock and
the borrower or pledgee may sell the USA common stock as loaned or upon a
default may sell or otherwise transfer the pledged USA common stock.
However, pursuant to the agreement and plan of merger, until 70% or more of
the shares of USA common stock issuable to the Selling Stockholders under the
agreement and plan of merger has been sold (and except for any transaction in
respect of any recognized market index), each of the Selling Stockholders is
required to consult with USA regarding any sale, pledge or hedging transaction
of the shares of USA common stock such Selling Stockholder plans on entering
into and inform USA of the financial terms of such proposed transaction, and if
USA provides an alternative third party who will provide a sale, pledge or
hedging transaction having substantially equivalent financial terms within one
business day of being informed by such Selling Stockholder of the proposed
transaction, then such Seller or Sellers shall execute such transaction through
the third party selected by USA. Except as provided herein, the Selling
Stockholders will act independently of USA in making decisions with respect to
the timing, manner and size of each sale.
The term "Selling Stockholders" includes permitted assignees of the Selling
Stockholders under the registration rights agreement. A permitted assignee is a
person who:
- has been transferred shares covered by this prospectus from a Selling
Stockholder with the prior written consent of the parties to the
registration rights agreement,
7
- is a member of a selling stockholder's "holder group", as defined in the
registration rights agreement, or
- is a "charity", as defined in the registration rights agreement,
provided such person, member or charity has agreed in writing with the Selling
Stockholders and USA to be bound by and comply with all the provisions of the
registration rights agreement, and provided, further, that USA has received a
written acknowledgement and agreement from such person, member or charity that
is in form and substance reasonably satisfactory to USA that such person, member
or charity agrees to be bound with respect to the transferred shares covered by
this prospectus to all the provisions of the registration rights agreement and
that such person, member or charity is bound by and a party to the registration
rights agreement. Persons who are members of a Selling Stockholder's holder
group include:
- the Selling Stockholder,
- a Selling Stockholder's spouse, parents, siblings and lineal descendants,
- a trust for the benefit of any of the foregoing,
- any individual, corporation, partnership, trust, other entity or group
(which term shall include a "group" as such term is defined in
Section 13(d)(3) of the Securities Exchange Act of 1934, as amended),
directly or indirectly controlling, controlled by or under common control
with such Selling Stockholder, members of such Selling Stockholder's
immediate family and lineal descendants or trusts for the benefit of any
of the foregoing, and
- upon the death of the Selling Stockholder, the Selling Stockholder's
estate, executors, administrators and personal representatives, and heirs,
legatees and distributees, except that a Selling Stockholder's parent or
parents shall only be considered to be a member of such Selling
Stockholder's "holder group", as defined in the registration rights
agreement, if the selling stockholder offers, sells, contracts to sell or
otherwise disposes of any shares of USA common stock covered by this
prospectus to such parent, and then, the parent shall only be considered a
member of such Selling Stockholder's holder group with respect to such
shares.
USA common stock covered by this prospectus which qualifies for sale
pursuant to Rule 144 of the Securities Act may be sold under Rule 144 rather
than pursuant to this prospectus.
The Selling Stockholders reserve the right to accept and, together with
their agents from time to time, to reject, in whole or in part, any proposed
purchase of USA common stock to be made directly or through agents.
In order to comply with securities laws in certain jurisdictions, the USA
common stock being offered under this prospectus will be offered or sold in such
jurisdictions only through registered or licensed brokers or dealers. In
addition, in certain jurisdictions the securities offered hereby may not be
offered or sold unless they have been registered or qualified for sale in such
jurisdictions or an exemption from registration or qualification is available
and is complied with.
8
VOLUME LIMITATION
Under the registration rights agreement entered into in connection with the
Interval acquisition, until the first anniversary of the Interval acquisition,
each of the Selling Stockholders to whom 50,000 or more shares of USA common
stock are issuable under the agreement and plan of merger has agreed that, after
70% or more of the USA common stock issuable to the Selling Stockholders under
the agreement and plan of merger has been sold and USA has notified the Selling
Stockholders of such fact, such Selling Stockholder will not transfer or sell,
during any trading day, an aggregate number of shares of USA common stock equal
to 10% or more of the USA common stock issuable to such Selling Stockholder
under the agreement and plan of merger.
TIMING AND PRICE
The shares of USA common stock being offered under this prospectus may be
sold from time to time by the Selling Stockholders. There is no assurance that
the Selling Stockholders will sell or dispose of any or all of their shares of
USA common stock.
Under the registration rights agreement entered into with the Selling
Stockholders, we are required to keep the registration statement of which this
prospectus is a part effective until the earlier of the date on which the
Selling Stockholders no longer hold the USA common stock or the first
anniversary of the closing of the Interval acquisition.
The Selling Stockholders will be subject to applicable provisions of the
Exchange Act and the rules and regulations thereunder, which provisions may
limit the timing of purchases and sales of USA common stock by them.
The USA common stock being offered under this prospectus may only be sold in
transactions that consist of trades executed at prevailing market prices
(excluding any discount or commission received by the brokers through which such
trade is effected) obtainable at the time of such transaction through brokers,
acting as principal or agent, in transactions on the Nasdaq National Market or
such other national securities exchange on which the shares of USA common stock
are then listed.
PROCEEDS, COMMISSIONS AND EXPENSES
The aggregate proceeds to the Selling Stockholders from the sale of the USA
common stock offered by them under this prospectus will be the purchase price of
such USA common stock less discounts, concessions and commissions, if any. USA
will not receive any proceeds from the sale of USA common stock by the Selling
Stockholders.
The Selling Stockholders will be responsible for payment of commissions,
concessions and discounts of dealers or agents. The Selling Stockholders will
pay for the fees and expenses of their counsel, as well as all applicable stock
transfer taxes, brokerage commissions, discounts or commissions. We will pay any
printing costs, SEC filing fees and other fees, disbursements and out-of-pocket
expenses and costs incurred by us in connection with the preparation of the
registration statement of which this prospectus is a part and in complying with
all applicable securities and blue sky laws.
The Selling Stockholders and any broker-dealers or agents that participate
with the Selling Stockholders in the distribution of the USA common stock may be
deemed to be "underwriters" within the meaning of the Securities Act, and any
commissions received by them and any profit on the resale of the USA common
stock may be deemed to be underwriting commissions or discounts under the
Securities Act.
Under the registration rights agreement described above, USA has agreed to
indemnify the Selling Stockholders against certain liabilities, including
certain liabilities arising under the Securities Act. The Selling Stockholders
may agree to indemnify any agent, dealer or broker-dealer that participates in
9
transactions involving sales of the USA common stock against certain
liabilities, including liabilities arising under the Securities Act.
NASDAQ LISTING STATUS
USA common stock is currently listed on the Nasdaq National Market under the
symbol "USAI."
DESCRIPTION OF USA COMMON STOCK
Set forth below is a description of the USA common stock being offered under
this prospectus. The following statements are brief summaries of, and are
subject to the provisions of, our restated certificate of incorporation, as
amended, our amended and restated by-laws, and the relevant provisions of the
General Corporation Law of the State of Delaware.
As of the date of this prospectus, our authorized capital stock consists of
1,600,000,000 shares of USA common stock, par value $0.01 per share, 400,000,000
shares of USA Class B common stock, par value $0.01 per share, and 100,000,000
shares of preferred stock, par value $0.01 per share. As of May 31, 2002, there
were 351,924,103 shares of USA common stock outstanding, 63,033,452 shares of
USA Class B common stock outstanding and 13,120,533 shares of USA preferred
stock outstanding.
With respect to matters that may be submitted to a vote or for the consent
of our stockholders generally, including the election of directors, each holder
of USA common stock, USA Class B common stock and USA preferred stock will vote
together as a single class. In connection with any such vote, each holder of USA
common stock is entitled to one vote for each share of USA common stock held,
each holder of USA Class B common stock is entitled to ten votes for each share
of USA Class B common stock held and each holder of USA preferred stock is
entitled to two votes for each share of USA preferred stock held.
Notwithstanding the foregoing, the holders of USA common stock, acting as a
single class, are entitled to elect 25% of the total number of our directors,
and, in the event that 25% of the total number of directors shall result in a
fraction of a director, then the holders of USA common stock, acting as a single
class, are entitled to elect the next higher whole number of directors. In
addition, Delaware law requires that certain matters be approved by the holders
of USA common stock voting as a separate class.
Shares of USA Class B common stock are convertible into shares of USA common
stock at the option of the holder thereof, at any time, on a share-for-share
basis. Such conversion ratio will in all events be equitably preserved in the
event of any recapitalization of USA by means of a stock dividend on, or a stock
split or combination of, outstanding USA common stock or USA Class B common
stock, or in the event of any merger, consolidation or other reorganization of
USA with another corporation. Upon the conversion of USA Class B common stock
into shares of USA common stock, those shares of USA Class B common stock will
be retired and will not be subject to reissue. Shares of USA common stock are
not convertible into shares of USA Class B common stock.
In all other respects, the USA common stock and the USA Class B common stock
are identical. The holders of USA common stock and the holders of USA Class B
common stock are entitled to receive, share for share, such dividends as may be
declared by our board of directors out of funds legally available therefor. In
the event of a liquidation, dissolution, distribution of assets or winding-up of
USA, the holders of USA common stock and the holders of USA Class B common stock
are entitled to share ratably in all assets of USA available for distribution to
our stockholders, after the rights of the holders of the USA preferred stock,
have been satisfied.
In connection with our acquisition of USA Network and Studios USA in 1998,
we granted to Liberty preemptive rights to acquire shares of USA stock. These
preemptive rights, which were amended in connection with the VUE transaction,
generally provide that Liberty may elect to purchase a number of shares of USA
stock so that the percentage equity interest Liberty owned of us
10
immediately after a transaction would be the same as immediately before such
transaction, in each case, assuming the exchange of all shares of Home Shopping
Network owned by a subsidiary of Liberty. The purchase price for shares of USA
stock pursuant to a preemptive right election is the fair market value of the
USA stock purchased.
Our certificate of incorporation provides that there can be no stock
dividends or stock splits or combinations of stock declared or made on USA
common stock or USA Class B common stock unless the shares of USA common stock
and USA Class B common stock then outstanding are treated equally and
identically.
In connection with the acquisition of a controlling interest in
Expedia, Inc., USA issued an aggregate of approximately 13,125,000 shares of its
preferred stock, par value $0.01 per share, "Series A Cumulative Convertible
Preferred Stock," each having a $50.00 face value and a term of 20 years, which
we refer to in this prospectus as USA preferred stock. Each share of USA
preferred stock is convertible, at the option of the holder at any time, into
that number of shares of USA common stock equal to the quotient obtained by
dividing $50 by the conversion price per share of USA common stock (as defined
in the certificate of designation for the USA preferred stock). In the event of
a voluntary or involuntary liquidation, dissolution or winding up of USA,
holders of USA preferred stock shall be entitled to receive, in preference to
any holder of USA common shares, an amount per share equal to all accrued and
unpaid dividends plus the greater of (a) face value, or (b) the liquidating
distribution that would be received had such holder converted the USA preferred
stock into USA common stock immediately prior to the liquidation, dissolution or
winding up of USA.
The arrangements described in this prospectus in the section "RISK FACTORS",
and more fully described in the documents identified under the caption "WHERE
YOU CAN FIND MORE INFORMATION", may have the effect of delaying, deferring or
preventing a change in control of USA.
The transfer agent for the shares of USA common stock and USA preferred
stock is The Bank of New York.
The shares of USA common stock being offered under this prospectus have been
legally issued, are fully paid and are non-assessable.
CERTAIN MATERIAL UNITED STATES
FEDERAL TAX CONSEQUENCES
GENERAL
The following is a general discussion of certain material United States
federal income and estate tax consequences of the ownership and disposition of
USA common stock.
As used herein, a "United States person" is
- a citizen or resident of the United States;
- a corporation created or organized in the United States or under the laws
of the United States or of any state;
- an estate the income of which is includible in gross income for United
States federal income taxation regardless of its source;
- a trust if a court in the United States is able to exercise primary
supervision over the administration of the trust and one or more United
States persons have the authority to control all substantial decisions of
the trust; or
- any person otherwise subject to United States federal income tax on a net
income basis in respect of its worldwide taxable income.
11
A "U.S. Holder" is a beneficial owner of USA common stock who is a United
States person. A "Non-U.S. Holder" is a beneficial owner that is not a U.S.
Holder. If a partnership (including for this purpose any entity treated as a
partnership for United States federal tax purposes) is a beneficial owner of USA
common stock, the treatment of a partner in the partnership will generally
depend upon the status of the partner and upon the activities of the
partnership. Partnership and partners in such partnership should consult their
tax advisors about the United States federal income tax consequences of owning
and disposing of USA common stock.
This discussion is based on current law, which is subject to change,
possibly with retroactive effect, or different interpretations. This discussion
is limited to holders who hold USA common stock as capital assets. Moreover,
this discussion is for general information only and does not address all the tax
consequences that may be relevant in light of your particular circumstances, nor
does it discuss special tax provisions which may apply if you have relinquished
United States citizenship or residence.
EACH PROSPECTIVE PURCHASER IS ADVISED TO CONSULT A TAX ADVISOR WITH RESPECT
TO CURRENT AND POSSIBLE FUTURE TAX CONSEQUENCES OF PURCHASING, OWNING AND
DISPOSING OF OUR COMMON STOCK, AS WELL AS ANY TAX CONSEQUENCES THAT MAY ARISE
UNDER STATE, LOCAL, FOREIGN OR OTHER TAX LAWS.
TAXATION OF U.S. HOLDERS
This section describes the tax consequences to a U.S. Holder. If you are not
a U.S. Holder, this section does not apply to you.
DISTRIBUTIONS. The amount of any distribution USA makes in respect of its
common stock will be equal to the amount of cash and the fair market value, on
the date of distribution, of any property distributed. In general, distributions
on USA common stock will constitute dividend income, taxable at ordinary income
rates, to the extent of USA's current or accumulated earnings and profits. Any
excess will be treated as non-taxable return of capital to the extent of the
holder's basis in the common stock, and thereafter as capital gain.
SALES OR EXCHANGES. On the sale, exchange or other disposition of shares of
USA common stock (other than a redemption of the common stock, discussed below),
holders will generally recognize capital gain or loss equal to the difference
between the amount of cash and the fair market value of any property received
upon the sale, exchange or other disposition and the adjusted tax basis in the
stock sold, exchanged or disposed of. This gain or loss will be long-term
capital gain or loss if at the time of the sale, exchange or disposition the
holder has held the stock sold, exchanged or disposed of for more than one year.
The deductibility of capital losses is subject to limitations.
DIVIDENDS TO CORPORATE SHAREHOLDERS. In general, a distribution on the USA
common stock that is taxable as a dividend and that is made to a corporate
shareholder will qualify for the 70% corporate dividends-received deduction
under the Internal Revenue Code. However, a dividend that arises upon a
redemption of common stock will generally constitute an "extraordinary dividend"
under Section 1059 of the Internal Revenue Code. In addition, constructive
dividends received on common stock within two years of the holder's acquisition
of the stock may also constitute "extraordinary dividends." If the extraordinary
dividend rules apply, the corporate shareholder may lose some or all of the
benefits of the dividends-received deduction. Furthermore, there are many
exceptions and restrictions relating to the availability of the
dividends-received deduction. Consequently, corporate shareholders should
consult their own tax advisors regarding the extent, if any, that the
dividends-received deduction is available to them and the extent to which the
extraordinary dividend rules may apply.
12
REDEMPTION OF USA COMMON STOCK. A redemption of USA common stock generally
would be a taxable event and would be treated as if the holder sold the common
stock if the redemption:
- results in a "complete termination" of the holder's interest in USA stock;
- is "substantially disproportionate" (i.e., after the redemption, the
percentage of all our outstanding voting stock that is owned by the holder
is less than 80% of the percentage of all our outstanding voting stock
(and the percentage of all our outstanding common stock that is owned by
the holder is less than 80% of the percentage of all our outstanding
common stock) that was owned by the holder immediately before the
redemption); or
- is "not essentially equivalent to a dividend" (i.e., the redemption must
meaningfully reduce the holder's proportionate interest in USA based on
the holder's particular circumstance; the Internal Revenue Service (the
"IRS") has indicated that this test is satisfied by even a small reduction
in the percentage interest of a shareholder whose relative stock interest
in a publicly held corporation is minimal and who exercises no control
over corporate affairs).
In determining whether any of these tests has been met, holders must take
into account the shares of stock actually owned and the shares of stock
constructively owned by reason of certain constructive ownership rules set forth
in Section 318 of the Internal Revenue Code.
If stock is redeemed in a redemption that meets one of the tests described
above, the holder generally would recognize taxable gain or loss equal to the
difference between the amount of cash and the fair market value of property
received and the holder's tax basis in the stock redeemed. This gain or loss
would be long-term capital gain or capital loss if the stock were held for more
than one year.
If a redemption does not meet any of the tests described above, the entire
amount of the cash and the fair market value of property received generally
would be taxed as a dividend as explained above under "Distributions." If a
redemption is treated as a distribution that is taxable as a dividend, the
holder's basis in the redeemed stock would generally be transferred to the
holder's remaining shares of stock, if any.
INFORMATION REPORTING AND BACKUP WITHHOLDING. Information reporting will
generally apply to dividends received on USA common stock and to the proceeds
received on the sale or disposition of such stock by a U.S. Holder who is not an
exempt recipient. Generally, individuals are not exempt recipients, whereas
corporations are exempt recipients. Backup withholding will apply only if the
U.S. Holder is not an exempt recipient and:
- fails to furnish its Taxpayer Identification Number ("TIN") which, in the
case of an individual, is his or her Social Security Number;
- furnishes an incorrect TIN;
- in the case of dividends, is notified by the IRS that it has failed to
properly report payments of interest or dividends; or
- fails to certify, under penalty of perjury, that it has furnished a
correct TIN, has not been notified by the IRS that it is subject to backup
withholding (or has since been notified by the IRS that it is no longer
subject to backup withholding) and is a U.S. person (including a U.S.
resident alien).
U.S. Holders should consult their tax advisors regarding their qualification
for exemption from backup withholding and the procedure for demonstrating such
an exemption if applicable.
The amount of any backup withholding from a payment to a U.S. Holder is not
an additional tax and is allowable as a credit against the U.S. Holder's United
States federal income tax liability, if any, or may be claimed as a refund,
provided that the required information is furnished to the IRS.
13
TAXATION OF NON-U.S. HOLDERS
This section describes the tax consequences to a Non-U.S. Holder. If you are
a U.S. Holder, see the above discussion under "--Taxation of U.S. Holders."
DIVIDENDS. If dividends are paid, Non-U.S. Holders will be subject to
withholding of United States federal income tax at a 30% rate or a lower rate as
may be specified by an applicable income tax treaty. To claim the benefit of a
lower rate under an income tax treaty, Non-U.S. Holders must properly file with
the payor an IRS Form W-8BEN, or successor form, claiming an exemption from or
reduction in withholding under the applicable tax treaty. In addition, where
dividends are paid or deemed paid to a Non-U.S. Holder that is a partnership or
other pass through entity, persons holding an interest in the entity may need to
provide certification claiming an exemption or reduction in withholding under
the applicable treaty.
If actual or deemed dividends are considered effectively connected with the
conduct of a trade or business within the United States and, where a tax treaty
applies, are attributable to United States permanent establishment, those
dividends will not be subject to withholding tax, but instead will be subject to
United States federal income tax on a net basis at applicable graduated
individual or corporate rates, provided an IRS Form W-8ECI, or successor form,
is filed with the payor. In the case of a foreign corporation, any effectively
connected dividends may, under certain circumstances, be subject to an
additional "branch profits tax" at a rate of 30% or a lower rate as may be
specified by an applicable income tax treaty.
Non-U.S. Holders must comply with the certification procedures described
above, or, in the case of payments made outside the United States with respect
to an offshore account, certain documentary evidence procedures, directly or
under certain circumstances through an intermediary, to obtain the benefits of a
reduced rate under an income tax treaty with respect to dividends paid or deemed
paid with respect to USA common stock. In addition, if a Non-U.S. Holder is
required to provide an IRS Form W-8ECI or successor form, as discussed above,
the Non-U.S. Holder must also provide its tax identification number.
Non-U.S. Holders that are eligible for a reduced rate of United States
withholding tax pursuant to an income tax treaty may obtain a refund of any
excess amounts withheld by filing an appropriate claim for refund with the IRS.
GAIN ON DISPOSITION OF USA COMMON STOCK. Non-U.S. Holders generally will
not be subject to United States federal income tax on any gain realized on the
sale or other disposition of USA common stock unless:
- the gain is considered effectively connected with the conduct of a trade
or business within the United States and, where a tax treaty applies, is
attributable to a United States permanent establishment (and, in which
case, if the holder is a foreign corporation, may be subject to an
additional "branch profits tax" equal to 30% or a lower rate as may be
specified by an applicable income tax treaty);
- the holder is an individual who holds the USA common stock as a capital
asset and is present in the United States for 183 or more days in the
taxable year of the sale or other disposition and other conditions are
met; or
- we are or have been a "United States real property holding corporation,"
or a USRPHC, for United States federal income tax purposes. We believe
that we are not currently, and are not likely to become, a USRPHC. If we
were to become a USRPHC, then gain on the sale or other disposition of USA
common stock generally would not be subject to United States federal
income tax provided:
- USA common stock were "regularly traded" on an established securities
market; and
14
- the holder did not actually or constructively own more than 5% of the
USA common stock during the shorter of the five-year period preceding
the disposition or the holder's holding period.
FEDERAL ESTATE TAX. In the case of an individual, USA common stock held at
the time of death will be included in the individual's gross estate for United
States federal estate tax purposes, and may be subject to United States federal
estate tax, unless an applicable estate tax treaty provides otherwise.
INFORMATION REPORTING AND BACKUP WITHHOLDING. We must report annually to
the IRS and to each holder the amount of dividends paid or deemed paid and the
tax withheld with respect to those dividends, regardless of whether withholding
was required. Copies of the information returns reporting those dividends and
withholding may also be made available to the tax authorities in the country in
which a Non-U.S. Holder resides under the provisions of an applicable income tax
treaty or other applicable agreements.
Backup withholding is generally imposed on certain payments to persons that
fail to furnish the necessary identifying information to the payor. Generally
Non-U.S. Holders will be subject to back-up withholding tax with respect to
dividends paid on USA common stock unless they certify their status as Non-U.S.
Holders.
The payment of proceeds of a sale of USA common stock effected by or through
a United States office of a broker will be subject to both backup withholding
and information reporting unless the holder provides the payor with the holder's
name and address and certifies its Non-U.S. Holder status or otherwise
establishes an exemption. In general, backup withholding and information
reporting will not apply to the payment of the proceeds of a sale of USA common
stock by or through a foreign office of a broker. If, however, such broker is,
for United States federal income tax purposes, a United States person, a
controlled foreign corporation, a foreign person that derives 50% or more of its
gross income for certain periods from the conduct of a trade or business in the
United States, or, a foreign partnership that at any time during its tax year
either is engaged in the conduct of a trade or business in the United States or
has as partners one or more United States persons that, in the aggregate, hold
more than 50% of the income or capital interest in the partnership, such
payments will be subject to information reporting, but not backup withholding,
unless such broker has documentary evidence in its records that the holder is a
Non-U.S. Holder and certain other conditions are met or the holder otherwise
establishes an exemption.
Any amounts withheld under the backup withholding rules generally will be
allowed as a refund or a credit against the holder's United States federal
income tax liability provided the required information is furnished in a timely
manner to the IRS.
LEGAL MATTERS
The validity of the USA common stock offered by this prospectus is being
passed upon for us by Covington & Burling, New York, New York.
EXPERTS
Ernst & Young LLP, independent auditors, have audited the consolidated
financial statements and financial statement schedule of USA as set forth in
their report, included in USA Networks, Inc.'s (renamed USA Interactive) Annual
Report on Form 10-K for the year ended December 31, 2001, which is incorporated
by reference in this prospectus. USA's consolidated financial statements and
financial statement schedule are incorporated by reference in reliance on
Ernst & Young LLP's report, given on their authority as experts in accounting
and auditing.
15
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the various costs and expenses payable by the
Registrant in connection with the sale of USA common stock being registered,
other than broker-dealer discounts and commissions which are payable by the
Selling Stockholders. All amounts are estimates except the SEC registration fee.
ITEM AMOUNT
---- ----------
SEC Registration Fee........................................ $ 26,588
Printing Fees and Expenses.................................. $ 10,000
Legal Fees and Expenses..................................... $ 20,000
Accounting Fees and Expenses................................ $ 10,000
Miscellaneous............................................... $ 5,000
Total..................................................... $ 71,588
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Registrant's Restated Certificate of Incorporation limits, to the
maximum extent permitted by Delaware law, the personal liability of directors
for monetary damages for breach of their fiduciary duties as a director. The
Registrant's Amended and Restated By-Laws provide that the directors and
officers (and legal representatives of such directors and officers) will be
indemnified to the fullest extent authorized by the Delaware General Corporation
Law with respect to third-party actions, suits, investigations or proceedings
provided that any such person has met the applicable standard of conduct set
forth in the Delaware General Corporation Law described below. The Registrant's
Amended and Restated By-Laws further provide that directors and officers (and
legal representatives of such directors and officers) will be indemnified with
respect to actions or suits initiated by such person only if such action was
first approved by the board of directors. The Registrant's Amended and Restated
By-Laws allow the Registrant to pay all expenses incurred by a director or
officer (or legal representatives of such directors or officers) in defending
any proceeding in which the scope of the indemnification provisions as such
expenses are incurred in advance of its final disposition, upon an undertaking
by such party to repay such expenses, if it is ultimately determined that such
party was not entitled to indemnity by the Registrant. From time to time,
officers and directors may be provided with indemnification agreements that are
consistent with the foregoing provisions. The Registrant believes that these
agreements and arrangements are necessary to attract and retain qualified
persons as directors and officers.
Section 145 of the Delaware General Corporation Law provides that a
corporation may indemnify a director, officer, employee or agent who was or is a
party, or is threatened to be made a party to any action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason of the fact
that he was a director, officer, employee or agent of the corporation or was
serving at the request of the corporation against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action if he acted in good faith and in
a manner he reasonably believed to be in, or not opposed to, the best interests
of the corporation and, with respect to any criminal action or proceeding, had
no reasonable cause to believe his conduct was unlawful.
ITEM 16. EXHIBITS
The following exhibits are filed as part of this registration statement:
EXHIBIT NO. DESCRIPTION
----------- -----------
4.1 Registration Rights Agreement, dated as of May 30, 2002, by
and among the Registrant and the Selling Stockholders (as
defined in the accompanying prospectus).
5.1 Opinion of Covington & Burling, regarding the legality of
the USA common stock being registered.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Covington & Burling (included in Exhibit 5.1).
24 Power of Attorney (set forth on the signature page of this
registration statement).
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement to include any
material information with respect to the plan of distribution not previously
disclosed in this registration statement or any material change to such
information in this registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the Securities being registered which remain unsold at the
termination of the offering.
(4) That, for purposes of determining any liability under the Securities
Act, each filing of the Registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Exchange Act (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Exchange Act) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York, State of New York, on June 13, 2002.
USA INTERACTIVE
By: /s/ BARRY DILLER
-----------------------------------------
Barry Diller
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
POWER OF ATTORNEY
We, the undersigned officers and directors of USA Interactive, hereby
severally and individually constitute and appoint Dara Khosrowshahi, Julius
Genachowski and William Severance, and each of them severally, the true and
lawful attorneys and agents of each of us to execute in the name, place and
stead of each of us (individually and in any capacity stated below) any and all
amendments (including post-effective amendments) to this registration statement
on Form S-3 and any subsequent registration statement filed by the Registrant
pursuant to Rule 462(b) of the Securities Act of 1933 which relates to this
registration statement, and all instruments necessary or advisable in connection
therewith and to file the same with the Securities and Exchange Commission, each
of said attorneys and agents to have the power to act with or without the others
and to have full power and authority to do and perform in the name and on behalf
of each of the undersigned every act whatsoever necessary or advisable to be
done in the premises as fully and to all intents and purposes as any of the
undersigned might or could do in person, and we hereby ratify and confirm our
signatures as they may be signed by our said attorneys and agents or each of
them to any and all such amendments and instruments.
* * * * *
Pursuant to the requirements of the Securities Act, this registration
statement has been signed below by the following persons in the capacities
indicated as of June 13, 2002.
SIGNATURE TITLE
--------- -----
/s/ BARRY DILLER
------------------------------------------- Chairman of the Board, Chief Executive Officer
Barry Diller and Director Barry Diller
/s/ VICTOR A. KAUFMAN
------------------------------------------- Vice Chairman and Director
Victor A. Kaufman
/s/ WILLIAM J. SEVERANCE
------------------------------------------- Vice President and Controller (Chief
William J. Severance Accounting Officer)
/s/ DARA KHOSROWSHAHI
------------------------------------------- Executive Vice President and Chief Financial
Dara Khosrowshahi Officer
SIGNATURE TITLE
--------- -----
/s/ ROBERT R. BENNETT
------------------------------------------- Director
Robert R. Bennett
/s/ EDGAR BRONFMAN, JR.
------------------------------------------- Director
Edgar Bronfman, Jr.
/s/ ANNE M. BUSQUET
------------------------------------------- Director
Anne M. Busquet
/s/ PHILIPPE GERMOND
------------------------------------------- Director
Philippe Germond
/s/ DONALD R. KEOUGH
------------------------------------------- Director
Donald R. Keough
/s/ MARIE-JOSEE KRAVIS
------------------------------------------- Director
Marie-Josee Kravis
/s/ JOHN C. MALONE
------------------------------------------- Director
John C. Malone
/s/ JEAN-MARIE MESSIER
------------------------------------------- Director
Jean-Marie Messier
/s/ GEN. H. NORMAN SCHWARZKOPF
------------------------------------------- Director
Gen. H. Norman Schwarzkopf
/s/ DIANE VON FURSTENBERG
------------------------------------------- Director
Diane Von Furstenberg
INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION
----------- -----------
4.1 Registration Rights Agreement, dated as of May 30, 2002, by
and among the Registrant and the Selling Stockholders (as
defined in the accompanying prospectus).
5.1 Opinion of Covington & Burling, regarding the legality of
the USA common stock being registered.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Covington & Burling (included in Exhibit 5.1).
24 Power of Attorney (set forth on the signature page of this
registration statement).