WASHINGTON -(Dow Jones)- An
Excite At Home Corp. (ATHM)
shareholder filed a class-action
lawsuit against Excite@Home and its
directors, AT&T Corp. (T), Comcast
Corp. (CMCSA) and Cox
Communications Inc. (COX),
according to a Form 8-K filed Friday
with the Securities and Exchange
Commission.
The lawsuit, filed May 26 in the San Mateo County Superior Court, alleges the defendants breached fiduciary duties to Excite@Home stockholders by entering into an agreement providing for the extension of Excite@Home's distribution relationships with AT&T, Comcast and Cox.
The plaintiffs seek a court order nullifying the letter agreement, money damages and a court order establishing a stockholder committee comprised of unidentified class members to provide input regarding transactions relating to the letter agreement.
Excite@Home said in the filing it believes this action is without merit and intends to "defend against this action vigorously." However, if the plaintiffs prevail, the company might not be able to proceed with the transactions proposed by the letter agreement, which could "seriously" harm its business, according to the filing.
On March 28, the companies entered into an agreement that extended its distribution agreements with AT&T through 2008, and with Comcast and Cox through 2006. In addition, Cox and Comcast will give up certain veto rights they have at the Excite@Home board level, and their representatives will resign from the board. AT&T will have the right to elect a majority of the board members and Excite@Home will amend its charter to allow board action by simple majority.
Also under the agreement, AT&T will give Comcast and Cox the right to sell their Excite@Home shares to AT&T for a minimum price of $48 a share between Jan. 1, 2001 and June 4, 2002. Comcast and Cox each own about 30 million Class A Excite shares.
AT&T will have the right to purchase up to 25 million Excite Series A shares and 25 million Excite Series B shares. As a result, AT&T will have a 25% interest in Excite and 74% of the voting interest, compared with the 25% economic interest and 56% voting interest it now has.
Excite@Home also said in the filing that it has received notice from Cablevision Systems Corp. (CVC) stating that the letter agreement violates the terms of Excite@Home's agreements with Cablevision and that Cablevision's consent is required before the transactions can be completed.
Cablevision proposed that it be added to the agreement under the same terms as were granted to Comcast and Cox, or that Excite@Home negotiate a termination of the relationship between Excite@Home and Cablevision.
Excite@Home said it disagrees with Cablevision's assertion. The company also said it doesn't know if it will continue to be a partner of Cablevision under its existing agreements. |
