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SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
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[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[X] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
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BELLSOUTH CORPORATION
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials:
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[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(4) Date Filed:
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Dear BellSouth Team Member:
Today, BellSouth has filed a preliminary proxy statement and a registration
statement with the Securities and Exchange Commission (SEC) relating to our
plans to create a tracking stock to reflect the performance of our Latin
American business, which we refer to as the Latin America Group. This is an
important step in our on-going efforts to grow our businesses. A copy of the
press release is attached.
The proxy statement is in anticipation of a special shareholders meeting that
is expected to occur this summer. This proxy statement contains details about
the terms of the proposed tracking stock, BellSouth's Latin American business
and the expected benefits of the tracking stock structure.
After the SEC's clearance, we will print and mail the proxy statement to
shareholders. In this mailing, we will ask our shareholders to approve the
charter amendment that will permit us to create the Latin America Group stock.
Once we receive shareholder approval, we plan to sell shares of this stock to
the public in an initial public offering (IPO). Our current intent is to
distribute additional shares of that stock to our shareholders as a stock
dividend within six to 12 months following the IPO, subject of course to many
factors.
So what does all this mean? I realize that as both employees and shareholders
you may have many questions about this decision - how it impacts our business
and how it will impact the shares of stock you own. Below, we have put together
some basic questions and answers to hopefully address your questions. In the
meantime, I encourage you to review the preliminary proxy statement that you
can access at www.bellsouth.com/investor.
As you may be aware, the SEC process limits communications during this period,
but we will do our best to keep you informed as the timeline progresses. Again,
this is an important announcement for our business, and I look forward to being
able to share more information with you in the months ahead.
Duane Ackerman
QUESTIONS AND ANSWERS ABOUT THE TRACKING STOCK PROPOSAL
Q. WHAT IS A TRACKING STOCK AND WHAT IS IT SUPPOSED TO DO?
A. A tracking stock is a separate class or series of a company's common stock
that is designed to reflect the separate performance of a group of assets or
specific business units, divisions, subsidiaries or equity investments of the
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company. Companies like US West and Sprint have issued tracking stock and
AT&T plans to do so.
Q. WHAT ARE THE TRACKING STOCKS THAT BELLSOUTH IS PROPOSING?
A. "Latin America Group stock" will be a separate series of BellSouth common
stock intended to reflect the separate performance of the Latin America
Group, consisting of our Latin American businesses.
"BLS Group stock" will be a separate series of BellSouth common stock
intended to reflect the separate performance of the BLS Group, consisting
of all of our other businesses.
Q. WHAT WILL YOU BE DOING IN THE IPO?
A. We are planning to raise cash in an initial public offering (IPO) of new
shares of the Latin America Group stock soon after we receive approval from
our shareholders.
Q. WHAT WILL HAPPEN TO THE BELLSOUTH COMMON STOCK I CURRENTLY OWN?
A. It will automatically become BLS Group stock after the IPO.
Q. HOW WILL MY ECONOMIC INTEREST IN BELLSOUTH BE AFFECTED IF THE TRACKING
STOCK PROPOSAL IS APPROVED?
A. Upon the completion of the IPO, the BellSouth common stock will be
automatically changed to BLS Group stock. Anyone who holds shares of the
BellSouth common stock will then hold shares of BLS Group stock, which will
represent -- BellSouth's interests in all its other businesses, the Latin
America Group stock not sold in the IPO and the proceeds from the new
shares of the Latin America Group stock sold in the IPO. In other words,
with the conversion, shareholders interest in BellSouth will not be changed
in substance.
The holders of BLS Group stock and the holders of Latin America Group stock
will continue to be shareholders of BellSouth and, as such will be subject
to the benefits and risks associated with an investment in BellSouth and
all of its businesses, assets and liabilities.
Q. WILL I LOSE MY INTEREST IN BELLSOUTH'S LATIN AMERICA GROUP BUSINESSES?
A. No -- we are planning to distribute to our stockholders, within six to 12
months after the IPO, shares of the Latin America Group stock as a stock
dividend. Until that time, you will continue to have an interest in the
Latin
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American businesses through your current stock ownership. After the
distribution, your interest in all of BellSouth's businesses will be
represented through your ownership of our Latin America Group stock and
BLS Group stock.
Q. WHAT HAPPENS TO THE BELLSOUTH STOCK WITHIN MY EMPLOYEE BENEFIT PLANS?
A. There will be no changes to existing employee benefit plans that include
BellSouth common stock. At the IPO, all existing granted, purchased or
deferred shares of BellSouth common stock will be automatically changed into
BLS Group stock. In addition, future shares purchased through or distributed
within the existing benefit plans will be BLS Group stock.
After the planned distribution, each holder of BLS Group shares will
receive shares of Latin American Group stock based on their number of
shares of BLS Group stock. At that time, the employee benefit plans will be
revised to reflect BellSouth's tracking stock structure. Specific changes
and how they will be implemented have not been determined.
Q. WILL THE LATIN AMERICA GROUP STOCK BECOME PART OF MY BENEFIT PLANS THAT
CURRENTLY INCLUDE BELLSOUTH COMMON STOCK?
A. After the planned stock distribution, you will receive an interest in the
Latin America Group stock as a result of a stock dividend on the BLS Group
stock in your plans.
Q. WILL I BE ABLE TO ELECT TO HAVE MY BENEFIT PLAN DIRECTIONS SWITCHED FROM BLS
GROUP STOCK TO LATIN AMERICA GROUP STOCK?
A. Our stock-based benefit plans will be modified so that, going forward, they
will reflect our new tracking stock structure. We have not finalized those
plans.
Q. HAS BELLSOUTH DETERMINED WHO WILL LEAD THE LATIN AMERICA GROUP IF THE
PROPOSAL IS APPROVED?
A. The leadership team that will be proposed to the board includes Charles
"Buddy" Miller, president; Mark Droege, chief financial officer; Roberto
Peon, president -- Brazil; Mauricio Wior, president, Latin America -- South;
Dan Smith, executive vice president, Latin America -- North and J. Alberto
Gonzalez-Pita, vice president and general counsel.
A registration statement relating to these securities has been filed with the
Securities and Exchange Commission but has not yet become effective. These
securities may not be sold nor may offers to buy be accepted prior to the time
the registration statement becomes effective. This communication shall not
constitute an offer to sell or the solicitation of an offer to buy these
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securities, nor shall there be any sale of these securities in any state in
which such offer, solicitation or sale would be unlawful prior to registration
or qualification under the securities laws of any such state.
Shareholders should carefully review the definitive proxy statement when it is
available because it will contain important information. Shareholders can view
the proxy statement for free at the SEC's Internet Web site at
http://www.sec.gov. Shareholders will receive for free the definitive proxy
statement in connection with the solicitation of proxies for the special
meeting.
