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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Form 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report: June 10, 1996
PACIFIC TELESIS GROUP
A Nevada Commission File I.R.S. Employer
Corporation No. 1-8609 No. 94-2919931
130 Kearny Street, San Francisco, California 94108
Telephone Number (415) 394-3000
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Form 8-K Pacific Telesis Group
June 10, 1996
Item 5. Other Events
- ---------------------
The California Public Utilities Commission ("CPUC") authorized facilities-
based local services competition effective January 1996, and resale
competition effective March 1996. In March 1996 the CPUC adopted a decision
specifying terms and conditions for resale competition. Pending the
completion of cost studies, the decision sets interim wholesale prices for
basic residential services at 10 percent below retail prices and sets interim
wholesale prices for certain other services at 17 percent below retail prices.
Both retail and wholesale prices of basic residential services are below the
Company s cost and are subsidized by other services.
Item 7. Financial Statements and Exhibits
- -------------------------------------------
(c) Exhibits:
The exhibits listed below relate to Registration Statement No. 33-63647
on Form S-3 of the registrant and certain co-registrants and is filed
herewith for incorporation by reference in such Registration Statement.
Exhibit
Number Description
------- -----------
4-E-3 Form of First Amendment to Amended and Restated
Declaration of Trust.
4-H-2 Form of First Amendment to Supplemental Indenture to
Indenture.
4-K-2 Form of First Amendment to Preferred Securities Guarantee
Agreement.
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Form 8-K Pacific Telesis Group
June 10, 1996
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Pacific Telesis Group
June 10, 1996 By: /s/R. W. Odgers
-------------------------
R. W. Odgers
Executive Vice President, General Counsel
& Secretary
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EXHIBIT INDEX
The exhibits listed below relate to Registration Statement No. 33-63647 on
Form S-3 of the registrant and certain co-registrants and is filed herewith
for incorporation by reference in such Registration Statement.
Exhibit
Number Description
------- -----------
4-E-3 Form of First Amendment to Amended and Restated Declaration
of Trust.
4-H-2 Form of First Amendment to Supplemental Indenture to
Indenture.
4-K-2 Form of First Amendment to Preferred Securities Guarantee
Agreement.
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EXHIBIT 4-E.3
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FIRST AMENDMENT
TO
AMENDED AND RESTATED DECLARATION OF TRUST
THIS FIRST AMENDMENT TO AMENDED AND RESTATED DECLARATION OF TRUST
("Amendment") is made and entered as of the ____ day of ___________, 1996, by
and among ROOMY F. BALAPORIA, MILES H. MOCHIZUKI and MARIE B. WASHINTGON, as
trustees, MICHAEL J. MAJCHRZAK, as Delaware trustee, PACIFIC TELESIS GROUP, a
Nevada corporation, as sponsor, and THE FIRST NATIONAL BANK OF CHICAGO, as
property trustee.
WHEREAS, the parties executing this Amendment (the "Parties") have
entered into a Amendment and Restated Declaration of Trust as of _______, 1996
(the "Declaration");
WHEREAS, the Parties wish to amend the Declaration in the manner set
forth in this Amendment.
NOW, THEREFORE, for good and valuable consideration, the Parties agree as
follows:
1. AMENDMENT OF DECLARATION
1.1 Section 1.1 of the Declaration is hereby amended to delete the
definition of "Ministerial Action."
1.2 Section 3.6(d) of the Declaration is hereby amended to read in
its entirety as follows:
"(d) to give the Sponsor and the Property Trustee prompt
written notice of the occurrence of a Special Event;"
1.3 Section 3.6(m) of the Declaration is hereby amended to read in
its entirety as follows:
"(m) to give prompt written notice to the Holders of the
Securities of any notice received from the Subordinated Debenture
Issuer of its election (i) to defer payments of interest on the
Subordinated Debentures by extending the interest payment period
under the Indenture or, (ii) to shorten or extend the maturity date
on the Subordinated Debentures;"
1.4 Section 3.8(c)(iii) of the Declaration is hereby amended to
read in its entirety as follows:
"(iii) upon notice of distribution issued by the Regular
Trustees in accordance with the terms of the Securities, engage in
such ministerial activities as shall be necessary or appropriate to
effect the distribution of the Subordinated Debentures to Holders of
Securities upon the Sponsor's election to dissolve the Trust in
accordance with Section 8.1(a)(v)."
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1.5 The last sentence in Section 4.4 of the Declaration is hereby
amended to read in its entirety as follows:
"Notwithstanding any provision in this Declaration, any such Holder
may enforce the Sponsor's obligations under Section 1001 of the
Indenture directly against the Sponsor and the Sponsor irrevocably
waives any right or remedy to require that any such Holder take any
action against the Trust or any other Person before proceeding
against the Sponsor. "
1.6 Section 8.1(a)(v) of the Declaration is hereby amended to read
in its entirety as follows:
"(v) election by the Sponsor, effective upon notice to the
Trust, the Property Trustee and the Delaware Trustee, to dissolve
the Trust in accordance with the terms of the Securities and all of
the Subordinated Debentures shall have been distributed to the
Holders of Securities in exchange for all of the Securities."
1.7 Section 4(c) of Exhibit A to the Declaration is hereby amended
to read in its entirety as follows:
"(c) If, at any time, a Tax Event or an Investment Company
Event (each as defined below, and each a `Special Event') shall
occur and be continuing the Subordinated Debenture Issuer shall have
the right, upon not less than 30 nor more than 60 days notice, to
redeem the Subordinated Debentures in whole or in part for cash
within 90 days following the occurrence of such Special Event, and,
following such redemption, Securities with an aggregate liquidation
amount equal to the aggregate principal amount of the Subordinated
Debentures so redeemed shall be redeemed by the Trust at the
Redemption Price on a Pro Rata basis in accordance with paragraph 8
hereof. The Common Securities will be redeemed Pro Rata with the
Preferred Securities, except that if an Event of Default has
occurred and is continuing, the Preferred Securities will have
priority over the Common Securities with respect to payment of the
Redemption Price.
`Tax Event' means that the Regular Trustees shall have received
an opinion of a nationally recognized independent tax counsel
experienced in such matters to the effect that, as a result of (i)
any amendment to, or change (including any announced prospective
change) in, the laws (or any regulations thereunder of the United
States or any political subdivision or taxing authority thereof or
therein, or (ii) any official administrative pronouncement or
judicial decision interpreting or applying such laws or regulations,
which amendment or change is effective or such pronouncement or
decision is announced on or after the date of original issuance of
the Preferred Securities, there is more than an insubstantial risk
that (A) the Trust is, or will be within 90 days after the date
thereof, subject to United States federal income tax with respect to
interest accrued or received on the Subordinated Debentures, (B) the
Trust is, or will be within 90 days after the date thereof, subject
to more than a de minimis amount of taxes, duties or other
governmental charges, or (C) interest payable by the Subordinated
Debenture Issuer to the Trust on the Subordinated Debentures is not,
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or within 90 days of the date thereof, will not be deductible, in
whole or in part, by the Subordinated Debenture Issuer for United
States federal income tax purposes.
`Investment Company Event' means that the Regular Trustees
shall have received an opinion of a nationally recognized
independent counsel experienced in practice under the Investment
Company Act that, as a result of the occurrence of a change in law
or regulation or a written change in interpretation or application
of law or regulation by any legislative body, court, governmental
agency or regulatory authority (a `Change in 1940 Act Law'), there
is a more than an insubstantial risk that the Trust is or will be
considered an Investment Company which is required to be registered
under the Investment Company Act, which Change in 1940 Act Law
becomes effective on or after the date of original issuance of the
Preferred Securities."
1.8 Section 4(e) of Exhibit A to the Declaration is hereby amended
to read in its entirety as follows:
"(e) In the event that the Sponsor makes the election referred
to in Section 8.1(a)(v) of the Declaration, the Regular Trustees
shall dissolve the Trust and, after satisfaction of creditors, cause
Subordinated Debentures, held by the Property Trustee, having an
aggregate principal amount equal to the aggregate stated liquidation
amount of, with an interest rate identical to the Coupon Rate of,
and accrued and unpaid interest equal to accrued and unpaid
Distributions on and having the same record date for payment, as the
Securities, to be distributed to the Holders of the Securities in
liquidation of such Holders' interests in the Trust on a Pro Rata
basis in accordance with paragraph 8 hereof. On and from the date
fixed by the Regular Trustees for any distribution of Subordinated
Debentures and dissolution of the Trust: (i) the Securities will no
longer be deemed to be outstanding, (ii) the Depository or its
nominee (or any successor Depository or its nominee) will receive
one or more global certificate or certificates representing the
Subordinated Debentures to be delivered upon such distribution, and
having an aggregate principal amount equal to the aggregate stated
liquidation amount of, with an interest rate identical to the Coupon
Rate of, and accrued and unpaid interest equal to accrued and unpaid
Distributions on such Securities. If the Subordinated Debentures
are distributed to Holders of the Securities, pursuant to the terms
of the Indenture, the Subordinated Debenture Issuer will use its
best efforts to have the Subordinated Debentures listed on the New
York Stock Exchange or on such other exchange as the Preferred
Securities were listed immediately prior to the distribution of the
Subordinated Debentures."
2. MISCELLANEOUS
2.1 Except as is specifically provided herein, this Amendment shall
not be deemed to amend or modify the Declaration. The Declaration, as
modified herein, is in all respects ratified and confirmed, and the terms,
covenants and agreements therein, as amended by this Amendment, shall remain
in full force and effect.
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2.2 This Amendment may be executed in any number of counterparts
each of which shall be an original; but such counterparts shall together
constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the day and year first above written.
______________________________ ______________________________
Roomy F. Balaporia, as Trustee Miles H. Mochizuki, as Trustee
_______________________________ ______________________________
Marie B. Washington, as Trustee Michael J. Majchrzak, as
Delaware Trustee
PACIFIC TELESIS GROUP
as Sponsor
By:___________________________
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGO
as Property Trustee
By:_______________________________
Name:
Title:
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EXHIBIT 4-H.2
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FIRST AMENDMENT
TO
SUPPLEMENTAL INDENTURE
THIS FIRST AMENDMENT TO SUPPLEMENTAL INDENTURE ("Amendment") is made and
entered as of the ____ day of _______, 1996, by and among PACIFIC TELESIS
GROUP, a Nevada corporation, and THE FIRST NATIONAL BANK OF CHICAGO, as
trustee.
WHEREAS, the parties executing this Amendment (the "Parties") have
entered into a Supplemental Indenture as of _________, 1996 (the
"Supplemental Indenture");
WHEREAS, the Parties wish to amend the Supplemental Indenture in the
manner set forth in this Amendment.
NOW, THEREFORE, for good and valuable consideration, the Parties agree as
follows:
1. AMENDMENT OF SUPPLEMENTAL INDENTURE
1.1 Section 1.1(f) is hereby amended to read in its entirety as
follows:
"(f) the following terms have the meanings given to them in
the Declaration (as defined hereafter): (i) Business Day; (ii)
Delaware Trustee; (iii) Distribution; (iv) Property Trustee; (v)
Regular Trustees; (vi) Investment Company Event; (vii) Special
Event; and (viii) Tax Event; and"
1.2 Section 1.1(g) of the Supplemental Indenture is hereby amended
by deleting the definitions of "Extended Maturity Date" and "Maturity Date"
and by adding the following definition:
"`CONDITIONS' means (i) the Company is not in bankruptcy or
otherwise insolvent; (ii) the Company is not in default on any
Securities issued to any Pacific Telesis Trust or any trustee of
such Pacific Telesis Trust in connection with the issuance of Trust
Securities by such Pacific Telesis Trust; (iii) the Company has made
timely payments on the Subordinated Debentures for the immediately
preceding six quarters without deferrals; (iv) the Trust is not in
arrears on payments of Distributions on the Trust Securities issued
by it; and (v) the Subordinated Debentures are rated investment
grade or the equivalent by any one of Standard & Poor's Corporation,
Moody's Investors Service, Inc., Fitch Investor Services, Duff &
Phelps Credit Rating Company or any other nationally recognized
statistical rating organization."
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1.3 The definition of "Dissolution Event" in Section 1.1(g) of the
Supplemental Indenture is hereby amended to read in its entirety as follows:
"`DISSOLUTION EVENT' means that as a result of an election by
the Company, the Trust is to be dissolved in accordance with the
Declaration, and the Subordinated Debentures held by the Property
Trustee are to be distributed to the holders of the Trust Securities
(as defined in the Indenture) issued by the Trust pro rata in
accordance with the Declaration."
1.4 Section 2.2 of the Supplemental Indenture is hereby amended to
read in its entirety as follows:
"SECTION 2.2 MATURITY.
(a) The Maturity Date means the date on which the
Subordinated Debentures mature and on which the principal shall be
due and payable together with all accrued and unpaid interest
thereon including Compounded Interest (as defined in Section 4.1
hereof), if any, which date shall be the Scheduled Maturity Date
unless the Maturity Date has been changed pursuant to Section 2.2(b)
or (c), in which case the Maturity Date shall be the Maturity Date
most recently established in accordance with Section 2.2(b) or (c).
(b) If the Company has elected to dissolve the Trust and
cause the Subordinated Debentures to be distributed to the holders
of the Trust Securities in liquidation of the Trust in accordance
with Section 8.1(a)(v) of the Declaration, then the Company may
elect to shorten the Maturity Date to a date not earlier than
________________, 2001, or extend the Maturity Date to a date not
later than ________________, 2045, and such change in the Maturity
Date shall be effective on such date as notice thereof has been
given in accordance with Section 2.2(d) so long as, in the case of
an extension of the Maturity Date, the Company meets the Conditions
on such date; provided that, any such extension of the Maturity Date
shall cease to be in effect (and the Maturity Date shall be sixty
days after the Maturity Date in effect prior to such extension (the
"Preceding Maturity Date")) unless the Conditions also are met on
the Preceding Maturity Date.
(c) The Company may at any time before the date which is
90 days before the Maturity Date, elect to extend the Maturity Date
for one or more periods, but in no event to a date later than
_________, 2045, and such election shall be made, and such extension
of the Maturity Date shall be effective, on such date as notice
thereof has been given in accordance with Section 2.2(d) so long as
the Company meets the Conditions on such date, provided that, any
such extension of the Maturity Date shall cease to be in effect (and
the Maturity Date shall be the date 60 days after the Preceding
Maturity Date) unless the Conditions also are met on the Preceding
Maturity Date.
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(d) If the Company desires to change the Maturity Date
pursuant to Section 2.2(b) or (c), the Company shall give notice to
Holders of the Subordinated Debentures, the Property Trustee, the
Trust and the Trustee of the new Maturity Date."
1.5 Section 3.1 of the Supplemental Indenture is hereby amended to
read in its entirety as follows:
"SECTION 3.1 SPECIAL EVENT REDEMPTION.
If a Special Event has occurred and is continuing then,
notwithstanding Section 3.2 but subject to Section 3.3(b), the Company
shall have the right, upon not less than 30 days' nor more than 60 days'
notice to the Holders of the Subordinated Debentures, to redeem the
Subordinated Debentures, in whole or in part, for cash within 90 days
following the occurrence of such Special Event at a redemption price
equal to 100% of the principal amount to be redeemed plus any accrued and
unpaid interest thereon to the date of such redemption (the `Special
Redemption Price'). The Special Redemption Price shall be paid prior to
12:00 noon, New York time, on the date of such redemption or at such
earlier time as the Company determines and specifies in the notice of
redemption, provided the Company shall deposit with the Trustee an amount
sufficient to pay the Special Redemption Price by 11:00 a.m. on the date
such Special Redemption Price is to be paid."
1.6 Section 8.1 of the Supplemental Indenture is hereby amended to
read in its entirety as follows:
"SECTION 8.1 FORM OF SUBORDINATED DEBENTURE.
The Subordinated Debentures and the Trustee's Certificate of
Authentication to be endorsed thereon are to be substantially in the
following forms:
(FORM OF FACE OF SUBORDINATED DEBENTURE)
[IF THE SUBORDINATED DEBENTURE IS TO BE A GLOBAL SUBORDINATED
DEBENTURE, INSERT - This Subordinated Debenture is a Global Subordinated
Debenture within the meaning of the Indenture hereinafter referred to and
is registered in the name of a Depository or a nominee of a Depository.
This Subordinated Debenture is exchangeable for Subordinated Debentures
registered in the name of a person other than the Depository or its
nominee only in the limited circumstances described in the Indenture, and
no transfer of this Subordinated Debenture (other than a transfer of this
Subordinated Debenture as a whole by the Depository to a nominee of the
Depository or by a nominee of the Depository to the Depository or another
nominee of the Depository) may be registered except in limited
circumstances.
Unless this Subordinated Debenture is presented by an authorized
representative of The Depository Trust Company, a New York corporation
("DTC") to the issuer or its agent for registration of transfer, exchange
or payment, and any Subordinated Debenture issued is registered in the
name of Cede & Co. or such other name as requested by an authorized
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representative of DTC (and any payment hereon is made to Cede & Co. or to
such other entity as is requested by an authorized representative of
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY
OR TO ANY PERSON IS WRONGFUL since the registered owner hereof, Cede &
Co., has an interest herein.]
No.___________________
$_____________________
CUSIP No._____________
-----------------------------------
____% SUBORDINATED DEFERRABLE INTEREST DEBENTURE
DUE 2026
Pacific Telesis Group, a Nevada corporation (the `Company', which
term includes any successor corporation under the Indenture hereinafter
referred to), for value received, hereby promises to pay to
_______________, or registered assigns, the principal sum of
_____________ Dollars on ____________, 2026 (or on such earlier date
after ______, 2001 or such later date before ______, 2045, if the Company
elects to shorten or extend the Maturity Date as further described
herein), and to pay interest on said principal sum from ____________,
1996, or from the most recent interest payment date (each such date, an
`Interest Payment Date') to which interest has been paid or duly provided
for, quarterly (subject to deferral as set forth herein) in arrears on
March 31, June 30, September 30 and December 31 of each year commencing
_____________, 1996, at the rate of _____% per annum until the principal
hereof shall have become due and payable, and on any overdue principal
and (without duplication and to the extent that payment of such interest
is enforceable under applicable law) on any overdue installment of
interest at the same rate per annum compounded quarterly. The amount of
interest payable on any Interest Payment Date shall be computed on the
basis of a 360-day year of twelve 30-day months. In the event that any
date on which interest is payable on this Subordinated Debenture is not a
Business Day, then payment of interest payable on such date will be made
on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay), except that, if
such Business Day is in the next succeeding calendar year, such payment
shall be made on the immediately preceding Business Day, in each case
with the same force and effect as if made on such date. The interest
installment so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in the Indenture, be paid to the
person in whose name this Subordinated Debenture (or one or more
Predecessor Securities, as defined in said Indenture) is registered at
the close of business on the regular record date for such interest
installment, which shall be the close of business on the Business Day
next preceding such Interest Payment Date. {IF PURSUANT TO THE PROVISIONS
OF THE INDENTURE THE SUBORDINATED DEBENTURES ARE NO LONGER REPRESENTED BY
A GLOBAL SUBORDINATED DEBENTURE -- which shall be the close of business
on the ____ Business Day next preceding such Interest Payment Date.} Any
such interest installment not punctually paid or duly provided for shall
forthwith cease to be payable to the registered Holders on such regular
record date and may be paid to the Person in whose name this Subordinated
Debenture (or one or more Predecessor Securities) is registered at the
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close of business on a special record date to be fixed by the Trustee for
the payment of such defaulted interest, notice whereof shall be given to
the registered Holders of this series of Subordinated Debentures not less
than 10 days prior to such special record date, or may be paid at any
time in any other lawful manner not inconsistent with the requirements of
any securities exchange on which the Subordinated Debentures may be
listed, and upon such notice as may be required by such exchange, all as
more fully provided in the Indenture. The principal of and the interest
on this Subordinated Debenture shall be payable at the office or agency
of the Trustee maintained for that purpose in any coin or currency of the
United States of America that at the time of payment is legal tender for
payment of public and private debts; provided, however, that payment of
interest may be made at the option of the Company by check mailed to the
registered Holder at such address as shall appear in the Security
Register. Notwithstanding the foregoing, so long as the Holder of this
Subordinated Debenture is the Property Trustee, the payment of the
principal of and interest on this Subordinated Debenture will be made by
wire transfer in immediately available funds at such place and to such
account as may be designated by the Property Trustee. Payment of
principal of the Subordinated Debentures will only be made upon surrender
of the Subordinated Debentures to the Trustee.
The indebtedness evidenced by this Subordinated Debenture is, to the
extent provided in the Indenture, subordinate and junior in right of
payment to the prior payment in full of all Senior Indebtedness, and this
Subordinated Debenture is issued subject to the provisions of the
Indenture with respect thereto. Each Holder of this Subordinated
Debenture, by accepting the same, (a) agrees to and shall be bound by
such provisions, (b) authorizes and directs the Trustee on his or her
behalf to take such action as may be necessary or appropriate to
acknowledge or effectuate the subordination so provided and (c) appoints
the Trustee his or her attorney-in-fact for any and all such purposes.
Each Holder hereof, by his or her acceptance hereof, hereby waives all
notice of the acceptance of the subordination provisions contained herein
and in the Indenture by each holder of Senior Indebtedness, whether now
outstanding or hereafter incurred, and waives reliance by each such
holder upon said provisions.
This Subordinated Debenture shall not be entitled to any benefit
under the Indenture hereinafter referred to, be valid or become
obligatory for any purpose until the Certificate of Authentication hereon
shall have been signed by or on behalf of the Trustee.
The provisions of this Subordinated Debenture are continued on the
reverse side hereof and such continued provisions shall for all purposes
have the same effect as though fully set forth at this place.
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IN WITNESS WHEREOF, the Company has caused this instrument to be
executed.
Dated:__________________
PACIFIC TELESIS GROUP
By:_____________________
Attest:
By:_____________________
Secretary
(FORM OF CERTIFICATE OF AUTHENTICATION)
CERTIFICATE OF AUTHENTICATION
This is one of the Subordinated Debentures of the series of Subordinated
Debentures described in the within-mentioned Indenture.
The FIRST NATIONAL BANK OF CHICAGO
as Trustee
By:_______________________________
as Authenticating Agent
or
THE FIRST NATIONAL BANK OF CHICAGO
as Trustee
By:_______________________________
Authorized Officer
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(FORM OF REVERSE OF SUBORDINATED DEBENTURE)
This Subordinated Debenture is one of a duly authorized series of
Subordinated Debentures of the Company (herein sometimes referred to as the
`Subordinated Debentures'), specified in the Indenture, all issued or to be
issued in one or more series under and pursuant to an Indenture dated as of
January 9, 1996, duly executed and delivered between the Company and The First
National Bank of Chicago, as Trustee (the `Trustee'), as supplemented by the
Supplemental Indenture dated as of ____________, 1996, between the Company and
the Trustee (the Indenture as so supplemented, the `Indenture'), to which
Indenture and all indentures supplemental thereto reference is hereby made for
a description of the rights, limitations of rights, obligations, duties and
immunities thereunder of the Trustee, the Company and the Holders of the
Subordinated Debentures, and to all of which provisions the Holder of this
Subordinated Debenture, by acceptance hereof, assents and agrees. By the
terms of the Indenture, the Subordinated Debentures are issuable in series
that may vary as to amount, date of maturity, rate of interest and in other
respects as provided in the Indenture. This series of Subordinated Debentures
is limited in aggregate principal amount as specified in said Supplemental
Indenture.
Except as provided in the next paragraph, the Subordinated Debentures may
not be redeemed by the Company prior to __________, 2001. The Company shall
have the right to redeem this Subordinated Debenture at the option of the
Company, without premium or penalty, in whole or in part at any time and from
time to time on or after __________, 2001 (an `Optional Redemption'), at a
redemption price equal to 100% of the principal amount plus any accrued but
unpaid interest, including any Compounded Interest, if any, to the date of
such redemption (the `Optional Redemption Price'). Any redemption pursuant to
this paragraph will be made upon not less than 30 nor more than 60 days'
notice, at the Optional Redemption Price.
If, at any time, a Tax Event or an Investment Company Event (each, as
defined below, a `Special Event') shall occur or be continuing, the Company
shall have the right, upon not less than 30 nor more than 60 days' notice, to
redeem the Subordinated Debentures in whole or in part for cash at the
Optional Redemption Price within 90 days following the occurrence of such
Special Event.
`TAX EVENT' means that the Regular Trustees shall have obtained an
opinion of nationally recognized independent tax counsel experienced in such
matters to the effect that, as a result of (a) any amendment to, or change
(including any announced prospective change) in, the laws (or any regulations
thereunder) of the United States or any political subdivision or taxing
authority thereof or therein, (b) any official administrative pronouncement or
judicial decision interpreting or applying such laws or regulations, which
amendment or change is effective or such pronouncement or decision is
announced on or after the date of original issuance of the Preferred
Securities, there is more than an insubstantial risk that (i) the Trust is, or
will be within 90 days after the date thereof, subject to United States
federal income tax with respect to income accrued or received on the
Subordinated Debentures, (ii) the Trust is, or will be within 90 days after
the date thereof, subject to more than a de minimis amount of taxes, duties or
other governmental charges or (iii) interest payable to the Trust on the
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Subordinated Debentures is not, or within 90 days of the date thereof, will
not be deductible, in whole or in part, by the Company for United States
federal income tax purposes.
`INVESTMENT COMPANY EVENT' means that the Regular Trustees shall have
received an opinion of a nationally recognized independent counsel experienced
in practice under the Investment Company Act of 1940, as amended (the `1940
Act'), to the effect that, as a result of the occurrence of a change in law or
regulation or a change in interpretation or application of law or regulation
by any legislative body, court, governmental agency or regulatory authority
(a `Change in 1940 Act Law'), Pacific Telesis Financing is or will be
considered an `investment company' which is required to be registered under
the 1940 Act, which Change in 1940 Act Law becomes effective on or after the
date of original issuance of the Preferred Securities.
If the Debentures are only partially redeemed by the Company pursuant to
an Optional Redemption or as a result of a Tax Event as described above, the
Debentures will be redeemed pro rata or by lot or in some other equitable
manner determined by the Trustee. Notwithstanding the foregoing, if a partial
redemption of the Subordinated Debentures would result in the delisting of the
Preferred Securities by any national securities exchange or other organization
on which the Preferred Securities are then listed, the Company shall not be
permitted to effect such partial redemption and will only redeem the
Subordinated Debentures in whole.
In the event of redemption of this Subordinated Debenture in part only, a
new Subordinated Debenture or Subordinated Debentures of this series for the
unredeemed portion hereof will be issued in the name of the Holder hereof upon
the cancellation hereof.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Subordinated
Debentures may be declared, and upon such declaration shall become, due and
payable, in the manner, with the effect and subject to the conditions and
limitations provided in the Indenture.
The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the Holders of not less than a majority in aggregate
principal amount of the Subordinated Debentures of each series affected at the
time outstanding, as defined in the Indenture, to execute supplemental
indentures for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of the Indenture or of any
supplemental indenture or of modifying in any manner the rights of the Holders
of the Subordinated Debentures; provided, however, that no such supplemental
indenture shall (i) extend the fixed maturity of any Subordinated Debentures
of any series, or reduce the principal amount thereof, or reduce the rate or
extend the time of payment of interest thereon, or reduce any premium payable
upon the redemption thereof, without the consent of the Holder of each
Subordinated Debenture so affected, or (ii) reduce the aforesaid percentage of
Subordinated Debentures, the Holders of which are required to consent to any
such supplemental indenture, without the consent of the Holders of each
Subordinated Debenture then outstanding and affected thereby. The Indenture
also contains provisions permitting the Holders of a majority in aggregate
principal amount of the Subordinated Debentures of any series at the time
outstanding affected thereby, on behalf of all of the Holders of the
Subordinated Debentures of such series, to waive any past default in the
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performance of any of the covenants contained in the Indenture, or established
pursuant to the Indenture with respect to such series, and its consequences,
except a default in the payment of the principal of or premium, if any, or
interest on any of the Subordinated Debentures of such series. Any such
consent or waiver by the registered Holder of this Subordinated Debenture
(unless revoked as provided in the Indenture) shall be conclusive and binding
upon such Holder and upon all future Holders and owners of this Subordinated
Debenture and of any Subordinated Debenture issued in exchange herefor or in
place hereof (whether by registration of transfer or otherwise), irrespective
of whether or not any notation of such consent or waiver is made upon this
Subordinated Debenture.
No reference herein to the Indenture and no provision of this
Subordinated Debenture or of the Indenture shall alter or impair the
obligation of the Company, which is absolute and unconditional, to pay the
principal of and premium, if any, and interest on this Subordinated Debenture
at the time and place and at the rate and in the money herein prescribed.
The Company shall have the right at any time during the term of the
Subordinated Debentures from time to time to extend the interest payment
period of such Subordinated Debentures for up to 20 consecutive quarters not
to extend beyond the Maturity Date of the Subordinated Debentures (an
"Extended Interest Payment Period"), at the end of which period the Company
shall pay all interest then accrued and unpaid (together with interest thereon
at the rate specified for the Subordinated Debentures to the extent that
payment of such interest is enforceable under applicable law). In the event
that Pacific Telesis exercises this right to defer interest payments, then,
prior to the payment of all accrued interest on outstanding Subordinated
Debentures, (a) Pacific Telesis shall not declare or pay dividends on, or make
a distribution with respect to, or redeem, purchase or acquire, or make a
liquidation payment with respect to, any of its capital stock,
(b) Pacific Telesis shall not make any payment of interest, principal or
premium, if any, on or repay, repurchase or redeem any debt securities issued
by Pacific Telesis that rank pari passu with or junior to the Subordinated
Debentures and (c) Pacific Telesis shall not make any guarantee payments with
respect to the foregoing (other than pursuant to the Preferred Securities
Guarantee); provided, however, that restriction (a) above does not apply to
any stock dividends paid by Pacific Telesis where the dividend stock is the
same stock as that on which the dividend is being paid. Before the
termination of any such Extended Interest Payment Period, the Company may
further extend such Extended Interest Payment Period, provided that such
Extended Interest Payment Period together with all such further extensions
thereof shall not exceed 20 consecutive quarters and shall not extend beyond
the Maturity Date of the Subordinated Debentures. At the termination of any
such Extended Interest Payment Period and upon the payment of all accrued and
unpaid interest and any additional amounts then due, the Company may commence
a new Extended Interest Payment Period.
At any time the Company will have the right to dissolve the Trust and
cause the Subordinated Debentures to be distributed to the Holders of the
Trust Securities in liquidation of the Trust. If the Company elects to
dissolve the Trust and thereby causes the Subordinated Debentures to be
distributed to the Holders of the Trust Securities, the Company shall have the
right to (a) shorten the Maturity Date to any date that is no earlier than
___________, 2001 and (b) to extend the Maturity Date if the conditions in
clauses (i) through (v) below are met on the date the Company exercises such
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right and on the Maturity Date in effect prior to such proposed extension, to
any date that is no later than ___________, 2045. In addition, the Company
shall have the right, before the Maturity Date, to extend the Maturity Date
for one or more periods, but in no event to a date later than ___________,
2045, provided that the Company must satisfy the following conditions on the
date it exercises such right and on the Maturity Date in effect prior to such
extension: (i) the Company is not in bankruptcy or otherwise insolvent,
(ii) the Company is not in default on any Securities issued to a Pacific
Telesis Trust or any trustee of such trust in connection with an issuance of
Trust Securities by such trust, (iii) the Company has made timely payments on
the Subordinated Debentures for the immediately preceding six quarters without
deferrals, (iv) the Trust is not in arrears on payments of distributions on
the Trust Securities of the Trust, and (v) the Subordinated Debentures are
rated investment grade by a nationally recognized statistical rating
organization.
As provided in the Indenture and subject to certain limitations therein
set forth, this Subordinated Debenture is transferable by the registered
Holder hereof on the Security Register of the Company, upon surrender of this
Subordinated Debenture for registration of transfer at the Corporate Trust
Office of the Trustee accompanied by a written instrument or instruments of
transfer in form satisfactory to the Company or the Trustee duly executed by
the registered Holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Subordinated Debentures of authorized denominations
and for the same aggregate principal amount and series will be issued to the
designated transferee or transferees. No service charge will be made for any
such transfer, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in relation thereto.
Prior to due presentment for registration of transfer of this
Subordinated Debenture, the Company, the Trustee, any paying agent and any
Security Registrar may deem and treat the registered holder hereof as the
absolute owner hereof (whether or not this Subordinated Debenture shall be
overdue and notwithstanding any notice of ownership or writing hereon made by
anyone other than the Security Registrar) for the purpose of receiving payment
of or on account of the principal hereof and premium, if any, and interest due
hereon and for all other purposes, and neither the Company nor the Trustee nor
any paying agent nor any Subordinated Debenture Registrar shall be affected by
any notice to the contrary.
No recourse shall be had for the payment of the principal of or the
interest on this Subordinated Debenture, or for any claim based hereon, or
otherwise in respect hereof, or based on or in respect of the Indenture,
against any incorporator, stockholder, officer or director, past, present or
future, as such, of the Company or of any predecessor or successor
corporation, whether by virtue of any constitution, statute or rule of law, or
by the enforcement of any assessment or penalty or otherwise, all such
liability being, by the acceptance hereof and as part of the consideration for
the issuance hereof, expressly waived and released.
[The Subordinated Debentures of this series are issuable only in
registered form without coupons in denominations of $25 and any integral
multiple thereof provided that this Global Subordinated Debenture is
exchangeable for Subordinated Debentures in definitive form only under certain
limited circumstances set forth in the Indenture.] As provided in the
Indenture and subject to certain limitations herein and therein set forth,
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Subordinated Debentures of this series so issued are exchangeable for a like
aggregate principal amount of Subordinated Debentures of this series of a
different authorized denomination, as requested by the Holder surrendering the
same. All terms used in this Subordinated Debenture that are defined in the
Indenture shall have the meanings assigned to them in the Indenture."
2. MISCELLANEOUS
2.1. Except as is specifically provided herein, this Amendment
shall not be deemed to amend or modify the Supplemental Indenture. The
Supplemental Indenture, as modified herein, is in all respects ratified and
confirmed, and the terms, covenants and agreements therein, as amended by this
Amendment, shall remain in full force and effect.
2.2 This Amendment may be executed in any number of counterparts
each of which shall be an original; but such counterparts shall together
constitute but one and the same instrument.
In WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested as of the day and year first above written.
PACIFIC TELESIS GROUP
By:_________________________
Name:
Title:
Attest:
_______________________________
Assistant Secretary
The FIRST NATIONAL BANK OF CHICAGO
as Trustee
By:___________________________
Name:
Title:
Attest:
_____________________________
Trust Officer
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EXHIBIT 4-K.2
-------------
FIRST AMENDMENT
TO
PREFERRED SECURITIES GUARANTEE AGREEMENT
THIS FIRST AMENDMENT TO PREFERRED SECURITIES GUARANTEE AGREEMENT
("Amendment") is made and entered as of the ____ day of ______, 1996, by and
among PACIFIC TELESIS GROUP, a Nevada corporation, and THE FIRST NATIONAL BANK
OF CHICAGO, as trustee.
WHEREAS, the parties executing this Amendment (the "Parties") have
entered into a Preferred Securities Guarantee Agreement as of _______, 1996
(the "Preferred Guarantee");
WHEREAS, the Parties wish to amend the Preferred Guarantee in the manner
set forth in this Amendment.
NOW, THEREFORE, for good and valuable consideration, the Parties agree as
follows:
1. AMENDMENT TO PREFERRED GUARANTEE
1.1 The first paragraph of Section 6.2 of the Preferred Guarantee
is hereby amended to read in its entirety as follows:
"This Guarantee Agreement will constitute an unsecured
obligation of the Guarantor and will rank (i) subordinate and junior
in right of payment to all other liabilities of the Guarantor except
those made pari passu or subordinate by their terms, (ii) pari passu
with the most senior preferred or preference stock now or hereafter
issued by the Guarantor and with any guarantee now or hereafter
entered into by the Guarantor in respect of any preferred or
preference stock of any Affiliate of the Guarantor, and (iii) senior
to the Guarantor's common stock; provided, that, this Guarantee
Agreement shall be pari passu with the guarantee of the Guarantor
issued in connection with the 7.56% Trust Originated Preferred
Securities of Pacific Telesis Financing I."
2. MISCELLANEOUS
2.1 Except as is specifically provided herein, this Amendment
shall not be deemed to amend or modify the Preferred Guarantee. The Preferred
Guarantee, as modified herein, is in all respects ratified and confirmed, and
the terms, covenants and agreements therein, as amended by this Amendment,
shall remain in full force and effect.
2.2 This Amendment may be executed in any number of counterparts
each of which shall be an original; but such counterparts shall together
constitute but one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the day and year first above written.
PACIFIC TELESIS GROUP
By:_______________________________
Name:
Title:
The FIRST NATIONAL BANK OF CHICAGO
as Preferred Guarantee Trustee
By:_______________________________
Name:
Title:
2
