SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20569
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FORM 8-A/A
AMENDMENT NO. 1
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
BALLY ENTERTAINMENT CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 36-2512405
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(State of Incorporation) (IRS Employer Identification No.)
8700 West Bryn Mawr Avenue
Chicago, Illinois 60631
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(Address of principal executive offices) (Zip Code)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
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Preferred Stock Purchase New York Stock Exchange
Rights
Securities to be registered pursuant to Section 12(g) of the Act:
None
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(Title of Class)
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Item 1. Description of Securities to be Registered.
On December 4, 1986, the Board of Directors of Bally
Entertainment Corporation (formerly known as "Bally Manufacturing Corporation")
(the "Corporation") declared a dividend distribution of one Right for each
outstanding share of Common Stock, par value 66-2/3 cents per share (the "Common
Stock"), of the Corporation to stockholders of record at the close of business
on December 17, 1986. Each Right entitles the registered holder to purchase from
the Corporation a unit consisting of one one-hundredth of a share (a "Unit") of
Series B Junior Participating Preferred Stock, par value $1 per share (the
"Preferred Stock"), at a Purchase Price (the "Purchase Price") of $60.00 per
Unit, subject to adjustment. The Purchase Price may be paid, at the option of
the holder, in cash, shares of Common Stock or a combination thereof having a
value at the time of exercise equal to the Purchase Price. The description and
terms of the Rights are set forth in a Rights Agreement, dated as of December 4,
1986, as amended by Amendment No. 1 to the Rights Agreement, dated as of
November 15, 1995 and as hereafter amended from time to time (the "Rights
Agreement") between the Corporation and Chemical Bank, N.A. (successor to
Manufacturers Hanover Trust Company) as Rights Agent.
Initially, the Rights will be attached to all Common
Stock certificates representing shares then outstanding, and no
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separate Rights Certificates will be distributed. The Rights will not be
exercisable, and will not be transferable apart from the Common Stock, until the
earliest of (1) 10 days after the date (the "Stock Acquisition Date") of a
public announcement by a person or group, with certain exceptions, of beneficial
ownership of 10% or more of the Common Stock (such person or group is referred
to as an "Acquiring Person"), (2) 10 business days (or such later date as may be
determined by the Board of Directors prior to such time as any person or group
becomes an Acquiring Person) after a public announcement by a person or group
(with certain exceptions) of a tender or exchange offer which would result in
such person or group beneficially owning 20% or more of the Common Stock, or (3)
10 days after the occurrence of a Gaming Law Event (as described below). The
earliest of (1), (2) or (3) is referred to as the "Distribution Date". An
Acquiring Person does not include (A) the Corporation, (B) any subsidiary of the
Corporation, (C) any employee benefit plan of the Corporation or of any
subsidiary of the Corporation, or any entity organized, appointed or established
by the Corporation under the terms of any such employee benefit plan, (D) any
director of the Corporation holding office as of the close of business on
November 15, 1995, any immediate family member of, or entity controlled by, any
such director, or (E) any person or group whose ownership of 10% or more of the
Common Stock then outstanding results solely from (i) any action or transaction
or transactions approved by the Board of Directors before such person or group
became an Acquiring Person, or (ii) a reduction in the number of issued and
outstanding shares of Common Stock pursuant to a transaction or transactions
approved by the Board of Directors (provided that any person or group that does
not become an Acquiring Person by reason of clause (i) or (ii) above shall
become an Acquiring Person upon acquisition of an additional 1% of the shares of
the Common Stock unless such acquisition of additional shares of the Common
Stock will not result in such person or group becoming an Acquiring Person by
reason of such clause (i) or (ii)).
The Gaming Law Events generally include (1) a final court or
administrative order finding that a person or group having beneficial ownership
of 5% or more of the Common Stock (a "5% Stockholder") has violated any state
gaming, casino or similar laws or regulations in connection with such 5%
Stockholder's interest in the Corporation; (2) the failure of a 5% Stockholder
to eliminate or reduce to an acceptable level its beneficial ownership of the
Common Stock within 20 days after a final court or administrative order finding
that such 5% Stockholder is unsuitable or unqualified to hold its interest in
the Corporation under any state gaming, casino or similar laws or regulations;
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and (3) the acquisition by a person or group of a percentage of Common Stock, at
a time when the Corporation or any of its subsidiaries has one or more licenses
from any governmental authority administering any gaming, casino or similar laws
or regulations, which percentage exceeds the percentage ownership that any such
governmental authority shall have determined that such person or group may
acquire without such acquisition constituting, or being presumed to constitute,
control of the Corporation, unless such governmental authority by final order
shall have granted its prior approval to such person or group to acquire control
of the Corporation.
Unless the Rights are earlier redeemed, if a person or group
becomes an Acquiring Person or if a Gaming Law Event occurs, each Right, other
than those held by an Acquiring Person or by a 5% Stockholder causing such
occurrence (the "Triggering 5% Stockholder") and certain related parties (which
Rights will be voided), will entitle its holder to purchase, at the Right's
Purchase Price, shares of the Common Stock (or, in certain circumstances as
determined by the Board, other securities or assets of the Corporation) having a
calculated value of twice the Right's Purchase Price. However, the Rights will
not be so exercisable as long as the Rights are redeemable.
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In the event that, at any time following the Stock Acquisition
Date, (i) the Corporation is acquired in a merger or other business combination
transaction (other than a merger with an Acquiring Person in which the
Corporation is the surviving corporation and the Common Stock is not changed or
exchanged), or (ii) 50% or more of the Corporation's assets or earning power is
sold or transferred, each holder of a Right (except Rights which previously have
been voided as set forth above) shall thereafter have the right to receive, upon
exercise, common stock of the acquiring company having a calculated value equal
to two times the Purchase Price of the Right.
Until the Distribution Date, (i) the Rights will be evidenced
by the Common Stock certificates and will be transferred with and only with such
Common Stock certificates, (ii) new Common Stock certificates issued after
December 17, 1986 will contain a notation incorporating the Rights Agreement by
reference and (iii) the surrender for transfer of any certificate for Common
Stock outstanding will also constitute the transfer of the Rights associated
with the Common Stock represented by such certificate.
The Rights will expire at the close of business on December 4,
1996, unless earlier redeemed by the Corporation as described below.
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As soon as practicable after the Distribution Date, Rights
Certificates will be mailed to holders of record of the Common Stock as of the
close of business on the Distribution Date and, thereafter, the separate Rights
Certificates alone will represent the Rights. All shares of Common Stock issued
prior to the Distribution Date will be issued with Rights. Shares of Common
Stock issued after the Distribution Date will be issued with Rights if such
shares are issued pursuant to the exercise of stock options or stock
appreciation rights or under an employee benefit plan, or upon the conversation
of securities issued after December 17, 1986. Except as otherwise determined by
the Board of Directors, no other shares of Common Stock issued after the
Distribution Date will be issued with Rights.
The Purchase Price payable, and the number of Units of
Preferred Stock or other securities or property issuable, upon exercise of the
Rights are subject to adjustment from time to time to prevent dilution (i) in
the event of a stock dividend on, or a subdivision, combination or
reclassification of, the Preferred Stock, (ii) if holders of the Preferred Stock
are granted certain rights or warrants to subscribe for Preferred Stock or
convertible securities at less than the current market price of the Preferred
Stock, or (iii) upon the distribution to holders of the Preferred Stock of
evidences of indebtedness or assets (excluding regular quarterly cash dividends)
or of
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subscription rights or warrants (other than those referred to
above).
With certain exceptions, no adjustment in the Purchase Price
will be required until cumulative adjustments amount to at least 1% of the
Purchase Price. No fractional Units will be issued and, in lieu thereof, an
adjustment in cash will be made based on the market price of the Preferred Stock
on the last trading day prior to the date of exercise.
At any time until 10 days following the Stock Acquisition Date
or the date on which any person or group first becomes a Triggering 5%
Stockholder, the Corporation may redeem the Rights in whole, but not in part, at
a price of $.05 per Right, payable, at the election of the Corporation, in cash
or shares of Common Stock. The Rights may be redeemed after the time that any
person or group has become an Acquiring Person or a Triggering 5% Stockholder
only if approved by a majority of the Continuing Directors (as defined in the
Rights Agreement). Immediately upon the action of the Board of Director ordering
redemption of the Rights, the Rights will terminate and the only right of the
holders of Rights will be to receive the $.05 redemption price.
Until a Right is exercised, the holder thereof, as such, will
have no rights as a stockholder of the Corporation, including, without
limitation, the right to vote or to receive dividends. While the distribution of
the Rights will not be taxable to stockholders or to the Corporation,
stockholders may, depending upon the circumstances, recognize taxable income in
the event that the Rights become exercisable for Common Stock (or
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other consideration) of the Corporation or for common stock of
the acquiring company as set forth above.
Other than those provisions relating to the principal economic
terms of the Rights, any of the provisions of the Rights Agreement may be
amended by the Board of Directors of the Corporation prior to the Distribution
Date. After the Distribution Date, the provisions of the Rights Agreement may be
amended by the Board in order to cure any ambiguity, defect or inconsistency, to
make changes which do not adversely affect the interest of holders of Rights
(excluding the interests of any Acquiring Person or any Triggering 5%
Stockholder), or to shorten or lengthen any time period under the Rights
Agreement; provided, however, that no amendment to adjust the time period
governing redemption shall be made at such time as the Rights are not
redeemable.
As of December 31, 1994, there were 47,138,498 shares of
Common Stock outstanding and 146,956 shares in the treasury. As of December 31,
1994, there were 6,160,775 shares of Common Stock reserved for issuance pursuant
to the Corporation's existing stock plans and subject to then outstanding stock
options and stock appreciation rights. As long as the Rights are attached to the
Common Stock, the Corporation will issue one Right for each share of Common
Stock issued between the Record Date and the Distribution Date so that all such
shares will have
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attached Rights. 800,000 shares of Series B Junior Participating
Preferred Stock have been reserved for issuance upon exercise of
the Rights.
The Rights may have certain anti-takeover effects. Exercise of
the Rights will cause substantial dilution to a person or group that attempts to
acquire the Corporation without conditioning the offer on a substantial number
of Rights being acquired. In general, however, the Rights should not interfere
with any merger or other business combination approved by the Board of Directors
of the Corporation since the Board of Directors generally may, at its option,
redeem at any time prior to the earlier of (i) the close of business on the
tenth day following the Stock Acquisition Date, (ii) the close of business on
the tenth day following the date any person or group first becomes a Triggering
5% Stockholder, or (iii) December 4, 1996, all but not less than all the then
outstanding Rights at the Redemption Price.
A copy of the Rights Agreement, dated as of December 4, 1986,
between the Corporation and the Rights Agent has been filed with the Securities
and Exchange Commission as an Exhibit to a Registration Statement on Form 8-A
dated December 11, 1986, and a copy of Amendment No. 1 to the Rights Agreement,
dated as of November 15, 1995, between the Corporation and the Rights Agent,
including as Exhibit B-1 thereto the form of Rights Certificate,
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is attached hereto as Exhibit 2. The foregoing description of the Rights does
not purport to be complete and is qualified in its entirety by reference to the
Rights Agreement and the Rights Agreement is incorporated herein by reference in
its entirety.
Item 2. Exhibits.
1. Rights Agreement, dated as of December 4, 1986,
between Bally Entertainment Corporation (formerly
known as "Bally Manufacturing Corporation") and
Chemical Bank, N.A. (successor to Manufacturers
Hanover Trust Company) as Rights Agent
(incorporated by reference to the Corporation's
registration statement on Form 8-A dated December
11, 1986).
2. Amendment No. 1 to Rights Agreement, dated as of
November 15, 1995, between Bally Entertainment
Corporation (formerly known as "Bally
Manufacturing Corporation") and Chemical Bank,
N.A. (successor to Manufacturers Hanover Trust
Company) as Rights Agent, including Exhibit B-1
thereto.
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SIGNATURES
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the registrant has duly caused this registration statement
to be signed on its behalf by the undersigned hereunto duly authorized.
BALLY ENTERTAINMENT CORPORATION
Dated: November 14, 1995 By: /s/ Lee S. Hillman
----------------------------
Executive Vice President and
Chief Financial Officer
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EXHIBIT INDEX
Exhibit No. Description Page
- ----------- ----------- ----
1. Rights Agreement, dated as of December 4,
1986, between Bally Entertainment Corporation
(formerly known as "Bally Manufacturing
Corporation") and Chemical Bank, N.A.
(successor to Manufacturers Hanover Trust
Company) as Rights Agent (incorporated by
reference to the Corporation's registration
statement on Form 8-A dated December 11,
1986).
2. Amendment No. 1 to Rights Agreement, dated as 13
of November 15, 1995, between Bally
Entertainment Corporation (formerly known as
"Bally Manufacturing Corporation") and
Chemical Bank, N.A. (successor to
Manufacturers Hanover Trust Company) as
Rights Agent, including Exhibit B-1 thereto.
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EXHIBIT 2
AMENDMENT NO. 1
TO
RIGHTS AGREEMENT
Amendment No. 1, dated as of November 15, 1995, to the Rights
Agreement, dated as of December 4, 1986 (the "Agreement"), between Bally
Entertainment Corporation (formerly known as "Bally Manufacturing Corporation"),
a Delaware corporation (the "Corporation"), and Chemical Bank, N.A. (as
successor to Manufacturers Hanover Trust Company), a national banking
association (the "Rights Agent").
W I T N E S S E T H :
---------------------
WHEREAS, the Corporation and the Rights Agent executed and
delivered the Agreement specifying the terms of the Rights (as defined therein);
and
WHEREAS, the Board of Directors of the Corporation deems it
desirable to amend the Agreement pursuant to the provisions of Section 26 of the
Agreement to make certain modifications to the Agreement upon the terms and
conditions hereinafter set forth, such modifications to be effective on the date
hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereby agree as follows:
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1. The definition of the term "Acquiring Person" set forth in
Section 1(a) of the Agreement is hereby amended to read in its entirety as
follows:
"'Acquiring Person' shall mean any Person who or
which, together with all Affiliates and Associates of such Person,
shall be the Beneficial Owner of 10% or more of the shares of Common
Stock then outstanding; provided, that an Acquiring Person shall not
include (i) any Exempt Person, or (ii) any Person, together with all
Affiliates and Associates of such Person, who or which would be an
Acquiring Person solely by reason of (A) being the Beneficial Owner of
shares of Common Stock, the Beneficial Ownership of which was acquired
by such Person pursuant to any action or transaction or series of
related actions or transactions approved by the Board of Directors
before such Person otherwise became an Acquiring Person or (B) a
reduction in the number of issued and outstanding shares of Common
Stock pursuant to a transaction or a series of related transactions
approved by the Board of Directors of the Corporation; provided,
further, that in the event such Person described in this clause (ii)
does not become an Acquiring Person by reason of subclause (A) or (B)
of this clause (ii), such Person nonetheless shall become an Acquiring
Person in the event such Person thereafter acquires Beneficial
Ownership of an additional 1% of the shares of Common Stock, unless the
acquisition of such additional shares of Common Stock would not result
in such Person becoming an Acquiring Person by reason of subclause (A)
or (B) of this clause (ii). Notwithstanding the foregoing, if the Board
of Directors of the Corporation determines in good faith (but only if
at the time of such determination by the Board of Directors there are
then in office not less than a majority of directors (and in no event
less than three directors) who are Continuing Directors and such action
is approved by a majority of the Continuing Directors then in office)
that a Person who would otherwise be an "Acquiring Person" as defined
pursuant to the foregoing provisions of this Section 1(a) has become
such inadvertently, and such Person divests as promptly as practicable
a sufficient number of shares of Common Stock so that such Person would
no longer be an "Acquiring Person" as defined pursuant to the foregoing
provisions of this Section 1(a), then such Person shall not be deemed
an "Acquiring Person" for any purposes of this Agreement."
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2. A new definition of the term "Continuing Directors" and a
new definition of the term "Exempt Person" are hereby added to Section 1 of the
Agreement (immediately following the definition of "Common Stock" and each of
the paragraph letters in Section 1 following such new definitions shall be
sequentially re-lettered), which new definitions shall read in their entirety as
follows:
"(g) 'Continuing Directors' shall mean any
member of the Board of Directors, while such person is a
member of the Board of Directors, who is not an Acquiring
Person or a Triggering 5% Stockholder, or an Affiliate or
Associate of any Acquiring Person or Triggering 5%
Stockholder, or a representative or nominee of an Acquiring
Person or a Triggering 5% Stockholder or of any such Affiliate
or Associate, and who either (i) was a member of the Board of
Directors prior to the time that any Person became an
Acquiring Person or a Triggering 5% Stockholder, or (ii)
subsequently became a member of the Board of Directors, and
whose nomination for election or election to the Board of
Directors was recommended or approved by a majority of the
Continuing Directors then on the Board of Directors."
"(h) 'Exempt Person' shall mean (i) the
Corporation, any Subsidiary of the Corporation, any employee
benefit plan of the Corporation or of any Subsidiary of the
Corporation, or any Person or entity organized, appointed or
established by the Corporation for or pursuant to the terms of
any such plan, or (ii) any director of the Corporation holding
office as of the Close of business on November 15, 1995 and
any immediate family member of, or Person controlled by, any
such director."
3. The definition of the term "Section 11(a)(ii) Event" set
forth in old Section (1)(i) of the Agreement is hereby amended to read in its
entirety as follows:
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"'Section 11(a)(ii) Event' shall mean an
event described in Section 11(a)(ii)(A) or (B) hereof."
4. The definition of the terms "10% Stockholder" and
"Triggering 10% Stockholder" set forth in old Section 1(m) of the Agreement are
hereby replaced by the following definitions of the terms "5% Stockholder" and
"Triggering 5% Stockholder", respectively, and all corresponding references to
the terms "10% Stockholder" and "Triggering 10% Stockholder" in the Agreement
are hereby deemed to refer to the terms "5% Stockholder" and "Triggering 5%
Stockholder", respectively.
"5% Stockholder" shall mean any Person who
or which, together with all Affiliates and Associates of such
Person, shall be the Beneficial Owner of 5% or more of the
shares of Common Stock then outstanding, and "Triggering 5%
Stockholder" shall mean a 5% Stockholder whose actions or
inactions shall have caused the occurrence of a Section
11(a)(ii) Event, but neither such term shall include any
Exempt Person."
5. The first sentence of Section 3(a) of the Agreement is
hereby amended to read in its entirety as follows:
"Until the earliest of (i) the Close of
business on the tenth day after the Stock Acquisition Date,
(ii) the Close of business on the tenth Business Day (or such
later date as may be determined by action of the Board of
Directors prior to such time as any Person becomes an
Acquiring Person or Triggering 5% Stockholder) after the date
that a tender or exchange offer by any Person (other than an
Exempt Person) is first published or sent or given within the
meaning of Rule 14e-2(a) of the General Rules and Regulations
under the Exchange Act, if upon consummation thereof, such
Person would be the Beneficial Owner of 20% or more of the
shares of Common Stock then outstanding, or (iii) the Close of
business on the tenth day after the date on which any of the
events described in Section 11(a)(ii)(B) occur (the earliest
of (i), (ii) and (iii)
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being herein referred to as the "Distribution Date"), (x) the
Rights will be evidenced (subject to the provisions of
paragraph (b) of this Section 3) by the certificates for the
Common Stock registered in the names of the holders of the
Common Stock (which certificates for Common Stock shall be
deemed also to be certificates for Rights) and not by separate
certificates, and (y) the Rights will be transferable only in
connection with the transfer of the underlying shares of
Common Stock (including a transfer to the Corporation)."
6. Section 3 of the Agreement is hereby further amended to add
a new subsection (d) thereto, which shall read in its entirety as follows:
"(d) Certificates representing shares of
Common Stock issued after November 15, 1995 shall bear the
following legend:
This certificate also evidences and
entitles the holder hereof to certain Rights as set
forth in the Rights Agreement between Bally
Entertainment Corporation (formerly known as "Bally
Manufacturing Corporation") (the "Corporation") and
Chemical Bank, N.A. (successor to Manufacturers
Hanover Trust Company) (the "Rights Agent") dated as
of December 4, 1986, as amended by Amendment No. 1
thereto, dated as of November 15, 1995, and as
amended from time to time thereafter (the "Rights
Agreement"), the terms of which are hereby
incorporated herein by reference and a copy of which
is on file at the principal offices of the Rights
Agent. Under certain circumstances, as set forth in
the Rights Agreement, such Rights will be evidenced
by separate certificates and will no longer be
evidenced by this certificate. The Corporation will
mail to the holder of this certificate a copy of the
Rights Agreement, as in effect on the date of
mailing, without charge, promptly after receipt of a
written request therefor. Under certain circumstances
set forth in the Rights Agreement, Rights issued to,
or held by, any Person who is, was or becomes an
Acquiring Person or a Triggering 5% Stockholder or
any Affiliate or Associate thereof (as such terms are
defined in the Rights Agreement), whether currently
held by or on behalf
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of such Person or by any subsequent holder, may
become null and void.
With respect to such certificates containing the foregoing
legend, until the earlier of (i) the Distribution Date or (ii)
the Expiration Date, the Rights associated with the Common
Stock represented by such certificates shall be evidenced by
such certificates alone and registered holders of Common Stock
shall also be the registered holders of the associated Rights,
and the transfer of any of such certificates shall also
constitute the transfer of the Rights associated with the
Common Stock represented by such certificates."
7. Sections 11(a)(ii)(A), (B) and (C) of the Agreement are
hereby deleted in their entirety and new Sections 11(a)(ii)(A) and (B) shall be
added to the Agreement, which shall read in their entirety as follows:
"(ii) In the event:
(A) any Person, alone or together with its
Affiliates and Associates, shall become an Acquiring Person,
or
(B) (1) any 5% Stockholder, or any Affiliate
or Associate thereof, shall, at any time after the date of
this Agreement, be found by a final order of a court or
governmental body of competent jurisdiction (x) to have
violated any state gaming, casino or similar statute
(including, without limitation, the Nevada Gaming Control Act
and the New Jersey Casino Control Act), or any regulation
promulgated thereunder, in connection with such 5%
Stockholder's interest in the Corporation (unless such
violation shall have been excused or waived by such court or
body) or (y) to be unsuitable or unqualified under any such
statute or regulation to beneficially own 5% or more of the
Common Stock (unless such 5% Stockholder, within 20 days after
the date of such final order, ceases to be the Beneficial
Owner of any shares of Common Stock or reduces its beneficial
ownership of Common Stock to a level, if any, specifically
permitted by such final order); or (2) any Person, alone or
together with its
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Affiliates and Associates, shall, at any time after the date
of this Agreement and at a time when the Corporation or a
Subsidiary of the Corporation has one or more licenses from
any governmental authority administering any gaming, casino or
similar statutes or regulations, becomes the Beneficial Owner
of shares of Common Stock representing a percentage ownership
in excess of the percentage ownership that any such
governmental authority shall have determined by rule,
regulation or otherwise that such Person, together with its
Affiliates and Associates, may acquire without such
acquisition constituting, or being presumed to constitute,
control of the Corporation, unless such governmental authority
by final order shall have granted its prior approval of such
Person's application to acquire control of the Corporation
(provided, however, if the Board of Directors of the
Corporation determines in good faith (but only if at the time
of such determination by the Board of Directors there are then
in office not less than a majority of directors (and in no
event less than three directors) who are Continuing Directors
and such action is approved by a majority of the Continuing
Directors then in office) that a Person who has caused the
occurrence of an event set forth in Section 11(a)(ii)(B)(2)
hereof has inadvertently caused such occurrence, and such
Person divests as promptly as practicable a sufficient number
of shares of Common Stock so that such Person would thereafter
Beneficially Own shares of Common Stock representing a
percentage ownership less than the percentage ownership that
caused the occurrence of an event set forth in Section
11(a)(ii)(B)(2) hereof, then such Person shall not be deemed
to be a "Triggering 5% Stockholder" and such event shall not
be deemed to have occurred for any purposes of this
Agreement);
then, promptly following the later of (x) the first occurrence
of a Section 11(a)(ii) Event and (y) the date on which the
Corporation's right of redemption pursuant to Section 23(a)
expires (the later of (x) and (y) being referred to herein as
the "Section 11(a)(ii) Trigger Date"), proper provision shall
be made so that each holder of a Right (except as provided
below and in Section 7(e) hereof) shall thereafter have the
right to receive, upon exercise thereof at the then current
Purchase Price in accordance with the terms of this Agreement,
in lieu of a number of one one-hundredths of a share of
Preferred Stock, such number of shares of
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Common Stock of the Corporation as shall equal the result
obtained by (x) multiplying the then current Purchase Price by
the then number of one one-hundredths of a share of Preferred
Stock for which a Right was exercisable immediately prior to
the first occurrence of a Section 11(a)(ii) Event, and (y)
dividing that product (which product, following such first
occurrence, shall thereafter be referred to as the "Purchase
Price" for each Right and for all purposes of this Agreement)
by 50% of the Current Market Price (as hereinafter defined)
per share of Common Stock on the date of such first occurrence
(such number of shares, the "Adjustment Shares"); provided,
that the Purchase Price and the number of Adjustment Shares
shall be further adjusted as provided in this Agreement to
reflect any events occurring after the date of such first
occurrence."
8. The first sentence of Section 11(a)(iii) of the Agreement
is hereby amended to read in its entirety as follows:
"In the event that the number of shares of
Common Stock which is authorized by the Corporation's Restated
Certificate of Incorporation but not outstanding or reserved
for issuance for purposes other than upon exercise of the
Rights is not sufficient to permit the exercise in full of the
Rights in accordance with the foregoing subparagraph (ii) of
this Section 11(a), the Corporation shall: (A) determine the
excess of (1) the value of the Adjustment Shares issuable upon
the exercise of a Right (the "Current Value") over (2) the
Purchase Price (such excess, the "Spread"), and (B) with
respect to each Right, make adequate provision to substitute
for the Adjustment Shares, upon exercise of the Rights, (1)
cash, (2) a reduction in the Purchase Price, (3) Common Stock
or other equity securities of the Corporation (including,
without limitation, shares, or units of shares, of preferred
stock which the Board of Directors of the Corporation has
deemed (but only if at the time of such determination by the
Board of Directors there are then in office not less than a
majority of directors (and in no event less than three
directors) who are Continuing Directors and such action is
approved by a majority of the Continuing Directors then in
office) to have the same value as shares of Common Stock (such
shares or units of shares of preferred stock are herein
called,
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"common stock equivalents")), (4) debt securities of the
Corporation, (5) other assets, or (6) any combination of the
foregoing, having an aggregate value equal to the Current
Value, where such aggregate value has been determined by the
Board of Directors of the Corporation (but only if at the time
of such determination by the Board of Directors there are then
in office not less than a majority of directors (and in no
event less than three directors) who are Continuing Directors
and such action is approved by a majority of the Continuing
Directors then in office) based upon the advice of a
nationally recognized investment banking firm selected by the
Board of Directors of the Corporation (but only if at the time
of such selection by the Board of Directors there are then in
office not less than a majority of directors (and in no event
less than three directors) who are Continuing Directors and
such action is approved by a majority of the Continuing
Directors then in office); provided, however, if the
Corporation shall not have made adequate provision to
substitute value pursuant to clause (B) above within thirty
(30) days following the Section 11(a)(ii) Trigger Date, then
the Corporation shall be obligated to deliver, upon the
surrender for exercise of a Right and without requiring
payment of the Purchase Price, shares of Common Stock (to the
extent available) and then, if necessary, cash, which shares
and/or cash have an aggregate value equal to the Spread."
9. The first sentence of Section 23(a) of the Agreement is
hereby amended to read in its entirety as follows:
"The Board of Directors of the Corporation
may, at its option, but only by the vote of a majority of the
Board of Directors, at any time prior to the earlier of (i)
the Close of business on the tenth day following the Stock
Acquisition Date, (ii) the Close of business on the tenth day
following the date any Person first becomes a Triggering 5%
Stockholder, or (iii) the Final Expiration Date, redeem all
but not less than all the then outstanding Rights at a
redemption price of $.05 per Right, as such amount may be
appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date
hereof (such redemption price being hereinafter referred to as
the "Redemption Price") and the Corporation may, at its
option, pay the Redemption Price either in shares of
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Common Stock (based on the "Current Market Price", as defined
in Section 11(d)(i) hereof, of the shares of Common Stock at
the time of redemption) or cash; provided, however, that from
and after the time that any Person shall become an Acquiring
Person or a Triggering 5% Stockholder, the Corporation may
redeem the Rights only if at the time of the action of the
Board of Directors there are then in office not less than a
majority of directors (and in no event less than three
directors) who are Continuing Directors and such redemption is
approved by a majority of the Continuing Directors then in
office."
10. The second sentence of Section 23(a) of the Agreement is
hereby deleted in its entirety.
11. The first sentence of Section 26 is hereby amended to read
in its entirety as follows:
"Prior to the Distribution Date and subject
to the penultimate sentence of this Section 26, the
Corporation may and the Rights Agent shall, if the Corporation
so directs, supplement or amend any provision of this
Agreement without the approval of any holders of certificates
representing shares of Common Stock, including, without
limitation, the definition of Acquiring Person and Exempt
Person."
12. The penultimate sentence of Section 26 of the Agreement is
hereby amended to read in its entirety as follows:
"Notwithstanding anything contained in this
Agreement to the contrary, no supplement or amendment shall be
made (a) which changes the Redemption Price, the Final
Expiration Date, the Purchase Price or the number of one
one-hundredths of a share of Preferred Stock for which a Right
is exercisable, or (b) which changes any other provision of
this Agreement after the time that any Person becomes an
Acquiring Person or a Triggering 5% Stockholder, unless at the
time of the action of the Board of Directors approving such
supplement or amendment there are then in office not less than
a majority of directors (and in no event less than three
directors) who are Continuing Directors and
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such amendment or supplement is approved by a majority
of the Continuing Directors then in office."
13. Exhibit B to the Agreement is hereby amended to read in
its entirety as set forth in Exhibit B-1 attached hereto.
14. This Amendment No. 1 to the Agreement shall become
effective as of the Close of business on November 15, 1995. This Amendment No. 1
to the Agreement may be executed in any number of counterparts and each of such
counterparts shall for all purposes be deemed to be an original, and all such
counterparts shall together constitute but one and the same instrument.
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<PAGE>
15. Except as specifically provided in this Amendment No. 1 to
the Agreement, the Agreement shall remain in full force and effect and shall in
no way be amended, modified or affected.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment No. 1 to the Agreement to be duly executed, all as of the day and year
first above written.
BALLY ENTERTAINMENT CORPORATION
By: /s/ Lee S. Hillman
----------------------------------
Lee S. Hillman
Executive Vice President and
Chief Financial Officer
CHEMICAL BANK, N.A.
By: /s/ Michael A. Nespoli
---------------------------------
Name: Michael A. Nespoli
Title: Vice President
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EXHIBIT B-1
[Form of Rights Certificate]
Certificate No. R- __________ Rights
NOT EXERCISABLE AFTER DECEMBER 4, 1996 OR EARLIER IF REDEEMED BY THE
CORPORATION. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE
CORPORATION, AT $.05 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR
A TRIGGERING 5% STOCKHOLDER OR AN AFFILIATE OR ASSOCIATE OF EITHER (AS SUCH
TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH
RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHTS
CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN
ACQUIRING PERSON OR A TRIGGERING 5% STOCKHOLDER OR AN AFFILIATE OR ASSOCIATE OF
EITHER (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS
RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN
THE CIRCUMSTANCES SPECIFIED IN SECTION 7(E) OF SUCH AGREEMENT.]*
Rights Certificate
BALLY ENTERTAINMENT CORPORATION
This certifies that , or registered assigns,
is the registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions of
the Rights Agreement, dated as of December 4, 1986, as amended by Amendment No.
1 to the Rights Agreement, dated as of November 15, 1995 and as hereafter
amended from time to time (the "Rights Agreement"), between Bally Entertainment
Corporation (formerly known as "Bally Manufacturing Corporation"), a Delaware
corporation (the "Corporation"), and
- --------
* The portion of the legend in brackets shall be inserted only if
applicable and shall replace the preceding sentence.
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Chemical Bank, N.A. (successor to Manufacturers Hanover Trust Company), a
national banking association (the "Rights Agent"), to purchase from the
Corporation at any time prior to 5:00 P.M. (New York time) on December 4, 1996
at the office or offices of the Rights Agent designated for such purpose, or its
successors as Rights Agent, one one-hundredth of a fully paid, non-assessable
share of Series B Junior Participating Preferred Stock (the "Preferred Stock")
of the Corporation, at a purchase price of $60.00 per one one-hundredth of a
share (the "Purchase Price"), upon presentation and surrender of this Rights
Certificate with the Form of Election to Purchase and related Certificate duly
executed. The Purchase Price shall be paid, at the election of the registered
holder, in cash, shares of Common Stock of the Corporation or a combination
thereof. The number of Rights evidenced by this Rights Certificate (and the
number of shares which may be purchased upon exercise thereof) set forth above,
and the Purchase Price per share set forth above, are the number and Purchase
Price as of December 4, 1986, based on the Preferred Stock as constituted at
such date.
Upon the occurrence of a Section 11(a)(ii) Event (as such term
is defined in the Rights Agreement), if the Rights evidenced by this Rights
Certificate are beneficially owned by (i) an Acquiring Person or a Triggering 5%
Stockholder or an Affiliate or Associate of an Acquiring Person or of a
Triggering 5% Stockholder (as such terms are defined in the Rights Agreement),
(ii) a
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<PAGE>
transferee of any such Acquiring Person or Triggering 5% Stockholder or
Associate or Affiliate, or (iii) under certain circumstances specified in the
Rights Agreement, a transferee of a person who, concurrently with or after such
transfer, became an Acquiring Person or a Triggering 5% Stockholder or an
Affiliate or Associate of an Acquiring Person or a Triggering 5% Stockholder,
such Rights shall become null and void and no holder hereof shall have any right
with respect to such Rights from and after the occurrence of such Section
11(a)(ii) Event.
As provided in the Rights Agreement, the Purchase Price and
the number and kind of shares of Preferred Stock or other securities, which may
be purchased upon the exercise of the Rights evidenced by this Rights
Certificate are subject to modification and adjustment upon the happening of
certain events, including Triggering Events.
This Rights Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part hereof
and to which Rights Agreement reference is hereby made for a full description of
the rights, limitations of rights, obligations, duties and immunities hereunder
of the Rights Agent, the Corporation and the holders of the Rights Certificates,
which limitations of rights include the temporary suspension of the
exercisability of such Rights under the specific
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<PAGE>
circumstances set forth in the Rights Agreement. Copies of the Rights Agreement
are on file at the above-mentioned office of the Rights Agent and are also
available upon written request to the Corporation.
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the office or offices of the Rights Agent
designated for such purpose, may be exchanged for another Rights Certificate or
Rights Certificates of like tenor and date evidencing Rights entitling the
holder to purchase a like aggregate number of one one-hundredths of a share of
Preferred Stock as the Rights evidenced by the Rights Certificate or Rights
Certificates surrendered shall have entitled such holder to purchase. If this
Rights Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Rights Certificate or Rights Certificates
for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Corporation at its option
at a redemption price of $.05 per Right, payable, at the election of the
Corporation, in cash or shares of Common Stock, at any time prior to the earlier
of the close of business on (i) the tenth day following the Stock Acquisition
Date (as such time period may be extended or shortened pursuant to the Rights
Agreement), (ii) the tenth day following the date any person
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<PAGE>
or group first becomes a Triggering 5% Stockholder (as such time period may be
extended or shortened pursuant to the Rights Agreement), or (iii) the Final
Expiration Date.
No fractional shares of Preferred Stock will be issued upon
the exercise of any Right or Rights evidenced hereby (other than fractions which
are integral multiples of one one-hundredth of a share of Preferred Stock, which
may, at the election of the Corporation, be evidenced by depositary receipts),
but in lieu thereof a cash payment will be made, as provided in the Rights
Agreement.
No holder of this Rights Certificate shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of shares of
Preferred Stock or of any other securities of the Corporation which may at any
time be issuable on the exercise hereof, nor shall anything contained in the
Rights Agreement or herein be construed to confer upon the holder hereof, as
such, any of the rights of a stockholder of the Corporation or any right to vote
for the election of directors or upon any matter submitted to stockholders at
any meeting thereof, or to give or withhold consent to any corporate action, or
to receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Rights
29
<PAGE>
Certificate shall have been exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the
Corporation and its corporate seal.
Dated as of ________________, ____
ATTEST: BALLY ENTERTAINMENT CORPORATION
_____________________ By:________________________
Secretary Name:
Title:
Countersigned:
CHEMICAL BANK, N.A.
By:____________________
Authorized Signature
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[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED_____________________________________________________________
hereby sells, assigns and transfers unto_______________________________________
_______________________________________________________________________________
(Please print name and address of transferee)
_______________________________________________________________________________
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint ____________________________
Attorney, to transfer the within Rights Certificate on the books of the
within-named Corporation, with full power of substitution.
Dated:____ ________________, 19__
_______________________
Signature
Signature Guaranteed:
Certificate
___________
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) this Rights Certificate [ ] is [ ] is not being sold,
assigned and transferred by or on behalf of a Person who is or was an Acquiring
Person or a Triggering 5% Stockholder or an Affiliate
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<PAGE>
or Associate of any such Acquiring Person or a Triggering 5%
Stockholder (as such terms are defined pursuant to the Rights
Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Rights
Certificate from any Person who is, was or subsequently became an Acquiring
Person or a Triggering 5% Stockholder or an Affiliate or Associate of an
Acquiring Person or a Triggering 5% Stockholder.
Dated: _____________, 19__ ________________________
Signature
Signature Guaranteed:
NOTICE
______
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
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<PAGE>
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise Rights
represented by the Rights Certificate.)
To: BALLY ENTERTAINMENT CORPORATION
The undersigned hereby irrevocably elects to exercise _______
Rights represented by this Rights Certificate to purchase the shares of
Preferred Stock issuable upon the exercise of the Rights (or such other
securities of the Corporation or of any other person which may be issuable upon
the exercise of the Rights) and requests that certificates for such shares be
issued in the name of and delivered to:
_______________________________________________________________________________
(Please print name and address)
_______________________________________________________________________________
Please insert social security or
other identifying number:______________________________________________________
If such number of Rights shall not be all the Rights evidenced
by this Rights Certificate, a new Rights Certificate for the balance of such
Rights shall be registered in the name of and delivered to:
_______________________________________________________________________________
(Please print name and address)
_______________________________________________________________________________
Please insert social security or
other identifying number:______________________________________________________
Dated:_______________, 19__ ________________________
Signature
Signature Guaranteed.
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<PAGE>
Certificate
___________
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Rights Certificate [ ] are
[ ] are not being exercised by or on behalf of a Person who is or was an
Acquiring Person or a Triggering 5% Stockholder or an Affiliate or Associate of
any such Acquiring Person or Triggering 5% Stockholder (as such terms are
defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Rights
Certificate from any Person who is, was or became an Acquiring Person or a
Triggering 5% Stockholder or an Affiliate or Associate of an Acquiring Person or
a Triggering 5% Stockholder.
Dated:________________ , 19__ _____________________________
Signature
Signature Guaranteed:
NOTICE
______
The signature to the foregoing Election to Purchase and
Certificate must correspond to the name as written upon the face of this Rights
Certificate in every particular, without alteration or enlargement or any change
whatsoever.
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