Twenty-First Century Fox 2007 Annual Report Download - page 92

NEWS CORPORATION
Notes to the Consolidated Financial Statements (continued)
Note 12 Stockholders’ Equity
Preferred Stock and Common Stock
Under the News Corporation Restated Certificate of Incorporation, the Company’s Board of Directors (the “Board”) is authorized to
issue shares of preferred stock or common stock at any time, without stockholder approval, and to determine all the terms of those
shares, including the following:
(i) the voting rights, if any, except that the issuance of preferred stock or series common stock which entitles holders thereof
to more than one vote per share requires the affirmative vote of the holders of a majority of the combined voting power of the
then outstanding shares of the Company’s capital stock entitled to vote generally in the election of directors;
(ii) the dividend rate and preferences, if any, which that preferred stock or common stock will have compared to any other
class; and
(iii) the redemption and liquidation rights and preferences, if any, which that preferred stock or common stock will have
compared to any other class.
Any decision by the Board to issue preferred stock or common stock must, however, be taken in accordance with the Board’s
fiduciary duty to act in the best interests of the Company’s stockholders. The Company is authorized to issue 100,000,000 shares of
preferred stock, par value $0.01 per share, of which 9,000,000 preferred shares have been designated as Series A Junior Participating
Preferred Stock, par value $0.01 per share. As of June 30, 2007, there were no shares of preferred stock, including Series A Junior
Participating Preferred Stock, issued and outstanding. The Board has the authority, without any further vote or action by the stock-
holders, to issue preferred stock in one or more series and to fix the number of shares, designations, relative rights (including voting
rights), preferences, qualifications and limitations of such series to the full extent permitted by Delaware law.
The Company has two classes of common stock that are authorized and outstanding, non-voting Class A Common Stock and
voting Class B Common Stock. Class A Common Stock carry the right to dividends in the amount equal to 120% of the aggregate
of all dividends declared on a share of Class B Common Stock through fiscal 2007. Subsequent to the final fiscal 2007 dividend
payment, shares of Class A Common Stock will cease to carry any rights to a greater dividend than shares of Class B Common Stock.
As of June 30, 2007, there were approximately 54,000 holders of record of shares of Class A Common Stock and 1,600 holders
of record of Class B Common Stock.
In the event of a liquidation or dissolution of the Company, or a portion thereof, holders of Class A Common Stock and Class B
Common Stock shall be entitled to receive all of the remaining assets of the Company available for distribution to its stockholders,
ratably in proportion to the number of shares held by Class A Common Stock stockholders and Class B Common Stock stockholders,
respectively. In the event of any merger or consolidation with or into another entity, the holders of Class A Common Stock and the
holders of Class B Common Stock shall be entitled to receive substantially identical per share consideration.
Stockholder Rights Plan
In fiscal 2005, the Board adopted a stockholder rights plan (the “Rights Plan”).
Under the Rights Plan, each stockholder of record received a distribution of one right for each share of voting and non-voting
common stock of the Company (the “Rights”).
The Rights are represented by the Company’s common stock certificates. The Rights are not traded separately from the com-
mon stock and are not exercisable.
The Rights will become exercisable only if a person or group obtains ownership (defined to include stock which a person has the
right to acquire, regardless of whether such right is subject to the passage of time or the satisfaction of conditions), or announces a
tender offer that would result in ownership of 15% or more of the Company’s voting common stock, at which time each Right
would enable the holder of such Right to buy additional stock of the Company. Following the acquisition of 15% or more of the
Company’s voting common stock, the holders of Rights (other than the acquiring person or group) will be entitled to purchase from
the Company shares of the Company’s voting or non-voting common stock, as applicable, at half price, and in the event of a sub-
sequent merger or other acquisition of the Company, to buy shares of common stock of the acquiring entity at half price. The Rights
Plan grandfathered holdings of voting common stock and disclosed contracts permitting the acquisition of voting common stock in
each case that existed at the time the Right Plan was adopted, including the then existing holdings of the Murdoch family and affili-
ated entities and Liberty, but any additional acquisitions (subject to a 1% cushion granted to all exempt holders) by the Murdoch
family and its affiliated entities or by Liberty and its affiliated entities would trigger the Rights.
In August 2005, the Company announced that the Board determined to extend the expiration date of the Rights Plan for an
additional two-year period, expiring in November 2007. Each Right permits the holder to spend $80 for the purchases described
above. In April 2006, the Company agreed to a settlement of a lawsuit regarding the extension of its stockholder rights plan. In
August 2006, the Company announced that, in accordance with the terms of the settlement of a lawsuit regarding the Company’s
Rights Plan, the Board had approved the adoption of an Amended and Restated Rights Plan, extending the term of the Company’s
existing Rights Plan from November 7, 2007 to October 20, 2008. The Board has the right to extend the term for an additional year
if the situation with Liberty has not, in the Board’s judgment, been resolved. The terms of the Amended and Restated Rights Plan
remain the same as the Company’s existing stockholder rights plan in all other material respects. Pursuant to the terms of the
settlement, on October 20, 2006, the Amended and Restated Rights Plan was presented for a vote of the Company’s Class B stock-
holders at the Company’s 2006 annual meeting of stockholders and the stockholders voted in favor of its approval. In January 2007,
the Rights Plan was amended to allow for the grant of an irrevocable proxy to Liberty in connection with the stockholder vote on
the Share Exchange Agreement. The Company has announced that it intends to redeem the rights issued under the Rights Plan if
NEWS CORPORATION 2007 Annual Report 91