8-KMaterial AgreementsShareholder MattersExhibits & Filings

Warner Bros. Discovery, Inc. 8-K Report, Material Agreement (Dec 11, 2008)

Filed December 11, 2008For Securities:WBD

Summary

Discovery Communications, Inc. filed an 8-K on December 11, 2008, reporting an amendment to its Rights Agreement, effective December 10, 2008. The key change allows a 'Passive Investor' to acquire up to 20% of the Company's outstanding common stock without triggering the Rights Agreement. A Passive Investor is defined by specific criteria, including filing a Schedule 13G and acquiring shares in the ordinary course of business without intent to influence control. This amendment is significant for investors as it raises the threshold for triggering the company's poison pill defense, potentially making the company more accessible to larger passive stakeholders. The company's Board of Directors retains discretion in determining whether an investor qualifies as 'Passive' and can request a reduction in ownership if an investor is deemed to be acting with the intent to influence control.

Key Highlights

  • 1Discovery Communications, Inc. amended its Rights Agreement on December 10, 2008.
  • 2The amendment allows a 'Passive Investor' to hold up to 20% of the company's common stock.
  • 3A 'Passive Investor' is defined by specific criteria, including filing a Schedule 13G and not intending to influence control.
  • 4The Board of Directors has the discretion to determine 'Passive Investor' status.
  • 5The Board can request ownership reduction if an investor ceases to be 'Passive' or is deemed to be influencing control.
  • 6This filing incorporates the details of the amendment into the company's public record.

Frequently Asked Questions

The main purpose of the amendment is to allow a 'Passive Investor' to acquire and hold a larger percentage, up to 20%, of Discovery Communications' outstanding common stock without triggering the company's poison pill provisions.

A 'Passive Investor' is defined as an entity that has filed a Schedule 13G with the SEC, is primarily managing investment funds for unaffiliated investors, acquired shares in the ordinary course of business without intent to influence control, and meets specific ownership thresholds for Series B and Series A common stock. The company's Board of Directors also has the sole discretion to deem an investor as 'Passive'.

This amendment potentially makes Discovery Communications more attractive to large institutional investors or investment funds that might have previously been hesitant to accumulate significant stakes due to the 'poison pill' provisions. It signals a higher tolerance for substantial passive shareholdings.

Yes, the Board of Directors retains significant discretion. They can determine if an investor qualifies as 'Passive' and can request that an investor reduce their ownership if they are deemed to be no longer 'Passive' or are attempting to influence control of the company.