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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
September 6, 1996
Date of Report (Date of earliest event reported)
TURNER BROADCASTING SYSTEM, INC.
(Exact name of registrant as specified in its charter)
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<S> <C> <C>
Georgia 0-9334 58-0950695
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
</TABLE>
<TABLE>
<S> <C>
One CNN Center, Atlanta, Georgia 30303
(Address of principal executive offices) (Zip Code)
</TABLE>
Registrant's telephone number, including area code: (404) 827-1700
Not Applicable
(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS.
As previously reported, Turner Broadcasting System, Inc., a Georgia
corporation ("TBS"), has entered into an Amended and Restated Agreement and
Plan of Merger dated as of September 22, 1995 (the "Merger Agreement") among
TBS, Time Warner Inc. ("Time Warner"), TW Inc., a Delaware corporation and
currently a wholly-owned subsidiary of Time Warner ("New Time Warner"), Time
Warner Acquisition Corp., a Delaware corporation ("Delaware Sub"), and TW
Acquisition Corp., a Georgia corporation ("Georgia Sub"), which provides for a
transaction in which TBS and Time Warner will each become a wholly-owned
subsidiary of a new holding company. Pursuant to the Merger Agreement, (a)
Georgia Sub will be merged into TBS (the "TBS Merger"), (b) each outstanding
share of Class A Common Stock, par value $0.0625 per share, of TBS and each
share of Class B Common Stock, par value $0.0625 per share, of TBS (other than
shares held directly or indirectly by Time Warner or New Time Warner or in the
treasury of TBS and other than shares with respect to which dissenters' rights
are properly exercised) will be converted into 0.75 of a share of common stock,
par value $.01 per share, of New Time Warner ("New Time Warner Common Stock"),
(c) each share of Class C Convertible Preferred Stock, par value $.125 per
share, of TBS (other than shares held directly or indirectly by Time Warner or
New Time Warner or in the treasury of TBS and other than shares with respect to
which dissenters' rights are properly exercised) will be converted into 4.80
shares of New Time Warner Common Stock, (d) Delaware Sub will be merged into
Time Warner (the "TW Merger" and together with the TBS Merger, the "Mergers"),
(e) each outstanding share of common stock, par value $1.00 per share, of Time
Warner, other than shares held directly or indirectly by Time Warner, will be
converted into one share of New Time Warner Common Stock, (f) each outstanding
share of each series of preferred stock of Time Warner, other than shares held
directly or indirectly by Time Warner and shares with respect to which
appraisal rights are properly exercised, will be converted into one share of a
substantially identical series of preferred stock of New Time Warner having the
same designation as the shares of preferred stock of Time Warner so converted,
(g) each of Time Warner and TBS will become a wholly-owned subsidiary of New
Time Warner and (h) New Time Warner will be renamed "Time Warner Inc."
After an extensive review of the Mergers by the staff of the Federal
Trade Commission (the "FTC") and in order to eliminate certain concerns raised
by the staff of the FTC regarding possible competitive effects of the Mergers
and the related transactions, TBS, Time Warner, Tele-Communications, Inc.
("TCI") and Liberty Media Corporation ("LMC") have executed the Agreement
Containing Consent Order (including the related Interim Agreement, the "FTC
Consent Decree") dated August 14, 1996 and have submitted the FTC Consent
Decree to the commissioners of the FTC. The FTC commissioners have not yet
initially accepted the FTC Consent Decree, and the obligations of Time Warner,
TBS and TCI to consummate the Mergers are conditioned upon such initial
acceptance. The FTC Consent Decree contains provisions (i) restricting the
amount and type of New Time Warner securities that TCI and its affiliates may
hold after the consummation of the Mergers, (ii) limiting the duration of
agreements for mandatory analog carriage by TCI cable systems of TBS
programming services, and (iii) restricting certain actions by New Time Warner
after the consummation of the Mergers with respect to the distribution and
pricing of programming services. If the FTC does not initially accept the FTC
Consent Decree, the FTC may seek to enjoin the consummation of the Mergers. If
the FTC does initially accept the FTC Consent Decree, the FTC will publish the
FTC Consent Decree for public comment for a period of 60 days. If the FTC does
not finally accept the FTC Consent Decree after the period for public comment,
the FTC could take such action under the antitrust laws as it deems necessary
or desirable in the public interest, including seeking the divestiture of
substantial assets of TBS or its subsidiaries or Time Warner or its
subsidiaries. If finally accepted by the FTC, the FTC Consent Decree will
terminate on the tenth anniversary of such final acceptance. A copy of the FTC
Consent Decree is attached as Exhibit 99.1 hereto and incorporated herein by
reference.
In connection with the FTC Consent Decree, the parties to the Merger
Agreement entered into Amendment No. 1, dated as of August 8, 1996, to the
Merger Agreement, which provides for (i) certain changes required by the terms
of the FTC Consent Decree, (ii) certain recent changes and proposed changes in
the capital structure of Time Warner, and (iii) the extension of the
expiration date of the Merger Agreement to December 31, 1996. A copy of
such Amendment No. 1 is attached as Exhibit 2.1 hereto and incorporated herein
by reference. The Merger Agreement, as amended by such Amendment No. 1, is
referred to herein as the "Amended Merger Agreement".
Also in connection with the execution of the FTC Consent Decree, TBS
terminated an agreement to extend, upon the consummation of the Mergers,
existing affiliation agreements pursuant to which TCI and its affiliates
distribute TBS programming services. In lieu thereof, TBS entered into an
agreement relating to the carriage after the consummation of the Mergers by
TCI-affiliated cable systems of Headline News and WTBS (following the conversion
of WTBS to a copyright-paid cable television programming service), certain
conditional rebate arrangements available to TCI-affiliated cable systems with
respect to other TBS programming services and certain other related matters.
Also in connection with the Mergers, certain subsidiaries of TBS and
certain affiliates of TCI have entered into agreements which provide for the
exhibition, on a non-exclusive basis, of all motion pictures theatrically
released during the term of such agreements by New Line Cinema Corporation,
Castle Rock Entertainment and Turner Pictures Worldwide, Inc. on pay-per-view
services owned by such TCI affiliates.
To ensure compliance with the FTC Consent Decree, Time Warner, New
Time Warner, LMC and certain subsidiaries of LMC entered into the Second
Amended and Restated LMC Agreement, dated as of September 22, 1995 (the "LMC
Agreement").
As a result of an arrangement among R.E. Turner, TBS and Time Warner
and pursuant to the LMC Agreement, holders of a sufficient number of
shares of the TBS capital stock have agreed to vote all of the shares owned by
them in favor of the approval of the TBS Merger, the Amended Merger Agreement,
and the other transactions contemplated by the Amended Merger Agreement to
assure approval by the TBS shareholders, regardless of the vote of any other TBS
shareholder.
As previously reported, in connection with the Mergers, TBS and LMC
Southeast Sports, Inc. ("LMC Sports") entered into a stock purchase agreement
(the "SportSouth Agreement") pursuant to which TBS will sell to LMC Sports all
of the outstanding capital stock of Turner Sports Programming, Inc. which owns a
44% interest in SportSouth Network, Ltd. The SportSouth Agreement was not
amended in connection with the FTC Consent Decree, remains in effect and the
transaction thereunder continues to be conditioned upon the consummation of the
Mergers.
2
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
The following items are filed with this report:
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Exhibit Number Description
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2.1 Amendment No. 1, dated as of August 8, 1996,
to the Amended and Restated Agreement and Plan
of Merger dated as of September 22, 1995, among
Time Warner Inc., TW Inc., Time Warner Acquisition
Corp. TW Acquisition Corp. and Turner Broadcasting
System, Inc.
99.1 Form of Agreement Containing Consent Order, dated
August 14, 1996, among Time Warner Inc., Turner
Broadcasting System, Inc., Tele-Communications, Inc.,
Liberty Media Corporation and the Federal Trade
Commission.
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3
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SIGNATURE
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, thereto duly authorized.
TURNER BROADCASTING SYSTEM, INC.
(Registrant)
Date: September 6, 1996 By: /s/ William S. Ghegan
--------------------------------
Name: William S. Ghegan
Title: Vice President and Controller
and Chief Accounting Officer
4
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EXHIBIT INDEX
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<CAPTION>
Exhibit Number Description
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2.1 Amendment No. 1, dated as of August 8, 1996,
to the Amended and Restated Agreement and Plan
of Merger dated as of September 22, 1995, among
Time Warner Inc., TW Inc., Time Warner Acquisition
Corp., TW Acquisition Corp. and Turner Broadcasting
System, Inc.
99.1 Form of Agreement Containing Consent Order dated
August 14, 1996, among Time Warner Inc., Turner
Broadcasting System, Inc., Tele-Communications, Inc.,
Liberty Media Corporation and the Federal Trade
Commission.
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EXHIBIT 2.1
AMENDMENT No. 1 (this "Amendment") dated as
of August 8, 1996, to the AMENDED AND RESTATED
AGREEMENT AND PLAN OF MERGER (the "Agreement") dated
as of September 22, 1995, among TIME WARNER INC., a
Delaware corporation ("Parent"), TW INC., a Delaware
corporation ("Holdco") and a direct wholly owned
subsidiary of Parent, TIME WARNER ACQUISITION CORP., a
Delaware corporation ("Delaware Sub") and a direct
wholly owned subsidiary of Holdco, TW ACQUISITION
CORP., a Georgia corporation ("Georgia Sub") and a
direct wholly owned subsidiary of Holdco, and TURNER
BROADCASTING SYSTEM, INC., a Georgia corporation (the
"Company").
WHEREAS Parent, Holdco, Delaware Sub, Georgia Sub and the
Company have agreed to amend the Agreement; and
WHEREAS the respective Boards of Directors of Parent, Holdco,
Delaware Sub, Georgia Sub and the Company have approved and adopted this
Amendment.
NOW, THEREFORE, the parties agree as follows:
SECTION 1. Amendment of Agreement.
(a) Section 2.01 of the Agreement is hereby amended and restated in its
entirety to read as follows:
"SECTION 2.01. Effect on Parent Capital Stock.
As of the Effective Time of the Mergers, by virtue of the TW Merger and without
any action on the part of the holder of any shares of Parent Capital Stock (as
defined in Section 2.01(a)) or any shares of capital stock of Delaware Sub:
(a) Capital Stock of Delaware Sub. Each issued and
outstanding share of Common Stock, par value $1.00 per share, of Delaware Sub
shall be converted into (i) one one-millionth (1/1,000,000th) of a fully paid
and nonassessable share of Common Stock, par value $1.00 per share, of the TW
Surviving Corporation for each share of Common Stock, par value $1.00 per
share, of Parent ("Parent Common Stock") issued and outstanding immediately
prior to the Effective Time of the Mergers, (ii) one one-millionth
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2
(1/1,000,000th) of a fully paid and nonassessable share of Series C Convertible
Preferred Stock, par value $1.00 per share, of the TW Surviving Corporation for
each share of Series C Convertible Preferred Stock, par value $1.00 per share,
of Parent ("Parent Series C Preferred Stock"), if any, issued and outstanding
immediately prior to the Effective Time of the Mergers, (iii) one one-millionth
(1/1,000,000th) of a fully paid and nonassessable share of Series D Convertible
Preferred Stock, par value $1.00 per share, of the TW Surviving Corporation for
each share of Series D Convertible Preferred Stock, par value $1.00 per share,
of Parent ("Parent Series D Preferred Stock"), if any, issued and outstanding
immediately prior to the Effective Time of the Mergers, (iv) one one-millionth
(1/1,000,000th) of a fully paid and nonassessable share of Series E Convertible
Preferred Stock, par value $1.00 per share, of the TW Surviving Corporation for
each share of Series E Convertible Preferred Stock, par value $1.00 per share,
of Parent ("Parent Series E Preferred Stock"), if any, issued and outstanding
immediately prior to the Effective Time of the Mergers, (v) one one-millionth
(1/1,000,000th) of a fully paid and nonassessable share of Series F Convertible
Preferred Stock, par value $1.00 per share, of the TW Surviving Corporation for
each share of Series F Convertible Preferred Stock, par value $1.00 per share,
of Parent ("Parent Series F Preferred Stock"), if any, issued and outstanding
immediately prior to the Effective Time of the Mergers, (vi) one one-millionth
(1/1,000,000th) of a fully paid and nonassessable share of Series G Convertible
Preferred Stock, par value $1.00 per share, of the TW Surviving Corporation for
each share of Series G Convertible Preferred Stock, par value $1.00 per share,
of Parent ("Parent Series G Preferred Stock"), if any, issued and outstanding
immediately prior to the Effective Time of the Mergers, (vii) one one-millionth
(1/1,000,000th) of a fully paid and nonassessable share of Series H Convertible
Preferred Stock, par value $1.00 per share, of the TW Surviving Corporation for
each share of Series H Convertible Preferred Stock, par value $1.00 per share,
of Parent ("Parent Series H Preferred Stock"), if any, issued and outstanding
immediately prior to the Effective Time of the Mergers, (viii) one
one-millionth (1/1,000,000th) of a fully paid and nonassessable share of Series
I Convertible Preferred Stock, par value $1.00 per share, of the TW Surviving
Corporation for each share of Series I Convertible Preferred Stock, par value
$1.00 per share, of Parent ("Parent Series I Preferred Stock"), if any, issued
and outstanding immediately prior to the
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3
Effective Time of the Mergers, (ix) one one-millionth (1/1,000,000th) of a
fully paid and nonassessable share of Series J Convertible Preferred Stock, par
value $1.00 per share, of the TW Surviving Corporation for each share of Series
J Convertible Preferred Stock, par value $1.00 per share, of Parent ("Parent
Series J Preferred Stock"), if any, issued and outstanding immediately prior to
the Effective Time of the Mergers, (x) one one-millionth (1/1,000,000th) of a
fully paid and nonassessable share of 10 1/4% Series K Exchangeable Preferred
Stock, par value $1.00 per share, of the TW Surviving Corporation for each
share of 10 1/4% Series K Exchangeable Preferred Stock, par value $1.00 per
share, of Parent ("Parent Series K Preferred Stock"), if any, issued and
outstanding immediately prior to the Effective Time of the Mergers, (xi) one
one-millionth (1/1,000,000th) of a fully paid and nonassessable share of 10
1/4% Series L Exchangeable Preferred Stock, par value $1.00 per share, of the
TW Surviving Corporation for each share of 10 1/4% Series L Exchangeable
Preferred Stock, par value $1.00 per share, of Parent ("Parent Series L
Preferred Stock"), if any, issued and outstanding immediately prior to the
Effective Time of the Mergers and (xii) one one-millionth (1/1,000,000th) of a
fully paid and nonassessable share of 10 1/4% Series M Exchangeable Preferred
Stock, par value $1.00 per share, of the TW Surviving Corporation for each
share of 10 1/4% Series M Exchangeable Preferred Stock, par value $1.00 per
share, of Parent ("Parent Series M Preferred Stock" and, together with the
Parent Common Stock, the Parent Series C Preferred Stock, the Parent Series D
Preferred Stock, the Parent Series E Preferred Stock, the Parent Series F
Preferred Stock, the Parent Series G Preferred Stock, the Parent Series H
Preferred Stock, the Parent Series I Preferred Stock, the Parent Series J
Preferred Stock, the Parent Series K Preferred Stock and the Parent Series L
Preferred Stock, the "Parent Capital Stock"), if any, issued and outstanding
immediately prior to the Effective Time of the Mergers. For the purposes of
this Section 2.01(a), shares of Parent Capital Stock, other than Parent Series
C Preferred Stock, held by Parent Subsidiaries (as defined in Section 3.02(a))
shall be deemed to be not outstanding.
(b) Cancellation of Treasury Stock. Each share of Parent
Capital Stock that is owned by Parent shall automatically be canceled and
retired and shall cease to exist, and no shares of Common Stock, par value $.01
per share, of Holdco (the "Holdco Common Stock") or other consideration shall
be delivered in exchange therefor.
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4
(c) Conversion of Parent Capital Stock. Subject to
Sections 2.01(d) and 2.03(e), each issued share of Parent Capital Stock (other
than shares to be canceled in accordance with Section 2.01(b) and other than
shares subject to Section 2.01(f)) shall be converted into fully paid and
nonassessable shares of the capital stock of Holdco ("Holdco Capital Stock") in
accordance with the following table (it being acknowledged that as of August 8,
1996 (the date of the last amendment of this Section 2.01), (x) no shares of
Parent Series J Preferred Stock, Parent Series L Preferred Stock and Parent
Series M Preferred Stock are outstanding and (y) it is anticipated that no
shares of Parent Series C Preferred Stock, Parent Series L Preferred Stock and
either Parent Series K Preferred Stock or Parent Series M Preferred Stock will
be outstanding immediately prior to the Effective Time of the Mergers):
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<CAPTION>
Each Share of the Number and Class or Series
Specified Class or Series of Shares of Holdco Capital
of Parent Capital Stock Stock Into Which Converted
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<S> <C>
Parent Common Stock One Share of Holdco Common
Stock
Parent Series C Preferred 2.08264 shares of Holdco
Stock Common Stock
Parent Series D Preferred One share of Series D
Stock Convertible Preferred Stock,
par value $.10 per share, of
Holdco ("Holdco Series D
Preferred Stock")
Parent Series E Preferred One share of Series E
Stock Convertible Preferred Stock,
par value $.10 per share, of
Holdco ("Holdco Series E
Preferred Stock")
Parent Series F Preferred One share of Series F
Stock Convertible Preferred Stock,
par value $.10 per share, of
Holdco ("Holdco Series F
Preferred Stock")
Parent Series G Preferred One share of Series G
Stock Convertible Preferred Stock,
par value $.10 per share, of
Holdco ("Holdco Series G
Preferred Stock")
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5
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Parent Series H Preferred Stock One share of Series H
Convertible Preferred Stock,
par value $.10 per share, of
Holdco ("Holdco Series H
Preferred Stock")
Parent Series I Preferred Stock One share of Series I
Convertible Preferred Stock,
par value $.10 per share, of
Holdco ("Holdco Series I
Preferred Stock")
Parent Series J Preferred Stock One share of Series J
Convertible Preferred Stock,
par value $.10 per share, of
Holdco ("Holdco Series J
Preferred Stock")
Parent Series K Preferred Stock One share of 10 1/4% Series M
Exchangeable Preferred Stock,
par value $.10 per share, of
Holdco ("Holdco Series M
Preferred Stock")
Parent Series L Preferred Stock One share of 10 1/4% Series L
Exchangeable Preferred Stock,
par value $.10 per share, of
Holdco ("Holdco Series L
Preferred Stock")
Parent Series M Preferred Stock One share of Holdco Series M
Preferred Stock
</TABLE>
As of the Effective Time of the Mergers, all such shares of Parent Capital
Stock shall no longer be outstanding and shall automatically be canceled and
retired and shall cease to exist. Subject to Sections 2.01(d) and 2.03(e), as
of the Effective Time of the Mergers (i) each certificate theretofore
representing shares of Parent Capital Stock (other than each certificate
theretofore representing Parent Series C Preferred Stock or Parent Series K
Preferred Stock (the "Changed Parent Stock")), without any action on the part of
Holdco, Parent or the holder thereof, shall be deemed to represent an equivalent
number of shares of the class or series of Holdco Capital Stock set forth above
next to the class or series of Parent Capital Stock formerly represented by such
certificate and shall cease to represent any rights in any shares of Parent
Capital Stock, and (ii) each holder of a certificate representing any shares of
Changed Parent Stock shall cease
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6
to have any rights with respect thereto, except the right to receive, upon the
surrender of any such certificates, certificates representing the number of
shares of the class or series of Holdco Capital Stock, and any cash in lieu of
fractional shares of such class or series of Holdco Capital Stock, set forth
above next to the series of Changed Parent Stock formerly represented by such
certificate to be issued or paid in consideration therefor upon surrender of
such certificate in accordance with Section 2.03, without interest.
(d) Appraisal Rights. Notwithstanding anything in this
Agreement to the contrary, shares ("Appraisal Shares") of Parent Capital Stock
(other than Parent Common Stock) that are outstanding immediately prior to the
Effective Time of the Mergers and that are held by any stockholder of Parent
who is entitled to demand and properly demands appraisal of such Appraisal
Shares pursuant to, and who complies in all respects with, the provisions of
Section 262 of the DGCL ("Section 262") shall not be converted into Holdco
Capital Stock as provided in Section 2.01(c), but rather the holders of
Appraisal Shares shall be entitled to payment of the fair value of such
Appraisal Shares in accordance with the provisions of Section 262; provided,
however, that if any such holder shall fail to perfect or otherwise shall
waive, withdraw or lose the right to appraisal under Section 262 or a court of
competent jurisdiction shall determine that such holder is not entitled to the
relief provided by Section 262, then the right of such holder of Appraisal
Shares to be paid the fair value of such holder's Appraisal Shares shall cease
and such Appraisal Shares shall be treated as if they had been converted as of
the Effective Time of the Mergers into shares of Holdco Capital Stock as
provided in Section 2.01(c).
(e) Exchange Ratio for Parent Options and Parent
Warrants. (i) As of the Effective Time of the Mergers, each outstanding
Parent Option (as defined in Section 3.02(c)) and each outstanding warrant (a
"Parent Warrant") to purchase Parent Common Stock, originally issued in
connection with the first issuance of Parent Series B Preferred Stock, shall be
assumed by Holdco and converted into an option or warrant, as the case may be,
to purchase shares of Holdco Common Stock, as provided below. Following the
Effective Time of the Mergers, each Parent Option shall continue to have, and
shall be subject to, the same terms and conditions set forth in the applicable
Parent Stock Plan
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(as defined in Section 3.02(c)) pursuant to which such Parent Option was
granted, and each Parent Warrant shall continue to have, and shall be subject
to, the same terms and conditions, in each case as in effect immediately prior
to the Effective Time of the Mergers, except that each such Parent Option or
Parent Warrant shall be exercisable for the same number of shares of Holdco
Common Stock as the number of shares of Parent Common Stock for which such
Parent Option or Parent Warrant was exercisable immediately prior to the
Effective Time of the Mergers.
(ii) As of the Effective Time of the Mergers, Holdco shall
enter into an assumption agreement with respect to each Parent Option and each
Parent Warrant, which, in the case of any Parent Option, shall provide for
Holdco's assumption of the obligations of Parent under the applicable Parent
Stock Plan. Prior to the Effective Time of the Mergers, Parent shall make such
amendments, if any, to the Parent Stock Plans as shall be necessary to permit
such assumption in accordance with this Section 2.01(e).
(iii) It is the intention of the parties that, to the
extent that any Parent Option constitutes an "incentive stock option" (within
the meaning of Section 422 of the Code) immediately prior to the Effective Time
of the Mergers, such Parent Option shall continue to qualify as an incentive
stock option to the maximum extent permitted by Section 422 of the Code, and
that the assumption of the Parent Option provided by this Section 2.01(e) shall
satisfy the conditions of Section 424(a) of the Code.
(f) Treatment of Parent Capital Stock Held by Parent
Subsidiaries. Notwithstanding anything in this Agreement to the contrary, each
share of Parent Capital Stock (other than any Parent Series C Preferred Stock)
held by any Parent Subsidiary shall be converted into (i) in the case of each
share of Parent Common Stock, one one-thousandth (1/1,000th) of a fully paid
and nonassessable share of Common Stock of the TW Surviving Corporation, (ii) in
the case of each share of Parent Series D Preferred Stock, one one-thousandth
(1/1,000th) of a fully paid and nonassessable share of Series D Convertible
Preferred Stock of the TW Surviving Corporation, (iii) in the case of each share
of Parent Series E Preferred Stock, one one-thousandth (1/1,000th) of a fully
paid and nonassessable share of Series E Convertible Preferred Stock of the TW
Surviving Corporation, (iv) in the case of each share of Parent Series F
Preferred Stock, one one-thousandth (1/1,000th) of
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8
a fully paid and nonassessable share of Series F Convertible Preferred Stock of
the TW Surviving Corporation, (v) in the case of each share of Parent Series G
Preferred Stock, one one-thousandth (1/1,000th) of a fully paid and
nonassessable share of Series G Convertible Preferred Stock of the TW Surviving
Corporation, (vi) in the case of each share of Parent Series H Preferred Stock,
one one-thousandth (1/1,000th) of a fully paid and nonassessable share of
Series H Convertible Preferred Stock of the TW Surviving Corporation, (vii) in
the case of each share of Parent Series I Preferred Stock, one one-thousandth
(1/1,000th) of a fully paid and nonassessable share of Series I Convertible
Preferred Stock of the TW Surviving Corporation, (viii) in the case of each
share of Parent Series J Preferred Stock, one one-thousandth (1/1000th) of a
fully paid and nonassessable share of Series J Convertible Preferred Stock of
the TW Surviving Corporation, (ix) in the case of each share of Parent Series K
Preferred Stock, one one-thousandth (1/1,000th) of a fully paid and
nonassessable share of 10 1/4% Series K Exchangeable Preferred Stock of the
TW Surviving Corporation, (x) in the case of each share of Parent Series L
Preferred Stock, one one-thousandth (1/1,000th) of a fully paid and
nonassessable share of 10 1/4% Series L Exchangeable Preferred Stock of the TW
Surviving Corporation and (xi) in the case of each share of Parent Series M
Preferred Stock, one one-thousandth (1/1,000th) of a fully paid and
nonassessable share of 10 1/4% Series M Exchangeable Preferred Stock of the TW
Surviving Corporation."
(b) Section 2.03(e)(iv) of the Agreement is hereby
deleted.
(c) The definition of "Material Transaction" in the fifth
sentence of Section 5.16 of the Agreement is hereby amended and restated in its
entirety as follows:
"For purposes of this Agreement, "Material Transaction" means (i) the issuance
by Parent of more than 90,000,000 "common stock equivalents" (one common stock
equivalent being equal to one share of Parent Common Stock, including any share
of Parent Common Stock issuable by Parent upon conversion, exercise or exchange
of any other capital stock, warrant or other security or right of Parent, any
Parent Subsidiary or any other controlled affiliate of Parent) in any single
transaction or in any series of individual transactions (excluding any
transaction involving an exchange by Parent on a one-for-one basis of newly
issued shares of Parent Series J Preferred Stock for outstanding
<PAGE> 9
9
shares of Parent Series C Preferred Stock) each of which involves the issuance
of more than 20,000,000 common stock equivalents, whether or not such
individual transactions are related to each other, or (ii) the sale or other
disposition in any transaction or series of transactions, whether or not
related to each other, by Parent or any Parent Subsidiary of any business or
assets with an aggregate fair market value in excess of $3,500,000,000,
excluding from such amount (i) sales of inventory in the ordinary course of
business consistent with prior practice and (y) the sale or disposition, in a
single transaction or series of related transactions, of assets with an
aggregate fair market value of $500,000,000 or less."
(c) Section 6.01(c) of the Agreement is hereby amended
and restated in its entirety to read as follows:
"(c) Antitrust. The waiting periods (and any extensions thereof)
applicable to the transactions contemplated by this Agreement under the HSR Act
shall have been terminated or shall have expired. The Federal Trade Commission
(the "FTC") shall have initially accepted the FTC Agreement Containing Consent
Order relating to the Mergers and ancillary matters. Any consents, approvals
and filings under any foreign antitrust law the absence of which would prohibit
the consummation of the Mergers shall have been obtained or made."
(d) Section 6.01(h) of the Agreement is hereby deleted.
(e) Section 7.01(b)(iii) of the Agreement is hereby
amended and restated in its entirety, as follows:
"(iii) if the Mergers shall not have been consummated on or
before December 31, 1996, unless the failure to consummate the
Mergers is the result of a wilful and material breach of this
Agreement by the party seeking to terminate this Agreement;".
SECTION 2. Miscellaneous. (a) Except as expressly set forth in
Section 1, all the provisions of the Agreement are hereby ratified and confirmed
by all the parties and shall remain in full force and effect. All references in
the Agreement to "this Agreement" shall be read as references to the Agreement,
as amended by this Amendment.
<PAGE> 10
10
(b) Each party consents to the execution and delivery by
Parent and the Company of the Agreement Containing Consent Order referred to
in Section 6.01(c) of the Agreement, as amended by this Amendment.
(c) This Amendment may be executed in two or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when two or more counterparts have been signed by each
of the parties and delivered to the other parties.
(d) This Amendment shall be governed by, and construed in
accordance with, the laws of the State of Delaware, regardless of the laws that
might otherwise govern under applicable principles of conflicts of laws
thereof.
IN WITNESS WHEREOF, Parent, Holdco, Delaware Sub, Georgia Sub
and the Company have caused this Amendment to be signed by their respective
officers thereunto duly authorized, all as of the date first written above.
TIME WARNER INC.,
by /s/ Peter R. Haje
------------------------------------
Name: Peter R. Haje
Title: Executive Vice President
TW INC.,
by /s/ Thomas W. McEnerney
-----------------------------------
Name: Thomas W. McEnerney
Title: Vice President
TIME WARNER ACQUISITION CORP.,
by /s/ Thomas W. McEnerney
-----------------------------------
Name: Thomas W. McEnerney
Title: Vice President
<PAGE> 11
11
TW ACQUISITION CORP.,
by /s/ Thomas W. McEnerney
-----------------------------------
Name: Thomas W. McEnerney
Title: Vice President
TURNER BROADCASTING SYSTEM, INC.,
by /s/ Steven W. Korn
-----------------------------------
Name: Steven W. Korn
Title: Vice President
<PAGE> 1
EXHIBIT 99.1
UNITED STATES OF AMERICA
BEFORE FEDERAL TRADE COMMISSION
- -------------------------------
)
In the Matter of )
)
TIME WARNER INC., )
a corporation; )
)
TURNER BROADCASTING )
SYSTEM, INC., )
a corporation; )
)
) File No.961-0004
)
TELE-COMMUNICATIONS, INC., )
a corporation; and )
)
LIBERTY MEDIA CORPORATION, )
a corporation. )
)
- -------------------------------
AGREEMENT CONTAINING CONSENT ORDER
The Federal Trade Commission ("Commission"), having initiated an
investigation of the proposed acquisition of Turner Broadcasting System, Inc.
("Turner") by Time Warner Inc.("Time Warner"), and Tele-Communications, Inc.'s
("TCI") and Liberty Media Corporation's ("LMC") proposed acquisitions of
interests in Time Warner, and it now appearing that Time Warner, Turner, TCI,
and LMC, hereinafter sometimes referred to as "proposed respondents," are
willing to enter into an agreement containing an order to divest certain
assets, and providing for other relief:
IT IS HEREBY AGREED by and between proposed respondents, by their duly
authorized officers and attorneys, and counsel for the Commission that:
1. Proposed respondent Time Warner is a corporation organized, existing
and doing business under and by virtue of the laws of the State of
Delaware with its office and principal place of business located at 75
Rockefeller Plaza, New York, New York 10019.
<PAGE> 2
2. Proposed respondent Turner is a corporation organized, existing and doing
business under and by virtue of the laws of the State of Georgia, with its
office and principal place of business located at One CNN Center, Atlanta,
Georgia 30303.
3. Proposed respondent TCI is a corporation organized, existing and doing
business under and by virtue of the law of the State of Delaware, with its
office and principal place of business located at 5619 DTC Parkway,
Englewood, Colorado 80111.
4. Proposed respondent LMC is a corporation organized, existing and doing
business under and by virtue of the law of the State of Delaware, with its
office and principal place of business located at 8101 East Prentice
Avenue, Englewood, Colorado 80111.
5. Proposed respondents admit all the jurisdictional facts set forth in the
draft of complaint here attached for purposes of this agreement and order
only.
6. Proposed respondents waive:
(1) any further procedural steps;
(2) the requirement that the Commission's decision contain a statement of
findings of fact and conclusions of law;
(3) all rights to seek judicial review or otherwise to challenge or
contest the validity of the order entered pursuant to this agreement; and
(4) any claim under the Equal Access to Justice Act.
7. Proposed respondents shall submit (either jointly or individually),
within sixty (60) days of the date this agreement is signed by proposed
respondents, an initial report or reports, pursuant to Section 2.33 of the
Commission's Rules, signed by the proposed respondents and setting forth
in detail the manner in which the proposed respondents will comply with
Paragraphs VI, VII and VIII of the order, when and if entered. Such
report will not become part of the public record unless and until this
agreement and order are accepted by the Commission for public comment.
8. This agreement shall not become part of the public record of the
proceeding unless and until it is accepted by the Commission. If this
agreement is accepted by the Commission it, together with a draft of the
complaint contemplated hereby, will be placed on the public record for a
period of sixty (60) days and information in respect thereto publicly
released. The Commission thereafter may either withdraw its acceptance of
this agreement and so notify the proposed respondents, in which event it
will take such action as it may consider appropriate, or issue and serve
its complaint (in such form as the circumstances may require) and
decision, in disposition of the
2
<PAGE> 3
proceeding.
9. This agreement is for settlement purposes only and does not constitute an
admission by proposed respondents that the law has been violated as
alleged in the draft of complaint here attached, or that the facts as
alleged in the draft complaint, other than jurisdictional facts, are true.
10. This agreement contemplates that, if it is accepted by the Commission,
and if such acceptance is not subsequently withdrawn by the Commission
pursuant to the provisions of Section 2.34 of the Commission's Rules, the
Commission may, without further notice to the proposed respondents, (1)
issue its complaint corresponding in form and substance with the draft of
complaint here attached and its decision containing the following order in
disposition of the proceeding, and (2) make information public with
respect thereto. When so entered, the order shall have the same force and
effect and may be altered, modified or set aside in the same manner and
within the same time provided by statute for other orders. The order
shall become final upon service. Delivery by the U.S. Postal Service of
the complaint and decision containing the agreed-to order to proposed
respondents' addresses as stated in this agreement shall constitute
service. Proposed respondents waive any right they may have to any other
manner of service. The complaint may be used in construing the terms of
the order, and no agreement, understanding, representation, or
interpretation not contained in the order or the agreement may be used to
vary or contradict the terms of the order.
11. Proposed respondents have read the proposed complaint and order
contemplated hereby. Proposed respondents understand that once the order
has been issued, they will be required to file one or more compliance
reports showing that they have fully complied with the order. Proposed
respondents further understand that they may be liable for civil penalties
in the amount provided by law for each violation of the order after it
becomes final.
12. Proposed respondents agree to be bound by all of the terms of the Interim
Agreement attached to this agreement and made a part hereof as Appendix I,
upon acceptance by the Commission of this agreement for public comment.
Proposed respondents agree to notify the Commission's Bureau of
Competition in writing, within 30 days of the date the Commission accepts
this agreement for public comment, of any and all actions taken by the
proposed respondents to comply with the Interim Agreement and of any
ruling or decision by the Internal Revenue Service ("IRS") concerning the
Distribution of The Separate Company stock to the holders of the Liberty
Tracking Stock within two (2) business days after service of the IRS
Ruling.
13. The order's obligations upon proposed respondents are contingent upon
consummation of the Acquisition.
3
<PAGE> 4
ORDER
I.
As used in this Order, the following definitions shall apply:
A) "Acquisition" means Time Warner's acquisition of Turner and TCI's and LMC's
acquisition of interest in Time Warner.
B) "Affiliated" means having an Attributable Interest in a Person.
C) "Agent" or "Representative" means a Person that is acting in a fiduciary
capacity on behalf of a principal with respect to the specific conduct or
action under review or consideration.
D) "Attributable Interest" means an interest as defined in 47 C.F.R. Section
76.501 (and accompanying notes), as that rule read on July 1, 1996.
E) "Basic Service Tier" means the Tier of video programming as defined in 47
C.F.R. Sec. 76.901(a), as that rule read on July 1, 1996.
F) "Buying Group" or "Purchasing Agent" means any Person representing the
interests of more than one Person distributing multichannel video programming
that: (1) agrees to be financially liable for any fees due pursuant to a
Programming Service Agreement which it signs as a contracting party as a
representative of its members, or each of whose members, as contracting
parties, agrees to be liable for its portion of the fees due pursuant to the
programming service agreement; (2) agrees to uniform billing and standardized
contract provisions for individual members; and (3) agrees either collectively
or individually on reasonable technical quality standards for the individual
members of the group.
G) "Carriage Terms" means all terms and conditions for sale, licensing or
delivery to an MVPD for a Video Programming Service and includes, but is not
limited to, all discounts (such as for volume, channel position and
Penetration Rate), local advertising availabilities, marketing, and
promotional support, and other terms and conditions.
H) "CATV" means a cable system, or multiple cable systems Controlled by the
same Person, located in the United States.
I) "Closing Date" means the date of the closing of the Acquisition.
J) "CNN" means the Video Programming Service Cable News Network.
K) "Commission" means the Federal Trade Commission.
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<PAGE> 5
L) "Competing MVPD" means an Unaffiliated MVPD whose proposed or actual
service area overlaps with the actual service area of an Time Warner CATV.
M) "Control," "Controlled" or "Controlled by" has the meaning set forth in 16
C.F.R. Section 801.1 as that regulation read on July 1, 1996, except that Time
Warner's 50% interest in Comedy Central (as of the Closing Date) and TCI's 50%
interests in Bresnan Communications, Intermedia Partnerships and Lenfest
Communications (all as of the Closing Date) shall not be deemed sufficient
standing alone to confer Control over that Person.
N) "Converted WTBS" means WTBS once converted to a Video Programming Service.
O) "Fully Diluted Equity of Time Warner" means all Time Warner common stock
actually issued and outstanding plus the aggregate number of shares of Time
Warner common stock that would be issued and outstanding assuming the exercise
of all outstanding options, warrants and rights (excluding shares that would
be issued in the event a poison pill is triggered) and the conversion of all
outstanding securities that are convertible into Time Warner common stock.
P) "HBO" means the Video Programming Service Home Box Office, including
multiplexed versions.
Q) "Independent Advertising-Supported News and Information Video Programming
Service" means a National Video Programming Service (1) that is not owned,
Controlled by, or Affiliated with Time Warner; (2) that is a 24-hour per day
service consisting of current national, international, sports, financial and
weather news and/or information, and other similar programming; and (3) that
has national significance so that, as of February 1, 1997, it has contractual
commitments to supply its service to 10 million subscribers on Unaffiliated
MVPDs, or, together with the contractual commitments it will obtain from Time
Warner, it has total contractual commitments to supply its service to 15
million subscribers. If no such Service has such contractual commitments, then
Time Warner may choose from among the two Services with contractual commitments
with Unaffiliated MVPDs for the largest number of subscribers.
R) "Independent Third Party" means (1) a Person that does not own, Control, and
is not Affiliated with or has a share of voting power, or an Ownership Interest
in, greater than 1% of any of the following: TCI, LMC, or the Kearns-Tribune
Corporation; or (2) a Person which none of TCI, LMC, or the TCI Control
Shareholders owns, Controls, is Affiliated with, or in which any of them has a
share of voting power, or an Ownership Interest in, greater than 1%. Provided,
however, that an Independent Third Party shall not lose such status if, as a
result of a transaction between an Independent Third Party and The Separate
Company, such Independent Third Party becomes a successor to The Separate
Company and the TCI Control Shareholders collectively hold an Ownership
Interest of 5% or less and collectively hold a share of voting power of 1% or
less in that successor company.
5
<PAGE> 6
S) "LMC" means Liberty Media Corporation, all of its directors, officers,
employees, Agents, and Representatives, and also includes (1) all of its
predecessors, successors, assigns, subsidiaries, and divisions, all of their
respective directors, officers, employees, Agents, and Representatives, and
the respective successors and assigns of any of the foregoing; and (2)
partnerships, joint ventures, and affiliates that Liberty Media Corporation
Controls, directly or indirectly.
T) "The Liberty Tracking Stock" means Tele-Communications, Inc. Series A
Liberty Media Group Common Stock and Tele-Communications, Inc. Series B
Liberty Media Group Common Stock.
U) "Multichannel Video Programming Distributor" or "MVPD" means a Person
providing multiple channels of video programming to subscribers in the United
States for which a fee is charged, by any of various methods including, but
not limited to, cable, satellite master antenna television, multichannel
multipoint distribution, direct-to-home satellite (C-band, Ku-band, direct
broadcast satellite), ultra high-frequency microwave systems (sometimes
called LMDS), open video systems, or the facilities of common carrier
telephone companies or their affiliates, as well as Buying Groups or
Purchasing Agents of all such Persons.
V) "National Video Programming Service" means a Video Programming Service that
is intended for distribution in all or substantially all of the United States.
W) "Ownership Interest" means any right(s), present or contingent, to hold
voting or nonvoting interest(s), equity interest(s), and/or beneficial
ownership(s) in the capital stock of a Person.
X) "Penetration Rate" means the percentage of Total Subscribers on an MVPD who
receives a particular Video Programming Service.
Y) "Person" includes any natural person, corporate entity, partnership,
association, joint venture, government entity or trust.
Z) "Programming Service Agreement" means any agreement between a Video
Programming Vendor and an MVPD by which a Video Programming Vendor agrees to
permit carriage of a Video Programming Service on that MVPD.
AA) "The Separate Company" means a separately incorporated Person, either
existing or to be created, to take the actions provided by Paragraph II and
includes without limitation all of The Separate Company's subsidiaries,
divisions, and affiliates Controlled, directly or indirectly, all of their
respective directors, officers, employees, Agents, and Representatives, and
the respective successors and assigns of any of the foregoing, other than any
Independent Third Party.
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<PAGE> 7
BB) "Service Area Overlap" means the geographic area in which a Competing
MVPD's proposed or actual service area overlaps with the actual service area
of a Time Warner CATV.
CC) "Similarly Situated MVPDs" means MVPDs with the same or similar number of
Total Subscribers as the Competing MVPD has nationally and the same or similar
Penetration Rate(s) as the Competing MVPD makes available nationally.
DD) "TCI" means Tele-Communications, Inc., all of its directors, officers,
employees, Agents, and Representatives, and also includes (1) all of its
predecessors, successors, assigns, subsidiaries, and divisions, all of their
respective directors, officers, employees, Agents, and Representatives, and
the respective successors and assigns of any of the foregoing; and (2)
partnerships, joint ventures, and affiliates that Tele-Communications, Inc.
Controls, directly or indirectly. TCI acknowledges that the obligations of
subparagraphs (C)(6), (8)-(9), (D)(1)-(2) of Paragraph II and of Paragraph III
of this order extend to actions by Bob Magness and John C. Malone, taken in an
individual capacity as well as in a capacity as an officer or director, and
agrees to be liable for such actions.
EE) "TCI Control Shareholders" means the following Persons, individually as
well as collectively: Bob Magness, John C. Malone, and the Kearns-Tribune
Corporation, its Agents and Representatives, and the respective successors and
assigns of any of the foregoing.
FF) "TCI's and LMC's Interest in Time Warner" means all the Ownership Interest
in Time Warner to be acquired by TCI and LMC, including the right of first
refusal with respect to Time Warner stock to be held by R.E. Turner, III,
pursuant to the Shareholders Agreement dated September 22, 1995 with LMC or
any successor agreement.
GG) "TCI's and LMC's Turner-Related Businesses" means the businesses conducted
by Southern Satellite Systems, Inc., a subsidiary of TCI which is principally
in the business of distributing WTBS to MVPDs.
HH) "Tier" means a grouping of Video Programming Services offered by an MVPD
to subscribers for one package price.
II) "Time Warner" means Time Warner Inc., all of its directors, officers,
employees, Agents, and Representatives, and also includes (1) all of its
predecessors, successors, assigns, subsidiaries, and divisions, including, but
not limited to, Turner after the Closing Date, all of their respective
directors, officers, employees, Agents, and Representatives, and the
respective successors and assigns of any of the foregoing; and (2)
partnerships, joint ventures, and affiliates that Time Warner Inc. Controls,
directly or indirectly. Time Warner shall, except for the purposes of
definitions OO and PP, include Time Warner Entertainment Company, L.P., so
long as it falls within this definition.
JJ) "Time Warner CATV" means a CATV which is owned or Controlled by Time
Warner.
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<PAGE> 8
"Non-Time Warner CATV" means a CATV which is not owned or Controlled by Time
Warner. Obligations in this order applicable to Time Warner CATVs shall not
survive the disposition of Time Warner's Control over them.
KK) "Time Warner National Video Programming Vendor" means a Video Programming
Vendor providing a National Video Programming Service which is owned or
Controlled by Time Warner. Likewise, "Non-Time Warner National Video
Programming Vendor" means a Video Programming Vendor providing a National
Video Programming Service which is not owned or Controlled by Time Warner.
LL) "TNT" means the Video Programming Service Turner Network Television.
MM) "Total Subscribers" means the total number of subscribers to an MVPD other
than subscribers only to the Basic Service Tier.
NN) "Turner" means Turner Broadcasting System, Inc., all of its directors,
officers, employees, Agents, and Representatives, and also includes (1) all of
its predecessors, successors (except Time Warner), assigns (except Time
Warner), subsidiaries, and divisions; and (2) partnerships, joint ventures,
and affiliates that Turner Broadcasting System, Inc., Controls, directly or
indirectly.
OO) "Turner Video Programming Services" means each Video Programming Service
owned or Controlled by Turner on the Closing Date, and includes (1) WTBS, (2)
any such Video Programming Service and WTBS that is transferred after the
Closing Date to another part of Time Warner (including TWE), and (3) any Video
Programming Service created after the Closing Date that Time Warner owns or
Controls that is not owned or Controlled by TWE, for so long as the Video
Programming Service remains owned or Controlled by Time Warner.
PP) "Turner-Affiliated Video Programming Services" means each Video
Programming Service, whether or not satellite-delivered, that is owned,
Controlled by, or Affiliated with Turner on the Closing Date, and includes
(1) WTBS, (2) any such Video Programming Service and WTBS that is transferred
after the Closing Date to another part of Time Warner (including TWE), and
(3) any Video Programming Service created after the Closing Date that Time
Warner owns, Controls or is Affiliated with that is not owned, Controlled by,
or Affiliated with TWE, for so long as the Video Programming Service remains
owned, Controlled by, or affiliated with Time Warner.
QQ) "TWE" means Time Warner Entertainment Company, L.P., all of its officers,
employees, Agents, Representatives, and also includes (1) all of its
predecessors, successors, assigns, subsidiaries, divisions, including, but not
limited to, Time Warner Cable, and the respective successors and assigns of any
of the foregoing, but excluding Turner; and (2) partnerships, joint ventures,
and affiliates that Time Warner Entertainment Company, L.P., Controls, directly
or indirectly.
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<PAGE> 9
RR) "TWE's Management Committee" means the Management Committee established in
Section 8 of the Admission Agreement dated May 16, 1993, between TWE and U S
West, Inc., and any successor thereof, and includes any management committee in
any successor agreement that provides for membership on the management
committee for non-Time Warner individuals.
SS) "TWE Video Programming Services" means each Video Programming Service owned
or Controlled by TWE on the Closing Date, and includes (1) any such Video
Programming Service transferred after the Closing Date to another part of Time
Warner and (2) any Video Programming Service created after the Closing Date
that TWE owns or Controls, for so long as the Video Programming Service remains
owned or Controlled by TWE.
TT) "TWE-Affiliated Video Programming Services" means each Video Programming
Service, whether or not satellite-delivered, that is owned, Controlled by, or
Affiliated with TWE, and includes (1) any such Video Programming Service
transferred after the Closing Date to another part of Time Warner and (2) any
Video Programming Service created after the Closing Date that TWE owns or
Controls, or is Affiliated with, for so long as the Video Programming Service
remains owned, Controlled by, or Affiliated with TWE.
VV) "Unaffiliated MVPD" means an MVPD which is not owned, Controlled by, or
Affiliated with Time Warner.
WW) "United States" means the fifty states, the District of Columbia, and all
territories, dependencies, or possessions of the United States of America.
XX) "Video Programming Service" means a satellite-delivered video programming
service that is offered, alone or with other services, to MVPDs in the United
States. It does not include pay-per-view programming service(s), interactive
programming service(s), over-the-air television broadcasting, or satellite
broadcast programming as defined in 47 C.F.R. Sec. 76.1000 (f) as that rule read
on July 1, 1996.
YY) "Video Programming Vendor" means a Person engaged in the production,
creation, or wholesale distribution to MVPDs of Video Programming Services for
sale in the United States.
ZZ) "WTBS" means the television broadcast station popularly known as TBS
Superstation, and includes any Video Programming Service that may be a
successor to WTBS, including Converted WTBS.
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<PAGE> 10
II.
IT IS ORDERED that:
(A) TCI and LMC shall divest TCI's and LMC's Interest in Time Warner and TCI's
and LMC's Turner-Related Businesses to The Separate Company by:
(1) combining TCI's and LMC's Interest in Time Warner Inc. and TCI's and
LMC's Turner-Related Businesses in The Separate Company;
(2) distributing The Separate Company stock to the holders of Liberty
Tracking Stock ("Distribution"); and
(3) using their best efforts to ensure that The Separate Company's stock
is registered or listed for trading on the Nasdaq Stock Market or the New
York Stock Exchange or the American Stock Exchange.
(B) TCI and LMC shall make all regulatory filings, including, but not limited
to, filings with the Federal Communications Commission and the Securities and
Exchange Commission that are necessary to accomplish the requirements of
Paragraph II(A).
(C) TCI, LMC, and The Separate Company shall ensure that:
(1) The Separate Company's by-laws obligate The Separate Company to be
bound by this order and contain provisions ensuring compliance with this
order;
(2) The Separate Company's board of directors at the time of the
Distribution are subject to the prior approval of the Commission;
(3) The Separate Company shall, within six (6) months of the
Distribution, call a shareholder's meeting for the purpose of electing
directors;
(4) No member of the board of directors of The Separate Company, both at
the time of the Distribution and pursuant to any election now or at any
time in the future, shall, at the time of his or her election or while
serving as a director of The Separate Company, be an officer, director,
or employee of TCI or LMC or shall hold, or have under his or her
direction or Control, greater than one-tenth of one percent (0.1%) of
the voting power of TCI and one-tenth of one percent (0.1%) of the
Ownership Interest in TCI or greater than one-tenth of one percent (0.1%)
of the voting power of LMC and one-tenth of one percent (0.1%) of the
Ownership Interest in LMC;
(5) No officer, director or employee of TCI or LMC shall concurrently
serve as an officer or employee of The Separate Company. Provided
further, that TCI or LMC
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<PAGE> 11
employees who are not TCI Control Shareholders or directors or officers of
either Tele-Communications, Inc. or Liberty Media Corporation may provide to
The Separate Company services contemplated by the attached Transition Services
Agreement;
(6) The TCI Control Shareholders shall promptly exchange the shares of stock
received by them in the Distribution for shares of one or more classes or
series of convertible preferred stock of The Separate Company that shall be
entitled to vote only on the following issues on which a vote of the
shareholders of The Separate Company is required: a proposed merger;
consolidation or stock exchange involving The Separate Company; the sale,
lease, exchange or other disposition of all or substantially all of The
Separate Company's assets; the dissolution or winding up of The Separate
Company; proposed amendments to the corporate charter or bylaws of The
Separate Company; proposed changes in the terms of such classes or series; or
any other matters on which their vote is required as a matter of law (except
that, for such other matters, The Separate Company and the TCI Control
Shareholders shall ensure that the TCI Control Shareholders' votes are
apportioned in the exact ratio as the votes of the rest of the shareholders);
(7) No vote on any of the proposals listed in subparagraph (6) shall be
successful unless a majority of shareholders other than the TCI Control
Shareholders vote in favor of such proposal;
(8) After the Distribution, the TCI Control Shareholders shall not seek to
influence, or attempt to control by proxy or otherwise, any other Person's
vote of The Separate Company stock;
(9) After the Distribution, no officer, director or employee of TCI or LMC, or
any of the TCI Control Shareholders shall communicate, directly or indirectly,
with any officer, director, or employee of The Separate Company. Provided,
however, that the TCI Control Shareholders may communicate with an officer,
director or employee of The Separate Company when the subject is one of the
issues listed in subparagraph 6 on which TCI Control Shareholders are permitted
to vote, except that, when a TCI Control Shareholder seeks to initiate action
on a subject listed in subparagraph 6 on which the TCI Control Shareholders
are permitted to vote, the initial proposal for such action shall be made in
writing. Provided further, that this provision does not apply to
communications by TCI or LMC employees who are not TCI Control Shareholders or
directors or officers of either Tele-Communications, Inc. or Liberty Media
Corporation in the context of providing to The Separate Company services
contemplated by the attached Transition Services Agreement or to
communications relating to the possible purchase of services from TCI's and
LMC's Turner-Related Businesses;
(10) The Separate Company shall not acquire or hold greater than 14.99% of the
Fully Diluted Equity of Time Warner. Provided, however, that, if the TCI
Control
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<PAGE> 12
Shareholders reduce their collective holdings in The Separate Company to
no more than one-tenth of one percent (0.1%) of the voting power of The
Separate Company and one-tenth of one percent (0.1%) of the Ownership
Interest in The Separate Company or reduce their collective holdings in
TCI and LMC to no more than one-tenth of one percent (0.1%) of the
voting power of TCI and one-tenth of one percent (0.1%) of the Ownership
Interest in TCI and one-tenth of one percent (0.1%) of the voting power
of LMC and one-tenth of one percent (0.1%) of the Ownership Interest
in LMC, then The Separate Company shall not be prohibited by this order
from increasing its holding of Time Warner stock beyond that figure; and
(11) The Separate Company shall not acquire or hold, directly or
indirectly, any Ownership Interest in Time Warner that is entitled to
exercise voting power except (a) a vote of one-one hundredth (1/100) of a
vote per share owned, voting with the outstanding common stock, with
respect to the election of directors and (b) with respect to proposed
changes in the charter of Time Warner Inc. or of the instrument creating
such securities that would (i) adversely change any of the terms of such
securities or (ii) adversely affect the rights, power, or preferences of
such securities. Provided, however, that any portion of The Separate
Company's stock in Time Warner that is sold to an Independent Third Party
may be converted into voting stock of Time Warner. Provided, further,
that, if the TCI Control Shareholders reduce their collective holdings in
The Separate Company to no more than one-tenth of one percent (0.1%) of
the voting power of The Separate Company and one-tenth of one percent
(0.1%) of the Ownership Interest in The Separate Company or reduce their
collective holdings in both TCI and LMC to no more than one-tenth of one
percent (0.1%) of the voting power of TCI and one-tenth of one percent
(0.1%) of the Ownership Interest in TCI and one-tenth of one percent
(0.1%) of the voting power of LMC and one-tenth of one percent (0.1%) of
the Ownership Interest in LMC, The Separate Company's Time Warner stock
may be converted into voting stock of Time Warner.
(D) TCI and LMC shall use their best efforts to obtain a private letter ruling
from the Internal Revenue Service to the effect that the Distribution will be
generally tax-free to both the Liberty Tracking Stock holders and to TCI under
Section 355 of the Internal Revenue Code of 1986, as amended ("IRS Ruling").
Upon receipt of the IRS Ruling, TCI and LMC shall have thirty (30) days
(excluding time needed to comply with the requirements of any federal
securities and communications laws and regulations, provided that TCI and LMC
shall use their best efforts to comply with all such laws and regulations) to
carry out the requirements of Paragraph II(A) and (B). Pending the IRS Ruling,
or in the event that TCI and LMC are unable to obtain the IRS Ruling,
(1) TCI, LMC, Bob Magness and John C. Malone, collectively and
individually, shall not acquire or hold, directly or indirectly, an
Ownership Interest that is more than the lesser of 9.2% of the Fully
Diluted Equity of Time Warner or 12.4% of the actual issued and
outstanding common stock of Time Warner, as determined by generally
accepted accounting principles. Provided, however, that day-to-day market
price changes that cause any such holding to exceed the latter threshold
shall not be deemed to cause the parties to be in violation of this
subparagraph; and
12
<PAGE> 13
(2) TCI, LMC and the TCI Control Shareholders shall not acquire or hold
any Ownership Interest in Time Warner that is entitled to exercise
voting power except (a) a vote of one-one hundredth (1/100) of a vote
per share owned, voting with the outstanding common stock, with respect
to the election of directors and (b) with respect to proposed changes in
the charter of Time Warner Inc. or of the instrument creating such
securities that would (i) adversely change any of the terms of such
securities or (h) adversely affect the rights, power, or preferences of
such securities. Provided, however, that any portion of TCI's and LMC's
Interest in Time Warner that is sold to an Independent Third Party may
be converted into voting stock of Time Warner.
In the event that TCI and LMC are unable to obtain the IRS Ruling, TCI and LMC
shall be relieved of the obligations set forth in subparagraphs (A), (B) and
(C).
III.
IT IS FURTHER ORDERED that
After the Distribution, TCI, LMC, Bob Magness and John C. Malone,
collectively and individually, shall not acquire or hold, directly or
indirectly, any voting power of, or other Ownership Interest in, Time Warner
that is more than the lesser of 1% of the Fully Diluted Equity of Time Warner
or 1.35% of the actual issued and outstanding common stock of Time Warner, as
determined by generally accepted accounting principles (provided, however, that
such interest shall not vote except as provided in Paragraph II(D)(2)), without
the prior approval of the Commission. Provided, further, that day-to-day market
price changes that cause any such holding to exceed the latter threshold shall
not be deemed to cause the parties to be in violation of this Paragraph.
IV.
IT IS FURTHER ORDERED that
(A) For six months after the Closing Date, TCI and Time Warner shall not enter
into any new Programming Service Agreement that requires carriage of any
Turner Video Programming Service on any analog Tier of TCI's CATVs.
(B) Any Programming Service Agreement entered into thereafter that requires
carriage of any Turner Video Programming Service on TCI's CATVs on an analog
Tier shall be limited in effective duration to five (5) years, except that
such agreements may give TCI the unilateral right(s) to renew such agreements
for one or more five-year periods.
(C) Notwithstanding the foregoing, Time Warner, Turner and TCI may enter into,
prior to the Closing Date, agreements that require carriage on an analog Tier
by TCI for no more than five years for each of WTBS (with the five year period
to commence at the time of WTBS' conversion to Converted WTBS) and Headline
News, and such agreements may give TCI the unilateral right(s) to renew such
agreements for one or more five-year periods.
13
<PAGE> 14
V.
IT IS FURTHER ORDERED that
Time Warner shall not, expressly or impliedly:
(A) refuse to make available or condition the availability of HBO to any MVPD
on whether that MVPD or any other MVPD agrees to carry any Turner-Affiliated
Video Programming Service;
(B) condition any Carriage Terms for HBO to any MVPD on whether that MVPD or
any other MVPD agrees to carry any Turner-Affiliated Video Programming Service;
(C) refuse to make available or condition the availability of each of CNN,
WTBS, or TNT to any MVPD on whether that MVPD or any other MVPD agrees to carry
any TWE-Affiliated Video Programming Service; or
(D) condition any Carriage Terms for each of CNN, WTBS, or TNT to any MVPD on
whether that MVPD or any other MVPD agrees to carry any TWE-Affiliated Video
Programming Service.
VI.
IT IS FURTHER ORDERED that
(A) For subscribers that a Competing MVPD services in the Service Area Overlap,
Time Warner shall provide, upon request, any Turner Video Programming Service
to that Competing MVPD at Carriage Terms no less favorable, relative to the
Carriage Terms then offered by Time Warner for that Service to the three MVPDs
with the greatest number of subscribers, than the Carriage Terms offered by
Turner to Similarly Situated MVPDs relative to the Carriage Terms offered by
Turner to the three MVPDs with the greatest number of subscribers for that
Service on July 30, 1996. For Turner Video Programming Services not in
existence on July 30, 1996, the pre-Closing Date comparison will be to relative
Carriage Terms offered with respect to any Turner Video Programming Service
existing as of July 30, 1996.
(B) Time Warner shall be in violation of this Paragraph if the Carriage Terms
it offers to the Competing MVPD for those subscribers outside the Service Area
Overlap are set at a higher level compared to Similarly Situated MVPDs so as to
avoid the restrictions set forth in subparagraph (A).
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<PAGE> 15
VII.
IT IS FURTHER ORDERED that
(A) Time Warner shall not require a financial interest in any National Video
Programming Service as a condition for carriage on one or more Time Warner
CATVs.
(B) Time Warner shall not coerce any National Video Programming Vendor to
provide, or retaliate against such a Vendor for failing to provide exclusive
rights against any other MVPD as a condition for carriage on one or more Time
Warner CATVs.
(C) Time Warner shall not engage in conduct the effect of which is to
unreasonably restrain the ability of a Non-Time Warner National Video
Programming Vendor to compete fairly by discriminating in video programming
distribution on the basis of affiliation or nonaffiliation of Vendors in the
selection, terms, or conditions for carriage of video programming provided by
such Vendors.
VIII.
IT IS FURTHER ORDERED that
(A) Time Warner shall collect the following information, on a quarterly
basis:
(1) for any and all offers made to Time Warner's corporate office by a
Non-Time Warner National Video Programming Vendor to enter into or to
modify any Programming Service Agreement for carriage on an Time Warner
CATV, in that quarter:
a) the identity of the National Video Programming Vendor;
b) a description of the type of programming;
c) any and all Carriage Terms as finally agreed to or, when there
is no final agreement but the Vendor's initial offer is more than
three months old, the last offer of each side;
d) any and all commitment(s) to a roll-out schedule, if applicable,
as finally agreed to or, when there is no final agreement but the
Vendor's initial offer is more than three months old, the last offer
of each side;
e) a copy of any and all Programming Service Agreement(s) as finally
agreed to or, when there is no final agreement but the Vendor's
initial offer is more than three months old, the last offer of each
side; and
15
<PAGE> 16
(2) on an annual basis for each National Video Programming Service on
Time Warner CATVs, the actual carriage rates on Time Warner CATVs and
(a) the average carriage rates on all Non-Time Warner CATVs for
each National Video Programming Service that has
publicly-available information from which Penetration Rates can be
derived; and
(b) the carriage rates on each of the fifty (50) largest (in total
number of subscribers) Non-Time Warner CATV's for each National
Video Programming Service that has publicly-available information
from which Penetration Rates can be derived.
(B) The information collected pursuant to subparagraph (A) shall be provided
to each member of TWE's Management Committee on the last day of March, June,
September and December of each year. Provided, however, that, in the event
TWE's Management Committee ceases to exist, the disclosures required in this
Paragraph shall be made to any and all partners in TWE; or, if there are no
partners in TWE, then the disclosures required in this Paragraph shall be made
to the Audit Committee of Time Warner.
(C) The General Counsel within TWE who is responsible for CATV shall annually
certify to the Commission that it believes that Time Warner is in compliance
with Paragraph VII of this order.
(D) Time Warner shall retain all of the information collected as required by
subparagraph (A), including information on when and to whom such information
was communicated as required herein in subparagraph (B), for a period of five
(5) years.
IX.
IT IS FURTHER ORDERED that
(A) By February 1, 1997, Time Warner shall execute a Programming Service
Agreement with at least one Independent Advertising-Supported News and
Information National Video Programming Service, unless the Commission
determines, upon a showing by Time Warner, that none of the offers of Carriage
Terms are commercially reasonable.
(B) If all the requirements of either subparagraph (A) or (C) are met, Time
Warner shall carry an Independent Advertising-Supported News and Information
Video Programming Service on Time Warner CATVs at Penetration Rates no less
than the following:
(1) If the Service is carried on Time Warner CATVs as of July 30, 1996,
Time Warner must make the Service available:
16
<PAGE> 17
(a) By July 30, 1997, so that it is available to 30% of the Total
Subscribers of all Time Warner CATVs at that time; and
(b) By July 30, 1999, so that it is available to 50% of the Total
Subscribers of all Time Warner CATVs at that time.
(2) If the Service is not carried on Time Warner CATVs as of July 30,
1996, Time Warner must make the Service available:
(a) By July 30, 1997, so that it is available to 10% of the Total
Subscribers of all Time Warner CATVs at that time;
(b) By July 30, 1999, so that it is available to 30% of the Total
Subscribers of all Time Warner CATVs at that time, and
(c) By July 30, 2001, so that it is available to 50% of the Total
Subscribers of all Time Warner CATVs at that time.
(C) If, for any reason, the Independent Advertising-Supported News and
Information National Video Programming Service chosen by Time Warner ceases
operating or is in material breach of its Programming Service Agreement with
Time Warner at any time before July 30, 2001, Time Warner shall, within six
months of the date that such Service ceased operation or the date of
termination of the Agreement because of the material breach, enter into a
replacement Programming Service Agreement with a replacement Independent
Advertising-Supported News and Information National Video Programming Service
so that replacement Service is available pursuant to subparagraph (B) within
three months of the execution of the replacement Programming Service Agreement,
unless the Commission determines, upon a showing by Time Warner, that none of
the Carriage Terms offered are commercially reasonable. Such replacement
Service shall have, six months after the date the first Service ceased
operation or the date of termination of the first Agreement because of the
material breach, contractual commitments to supply its Service to at least 10
million subscribers on Unaffiliated MVPDs, or, together with the contractual
commitments it will obtain from Time Warner, total contractual commitments to
supply its Service to 15 million subscribers; if no such Service has such
contractual commitments, then Time Warner may choose from among the two
Services with contractual commitments with Unaffiliated MVPDs for the largest
number of subscribers.
X.
IT IS FURTHER ORDERED that:
(A) Within sixty (60) days after the date this order becomes final and every
sixty (60) days thereafter until respondents have fully complied with the
provisions of Paragraphs IV(A) and IX(A) of this order and, with respect to
Paragraph II, until the Distribution, respondents shall
17
<PAGE> 18
submit jointly or individually to the Commission a verified written report or
reports setting forth in detail the manner and form in which they intend to
comply, are complying, and have complied with Paragraphs II, IV(A) and IX(A) of
this order.
(B) One year (1) from the date this order becomes final, annually for the next
nine (9) years on the anniversary of the date this order becomes final, and at
other times as the Commission may require, respondents shall file jointly or
individually a verified written report or reports with the Commission setting
forth in detail the manner and form in which they have complied and are
complying with each Paragraph of this order.
XI.
IT IS FURTHER ORDERED that respondents shall notify the Commission at
least thirty (30) days prior to any proposed change in respondents (other than
this Acquisition) such as dissolution, assignment, sale resulting in the
emergence of a successor corporation, or the creation or dissolution of
subsidiaries or any other change in the corporation that may affect
compliance obligations arising out of the order.
XII.
IT IS FURTHER ORDERED that, for the purpose of determining or securing
compliance with this order, and subject to any legally recognized privilege,
upon written request, respondents shall permit any duly authorized
representative of the Commission:
1 . Access, during regular business hours upon reasonable notice and in the
presence of counsel for respondents, to inspect and copy all books, ledgers,
accounts, correspondence, memoranda and other records and documents in the
possession or under the control of respondents relating to any matters
contained in this order; and
2. Upon five days' notice to respondents and without restraint or interference
from it, to interview officers, directors, or employees of respondents, who may
have counsel present, regarding such matters.
XIII.
IT IS FURTHER ORDERED THAT this order shall terminate ten (10) years from
the date this order becomes final.
18
<PAGE> 19
Signed this 14th day of August, 1996.
TIME WARNER INC., A CORPORATION
By:
--------------------------------------------
Gerald M. Levin
--------------------------------------------
Counsel for Time Warner Inc.
TURNER BROADCASTING SYSTEM, INC., A CORPORATION
By:
--------------------------------------------
General Counsel
--------------------------------------------
Counsel for Turner Broadcasting System, Inc.
TELE-COMMUNICATIONS, INC., A CORPORATION
By:
--------------------------------------------
John C. Malone
--------------------------------------------
Counsel for Tele-Communications, Inc.
LIBERTY MEDIA CORPORATION, A CORPORATION
By:
--------------------------------------------
Vice President
--------------------------------------------
Counsel for Liberty Media Corporation
19
<PAGE> 20
FEDERAL TRADE COMMISSION
By:
-----------------------
James A. Fishkin
Attorney
Bureau of Competition
Approved
- --------------------------
Robert W. Doyle, Jr.
Deputy Assistant Director
Bureau of Competition
- --------------------------
George S. Cary
Senior Deputy Director
Bureau of Competition
- --------------------------
William J. Baer
Director
Bureau of Competition
20
<PAGE> 21
Appendix I
UNITED STATES OF AMERICA
BEFORE FEDERAL TRADE COMMISSION
- -------------------------------
In the Matter of )
)
TIME WARNER INC., )
a corporation; )
)
TURNER BROADCASTING )
SYSTEM, INC., )
a corporation; )
)
) File No. 961-0004
TELE-COMMUNICATIONS, INC., )
a corporation; and )
)
LIBERTY MEDIA CORPORATION, )
a corporation. )
- -------------------------------
INTERIM AGREEMENT
This Interim Agreement is by and between Time Warner Inc. ("Time Warner"),
a corporation organized, existing, and doing business under and by virtue of
the law of the State of Delaware, with its office and principal place of
business at New York, New York; Turner Broadcasting System, Inc. ("Turner"), a
corporation organized, existing, and doing business under and by virtue of the
law of the State of Georgia with its office and principal place of business at
Atlanta, Georgia; Tele-Communications, Inc. ("TCI"), a corporation organized,
existing, and doing business under and by virtue of the law of the State of
Delaware, with its office and principal place of business located at Englewood,
Colorado; Liberty Media Corp. ("LMC"), a corporation organized, existing and
doing business under and by virtue of the law of the State of Delaware, with
its office and principal place of business located at Englewood, Colorado; and
the Federal Trade Commission ("Commission"), an independent agency of the
<PAGE> 22
INTERIM AGREEMENT PAGE 2 OF 5
United States Government, established under the Federal Trade Commission Act of
1914, 15 U.S.C. Section 41 et seq.
WHEREAS Time Warner entered into an agreement with Turner for Time Warner
to acquire the outstanding voting securities of Turner, and TCI and LMC
proposed to acquire stock in Time Warner (hereinafter "the Acquisition");
WHEREAS the Commission is investigating the Acquisition to determine
whether it would violate any statute enforced by the Commission;
WHEREAS TCI and LMC are willing to enter into an Agreement Containing
Consent Order (hereafter "Consent Order") requiring them, inter alia, to divest
TCI's and LMC's Interest in Time Warner and TCI's and LMC's Turner-Related
Businesses, by contributing those interests to a separate corporation, The
Separate Company, the stock of which will be distributed to the holders of
Liberty Tracking Stock ("the Distribution"), but, in order to fulfill paragraph
II(D) of that Consent Order, TCI and LMC must apply now to receive an Internal
Revenue Service ruling as to whether the Distribution will be generally
tax-free to both the Liberty Tracking Stock holders and to TCI under Section
355 of the Internal Revenue Code of 1986, as amended ("IRS Ruling");
WHEREAS "TCI's and LMC's Interest in Time Warner" means all of the
economic interest in Time Warner to be acquired by TCI and LMC, including the
right of first refusal with respect to Time Warner stock to be held by R. E.
Turner, III, pursuant to the Shareholders Agreement dated September 22, 1995
with LMC or any successor agreement;
WHEREAS "TCI's and LMC's Turner-Related Businesses" means the businesses
conducted by Southern Satellite Systems, Inc., a subsidiary of TCI which is
principally in the business of distributing WTBS to MVPDs;
WHEREAS "Liberty Tracking Stock" means Tele-Communications, Inc. Series A
Liberty Media Group Common Stock and Tele-Communications, Inc. Series B
Liberty Media Group Common Stock;
WHEREAS Time Warner, Turner, TCI, and LMC are willing to enter into a
Consent Order requiring them, inter alia, to forego entering into certain new
programming service agreements for a period of six months from the date that
the parties close this Acquisition ("Closing Date"), but, in order to comply
more fully with that requirement, they must cancel now the two agreements that
were negotiated as part of this Acquisition: namely, (1) the September 15,
1995, program service agreement between TCI's subsidiary, Satellite Services,
Inc. ("SSI"), and Turner and (2) the September 14, 1995, cable carriage
agreement between SSI and Time Warner for WTBS (hereafter "Two Programming
Service Agreements");
<PAGE> 23
INTERIM AGREEMENT PAGE 3 OF 5
WHEREAS if the Commission accepts the attached Consent Order, the
Commission is required to place the Consent Order on the public record for a
period of at least sixty (60) days and may subsequently withdraw such
acceptance pursuant to the provisions of Rule 2.34 of the Commission's Rules of
Practice and Procedure, 16 C.F.R. Section 2.34;
WHEREAS the Commission is concerned that if the parties do not, before
this order is made final, apply to the IRS for the IRS Ruling and cancel the
Two Programming Service Agreements, compliance with the operative provisions of
the Consent Order might not be possible or might produce a less than effective
remedy;
WHEREAS Time Warner, Turner, TCI, and LMC's entering into this Agreement
shall in no way be construed as an admission by them that the Acquisition is
illegal;
WHEREAS Time Warner, Turner, TCI, and LMC understand that no act or
transaction contemplated by this Agreement shall be deemed immune or exempt
from the provisions of the antitrust laws or the Federal Trade Commission Act
by reason of anything contained in this Agreement;
NOW, THEREFORE, upon understanding that the Commission has not yet
determined whether the Acquisition will be challenged, and in consideration of
the Commission's agreement that, unless the Commission determines to reject the
Consent Order, it will not seek further relief from Time Warner, Turner, TCI,
and LMC with respect to the Acquisition, except that the Commission may
exercise any and all rights to enforce this Agreement and the Consent Order to
which this Agreement is annexed and made a part thereof, the parties agree as
follows:
1. Within thirty (30) days of the date the Commission accepts the attached
Consent Order for public comment, TCI and LMC shall apply to the IRS for
the IRS Ruling.
2. On or before the Closing Date, Time Warner, Turner and TCI shall cancel
the Two Programming Service Agreements.
3. This Agreement shall be binding when approved by the Commission.
Dated: August 14, 1996
<PAGE> 24
INTERIM AGREEMENT PAGE 4 OF 5
FOR THE FEDERAL TRADE COMMISSION
- -----------------------
- -----------------------
Stephen Calkins
General Counsel
FOR TIME WARNER INC., A CORPORATION
By:
---------------------------
Gerald M. Levin
---------------------------
Counsel for Time Warner Inc.
FOR TURNER BROADCASTING SYSTEM, INC., A CORPORATION
By:
--------------------------------------------
General Counsel
--------------------------------------------
Counsel for Turner Broadcasting System, Inc.
FOR TELE-COMMUNICATIONS, INC., A CORPORATION
By:
-----------------------
John C. Malone
------------------------
Counsel for Tele-Communications, Inc.
<PAGE> 25
INTERIM AGREEMENT PAGE 5 OF 5
FOR LIBERTY MEDIA CORPORATION, A CORPORATION
By:
---------------------
Vice President
---------------------
Counsel for Liberty Media Corporation
