U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 4
STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP
Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934,
Section 17(a) of the Public Utility Holding Company Act of 1935 or
Section 30(f) of the Investment Company Act of 1940
[X] Check box if no longer subject of Section 16. Form 4 or Form 5 obligations
may continue. See Instruction 1(b).
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1. Name and Address of Reporting Person*
Time Warner Inc.
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(Last) (First) (Middle)
75 Rockefeller Plaza
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(Street)
New York NY 10019
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(City) (State) (Zip)
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2. Issuer Name and Ticker or Trading Symbol
CDnow, Inc. (CDNW)
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3. IRS Identification Number of Reporting Person, if an Entity (Voluntary)
13-3527249
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4. Statement for Month/Year
March 2000
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5. If Amendment, Date of Original (Month/Year)
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6. Relationship of Reporting Person to Issuer
(Check all applicable)
[_] Director [X] 10% Owner
[_] Officer (give title below) [_] Other (specify below)
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7. Individual or Joint/Group Filing (Check applicable line)
[_] Form filed by one Reporting Person
[X] Form filed by more than one Reporting Person
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Table I -- Non-Derivative Securities Acquired, Disposed of,
or Beneficially Owned
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<CAPTION>
6.
4. 5. Owner-
Securities Acquired (A) or Amount of ship
3. Disposed of (D) Securities Form: 7.
Transaction (Instr. 3, 4 and 5) Beneficially Direct Nature of
2. Code ------------------------------- Owned at End (D) or Indirect
1. Transaction (Instr. 8) (A) of Month Indirect Beneficial
Title of Security Date ------------ Amount or Price (Instr. 3 (I) Ownership
(Instr. 3) (mm/dd/yy) Code V (D) and 4) (Instr.4) (Instr. 4)
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<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
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* If the Form is filed by more than one Reporting Person, see Instruction
4(b)(v).
Reminder: Report on a separate line for each class of securities beneficially
owned directly or indirectly.
Page 1 of 4
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FORM 4 (continued)
Table II -- Derivative Securities Acquired, Disposed of, or Beneficially Owned
(e.g., puts, calls, warrants, options, convertible securities)
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10.
9. Owner-
Number ship
of Form
2. Deriv- of
Conver- 5. 7. ative Deriv- 11.
sion Number of Title and Amount Secur- ative Nature
or Derivative 6. of Underlying 8. ities Secur- of
Exer- 4. Securities Date Securities Price Bene- ity: In-
cise 3. Trans- Acquired (A) Exercisable and (Instr. 3 and 4) of ficially Direct direct
Price Trans- action or Disposed Expiration Date ---------------- Deriv- Owned (D) or Bene-
1. of action Code of(D) (Month/Day/Year) Amount ative at End In- ficial
Title of Deriv- Date (Instr. (Instr. 3, ---------------- or Secur- of direct Owner-
Derivative ative (Month/ 8) 4 and 5) Date Expira- Number ity Month (I) ship
Security Secur- Day/ ------ ------------ Exer- tion of (Instr.(Instr. (Instr. (Instr.
(Instr. 3) ity Year) Code V (A) (D) cisable Date Title Shares 5) 4) 4) 4)
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<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Option to Purchase $17.9689 March 13 * X * * * * Common 2,265,806.5 * * * *
,2000 Stock
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</TABLE>
Explanation of Responses:
* See Schedule I.
Page 2 of 4
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Name and Address of Reporting Person:
Time Warner Inc.
75 Rockefeller Plaza
New York, New York 10019
Additional Reporting Persons:
Sony Corporation of America
550 Madison Avenue
New York, New York 10022
Relationship to Issuer: 10% Owner
IRS Identification Number: 13-1914734
Sony Corporation
6-7-35 Kitashingawa
Shinagawa-ku, Tokyo 141-0001 Japan
Relationship to Issuer: 10% Owner
Issuer Name and Ticker or Trading Symbol:
CDnow, Inc. (CDNW)
Statement for Month/Year
March 2000
/s/ Spencer B. Hays March 22, 2000
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**Signature of Reporting Person Date
Time Warner Inc.
Name: Spencer B. Hays
Title: Vice President
/s/ M. N. Henny March 22, 2000
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**Signature of Reporting Person Date
Sony Corporation of America
Name: M. N. Henny
Title: Executive Vice President
/s/ Teruhisa Tokunaka March 22, 2000
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**Signature of Reporting Person Date
Sony Corporation
Name: Teruhisa Tokunaka
Title: Senior Managing Director and
Chief Financial Officer
** Intentional misstatements or omissions of facts constitute Federal
Criminal Violations.
See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
Note: File three copies of this Form, one of which must be manually signed.
If space provided is insufficient, see Instruction 6 for procedure.
Potential persons who are to respond to the collection of information contained
in this form are not required to respond unless the form displays a currently
valid OMB Number.
Page 3 of 4
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SCHEDULE I
Notes to Form 4
Name and Address of Reporting Person:
Time Warner Inc.
75 Rockefeller Plaza
New York, New York 10019
Additional Reporting Persons:
Sony Corporation of America
550 Madison Avenue
New York, New York 10022
Relationship to Issuer: 10% Owner
Sony Corporation
6-7-35 Kitashinagawa
Shinagawa-ku, Tokyo 141-0001 Japan
Relationship to Issuer: 10% Owner
Issuer Name and Ticker or Trading Symbol:
CDnow, Inc. (CDNW)
Statement for Month/Year
March 2000
Explanation of Responses
On July 12, 1999, Time Warner Inc., a Delaware corporation ("Time
Warner"), and Sony Corporation of America, a New York corporation ("SCA") and
the United States headquarters of, and a wholly owned subsidiary of, Sony
Corporation, a Japanese corporation ("Sony"), together with certain other
parties, entered into an Agreement of Merger and Contribution (the "Merger
Agreement") with CDnow, Inc., a Pennsylvania corporation ("CDnow").
In connection with the Merger Agreement, Time Warner, SCA and CDnow
entered into a Stock Option Agreement (the "Stock Option Agreement"). Pursuant
to the Stock Option Agreement, CDnow granted to Time Warner and SCA (to be
shared equally by them) an irrevocable option (the "Option") to purchase up to
4,531,721.0 shares of common stock, without par value ("CDnow Common Stock"),
of CDnow (subject to adjustment), representing approximately 15.0% of the
shares of CDnow Common Stock outstanding on July 9, 1999, at a cash purchase
price per share equal to $17.9689. Upon exercise of the Option, each of Time
Warner and SCA may purchase up to 2,265,860.5 shares of CDnow Common Stock,
which would represent 7.0% of the shares of CDnow Common Stock outstanding
(based on the number of shares of CDnow Common Stock outstanding on July 9,
1999 and giving effect to the issuance of the shares of CDnow Common Stock
that may be purchased by such party upon exercise of the Option). The Option
may be exercised jointly by Time Warner and SCA at any time after the
occurrence of any event as a result of which Time Warner and SCA become
entitled to receive a termination fee under the Merger Agreement. The Option
will terminate upon the earliest of (i) the effective time of the merger, (ii)
90 days after the termination fee is paid and (iii) the termination of the
Merger Agreement (unless Time Warner and SCA have the right to receive the
termination fee upon the occurrence of certain events, in which case the
Option will not terminate until the later of (x) 90 days after the termination
fee is paid and (y) the expiration of the period in which Time Warner and SCA
have the right to receive the termination fee).
On March 13, 2000, Time Warner and SCA, together with CDnow and
certain other parties, entered into a Termination Agreement (the "Termination
Agreement"). Pursuant to the Termination Agreement, each of Time Warner, SCA
and CDnow mutually consented to terminate the Merger Agreement. In accordance
with the Option Agreement, the termination of the Merger Agreement caused the
Option to terminate and be of no further force and effect.
