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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-A/A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR 12(g) OF THE
SECURITIES EXCHANGE ACT OF 1934
AMENDMENT NO. 1
TIME WARNER INC.
(Exact name of registrant as specified in its charter)
DELAWARE 13-3527249
(State of incorporation (IRS Employer
or organization) Identification No.)
75 Rockefeller Plaza 10019
New York, New York (Zip Code)
(address of principal executive offices)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each Class Name of each exchange on which
to be so registered each class is to be registered
Rights to Purchase Series A New York Stock Exchange
Participating Cumulative
Preferred Stock
If this form relates to the registration of a class of securities
pursuant to Section 12(b) of the Exchange Act and is effective pursuant to
General Instruction A.(c), check the following box. [X]
If this form relates to the registration of a class of securities
pursuant to Section 12(g) of the Exchange Act and is effective pursuant to
General Instruction A.(d), check the following box. [ ]
Securities Act registration statement file number to which this form
relates:
...............(if applicable)
Securities to be registered pursuant to Section 12(g) of the Act:
None
(Title of Class)
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<PAGE>
This Registration Statement on Form 8-A/A amends and restates the
Registration Statement on Form 8-B filed with the Securities and Exchange
Commission (the "Commission") by TW Inc. (which was renamed Time Warner Inc.
("Time Warner")) on October 2, 1996 relating to the rights distributed to the
stockholders of Time Warner (the "Rights") in connection with the Rights
Agreement dated as of October 10, 1996 (the "Rights Agreement"), between Time
Warner and ChaseMellon Shareholder Services L.L.C., as Rights Agent. The
Rights Agreement was subsequently amended by Amendment No. 1 dated as of
December 15, 1998 ("Amendment No. 1") and Amendment No. 2 dated as of January
21, 1999 ("Amendment No. 2"). On January 10, 2000, Time Warner executed
Amendment No. 3 to the Rights Agreement ("Amendment No. 3"). All of these
amendments are reflected in this Registration Statement.
Item 1. Description of Registrant's Securities to be Registered.
On January 10, 2000, Time Warner Inc. ("Time Warner") and America
Online, Inc. ("America Online") entered into an Agreement and Plan of Merger
(the "Merger Agreement"). Under the terms of the Merger Agreement, Time Warner
and America Online will initially form a new corporation ("Holdco"). Holdco
will thereafter form two wholly-owned subsidiaries. Upon the closing of the
transaction, one such subsidiary will merge with and into Time Warner, and one
such subsidiary will merge with and into America Online (the "Mergers"), with
each of Time Warner and America Online surviving the Mergers. As a result of
the Mergers, Time Warner and America Online will become wholly-owned
subsidiaries of Holdco, which will be renamed AOL Time Warner Inc. after the
Mergers.
As a condition to America Online entering into the Merger Agreement,
Time Warner and America Online entered into a Stock Option Agreement dated as
of January 10, 2000 (the "Stock Option Agreement"), whereby Time Warner
granted America Online an irrevocable option to purchase up to 233,263,204
shares of common stock, par value $0.01 per share, of Time Warner ("Time
Warner Common Stock"). In addition, on January 10, 2000, America Online
entered into a voting agreement (the "Voting Agreement") with stockholders who
collectively have beneficial ownership of approximately 9% of outstanding Time
Warner Common Stock. Pursuant to the terms of the Voting Agreement, such
stockholders have agreed, among other things, to vote in favor of the adoption
of the Merger Agreement.
On January 10, 2000, in connection with the Merger Agreement, the
Stock Option Agreement and the Voting Agreement, Time Warner executed
Amendment No. 3. Amendment No. 3 provides that none of Holdco, America Online
or any of their Associates or Affiliates shall be deemed to be an Acquiring
Person solely by reason of the approval, execution, delivery or performance of
the Merger Agreement, the Stock Option Agreement or the Voting Agreement or
the consummation of the transactions contemplated by the Merger Agreement, the
Stock Option Agreement or the Voting Agreement. Amendment No. 3 also operates
to eliminate the restriction on the ability of the Time Warner board of
directors to further supplement or amend the provisions of the Rights
Agreement by reducing the Redemption Price or providing for an earlier
Expiration Date (each as defined below).
Capitalized terms used but not defined herein have the meaning set
forth in the Rights Agreement. A summary of the Rights, as amended, follows.
The Rights Agreement, Amendment No. 1, Amendment No. 2 and Amendment No. 3 are
incorporated herein by reference as Exhibits 1, 2, 3 and 4, respectively.
SUMMARY OF THE RIGHTS AGREEMENT
On October 10, 1996, the Board of Directors of Time Warner (the
"Time Warner Board") declared a dividend distribution of one right ("Right")
on each outstanding share of Time Warner Common Stock to holders of record of
Time Warner Common Stock at the close of business on October 10, 1996 (the
"Record Date"). The Rights Agreement provides that one Right will be
distributed for each newly issued share of Time Warner Common Stock issued
after the Record Date, until the Distribution Date (which is described in the
next paragraph). Each Right, when it becomes exercisable as described below,
will entitle the registered holder thereof to purchase from Time Warner one
two-thousandth (1/2000th) of a share of Time Warner Series A Participating
Cumulative Preferred Stock ("Time Warner Series A Preferred Stock") at a price
of $75 (as adjusted to reflect the two-for-one stock split with respect to the
Time Warner Common Stock that occurred on December 15, 1998) (the "Purchase
Price").
<PAGE>
Initially, the Rights attach to all Time Warner Common Stock
certificates representing shares of Time Warner Common Stock then issued and
outstanding, or to a current Ownership Statement issued with respect to shares
at uncertificated Time Warner Common Stock in lieu of such stock certificates,
and no separate Rights Certificates (as defined below) will be distributed.
The Rights will separate from the shares of Time Warner Common Stock upon the
earlier of (a) such time as Time Warner learns that a person or group
(including an Associate or Affiliate of such person or group) has acquired, or
has obtained the right to acquire, Beneficial Ownership (as defined below) of
more than 15% of the outstanding shares of Time Warner Common Stock on a fully
diluted basis other than pursuant to a Qualifying Offer (as defined below)
(such person or group being an "Acquiring Person"), and (b) such date, if any,
as may be designated by the Time Warner Board following the commencement of,
or first public announcement of intent to commence, a tender or exchange offer
for outstanding shares of Time Warner Common Stock which could result in a
person or group becoming the Beneficial Owner of more than 15% of the Time
Warner Common Stock on a fully diluted basis, other than pursuant to a
Qualifying Offer (the earlier of such dates being called the "Distribution
Date").
Notwithstanding the foregoing, none of Holdco, America Online or any
of their respective Associates or Affiliates shall be deemed to be an
Acquiring Person, solely by reason of the approval, execution, delivery or
performance of the Merger Agreement, the Stock Option Agreement or the Voting
Agreement or the consummation of the transactions contemplated by the Merger
Agreement, The Stock Option Agreement or the Voting Agreement.
Until the Distribution Date, the Rights are evidenced by the
certificates for the Time Warner Common Stock registered in the names of the
holders thereof (which certificates for Time Warner Common Stock will also be
deemed to be Rights Certificates, as defined below), or by a current ownership
statement issued with respect to shares of uncertificated Time Warner Common
Stock in lieu of such a certificate and not by separate Rights Certificates.
Therefore, until the Distribution Date, the Rights are transferred with and
only with the Time Warner Common Stock. As soon as practicable following the
Distribution Date, separate certificates evidencing the Rights ("Rights
Certificates") will be mailed to holders of record of shares of Time Warner
Common Stock as of the close of business on the Distribution Date and to each
initial record holder of certain shares of Time Warner Common Stock issued
after the Distribution Date, and such separate Rights Certificates alone will
thereafter evidence the Rights. The Rights are not exercisable until the
Distribution Date and currently expire on January 20, 2004 (the "Expiration
Date"), unless earlier redeemed by Time Warner as described below. The number
of shares of Time Warner Series A Preferred Stock or other securities issuable
upon exercise of a Right, the Purchase Price, the Redemption Price (as defined
below) and the number of Rights associated with each outstanding share of Time
Warner Common Stock are all subject to adjustment in the event of any change
in the Time Warner Common Stock or the Time Warner Series A Preferred Stock,
whether by reason of stock dividends, stock splits, recapitalizations,
mergers, consolidations, combinations or exchanges of securities, split-ups,
split-offs, spin-offs, liquidations, other similar changes in capitalization,
any distribution or issuance of cash, assets, evidences of indebtedness or
subscription rights, options or warrants to holders of shares of Time Warner
Common Stock or Time Warner Series A Preferred Stock, as the case may be
(other than distribution of the Rights or regular quarterly dividends) or
otherwise.
The shares of Time Warner Series A Preferred Stock are authorized to
be issued in fractions which are an integral multiple of one one-thousandth
(1/1000th) of a share of Time Warner Series A Preferred Stock. Time Warner
may, but will not be required to, issue fractions of shares upon the exercise
of Rights and, in lieu of fractional shares, Time Warner may issue
certificates or utilize a depositary arrangement as provided by the terms of
the Time Warner Series A Preferred Stock and, in the case of fractions other
than one two-thousandth (1/2000th) of a share of Time Warner Series A
Preferred Stock or an integral multiple thereof, may make a cash payment based
on the market value of such shares.
<PAGE>
At such time that there is an Acquiring Person, the Rights will
entitle each registered holder (other than such Acquiring Person or any
Associate or Affiliate of such Acquiring Person) of a Right to purchase, for
the Purchase Price, that number of two-thousandths (1/2000ths) of a share of
Time Warner Series A Preferred Stock that is equivalent in value to the number
of shares of Time Warner Common Stock that at the time of such event would
have a market value of twice the Purchase Price.
In the event Time Warner is acquired in a merger or other business
combination by an Acquiring Person or an Associate or Affiliate of an
Acquiring Person that is a publicly traded corporation or 50% or more of Time
Warner's assets or assets representing 50% or more of Time Warner's revenues
or cash flow are sold, leased, exchanged or otherwise transferred (in one or
more transactions) to an Acquiring Person or an Associate or Affiliate of an
Acquiring Person that is a publicly traded corporation, each Right will
entitle its holder (subject to the next paragraph) to purchase, for the
Purchase Price, that number of common shares of such corporation that at the
time of the transaction would have a market value of twice the Purchase Price.
In the event Time Warner is acquired in a merger or other business combination
by an Acquiring Person or an Associate or Affiliate of an Acquiring Person
that is not a publicly traded corporation or 50% or more of Time Warner's
assets or assets representing 50% or more of Time Warner's revenues or cash
flow are sold, leased, exchanged or otherwise transferred (in one or more
transactions) to an Acquiring Person or an Associate or Affiliate of an
Acquiring Person that is not a publicly traded entity, each Right will entitle
its holder (subject to the next paragraph) to purchase, for the Purchase
Price, at such holder's option, (a) that number of shares of the surviving
corporation in the transaction with such entity (which surviving corporation
could be Time Warner) that at the time of the transaction would have a book
value of twice the Purchase Price, (b) that number of shares of such entity
that at the time of the transaction would have a book value of twice the
Purchase Price or (c) if such entity has an Affiliate that has publicly traded
shares, that number of shares of such Affiliate that at the time of the
transaction would have a market value of twice the Purchase Price.
Any Rights that are at any time beneficially owned by an Acquiring
Person (or any Associate or Affiliate of an Acquiring Person) will be null and
void and nontransferable and any holder of any such Right (including any
purported transferee or subsequent holder) will be unable to exercise or
transfer any such Right.
The Rights Agreement does not apply to any Qualifying Offer.
Accordingly, the Rights will not become exercisable in the case of a tender
offer that constitutes a Qualifying Offer or a merger or business combination
consummated in compliance with the requirements of a Qualifying Offer. The
Rights Agreement defines a "Qualifying Offer" as an all-cash tender offer for
all outstanding shares of Time Warner Common Stock which meets the following
requirements (a) the person or group making the tender offer must, prior to or
upon commencing such offer, have provided to Time Warner firm written
commitments from responsible financial institutions, which have been accepted
by such person or group, to provide, subject only to customary terms and
conditions, funds for such offer which, when added to the amount of cash and
cash equivalents which such person or group then has available and has
irrevocably committed in writing to Time Warner to utilize for purposes of the
offer, will be sufficient to pay for all shares of Time Warner Common Stock
outstanding on a fully diluted basis pursuant to the offer and the second-step
transaction required by clause (e) below and all related expenses, together
with copies of all written materials prepared by such person or group for such
financial institutions in connection with obtaining such financing
commitments, (b) such person or group must own, after consummating such offer,
shares of Time Warner Capital Stock representing a majority of the shares of
Time Warner Common Stock outstanding on a fully diluted basis, (c) such offer
must in all events remain open for at least 45 business days and must be
extended for at least 20 business days after the last increase or permitted
decrease in the price offered and after any bona fide higher alternative offer
(except in certain limited circumstances set forth in the Rights Agreement),
(d) such offer is accompanied by a written opinion, in customary form, of a
nationally recognized investment banking firm which is addressed to the
holders of the shares of Time Warner Common Stock other than such person or
group and states that the price to be paid to such holders pursuant to the
offer is fair from a financial point of view to such holders and which
includes any written presentation of such firm showing the analysis and range
of the values underlying such conclusion, and (e) prior to or upon commencing
<PAGE>
such offer, such person or group must irrevocably commit in writing to Time
Warner (i) to consummate promptly upon completion of the offer a transaction
or transactions whereby all remaining shares of Time Warner Common Stock will
be acquired for the same price per share paid pursuant to the offer, subject
only to the condition that the Time Warner Board has granted any approvals
required to enable such person or group to consummate such transaction or
transactions without obtaining the vote of any other stockholder, (ii) that
such person or group will not amend such offer to reduce the per share price
offered (except in certain limited circumstances to be set forth in the Rights
Agreement), to change the form of consideration offered or to reduce the
number of shares being sought or in any other respect which is materially
adverse to Time Warner's stockholders, (iii) that such person or group will
not make any offer for any equity securities of Time Warner for six months
after commencement of the original offer if the original offer does not result
in the tender of the number of shares required to be purchased pursuant to
clause (b) above, unless another tender offer by another party for all
outstanding shares of Time Warner Common Stock (x) constitutes a Qualifying
Offer and (y) is approved by the Time Warner Board (in which event any new
offer by such person or group must be at a price no less than that provided
for in such approved offer).
At any time prior to the earlier of (a) such time as a person
becomes an Acquiring Person and (b) the Expiration Date, the Time Warner Board
may redeem the Rights in whole, but not in part, at a price (in cash or shares
of Time Warner Common Stock or other securities of Time Warner deemed by the
Time Warner Board to be at least equivalent in value) of $0.005 per Right,
subject to adjustment as provided in the Rights Agreement (the "Redemption
Price"). Immediately upon the action of the Time Warner Board electing to
redeem the Rights, and without any further action and without any notice, the
right to exercise the Rights will terminate, and the only right of the holders
of Rights will be to receive the Redemption Price.
After there is an Acquiring Person, the Time Warner Board may elect
to exchange each Right (other than Rights that become null and void and
nontransferable as is described above) for consideration per Right consisting
of one-half of the securities that would be issuable at such time upon the
exercise of one Right pursuant to the terms of the Rights Agreement. Until a
Right is exercised, the holder thereof, as such, will have no rights as a
stockholder of Time Warner, including the right to vote or to receive
dividends.
At any time prior to the Distribution Date, Time Warner may, without
the approval of any holder of Rights, supplement or amend any provision of the
Rights Agreement (including the date on which the Distribution Date shall
occur, the time during which the Rights may be redeemed, the Expiration Date
or the terms of the Time Warner Series A Preferred Stock).
The Rights Agreement and the Rights have certain antitakeover
effects. The exercise of the Rights will cause substantial dilution to any
person or group that attempts to acquire Time Warner unless (a) such
acquisition is approved by the Time Warner Board (since the Time Warner Board
may, at its option, at any time prior to any person becoming an Acquiring
Person, redeem the Rights), (b) such acquisition meets the standard for a
Qualifying Offer or (c) such acquisition is conditioned upon substantially all
the Rights being acquired.
Under the Rights Agreement, a person shall be deemed the "Beneficial
Owner" of, and shall be deemed to "beneficially own," and shall be deemed to
have "Beneficial Ownership" of, any securities:
(a) which such person or any of such person's Associates or
Affiliates is deemed to "beneficially own" within the meaning of Rule
13d-3 under the Exchange Act;
<PAGE>
(b) which such person or any of such person's Associates or
Affiliates has (i) the right to acquire (whether such right is
exercisable immediately or only after the passage of time) pursuant to
any agreement, arrangement or understanding (written or oral), or upon
the exercise of conversion rights, exchange rights, rights (other than
the Rights), warrants or options, or otherwise; provided, however, that a
person shall not be deemed under this clause (i) to be the Beneficial
Owner of, or to beneficially own, or to have Beneficial Ownership of, any
securities tendered pursuant to a tender or exchange offer made by or on
behalf of such person or any of such person's Associates or Affiliates
until such tendered securities are accepted for purchase or exchange
thereunder or (ii) the right to vote pursuant to any agreement,
arrangement or understanding (written or oral); provided, however, that a
person shall not be deemed under this clause (ii) to be the Beneficial
Owner of, or to beneficially own, any security if (A) the agreement,
arrangement or understanding (written or oral) to vote such security
arises solely from a revocable proxy or consent given to such person in
response to a public proxy or consent solicitation made pursuant to, and
in accordance with, the applicable rules and regulations under the
Exchange Act and (B) the Beneficial Ownership of such security is not
also then reportable on Schedule 13D under the Exchange Act (or any
comparable or successor report); or
(c) which are beneficially owned, directly or indirectly, by any
other person with which such person or any of such person's Associates or
Affiliates has any agreement, arrangement or understanding (written or
oral) for the purpose of acquiring, holding, voting or disposing of any
shares of Time Warner Common Stock, any other securities of Time Warner
generally entitled to vote together with the shares of Time Warner Common
Stock or any rights, warrants, options or other securities exercisable or
exchangeable for, or convertible into, shares of Time Warner Common Stock
or other securities of Time Warner generally entitled to vote together
with the shares of Time Warner Common Stock.
A person shall also be deemed to be the "Beneficial Owner" of, and
to "beneficially own," and to have "Beneficial Ownership" of, shares of Time
Warner Common Stock if such person is the Beneficial Owner of, or beneficially
owns, or has Beneficial Ownership of (as the case may be), any other
securities of Time Warner (whether or not convertible into or exchangeable for
shares of Time Warner Common Stock) generally entitled to vote together with
the shares of Time Warner Common Stock. If the preceding sentence is
applicable in any case, such person shall be deemed by virtue of Beneficial
Ownership of such other securities to be the "Beneficial Owner" of, and to
"beneficially own," and to have "Beneficial Ownership" of, that number of
shares of Time Warner Common Stock equal to the greater of (a) the number of
votes entitled to be cast in respect of such other securities upon any matter
being voted upon by the holders of shares of Time Warner Common Stock and the
holders of such other securities, voting together as a single class, and (b)
if applicable, the number of shares of Time Warner Common Stock issuable upon
conversion in full into, or exchange in full for, shares of Time Warner Common
Stock of such other securities.
In the event any Time Warner securities are subject to an approved
voting trust, then (a) the trustee or trustees under such voting trust shall
be deemed not to be the "Beneficial Owner" of any such Time Warner securities
and (b) each beneficiary of such voting trust shall be deemed to be the
"Beneficial Owner" of all such Time Warner securities.
<PAGE>
Notwithstanding the foregoing, (a) no person ordinarily engaged in
business as an underwriter of securities shall be deemed to be the "Beneficial
Owner" of, to "beneficially own," or to have any "Beneficial Ownership" of,
any securities acquired in a bona fide firm commitment underwriting pursuant
to an underwriting agreement with Time Warner and (b) no person shall be
deemed to be the "Beneficial Owner" of, to "beneficially own," or to have any
"Beneficial Ownership" of, any securities by reason of such person or any of
such person's Associates or Affiliates having the right to acquire (whether
such right is exercisable immediately or only after the passage of time) such
securities pursuant to a right of first refusal, right of first offer or
similar agreement, arrangement or understanding granted by another person (the
"subject person") (i) that does not provide any direct or indirect limitations
or restrictions on the ability of the subject person to exercise (or refrain
from exercising) any voting rights associated with such securities or contain
any other agreement, arrangement or understanding with respect to such voting
rights, (ii) that does not contain any incentive for the subject person to
support or oppose any particular business combination with an Acquiring Person
or otherwise to exercise (or refrain from exercising) any voting rights
associated with such securities in a manner advantageous to such person or any
of such person's Associates or Affiliates and (iii) with respect to which
prior written notice of which shall have been given to Time Warner.
This summary description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights
Agreement, Amendment No. 1, Amendment No. 2 and Amendment No. 3.
Item 2. Exhibits.
Exhibit No. Exhibit
1. Rights Agreement, dated as of October 10, 1996,
between Time Warner Inc. and ChaseMellon
Shareholder Services L.L.C., as Rights Agent,
including the Certificate of Designations of
the Series A Participating Cumulative Preferred
Stock as Exhibit A and the form of Rights
Certificate as Exhibit B (incorporated herein
by reference to Exhibit 4.17 to Post-Effective
Amendment No. 1 on Form S-8 to Time Warner
Inc.'s Registration Statement on Form S-4,
filed on October 11, 1996).
<PAGE>
Exhibit No. Exhibit
2. Amendment No. 1 to Rights Agreement dated as of
December 15, 1998, between Time Warner Inc. and
ChaseMellon Shareholder Services L.L.C.
(incorporated herein by reference to Exhibit
4.2 to Time Warner Inc.'s Annual Report on Form
10-K for the year ended December 31, 1998).
3. Amendment No. 2 to Rights Agreement dated as of
January 21, 1999, between Time Warner Inc. and
ChaseMellon Shareholder Services L.L.C.
(incorporated herein by reference to Exhibit
4.3 to Time Warner Inc.'s Annual Report on Form
10-K for the year ended December 31, 1998).
4.* Amendment No. 3 to Rights Agreement dated as of
January 10, 2000, between Time Warner Inc. and
ChaseMellon Shareholder Services L.L.C.
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* Filed herewith
<PAGE>
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, as amended, the registrant has duly caused this
amendment to the registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
Dated: January 31, 2000
TIME WARNER INC.
By: /s/ Thomas W. McEnerney
-----------------------------
Name: Thoams W. McEnerney
Title: Vice President
<PAGE>
INDEX OF EXHIBITS
Item 2. Exhibits.
Exhibit No. Exhibit
1. Rights Agreement, dated as of October 10, 1996,
between Time Warner Inc. and ChaseMellon
Shareholder Services L.L.C., as Rights Agent,
including the Certificate of Designations of
the Series A Participating Cumulative Preferred
Stock as Exhibit A and the form of Rights
Certificate as Exhibit B (incorporated herein
by reference to Exhibit 4.17 to Post-Effective
Amendment No. 1 on Form S-8 to Time Warner
Inc.'s Registration Statement on Form S-4,
filed on October 11, 1996).
2. Amendment No. 1 to Rights Agreement dated as of
December 15, 1998, between Time Warner Inc. and
ChaseMellon Shareholder Services L.L.C.
(incorporated herein by reference to Exhibit
4.2 to Time Warner Inc.'s Annual Report on Form
10-K for the year ended December 31, 1998).
3. Amendment No. 2 to Rights Agreement dated as of
January 21, 1999, between Time Warner Inc. and
ChaseMellon Shareholder Services L.L.C.
(incorporated herein by reference to Exhibit
4.3 to Time Warner Inc.'s Annual Report on Form
10-K for the year ended December 31, 1998).
4.* Amendment No. 3 to Rights Agreement dated as of
January 10, 2000, between Time Warner Inc. and
ChaseMellon Shareholder Services L.L.C.
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* Filed herewith
<PAGE>
EXHIBIT 4
AMENDMENT NO. 3 TO RIGHTS AGREEMENT
This Amendment No. 3 dated as of January 10, 2000 (this "Amendment")
to the Rights Agreement dated as of October 10, 1996, as amended (the "Rights
Agreement"), between TIME WARNER INC., a Delaware corporation formally named
TW Inc. (the "Company"), and CHASEMELLON SHAREHOLDER SERVICES L.L.C. (the
"Rights Agent").
WHEREAS the Company has duly authorized the execution and delivery
of this Amendment and has done all things necessary to make this Amendment a
valid agreement of the Company. This Amendment is entered into pursuant to
Section 26 of the Rights Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
1. Defined Terms. Terms defined in the Rights Agreement and not
otherwise defined herein shall have the meanings given to them in the Rights
Agreement.
2. Amendment of Section 1. (a) Section 1 of the Rights
Agreement is hereby amended to add the following sentence at the end of the
definition of "Acquiring Person":
"Notwithstanding anything in this Agreement to the contrary, none of
Holdco, America Online or any of their respective Affiliates or Associates
shall be deemed to be an Acquiring Person, solely by reason of the approval,
execution, delivery or performance of the Merger Agreement, the Voting
Agreement or the Time Warner Stock Option Agreement or the consummation of the
transactions contemplated by the Merger Agreement, the Voting Agreement or the
Time Warner Stock Option Agreement."
(b) Section 1 of the Rights Agreement is further amended to
insert the following definitions in the proper alphabetical order:
"America Online" shall have the meaning assigned to such term
in the Merger Agreement;
"Holdco" shall have the meaning assigned to such term in the
Merger Agreement;
"Merger Agreement" shall mean the Agreement and Plan of Merger
dated as of January 10, 2000, between America
<PAGE>
2
Online and the Company, as amended from time to time in accordance with its
terms;
"Time Warner Stock Option Agreement" shall have the meaning
assigned to such term in the Merger Agreement; and
"Voting Agreement" shall have the meaning assigned to such term
in the Merger Agreement."
3. Amendment of Section 26. Section 26 of the Rights Agreement
is hereby amended to delete the entire last sentence of such Section,
beginning with the phrase "In addition".
4. Effectiveness. This Amendment shall be deemed effective as
of January 10, 2000, as if executed on such date. Except as amended hereby,
the Rights Agreement shall remain in full force and effect and shall be
otherwise unaffected hereby.
5. Miscellaneous. This Amendment shall be deemed to be a
contract made under the laws of the State of Delaware and for all purposes
shall be governed by and construed in accordance with the laws of such state.
This Amendment may be executed in any number of counterparts, each of such
counterparts shall for all purposes be deemed an original and all such
counterparts shall together constitute but one and the same instrument.
<PAGE>
3
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed and attested, all as of the day and year first above written.
Attest: TIME WARNER INC.,
/s/ by /s/ Christopher P. Bogart
- --------------------------- --------------------------------
Title: Assistant Secretary Name: Christopher P. Bogart
Title: Executive Vice President,
General Counsel and
Secretary
