<PAGE>
As filed with the Securities and Exchange Commission on December 2, 1999
Registration No.__________
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
TIME WARNER TELECOM INC.
(Exact name of registrant as specified in its charter)
DELAWARE 84-1500624
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
10475 Park Meadows Drive
Littleton, CO 80124
(303) 566-1000
(Address of Principal Executive Offices) (Zip Code)
------------------
Time Warner Telecom 2000 Qualified Stock Purchase Plan
(Full title of the Plan)
------------------
David J. Rayner
Senior Vice President and Chief Financial Officer
Time Warner Telecom Inc.
10475 Park Meadows Drive
Littleton, CO 80124
(Name and Address of agent for service)
(303) 566-1000
(Telephone number, including area code, of agent for service)
------------------
<TABLE>
<CAPTION>
Title of Securities Amount to be Proposed Maximum Proposed Maximum Amount of
to be Registered Registered (1) Offering Price Aggregate Offering Registration Fee
Per Share (2) Price (2)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A Common Stock, par value $.01 per share
("Class A Common Stock")..................... 750,000 $30.33 $22,747,500 $6,005.34
================================================================================================================================
</TABLE>
(1) This Registration Statement also relates to an indeterminate number of
additional shares of Class A Common Stock pursuant to the change in
capitalization provisions of the above-referenced plan.
(2) Estimated solely for purposes of calculating the registration fee, pursuant
to Rules 457(c) and (h) based on the average of the high and low prices of
the Class A Common Stock as reported on the NASDAQ National Market Issues
listing as published in the Wall Street Journal for November 29, 1999, on
which day such average was $30.33.
<PAGE>
PART II
This Registration Statement on Form S-8 registers 750,000 shares of the
Registrant's Class A Common Stock for issuance pursuant to the terms of the Time
Warner Telecom 2000 Qualified Stock Purchase Plan (the "Plan").
Item 3. Incorporation of Documents by Reference.
The following documents filed with the Securities and Exchange Commission by
the Registrant pursuant to the Securities Exchange Act of 1934, or as otherwise
indicated, are hereby incorporated by reference in this Registration Statement:
1. The Annual Report of Time Warner Telecom LLC, predecessor to the
Registrant, on Form 10-K for the year ended December 31, 1998 (the "1998
Form 10-K");
2. The Registrant's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1999, June 30, 1999 and September 30, 1999; and
3. The description of the Registrant's Class A Common Stock, par value $.01
per share, contained in its Registration Statement on Form 8-A, as filed
with the SEC on May 11, 1999, pursuant to Section 12(b) of the
Securities Exchange Act of 1934.
All documents and reports subsequently filed by the Registrant pursuant to
Sections 13(a) and (c), 14 or 15(d) of the Securities Exchange Act of 1934 after
the date of this Registration Statement and prior to the filing of a post-
effective amendment to this Registration Statement which indicates that all
securities offered hereby have been sold, or which deregisters all such
securities remaining unsold, shall be deemed to be incorporated by reference in
this Registration Statement and to be a part hereof from the date of filing of
such documents or reports. Any statement, information or document incorporated
hereby by reference or deemed to be incorporated herein by reference and to be a
part hereof may be automatically updated or replaced by documents the Registrant
subsequently files which also are or are deemed to be incorporated herein by
reference. Any statement, information or document so modified or superseded will
not be deemed, except as so modified or superseded, to constitute a part of this
Registration Statement.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
Article VII of the Bylaws of Time Warner Telecom Inc. (the "Company") provides
that to the fullest extent permitted under the General Corporation Law of the
State of Delaware (the "DGCL"), the Company will indemnify and hold harmless any
person that was or is made or threatened to be made a party or is otherwise
involved in any action, suit or proceeding by reason of the fact that such
person is or was a director or officer of the Company.
II-2
<PAGE>
Section 145 of the DGCL provides that a corporation may indemnify directors
and officers as well as other employees and individuals against expenses
(including attorney' fees), judgments, fines, and amounts paid in settlement in
connection with specified actions, suits or proceedings, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of the corporation--a "derivative action"), if they acted in good faith
and in a manner they reasonably believed to be in or not opposed to the best
interests of the corporation and, with respect to any criminal actions or
proceedings, had no reasonable cause to believe their conduct was unlawful. A
similar standard is applicable in the case of derivative actions, except that
indemnification only extends to expenses (including attorneys' fees) actually
and reasonably incurred in connection with the defense or settlement or such
action, except that no indemnification may be made in respect of any claim or
matter as to which the person has been adjudged to be liable to the corporation
unless the court determines upon application that, in view of all of the
circumstances, the person is fairly and reasonably entitled to indemnity for
expenses. The Company also has obtained insurance policies which provide
coverage for the Registrant's directors and officers in certain situations,
including some situations where the Registrant cannot directly indemnify the
directors or officers.
The By-laws of Time Warner Inc. ("TWI") require indemnification to the fullest
extent permitted under Delaware or other applicable law of any person who is or
was a director or officer of TWI, and permit such indemnification of any agent
of TWI, who is or was involved or threatened to be made so involved in any
action, suit or proceeding, whether criminal, civil, administrative or
investigative, by reason of the fact that such person is or was serving at the
request of TWI as a director, officer or employee of any other enterprise. Mr.
Hays, a director, would be automatically covered by this provision; TWI has
agreed to cover Messrs. Britt and Davies, directors of the Company. The
Directors' and Officers' Liability and Reimbursement Insurance Policy of TWI is
designed to reimburse TWI for any payments made by it pursuant to the foregoing
indemnification. In addition, generally, the By-laws of American Television and
Communication Corporation ("ATC"), Time Warner Companies, Inc. ("TWCI") and
Warner Communications Inc. ("WCI"), subsidiaries of TWI that hold interests in
the Company, provide for the indemnification of the officers and directors of
ATC, TWCI and WCI to the fullest extent permitted by applicable law. Messrs.
Britt, Davies and Hays are officers of ATC and Mr. Hays is also an officer of
TWCT and WCI.
The By-laws of MediaOne Group, Inc. ("MediaOne") require indemnification to
the fullest extent permitted under Delaware law of any person who is or was a
director, officer or employee of MediaOne, or was otherwise designated as an
indemnified representative (as defined in the MediaOne By-laws) by MediaOne,
against any liability (as defined in the MediaOne By-laws) incurred by such
person in connection with any proceeding (as defined in the MediaOne By-laws) in
which such person is involved by reason of their past, present or future
services for, or at the request of, MediaOne as a director, officer, employee,
agent, fiduciary or trustee of any other entity or enterprise. Messrs. Holmes,
McPhie, and Webster, directors of the Registrant, are covered by this provision.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
The exhibits listed on the accompanying Exhibit Index are filed or
incorporated by reference as part of this Registration Statement.
Item 9. Undertakings.
II-3
<PAGE>
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of this Registration Statement (or the most
recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the
information set forth in the Registration Statement.
Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered)
and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of
prospectus filed with the SEC pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more
than a 20 percent change in the maximum aggregate offering price
set forth in the "Calculation of Registration Fee" table in the
effective Registration Statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the Registration Statement is on Form S-3, Form S-8, or Form F-3 and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
SEC by the Registrant pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the Registration
Statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(3) To remove from registration by means of post-effective amendment any of
the securities being registered which remain unsold at the termination
of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
the Registrant's annual report pursuant to
II-4
<PAGE>
Section 13(a) or 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in the Registration Statement shall be deemed to
be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(h) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "Act") may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in
the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit
to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned thereunto duly
authorized, in Denver, Colorado, on December 2, 1999.
TIME WARNER TELECOM INC.
By: /s/ David J. Rayner
____________________________________
Name: David J. Rayner
Title: Senior Vice President and
Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed below by the following persons in the capacities and
on the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
(i) Principal Executive Officer:
/s/ Larissa L. Herda
____________________________ President and Chief Executive Officer December 2,
Larissa L. Herda and Director 1999
(ii) Principal Financial Officer:
/s/ David J. Rayner
____________________________ Senior Vice President and Chief December 2,
David J. Rayner Financial Officer 1999
(iii) Principal Accounting Officer:
/s/ Jill Stuart
____________________________ Vice President, Accounting and Finance December 2,
Jill Stuart and Chief Accounting Officer 1999
(iv) Directors:
/s/ Glenn A. Britt
____________________________
Glenn A. Britt Director December 2,
1999
/s/ Bruce Claflin
____________________________ Director December 2,
Bruce Claflin 1999
</TABLE>
II-6
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
/s/ Richard J. Davies
____________________________
Richard J. Davies Director December 2,
1999
/s/ Spencer Hays
____________________________
Spencer Hays Director December 2,
1999
/s/ Larissa L. Herda
____________________________
Larissa L. Herda Director December 2,
1999
/s/ Douglas Holmes
____________________________
Douglas Holmes Director December 2,
1999
/s/ Lisa Hook
____________________________
Lisa Hook Director December 2,
1999
/s/ Stephen A. McPhie
____________________________
Stephen A. McPhie Director December 2,
1999
/s/ Robert J. Miron
____________________________
Robert J. Miron Director December 2,
1999
/s/ Audley M. Webster
____________________________
Audley M. Webster Director December 2,
1999
</TABLE>
II-7
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Description Page
----------- ----
<C> <S> <C>
4.1 Restated Certificate of Incorporation of the Registrant as filed *
with the Secretary of State of the State of Delaware on May 10,
1999 (which is incorporated herein by reference to Exhibit 3.1 to
the Registrants' Registration Statement on Form S-1 as filed with
the SEC on May 11, 1999 (Registration No.333-49439)
4.2 By-laws of the Registrant as of May 10, 1999 (which are *
incorporated herein by reference to Exhibit 3.2 to the
Registrant's 1999 S-1 as filed with the SEC on May 11, 1999
(Registration No.333-49439).
4.3 Time Warner Telecom 2000 Qualified Stock Purchase Plan
5 Opinion of Holland & Hart LLP regarding the legality of the
securities being registered.
23.1 Consent of Ernst & Young LLP, Independent Auditors.
23.2 Consent of Holland & Hart LLP (which is incorporated herein by *
reference to Exhibit 5)
</TABLE>
- -------------------------------
* Incorporated by reference
II-8
<PAGE>
Exhibit 4.3
TIME WARNER TELECOM
2000 QUALIFIED STOCK PURCHASE PLAN
1. Purpose. The purpose of the Time Warner Telecom 2000 Qualified Stock
-------
Purchase Plan (the "Plan") is to facilitate capital accumulation by Eligible
Employees in the form of Common Stock of the Company and thereby to provide
employee identification with and commitment to the goals of the Company. The
Company intends that the Plan qualify as an "employee stock purchase plan" under
section 423 of the Code. The provisions of the Plan shall be construed so as to
extend and limit participation in a manner consistent with the requirements of
that section of the Code.
2. Definitions. Whenever used in this Plan:
-----------
A. "Board of Directors" means the Board of Directors of Time Warner
Telecom.
B. "Code" means the Internal Revenue Code of 1986, as amended.
C. "Committee" means the Human Resources & Benefits Committee of Time
Warner Telecom, or any other individual or committee that has been delegated
the authority to act by and on behalf of the Human Resources & Benefits
Committee, or the Board of Directors if there is no Committee.
D. "Common Stock" means the Class A Common Stock, par value $.01 per
share, of the Company.
E. "Company" means Time Warner Telecom Inc. and any subsidiary thereof.
F. "Compensation" means: in the case of a salaried employee, the base
salary in effect for the employee on the respective Date of Offering
annualized; in the case of an employee paid on an hourly basis, the rate of
pay in effect for the employee on the respective Date of Offering times the
number of hours scheduled to be worked for the year; and in the case of a
sales-based or commissioned employee, the base salary in effect for the
employee on the respective Date of Offering annualized plus the average of
the commissions paid to the employee for the six-month period ending on the
May 31 or November 30 immediately preceding the Date of Offering annualized.
G. "Date of Offering" means January 1, 2000 and thereafter each July 1 and
January 1.
<PAGE>
H. "Eligible Employee" means any person who is a regular employee
scheduled to work at least 20 hours per week on a regular basis as of a Date
of Offering during the term of this Plan. Provided, however, that "Eligible
Employee" shall not include any person who immediately prior to the offering
on a Date of Offering: (i) is a director of the Company; or (ii) would be
deemed for purposes of Code (S) 423(b)(3) to own stock possessing five
percent (5%) or more of the total combined voting power or value of all
classes of stock of the Company. In the sole discretion of the Board of
Directors, all employees who would be deemed to be "insiders" pursuant to
Section 16 of the Securities Exchange Act of 1934 may be excluded from the
definition of "Eligible Employee" for purposes of any one or more offerings
under Section 4 of the Plan.
I. "Market Price" means the closing sale price for Common Stock (as
reported in the NASDAQ National Market Issues listing published in The Wall
Street Journal) on a given day or, if no sales of Common Stock were made on
that day, on the next preceding day on which sales were made and prices
reported. If the Common Stock of the Company is not admitted to trading on a
public market on the dates for which closing prices of the Common Stock are
to be determined, then reference shall be made to the fair market value of
the Common Stock on that date, as determined on such basis as shall be
established or specified by the Committee and/or the Board of Directors.
J. "Offering Price" means eighty-five percent (85%) of the Market Price of
Common Stock on a Date of Offering.
K. "Plan" means the Time Warner Telecom 2000 Qualified Stock Purchase
Plan.
L. "Purchase Period" means the period of January 1, 2000 to June 30, 2000
and thereafter each semi-annual period commencing on July 1 or January 1 of
each year, during and with respect to which periods payroll deductions may be
made from the Compensation of Eligible Employees accepting an option under an
offering hereunder for the period then ending.
M. "Purchase Price" means the aggregate purchase price for the Common
Stock subject to an Eligible Employee's option, calculated by multiplying the
number of shares of Common Stock for which the Eligible Employee accepted an
option pursuant to Section 5A by the Offering Price or the Alternative
Offering Price (as defined in Section 11), whichever is applicable.
3. Scope of the Plan. Options to purchase shares of Common Stock may be
-----------------
granted by the Company to Eligible Employees during the no more than five year
period commencing January 1, 2000, as hereinafter provided, but not more than
750,000 shares of Common Stock (subject to adjustment as provided in Paragraph
15) shall be purchased pursuant to such options. All options granted pursuant
to this Plan shall be subject to the same terms, conditions, rights and
privileges. The shares of Common Stock delivered by the Company pursuant to
this Plan may be treasury shares, newly issued shares, or both. If a
registration statement or other exemption from registration is not then in
effect under the
2
<PAGE>
Securities Act of 1933 (the "Securities Act"), the Plan shall in all cases be
administered to comply with Rule 701 of the Securities Act as then in effect.
4. Offerings. Subject to the terms and conditions of this Plan, the Board of
---------
Directors through the Committee shall make an offering on January 1, 2000 (the
initial Date of Offering) to Eligible Employees to purchase Common Stock under
this Plan on June 30, 2000, and thereafter such offering shall be as of each
subsequent Date of Offering to Eligible Employees to purchase Common Stock under
this Plan on the last day of each subsequent Purchase Period. The terms and
conditions for each such offering shall specify such information as the
Committee may deem appropriate, including (i) the aggregate number of shares of
Common Stock available for purchase under the Plan with respect to that
offering, (ii) the Offering Price of those shares, and (iii) the number of
shares of Common Stock available for purchase under the Plan by an individual
with respect to that offering.
5. Amount of Common Stock Each Eligible Employee May Purchase.
----------------------------------------------------------
A. Anything herein to the contrary notwithstanding, subject to the
provisions of this Plan, and as to any offering made hereunder, each Eligible
Employee shall be offered an option to purchase the number of shares of
Common Stock which has on the Date of Offering a Purchase Price (determined
on the basis of the Offering Price) equal to the amount designated by the
Eligible Employee which is the lesser of: (i) from one percent (1%) to
fifteen percent (15%) (in whole percentage points) of his or her Compensation
as of the Date of Offering, or (ii) the amount of Compensation that would be
required to purchase a maximum number of shares of Common Stock established
by the Committee as of each Date of Offering.
B. Anything herein to the contrary notwithstanding, if any Eligible
Employee offered an option to purchase shares of Common Stock hereunder would
be deemed for the purposes of Code (S)(S) 423(b)(3) and 424(d) to own stock
(including the maximum number of shares of Common Stock covered by the option
determined pursuant to the foregoing formula) possessing five percent (5%) or
more of the total combined voting power or value of all classes of stock of
the Company, the maximum number of shares of Common Stock covered by the
option shall be reduced to that number of shares which, when added to the
stock which such person is so deemed to own (excluding the maximum number of
shares of Common Stock covered by the option determined pursuant to the
foregoing formula), is less than such five percent (5%).
C. Anything herein to the contrary notwithstanding, no Eligible Employee
may be granted an option under this Plan which (within the meaning of the
limitation provided by Code (S) 423(b)(8)) would permit his or her rights to
purchase stock under all qualified employee stock purchase plans of the
Company to accrue at a rate in excess of $25,000 of fair market value of the
Common Stock (as of the time of grant) for each calendar year for which such
option is outstanding at any time. If such be the case with respect to an
option under this Plan determined pursuant to the foregoing formula, such
option shall be reduced to cover only the
3
<PAGE>
greatest number of shares an option for which may be granted within the
limitation provided by Code (S) 423(b)(8).
D. If Eligible Employees elect, in any one offering, to accept options to
an extent which would result (if options were granted on that basis) in the
granting of options for that offering to purchase more than the aggregate
number of shares of Common Stock specified by the Committee for that
offering, the Committee shall adjust such options on a pro rata basis, in
accordance with the number of shares of Common Stock actually subscribed for
by each such Eligible Employee, so that the aggregate number of shares
subject to purchase under that offering does not exceed such specified number
of shares.
6. Method of Participation.
-----------------------
A. The Committee shall give notice to Eligible Employees of each offering
of options to purchase shares of Common Stock pursuant to Paragraph 4 of this
Plan and the terms and conditions for each offering, including the Purchase
Price for the shares subject to the option to be offered to each Eligible
Employee, and such other information as the Committee may determine. Such
notice is subject to revision by the Company at any time prior to the Date of
Offering, which is the date of grant of the option.
B. Each Eligible Employee who, in accordance with Paragraph 5.A above,
desires to accept all or any part of the option to purchase shares of Common
Stock under an offering shall signify his or her election to do so on a date
on or before the Date of Offering, as specified in the notice of offering
provided to Eligible Employees pursuant to Paragraph 4. The notice of
election, or a cancellation or any revision of such notice of election, shall
be in writing in the form and manner prescribed by the Committee and shall be
signed by the Eligible Employee. Each such Eligible Employee also shall
authorize the Company, in the form and manner prescribed by the Committee, to
make payroll deductions to cover the Purchase Price of those shares of Common
Stock for which he or she has elected to accept an option. Such election and
authorization shall continue in effect, unless and until such Eligible
Employee withdraws from this Plan, modifies his or her authorization and
designation, or terminates his or her employment with the Company, as
hereinafter provided.
C. Following each Date of Offering, the Company shall, as soon as
practicable, provide each Eligible Employee accepting an option under the
offering a notice confirming the number of shares covered by such option, the
per share and aggregate Offering Price, any reduction in accordance with
Paragraph 5 above, and the resulting amount of periodic payroll deductions.
D. Any Eligible Employee who shall not make a timely election as provided
in Paragraph 6.B above, shall be deemed to have elected not to accept any
part of such option. Such election shall be irrevocable for such offering.
7. Payroll Deductions.
------------------
4
<PAGE>
A. The Offering Price for those shares of Common Stock as to which each
Eligible Employee has elected to accept the option offered to him or her
shall, during the Purchase Period, be deducted from the Eligible Employee's
Compensation through payroll deductions, in substantially equal installments.
Such payroll deduction periods shall commence with the first applicable
payroll period beginning in the Purchase Period and shall continue until the
last payroll period of the Purchase Period.
B. In the event the amount of payroll deductions during a Purchase Period
credited to the account of an Eligible Employee participating in this Plan
is, because of leave of absence, temporary lay-off, temporary disability or
any other reason (other than reduction as provided in Paragraph 8, withdrawal
as provided in Paragraph 9 or termination of employment as provided in
Paragraph 10) not sufficient to permit the purchase of the total number of
shares of Common Stock for which he or she has accepted an option, the
Eligible Employee may at any time prior to conclusion of the Purchase Period
make a payment to the Company in one lump sum of all or any portion of the
shortfall amount. To the extent of any remaining shortfall, the number of
shares of Common Stock subject to purchase under the Eligible Employee's
option shall be reduced automatically to that number of shares which his or
her account, at the conclusion of the Purchase Period, is sufficient to
purchase. The cash balance, if any, shall be refunded to the Eligible
Employee without interest.
8. Right to Reduce or Stop Deductions. An Eligible Employee who has accepted
----------------------------------
an option to purchase shares of Common Stock may, at any time prior to the 30th
day before the last day of the Purchase Period, direct the Company to (i) reduce
his or her payroll deduction, or (ii) make no further deductions. Upon either
of such actions, payroll deductions with respect to such option shall be reduced
or discontinued. If the employee has directed that payroll deductions be
reduced or discontinued, any sum previously deducted in respect of the offering
shall be retained by the Company until the end of the Purchase Period, and shall
be applied, along with any additional deductions at the reduced rate, to the
exercise of the employee's option as provided in Paragraph 11.
Any Eligible Employee who stops payroll deductions may not thereafter resume
payroll deductions for the Purchase Period, and any Eligible Employee who
decreases payroll deductions may not thereafter further decrease or increase
such contributions, except that he or she may stop such contributions during the
Purchase Period. Notification of an Eligible Employee's election to reduce or
terminate deductions to cancel an option or otherwise withdraw funds shall be
made by the filing of an appropriate notice to such effect with the Committee.
9. Right to Withdraw. In addition to the reduction or cessation of
-----------------
contributions in Paragraph 8, any Eligible Employee may direct the Company to
cancel the entire option prior to the 30th day before the last day of the
Purchase Period or request return of any portion of his or her account. If the
employee has so directed, the Company shall stop automatically any payroll
deduction for the employee and shall, as soon as practicable, refund all
requested amounts credited to the account of such employee with respect to the
applicable offering. Notification of an Eligible Employee's election to cancel
an option or
5
<PAGE>
otherwise withdraw funds shall be made by the filing of an appropriate written
and signed notice to such effect with the Committee.
10. Termination of Employment.
-------------------------
A. In the event the employment of an Eligible Employee who has accepted an
option to purchase shares of Common Stock is terminated prior to conclusion
of the Purchase Period, because of death, permanent disability, or retirement
at or after age 65 (or earlier with the Company's consent), the employee (or
his or her legal representative, if applicable) may either:
(1) cancel the option, in which event the Company shall, as soon as
practicable, refund all amounts credited to his or her account under any
offering in which he or she is participating under this Plan; or
(2) elect to receive at the conclusion of the Purchase Period that
number of whole shares of Common Stock (not to exceed the shares subject
to the option, as the same may be adjusted hereunder) which those payroll
deductions actually made are sufficient to purchase, plus the cash
balance credited to his or her account, if any.
For purposes of this paragraph, "permanent disability" shall mean
"disability" as defined under the Company's long term disability plan or
insurance policy as then in effect. In the absence of such plan or policy,
"permanent disability" shall mean the inability of an individual to engage in
any substantial gainful activity by reason of any medically determinable
physical or mental impairment which can be expected to result in death or
which has lasted or can be expected to last for a continuous period of not
less than 12 months. The Committee may request reasonable proof of
disability.
B. The election of an Eligible Employee (or his or her legal
representative, if applicable) pursuant to Paragraph 10.A above, shall be
made within three (3) months of the event causing the termination of
employment, but not later than the conclusion of the Purchase Period (except
in the case of death). Written and signed notification of the election shall
be filed with the Committee and, in the event no notification has been filed
within the prescribed period, the Company shall act in accordance with
provision 10.A(1) above.
C. In the event the employment of an Eligible Employee who has accepted an
option to purchase shares of Common Stock is terminated for any reason other
than those specified in Paragraph 10.A, the Company shall, as soon as
practicable, refund all amounts credited to his or her account without
payment of interest under any offering in which he or she is participating
under this Plan and such former employee shall have no right to purchase
Common Stock under this Plan. Any Eligible Employee who is on a leave of
absence for longer than ninety (90) days and whose reemployment is not
guaranteed either by statute or by contract shall be deemed to have
terminated employment for purposes of this Plan on the ninety-first (91) day
of such absence.
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11. Exercise of Option and Purchase of Shares. As of the last day of the
-----------------------------------------
Purchase Period, the Committee shall determine an Alternative Offering Price,
which shall be eighty-five percent (85%) of the Market Price of the Common Stock
on such last day of the Purchase Period. Unless an Eligible Employee who has
accepted an option under the offering has subsequently withdrawn from the
offering pursuant to Paragraph 9 or 10.A(1) hereof, his or her option shall be
deemed to have been exercised as of the last day of the applicable Purchase
Period and become on such date an irrevocable obligation to purchase Common
Stock in accordance with the provisions of this Plan. The number of shares of
Common Stock so purchased by each such Eligible Employee shall be determined by
dividing the amount accumulated in his or her account during the Purchase Period
by the lower of either the Offering Price or the Alternative Offering Price.
Provided, however, in no event shall the number of shares so determined and
purchased by an Eligible Employee exceed the total number of shares originally
covered by his or her option in accordance with Paragraph 6. Any the difference
between the amount deducted under paragraphs 6B and 7 and the Purchase Price
will be refunded to the Eligible Employee, without payment of interest. As soon
as practicable thereafter, the Committee shall establish an account with a
brokerage firm reflecting the ownership of the shares of Common Stock,
determined as aforesaid, purchased by each Eligible Employee. Notwithstanding
the foregoing, with an employee's written and signed election, certificates for
the number of whole shares of Common Stock purchased by the employee shall be
issued and delivered to him or her (for a reasonable fee as determined under the
terms of the Company's administrative contract with the brokerage firm). No
certificates for fractional shares will be issued under the Plan or any option.
12. Rights as a Stockholder. An Eligible Employee who has accepted an option
-----------------------
to purchase shares of Common Stock under this Plan shall not be entitled to any
of the rights or privileges of a stockholder of the Company with respect to such
shares, including the right to receive any dividends which may be declared by
the Company, until such time as he or she actually has paid the Purchase Price
for such shares and certificates have been issued to him or her in accordance
with Paragraph 11 hereof.
13. Rights Not Transferable. An Eligible Employee's rights under this Plan
-----------------------
and options accepted by him or her hereunder are exercisable only by the
Eligible Employee during his or her lifetime, and may not be sold, pledged,
assigned or transferred in any manner other than by will or the laws of descent
and distribution. Any attempt to sell, pledge, assign or transfer the same
shall be void, and automatically shall cause the option held by the Eligible
Employee to be terminated. In such event, the Company shall refund all
remaining amounts credited to the account of such Eligible Employee under this
Plan.
14. Administration of the Plan.
--------------------------
A. This Plan shall be administered by the Committee, which is authorized
to make such uniform rules as may be necessary to carry out its provisions.
The Committee shall determine any questions arising in the administration,
interpretation and application of this Plan, and all such determination shall
be conclusive and binding on all parties.
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B. If any option under this Plan shall be canceled, lapse or terminate
unexercised, the number of shares of Common Stock covered thereby shall again
become available for sale under this Plan during subsequent Purchase Periods.
C. In applying any provision of the Plan that provides for a refund of
monies to an Eligible Employee, such refund will be issued in accordance with
the payroll practices of the Company, but not more frequently than once per
month.
15. Adjustment Upon Changes in Capitalization. In the event of any change in
-----------------------------------------
the Common Stock of the Company by reason of stock dividends, split-ups,
corporate separations, recapitalizations, mergers, consolidations, combinations,
exchanges of shares and the like, the aggregate number and class of shares
available under this Plan and the number, class and Offering Price of shares
under option but not yet purchased under this Plan, shall be adjusted
appropriately by the Committee.
16. Registration of Certificates. Stock certificates may be registered in
----------------------------
the name of the Eligible Employee, or, if he or she so designates, in the
Eligible Employee's name jointly with another individual, with right of
survivorship.
17. Amendment of Plan. The Board of Directors may at any time amend this
-----------------
Plan in any respect which shall not adversely affect the rights of Eligible
Employees pursuant to options accepted under the Plan, except that, without
stockholder approval on the same basis as required by paragraph 21.A, no
amendment shall be made (i) increasing the number of shares to be reserved under
this Plan, (ii) decreasing the Offering Price, or (iii) changing employees
eligible to participate in the Plan. Plan amendments may be communicated to
Eligible Employees by Company mail, Company electronic mail or by posting a copy
of the amended plan on the Company's intranet or public drive. Upon request,
the Company will provide an Eligible Employee with a paper copy of the Plan, as
amended to the date of request.
18. Termination of the Plan. This Plan shall consist of an offering
-----------------------
commencing January 1, 2000 and ending June 30, 2000, and thereafter consecutive
semi-annual offerings beginning on the next subsequent July 1 and January 1 of
each year. All rights of Eligible Employees in any offering hereunder shall
terminate at the earlier of the conclusion of the last Purchase Period
authorized herein on the fifth anniversary of five years after effective date
or:
A. On the day that Eligible Employees participating in offerings made
under this Plan become entitled to purchase a number of shares of Common
Stock equal to or greater than the number of shares remaining available for
purchase; or
B. At any time, at the discretion of the Board of Directors after thirty
(30) days' notice has been given to the employees.
Upon termination of this Plan, shares of Common Stock shall be issued to
Eligible Employees in accordance with Paragraph 10.A, and cash, if any,
remaining in the accounts of the Eligible Employees shall be refunded to them
without payment of interest, as if the Plan were terminated at the end of a
Purchase Period.
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19. Governmental Regulations and Listing. All rights granted or to be
------------------------------------
granted to Eligible Employees under this Plan are expressly subject to all
applicable laws and regulations and to the approval of all governmental
authorities required in connection with the authorization, issuance, sale or
transfer of the shares of Common Stock reserved for this Plan, including, where
applicable and without limitation, there being a current registration statement
of the Company under the Securities Act of 1933, as amended, covering the shares
of Common Stock purchasable under options on the last day of the Purchase Period
applicable to such options, options (and if such a registration statement shall
not be effective at such time as it is required to be, the term of such options
and the Purchase Period may, at the Company's sole discretion, be extended as
the Company deems appropriate) or there being an exemption from registration
available in the Company's sole judgment. If applicable, all such rights
hereunder are also similarly subject to effectiveness of an appropriate listing
application to the NASDAQ Stock Market, a national stock exchange, or other
public market on which the Common Stock trades covering the shares of Common
Stock under the Plan upon official notice of issuance.
20. Tax Consequences. No income is recognized by an Eligible Employee when
----------------
the option is granted, or when the option is exercised. However, the Eligible
Employee must include as ordinary taxable income at the time of sale or other
taxable disposition of the Common Stock, the 15% discount of the option price
(equal to the lesser of: (1) the amount, if any, by which the fair market value
of the Common Stock when the option was granted exceeds the option price; or (2)
the amount, if any, by which the Common Stock's fair market value at the time of
such disposition or death exceeds the exercise price paid). In general, the
Eligible Employee also will recognize capital gain on any increase in fair
market value in the Common Stock (in excess of the Employee's basis in the
Common Stock), if the disposition occurs at least two years after the date on
which the option is granted and if the Eligible Employee has held the Common
Stock at least twelve months (the "Holding Period"). If the Eligible Employee
disposes of the Common Stock acquired by an exercise of an option under the Plan
before the expiration of the Holding Period, the Eligible Employee must
recognize as ordinary compensation income in the year of the disposition the
difference between the Common Stock's option price and the fair market value on
the date exercised.
21. Miscellaneous.
-------------
A. This Plan shall be submitted for approval by the stockholders of the
Company no later than 12 months from the date of adoption of the Plan by the
Board of Directors in accordance with standard corporate procedures. Exercise
of options accepted prior thereto is subject to the condition that prior to
such date this Plan shall be approved by such stockholders in the manner
contemplated by Code (S) 423(b)(2). If not so approved prior to such date,
this Plan shall terminate, all options hereunder shall be canceled and be of
no further force or effect, and the Company shall, as soon as practicable,
refund to all Eligible Employees, all sums credited to their respective
accounts in accordance with Paragraph 7 hereof without payment of interest.
B. This Plan shall not be deemed to constitute a contract of employment
between the Company and any Eligible Employee, nor shall it interfere with
the
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<PAGE>
right of the Company to terminate any Eligible Employee and treat him or her
without regard to the effect which such treatment might have upon him or her
under this Plan.
C. This Plan shall be construed and its provisions enforced and
administered in accordance with the laws of the State of Colorado, and in
accordance with the applicable provisions of Code (S)(S) 421 and 423 and all
related Code sections applicable to a qualified "employee stock purchase
plan."
D. Wherever appropriate as used herein, the masculine gender may be read
as the feminine gender, the feminine gender may be read as the masculine
gender, the singular may be read as the plural and the plural may be read as
the singular.
E. If any one or more of the terms, conditions or provisions or any part
hereof contained in this Plan shall for any reason or to any extent be held
invalid, illegal or unenforceable by any court or governmental agency of
competent jurisdiction, such invalidity, illegality or unenforceability shall
not affect the remainder of such terms, conditions or provisions, or any
other provision of this Plan, and this Plan shall be construed as if the
invalid, illegal or unenforceable term, condition or provision had never been
contained herein, and each term, condition or provision shall be valid and
enforced to the fullest extent permitted by law.
IN WITNESS WHEREOF, the duly authorized representatives of the Company have
executed this Plan.
TIME WARNER TELECOM INC.
Plan Sponsor
By: /s/ Julie A. Rich
------------------------------
Title: Sr. Vice President of Human Resources &
Business Administration
Date: December 1, 1999
DENVER:0910392.09
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Exhibit 5
December 1, 1999
Board of Directors
Time Warner Telecom Inc.
10475 Park Meadows Drive
Littleton, CO 80124
To the Board of Directors:
As counsel for Time Warner Telecom Inc. (the "Company"), a Delaware
corporation, we have examined and are familiar with its Certificate of
Incorporation, its Bylaws and its various corporate records and procedures
relating to its incorporation. We are also familiar with the procedures taken
by the Board of Directors of the Company to adopt the Time Warner Telecom 2000
Qualified Stock Purchase Plan (the "Plan"). Pursuant to the terms and
conditions set forth in the Plan, the Company may issue and sell up to 750,000
shares of its Common Stock (par value $.01 per share), respectively, subject to
possible adjustment, to eligible employees of the Company and its subsidiaries.
The Plan specifically requires shareholder approval of the Plan within 12 months
from the date of adoption of the Plan by the Board of Directors of the Company.
We also have examined such other matters and have made such other inquiries as
we deem relevant to our opinions expressed below.
We are of the opinion that the total 750,000 shares of Common Stock of the
Company, when issued in accordance with the Plan after shareholder approval of
the Plan, will be legally issued and validly outstanding shares of the Common
Stock of the Company, fully paid and non-assessable; provided, that the
consideration for each share is not less than the par value thereof.
We hereby consent to the filing of this opinion with the Securities and
Exchange Commission as an Exhibit to the Company's Registration Statement on
Form S-8 in connection with the Plan, and any amendments thereto.
Very truly yours,
Holland & Hart LLP
DENVER:0957458.01
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference of our report dated February
5, 1999, with respect to the combined financial statements and schedule of Time
Warner Telecom LLC, predecessor to Time Warner Telecom Inc., included in its
Annual Report (Form 10-K) for the year ended December 31, 1998, filed with the
Securities and Exchange Commission, in the Registration Statement (Form S-8)
pertaining to the Time Warner Telecom 2000 Qualified Stock Purchase Plan.
/s/ Ernst & Young LLP
Denver, Colorado
December 1, 1999
