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CERTIFICATE OF THE VOTING POWERS, DESIGNATIONS,
PREFERENCES AND RELATIVE, PARTICIPATING,
OPTIONAL OR OTHER SPECIAL RIGHTS AND
QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS THEREOF,
OF SERIES LMC COMMON STOCK
OF
AOL TIME WARNER INC.
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Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
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AOL Time Warner Inc., a corporation organized and existing
under the General Corporation Law of the State of Delaware (the "Corporation"),
does hereby certify that the following resolution was duly adopted by action of
the Board of Directors of the Corporation (the "Board of Directors").
RESOLVED that pursuant to the authority expressly granted to
and vested in the Board of Directors by the provisions of Section 3 of Article
IV of the Restated Certificate of Incorporation of the Corporation, as amended
from time to time (the "Certificate of Incorporation"), and Section 151(g) of
the DGCL, the Board of Directors hereby creates, from the authorized shares of
Series Common Stock, par value $0.01 per share ("Series Common Stock"), of the
Corporation authorized to be issued pursuant to the Certificate of
Incorporation, a series of Series Common Stock, and hereby fixes the voting
powers, designations, preferences and relative, participating, optional or other
special rights, and qualifications, limitations or restrictions thereof, of the
shares of such series as follows:
The series of Series Common Stock hereby established shall
consist of 210,000,000 shares designated as Series LMC Common Stock. The number
of shares constituting such series may be increased or decreased (but not below
the number of shares then outstanding) from time to time by a resolution or
resolutions of the Board of Directors of the Corporation.
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1. Definitions. As used herein, the following
terms shall have the indicated meanings:
1.1 "Board of Directors" shall mean the
Board of Directors of the Corporation or, with respect to any action to be taken
by the Board of Directors, any committee of the Board of Directors duly
authorized to take such action.
1.2 "Capital Stock" shall mean any and all
shares of corporate stock of a Person (however designated and whether
representing rights to vote, rights to participate in dividends or distributions
upon liquidation or otherwise with respect to such Person, or any division or
subsidiary thereof, or any joint venture, partnership, corporation or other
entity).
1.3 "Certificate" shall mean the Certificate
of the Voting Powers, Designations, Preferences and Relative, Participating,
Optional or Other Special Rights, and Qualifications, Limitations or
Restrictions Thereof, of Series LMC Common Stock filed with the Secretary of
State of the State of Delaware pursuant to Section 151 of the DGCL, as amended
from time to time.
1.4 "Closing Price" of the Common Stock
shall mean the last reported sale price of the Common Stock (regular way) as
shown on the Composite Tape of the NYSE, or, in case no such sale takes place on
such day, the average of the closing bid and asked prices on the NYSE, or, if
the Common Stock is not listed or admitted to trading on the NYSE, on the
principal national securities exchange on which such stock is listed or admitted
to trading, or, if it is not listed or admitted to trading on any national
securities exchange, the last reported sale price of the Common Stock, or, in
case no such sale takes place on such day, the average of the closing bid and
asked prices, in either case as reported by NASDAQ.
1.5 "Common Stock" shall mean the class of
Common Stock, par value $0.01 per share, of the Corporation, or any other class
of stock resulting from (x) successive changes or reclassifications of such
Common Stock consisting of changes in par value, or from par value to no par
value, (y) a subdivision or combination or (z) any other changes for which an
adjustment is made under Section 2.4(a), together with any rights associated
generally with the shares of Common Stock.
1.6 "Communications Laws" shall mean the
Communications Act of 1934 (as amended and supplemented from
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time to time and any successor statute or statutes regulating telecommunications
companies) and the rules and regulations (and interpretations thereof and
determinations with respect thereto) promulgated, issued or adopted from time to
time by the Federal Communications Commission (the "FCC"). All references herein
to Communications Laws shall include as of any relevant date in question the
Communications Laws as then in effect (including any Communications Law or part
thereof the effectiveness of which is then stayed or promulgated with a delayed
effective date).
1.7 "Conversion Date" shall have the meaning set
forth in Section 3.5.
1.8 "Corporation" shall mean AOL Time Warner Inc., a
Delaware corporation, and any of its successors by operation of law, including
by merger or consolidation.
1.9 "DGCL" shall mean the General Corporation Law of
the State of Delaware, as amended from time to time.
1.10 "Dividend Payment Date" shall have the meaning
set forth in Section 2.1.
1.11 "Formula Number" shall have the meaning set
forth in Section 2.1.
1.12 "LMC Agreement" shall mean the Second Amended
and Restated LMC Agreement dated as of September 22, 1995, among a Delaware
corporation known on such date as "Time Warner Inc.", TW Inc., Liberty Media
Corporation, a Delaware corporation ("LMC Parent"), and certain subsidiaries of
LMC Parent listed under "Subsidiaries of LMC Parent" on the signature pages
thereto, as amended by Amendment No. 1 dated as of June 24, 1997, Amendment No.
2 dated as of May 25, 1999, and as further amended from time to time.
1.13 "Merger Agreement" shall mean the Second Amended
and Restated Agreement and Plan of Merger dated as of January 10, 2000, among
AOL Time Warner Inc., America Online, Inc., Time Warner Inc., America Online
Merger Sub Inc. and Time Warner Merger Sub Inc., as such agreement may be
amended from time to time in accordance with its terms.
1.14 "NASDAQ" shall mean The Nasdaq Stock Market.
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1.15 "NYSE" shall mean the New York Stock Exchange,
Inc.
1.16 "Parity Stock" shall mean shares of Common Stock
and shares of any other class or series of Capital Stock of the Corporation
that, by the terms of the Certificate of Incorporation or of the instrument by
which the Board of Directors, acting pursuant to authority granted in the
Certificate of Incorporation, shall fix the relative rights, preferences and
limitations thereof, shall, in the event that the stated dividends thereon are
not paid in full, be entitled to share ratably with the shares of this Series in
the payment of dividends in accordance with the sums that would be payable on
such shares if all dividends were declared and paid in full, or shall, in the
event that the amounts payable thereon in liquidation are not paid in full, be
entitled to share ratably with the shares of this Series in any distribution of
assets other than by way of dividends in accordance with the sums that would be
payable in such distribution if all sums payable were discharged in full.
1.17 "Permitted Transferee" shall mean any Liberty
Party, as such term is defined in the LMC Agreement.
1.18 "Person" shall mean an individual, corporation,
partnership, limited liability company, joint venture, association, trust,
unincorporated organization or other entity.
1.19 "Preferred Stock" shall mean the class of
Preferred Stock, par value $0.10 per share, of the Corporation.
1.20 "Record Date" shall have the meaning set forth
in Section 2.1.
1.21 "Senior Stock" shall mean shares of any class or
series of Capital Stock of the Corporation that, by the terms of the Certificate
of Incorporation or of the instrument by which the Board of Directors, acting
pursuant to authority granted in the Certificate of Incorporation, shall fix the
relative rights, preferences and limitations thereof, shall be senior to the
shares of this Series in respect of the right to receive dividends or to
participate in any distribution of assets other than by way of dividends.
1.22 "Series Common Stock" shall mean the class of
Series Common Stock, par value $0.01 per share, of the Corporation.
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1.23 "Series LMC Common Stock" and "this Series"
shall mean the series of Series Common Stock authorized and designated as Series
LMC Common Stock.
1.24 "Series LMCN-V Common Stock" shall mean the
series of Series Common Stock authorized and designated as Series LMCN-V Common
Stock.
1.25 "Trading Day" shall mean, so long as the Common
Stock is listed or admitted to trading on the NYSE, a day on which the NYSE is
open for the transaction of business, or, if the Common Stock is not listed or
admitted to trading on the NYSE, a day on which the principal national
securities exchange on which the Common Stock is listed is open for the
transaction of business, or, if the Common Stock is not so listed or admitted
for trading on any national securities exchange, a day on which the National
Market System of NASDAQ is open for the transaction of business.
2. Dividends.
2.1 The holders of shares of this Series shall be
entitled to receive dividends, out of funds legally available therefor, payable
on such dates as may be set by the Board of Directors for payment of cash
dividends on the Common Stock (each such date being referred to herein as a
"Dividend Payment Date"), in cash, in an amount per share equal to the product
of (i) the Formula Number in effect as of such Dividend Payment Date multiplied
by (ii) the amount of the regularly scheduled cash dividend to be paid on one
share of Common Stock on such Dividend Payment Date; provided, however,
dividends on the shares of this Series shall be payable pursuant to this Section
2.1 only to the extent that regularly scheduled cash dividends are declared and
paid on the Common Stock. As used herein, the "Formula Number" shall initially
be 1.0000, which shall be adjusted from time to time pursuant to Section 2.4.
The dividends payable on any Dividend Payment Date shall be paid to the holders
of record of shares of this Series at the close of business on the record date
for the related regularly scheduled cash dividend on the Common Stock (each such
date being referred to herein as a "Record Date"). The amount of dividends that
are paid to each holder of record on any Dividend Payment Date shall be rounded
to the nearest cent.
2.2 In case the Corporation shall at any time
distribute (other than a distribution in liquidation of the Corporation and
other than a distribution of Common
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Stock as a result of which an adjustment to the Formula Number is made pursuant
to Section 2.4 or in connection with which a dividend of shares of this Series
is paid in accordance with Section 2.4(e)) to the holders of its shares of
Common Stock any assets or property, including evidences of indebtedness or
securities of the Corporation or of any other Person (including common stock of
such Person) or cash (but excluding regularly scheduled cash dividends payable
on shares of Common Stock), or in case the Corporation shall at any time
distribute (other than a distribution in liquidation of the Corporation) to such
holders rights, options or warrants to subscribe for or purchase shares of
Common Stock (including shares held in the treasury of the Corporation), or
rights, options or warrants to subscribe for or purchase any other security or
rights, options or warrants to subscribe for or purchase any assets or property
(in each case, whether of the Corporation or otherwise, but other than any
distribution of rights to purchase securities of the Corporation if the holder
of shares of this Series would otherwise be entitled to receive such rights upon
conversion of shares of this Series for Common Stock pursuant to Section 3,
provided, however, that if such rights are subsequently redeemed by the
Corporation, such redemption shall be treated for purposes of this Section 2.2
as a cash dividend (but not a regularly scheduled cash dividend) on the Common
Stock), the Corporation shall simultaneously distribute such assets, property,
securities, rights, options or warrants to the holders of shares of this Series
on the record date fixed for determining the holders of Common Stock entitled to
participate in such distribution (or, if no such record date shall be
established, the effective time thereof) in an amount per share of this Series
equal to the amount that a holder of one share of this Series would have been
entitled to receive had such share of this Series been converted into Common
Stock immediately prior to such record date (or effective time). In the event of
a distribution to holders of shares of this Series pursuant to this Section 2.2,
such holders shall be entitled to receive fractional shares or interests only to
the extent that holders of Common Stock are entitled to receive the same. The
holders of shares of this Series on the applicable record date (or effective
time) shall be entitled to receive in lieu of such fractional shares or
interests the same consideration as is payable to holders of Common Stock with
respect thereto. If there are no fractional shares or interests payable to
holders of Common Stock, the holders of shares of this Series on the applicable
record date (or effective time) shall receive in lieu of such fractional shares
or interests the fair value thereof as determined by the Board of Directors.
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2.3 In the event that the holders of Common Stock are
entitled to make any election with respect to the kind or amount of securities
or other property receivable by them in any distribution that is subject to
Section 2.2, the kind and amount of securities or other property that shall be
distributable to the holders of shares of this Series shall be based on (i) the
election, if any, made by the holder of record (as of the date used for
determining the holders of Common Stock entitled to make such election) of the
largest number of shares of this Series in writing to the Corporation on or
prior to the last date on which a holder of Common Stock may make such an
election or (ii) if no such election is timely made, an assumption that such
holder failed to exercise any such rights (provided that if the kind or amount
of securities or other property is not the same for each nonelecting holder,
then the kind and amount of securities or other property receivable by holders
of shares of this Series shall be based on the kind or amount of securities or
other property receivable by a plurality of the shares held by the nonelecting
holders of Common Stock). Concurrently with the mailing to holders of Common
Stock of any document pursuant to which such holders may make an election of the
type referred to in this Section 2.3, the Corporation shall mail a copy thereof
to the holders of record of shares of this Series as of the date used for
determining the holders of record of Common Stock entitled to such mailing,
which document shall be used by the holders of record of shares of this Series
to make such an election.
2.4 The Formula Number shall be adjusted from time to
time as follows for events occurring after the effective time of the
transactions contemplated by the Merger Agreement, whether or not any shares of
this Series have been issued by the Corporation:
(a) In case the Corporation shall (i) pay a dividend
in shares of its Common Stock, (ii) combine its outstanding shares of
Common Stock into a smaller number of shares, (iii) subdivide its
outstanding shares of Common Stock or (iv) reclassify (other than by
way of a merger or consolidation that is subject to Section 3.6) its
shares of Common Stock, then the Formula Number in effect immediately
before such event shall be appropriately adjusted so that immediately
following such event the holders of shares of this Series shall be
entitled to receive upon conversion thereof the kind and amount of
shares of Capital Stock of the Corporation that they would have owned
or been entitled to receive upon or by reason of such event if such
shares of this Series had been converted
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immediately before the record date (or, if no record date, the
effective date) for such event (it being understood that any
distribution of cash or Capital Stock (other than Common Stock) that
shall accompany a reclassification of the Common Stock, shall be
subject to Section 2.2 rather than this Section 2.4(a)). An adjustment
made pursuant to this Section 2.4(a) shall become effective
retroactively immediately after the record date in the case of a
dividend or distribution and shall become effective retroactively
immediately after the effective date in the case of a subdivision,
combination or reclassification. For the purposes of this Section
2.4(a), in the event that the holders of Common Stock are entitled to
make any election with respect to the kind or amount of securities
receivable by them in any transaction that is subject to this Section
2.4(a) (including any election that would result in all or a portion of
the transaction becoming subject to Section 2.2), the kind and amount
of securities that shall be distributable to the holders of shares of
this Series shall be based on (i) the election, if any, made by the
holder of record (as of the date used for determining the holders of
Common Stock entitled to make such election) of the largest number of
shares of this Series in writing to the Corporation on or prior to the
last date on which a holder of Common Stock may make such an election
or (ii) if no such election is timely made, an assumption that such
holder failed to exercise any such rights (provided that if the kind or
amount of securities is not the same for each nonelecting holder, then
the kind and amount of securities receivable shall be based on the kind
or amount of securities receivable by a plurality of nonelecting
holders of Common Stock). Concurrently with the mailing to holders of
Common Stock of any document pursuant to which such holders may make an
election of the type referred to in this Section 2.4(a), the
Corporation shall mail a copy thereof to the holders of record of
shares of this Series as of the date used for determining the holders
of record of Common Stock entitled to such mailing, which document
shall be used by the holders of record of shares of this Series to make
such an election.
(b) The Corporation shall be entitled to make such
additional adjustments in the Formula Number, in addition to those
required by Section 2.4(a) as shall be necessary in order that any
dividend or distribution in Common Stock or any subdivision,
reclassification or combination of shares of Common Stock referred to
above, shall not be taxable to the
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holders of Common Stock for United States Federal income tax purposes,
so long as such additional adjustments pursuant to this Section 2.4(b)
do not decrease the Formula Number.
(c) All calculations under this Section 2 and Section
3 shall be made to the nearest cent, one- hundredth of a share or, in
the case of the Formula Number, one hundred-thousandth. Notwithstanding
any other provision of this Section 2.4, the Corporation shall not be
required to make any adjustment of the Formula Number unless such
adjustment would require an increase or decrease of at least one
percent (1%) of the Formula Number. Any lesser adjustment shall be
carried forward and shall be made at the time of and together with the
next subsequent adjustment that, together with any adjustment or
adjustments so carried forward, shall amount to an increase or decrease
of at least one percent (1%) of the Formula Number. Any adjustments
under this Section 2.4 shall be made successively whenever an event
requiring such an adjustment occurs.
(d) Promptly after an adjustment in the Formula
Number is required, the Corporation shall provide written notice to
each of the holders of shares of this Series, which notice shall state
the adjusted Formula Number.
(e) Notwithstanding anything to the contrary in this
Section 2.4 or the Certificate, if the Corporation pays a dividend with
respect to its outstanding Common Stock in the form of additional
shares of Common Stock, and the Corporation pays an equivalent dividend
with respect to its outstanding Series LMCN-V Common Stock, if any, in
the form of additional shares of Series LMCN-V Common Stock, then:
(i) the Corporation shall pay a dividend with respect
to the outstanding shares of this Series, if any, in the form
of additional shares of this Series, payable at the same time
with the same record date and in the same ratio as the
dividend with respect to the Common Stock (including treatment
of fractional shares); and
(ii) if the Corporation pays a dividend in accordance
with clause (i) above or if there are at the time no shares of
this Series outstanding, there shall not be any adjustment to
the Formula
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Number by reason of such dividend with respect to the Common
Stock.
(f) If a distribution is made in accordance with the
provisions of Section 2.2, anything in this Section 2.4 to the contrary
notwithstanding, no adjustment pursuant to this Section 2.4 shall be
effected by reason of the distribution of such assets, property,
securities, rights, options or warrants or the subsequent modification,
exercise, expiration or termination of such securities, rights, options
or warrants.
3. Conversion at the Option of the Holder.
3.1 Each holder of a share of this Series shall have
the right at any time to convert such share of this Series into either: (i) a
number of shares of Common Stock per share of this Series equal to the Formula
Number in effect on the Conversion Date or (ii) one share of Series LMCN-V
Common Stock per share of this Series; provided, however, that such holder may
convert shares of this Series only to the extent that the ownership by such
holder or its designee of the shares of Common Stock or Series LMCN-V Common
Stock issuable upon such conversion would not violate the Communications Laws.
3.2 No adjustments in respect of payments of
dividends on shares of this Series surrendered for conversion or any dividend on
the Common Stock or Series LMCN-V Common Stock issued upon conversion shall be
made upon the conversion of any shares of this Series (it being understood that
if the Conversion Date for shares of this Series occurs after the Record Date
and prior to the Dividend Payment Date of any such dividend, the holders of
record of shares of this Series on such Record Date shall be entitled to receive
the dividend payable with respect to such shares on the related Dividend Payment
Date pursuant to Section 2.1).
3.3 The Corporation may, but shall not be required
to, in connection with any conversion of shares of this Series into shares of
Common Stock, issue a fraction of a share of Common Stock, and if the
Corporation shall determine not to issue any such fraction, the Corporation
shall make a cash payment (rounded to the nearest cent) equal to such fraction
multiplied by the Closing Price of the Common Stock on the last Trading Day
prior to the Conversion Date. The Corporation shall issue a fraction of a share
of Series LMCN-V Common Stock in order to effect a
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conversion of a fraction of a share of this Series into Series LMCN-V Common
Stock.
3.4 Any holder of shares of this Series electing to
convert such shares into Common Stock or Series LMCN-V Common Stock shall
surrender the certificate or certificates for such shares at the principal
executive office of the Corporation (or at such other place as the Corporation
may designate by notice to the holders of shares of this Series) during regular
business hours, duly endorsed to the Corporation or in blank, or accompanied by
instruments of transfer to the Corporation or in blank, or in form satisfactory
to the Corporation, and shall give written notice to the Corporation at such
office that such holder elects to convert such shares of this Series, which
notice shall state whether the shares of this Series delivered for conversion
shall be converted into shares of Common Stock or shares of Series LMCN-V Common
Stock. If any such certificate or certificates shall have been lost, stolen or
destroyed, the holder shall, in lieu of delivering such certificate or
certificates, deliver to the Corporation (or such other place) an
indemnification agreement and bond satisfactory to the Corporation. The
Corporation shall, as soon as practicable (subject to Section 3.8) after such
deposit of certificates for shares of this Series or delivery of the
indemnification agreement and bond, accompanied by the written notice above
prescribed, issue and deliver at such office (or such other place) to the holder
for whose account such shares were surrendered, or a designee of such holder,
certificates representing either (i) the number of shares of Common Stock and
the cash, if any, or (ii) the number of shares of Series LMCN-V Common Stock, as
the case may be, to which such holder is entitled upon such conversion. Each
share of Common Stock delivered to a holder or its designee as a result of
conversion of shares of this Series pursuant to this Section 3 shall be
accompanied by any rights associated generally with each other share of Common
Stock outstanding as of the Conversion Date.
3.5 Conversion shall be deemed to have been made as
of the date (the "Conversion Date") that the certificate or certificates for the
shares of this Series to be converted and the written notice prescribed in
Section 3.4 are received by the Corporation; and the Person entitled to receive
the Common Stock or Series LMCN-V Common Stock issuable upon such conversion
shall be treated for all purposes as the holder of record of such Common Stock
or Series LMCN-V Common Stock, as the case may be, on such date. The Corporation
shall not be required to deliver certificates for shares of Common Stock or
Series LMCN-V
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Common Stock while the stock transfer books for such stock or for this Series
are duly closed for any purpose, but certificates for shares of Common Stock or
Series LMCN-V Common Stock, as the case may be, shall be delivered as soon as
practicable after the opening of such books.
3.6 In the event that after the effective time of the
transactions contemplated by the Merger Agreement, whether or not any shares of
this Series have been issued by the Corporation, either (a) any consolidation or
merger to which the Corporation is a party, other than a merger or consolidation
in which the Corporation is the surviving or continuing corporation and that
does not result in any reclassification of, or change (other than a change in
par value or from par value to no par value or from no par value to par value,
or as a result of a subdivision or combination) in, outstanding shares of Common
Stock or (b) any sale or conveyance of all or substantially all of the property
and assets of the Corporation, then lawful provision shall be made as part of
the terms of such transaction whereby the holder of each share of this Series
shall have the right thereafter, during the period such share shall be
convertible, to convert such share into the kind and amount of shares of stock
or other securities and property receivable upon such consolidation, merger,
sale or conveyance by a holder of the number of shares of Common Stock into
which such shares of this Series could have been converted immediately prior to
such consolidation, merger, sale or conveyance, subject to adjustment that shall
be as nearly equivalent as may be practicable to the adjustments provided for in
Section 2.4 and this Section 3 (based on (i) the election, if any, made in
writing to the Corporation by the holder of record (as of the date used for
determining holders of Common Stock entitled to make such election) of the
largest number of shares of this Series on or prior to the last date on which a
holder of Common Stock may make an election regarding the kind or amount of
securities or other property receivable by such holder in such transaction or
(ii) if no such election is timely made, an assumption that such holder failed
to exercise any such rights (provided that if the kind or amount of securities
or other property is not the same for each nonelecting holder, then the kind and
amount of securities or other property receivable shall be based upon the kind
and amount of securities or other property receivable by a plurality of the
nonelecting holders of Common Stock)). In the event that any of the transactions
referred to in clause (a) or (b) of the first sentence of this Section 3.6
involve the distribution of cash or property (other than equity securities) to a
holder of Common Stock, lawful provision shall be made as part of the terms of
the transaction
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whereby the holder of each share of this Series on the record date fixed for
determining holders of Common Stock entitled to receive such cash or property
(or if no such record date is established, the effective date of such
transaction) shall be entitled to receive the amount of cash or property that
such holder would have been entitled to receive had such holder converted his
shares of this Series into Common Stock immediately prior to such record date
(or effective date) (based on the election or nonelection made by the holder of
record of the largest number of shares of this Series, as provided above).
Concurrently with the mailing to holders of Common Stock of any document
pursuant to which such holders may make an election regarding the kind or amount
of securities or other property that will be receivable by such holders in any
transaction described in clause (a) or (b) of the first sentence of this Section
3.6, the Corporation shall mail a copy thereof to the holders of record of the
shares of this Series as of the date used for determining the holders of record
of Common Stock entitled to such mailing, which document shall be used by the
holders of shares of this Series to make such an election. The Corporation shall
not enter into any of the transactions referred to in clause (a) or (b) of the
first sentence of this Section 3.6 unless effective provision shall be made in
the certificate or articles of incorporation or other constituent documents of
the Corporation or the entity surviving the consolidation or merger, if other
than the Corporation, or the entity acquiring the Corporation's assets, as the
case may be, so as to give effect to the provisions set forth in this Section
3.6. The provisions of this Section 3.6 shall apply similarly to successive
consolidations, mergers, sales or conveyances. For purposes of this Section 3.6,
the term "Corporation" shall refer to the Corporation as constituted immediately
prior to the merger, consolidation or other transaction referred to in this
Section 3.6.
3.7 The Corporation shall at all times reserve and
keep available, free from preemptive rights, out of its authorized but unissued
stock, for the purpose of effecting the conversion of the shares of this Series,
such number of its duly authorized shares of Common Stock and Series LMCN-V
Common Stock as shall from time to time be sufficient to effect the conversion
of all outstanding shares of this Series into shares of Common Stock or Series
LMCN-V Common Stock at any time (assuming that, at the time of the computation
of such number of shares, all such Common Stock or Series LMCN-V Common Stock
would be held by a single holder); provided, however, that nothing contained
herein shall preclude the Corporation from satisfying its obligations in respect
of the conversion of
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the shares by delivery of purchased shares of Common Stock or Series LMCN-V
Common Stock that are held in the treasury of the Corporation. All shares of
Common Stock or Series LMCN-V Common Stock that shall be deliverable upon
conversion of the shares of this Series shall be duly and validly issued, fully
paid and nonassessable. For purposes of this Section 3, any shares of this
Series at any time outstanding shall not include shares held in the treasury of
the Corporation.
3.8 In any case in which Section 2.4 shall require
that any adjustment be made effective as of or retroactively immediately
following a record date, the Corporation may elect to defer (but only for five
(5) Trading Days following the occurrence of the event that necessitates the
notice referred to in Section 2.4(d)) issuing to the holder of any shares of
this Series converted after such record date (i) the shares of Common Stock
issuable upon such conversion over and above (ii) the shares of Common Stock
issuable upon such conversion on the basis of the Formula Number prior to
adjustment; provided, however, that the Corporation shall deliver to such holder
a due bill or other appropriate instrument evidencing such holder's right to
receive such additional shares upon the occurrence of the event requiring such
adjustment.
3.9 If any shares of Common Stock or Series LMCN-V
Common Stock that would be issuable upon conversion pursuant to this Section 3
require registration with or approval of any governmental authority before such
shares may be issued upon conversion (other than any such registration or
approval required to avoid a violation of the Communications Laws), the
Corporation will in good faith and as expeditiously as possible cause such
shares to be duly registered or approved, as the case may be. The Corporation
will use commercially reasonable efforts to list the shares of (or depositary
shares representing fractional interests in) Common Stock required to be
delivered upon conversion of shares of this Series prior to such delivery upon
the principal national securities exchange, if any, upon which the outstanding
Common Stock is listed at the time of such delivery.
3.10 The Corporation shall pay any and all issue or
other taxes that may be payable in respect of any issue or delivery of shares of
Common Stock or Series LMCN-V Common Stock on conversion of shares of this
Series pursuant hereto. The Corporation shall not, however, be required to pay
any tax that is payable in respect of any transfer involved in the issue or
delivery of Common Stock or Series LMCN-V Common Stock in a name other than that
in
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15
which the shares of this Series so converted were registered, and no such issue
or delivery shall be made unless and until the Person requesting such issue has
paid to the Corporation the amount of such tax, or has established, to the
satisfaction of the Corporation, that such tax has been paid.
3.11 In case of (i) the voluntary or involuntary
dissolution, liquidation or winding up of the Corporation or (ii) any action
triggering an adjustment to the Formula Number pursuant to Section 2.4 (or in
connection with which a dividend of shares of this Series is paid in accordance
with Section 2.4(e)) or Section 3.6, then, in each case, the Corporation shall
cause to be mailed, first- class postage prepaid, to the holders of record of
the outstanding shares of this Series, at least fifteen (15) days prior to the
applicable record date for any such transaction (or if no record date will be
established, the effective date thereof), a notice stating (x) the date, if any,
on which a record is to be taken for the purpose of any such transaction (or, if
no record date will be established, the date as of which holders of record of
Common Stock entitled to participate in such transaction are determined), and
(y) the expected effective date thereof. Failure to give such notice or any
defect therein shall not affect the legality or validity of the proceedings
described in this Section 3.11.
4. Voting.
4.1 The shares of this Series shall have no voting
rights except as expressly provided in this Section 4 or as required by law.
4.2 Except as otherwise required by law, each share
of this Series shall be entitled to vote together as one class with the holders
of shares of Common Stock upon all matters upon which the holders of shares of
Common Stock are entitled to vote. In any such vote, the holders of shares of
this Series shall be entitled to a number of votes per share of this Series
equal to the product of (i) the Formula Number then in effect multiplied by (ii)
the maximum number of votes per share of Common Stock that any holder of shares
of Common Stock generally then has with respect to such matter.
4.3 So long as any shares of this Series remain
outstanding, unless a greater percentage shall then be required by law, the
Corporation shall not, without the affirmative vote or written consent of the
holders of shares
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16
of this Series representing at least 66-2/3% of the aggregate voting power of
shares of this Series then outstanding, amend, alter or repeal any of the
provisions of the Certificate or the Certificate of Incorporation so as, in any
such case, as applicable, to (i) amend, alter or repeal any of the powers,
preferences or rights of the Series Common Stock or (ii) adversely affect the
voting powers, designations, preferences and relative, participating, optional
or other special rights, and qualifications, limitations or restrictions
thereof, of the shares of this Series or the Series LMCN-V Common Stock;
provided, however, that no affirmative vote or written approval of any holder of
shares of this Series shall be required to amend, alter or repeal any of the
powers, preferences or rights of any series of Series Common Stock other than
this Series and the Series LMCN-V Common Stock.
4.4 So long as any shares of this Series remain
outstanding, the Corporation shall not, without the affirmative vote or written
consent of the holders of shares of this Series representing 100% of the
aggregate voting power of shares of this Series then outstanding, amend, alter
or repeal the provisions of Section 7.7 or this Section 4.4.
4.5 No consent of holders of shares of this Series
shall be required for (i) the creation of any indebtedness of any kind of the
Corporation, (ii) the authorization or issuance of any class or series of Parity
Stock or Senior Stock, (iii) the approval of any amendment to the Certificate of
Incorporation that would increase or decrease the aggregate number of authorized
shares of Series Common Stock or Common Stock or (iv) the authorization of any
increase or decrease in the number of shares constituting this Series; provided,
however, that the number of shares constituting this Series shall not be
decreased below the number of such shares then outstanding.
5. Liquidation Rights.
5.1 Upon the liquidation, dissolution or winding up
of the Corporation, whether voluntary or involuntary, the holders of shares of
this Series shall be entitled to receive, contemporaneously with any
distribution to holders of shares of Common Stock upon such liquidation,
dissolution or winding up, an aggregate amount per share equal to the product of
the Formula Number then in effect multiplied by the aggregate amount to be
distributed per share to holders of Common Stock.
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17
5.2 Neither the sale, exchange or other conveyance
(for cash, shares of stock, securities or other consideration) of all or
substantially all the property and assets of the Corporation nor the merger or
consolidation of the Corporation into or with any other corporation, or the
merger or consolidation of any other corporation into or with the Corporation,
shall be deemed to be a dissolution, liquidation or winding up, voluntary or
involuntary, for the purposes of this Section 5.
6. Transfer Restrictions.
6.1 Without the prior written consent of the
Corporation, no holder of shares of this Series shall offer, sell, transfer,
pledge, encumber or otherwise dispose of, or agree to offer, sell, transfer,
pledge, encumber or otherwise dispose of, any shares of this Series or interests
in any shares of this Series except to a Permitted Transferee that shall agree
that, prior to such Permitted Transferee ceasing to be a Permitted Transferee,
such Permitted Transferee must transfer ownership of any shares of this Series,
and all interests therein, held by such Permitted Transferee to any Permitted
Transferee. For the avoidance of doubt, the preceding sentence is not intended
to prohibit a holder of shares of this Series from entering into, or offering to
enter into, (a) any arrangement under which such holder agrees to promptly
convert shares of this Series and sell, transfer or otherwise dispose of the
Common Stock issuable upon such conversion or (b) any pledge or encumbrance of
shares of this Series; provided, however, that the terms of any such pledge or
encumbrance must require that, in the event of any sale or foreclosure with
respect to shares of this Series, such shares must be delivered immediately to
the Corporation for conversion into Common Stock. The provisions of this Section
6.1 shall continue to be in effect with respect to any shares of this Series
received by any holder by virtue of merger, consolidation, operation of law or
otherwise.
6.2 Certificates for shares of this Series shall bear
such legends as the Corporation shall from time to time deem appropriate.
7. Other Provisions.
7.1 All notices from the Corporation to the holders
of shares of this Series shall be given by one of the methods specified in
Section 7.2. With respect to any notice to a holder of shares of this Series
required to be
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18
provided hereunder, neither failure to give such notice, nor any defect therein
or in the transmission thereof, to any particular holder shall affect the
sufficiency of the notice or the validity of the proceedings referred to in such
notice with respect to the other holders or affect the legality or validity of
any distribution, right, warrant, reclassification, consolidation, merger,
conveyance, transfer, dissolution, liquidation or winding up, or the vote upon
any such action. Any notice that was mailed in the manner herein provided shall
be conclusively presumed to have been duly given whether or not the holder
receives the notice.
7.2 All notices and other communications hereunder
shall be deemed given (i) on the first Trading Day following the date received,
if delivered personally, (ii) on the Trading Day following timely deposit with
an overnight courier service, if sent by overnight courier specifying next day
delivery and (iii) on the first Trading Day that is at least five days following
deposit in the mails, if sent by first class mail to (x) a holder at its last
address as it appears on the transfer records or registry for the shares of this
Series and (y) the Corporation at the following address (or at such other
address as the Corporation shall specify in a notice pursuant to this Section
7.2): AOL Time Warner Inc., 75 Rockefeller Plaza, New York, New York 10019,
Attention: General Counsel.
7.3 Any shares of this Series that have been
converted or otherwise acquired by the Corporation shall, after such conversion
or acquisition, as the case may be, be retired and promptly canceled and shall
become authorized but unissued shares of this Series, unless the Board of
Directors determines otherwise.
7.4 The Corporation shall be entitled to recognize
the exclusive right of a Person registered on its records as the holder of
shares of this Series, and such holder of record shall be deemed the holder of
such shares for all purposes.
7.5 All notice periods referred to in the Certificate
shall commence on the date of the mailing of the applicable notice.
7.6 Any registered holder of shares of this Series
may proceed to protect and enforce its rights by any available remedy by
proceeding at law or in equity to protect and enforce any such rights, whether
for the specific enforcement of any provision in the Certificate or
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19
in aid of the exercise of any power granted herein, or to enforce any other
proper remedy.
7.7 The shares of this Series shall not be subject to
redemption at the option of the Corporation, including pursuant to Section 5 of
Article IV of the Certificate of Incorporation (or any equivalent provision in
any further amendment to or restatement of the Certificate of Incorporation).
This Certificate shall not become effective until and shall
become effective at 8:16 p.m., on January 11, 2001.
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20
IN WITNESS WHEREOF, AOL Time Warner Inc. has
caused this certificate to be signed this 11th day of January, 2001.
AOL TIME WARNER INC.
by /s/ Paul T. Cappuccio
____________________________
Name: Paul T. Cappuccio
Title: Vice President and
Assistant Secretary
