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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
TIME WARNER INC.
(Exact name of registrant as specified in its charter)
Delaware 13-1388520
(State of incorporation or (I.R.S. employer
organization) identification number)
75 Rockefeller Plaza
New York, New York 10019
(Address of principal (Zip code)
executive offices)
Securities to be registered pursuant to Section 12(b) of the
Act:
Title of each class Name of each exchange on
to be so registered which
each class is to be
registered
Rights to Purchase New York Stock Exchange
Series A Participating Pacific Stock Exchange
Cumulative
Preferred Stock
Securities to be registered pursuant to Section 12(g) of the
Act:
None
(Title of Class)
Page 1 of 73 sequentially numbered pages.
Exhibit Index is at page 10.
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Page 1 of 73
<PAGE>2
Item 1. Description of Securities to be Registered.
On January 20, 1994, the Board of Directors of
Time Warner Inc. (the "Company") declared a dividend of one
Right for each outstanding share of Common Stock, par value
$1.00 per share, of the Company (the "Common Shares"). The
Rights will be issued to the holders of record of Common
Shares outstanding on January , 1994, and with respect to
Common Shares issued thereafter until the Distribution Date
(as defined below) and, in certain circumstances, with
respect to Common Shares issued after the Distribution Date.
Each Right, when it becomes exercisable as described below,
will entitle the registered holder to purchase from the
Company one one-thousandth (1/1,000th) of a share of
Series A Participating Cumulative Preferred Stock, par value
$1.00 per share, of the Company (the "Preferred Shares") at
a price of $150 (the "Purchase Price"). The description and
terms of the Rights are set forth in a Rights Agreement
dated as of January 20, 1994 (the "Rights Agreement"),
between the Company and Chemical Bank, as Rights Agent (the
"Rights Agent").
Until the earlier of (i) such time as the Company
learns that a person or group (including any affiliate or
associate of such person or group) has acquired, or has
obtained the right to acquire, beneficial ownership of more
than 15% of the outstanding Common Shares, other than
pursuant to a Qualifying Offer (as defined below) (such
person or group being an "Acquiring Person"), and (ii) such
date, if any, as may be designated by the Board of Directors
of the Company following the commencement of, or first
public disclosure of an intent to commence, a tender or
exchange offer for outstanding Common Shares which could
result in such person or group becoming the beneficial owner
of more than 15% of the outstanding Common Shares, other
than pursuant to a Qualifying Offer (the earlier of such
dates being called the "Distribution Date"), the Rights will
be evidenced by the certificates for Common Shares
registered in the names of the holders thereof (which
certificates for Common Shares shall also be deemed to be
Right Certificates, as defined below) and not by separate
Right Certificates. Therefore, until the Distribution Date,
the Rights will be transferred with and only with the Common
Shares.
As soon as practicable following the Distribution
Date, separate certificates evidencing the Rights ("Right
Certificates") will be mailed to holders of record of the
Page 2 of 73
<PAGE>3
Common Shares as of the close of business on the Distribu-
tion Date (and to each initial record holder of certain
Common Shares originally issued after the Distribution
Date), and such separate Right Certificates alone will
thereafter evidence the Rights.
The Rights are not exercisable until the Distribu-
tion Date and will expire on January 20, 2004 (the
"Expiration Date") unless earlier redeemed by the Company as
described below.
The number of Preferred Shares or other securities
issuable upon exercise of a Right, the Purchase Price, the
Redemption Price (as defined below) and the number of Rights
associated with each outstanding Common Share are all
subject to adjustment by the Board of Directors of the
Company in the event of any change in the Common Shares or
the Preferred Shares, whether by reason of stock dividends,
stock splits, recapitalizations, mergers, consolidations,
combinations or exchanges of securities, split-ups, split-
offs, spin-offs, liquidations, other similar changes in
capitalization, any distribution or issuance of cash,
assets, evidences of indebtedness or subscription rights,
options or warrants to holders of Common Shares or Preferred
Shares, as the case may be (other than distribution of the
Rights or regular quarterly cash dividends) or otherwise.
The Preferred Shares are authorized to be issued
in fractions which are an integral multiple of one one-
thousandth (1/1,000th) of a Preferred Share. The Company
may, but is not required to, issue fractions of shares upon
the exercise of Rights, and, in lieu of fractional shares,
the Company may issue certificates or utilize a depository
arrangement as provided by the terms of the Preferred Shares
and, in the case of fractions other than one one-thousandth
(1/1,000th) of a Preferred Share or integral multiples
thereof, may make a cash payment based on the market price
of such shares.
At such time there is an Acquiring Person, the
Rights will entitle each holder (other than such Acquiring
Person (or any affiliate or associate of such Acquiring
Person)) of a Right to purchase, for the Purchase Price,
that number of one one-thousandths (l/l,000ths) of a
Preferred Share equivalent to the number of Common Shares
which at the time of such event would have a market value of
twice the Purchase Price.
Page 3 of 73
<PAGE>4
In the event the Company is acquired in a merger
or other business combination by an Acquiring Person or an
associate or affiliate of an Acquiring Person that is a
publicly traded corporation or 50% or more of the Company's
assets or assets representing 50% or more of the Company's
revenues or cash flow are sold, leased, exchanged or
otherwise transferred (in one or more transactions) to an
Acquiring Person or an associate or affiliate of an
Acquiring Person that is a publicly traded corporation, each
Right will entitle its holder (subject to the next
paragraph) to purchase, for the Purchase Price, that number
of common shares of such corporation which at the time of
the transaction would have a market value of twice the
Purchase Price. In the event the Company is acquired in a
merger or other business combination by an Acquiring Person
or an associate or affiliate of an Acquiring Person that is
not a publicly traded entity or 50% or more of the Company's
assets or assets representing 50% or more of the Company's
revenues or cash flow are sold, leased, exchanged or
otherwise transferred (in one or more transactions) to an
Acquiring Person or an associate or affiliate of an
Acquiring Person that is not a publicly traded entity, each
Right will entitle its holder (subject to the next
paragraph) to purchase, for the Purchase Price, at such
holder's option, (i) that number of shares of the surviving
corporation in the transaction with such entity (which
surviving corporation could be the Company) which at the
time of the transaction would have a book value of twice the
Purchase Price, (ii) that number of shares of such entity
which at the time of the transaction would have a book value
of twice the Purchase Price or (iii) if such entity has an
affiliate which has publicly traded common shares, that
number of common shares of such affiliate which at the time
of the transaction would have a market value of twice the
Purchase Price.
Any Rights that are, at any time beneficially
owned by an Acquiring Person (or any affiliate or associate
of an Acquiring Person) will be null and void and
nontransferable and any holder of any such Right (including
any purported transferee or subsequent holder) will be
unable to exercise or transfer any such Right.
The Rights Plan will not apply to any Qualifying
Offer. Accordingly, the Rights will not become exercisable
in the case of a tender offer that constitutes a Qualifying
Offer or of a merger or business combination consummated in
compliance with the requirements of a Qualifying Offer. The
Page 4 of 73
<PAGE>5
Rights Plan defines a "Qualifying Offer" as an all-cash
tender offer for all outstanding Common Shares which meets
the following requirements: (i) the person or group making
the tender offer must, prior to or upon commencing such
offer, have provided to the Company firm written commitments
from responsible financial institutions, which have been
accepted by such person or group, to provide, subject only
to customary terms and conditions, funds for such offer
which, when added to the amount of cash and cash equivalents
which such person or group then has available and has
irrevocably committed in writing to the Company to utilize
for purposes of the offer, will be sufficient to pay for all
Common Shares outstanding on a fully diluted basis pursuant
to the offer and the second-step transaction required by
clause (v) below and all related expenses, together with
copies of all written materials prepared by such person or
group for such financial institutions in connection with
obtaining such financing commitments; (ii) such person or
group must own, after consummating such offer, Common Shares
representing a majority of the then outstanding Common
Shares; (iii) such offer must in all events remain open for
at least 45 business days and must be extended for at least
20 business days after the last increase or permitted
decrease in the price offered and after any bona fide higher
alternative offer is made (except in certain limited
circumstances set forth in the Rights Agreement); (iv) such
offer is accompanied by a written opinion, in customary
form, of a nationally recognized investment banking firm
which is addressed to the holders of Common Shares other
than such person or group and states that the price to be
paid to such holders pursuant to the offer is fair from a
financial point of view to such holders and which includes
any written presentation of such firm showing the analysis
and range of values underlying such conclusion; and
(v) prior to or upon commencing such offer, such person or
group must irrevocably commit in writing to the Company
(x) to consummate promptly upon completion of the offer a
transaction or transactions whereby all remaining Common
Shares will be acquired at the same price per share paid
pursuant to the offer, subject only to the condition that
the Board has granted any approvals required to enable such
person or group to consummate such transaction or
transactions without obtaining the vote of any other
stockholder, (y) that such person or group will not amend
such offer to reduce the per share price offered (except in
certain limited circumstances set forth in the Rights
Agreement), change the form of consideration offered, or
reduce the number of shares being sought or in any other
Page 5 of 73
<PAGE>6
respect which is materially adverse to the Company's
stockholders, and (z) that such person or group will not
make any offer for any equity securities of the Company for
six months after commencement of the original offer if the
original offer does not result in the tender of the number
of shares required to be purchased pursuant to clause (ii)
above, unless another tender offer by another party for all
outstanding Common Shares is commenced that (a) constitutes
a Qualifying Offer or (b) is approved by the Company's Board
of Directors (in which event any new offer by such person or
group must be at a price no less than that provided for in
such approved offer).
At any time prior to the earlier of (i) such time
as a Person becomes an Acquiring Person and (ii) the Expira-
tion Date, the Board of Directors of the Company may redeem
the Rights in whole, but not in part, at a price (in cash or
Common Shares or other securities of the Company deemed by
the Board of Directors to be at least equivalent in value)
of $.01 per Right, subject to adjustment as provided in the
Rights Agreement (the "Redemption Price"); provided,
however, that, for the 120-day period after any date of a
change (resulting from a proxy or consent solicitation) in a
majority of the Board of Directors of the Company in office
at the commencement of such solicitation, the Rights may
only be redeemed if (A) there are directors then in office
who were in office at the commencement of such solicitation
and (B) the Board of Directors of the Company, with the
concurrence of a majority of such directors then in office,
determines that such redemption is, in their judgment, in
the best interests of the Company and its stockholders.
Immediately upon the action of the Board of
Directors of the Company electing to redeem the Rights, and
without any further action and without any notice, the right
to exercise the Rights will terminate and the only right of
the holders of Rights will be to receive the Redemption
Price.
After there is an Acquiring Person, the Board of
Directors may elect to exchange each Right (other than
Rights that shall have become null and void and nontrans-
ferable as described above) for consideration per Right
consisting of one-half of the securities that would be
issuable at such time upon the exercise of one Right pursu-
ant to the terms of the Rights Agreement.
Page 6 of 73
<PAGE>7
Until a Right is exercised, the holder thereof, as
such, will have no rights as a stockholder of the Company,
including, without limitation, the right to vote or to
receive dividends.
At any time prior to the Distribution Date, the
Company may, without the approval of any holder of the
Rights, supplement or amend any provision of the Rights
Agreement (including the date on which the Distribution Date
shall occur, the time during which the Rights may be
redeemed or the terms of the Preferred Shares), except that
no supplement or amendment shall be made which reduces the
Redemption Price (other than pursuant to certain adjustments
therein) or provides for an earlier Expiration Date.
However, during the 120-day period after any date of a
change (resulting from a proxy or consent solicitation) in a
majority of the Board of Directors of the Company in office
at the commencement of such solicitation, the Rights
Agreement may be supplemented or amended only if (A) there
are directors then in office who were in office at the
commencement of such solicitation and (B) the Board of
Directors of the Company, with the concurrence of a majority
of such directors then in office, determines that such
supplement or amendment is, in their judgment, in the best
interests of the Company and its stockholders.
The Rights have certain antitakeover effects. The
Rights will cause substantial dilution to a person or group
that attempts to acquire the Company without conditioning
the offer on substantially all the Rights being acquired.
The Rights will not interfere with any merger or other
business combination pursuant to a Qualifying Offer or with
a third party approved by the Board of Directors of the
Company since the Board of Directors of the Company may, at
its option, at any time prior to any person becoming an
Acquiring Person, redeem all but not less than all of the
then outstanding Rights at the Redemption Price.
The Rights Agreement specifying the terms of the
Rights, the Certificate of Designation of the Preferred
Shares specifying the terms of the Preferred Shares
(Exhibit A to the Rights Agreement) and the form of Right
Certificate (Exhibit B to the Rights Agreement) are filed
herewith as exhibits. The foregoing description of the
Rights does not purport to be complete and is qualified in
its entirety by reference to such exhibits, which are
incorporated herein by reference.
Page 7 of 73
<PAGE>8
Item 2. Exhibits.
1. Rights Agreement dated as of January 20,
1994, between Time Warner Inc. and Chemical
Bank, as Rights Agent.
2. Form of Certificate of the Voting Powers,
Preferences and Relative, Participating,
Optional and other Special Rights,
Qualifications, Limitations or Restrictions
of Series A Participating Cumulative
Preferred Stock of Time Warner Inc. (which is
attached as Exhibit A to the Rights Agreement
filed as Exhibit 1 hereto).
3. Form of Right Certificate (which is attached
as Exhibit B to the Rights Agreement filed as
Exhibit 1 hereto).
Page 8 of 73
<PAGE>9
SIGNATURE
Pursuant to the requirements of Section 12 of the
Securities Exchange Act of 1934, the registrant has duly
caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized.
TIME WARNER INC.
by /s/ Peter R. Haje
Dated: January 21, 1994 -------------------------
Name: Peter R. Haje
Title: Executive Vice
President
Page 9 of 73
<PAGE>10
INDEX OF EXHIBITS
Page Number
is
Sequentially
Exhibit Numbered
Number Title Statement
1. Rights Agreement dated as of
January 20, 1994, between Time Warner
Inc. and Chemical Bank, as Rights
Agent. 11
2. Form of Certificate of the Voting
Powers, Preferences and Relative,
Participating, Optional and other
Special Rights, Qualifications,
Limitations or Restrictions of Series
A Participating Cumulative Preferred
Stock of Time Warner Inc. (which is
attached as Exhibit A to the Rights
Agreement filed as Exhibit 1 hereto). 58
3. Form of Right Certificate (which is
attached as Exhibit B to the Rights
Agreement filed as Exhibit 1 hereto). 68
Page 10 of 73
<PAGE>11
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RIGHTS AGREEMENT
Dated as of January 20, 1994
between
TIME WARNER INC.
and
CHEMICAL BANK
as Rights Agent
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Page 11 of 73
<PAGE>12
Table of Contents
Section Page
1. Certain Definitions . . . . . . . . . . . . . . . . 1
2. Appointment of Rights Agent . . . . . . . . . . . 11
3. Issue of Rights and Right Certificates . . . . . . 12
4. Form of Right Certificates . . . . . . . . . . . . 14
5. Execution, Countersignature and
Registration . . . . . . . . . . . . . . . . . . . 14
6. Transfer, Split-Up, Combination and
Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen
Right Certificates; Uncertificated
Rights . . . . . . . . . . . . . . . . . . . . . . 15
7. Exercise of Rights; Expiration Date
of Rights . . . . . . . . . . . . . . . . . . . . . 16
8. Cancelation and Destruction of Right
Certificates . . . . . . . . . . . . . . . . . . . 18
9. Reservation and Availability of
Preferred Shares . . . . . . . . . . . . . . . . . 19
10. Preferred Shares Record Date . . . . . . . . . . . 21
11. Adjustments in Rights After There Is an
Acquiring Person; Exchange of Rights for
Shares; Business Combinations . . . . . . . . . . . 21
12. Certain Adjustments . . . . . . . . . . . . . . . . 27
13. Certificate of Adjustment . . . . . . . . . . . . . 28
14. Additional Covenants . . . . . . . . . . . . . . . 29
15. Fractional Rights and Fractional Shares . . . . . . 29
16. Rights of Action . . . . . . . . . . . . . . . . . 31
17. Transfer and Ownership of Rights and
Right Certificates . . . . . . . . . . . . . . . . 31
18. Right Certificate Holder Not Deemed
a Stockholder . . . . . . . . . . . . . . . . . . . 32
19. Concerning the Rights Agent . . . . . . . . . . . . 32
20. Merger or Consolidation or Change
of Rights Agent . . . . . . . . . . . . . . . . . . 32
21. Duties of Rights Agent . . . . . . . . . . . . . . 33
22. Change of Rights Agent . . . . . . . . . . . . . . 36
23. Issuance of Additional Rights and
Right Certificates . . . . . . . . . . . . . . . . 38
24. Redemption and Termination . . . . . . . . . . . . 38
25. Notices . . . . . . . . . . . . . . . . . . . . . . 39
26. Supplements and Amendments . . . . . . . . . . . . 40
27. Successors . . . . . . . . . . . . . . . . . . . . 41
Page 12 of 73
<PAGE>13
28. Benefits of Rights Agreement;
Determinations and Actions by the
Board of Directors, etc. . . . . . . . . . . . . . 41
29. Severability . . . . . . . . . . . . . . . . . . . 42
30. Governing Law . . . . . . . . . . . . . . . . . . . 43
31. Counterparts; Effectiveness . . . . . . . . . . . . 43
32. Descriptive Headings . . . . . . . . . . . . . . . 43
Exhibits
A Certificate of Designation
B Form of Right Certificate
Page 13 of 73
<PAGE>14
RIGHTS AGREEMENT dated as of January 20,
1994, between TIME WARNER INC., a Delaware
corporation (the "Company"), and Chemical
Bank, a New York banking corporation, as
Rights Agent (the "Rights Agent").
The Board of Directors of the Company has
authorized and declared a dividend of one Right (as
hereinafter defined) for each share of Common Stock, par
value $1.00 per share, of the Company (the "Common Stock")
outstanding at the Close of Business (as hereinafter
defined) on January 20, 1994 (the "Record Date"), and has
authorized the issuance of one Right (as such number may
hereafter be adjusted pursuant to the provisions of this
Rights Agreement) with respect to each share of Common Stock
that shall become outstanding between the Record Date and
the earliest of the Distribution Date, the Redemption Date
or the Expiration Date (as such terms are hereinafter
defined); provided, however, that Rights may be issued with
respect to shares of Common Stock that shall become
outstanding after the Distribution Date and prior to the
earlier of the Redemption Date or the Expiration Date in
accordance with the provisions of Section 23. Each Right
shall initially represent the right to purchase one one-
thousandths (1/1,000ths) of a share of Series A
Participating Cumulative Preferred Stock, par value
$1.00 per share, of the Company (the "Preferred Shares"),
having the powers, rights and preferences set forth in the
Certificate of Designation attached as Exhibit A.
Accordingly, in consideration of the premises and
the mutual agreements herein set forth, the parties hereby
agree as follows:
SECTION 1. Certain Definitions. For purposes of
this Rights Agreement, the following terms have the meanings
indicated:
"Acquiring Person" shall mean any Person who or
which, alone or together with all Affiliates and Associates
of such Person, shall be the Beneficial Owner of more than
15% of the Common Shares then outstanding, other than
pursuant to a Qualifying Offer, but shall not include
(a) the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or of any of its Subsidiaries,
or any Person holding Common Shares for or pursuant to the
terms of any such employee benefit plan or (b) any such
Page 14 of 73
<PAGE>15
Person who has become such a Beneficial Owner solely because
(i) of a change in the aggregate number of Common Shares
outstanding since the last date on which such Person
acquired Beneficial Ownership of any Common Shares or
(ii) it acquired such Beneficial Ownership in the good faith
belief that such acquisition would not (x) cause such
Beneficial Ownership to exceed 15% of the Common Shares then
outstanding and such Person relied in good faith in
computing the percentage of its Beneficial Ownership on
publicly filed reports or documents of the Company which are
inaccurate or out-of-date or (y) otherwise cause a
Distribution Date or the adjustment provided for in
Section 11(a) to occur. Notwithstanding clause (b) of the
prior sentence, if any Person that is not an Acquiring
Person due to such clause (b) does not reduce its percentage
of Beneficial Ownership of Common Shares to 15% or less by
the Close of Business on the fifth Business Day after notice
from the Company (the date of notice being the first day)
that such Person's Beneficial Ownership of Common Shares so
exceeds 15%, such Person shall, at the end of such five
Business Day period, become an Acquiring Person (and such
clause (b) shall no longer apply to such Person). For
purposes of this definition, the determination whether any
Person acted in "good faith" shall be conclusively
determined by the Board of Directors of the Company, acting
by a vote of those directors of the Company whose approval
would be required to redeem the Rights under Section 24.
"Affiliate" and "Associate", when used with
reference to any Person, shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules
and Regulations under the Exchange Act, as in effect on the
date of this Rights Agreement.
A Person shall be deemed the "Beneficial Owner"
of, and shall be deemed to "beneficially own", and shall be
deemed to have "Beneficial Ownership" of, any securities:
(i) which such Person or any of such Person's
Affiliates or Associates is deemed to "beneficially
own" within the meaning of Rule 13d-3 of the General
Rules and Regulations under the Exchange Act, as in
effect on the date of this Rights Agreement;
(ii) which such Person or any of such Person's
Affiliates or Associates has (A) the right to acquire
(whether such right is exercisable immediately or only
after the passage of time) pursuant to any agreement,
Page 15 of 73
<PAGE>16
arrangement or understanding (written or oral), or upon
the exercise of conversion rights, exchange rights,
rights (other than the Rights), warrants or options, or
otherwise; provided, however, that a Person shall not
be deemed the Beneficial Owner of, or to beneficially
own, or to have Beneficial Ownership of, securities
tendered pursuant to a tender or exchange offer made by
or on behalf of such Person or any of such Person's
Affiliates or Associates until such tendered securities
are accepted for purchase or exchange thereunder, or
(B) the right to vote pursuant to any agreement,
arrangement or understanding (written or oral);
provided, however, that a Person shall not be deemed
the Beneficial Owner of, or to beneficially own, any
security if (1) the agreement, arrangement or
understanding (written or oral) to vote such security
arises solely from a revocable proxy or consent given
to such Person in response to a public proxy or consent
solicitation made pursuant to, and in accordance with,
the applicable rules and regulations under the Exchange
Act and (2) the beneficial ownership of such security
is not also then reportable on Schedule 13D under the
Exchange Act (or any comparable or successor report);
or
(iii) which are beneficially owned, directly or
indirectly, by any other Person with which such Person
or any of such Person's Affiliates or Associates has
any agreement, arrangement or understanding (written or
oral) for the purpose of acquiring, holding, voting
(except pursuant to a revocable proxy as described in
clause (ii)(B) of this definition) or disposing of any
securities of the Company.
Notwithstanding the foregoing, nothing contained in this
definition shall cause a Person ordinarily engaged in
business as an underwriter of securities to be the
"Beneficial Owner" of, or to "beneficially own", any
securities acquired in a bona fide firm commitment
underwriting pursuant to an underwriting agreement with the
Company.
"Book Value", when used with reference to Common
Shares issued by any Person, shall mean the amount of equity
of such Person applicable to each Common Share, determined
(i) in accordance with generally accepted accounting
principles in effect on the date as of which such Book Value
is to be determined, (ii) using all the consolidated assets
Page 16 of 73
<PAGE>17
and all the consolidated liabilities of such Person on the
date as of which such Book Value is to be determined, except
that no value shall be included in such assets for goodwill
arising from consummation of a business combination, and
(iii) after giving effect to (A) the exercise of all rights,
options and warrants to purchase such Common Shares (other
than the Rights), and the conversion of all securities
convertible into such Common Shares, at an exercise or
conversion price, per Common Share, which is less than such
Book Value before giving effect to such exercise or
conversion (whether or not exercisability or convertibility
is conditioned upon occurrence of a future event), (B) all
dividends and other distributions on the capital stock of
such Person declared prior to the date as of which such Book
Value is to be determined and to be paid or made after such
date, and (C) any other agreement, arrangement or
understanding (written or oral), or transaction or other
action prior to the date as of which such Book Value is to
be determined which would have the effect of thereafter
reducing such Book Value.
"Business Combination" shall have the meaning set
forth in Section 11(c)(I).
"Business Day" shall mean each Monday, Tuesday,
Wednesday, Thursday and Friday which is not a day on which
banking institutions in the Borough of Manhattan, The City
of New York, are authorized or obligated by law or executive
order to close.
"Certificate of Designation" shall mean the
Certificate of Designation of Series A Participating
Cumulative Preferred Stock setting forth the powers,
preferences, rights, qualifications, limitations and
restrictions of such series of Preferred Stock of the
Company, a copy of which is attached as Exhibit A.
"Close of Business" on any given date shall mean
5:00 p.m., New York City time, on such date; provided,
however, that, if such date is not a Business Day, "Close of
Business" shall mean 5:00 p.m., New York City time, on the
next succeeding Business Day.
"Common Shares", when used with reference to the
Company prior to a Business Combination, shall mean the
shares of Common Stock of the Company or any other shares of
capital stock of the Company into which the Common Stock
shall be reclassified or changed. "Common Shares", when
Page 17 of 73
<PAGE>18
used with reference to any Person (other than the Company
prior to a Business Combination), shall mean shares of
capital stock of such Person (if such Person is a
corporation) of any class or series, or units of equity
interests in such Person (if such Person is not a
corporation) of any class or series, the terms of which do
not limit (as a maximum amount and not merely in
proportional terms) the amount of dividends or income
payable or distributable on such class or series or the
amount of assets distributable on such class or series upon
any voluntary or involuntary liquidation, dissolution or
winding up of such Person and do not provide that such class
or series is subject to redemption at the option of such
Person, or any shares of capital stock or units of equity
interests into which the foregoing shall be reclassified or
changed; provided, however, that, if at any time there shall
be more than one such class or series of capital stock or
equity interests of such Person, "Common Shares" of such
Person shall include all such classes and series
substantially in the proportion of the total number of
shares or other units of each such class or series
outstanding at such time.
"Common Stock" shall have the meaning set forth in
the introductory paragraph of this Rights Agreement.
"Company" shall have the meaning set forth in the
heading of this Rights Agreement; provided, however, that if
there is a Business Combination, "Company" shall have the
meaning set forth in Section 11(c)(III).
The term "control" with respect to any Person
shall mean the power to direct the management and policies
of such Person, directly or indirectly, by or through stock
ownership, agency or otherwise, or pursuant to or in
connection with an agreement, arrangement or understanding
(written or oral) with one or more other Persons by or
through stock ownership, agency or otherwise; and the terms
"controlling" and "controlled" shall have meanings
correlative to the foregoing.
"Distribution Date" shall have the meaning set
forth in Section 3(b).
"Exchange Act" shall mean the Securities Exchange
Act of 1934, as in effect on the date in question, unless
otherwise specifically provided.
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<PAGE>19
"Exchange Consideration" shall have the meaning
set forth in Section 11(b)(I).
"Expiration Date" shall have the meaning set forth
in Section 7(a).
"Major Part", when used with reference to the
assets of the Company and its Subsidiaries as of any date,
shall mean assets (i) having a fair market value aggregating
50% or more of the total fair market value of all the assets
of the Company and its Subsidiaries (taken as a whole) as of
the date in question, (ii) accounting for 50% or more of the
total value (net of depreciation and amortization) of all
the assets of the Company and its Subsidiaries (taken as a
whole) as would be shown on a consolidated or combined
balance sheet of the Company and its Subsidiaries as of the
date in question, prepared in accordance with generally
accepted accounting principles then in effect, or
(iii) accounting for 50% or more of the total amount of
earnings before interest, taxes, depreciation and
amortization or revenues of the Company and its Subsidiaries
(taken as a whole) as would be shown on, or derived from, a
consolidated or combined statement of income of the Company
and its Subsidiaries for the period of 12 months ending on
the last day of the Company's monthly accounting period next
preceding the date in question, prepared in accordance with
generally accepted accounting principles then in effect.
"Market Value", when used with reference to Common
Shares on any date, shall be deemed to be the average of the
daily closing prices, per share, of such Common Shares for
the period which is the shorter of (1) 30 consecutive
Trading Days immediately prior to the date in question or
(2) the number of consecutive Trading Days beginning on the
Trading Day immediately after the date of the first public
announcement of the event requiring a determination of the
Market Value and ending on the Trading Day immediately prior
to the record date of such event; provided, however, that,
in the event that the Market Value of such Common Shares is
to be determined in whole or in part during a period
following the announcement by the issuer of such Common
Shares of any action of the type described in Section 12(a)
that would require an adjustment thereunder, then, and in
each such case, the Market Value of such Common Shares shall
be appropriately adjusted to reflect the effect of such
action on the market price of such Common Shares. The
closing price for each Trading Day shall be the closing
price quoted on the composite tape for securities listed on
Page 19 of 73
<PAGE>20
the New York Stock Exchange, or, if such securities are not
quoted on such composite tape or if such securities are not
listed on such exchange, on the principal United States
securities exchange registered under the Exchange Act (or
any recognized foreign stock exchange) on which such
securities are listed, or, if such securities are not listed
on any such exchange, the average of the closing bid and
asked quotations with respect to a share of such securities
on the National Association of Securities Dealers, Inc.
Automated Quotations System ("NASDAQ") or such other system
then in use, or if no such quotations are available, the
average of the closing bid and asked prices as furnished by
a professional market maker making a market in such
securities selected by the Board of Directors of the
Company. If on any such Trading Day no market maker is
making a market in such securities, the closing price of
such securities on such Trading Day shall be deemed to be
the fair value of such securities as determined in good
faith by the Board of Directors of the Company (whose
determination shall be described in a statement filed with
the Rights Agent and shall be binding on the Rights Agent,
the holders of Rights and all other Persons); provided,
however, that for the purpose of determining the closing
price of the Preferred Shares for any Trading Day on which
there is no such market maker for the Preferred Shares the
closing price on such Trading Day shall be deemed to be the
Formula Number (as defined in the Certificate of
Designation) times the closing price of the Common Shares of
the Company on such Trading Day.
"Person" shall mean an individual, corporation,
partnership, joint venture, association, trust,
unincorporated organization or other entity.
"Preferred Shares" shall have the meaning set
forth in the introductory paragraph of this Rights
Agreement. Any reference in this Rights Agreement to
Preferred Shares shall be deemed to include any authorized
fraction of a Preferred Share, unless the context otherwise
requires.
"Principal Party" shall mean the Surviving Person
in a Business Combination; provided, however, that, if such
Surviving Person is a direct or indirect Subsidiary of any
other Person, "Principal Party" shall mean the Person which
is the ultimate parent of such Surviving Person and which is
not itself a Subsidiary of another Person. In the event
ultimate control of such Surviving Person is shared by two
Page 20 of 73
<PAGE>21
or more Persons, "Principal Party" shall mean that Person
that is immediately controlled by such two or more Persons.
"Purchase Price" with respect to each Right shall
mean $150, as such amount may from time to time be adjusted
as provided herein, and shall be payable in lawful money of
the United States of America. All references herein to the
Purchase Price shall mean the Purchase Price as in effect at
the time in question.
"Qualifying Offer" shall mean an all-cash tender
offer for all outstanding Common Shares which meets all of
the following requirements:
(1) on or prior to the date such offer is
commenced within the meaning of Rule 14d-2(a) of the
General Rules and Regulations under the Exchange Act,
such Person has, and has provided to the Company, firm
written commitments from responsible financial
institutions, which have been accepted by such Person
(or one of its Affiliates), to provide, subject only to
customary terms and conditions, funds for such offer
which, when added to the amount of cash and cash
equivalents which such Person then has available and
has irrevocably committed in writing to the Company to
utilize for purposes of such offer, will be sufficient
to pay for all Common Shares outstanding on a fully
diluted basis pursuant to the offer and the second-step
transaction required by clause (v) below and all
related expenses, together with copies of all written
materials prepared by such Person for such financial
institutions in connection with obtaining such
financing commitments;
(2) after the consummation of such offer, such
Person, alone or together with any of its Affiliates
and Associates, owns Common Shares representing a
majority of the then outstanding Common Shares;
(3) such offer remains open for at least
45 Business Days; provided, however, that (x) if there
is any increase in the price of such offer, such offer
must remain open for at least an additional 20 Business
Days after the last such increase, (y) such offer must
remain open for at least 20 Business Days after the
date that any bona fide alternative offer is made
which, in the opinion of one or more investment banking
firms designated by the Company, provides for consid-
Page 21 of 73
<PAGE>22
eration per share in excess of that provided for in
such offer, and (z) such offer must remain open for at
least 20 Business Days after the date on which such
Person reduces the per share price offered in accord-
ance with clause (5)(y) below; provided further,
however, that such offer need not remain open, as a
result of this clause (3), beyond (i) the time which
any other offer satisfying the criteria for a
Qualifying Offer is then required to be kept open under
this clause (3), or (ii) the scheduled expiration date,
as such date may be extended by public announcement on
or prior to the then scheduled expiration date, of any
other tender or exchange offer for Common Shares with
respect to which the Board of Directors has agreed to
redeem the Rights immediately prior to acceptance for
payment of Common Shares thereunder (unless such other
offer is terminated prior to its expiration without any
Common Shares having been purchased thereunder);
(4) such offer is accompanied by a written
opinion, in customary form, of a nationally recognized
investment banking firm which is addressed to the
holders of Common Shares other than such Person and
states that the price to be paid to holders pursuant to
the offer is fair from a financial point of view to
such holders and includes any written presentation of
such firm showing the analysis and range of values
underlying such conclusions; and
(5) prior to or on the date that such offer is
commenced within the meaning of Rule 14d-2(a) of the
General Rules and Regulations under the Exchange Act,
such Person makes an irrevocable written commitment to
the Company (x) to consummate a transaction or
transactions promptly upon the completion of such
offer, whereby all Common Shares not purchased in such
offer will be acquired at the same price per share paid
in such offer, subject only to the condition that the
Board of Directors shall have granted any approvals
required to enable such Person to consummate such
transaction or transactions following consummation of
such offer without obtaining the vote of any other
stockholder, (y) that such Person will not make any
amendment to the original offer which reduces the per
share price offered (other than a reduction to reflect
any dividend declared by the Company after the
commencement of such offer or any material change in
the capital structure of the Company initiated by the
Page 22 of 73
<PAGE>23
Company after the commencement of such offer, whether
by way of recapitalization, reorganization, repurchase
or otherwise), changes the form of consideration
offered, or reduces the number of shares being sought
or which is in any other respect materially adverse to
the Company's stockholders, and (z) that neither such
Person nor of any its Affiliates or Associates will
make any offer for any equity securities of the Company
for a period of six months after the commencement of
the original offer if such original offer does not
result in the tender of the number of Common Shares
required to be purchased pursuant to clause (2) above,
unless another tender offer by another party for all
outstanding Common Shares is commenced that
(a) constitutes a Qualifying Offer or (b) is approved
by the Board of Directors of the Company (in which
event, any new offer by such Person or of any of its
Affiliates or Associates must be at a price no less
than that provided for in such approved offer).
"Record Date" shall have the meaning set forth in
the introductory paragraph of this Rights Agreement.
"Redemption Date" shall have the meaning set forth
in Section 24(a).
"Redemption Price" with respect to each Right
shall mean $.01, as such amount may from time to time be
adjusted in accordance with Section 12. All references
herein to the Redemption Price shall mean the Redemption
Price as in effect at the time in question.
"Registered Common Shares" shall mean Common
Shares which are, as of the date of consummation of a
Business Combination, and have continuously been for the 12
months immediately preceding such date, registered under
Section 12 of the Exchange Act.
"Right Certificate" shall mean a certificate
evidencing a Right in substantially the form attached as
Exhibit B.
"Rights" shall mean the rights to purchase
Preferred Shares (or other securities) as provided in this
Rights Agreement.
Page 23 of 73
<PAGE>24
"Securities Act" shall mean the Securities Act of
1933, as in effect on the date in question, unless otherwise
specifically provided.
"Subsidiary" shall mean a Person, at least a
majority of the total outstanding voting power (being the
power under ordinary circumstances (and not merely upon the
happening of a contingency) to vote in the election of
directors of such Person (if such Person is a corporation)
or to participate in the management and control of such
Person (if such Person is not a corporation)) of which is
owned, directly or indirectly, by another Person or by one
or more other Subsidiaries of such other Person or by such
other Person and one or more other Subsidiaries of such
other Person.
"Surviving Person" shall mean (1) the Person which
is the continuing or surviving Person in a consolidation or
merger specified in Section 11(c)(I)(i) or 11(c)(I)(ii) or
(2) the Person to which the Major Part of the assets of the
Company and its Subsidiaries is sold, leased, exchanged or
otherwise transferred or disposed of in a transaction
specified in Section 11(c)(I)(iii); provided, however, that,
if the Major Part of the assets of the Company and its
Subsidiaries is sold, leased, exchanged or otherwise
transferred or disposed of in one or more related
transactions specified in Section 11(c)(I)(iii) to more than
one Person, the "Surviving Person" in such case shall mean
the Person that acquired assets of the Company and/or its
Subsidiaries with the greatest fair market value in such
transaction or transactions.
"Trading Day" shall mean a day on which the
principal national securities exchange (or principal
recognized foreign stock exchange, as the case may be) on
which any securities or Rights, as the case may be, are
listed or admitted to trading is open for the transaction of
business or, if the securities or Rights in question are not
listed or admitted to trading on any national securities
exchange (or recognized foreign stock exchange, as the case
may be), a Business Day.
SECTION 2. Appointment of Rights Agent. The
Company hereby appoints the Rights Agent to act as agent for
the Company in accordance with the terms and conditions
hereof, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint one
or more co-Rights Agents as it may deem necessary or
Page 24 of 73
<PAGE>25
desirable (the term "Rights Agent" being used herein to
refer, collectively, to the Rights Agent together with any
such co-Rights Agents). In the event the Company appoints
one or more co-Rights Agents, the respective duties of the
Rights Agent and any co-Rights Agents shall be as the
Company shall determine.
SECTION 3. Issue of Rights and Right
Certificates. (a) One Right shall be associated with each
Common Share outstanding on the Record Date, each additional
Common Share that shall become outstanding between the
Record Date and the earliest of the Distribution Date, the
Redemption Date or the Expiration Date and each additional
Common Share with which Rights are issued after the
Distribution Date but prior to the earlier of the Redemption
Date or the Expiration Date as provided in Section 23;
provided, however, that, if the number of outstanding Rights
are combined into a smaller number of outstanding Rights
pursuant to Section 12(a), the appropriate fractional Right
determined pursuant to such Section shall thereafter be
associated with each such Common Share.
(b) Until the earlier of (i) such time as the
Company learns that a Person has become an Acquiring Person
or (ii) the Close of Business on such date, if any, as may
be designated by the Board of Directors of the Company
following the commencement of, or first public disclosure of
an intent to commence, a tender or exchange offer by any
Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or of any
of its Subsidiaries, or any Person holding Common Shares for
or pursuant to the terms of any such employee benefit plan
and other than a Qualifying Offer) for outstanding Common
Shares, if upon consummation of such tender or exchange
offer such Person could be the Beneficial Owner of more than
15% of the outstanding Common Shares (the Close of Business
on the earlier of such dates being the "Distribution Date"),
(x) the Rights will be evidenced by the certificates for
Common Shares registered in the names of the holders thereof
and not by separate Right Certificates and (y) the Rights,
including the right to receive Right Certificates, will be
transferable only in connection with the transfer of Common
Shares. As soon as practicable after the Distribution Date,
the Rights Agent will send, by first-class, postage-prepaid
mail, to each record holder of Common Shares as of the
Distribution Date, at the address of such holder shown on
the records of the Company, a Right Certificate evidencing
one whole Right for each Common Share (or for the number of
Page 25 of 73
<PAGE>26
Common Shares with which one whole Right is then associated
if the number of Rights per Common Share held by such record
holder has been adjusted in accordance with the proviso in
Section 3(a)). If the number of Rights associated with each
Common Share has been adjusted in accordance with the
proviso in Section 3(a), at the time of distribution of the
Right Certificates the Company may make any necessary and
appropriate rounding adjustments so that Right Certificates
representing only whole numbers of Rights are distributed
and cash is paid in lieu of any fractional Right in
accordance with Section 15(a). As of and after the
Distribution Date, the Rights will be evidenced solely by
such Right Certificates.
(c) With respect to any certificate for Common
Shares, until the earliest of the Distribution Date, the
Redemption Date or the Expiration Date, the Rights
associated with the Common Shares represented by any such
certificate shall be evidenced by such certificate alone,
the registered holders of the Common Shares shall also be
the registered holders of the associated Rights and the
surrender for transfer of any such certificate shall also
constitute the transfer of the Rights associated with the
Common Shares represented thereby.
(d) Certificates issued for Common Shares after
the Record Date (including, without limitation, upon
transfer or exchange of outstanding Common Shares), but
prior to the earliest of the Distribution Date, the
Redemption Date or the Expiration Date, may have printed
on, written on or otherwise affixed to them the following
legend:
This certificate also evidences and entitles the
holder hereof to certain Rights as set forth in a
Rights Agreement dated as of January 20, 1994, as it
may be amended from time to time (the "Rights
Agreement"), between Time Warner Inc. (the "Company")
and Chemical Bank, as Rights Agent (the "Rights
Agent"), the terms of which are hereby incorporated
herein by reference and a copy of which is on file at
the principal executive offices of the Company. Under
certain circumstances, as set forth in the Rights
Agreement, such Rights will be evidenced by separate
certificates and will no longer be evidenced by this
certificate. The Rights Agent will mail to the holder
of this certificate a copy of the Rights Agreement
without charge after receipt of a written request
Page 26 of 73
<PAGE>27
therefor. Rights beneficially owned by Acquiring
Persons or their Affiliates or Associates (as such
terms are defined in the Rights Agreement) and by any
subsequent holder of such Rights are null and void and
nontransferable.
Notwithstanding this paragraph (d), the omission of a legend
shall not affect the enforceability of any part of this
Rights Agreement or the rights of any holder of Rights.
SECTION 4. Form of Right Certificates. The Right
Certificates (and the form of election to purchase and form
of assignment to be printed on the reverse side thereof)
shall be in substantially the form set forth as Exhibit B
and may have such marks of identification or designation and
such legends, summaries or endorsements printed thereon as
the Company may deem appropriate and as are not inconsistent
with the provisions of this Rights Agreement, or as may be
required to comply with any applicable law or with any rule
or regulation made pursuant thereto or with any rule or
regulation of any stock exchange on which the Rights may
from time to time be listed, or to conform to usage.
Subject to the provisions of Sections 7, 11 and 23, the
Right Certificates, whenever issued, shall be dated as of
the Distribution Date, and on their face shall entitle the
holders thereof to purchase such number of Preferred Shares
as shall be set forth therein for the Purchase Price set
forth therein, subject to adjustment from time to time as
herein provided.
SECTION 5. Execution, Countersignature and
Registration. (a) The Right Certificates shall be executed
on behalf of the Company by the Chairman of the Board, the
Chief Executive Officer, the President, the Chief Operating
Officer, the Treasurer or a Vice President (whether preceded
by any additional title) of the Company, either manually or
by facsimile signature, and have affixed thereto the
Company's seal or a facsimile thereof which shall be
attested by the Secretary, an Assistant Secretary or a Vice
President (whether preceded by any additional title,
provided that such Vice President shall not have also
executed the Right Certificates) of the Company, either
manually or by facsimile signature. The Right Certificates
shall be manually countersigned by the Rights Agent and
shall not be valid or obligatory for any purpose unless so
countersigned. In case any officer of the Company who shall
have signed any of the Right Certificates shall cease to be
such an officer of the Company before countersignature by
Page 27 of 73
<PAGE>28
the Rights Agent and issuance and delivery by the Company,
such Right Certificates may nevertheless be countersigned by
the Rights Agent and issued and delivered by the Company
with the same force and effect as though the person who
signed such Right Certificates had not ceased to be such an
officer of the Company; and any Right Certificate may be
signed on behalf of the Company by any person who, at the
actual date of execution of such Right Certificate, shall be
a proper officer of the Company to sign such Right
Certificate, although at the date of execution of this
Rights Agreement any such person was not such an officer of
the Company.
(b) Following the Distribution Date, the Rights
Agent will keep or cause to be kept, at its principal office
in New York, New York, books for registration and transfer
of the Right Certificates issued hereunder. Such books
shall show the names and addresses of the respective holders
of the Right Certificates, the number of Rights evidenced by
each of the Right Certificates, the certificate number of
each of the Right Certificates and the date of each of the
Right Certificates.
SECTION 6. Transfer, Split-Up, Combination and
Exchange of Right Certificates; Mutilated, Destroyed, Lost
or Stolen Right Certificates; Uncertificated Rights.
(a) Subject to the provisions of Sections 7(e) and 15, at
any time after the Distribution Date, and at or prior to the
Close of Business on the earlier of the Redemption Date or
the Expiration Date, any Right Certificate or Right
Certificates may be transferred, split-up, combined or
exchanged for another Right Certificate or Right
Certificates representing, in the aggregate, the same number
of Rights as the Right Certificate or Right Certificates
surrendered then represented. Any registered holder
desiring to transfer, split-up, combine or exchange any
Right Certificate shall make such request in writing
delivered to the Rights Agent and shall surrender the Right
Certificate or Right Certificates to be transferred, split-
up, combined or exchanged at the principal office of the
Rights Agent; provided, however, that neither the Rights
Agent nor the Company shall be obligated to take any action
whatsoever with respect to the transfer of any Right
Certificate surrendered for transfer until the registered
holder shall have completed and signed the certification
contained in the form of assignment on the reverse side of
such Right Certificate and shall have provided such
additional evidence of the identity of the Beneficial Owner
Page 28 of 73
<PAGE>29
(or former Beneficial Owner) or Affiliates or Associates
thereof as the Company shall reasonably request. Thereupon
the Rights Agent shall, subject to Sections 7(e) and 15,
countersign and deliver to the Person entitled thereto a
Right Certificate or Right Certificates, as the case may be,
as so requested. The Company may require payment of a sum
sufficient to cover any tax or governmental charge that may
be imposed in connection with any transfer, split-up,
combination or exchange of Right Certificates.
(b) Upon receipt by the Company and the Rights
Agent of evidence reasonably satisfactory to them of the
loss, theft, destruction or mutilation of a valid Right
Certificate, and, in case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to them, and,
at the Company's request, reimbursement to the Company and
the Rights Agent of all reasonable expenses incidental
thereto, and upon surrender to the Rights Agent and
cancelation of the Right Certificate if mutilated, the
Company will make a new Right Certificate of like tenor and
deliver such new Right Certificate to the Rights Agent for
delivery to the registered owner in lieu of the Right
Certificate so lost, stolen, destroyed or mutilated.
(c) Notwithstanding any other provision hereof,
the Company and the Rights Agent may amend this Rights
Agreement to provide for uncertificated Rights in addition
to or in place of Rights evidenced by Right Certificates.
SECTION 7. Exercise of Rights; Expiration Date of
Rights. (a) Subject to Section 7(e) and except as
otherwise provided herein (including Section 11), each Right
shall entitle the registered holder thereof, upon exercise
thereof as provided herein, to purchase for the Purchase
Price, at any time after the Distribution Date and at or
prior to the earlier of (i) the Close of Business on the
10th anniversary of the date of this Rights Agreement (the
Close of Business on such date being the "Expiration Date"),
or (ii) the Redemption Date, one one-thousandths
(1/1,000ths) of a Preferred Share, subject to adjustment
from time to time as provided in Sections 11 and 12.
(b) The registered holder of any Right
Certificate may exercise the Rights evidenced thereby
(except as otherwise provided herein) in whole or in part at
any time after the Distribution Date, upon surrender of the
Right Certificate, with the form of election to purchase on
the reverse side thereof duly executed, to the Rights Agent
Page 29 of 73
<PAGE>30
at the principal office of the Rights Agent in New York, New
York, together with payment of the Purchase Price for each
one one-thousandths (1/1,000ths) of a Preferred Share as to
which the Rights are exercised, at or prior to the earlier
of (i) the Expiration Date or (ii) the Redemption Date.
(c) Upon receipt of a Right Certificate
representing exercisable Rights, with the form of election
to purchase duly executed, accompanied by payment of the
Purchase Price for the Preferred Shares to be purchased
together with an amount equal to any applicable transfer
tax, in lawful money of the United States of America, in
cash or by certified check or money order payable to the
order of the Company, the Rights Agent shall thereupon
(i) either (A) promptly requisition from any transfer agent
of the Preferred Shares (or make available, if the Rights
Agent is the transfer agent) certificates for the number of
Preferred Shares to be purchased and the Company hereby
irrevocably authorizes its transfer agent to comply with all
such requests or (B) if the Company shall have elected to
deposit the Preferred Shares with a depositary agent under a
depositary arrangement, promptly requisition from the
depositary agent depositary receipts representing the number
of one one-thousandths (1/1,000ths) of a Preferred Share to
be purchased (in which case certificates for the Preferred
Shares to be represented by such receipts shall be deposited
by the transfer agent with the depositary agent) and the
Company will direct the depositary agent to comply with all
such requests, (ii) when appropriate, promptly requisition
from the Company the amount of cash to be paid in lieu of
issuance of fractional shares in accordance with Section 15,
(iii) promptly after receipt of such certificates or
depositary receipts, cause the same to be delivered to or
upon the order of the registered holder of such Right
Certificate, registered in such name or names as may be
designated by such holder and (iv) when appropriate, after
receipt promptly deliver such cash to or upon the order of
the registered holder of such Right Certificate.
(d) In case the registered holder of any Right
Certificate shall exercise fewer than all the Rights
evidenced thereby, a new Right Certificate evidencing Rights
equivalent to the Rights remaining unexercised shall be
issued by the Rights Agent and delivered to the registered
holder of such Right Certificate or to his duly authorized
assigns, subject to the provisions of Section 15.
Page 30 of 73
<PAGE>31
(e) Notwithstanding anything in this Rights
Agreement to the contrary, any Rights that are at any time
beneficially owned by an Acquiring Person or any Affiliate
or Associate of an Acquiring Person shall be null and void
and nontransferable, and any holder of any such Right
(including any purported transferee or subsequent holder)
shall not have any right to exercise or transfer any such
Right.
(f) Notwithstanding anything in this Rights
Agreement to the contrary, neither the Rights Agent nor the
Company shall be obligated to undertake any action with
respect to a registered holder of any Right Certificates
upon the occurrence of any purported exercise as set forth
in this Section 7 unless such registered holder shall have
(i) completed and signed the certificate contained in the
form of election to purchase set forth on the reverse side
of the Right Certificate surrendered for such exercise and
(ii) provided such additional evidence of the identity of
the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Company shall
reasonably request.
(g) The Company may temporarily suspend, for a
period of time not to exceed 90 calendar days after the
Distribution Date, the exercisability of the Rights in order
to prepare and file a registration statement under the
Securities Act, on appropriate form, with respect to the
Preferred Shares purchasable upon exercise of the Rights and
permit such registration statement to become effective;
provided, however, that no such suspension shall remain
effective after, and the Rights shall without any further
action by the Company or any other Person become exercisable
immediately upon, the effectiveness of such registration
statement. Upon any such suspension, the Company shall
issue a public announcement stating that the exercisability
of the Rights has been temporarily suspended and shall issue
a further public announcement at such time as the suspension
is no longer in effect. Notwithstanding any provision
herein to the contrary, the Rights shall not be exercisable
in any jurisdiction if the requisite qualification under the
blue sky or securities laws of such jurisdiction shall not
have been obtained or the exercise of the Rights shall not
be permitted under applicable law.
SECTION 8. Cancelation and Destruction of Right
Certificates. All Right Certificates surrendered or
presented for the purpose of exercise, transfer, split-up,
Page 31 of 73
<PAGE>32
combination or exchange shall, and any Right Certificate
representing Rights that have become null and void and
nontransferable pursuant to Section 7(e) surrendered or
presented for any purpose shall, if surrendered or presented
to the Company or to any of its agents, be delivered to the
Rights Agent for cancelation or in canceled form, or, if
surrendered or presented to the Rights Agent, shall be
canceled by it, and no Right Certificates shall be issued in
lieu thereof except as expressly permitted by this Rights
Agreement. The Company shall deliver to the Rights Agent
for cancelation and retirement, and the Rights Agent shall
so cancel and retire, any Right Certificate purchased or
acquired by the Company. The Rights Agent shall deliver all
canceled Right Certificates to the Company, or shall, at the
written request of the Company, destroy such canceled Right
Certificates, and in such case shall deliver a certificate
of destruction thereof to the Company.
SECTION 9. Reservation and Availability of
Preferred Shares. (a) The Company covenants and agrees
that it will cause to be reserved and kept available out of
its authorized and unissued Preferred Shares or any
authorized and issued Preferred Shares held in its treasury,
free from preemptive rights or any right of first refusal, a
number of Preferred Shares sufficient to permit the exercise
in full of all outstanding Rights.
(b) In the event that there shall not be
sufficient Preferred Shares issued but not outstanding or
authorized but unissued to permit the exercise or exchange
of Rights in accordance with Section 11, the Company
covenants and agrees that it will take all such action as
may be necessary to authorize additional Preferred Shares
for issuance upon the exercise or exchange of Rights
pursuant to Section 11; provided, however, that if the
Company is unable to cause the authorization of additional
Preferred Shares, then the Company shall, or in lieu of
seeking any such authorization, the Company may, to the
extent necessary and permitted by applicable law and any
agreements or instruments in effect prior to the
Distribution Date to which it is a party, (A) upon surrender
of a Right, pay cash equal to the Purchase Price in lieu of
issuing Preferred Shares and requiring payment therefor,
(B) upon due exercise of a Right and payment of the Purchase
Price for each Preferred Share as to which such Right is
exercised, issue equity securities having a value equal to
the value of the Preferred Shares which otherwise would have
been issuable pursuant to Section 11, which value shall be
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<PAGE>33
determined by a nationally recognized investment banking
firm selected by the Board or (C) upon due exercise of a
Right and payment of the Purchase Price for each Preferred
Share as to which such Right is exercised, distribute a
combination of Preferred Shares, cash and/or other equity
and/or debt securities having an aggregate value equal to
the value of the Preferred Shares which otherwise would have
been issuable pursuant to Section 11, which value shall be
determined by a nationally recognized investment banking
firm selected by the Board. To the extent that any legal or
contractual restrictions (pursuant to agreements or
instruments in effect prior to the Distribution Date to
which it is party) prevent the Company from paying the full
amount payable in accordance with the foregoing sentence,
the Company shall pay to holders of the Rights as to which
such payments are being made all amounts which are not then
restricted on a pro rata basis as such payments become
permissible under such legal or contractual restrictions
until such payments have been paid in full.
(c) The Company covenants and agrees that it will
take all such action as may be necessary to ensure that all
Preferred Shares delivered upon exercise or exchange of
Rights shall, at the time of delivery of the certificates
for such Preferred Shares (subject to payment of the
Purchase Price), be duly and validly authorized and issued
and fully paid and nonassessable shares.
(d) So long as the Preferred Shares issuable upon
the exercise or exchange of Rights are to be listed on any
national securities exchange, the Company covenants and
agrees to use its best efforts to cause, from and after such
time as the Rights become exercisable or exchangeable, all
Preferred Shares reserved for such issuance to be listed on
such securities exchange upon official notice of issuance
upon such exercise or exchange.
(e) The Company further covenants and agrees that
it will pay when due and payable any and all Federal and
state transfer taxes and charges which may be payable in
respect of the issuance or delivery of Right Certificates or
of any Preferred Shares or Common Shares or other securities
upon the exercise or exchange of the Rights. The Company
shall not, however, be required to pay any transfer tax
which may be payable in respect of any transfer or delivery
of Right Certificates to a Person other than, or in respect
of the issuance or delivery of certificates for the
Preferred Shares or Common Shares or other securities, as
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<PAGE>34
the case may be, in a name other than that of, the
registered holder of the Right Certificate evidencing Rights
surrendered for exercise or exchange or to issue or deliver
any certificates for Preferred Shares or Common Shares or
other securities, as the case may be, upon the exercise or
exchange of any Rights until any such tax shall have been
paid (any such tax being payable by the holder of such Right
Certificate at the time of surrender) or until it has been
established to the Company's satisfaction that no such tax
is due.
SECTION 10. Preferred Shares Record Date. Each
Person in whose name any certificate for Preferred Shares or
Common Shares or other securities is issued upon the
exercise or exchange of Rights shall for all purposes be
deemed to have become the holder of record of the Preferred
Shares or Common Shares or other securities, as the case may
be, represented thereby on, and such certificate shall be
dated, the date upon which the Right Certificate evidencing
such Rights was duly surrendered and payment of any Purchase
Price (and any applicable transfer taxes) was made;
provided, however, that, if the date of such surrender and
payment is a date upon which the transfer books of the
Company for the Preferred Shares or Common Shares or other
securities, as the case may be, are closed, such Person
shall be deemed to have become the record holder of such
Preferred Shares or Common Shares or other securities, as
the case may be, on, and such certificate shall be dated,
the next succeeding Business Day on which the tranfer books
of the Company for the Preferred Shares or Common Shares or
other securities, as the case may be, are open.
SECTION 11. Adjustments in Rights After There Is
an Acquiring Person; Exchange of Rights for Shares; Business
Combinations. (a) Upon a Person becoming an Acquiring
Person, proper provision shall be made so that each holder
of a Right, except as provided in Section 7(e), shall
thereafter have a right to receive, upon exercise thereof
for the Purchase Price in accordance with the terms of this
Rights Agreement, such number of one one-thousandths
(1/1,000ths) of a Preferred Share as shall equal the result
obtained by multiplying the Purchase Price by a fraction,
the numerator of which is the number of one one-thousandths
(1/1,000ths) of a Preferred Share for which a Right is then
exercisable and the denominator of which is 50% of the
Market Value of the Common Shares on the date on which a
Person becomes an Acquiring Person. As soon as practicable
after a Person becomes an Acquiring Person (provided the
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<PAGE>35
Company shall not have elected to make the exchange
permitted by Section 11(b)(I) for all outstanding Rights),
the Company covenants and agrees to use its best efforts to:
(I) prepare and file a registration statement
under the Securities Act, on an appropriate form, with
respect to the Preferred Shares purchasable upon
exercise of the Rights;
(II) cause such registration statement to become
effective as soon as practicable after such filing;
(III) cause such registration statement to remain
effective (with a prospectus at all times meeting the
requirements of the Securities Act) until the
Expiration Date; and
(IV) qualify or register the Preferred Shares
purchasable upon exercise of the Rights under the blue
sky or securities laws of such jurisdictions as may be
necessary or appropriate.
(b)(I) The Board of Directors of the Company may,
at its option, at any time after a Person becomes an
Acquiring Person, mandatorily exchange all or part of the
then outstanding and exercisable Rights (which shall not
include Rights that shall have become null and void and
nontransferable pursuant to the provisions of Section 7(e))
for consideration per Right consisting of one-half of the
securities that would be issuable at such time upon the
exercise of one Right in accordance with Section 11(a) or,
if applicable, Section 9(b) (the consideration issuable per
Right pursuant to this Section 11(b)(I) being the "Exchange
Consideration"). The Board of Directors of the Company may,
at its option, issue, in substitution for Preferred Shares,
Common Shares in an amount per Preferred Share equal to the
Formula Number (as defined in the Certificate of
Designation) if there are sufficient Common Shares issued
but not outstanding or authorized but unissued. If the
Board of Directors of the Company elects to exchange all the
Rights for Exchange Consideration pursuant to this
Section 11(b)(I) prior to the physical distribution of the
Rights Certificates, the Corporation may distribute the
Exchange Consideration in lieu of distributing Right
Certificates, in which case for purposes of this Rights
Agreement holders of Rights shall be deemed to have
simultaneously received and surrendered for exchange Right
Certificates on the date of such distribution.
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<PAGE>36
(II) Any action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to
Section 11(b)(I) shall be irrevocable and, immediately upon
the taking of such action and without any further action and
without any notice, the right to exercise any such Right
pursuant to Section 11(a) shall terminate and the only right
thereafter of a holder of such Right shall be to receive the
Exchange Consideration in exchange for each such Right held
by such holder or, if the Exchange Consideration shall not
have been paid or issued, to exercise any such Right
pursuant to Section 11(c)(I). The Company shall promptly
give public notice of any such exchange; provided, however,
that the failure to give, or any defect in, such notice
shall not affect the validity of such exchange. The Company
promptly shall mail a notice of any such exchange to all
holders of such Rights at their last addresses as they
appear upon the registry books of the Rights Agent. Any
notice which is mailed in the manner herein provided shall
be deemed given, whether or not the holder receives the
notice. Each such notice of exchange will state the method
by which the exchange of the Rights for the Exchange
Consideration will be effected and, in the event of any
partial exchange, the number of Rights which will be
exchanged. Any partial exchange shall be effected pro rata
based on the number of Rights (other than Rights which shall
have become null and void and nontransferable pursuant to
the provisions of Section 7(e)) held by each holder of
Rights.
(c)(I) In the event that, following a
Distribution Date, directly or indirectly, any transactions
specified in the following clause (i), (ii) or (iii) of this
Section 11(c) (each such transaction being a "Business
Combination") shall be consummated:
(i) the Company shall consolidate with, or merge
with and into, any Acquiring Person or any Affiliate or
Associate of an Acquiring Person;
(ii) any Acquiring Person or any Affiliate or
Associate of an Acquiring Person shall merge with and
into the Company and, in connection with such merger,
all or part of the Common Shares shall be changed into
or exchanged for capital stock or other securities of
the Company or of any Acquiring Person or Affiliate or
Associate of an Acquiring Person or cash or any other
property; or
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<PAGE>37
(iii) the Company shall sell, lease, exchange or
otherwise transfer or dispose of (or one or more of its
Subsidiaries shall sell, lease, exchange or otherwise
transfer or dispose of), in one or more transactions,
the Major Part of the assets of the Company and its
Subsidiaries (taken as a whole) to any Acquiring Person
or any Affiliate or Associate of an Acquiring Person,
then, in each such case, proper provision shall be made so
that each holder of a Right, except as provided in
Section 7(e), shall thereafter have the right to receive,
upon the exercise thereof for the Purchase Price in
accordance with the terms of this Rights Agreement, the
securities specified below (or, at such holder's option,
the securities specified in Section 11(a)):
(A) If the Principal Party in such Business
Combination has Registered Common Shares outstanding,
each Right shall thereafter represent the right to
receive, upon the exercise thereof for the Purchase
Price in accordance with the terms of this Rights
Agreement, such number of Registered Common Shares of
such Principal Party, free and clear of all liens,
encumbrances or other adverse claims, as shall have an
aggregate Market Value equal to the result obtained by
multiplying the Purchase Price by two;
(B) If the Principal Party involved in such
Business Combination does not have Registered Common
Shares outstanding, each Right shall thereafter
represent the right to receive, upon the exercise
thereof for the Purchase Price in accordance with the
terms of this Rights Agreement, at the election of the
holder of such Right at the time of the exercise
thereof, any of:
(1) such number of Common Shares of the
Surviving Person in such Business Combination as
shall have an aggregate Book Value immediately
after giving effect to such Business Combination
equal to the result obtained by multiplying the
Purchase Price by two;
(2) such number of Common Shares of the
Principal Party in such Business Combination (if
the Principal Party is not also the Surviving
Person in such Business Combination) as shall have
an aggregate Book Value immediately after giving
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<PAGE>38
effect to such Business Combination equal to the result
obtained by multiplying the Purchase Price by two; or
(3) if the Principal Party in such Business
Combination is an Affiliate of one or more Persons
which has Registered Common Shares outstanding,
such number of Registered Common Shares of
whichever of such Affiliates of the Principal
Party has Registered Common Shares with the
greatest aggregate Market Value on the date of
consummation of such Business Combination as shall
have an aggregate Market Value on the date of such
Business Combination equal to the result obtained
by multiplying the Purchase Price by two.
(II) The Company shall not consummate any
Business Combination unless each issuer of Common Shares for
which Rights may be exercised, as set forth in this
Section 11(c), shall have sufficient authorized Common
Shares that have not been issued or reserved for issuance
(and which shall, when issued upon exercise thereof in
accordance with this Rights Agreement, be validly issued,
fully paid and nonassessable and free of preemptive rights,
rights of first refusal or any other restrictions or
limitations on the transfer or ownership thereof) to permit
the exercise in full of the Rights in accordance with this
Section 11(c) and unless prior thereto:
(i) a registration statement under the Securities
Act on an appropriate form, with respect to the Rights
and the Common Shares of such issuer purchasable upon
exercise of the Rights, shall be effective under the
Securities Act; and
(ii) the Company and each such issuer shall have:
(A) executed and delivered to the Rights
Agent a supplemental agreement providing for the
assumption by such issuer of the obligations set
forth in this Section 11(c) (including the
obligation of such issuer to issue Common Shares
upon the exercise of Rights in accordance with the
terms set forth in Sections 11(c)(I) and
11(c)(III)) and further providing that such
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<PAGE>39
issuer, at its own expense, will use its best efforts
to:
(1) cause a registration statement under
the Securities Act on an appropriate form,
with respect to the Rights and the Common
Shares of such issuer purchasable upon
exercise of the Rights, to remain effective
(with a prospectus at all times meeting the
requirements of the Securities Act) until the
Expiration Date;
(2) qualify or register the Rights and
the Common Shares of such issuer purchasable
upon exercise of the Rights under the blue
sky or securities laws of such jurisdictions
as may be necessary or appropriate; and
(3) list the Rights and the Common
Shares of such issuer purchasable upon
exercise of the Rights on each national
securities exchange on which the Common
Shares were listed prior to the consummation
of the Business Combination or, if the Common
Shares were not listed on a national
securities exchange prior to the consummation
of the Business Combination, on a national
securities exchange;
(B) furnished to the Rights Agent a written
opinion of independent counsel stating that such
supplemental agreement is a valid, binding and
enforceable agreement of such issuer; and
(C) filed with the Rights Agent a certificate
of a nationally recognized firm of independent
accountants setting forth the number of Common
Shares of such issuer which may be purchased upon
the exercise of each Right after the consummation
of such Business Combination.
(III) After consummation of any Business
Combination and subject to the provisions of
Section 11(c)(II), (i) each issuer of Common Shares for
which Rights may be exercised as set forth in this
Section 11(c) shall be liable for, and shall assume, by
virtue of such Business Combination, all the obligations and
duties of the Company pursuant to this Rights Agreement,
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<PAGE>40
(ii) the term "Company" shall thereafter be deemed to refer
to such issuer, (iii) each such issuer shall take such steps
in connection with such consummation as may be necessary to
assure that the provisions hereof (including the provisions
of Sections 11(a) and 11(c)) shall thereafter be applicable,
as nearly as reasonably may be, in relation to its Common
Shares thereafter deliverable upon the exercise of the
Rights, and (iv) the number of Common Shares of each such
issuer thereafter receivable upon exercise of any Right
shall be subject to adjustment from time to time in a manner
and on terms as nearly equivalent as practicable to the
provisions of Sections 11 and 12 and the provisions of
Section 7, 9 and 10 with respect to the Preferred Shares
shall apply, as nearly as reasonably may be, on like terms
to any such Common Shares.
SECTION 12. Certain Adjustments. (a) To
preserve the actual or potential economic value of the
Rights, if at any time after the date of this Rights
Agreement there shall be any change in the Common Shares or
the Preferred Shares, whether by reason of stock dividends,
stock splits, recapitalizations, mergers, consolidations,
combinations or exchanges of securities, split-ups, split-
offs, spin-offs, liquidations, other similar changes in
capitalization, any distribution or issuance of cash,
assets, evidences of indebtedness or subscription rights,
options or warrants to holders of Common Shares or Preferred
Shares, as the case may be (other than distribution of the
Rights or regular quarterly cash dividends) or otherwise,
then, in each such event the Board of Directors of the
Company shall make such appropriate adjustments in the
number of Preferred Shares (or the number and kind of other
securities) issuable upon exercise of each Right, the
Purchase Price and Redemption Price in effect at such time
and the number of Rights outstanding at such time (including
the number of Rights or fractional Rights associated with
each Common Share) such that following such adjustment such
event shall not have had the effect of reducing or limiting
the benefits the holders of the Rights would have had absent
such event.
(b) If, as a result of an adjustment made
pursuant to Section 12(a), the holder of any Right
thereafter exercised shall become entitled to receive any
securities other than Preferred Shares, thereafter the
number of such securities so receivable upon exercise of any
Right shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to
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<PAGE>41
the provisions of Sections 11 and 12 and the provisions of
Sections 7, 9 and 10 with respect to the Preferred Shares
shall apply, as nearly as reasonably may be, on like terms
to any such other securities.
(c) All Rights originally issued by the Company
subsequent to any adjustment made to the amount of Preferred
Shares or other securities relating to a Right shall
evidence the right to purchase, for the Purchase Price, the
adjusted number and kind of securities purchasable from time
to time hereunder upon exercise of the Rights, all subject
to further adjustment as provided herein.
(d) Irrespective of any adjustment or change in
the Purchase Price or the number of Preferred Shares or
number or kind of other securities issuable upon the
exercise of the Rights, the Right Certificates theretofore
and thereafter issued may continue to express the terms
which were expressed in the initial Right Certificates
issued hereunder.
(e) In any case in which action taken pursuant to
Section 12(a) requires that an adjustment be made effective
as of a record date for a specified event, the Company may
elect to defer until the occurrence of such event the
issuing to the holder of any Right exercised after such
record date the Preferred Shares and/or other securities, if
any, issuable upon such exercise over and above the
Preferred Shares and/or other securities, if any, issuable
before giving effect to such adjustment; provided, however,
that the Company shall deliver to such holder a due bill or
other appropriate instrument evidencing such holder's right
to receive such additional securities upon the occurrence of
the event requiring such adjustment.
SECTION 13. Certificate of Adjustment. Whenever
an adjustment is made as provided in Section 11 or 12, the
Company shall (a) promptly prepare a certificate setting
forth such adjustment and a brief statement of the facts
accounting for such adjustment (b) promptly file with the
Rights Agent and with each transfer agent for the Preferred
Shares a copy of such certificate and (c) mail a brief
summary thereof to each holder of a Right Certificate (or,
prior to the Distribution Date, of the Common Shares) in
accordance with Section 25. The Rights Agent shall be fully
protected in relying on any such certificate and on any
adjustment therein contained.
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<PAGE>42
SECTION 14. Additional Covenants. (a) Notwith-
standing any other provision of this Rights Agreement, no
adjustment to the number of Preferred Shares (or fractions
of a share) or other securities for which a Right is exer-
cisable or the number of Rights outstanding or associated
with each Common Share or any similar or other adjustment
shall be made or be effective if such adjustment would have
the effect of reducing or limiting the benefits the holders
of the Rights would have had absent such adjustment, includ-
ing, without limitation, the benefits under Sections 11 and
12, unless the terms of this Rights Agreement are amended so
as to preserve such benefits.
(b) The Company covenants and agrees that, after
the Distribution Date, except as permitted by Section 26, it
will not take (or permit any Subsidiary of the Company to
take) any action if at the time such action is taken it is
intended or reasonably foreseeable that such action will
reduce or otherwise limit the benefits the holders of the
Rights would have had absent such action, including, without
limitation, the benefits under Sections 11 and 12. Any
action taken by the Company during any period after any
Person becomes an Acquiring Person but prior to the
Distribution Date shall be null and void unless such action
could be taken under this Section 14(b) from and after the
Distribution Date. The Company shall not consummate any
Business Combination if any issuer of Common Shares for
which Rights may be exercised after such Business
Combination in accordance with Section 11(c) shall have
taken any action that reduces or otherwise limits the
benefits the holders of the Rights would have had absent
such action, including, without limitation, the benefits
under Sections 11 and 12.
SECTION 15. Fractional Rights and Fractional
Shares. (a) The Company may, but shall not be required to,
issue fractions of Rights or distribute Right Certificates
which evidence fractional Rights. In lieu of such
fractional Rights, the Company may pay to the registered
holders of the Right Certificates with regard to which such
fractional Rights would otherwise be issuable an amount in
cash equal to the same fraction of the current market value
of a whole Right. For purposes of this Section 15(a), the
current market value of a whole Right shall be the closing
price of the Rights (as determined pursuant to the second
and third sentences of the definition of Market Value
contained in Section 1) for the Trading Day immediately
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<PAGE>43
prior to the date on which such fractional Rights would have
been otherwise issuable.
(b) The Company may, but shall not be required
to, issue fractions of Preferred Shares upon exercise of the
Rights or distribute certificates which evidence fractional
Preferred Shares. In lieu of fractional Preferred Shares,
the Company may elect to (i) utilize a depository
arrangement as provided by the terms of the Preferred Shares
or (ii) in the case of a fraction of a Preferred Share
(other than one one-thousandths (1/1,000ths) of a Preferred
Share or any integral multiple thereof), pay to the
registered holders of Right Certificates at the time such
Rights are exercised as herein provided an amount in cash
equal to the same fraction of the current market value of
one Preferred Share, if any are outstanding and publicly
traded (or the Formula Number times the current market value
of one Common Share if the Preferred Shares are not
outstanding and publicly traded). For purposes of this
Section 15(b), the current market value of a Preferred Share
(or Common Share) shall be the closing price of a Preferred
Share (or Common Share) (as determined pursuant to the
second and third sentences of the definition of Market Value
contained in Section 1) for the Trading Day immediately
prior to the date of such exercise. If, as a result of an
adjustment made pursuant to Section 12(a), the holder of any
Right thereafter exercised shall become entitled to receive
any securities other than Preferred Shares, the provisions
of this Section 15(b) shall apply, as nearly as reasonably
may be, on like terms to such other securities.
(c) The Company may, but shall not be required
to, issue fractions of Common Shares upon exchange of Rights
pursuant to Section 11(b), or to distribute certificates
which evidence fractional Common Shares. In lieu of such
fractional Common Shares, the Company may pay to the
registered holders of the Right Certificates with regard to
which such fractional Common Shares would otherwise be
issuable an amount in cash equal to the same fraction of the
current Market Value of one Common Share as of the date on
which a Person became an Acquiring Person.
(d) The holder of Rights by the acceptance of the
Rights expressly waives his right to receive any fractional
Rights or any fractional shares upon exercise of a Right
except as provided in this Section 15.
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<PAGE>44
SECTION 16. Rights of Action. (a) All rights of
action in respect of this Rights Agreement are vested in the
respective registered holders of the Right Certificates
(and, prior to the Distribution Date, the registered holders
of the Common Shares); and any registered holder of any
Right Certificate (or, prior to the Distribution Date, of
the Common Shares), without the consent of the Rights Agent
or of the holder of any other Right Certificate (or, prior
to the Distribution Date, of the Common Shares) may, in his
own behalf and for his own benefit, enforce, and may
institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect
of, his right to exercise the Rights evidenced by such Right
Certificate in the manner provided in such Right Certificate
and in this Rights Agreement. Without limiting the
foregoing or any remedies available to the holders of
Rights, it is specifically acknowledged that the holders of
Rights would not have an adequate remedy at law for any
breach of this Rights Agreement and shall be entitled to
specific performance of the obligations of any Person under,
and injunctive relief against actual or threatened
violations of the obligations of any Person subject to, this
Rights Agreement.
(b) Any holder of Rights who prevails in an
action to enforce the provisions of this Rights Agreement
shall be entitled to recover the reasonable costs and
expenses, including attorneys' fees, incurred in such
action.
SECTION 17. Transfer and Ownership of Rights and
Right Certificates. (a) Prior to the Distribution Date,
the Rights will be transferable only in connection with the
transfer of the Common Shares.
(b) After the Distribution Date, the Right
Certificates will be transferable, subject to Section 7(e),
only on the registry books of the Rights Agent if surren-
dered at the principal office of the Rights Agent, duly
endorsed or accompanied by a proper instrument of transfer.
(c) The Company and the Rights Agent may deem and
treat the Person in whose name a Right Certificate (or,
prior to the Distribution Date, the associated Common Shares
certificate) is registered as the absolute owner thereof and
of the Rights evidenced thereby (notwithstanding any nota-
tions of ownership or writing on the Right Certificates or
the associated certificate for Common Shares made by anyone
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<PAGE>45
other than the Company or the Rights Agent) for all purposes
whatsoever, and neither the Company nor the Rights Agent
shall be affected by any notice to the contrary.
SECTION 18. Right Certificate Holder Not Deemed a
Stockholder. No holder, as such, of any Right Certificate
shall be entitled to vote or receive dividends or be deemed,
for any purpose, the holder of the Preferred Shares or of
any other securities of the Company which may at any time be
issuable on the exercise of the Rights represented thereby,
nor shall anything contained herein or in any Right Certifi-
cate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a stockholder of
the Company, including, without limitation, any right to
vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to give
or withhold consent to any corporate action, or to receive
notice of meetings or other actions affecting stockholders,
or to receive dividends or other distributions or
subscription rights, or otherwise, until the Right or Rights
evidenced by such Right Certificate shall have been
exercised in accordance with the provisions hereof.
SECTION 19. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent reason-
able compensation for all services rendered by it hereunder
and from time to time, on demand of the Rights Agent, its
reasonable expenses and counsel fees and other disbursements
incurred in the administration and execution of this Rights
Agreement and the exercise and performance of its duties
hereunder.
(b) The Rights Agent shall be protected and shall
incur no liability for or in respect of any action taken,
suffered or omitted by it in connection with its administra-
tion of this Rights Agreement in reliance upon any Right
Certificate or certificate for the Common Shares or for
other securities of the Company, instrument of assignment or
transfer, power of attorney, endorsement, affidavit, letter,
notice, direction, consent, certificate, statement, or other
paper or document believed by it to be genuine and to be
signed, executed and, where necessary, verified or acknowl-
edged, by the proper Person or Persons.
SECTION 20. Merger or Consolidation or Change of
Rights Agent. (a) Any corporation into which the Rights
Agent or any successor Rights Agent may be merged or with
which it may be consolidated, or any corporation resulting
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<PAGE>46
from any merger or consolidation to which the Rights Agent
or any successor Rights Agent shall be a party, or any
corporation succeeding to the stock transfer or corporate
trust business of the Rights Agent or any successor Rights
Agent, shall be the successor to the Rights Agent under this
Rights Agreement without the execution or filing of any
paper or any further act on the part of any of the parties
hereto; provided that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions
of Section 22. In case, at the time such successor Rights
Agent shall succeed to the agency created by this Rights
Agreement, any of the Right Certificates shall have been
countersigned but not delivered, any such successor Rights
Agent may adopt the countersignature of the predecessor
Rights Agent and deliver such Right Certificates so
countersigned; and, in case at that time any of the Right
Certificates shall not have been countersigned, any succes-
sor Rights Agent may countersign such Right Certificates
either in the name of the predecessor Rights Agent or in the
name of the successor Rights Agent; and in all such cases
such Right Certificates shall have the full force provided
in the Right Certificates and in this Rights Agreement.
(b) In case at any time the name of the Rights
Agent shall be changed and at such time any of the Right
Certificates shall have been countersigned but not deliv-
ered, the Rights Agent may adopt the countersignature under
its prior name and deliver Right Certificates so counter-
signed; and, in case at that time any of the Right Certifi-
cates shall not have been countersigned, the Rights Agent
may countersign such Right Certificates either in its prior
name or in its changed name; and in all such cases such
Right Certificates shall have the full force provided in the
Right Certificates and in this Rights Agreement.
SECTION 21. Duties of Rights Agent. The Rights
Agent undertakes the duties and obligations imposed by this
Rights Agreement upon the following terms and conditions, by
all of which the Company and the holders of Right Certifi-
cates (or, prior to the Distribution Date, of the Common
Shares), by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal
counsel (who may be legal counsel for the Company), and the
opinion of such counsel shall be full and complete author-
ization and protection to the Rights Agent as to any action
taken, suffered or omitted by it in good faith and in
accordance with such opinion.
Page 46 of 73
<PAGE>47
(b) Whenever in the performance of its duties
under this Rights Agreement the Rights Agent shall deem it
necessary or desirable that any fact or matter (including,
without limitation, the identity of any Acquiring Person) be
proved or established by the Company prior to taking,
refraining from taking or suffering any action hereunder,
such fact or matter (unless other evidence in respect
thereof be herein specifically prescribed) may be deemed to
be conclusively proved and established by a certificate
signed by any one of the Chairman of the Board, the Chief
Executive Officer, the President, the Chief Operating
Officer, the Chief Financial Officer, a Vice President
(whether preceded by any additional title), the Treasurer or
the Secretary of the Company and delivered to the Rights
Agent; and such certificate shall be full authorization to
the Rights Agent for any action taken or suffered in good
faith by it under the provisions of this Rights Agreement in
reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder
only for its own negligence, bad faith or wilful misconduct.
(d) The Rights Agent shall not be liable for or
by reason of any of the statements of fact or recitals
contained in this Rights Agreement or in the Right Certifi-
cates (except as to its countersignature thereof) or be
required to verify the same, but all such statements and
recitals are and shall be deemed to have been made by the
Company only.
(e) The Rights Agent shall not be under any
responsibility in respect of the validity of this Rights
Agreement or the execution and delivery hereof (except the
due execution hereof by the Rights Agent) or in respect of
the validity or execution of any Right Certificate (except
its countersignature thereof); nor shall it be responsible
for any breach by the Company of any covenant or condition
contained in this Rights Agreement or in any Right Certifi-
cate; nor shall it be responsible for any adjustment
required under the provisions of Section 11 or 12 or
responsible for the manner, method or amount of any such
adjustment or the ascertaining of the existence of facts
that would require any such adjustment (except with respect
to the exercise of Rights evidenced by Right Certificates
after actual notice of any such adjustment); nor shall it by
any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any
Preferred Shares or Common Shares to be issued pursuant to
Page 47 of 73
<PAGE>48
this Rights Agreement or any Right Certificate or as to
whether any Preferred Shares or Common Shares will, when so
issued, be validly authorized and issued, fully paid and
nonassessable.
(f) The Company agrees that it will perform,
execute, acknowledge and deliver or cause to be performed,
executed, acknowledged and delivered all such further and
other acts, instruments and assurances as may reasonably be
required by the Rights Agent for the carrying out or per-
forming by the Rights Agent of the provisions of this Rights
Agreement.
(g) The Rights Agent is hereby authorized and
directed to accept instructions with respect to the perfor-
mance of its duties hereunder from any one of the Chairman
of the Board, the Chief Executive Officer, the President,
the Chief Operating Officer, a Vice President (whether
preceded by any additional title), the Secretary or the
Treasurer of the Company, in connection with its duties and
it shall not be liable for any action taken or suffered to
be taken by it in good faith in accordance with instructions
of any such officer.
(h) The Rights Agent and any stockholder, direc-
tor, officer or employee of the Rights Agent may buy, sell
or deal in any of the Rights or other securities of the
Company or become pecuniarily interested in any transaction
in which the Company may be interested, or contract with or
lend money to the Company or otherwise act as fully and
freely as though it were not the Rights Agent under this
Rights Agreement. Nothing herein shall preclude the Rights
Agent from acting in any other capacity for the Company or
for any other legal entity.
(i) The Rights Agent may execute and exercise any
of the rights or powers hereby vested in it or perform any
duty hereunder either itself or by or through its attorneys
or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of
any such attorneys or agents or for any loss to the Company
resulting from any such act, default, neglect or misconduct
provided reasonable care was exercised in the selection and
continued employment thereof.
(j) The Company agrees to indemnify and to hold
the Rights Agent harmless against any loss, liability,
damage or expense (including reasonable fees and expenses of
Page 48 of 73
<PAGE>49
legal counsel) which the Rights Agent may incur resulting
from its actions as Rights Agent pursuant to this Rights
Agreement; provided, however, that the Rights Agent shall
not be indemnified or held harmless with respect to any such
loss, liability, damage or expense incurred by the Rights
Agent as a result of, or arising out of, its own negligence,
bad faith or wilful misconduct. In no case shall the
Company be liable with respect to any action, proceeding,
suit or claim against the Rights Agent unless the Rights
Agent shall have notified the Company, by letter or by
facsimile confirmed by letter, of the assertion of any
action, proceeding, suit or claim against the Rights Agent,
promptly after the Rights Agent shall have notice of any
such assertion of an action, proceeding, suit or claim or
have been served with the summons or other first legal
process giving information as to the nature and basis of the
action, proceeding, suit or claim. The Company shall be
entitled to participate at its own expense in the defense of
any such action, proceeding, suit or claim, and, if the
Company so elects, the Company shall assume the defense of
any such action, proceeding, suit or claim. In the event
that the Company assumes such defense, the Company shall not
thereafter be liable for the fees and expenses of any
additional counsel retained by the Rights Agent, so long as
the Company shall retain counsel satisfactory to the Rights
Agent, in the exercise of its reasonable judgment, to defend
such action, proceeding, suit or claim. The Rights Agent
agrees not to settle any litigation in connection with any
action, proceeding, suit or claim with respect to which it
may seek indemnification from the Company without the prior
written consent of the Company.
SECTION 22. Change of Rights Agent. The Rights
Agent or any successor Rights Agent may resign and be
discharged from its duties under this Rights Agreement upon
30 days' notice in writing mailed to the Company and to each
transfer agent of the Common Shares and the Preferred Shares
by registered or certified mail, and to the holders of the
Right Certificates (or, prior to the Distribution Date, of
the Common Shares) by first-class mail. The Company may
remove the Rights Agent or any successor Rights Agent upon
30 days' notice in writing, mailed to the Rights Agent or
successor Rights Agent, as the case may be, and to each
transfer agent of the Common Shares and the Preferred Shares
by registered or certified mail, and to the holders of the
Right Certificates (or, prior to the Distribution Date, of
the Common Shares) by first-class mail. If the Rights Agent
shall resign or be removed or shall otherwise become incapa-
Page 49 of 73
<PAGE>50
ble of acting, the Company shall appoint a successor to the
Rights Agent. If the Company shall fail to make such
appointment within a period of 30 days after giving notice
of such removal or after it has been notified in writing of
such resignation or incapacity by the resigning or incapaci-
tated Rights Agent or by the holder of a Right Certificate
(or, prior to the Distribution Date, of the Common Shares)
(who shall, with such notice, submit his Right Certificate
or, prior to the Distribution Date, the certificate
representing his Common Shares, for inspection by the
Company), then the registered holder of any Right
Certificate (or, prior to the Distribution Date, of the
Common Shares) may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or
by such a court, shall be a corporation organized and doing
business under the laws of the United States or of the State
of New York (or of any other state of the United States so
long as such corporation is authorized to conduct a stock
transfer or corporate trust business in the State of New
York), in good standing, having a principal office in the
State of New York, which is authorized under such laws to
exercise stock transfer or corporate trust powers and is
subject to supervision or examination by Federal or state
authority and which has at the time of its appointment as
Rights Agent a combined capital and surplus of at least
$50,000,000; provided that the principal transfer agent for
the Common Shares shall in any event be qualified to be the
Rights Agent. After appointment, the successor Rights Agent
shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as
Rights Agent without further act or deed; but the predeces-
sor Rights Agent shall deliver and transfer to the successor
Rights Agent any property at the time held by it hereunder,
and execute and deliver any further assurance, conveyance,
act or deed necessary for the purpose. Not later than the
effective date of any such appointment, the Company shall
file notice thereof in writing with the predecessor Rights
Agent and each transfer agent of the Common Shares and the
Preferred Shares, and mail a notice thereof in writing to
the registered holders of the Right Certificates (or, prior
to the Distribution Date, of the Common Shares). Failure to
give any notice provided for in this Section 22, however, or
any defect therein shall not affect the legality or validity
of the resignation or removal of the Rights Agent or the
appointment of the successor Rights Agent, as the case may
be.
Page 50 of 73
<PAGE>51
SECTION 23. Issuance of Additional Rights and
Right Certificates. Notwithstanding any of the provisions
of this Rights Agreement or of the Rights to the contrary,
the Company may, at its option, issue new Right Certificates
evidencing Rights in such form as may be approved by its
Board of Directors to reflect any adjustment or change made
in accordance with the provisions of this Rights Agreement.
In addition, in connection with the issuance or sale of
Common Shares following the Distribution Date and prior to
the earlier of the Redemption Date and the Expiration Date,
the Company (a) shall, with respect to Common Shares so
issued or sold pursuant to the exercise of stock options or
under any employee plan or arrangement, or upon the exer-
cise, conversion or exchange of securities, notes or deben-
tures issued by the Company, and (b) may, in any other case,
if deemed necessary or appropriate by the Board of Directors
of the Company, issue Right Certificates representing the
appropriate number of Rights in connection with such issu-
ance or sale; provided, however, that (i) no such Right
Certificate shall be issued if, and to the extent that, the
Company shall be advised by counsel that such issuance would
create a significant risk of material adverse tax conse-
quences to the Company or the Person to whom such Right
Certificate would be issued, and (ii) no such Right Certifi-
cate shall be issued if, and to the extent that, appropriate
adjustment shall otherwise have been made in lieu of the
issuance thereof.
SECTION 24. Redemption and Termination. (a) The
Board of Directors of the Company may, at its option, at any
time prior to the earlier of (i) such time as a Person
becomes an Acquiring Person and (ii) the Expiration Date,
order the redemption of all, but not fewer than all, the
then outstanding Rights at the Redemption Price (the date of
such redemption being the "Redemption Date"), and the
Company, at its option, may pay the Redemption Price either
in cash or Common Shares or other securities of the Company
deemed by the Board of Directors of the Company, in the
exercise of its sole discretion, to be at least equivalent
in value to the Redemption Price; provided, however, that,
in addition to any other limitations contained herein on the
right to redeem outstanding Rights (including the occurrence
of any event or the expiration of any period after which the
Rights may no longer be redeemed), for the 120-day period
after any date of a change (resulting from a proxy or
consent solicitation) in a majority of the Board of
Directors of the Company in office at the commencement of
such solicitation, the Rights may only be redeemed if
Page 51 of 73
<PAGE>52
(A) there are directors then in office who were in office at
the commencement of such solicitation and (B) the Board of
Directors of the Company, with the concurrence of a majority
of such directors then in office, determines that such
redemption is, in their judgment, in the best interests of
the Company and its stockholders.
(b) Immediately upon the action of the Board of
Directors of the Company ordering the redemption of the
Rights, and without any further action and without any
notice, the right to exercise the Rights will terminate and
the only right thereafter of the holders of Rights shall be
to receive the Redemption Price. Within 10 Business Days
after the action of the Board of Directors of the Company
ordering the redemption of the Rights, the Company shall
give notice of such redemption to the holders of the then
outstanding Rights by mailing such notice to all such
holders at their last addresses as they appear upon the
registry books of the Rights Agent or, prior to the Distri-
bution Date, on the registry books of the transfer agent for
the Common Shares. Each such notice of redemption will
state the method by which payment of the Redemption Price
will be made. The notice, if mailed in the manner herein
provided, shall be conclusively presumed to have been duly
given, whether or not the holder of Rights receives such
notice. In any case, failure to give such notice by mail,
or any defect in the notice, to any particular holder of
Rights shall not affect the sufficiency of the notice to
other holders of Rights.
SECTION 25. Notices. Notices or demands author-
ized by this Agreement to be given or made by the Rights
Agent or by the holder of a Right Certificate (or, prior to
the Distribution Date, of the Common Shares) to or on the
Company shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another
Page 52 of 73
<PAGE>53
address is filed in writing with the Rights Agent) as
follows:
Time Warner Inc.
75 Rockefeller Plaza
New York, New York 10019
Attention of General Counsel
Subject to the provisions of Section 22, any notice or
demand authorized by this Rights Agreement to be given or
made by the Company or by the holder of a Right Certificate
(or, prior to the Distribution Date, of the Common Shares)
to or on the Rights Agent shall be sufficiently given or
made if sent by first-class mail, postage prepaid, addressed
(until another address is filed in writing with the Company)
as follows:
Chemical Bank
450 West 33rd Street
New York, New York 10001
Attention of Lawrence E. Dennedy
Notices or demands authorized by this Rights Agreement to be
given or made by the Company or the Rights Agent to any
holder of a Right Certificate (or, prior to the Distribution
Date, of the Common Shares) shall be sufficiently given or
made if sent by first-class mail, postage prepaid, addressed
to such holder at the address of such holder as shown on the
registry books of the Rights Agent or, prior to the Distri-
bution Date, on the registry books of the transfer agent for
the Common Shares.
SECTION 26. Supplements and Amendments. At any
time prior to the Distribution Date and subject to the last
sentence of this Section 26, the Company may, and the Rights
Agent shall if the Company so directs, supplement or amend
any provision of this Rights Agreement (including, without
limitation, the date on which the Distribution Date shall
occur, the time during which the Rights may be redeemed
pursuant to Section 24 or any provision of the Certificate
of Designation) without the approval of any holder of the
Rights. From and after the Distribution Date and subject to
applicable law, the Company may, and the Rights Agent shall
if the Company so directs, amend this Rights Agreement
without the approval of any holders of Right Certificates
(i) to cure any ambiguity or to correct or supplement any
Page 53 of 73
<PAGE>54
provision contained herein which may be defective or incon-
sistent with any other provision of this Rights Agreement or
(ii) to make any other provisions in regard to matters or
questions arising hereunder which the Company may deem
necessary or desirable and which shall not adversely affect
the interests of the holders of Right Certificates (other
than an Acquiring Person or an Affiliate or Associate of an
Acquiring Person). Any supplement or amendment adopted
during any period after any Person has become an Acquiring
Person but prior to the Distribution Date shall be null and
void unless such supplement or amendment could have been
adopted under the prior sentence from and after the
Distribution Date. Any supplement or amendment to this
Rights Agreement duly approved by the Company that does not
amend Sections 19, 20, 21 or 22 in a manner adverse to the
Rights Agent shall become effective immediately upon
execution by the Company, whether or not also executed by
the Rights Agent. Notwithstanding anything contained in
this Rights Agreement to the contrary, during the 120-day
period after any date of a change (resulting from a proxy or
consent solicitation) in a majority of the Board of
Directors of the Company in office at the commencement of
such solicitation, this Rights Agreement may be supplemented
or amended only if (A) there are directors then in office
who were in office at the commencement of such solicitation
and (B) the Board of Directors of the Company, with the
concurrence of a majority of such directors then in office,
determines that such supplement or amendment is, in their
judgment, in the best interests of the Company and its
stockholders and, after the Distribution Date, the holders
of the Right Certificates. In addition, notwithstanding
anything to the contrary contained in this Rights Agreement,
no supplement or amendment to this Rights Agreement shall be
made which (a) reduces the Redemption Price (except as
required by Section 12(a)) or (b) provides for an earlier
Expiration Date.
SECTION 27. Successors. All the covenants and
provisions of this Rights Agreement by or for the benefit of
the Company or the Rights Agent shall bind and inure to the
benefit of their respective successors and assigns
hereunder.
SECTION 28. Benefits of Rights Agreement;
Determinations and Actions by the Board of Directors, etc.
(a) Nothing in this Rights Agreement shall be construed to
give to any Person other than the Company, the Rights Agent
and the registered holders of the Right Certificates (and,
Page 54 of 73
<PAGE>55
prior to the Distribution Date, of the Common Shares) any
legal or equitable right, remedy or claim under this Rights
Agreement; but this Rights Agreement shall be for the sole
and exclusive benefit of the Company, the Rights Agent and
the registered holders of the Right Certificates (and, prior
to the Distribution Date, of the Common Shares).
(b) Except as explicitly otherwise provided in
this Rights Agreement, the Board of Directors of the Company
shall have the exclusive power and authority to administer
this Rights Agreement and to exercise all rights and powers
specifically granted to the Board of Directors of the
Company or to the Company, or as may be necessary or
advisable in the administration of this Rights Agreement,
including, without limitation, the right and power to
(i) interpret the provisions of this Rights Agreement and
(ii) make all determinations deemed necessary or advisable
for the administration of this Rights Agreement (including,
without limitation, a determination to redeem or not redeem
the Rights or to amend this Rights Agreement and a determi-
nation of whether an offer constitutes a Qualifying Offer
and whether there is an Acquiring Person).
(c) Nothing contained in this Rights Agreement
shall be deemed to be in derogation of the obligation of the
Board of Directors of the Company to exercise its fiduciary
duty. Without limiting the foregoing, nothing contained
herein shall be construed to suggest or imply that the Board
of Directors shall not be entitled to reject any Qualifying
Offer or any other tender offer, or to recommend that
holders of Common Shares reject any Qualifying Offer or any
other tender offer, or to take any other action (including,
without limitation, the commencement, prosecution, defense
pr settlement of any litigation and the submission of
additional or alternative offers or other proposals) with
respect to any Qualifying Offer or any other tender offer
that the Board of Directors believes is necessary or
appropriate in the exercise of such fiduciary duty.
SECTION 29. Severability. If any term, provi-
sion, covenant or restriction of this Rights Agreement is
held by a court of competent jurisdiction or other authority
to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Rights
Agreement shall remain in full force and effect and shall in
no way be affected, impaired or invalidated.
Page 55 of 73
<PAGE>56
SECTION 30. Governing Law. This Rights Agreement
and each Right Certificate issued hereunder shall be deemed
to be a contract made under the law of the State of Delaware
and for all purposes shall be governed by and construed in
accordance with the law of such State applicable to con-
tracts to be made and performed entirely within such State.
SECTION 31. Counterparts; Effectiveness. This
Rights Agreement may be executed in any number of
counterparts and each of such counterparts shall for all
purposes be deemed to be an original, and all such
counterparts shall together constitute but one and the same
instrument. This Rights Agreement shall be effective as of
the Close of Business on the date hereof.
SECTION 32. Descriptive Headings. Descriptive
headings of the several Sections of this Rights Agreement
are inserted for convenience only and shall not control or
affect the meaning or construction of any of the provisions
of this Rights Agreement.
IN WITNESS WHEREOF, the parties hereto have caused
this Rights Agreement to be duly executed as of the day and
year first above written.
TIME WARNER INC.,
by
-------------------------
Name:
Title:
CHEMICAL BANK, as Rights
Agent,
by
-------------------------
Name:
Title:
Page 56 of 73
<PAGE>57
Exhibits to Rights Agreement.
Page 57 of 73
<PAGE>58
EXHIBIT A
CERTIFICATE OF THE VOTING POWERS,
DESIGNATIONS, PREFERENCES AND RELATIVE
PARTICIPATING, OPTIONAL AND OTHER SPECIAL
RIGHTS AND QUALIFICATIONS, LIMITATIONS
OR RESTRICTIONS OF SERIES A
PARTICIPATING CUMULATIVE
PREFERRED STOCK OF
TIME WARNER INC.
Pursuant to Section 151 of the General Corporation
Law of the State of Delaware, Time Warner Inc. (the
"Corporation"), a corporation organized and existing under
the General Corporation Law of the State of Delaware, in
accordance with the provisions of Section 103 thereof, DOES
HEREBY CERTIFY:
That, pursuant to the authority conferred upon the
Board of Directors of the Corporation by Section 2 of
Article IV of the Restated Certificate of Incorporation of
the Corporation (the "Certificate of Incorporation"), the
Board of Directors of the Corporation on January 20, 1994,
adopted the following resolution creating a series of
Preferred Stock designated as Series A Participating
Cumulative Preferred Stock:
RESOLVED, that, pursuant to the authority vested
in the Board of Directors of the Corporation in
accordance with the provisions of the Restated
Certificate of Incorporation of the Corporation, a
series of Preferred Stock of the Corporation is hereby
created and that the designation and number of shares
thereof and the voting powers, preferences and
relative, participating, optional and other special
rights of the shares of such series, and the quali-
fications, limitations or restrictions thereof are as
follows:
SECTION 1. Designation and Number of Shares. The
shares of such series shall be designated as "Series A Par-
ticipating Cumulative Preferred Stock" (the "Series A Pre-
ferred Stock"), par value $1.00 per share. The number of
shares initially constituting the Series A Preferred Stock
shall be 4,000,000; provided, however, that, if more than a
total of 4,000,000 shares of Series A Preferred Stock shall
be issuable upon the exercise of Rights (the "Rights")
issued pursuant to the Rights Agreement dated as of
January 20, 1994, between the Corporation and Chemical Bank,
Page 58 of 73
<PAGE>59
a New York banking corporation, as Rights Agent (the"Rights
Agreement"), the Board of Directors of the Corporation,
pursuant to Section 151(g) of the General Corporation Law of
the State of Delaware, shall direct by resolution or
resolutions that a certificate be properly executed,
acknowledged, filed and recorded, in accordance with the
provisions of Section 103 thereof, providing for the total
number of shares of Series A Preferred Stock authorized to
be issued to be increased (to the extent that the
Certificate of Incorporation then permits) to the largest
number of whole shares (rounded up to the nearest whole
number) issuable upon exercise of such Rights.
SECTION 2. Dividends or Distributions. (a) Sub-
ject to the prior and superior rights of the holders of
shares of any other series of Preferred Stock or other class
of capital stock of the Corporation ranking prior and supe-
rior to the shares of Series A Preferred Stock with respect
to dividends, the holders of shares of the Series A Pre-
ferred Stock shall be entitled to receive, when, as and if
declared by the Board of Directors, out of the assets of the
Corporation legally available therefor, (1) quarterly divi-
dends payable in cash on the last day of each fiscal quarter
in each year, or such other dates as the Board of Directors
of the Corporation shall approve (each such date being
referred to herein as a "Quarterly Dividend Payment Date"),
commencing on the first Quarterly Dividend Payment Date
after the first issuance of a share or a fraction of a share
of Series A Preferred Stock, in the amount of $.01 per whole
share (rounded to the nearest cent) less the amount of all
cash dividends declared on the Series A Preferred Stock
pursuant to the following clause (2) since the immediately
preceding Quarterly Dividend Payment Date or, with respect
to the first Quarterly Dividend Payment Date, since the
first issuance of any share or fraction of a share of Series
A Preferred Stock (the total of which shall not, in any
event, be less than zero) and (2) dividends payable in cash
on the payment date for each cash dividend declared on the
Common Stock in an amount per whole share (rounded to the
nearest cent) equal to the Formula Number (as hereinafter
defined) then in effect times the cash dividends then to be
paid on each share of Common Stock. In addition, if the
Corporation shall pay any dividend or make any distribution
on the Common Stock payable in assets, securities or other
forms of noncash consideration (other than dividends or
distributions solely in shares of Common Stock), then, in
each such case, the Corporation shall simultaneously pay or
make on each outstanding whole share of Series A Preferred
Page 59 of 73
<PAGE>60
Stock a dividend or distribution in like kind equal to the
Formula Number then in effect times such dividend or
distribution on each share of the Common Stock. As used
herein, the "Formula Number" shall be 1,000; provided,
however, that, if at any time after January 20, 1994, the
Corporation shall (i) declare or pay any dividend on the
Common Stock payable in shares of Common Stock or make any
distribution on the Common Stock in shares of Common Stock,
(ii) subdivide (by a stock split or otherwise) the outstand-
ing shares of Common Stock into a larger number of shares of
Common Stock or (iii) combine (by a reverse stock split or
otherwise) the outstanding shares of Common Stock into a
smaller number of shares of Common Stock, then in each such
event the Formula Number shall be adjusted to a number
determined by multiplying the Formula Number in effect
immediately prior to such event by a fraction, the numerator
of which is the number of shares of Common Stock that are
outstanding immediately after such event and the denominator
of which is the number of shares of Common Stock that are
outstanding immediately prior to such event (and rounding
the result to the nearest whole number); and provided
further, that, if at any time after January 20, 1994, the
Corporation shall issue any shares of its capital stock in a
merger, reclassification, or change of the outstanding
shares of Common Stock, then in each such event the Formula
Number shall be appropriately adjusted to reflect such
merger, reclassification or change so that each share of
Preferred Stock continues to be the economic equivalent of a
Formula Number of shares of Common Stock prior to such
merger, reclassification or change.
(b) The Corporation shall declare a dividend or
distribution on the Series A Preferred Stock as provided in
Section 2(a) immediately prior to or at the same time it
declares a dividend or distribution on the Common Stock
(other than a dividend or distribution solely in shares of
Common Stock); provided, however, that, in the event no
dividend or distribution (other than a dividend or distribu-
tion in shares of Common Stock) shall have been declared on
the Common Stock during the period between any Quarterly
Dividend Payment Date and the next subsequent Quarterly
Dividend Payment Date, a dividend of $.01 per share on the
Series A Preferred Stock shall nevertheless be payable on
such subsequent Quarterly Dividend Payment Date. The Board
of Directors may fix a record date for the determination of
holders of shares of Series A Preferred Stock entitled to
receive a dividend or distribution declared thereon, which
Page 60 of 73
<PAGE>61
record date shall be the same as the record date for any
corresponding dividend or distribution on the Common Stock.
(c) Dividends shall begin to accrue and be cumu-
lative on outstanding shares of Series A Preferred Stock
from and after the Quarterly Dividend Payment Date next pre-
ceding the date of original issue of such shares of Series A
Preferred Stock; provided, however, that dividends on such
shares which are originally issued after the record date for
the determination of holders of shares of Series A Preferred
Stock entitled to receive a quarterly dividend and on or
prior to the next succeeding Quarterly Dividend Payment Date
shall begin to accrue and be cumulative from and after such
Quarterly Dividend Payment Date. Notwithstanding the fore-
going, dividends on shares of Series A Preferred Stock which
are originally issued prior to the record date for the
determination of holders of shares of Series A Preferred
Stock entitled to receive a quarterly dividend on the first
Quarterly Dividend Payment Date shall be calculated as if
cumulative from and after the last day of the fiscal quarter
next preceding the date of original issuance of such shares.
Accrued but unpaid dividends shall not bear interest.
Dividends paid on the shares of Series A Preferred Stock in
an amount less than the total amount of such dividends at
the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such
shares at the time outstanding.
(d) So long as any shares of the Series A Pre-
ferred Stock are outstanding, no dividends or other distri-
butions shall be declared, paid or distributed, or set aside
for payment or distribution, on the Common Stock unless, in
each case, the dividend required by this Section 2 to be
declared on the Series A Preferred Stock shall have been
declared.
(e) The holders of the shares of Series A Pre-
ferred Stock shall not be entitled to receive any dividends
or other distributions except as provided herein.
SECTION 3. Voting Rights. The holders of shares
of Series A Preferred Stock shall have the following voting
rights:
(a) Each holder of Series A Preferred Stock shall
be entitled to a number of votes equal to the Formula Number
then in effect, for each share of Series A Preferred Stock
held of record on each matter on which holders of the Common
Page 61 of 73
<PAGE>62
Stock or stockholders generally are entitled to vote, multi-
plied by the maximum number of votes per share which any
holder of the Common Stock or stockholders generally then
have with respect to such matter (assuming any holding
period or other requirement to vote a greater number of
shares is satisfied).
(b) Except as otherwise provided herein or by
applicable law, the holders of shares of Series A Preferred
Stock and the holders of shares of Common Stock shall vote
together as one class for the election of directors of the
Corporation and on all other matters submitted to a vote of
stockholders of the Corporation.
(c) If, at the time of any annual meeting of
stockholders for the election of directors, the equivalent
of six quarterly dividends (whether or not consecutive)
payable on any share or shares of Series A Preferred Stock
are in default, the number of directors constituting the
Board of Directors of the Corporation shall be increased by
two. In addition to voting together with the holders of
Common Stock for the election of other directors of the
Corporation, the holders of record of the Series A Preferred
Stock, voting separately as a class to the exclusion of the
holders of Common Stock, shall be entitled at said meeting
of stockholders (and at each subsequent annual meeting of
stockholders), unless all dividends in arrears have been
paid or declared and set apart for payment prior thereto, to
vote for the election of two directors of the Corporation,
the holders of any Series A Preferred Stock being entitled
to cast a number of votes per share of Series A Preferred
Stock equal to the Formula Number. Until the default in
payments of all dividends which permitted the election of
said directors shall cease to exist, any director who shall
have been so elected pursuant to the next preceding sentence
may be removed at any time, either with or without cause,
only by the affirmative vote of the holders of the shares of
Series A Preferred Stock at the time entitled to cast a
majority of the votes entitled to be cast for the election
of any such director at a special meeting of such holders
called for that purpose, and any vacancy thereby created may
be filled by the vote of such holders. If and when such
default shall cease to exist, the holders of the Series A
Preferred Stock shall be divested of the foregoing special
voting rights, subject to revesting in the event of each and
every subsequent like default in payments of dividends.
Upon the termination of the foregoing special voting rights,
the terms of office of all persons who may have been elected
Page 62 of 73
<PAGE>63
directors pursuant to said special voting rights shall
forthwith terminate, and the number of directors constitut-
ing the Board of Directors shall be reduced by two. The
voting rights granted by this Section 3(c) shall be in
addition to any other voting rights granted to the holders
of the Series A Preferred Stock in this Section 3.
(d) Except as provided herein, in Section 11 or
by applicable law, holders of Series A Preferred Stock shall
have no special voting rights and their consent shall not be
required (except to the extent they are entitled to vote
with holders of Common Stock as set forth herein) for
authorizing or taking any corporate action.
SECTION 4. Certain Restrictions. (a) Whenever
quarterly dividends or other dividends or distributions
payable on the Series A Preferred Stock as provided in
Section 2 are in arrears, thereafter and until all accrued
and unpaid dividends and distributions, whether or not
declared, on shares of Series A Preferred Stock outstanding
shall have been paid in full, the Corporation shall not
(i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise
acquire for consideration any shares of stock ranking
junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred
Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a
parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A Preferred
Stock, except dividends paid ratably on the Series A
Preferred Stock and all such parity stock on which
dividends are payable or in arrears in proportion to
the total amounts to which the holders of all such
shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity
(either as to dividends or upon liquidation, dissolu-
tion or winding up) with the Series A Preferred Stock;
provided that the Corporation may at any time redeem,
purchase or otherwise acquire shares of any such parity
stock in exchange for shares of any stock of the
Corporation ranking junior (either as to dividends or
Page 63 of 73
<PAGE>64
upon dissolution, liquidation or winding up) to the
Series A Preferred Stock; or
(iv) purchase or otherwise acquire for considera-
tion any shares of Series A Preferred Stock, or any
shares of stock ranking on a parity with the Series A
Preferred Stock, except in accordance with a purchase
offer made in writing or by publication (as determined
by the Board of Directors) to all holders of such
shares upon such terms as the Board of Directors, after
consideration of the respective annual dividend rates
and other relative rights and preferences of the
respective series and classes, shall determine in good
faith will result in fair and equitable treatment among
the respective series or classes.
(b) The Corporation shall not permit any subsidi-
ary of the Corporation to purchase or otherwise acquire for
consideration any shares of stock of the Corporation unless
the Corporation could, under paragraph (a) of this Sec-
tion 4, purchase or otherwise acquire such shares at such
time and in such manner.
SECTION 5. Liquidation Rights. Upon the liquida-
tion, dissolution or winding up of the Corporation, whether
voluntary or involuntary, no distribution shall be made
(1) to the holders of shares of stock ranking junior (either
as to dividends or upon liquidation, dissolution or winding
up) to the Series A Preferred Stock unless, prior thereto,
the holders of shares of Series A Preferred Stock shall have
received an amount equal to the accrued and unpaid dividends
and distributions thereon, whether or not declared, to the
date of such payment, plus an amount equal to the greater of
(x) $.01 per whole share or (y) an aggregate amount per
share equal to the Formula Number then in effect times the
aggregate amount to be distributed per share to holders of
Common Stock or (2) to the holders of stock ranking on a
parity (either as to dividends or upon liquidation, dissolu-
tion or winding up) with the Series A Preferred Stock,
except distributions made ratably on the Series A Preferred
Stock and all other such parity stock in proportion to the
total amounts to which the holders of all such shares are
entitled upon such liquidation, dissolution or winding up.
SECTION 6. Consolidation, Merger, etc. In case
the Corporation shall enter into any consolidation, merger,
combination or other transaction in which the shares of
Common Stock are exchanged for or changed into other stock
Page 64 of 73
<PAGE>65
or securities, cash or any other property, then in any such
case the then outstanding shares of Series A Preferred Stock
shall at the same time be similarly exchanged or changed
into an amount per share equal to the Formula Number then in
effect times the aggregate amount of stock, securities, cash
or any other property (payable in kind), as the case may be,
into which or for which each share of Common Stock is
exchanged or changed. In the event both this Section 6 and
Section 2 appear to apply to a transaction, this Section 6
will control.
SECTION 7. No Redemption; No Sinking Fund.
(a) The shares of Series A Preferred Stock shall not be
subject to redemption by the Corporation or at the option of
any holder of Series A Preferred Stock except as set forth
in Section 5 of Article IV of the Restated Certificate of
Incorporation of the Corporation; provided, however, that
the Corporation may purchase or otherwise acquire
outstanding shares of Series A Preferred Stock in the open
market or by offer to any holder or holders of shares of
Series A Preferred Stock.
(b) The shares of Series A Preferred Stock shall
not be subject to or entitled to the operation of a retire-
ment or sinking fund.
SECTION 8. Ranking. The Series A Preferred Stock
shall rank junior to all other series of Preferred Stock of
the Corporation, unless the Board of Directors shall specif-
ically determine otherwise in fixing the powers, preferences
and relative, participating, optional and other special
rights of the shares of such series and the qualifications,
limitations and restrictions thereof.
SECTION 9. Fractional Shares. The Series A
Preferred Stock shall be issuable upon exercise of the
Rights issued pursuant to the Rights Agreement in whole
shares or in any fraction of a share that is one one-
thousandths (1/1,000ths) of a share or any integral multiple
of such fraction which shall entitle the holder, in
proportion to such holder's fractional shares, to receive
dividends, exercise voting rights, participate in
distributions and to have the benefit of all other rights of
holders of Series A Preferred Stock. In lieu of fractional
shares, the Corporation, prior to the first issuance of a
share or a fraction of a share of Series A Preferred Stock,
may elect (1) to make a cash payment as provided in the
Rights Agreement for fractions of a share other than one
Page 65 of 73
<PAGE>66
one-thousandths (1/1,000ths) of a share or any integral
multiple thereof or (2) to issue depository receipts
evidencing such authorized fraction of a share of Series A
Preferred Stock pursuant to an appropriate agreement between
the Corporation and a depository selected by the
Corporation; provided that such agreement shall provide that
the holders of such depository receipts shall have all the
rights, privileges and preferences to which they are
entitled as holders of the Series A Preferred Stock.
SECTION 10. Reacquired Shares. Any shares of
Series A Preferred Stock purchased or otherwise acquired by
the Corporation in any manner whatsoever shall be retired
and canceled promptly after the acquisition thereof. All
such shares shall upon their cancelation become authorized
but unissued shares of Preferred Stock, without designation
as to series until such shares are once more designated as
part of a particular series by the Board of Directors
pursuant to the provisions of Section 2 of Article IV of the
Certificate of Incorporation.
SECTION 11. Amendment. None of the powers,
preferences and relative, participating, optional and other
special rights of the Series A Preferred Stock as provided
herein or in the Certificate of Incorporation shall be
amended in any manner which would alter or change the
powers, preferences, rights or privileges of the holders of
Series A Preferred Stock so as to affect them adversely
without the affirmative vote of the holders of at least 66-
2/3% of the outstanding shares of Series A Preferred Stock,
voting as a separate class; provided, however, that no such
amendment approved by the holders of at least 66-2/3% of the
outstanding shares of Series A Preferred Stock shall be
deemed to apply to the powers, preferences, rights or
privileges of any holder of shares of Series A Preferred
Page 66 of 73
<PAGE>67
Stock originally issued upon exercise of the Rights after
the time of such approval without the approval of such
holder.
IN WITNESS WHEREOF, the Corporation has caused
this Certificate to be duly executed in its corporate name
on this day of January 1994.
TIME WARNER INC.,
by
-------------------------
Name:
Title:
Attest:
-------------------------
Name:
Title:
Page 67 of 73
<PAGE>68
EXHIBIT B
[Form of Right Certificate]
Certificate No. [R]-
___________ Rights
NOT EXERCISABLE AFTER JANUARY 20, 2004, OR EARLIER
IF REDEEMED BY THE COMPANY. THE RIGHTS ARE
SUBJECT TO REDEMPTION, AT THE OPTION OF THE
COMPANY, AT $.01 PER RIGHT, ON THE TERMS SET FORTH
IN THE RIGHTS AGREEMENT. RIGHTS BENEFICIALLY
OWNED BY AN ACQUIRING PERSON OR AN AFFILIATE OR
ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS
ARE DEFINED IN THE RIGHTS AGREEMENT) AND BY ANY
SUBSEQUENT HOLDER OF SUCH RIGHTS ARE NULL AND VOID
AND NONTRANSFERABLE.
Right Certificate
TIME WARNER INC.
This certifies that , or
registered assigns, is the registered owner of the number of
Rights set forth above, each of which entitles the owner
thereof, subject to the terms, provisions and conditions of
the Rights Agreement dated as of January 20, 1994 (the
"Rights Agreement"), between Time Warner Inc., a Delaware
corporation (the "Company"), and Chemical Bank, a New York
banking corporation, as Rights Agent (the "Rights Agent"),
unless the Rights evidenced hereby shall have been
previously redeemed by the Company, to purchase from the
Company at any time after the Distribution Date (as defined
in the Rights Agreement) and prior to 5:00 p.m., New York
City time, on the 10th anniversary of the date of the Rights
Agreement (the "Expiration Date"), at the principal office
of the Rights Agent, or its successors as Rights Agent, in
the City of New York, one one-thousandths (1/1,000ths) of a
fully paid, nonassessable share of Series A Participating
Cumulative Preferred Stock, par value $1.00 per share, of
the Company (the "Preferred Shares"), at a purchase price
per one one-thousandths (1/1,000ths) of a share equal to
$150 (the "Purchase Price") payable in cash, upon
presentation and surrender of this Right Certificate with
the Form of Election to Purchase duly executed.
Page 68 of 73
<PAGE>69
The Purchase Price and the number and kind of
shares which may be purchased upon exercise of each Right
evidenced by this Right Certificate, as set forth above, are
the Purchase Price and the number and kind of shares which
may be so purchased as of [ ]. As provided in
the Rights Agreement, the Purchase Price and the number and
kind of shares which may be purchased upon the exercise of
each Right evidenced by this Right Certificate are subject
to modification and adjustment upon the happening of certain
events.
If the Rights evidenced by this Right Certificate
are at any time beneficially owned by an Acquiring Person or
an Affiliate or Associate of an Acquiring Person (as such
terms are defined in the Rights Agreement), such Rights
shall be null and void and nontransferable and the holder of
any such Right (including any purported transferee or
subsequent holder) shall not have any right to exercise or
transfer any such Right.
This Right Certificate is subject to all the
terms, provisions and conditions of the Rights Agreement,
which terms, provisions and conditions are hereby incorpo-
rated herein by reference and made a part hereof and to
which reference to the Rights Agreement is hereby made for a
full description of the rights, limitations of rights,
obligations, duties and immunities hereunder of the Rights
Agent, the Company and the holders of the Right Certifi-
cates. Copies of the Rights Agreement are on file at the
above-mentioned office of the Rights Agent and are also
available from the Company upon written request.
This Right Certificate, with or without other
Right Certificates, upon surrender at the principal stock
transfer or corporate trust office of the Rights Agent, may
be exchanged for another Right Certificate or Right Certifi-
cates of like tenor and date evidencing Rights entitling the
holder to purchase a like aggregate number and kind of
shares as the Rights evidenced by the Right Certificate or
Right Certificates surrendered shall have entitled such
holder to purchase. If this Right Certificate shall be
exercised in part, the holder shall be entitled to receive
upon surrender hereof another Right Certificate or Right
Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement,
the Rights evidenced by this Right Certificate may be
redeemed by the Company at its option at a redemption price
Page 69 of 73
<PAGE>70
(in cash or shares of Common Stock or other securities of
the Company deemed by the Board of Directors to be at least
equivalent in value) of $.01 per Right (which amount shall
be subject to adjustment as provided in the Rights Agree-
ment) at any time prior to the earlier of (i) such time as a
Person becomes an Acquiring Person and (ii) the Expiration
Date; provided, however, that, for the 120-day period after
any date of a change (resulting from a proxy or consent
solicitation) in a majority of the Board of Directors of the
Company in office at the commencement of such solicitation,
the Rights may only be redeemed if (A) there are directors
then in office who were in office at the commencement of
such solicitation and (B) the Board of Directors of the
Company, with the concurrence of a majority of such
directors then in office, determines that such redemption
is, in their judgment, in the best interests of the Company
and its stockholders.
The Company may, but shall not be required to,
issue fractions of Preferred Shares or distribute certifi-
cates which evidence fractions of Preferred Shares upon the
exercise of any Right or Rights evidenced hereby. In lieu
of issuing fractional shares, the Company may elect to make
a cash payment as provided in the Rights Agreement for
fractions of a share other than one one-thousandths
(1/1,000ths) of a share or any integral multiple thereof or
to issue certificates or utilize a depository arrangement as
provided in the terms of the Rights Agreement and the
Preferred Shares.
No holder of this Right Certificate shall be
entitled to vote or receive dividends or be deemed for any
purpose the holder of the Preferred Shares or of any other
securities of the Company which may at any time be issuable
on the exercise hereof, nor shall anything contained in the
Rights Agreement or herein be construed to confer upon the
holder hereof, as such, any of the rights of a stockholder
of the Company, including, without limitation, any right to
vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to give
or withhold consent to any corporate action, or to receive
notice of meetings or other actions affecting stockholders
(except as provided in the Rights Agreement), or to receive
dividends or other distributions or subscription rights, or
otherwise, until the Right or Rights evidenced by this Right
Certificate shall have been exercised as provided in accor-
dance with the provisions of the Rights Agreement.
Page 70 of 73
<PAGE>71
This Right Certificate shall not be valid or
obligatory for any purpose until it shall have been counter-
signed by the Rights Agent.
WITNESS the facsimile signature of the proper
officers of the Company and its corporate seal.
Dated as of:
TIME WARNER INC.,
by
-------------------------
Name:
Title:
Attest:
-------------------------
Name:
Title:
Countersigned:
CHEMICAL BANK,
as Rights Agent,
by
---------------------
Authorized Officer
Page 71 of 73
<PAGE>72
[On Reverse Side of Right Certificate]
FORM OF ELECTION TO PURCHASE
(To be executed by the registered holder if
such holder desires to exercise the Rights
represented by this Right Certificate.)
To the Rights Agent:
The undersigned hereby irrevocably elects to
exercise Rights represented by this Right
Certificate to purchase the Preferred Shares (or other
shares) issuable upon the exercise of such Rights and
requests that certificates for such shares be issued in the
name of:
Please insert social security
or other identifying number
------------------------------------------------------------
(Please print name and address)
------------------------------------------------------------
If such number of Rights shall not be all the
Rights evidenced by this Right Certificate, a new Right
Page 72 of 73
<PAGE>73
Certificate for the balance remaining of such Rights shall
be registered in the name of and delivered to:
Please insert social security
or other identifying number
------------------------------------------------------------
(Please print name and address)
------------------------------------------------------------
Dated: , 19
------------------------------
Signature
Signature Guaranteed:
NOTICE
The signature on the foregoing Form of Election to
Purchase must correspond to the name as written upon the
face of this Right Certificate in every particular, without
alteration or enlargement or any change whatsoever.
Page 73 of 73
