SEC Filings

S-4/A
TIME WARNER INC. filed this Form S-4/A on 03/24/2000
Entire Document
 
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   America Online designed the dividend, liquidation, voting and redemption
features of the America Online series A-1 preferred stock so that the value of
one quarter of one-thousandth of a share of America Online series A-1 preferred
stock approximates the value of one share of America Online common stock.
Shares of America Online series A-1 preferred stock may only be purchased after
the America Online rights have become exercisable.
 
   The rights of the America Online series A-1 preferred stock as to dividends,
liquidation and voting, and in the event of mergers or consolidations, are
protected by customary antidilution provisions.
 
   Time Warner. In 1996, Time Warner adopted a stockholder rights plan pursuant
to a rights agreement with ChaseMellon Shareholder Services L.L.C., as rights
agent. Set forth below is a summary of the material provisions of the rights
agreement. The summary does not include a complete description of all of the
terms of the rights agreement. All Time Warner stockholders and America Online
stockholders are urged to read carefully the relevant provisions of Time
Warner's rights plan, copies of which will be sent to Time Warner stockholders
upon request. See "Where you can find more information."
 
   Exercisability of Rights. Under the Time Warner rights agreement, one right,
referred to as a Time Warner right, attaches to each share of Time Warner
common stock outstanding and, when exercisable, entitles the registered holder
to purchase from Time Warner one two-thousandth of a share of Time Warner
series A preferred stock at an initial purchase price of $75, subject to
customary antidilution adjustments.
 
   The Time Warner rights will not become exercisable until the earlier of:
     
  .  such time as Time Warner learns that a person has become the beneficial
     owner of 15% or more of the Time Warner common stock then outstanding ;
     and     
     
  .  the date designated by the Time Warner board of directors following the
     commencement of, or the announcement of an intention to commence, a
     tender offer or exchange offer that would result in a person becoming
     the beneficial owner of 15% or more of the Time Warner common stock then
     outstanding.     
   
In connection with the merger, the Time Warner rights agreement was amended to
provide that the Time Warner rights will not become exercisable solely by
reason of the merger agreement, the stock option agreement and completion of
the transactions contemplated thereby.     
   
   "Flip In" Feature. In the event a person becomes the beneficial owner of 15%
or more of the Time Warner common stock outstanding, each holder of a Time
Warner right, except for that person, will have the right to acquire, upon
exercise of the Time Warner right, instead of one two-thousandth of a share of
Time Warner series A preferred stock, shares of Time Warner common stock having
a value equal to twice the exercise price of the Time Warner right. For
example, if we assume that the initial purchase price of $75 is in effect on
the date that the flip-in feature of the Time Warner right is exercised, any
holder of a Time Warner right, except for the person that has become the
beneficial owner of 15% or more of the outstanding Time Warner common stock,
may exercise his or her Time Warner right by paying to Time Warner $75 in order
to receive from Time Warner shares of Time Warner common stock having a value
equal to $150.     
   
   "Exchange" Feature. At any time after a person becomes the beneficial owner
of 15% or more of the Time Warner common stock then outstanding, the board of
directors of Time Warner may, at its option, exchange all or some of the Time
Warner rights, except for those held by such person, for consideration per Time
Warner right consisting of one-half of the securities that would be issuable
upon exercise of one Time Warner right. Use of this exchange feature means that
eligible Time Warner rights holders would not have to pay a purchase price
before receiving shares of Time Warner common stock.     
       
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