SEC Filings

S-4/A
TIME WARNER INC. filed this Form S-4/A on 03/24/2000
Entire Document
 
<PAGE>
 
   
   "Flip Over" Feature. In the event that, after the Time Warner rights have
become exercisable:     
     
  .  Time Warner merges into any person who has become the beneficial owner
     of 15% or more of the Time Warner common stock then outstanding;     
     
  .  a person who has become the beneficial owner of 15% or more of the Time
     Warner common stock then outstanding merges into Time Warner; or     
     
  .  Time Warner sells more than 50% of its assets or earning power to a
     person who has become the beneficial owner of 15% or more of the Time
     Warner common stock then outstanding,     
   
then each holder of a Time Warner right, except for a person that is the
beneficial owner of 15% or more of the Time Warner common stock then
outstanding, will have the right to receive, upon exercise of the Time Warner
right, the number of shares of the acquiring company's common stock equal to
twice the exercise price of the Time Warner right.     
 
   Redemption of Rights. At any time prior to the earlier to occur of:
     
  .  a person becoming the beneficial owner of 15% or more of the Time Warner
     common stock then outstanding; and     
 
  .  January 20, 2004,
   
the board of directors of Time Warner may redeem all of the Time Warner rights
at a redemption price of $0.005 per right, subject to adjustment. The right to
exercise the Time Warner rights will terminate upon redemption, and at such
time, the holders of the Time Warner rights will have the right to receive only
the redemption price for each Time Warner right held.     
   
   Amendment of Rights. At any time before a person becomes the beneficial
owner of 15% or more of the Time Warner common stock then outstanding, the
terms of the existing Time Warner rights agreement may be amended by the Time
Warner board of directors without the approval of the holders of the rights.
After the date any person acquires at least 15% of Time Warner's outstanding
common stock, the rights agreement may not be amended in any manner which would
adversely affect the interests of the holders of the Time Warner rights,
excluding the interests of the acquiror.     
   
   Termination of Rights. If not previously exercised, the Time Warner rights
will expire on January 20, 2004, unless Time Warner earlier redeems or
exchanges the Time Warner rights or shortens or extends the expiration date.
       
   Anti-Takeover Effects. The Time Warner rights have anti-takeover effects.
Once the Time Warner rights have become exercisable, in most cases the Time
Warner rights will cause substantial dilution to a person that attempts to
acquire or merge with Time Warner. Accordingly, the existence of the Time
Warner rights may deter potential acquirors from making a takeover proposal or
a tender offer. The Time Warner rights should not interfere with any merger or
other business combination approved by the Time Warner board of directors
because Time Warner may redeem the Time Warner rights and because the Time
Warner board of directors can amend the Time Warner rights agreement so that a
transaction approved by the Time Warner board of directors would not cause the
Time Warner rights to become exercisable.     
   
   Series A Preferred Stock. In connection with the creation of the Time Warner
rights, the board of directors of Time Warner authorized the issuance of
8,000,000 shares of Time Warner preferred stock designated as Time Warner
series A participating cumulative preferred stock.     
   
   The Time Warner series A preferred stock is attributed a formula number,
referred to as the "series A formula number," which is subject to customary
antidilution adjustments. The series A formula number is currently 2,000.     
 
                                      121