SEC Filings

S-4/A
TIME WARNER INC. filed this Form S-4/A on 03/24/2000
Entire Document
 
<PAGE>
 
Grantee shall pay to Issuer by wire transfer of immediately available funds to
an account specified by Issuer to Grantee in writing at least two Business Days
prior to the Option Closing an amount equal to the Exercise Price multiplied by
the number of Option Shares to be purchased for cash pursuant to this Article
I; provided that the failure or refusal of Issuer to specify an account shall
not affect Issuer's obligation to issue the Option Shares.
 
   (d) Upon the delivery by Grantee to Issuer of the Option Notice and the
tender of the applicable aggregate Exercise Price in immediately available
funds or the requisite portion of the Option in accordance with Section 1.3,
Grantee shall be deemed to be the holder of record of the Option Shares
issuable upon such exercise, notwithstanding that the stock transfer books of
Issuer may then be closed, that certificates representing such Option Shares
may not then have been actually delivered to Grantee, or Issuer may have failed
or refused to take any action required of it hereunder. Issuer shall pay all
expenses that may be payable in connection with the preparation, issuance and
delivery of stock certificates or an amendment to this Agreement under this
Section 1.2 and any filing fees and other expenses arising from the performance
of the transactions contemplated hereby.
 
   1.3 Payments.
 
   (a) The purchase and sale of the Option Shares pursuant to Section 1.2 of
this Agreement shall be at a purchase price equal to $110.63 per Share (as such
amount may be adjusted pursuant to the terms hereof, the "Exercise Price"),
payable at Grantee's option in cash, by surrender of a portion of the Option in
accordance with Section 1.3(b), or a combination thereof.
 
   (b) Grantee may elect to purchase Option Shares issuable, and pay some or
all of the aggregate Exercise Price payable, upon an exercise of the Option by
surrendering a portion of the Option with respect to such number of Option
Shares as is determined by dividing (i) the aggregate Exercise Price payable in
respect of the number of Option Shares being purchased in such manner by (ii)
the excess of the Fair Market Value (as defined below) per share of Issuer
Common Stock as of the last trading day preceding the date Grantee delivers its
Option Notice (such date, the "Option Exercise Date") over the per share
Exercise Price. The "Fair Market Value" per share of Issuer Common Stock shall
be (i) if the Issuer Common Stock is listed on the New York Stock Exchange,
Inc. (the "NYSE") or any other nationally recognized exchange or trading system
as of the Option Exercise Date, the average of last reported sale prices per
share of Issuer Common Stock thereon for the 10 trading days commencing on the
12th trading day immediately preceding the Option Exercise Date, or (ii) if the
Issuer Common Stock is not listed on the NYSE or any other nationally
recognized exchange or trading system as of the Option Exercise Date, the
amount determined by a mutually acceptable independent investment banking firm
as the value per share the Issuer Common Stock would have if publicly traded on
a nationally recognized exchange or trading system (assuming no discount for
minority interest, illiquidity or restrictions on transfer). That portion of
the Option so surrendered under this Section 1.3(b) shall be canceled and shall
thereafter be of no further force and effect.
 
   (c) Certificates for the Option Shares delivered at an Option Closing will
have typed or printed thereon a restrictive legend which will read
substantially as follows:
 
  "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
  UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY BE REOFFERED OR SOLD
  ONLY IF SO REGISTERED OR IF AN EXEMPTION FROM SUCH REGISTRATION IS
  AVAILABLE. SUCH SECURITIES ARE ALSO SUBJECT TO ADDITIONAL RESTRICTIONS ON
  TRANSFER AS SET FORTH IN THE STOCK OPTION AGREEMENT DATED AS OF JANUARY 10,
  2000, A COPY OF WHICH MAY BE OBTAINED FROM THE SECRETARY OF TIME WARNER
  INC. AT ITS PRINCIPAL EXECUTIVE OFFICES."
 
It is understood and agreed that (i) the reference to restrictions arising
under the Securities Act in the above legend will be removed by delivery of
substitute certificate(s) without such reference if such Option Shares have
been registered pursuant to the Securities Act, such Option Shares have been
sold in reliance on and in
 
                                      C-3