Exhibit 4.2
AMENDMENT NO. 1 TO STOCKHOLDERS' AGREEMENT
This is Amendment No. 1 (this ("Amendment"), dated as of July 19, 2000, to
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the Stockholders Agreement dated as of May 10, 1999 (the "Stockholders
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Agreement"), among Time Warner Telecom Inc., a Delaware corporation (the
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"Company"), Time Warner Companies, Inc., a Delaware corporation (the "TWX"),
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American Television and Communications Corporation, a Delaware corporation
("ATC"), Warner Communications Inc., a Delaware corporation ("WCI"), TW/TAE,
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Inc., a Delaware corporation ("TW/TAE"), FibrCOM Holdings, L.P., a Delaware
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limited partnership that is owned by TW/KBLCOM Inc., Delaware corporation
("TW/KBLCOM"), Paragon Communications, a Colorado general partnership ("Paragon"
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and, together with TWX, ATC, WCI, TWI/TAE and TW/KBLCOM, the "TW Stockholders"),
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MediaOne of Colorado, Inc., a Colorado corporation (the "MediaOne Stockholder"),
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and Advance/Newhouse Partnership, a New York general partnership ("A/N").
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Capitalized terms used in this Amendment and not otherwise defined herein shall
have the meaning assigned thereto in the Stockholders Agreement.
WHEREAS, the parties to the Stockholders Agreement desire to amend certain
provisions of the Stockholders Agreement;
WHEREAS, all of the shares of Common Stock of the Company held by the
MediaOne Stockholder were transferred to MediaOne Holdings II, Inc. pursuant to
an Assignment and Assumption Agreement dated February 11, 2000;
WHEREAS, Section 2.5 of the Stockholders Agreement provides that in the
event the Company takes any action which changes the number of shares of Common
Stock of the Company outstanding the ownership thresholds for nominations of
directors must be adjusted, and such ownership thresholds have been and will
continue to be adjusted from time to time;
WHEREAS, the number of shares of Common Stock of the Company outstanding
has increased due to the issuance of Class A Common Stock, par value $.0l per
share ("Class A Common Stock") (i) in connection with the acquisition of
Internet Connect, Inc.; (ii) in connection with the acquisition of Metrocomm,
Inc.; (iii) in an initial public offering pursuant to the Underwriting Agreement
dated as of May 11, 1999 and (iv) in connection with the exercise of stock
options;
WHEREAS, as of June 30, 2000, the Company had 33,177,815 shares of Class A
Common Stock and 72,226,500 shares of Class B Common Stock, par value $.O1 per
share outstanding;
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WHEREAS, Annex A attached hereto sets forth the calculation of the
Ownership Percentages required for nominations of directors as provided in the
Stockholders Agreement;
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the adequacy and receipt of which is hereby
acknowledged, the parties hereto, intending to be legally bound, agree as
follows:
1. Amendment to Sections 2.1(c) (i) (A) through (C) of the Stockholders
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Agreement. Sections 2.1(c) (i) (A) through (C) of the Stockholders Agreement are
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hereby amended and restated in their entirety to read as follows:
"(c) The Agreed Nominees shall be designated as follows:
(i) (A) So long as the TW Stockholder Group has an
Ownership Percentage which is greater than or equal to 14.55%
(as adjusted from time to time pursuant to Section 2.5), the TW
Stockholder Group shall have the right to designate four Agreed
Nominees. If the TW Stockholder Group has an Ownership
Percentage which is less than 14.55% (as adjusted from time to
time pursuant to Section 2.5), the TW Stockholder Group shall
have the right to designate a number of Agreed Nominees
determined in accordance with the following table (with the
percentages set forth in such table being adjusted from time to
time pursuant to Section 2.5).
TW Stockholder Group Number of
Ownership Percentage Agreed Nominees
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14.55% or greater 4
12.12% to 14.54% 3
9.70% to 12.11% 2
7.28% to 9.69% 1
less than 7.28% 0
(B) So long as the TW Stockholder Group has an Ownership
Percentage which is greater than or equal to 14.55% (as
adjusted from time to time pursuant to Section 2.5), the
MediaOne Stockholder Group shall have the right to designate a
number of Agreed Nominees determined in accordance with the
following table (with the percentages set forth in such table
being adjusted from time to time pursuant to Section 2.5).
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Media One
Stockholder Group Number of
Ownership Percentage Agreed Nominees
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7.28% or greater 3
less than 7.28% 0
If the TW Stockholder Group has an Ownership Percentage which
is less than 18.77% (as adjusted from time to time pursuant to
Section 2.5), the MediaOne Stockholder Group shall have the
right to designate a number of Agreed Nominees determined in
accordance with the following table (with the percentages set
forth in such table being adjusted from time to time pursuant
to Section 2.5).
Media One
Stockholder Group Number of
Ownership Percentage Agreed Nominees
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14.55% or greater 3
10.91% to 14.54% 2
7.28% to 10.90% 1
less than 7.28% 0
(C) So long as the A/N Stockholder Group has an Ownership
Percentage which is greater than or equal to 7.28%
(as adjusted from time to time pursuant to Section
2.5), the A/N Stockholder Group shall have the right
to designate one Agreed Nominee. If the A/N
Stockholder Group has an Ownership Percentage of less
than 7.28% (as adjusted from time to time pursuant to
Section 2.5), the A/N Stockholder Group shall not
have the right to designate any Agreed Nominees."
2. Amendment to Section 2.1(c) (iii) of the Stockholders
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Agreement. Section 2.1(c) (iii) of the Stockholders Agreement is
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hereby amended and restated in its entirety to read as follows:
"(iii) Three individuals nominated by the Nominating
Committee shall be Agreed Nominees if such individuals would be
Independent Directors at the time of their election and are
approved by a majority of the members of the Nominating
Committee."
3. Effectiveness. The amendments set forth in Sections 1
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and 2 hereof shall become effective upon
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execution of a counterpart of this Amendment by each of the undersigned parties.
Upon such effectiveness:
(i) all references in any document to the Stockholders Agreement
shall be deemed to be references to the Stockholders Agreement as amended
hereby; and
(ii) except as specifically amended hereby, the Stockholders Agreement
shall continue in full force and effect in accordance with the provisions
thereof, and as used therein, respectively, the terms "Agreement",
"herein", "hereof", and words of similar import shall, unless the context
otherwise requires, refer to the Stockholders Agreement as amended hereby.
4. Further Assurances. From time to time upon the request of any
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party, each party hereto shall execute, deliver and acknowledge any and all such
further documents and instruments and do such further acts and things as the
other party hereto may reasonably request to evidence or effectuate more
effectively the terms of and intent of the parties contemplated by this
Amendment.
This Amendment, which may be executed in two or more counterparts, all
of which shall be considered one and the same agreement, shall be governed by,
and construed in accordance with, the law of the State of New York without
reference to choice of law principles, including all matters of construction,
validity and performance except to the extent the laws of Delaware are
mandatorily applicable.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment No.
1 to be duly executed as of the date and year first written above.
TIME WARNER COMPANIES, INC.
By: /s/ Spencer B. Hays
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Name: Spencer B. Hays
Title: Vice President
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AMERICAN TELEVISION AND
COMMUNICATIONS CORPORATION
By: /s/ Spencer B. Hays
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Name: Spencer B. Hays
Title: Vice President
WARNER COMMUNICATIONS INC.
By: /s/ Spencer B. Hays
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Name: Spencer B. Hays
Title: Vice President
TW/TAE, INC.
By: /s/ Spencer B. Hays
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Name: Spencer B. Hays
Title: Vice President & Secretary
FIBRCOM HOLDINGS, L.P.
By: FIBRCOM INCORPORATED,
General Partner
By: /s/ Spencer B. Hays
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Name: Spencer B. Hays
Title: Vice President
PARAGON COMMUNICATIONS
By: KBL COMMUNICATIONS, INC.,
Managing General Partner
By: /s/ Spencer B. Hays
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Name: Spencer B. Hays
Title: Senior Vice President
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FIBRCOM HOLDINGS, L.P.
By: FIBRCOM INCORPORATED,
General Partner
By:__________________
Name:
Title:
PARAGON COMMUNICATIONS
By: KBL COMMUNICATIONS, INC.,
Managing General Partner
By:__________________
Name:
Title:
MEDIAONE HOLDINGS II, INC.
By: /s/ William R. Bechstein
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Name: William R. Bechstein
Title: Secretary
ADVANCE/NEWHOUSE PARTNERSHIP
By: ADVANCE COMMUNICATION CORP.
General Partner
By:__________________
Name:
Title:
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MEDIAONE OF COLORADO, INC.
By:________________________
Name:
Title:
ADVANCE/NEWHOUSE PARTNERSHIP
By: ADVANCE COMMUNICATION CORP.
General Partner
By: /s/ Robert J. Miron
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Name: Robert J. Miron
Title: President
ANNEX A
CALCULATION OF OWNERSHIP PERCENTAGES
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This Annex A sets forth the calculation of the Ownership
Percentages required for nominations of directors as provided in Section
2.1(c) (i) (A) through (C) of the Stockholders Agreement. Reference is made
to the letter notice dated March 10, 2000 (the "Letter"), attached hereto,
which served as the initial notice of adjustment of the Ownership
Percentages contained in the Stockholders Agreement.
As of March 10, 2000, the Company had 23,507,707 shares of Class
A Common Stock and 81,250,000 shares of Class B Common Stock outstanding.
As of June 30, 2000, the Company had 33,177,815 shares of Class A Common
Stock and 72,226,500 shares of Class B Common Stock outstanding.
Accordingly, the current adjusted Ownership Percentages in Section 2.1(c)
of the Amendment are adjusted to account for the change in the number of
shares of Common Stock outstanding by multiplying the Ownership Percentages
set forth in the Letter by 99.39% (the ratio of the number of shares
outstanding as of March 10, 2000 over the number of shares outstanding as
of June 30, 2000).