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EXHIBIT 2.1
AMENDMENT No. 1 (this "Amendment") dated as
of August 8, 1996, to the AMENDED AND RESTATED
AGREEMENT AND PLAN OF MERGER (the "Agreement") dated
as of September 22, 1995, among TIME WARNER INC., a
Delaware corporation ("Parent"), TW INC., a Delaware
corporation ("Holdco") and a direct wholly owned
subsidiary of Parent, TIME WARNER ACQUISITION CORP., a
Delaware corporation ("Delaware Sub") and a direct
wholly owned subsidiary of Holdco, TW ACQUISITION
CORP., a Georgia corporation ("Georgia Sub") and a
direct wholly owned subsidiary of Holdco, and TURNER
BROADCASTING SYSTEM, INC., a Georgia corporation (the
"Company").
WHEREAS Parent, Holdco, Delaware Sub, Georgia Sub and the
Company have agreed to amend the Agreement; and
WHEREAS the respective Boards of Directors of Parent, Holdco,
Delaware Sub, Georgia Sub and the Company have approved and adopted this
Amendment.
NOW, THEREFORE, the parties agree as follows:
SECTION 1. Amendment of Agreement.
(a) Section 2.01 of the Agreement is hereby amended and restated in its
entirety to read as follows:
"SECTION 2.01. Effect on Parent Capital Stock.
As of the Effective Time of the Mergers, by virtue of the TW Merger and without
any action on the part of the holder of any shares of Parent Capital Stock (as
defined in Section 2.01(a)) or any shares of capital stock of Delaware Sub:
(a) Capital Stock of Delaware Sub. Each issued and
outstanding share of Common Stock, par value $1.00 per share, of Delaware Sub
shall be converted into (i) one one-millionth (1/1,000,000th) of a fully paid
and nonassessable share of Common Stock, par value $1.00 per share, of the TW
Surviving Corporation for each share of Common Stock, par value $1.00 per
share, of Parent ("Parent Common Stock") issued and outstanding immediately
prior to the Effective Time of the Mergers, (ii) one one-millionth
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(1/1,000,000th) of a fully paid and nonassessable share of Series C Convertible
Preferred Stock, par value $1.00 per share, of the TW Surviving Corporation for
each share of Series C Convertible Preferred Stock, par value $1.00 per share,
of Parent ("Parent Series C Preferred Stock"), if any, issued and outstanding
immediately prior to the Effective Time of the Mergers, (iii) one one-millionth
(1/1,000,000th) of a fully paid and nonassessable share of Series D Convertible
Preferred Stock, par value $1.00 per share, of the TW Surviving Corporation for
each share of Series D Convertible Preferred Stock, par value $1.00 per share,
of Parent ("Parent Series D Preferred Stock"), if any, issued and outstanding
immediately prior to the Effective Time of the Mergers, (iv) one one-millionth
(1/1,000,000th) of a fully paid and nonassessable share of Series E Convertible
Preferred Stock, par value $1.00 per share, of the TW Surviving Corporation for
each share of Series E Convertible Preferred Stock, par value $1.00 per share,
of Parent ("Parent Series E Preferred Stock"), if any, issued and outstanding
immediately prior to the Effective Time of the Mergers, (v) one one-millionth
(1/1,000,000th) of a fully paid and nonassessable share of Series F Convertible
Preferred Stock, par value $1.00 per share, of the TW Surviving Corporation for
each share of Series F Convertible Preferred Stock, par value $1.00 per share,
of Parent ("Parent Series F Preferred Stock"), if any, issued and outstanding
immediately prior to the Effective Time of the Mergers, (vi) one one-millionth
(1/1,000,000th) of a fully paid and nonassessable share of Series G Convertible
Preferred Stock, par value $1.00 per share, of the TW Surviving Corporation for
each share of Series G Convertible Preferred Stock, par value $1.00 per share,
of Parent ("Parent Series G Preferred Stock"), if any, issued and outstanding
immediately prior to the Effective Time of the Mergers, (vii) one one-millionth
(1/1,000,000th) of a fully paid and nonassessable share of Series H Convertible
Preferred Stock, par value $1.00 per share, of the TW Surviving Corporation for
each share of Series H Convertible Preferred Stock, par value $1.00 per share,
of Parent ("Parent Series H Preferred Stock"), if any, issued and outstanding
immediately prior to the Effective Time of the Mergers, (viii) one
one-millionth (1/1,000,000th) of a fully paid and nonassessable share of Series
I Convertible Preferred Stock, par value $1.00 per share, of the TW Surviving
Corporation for each share of Series I Convertible Preferred Stock, par value
$1.00 per share, of Parent ("Parent Series I Preferred Stock"), if any, issued
and outstanding immediately prior to the
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Effective Time of the Mergers, (ix) one one-millionth (1/1,000,000th) of a
fully paid and nonassessable share of Series J Convertible Preferred Stock, par
value $1.00 per share, of the TW Surviving Corporation for each share of Series
J Convertible Preferred Stock, par value $1.00 per share, of Parent ("Parent
Series J Preferred Stock"), if any, issued and outstanding immediately prior to
the Effective Time of the Mergers, (x) one one-millionth (1/1,000,000th) of a
fully paid and nonassessable share of 10 1/4% Series K Exchangeable Preferred
Stock, par value $1.00 per share, of the TW Surviving Corporation for each
share of 10 1/4% Series K Exchangeable Preferred Stock, par value $1.00 per
share, of Parent ("Parent Series K Preferred Stock"), if any, issued and
outstanding immediately prior to the Effective Time of the Mergers, (xi) one
one-millionth (1/1,000,000th) of a fully paid and nonassessable share of 10
1/4% Series L Exchangeable Preferred Stock, par value $1.00 per share, of the
TW Surviving Corporation for each share of 10 1/4% Series L Exchangeable
Preferred Stock, par value $1.00 per share, of Parent ("Parent Series L
Preferred Stock"), if any, issued and outstanding immediately prior to the
Effective Time of the Mergers and (xii) one one-millionth (1/1,000,000th) of a
fully paid and nonassessable share of 10 1/4% Series M Exchangeable Preferred
Stock, par value $1.00 per share, of the TW Surviving Corporation for each
share of 10 1/4% Series M Exchangeable Preferred Stock, par value $1.00 per
share, of Parent ("Parent Series M Preferred Stock" and, together with the
Parent Common Stock, the Parent Series C Preferred Stock, the Parent Series D
Preferred Stock, the Parent Series E Preferred Stock, the Parent Series F
Preferred Stock, the Parent Series G Preferred Stock, the Parent Series H
Preferred Stock, the Parent Series I Preferred Stock, the Parent Series J
Preferred Stock, the Parent Series K Preferred Stock and the Parent Series L
Preferred Stock, the "Parent Capital Stock"), if any, issued and outstanding
immediately prior to the Effective Time of the Mergers. For the purposes of
this Section 2.01(a), shares of Parent Capital Stock, other than Parent Series
C Preferred Stock, held by Parent Subsidiaries (as defined in Section 3.02(a))
shall be deemed to be not outstanding.
(b) Cancellation of Treasury Stock. Each share of Parent
Capital Stock that is owned by Parent shall automatically be canceled and
retired and shall cease to exist, and no shares of Common Stock, par value $.01
per share, of Holdco (the "Holdco Common Stock") or other consideration shall
be delivered in exchange therefor.
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(c) Conversion of Parent Capital Stock. Subject to
Sections 2.01(d) and 2.03(e), each issued share of Parent Capital Stock (other
than shares to be canceled in accordance with Section 2.01(b) and other than
shares subject to Section 2.01(f)) shall be converted into fully paid and
nonassessable shares of the capital stock of Holdco ("Holdco Capital Stock") in
accordance with the following table (it being acknowledged that as of August 8,
1996 (the date of the last amendment of this Section 2.01), (x) no shares of
Parent Series J Preferred Stock, Parent Series L Preferred Stock and Parent
Series M Preferred Stock are outstanding and (y) it is anticipated that no
shares of Parent Series C Preferred Stock, Parent Series L Preferred Stock and
either Parent Series K Preferred Stock or Parent Series M Preferred Stock will
be outstanding immediately prior to the Effective Time of the Mergers):
Each Share of the Number and Class or Series
Specified Class or Series of Shares of Holdco Capital
of Parent Capital Stock Stock Into Which Converted
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Parent Common Stock One Share of Holdco Common
Stock
Parent Series C Preferred 2.08264 shares of Holdco
Stock Common Stock
Parent Series D Preferred One share of Series D
Stock Convertible Preferred Stock,
par value $.10 per share, of
Holdco ("Holdco Series D
Preferred Stock")
Parent Series E Preferred One share of Series E
Stock Convertible Preferred Stock,
par value $.10 per share, of
Holdco ("Holdco Series E
Preferred Stock")
Parent Series F Preferred One share of Series F
Stock Convertible Preferred Stock,
par value $.10 per share, of
Holdco ("Holdco Series F
Preferred Stock")
Parent Series G Preferred One share of Series G
Stock Convertible Preferred Stock,
par value $.10 per share, of
Holdco ("Holdco Series G
Preferred Stock")
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Parent Series H Preferred Stock One share of Series H
Convertible Preferred Stock,
par value $.10 per share, of
Holdco ("Holdco Series H
Preferred Stock")
Parent Series I Preferred Stock One share of Series I
Convertible Preferred Stock,
par value $.10 per share, of
Holdco ("Holdco Series I
Preferred Stock")
Parent Series J Preferred Stock One share of Series J
Convertible Preferred Stock,
par value $.10 per share, of
Holdco ("Holdco Series J
Preferred Stock")
Parent Series K Preferred Stock One share of 10 1/4% Series M
Exchangeable Preferred Stock,
par value $.10 per share, of
Holdco ("Holdco Series M
Preferred Stock")
Parent Series L Preferred Stock One share of 10 1/4% Series L
Exchangeable Preferred Stock,
par value $.10 per share, of
Holdco ("Holdco Series L
Preferred Stock")
Parent Series M Preferred Stock One share of Holdco Series M
Preferred Stock
As of the Effective Time of the Mergers, all such shares of Parent Capital
Stock shall no longer be outstanding and shall automatically be canceled and
retired and shall cease to exist. Subject to Sections 2.01(d) and 2.03(e), as
of the Effective Time of the Mergers (i) each certificate theretofore
representing shares of Parent Capital Stock (other than each certificate
theretofore representing Parent Series C Preferred Stock or Parent Series K
Preferred Stock (the "Changed Parent Stock")), without any action on the part of
Holdco, Parent or the holder thereof, shall be deemed to represent an equivalent
number of shares of the class or series of Holdco Capital Stock set forth above
next to the class or series of Parent Capital Stock formerly represented by such
certificate and shall cease to represent any rights in any shares of Parent
Capital Stock, and (ii) each holder of a certificate representing any shares of
Changed Parent Stock shall cease
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to have any rights with respect thereto, except the right to receive, upon the
surrender of any such certificates, certificates representing the number of
shares of the class or series of Holdco Capital Stock, and any cash in lieu of
fractional shares of such class or series of Holdco Capital Stock, set forth
above next to the series of Changed Parent Stock formerly represented by such
certificate to be issued or paid in consideration therefor upon surrender of
such certificate in accordance with Section 2.03, without interest.
(d) Appraisal Rights. Notwithstanding anything in this
Agreement to the contrary, shares ("Appraisal Shares") of Parent Capital Stock
(other than Parent Common Stock) that are outstanding immediately prior to the
Effective Time of the Mergers and that are held by any stockholder of Parent
who is entitled to demand and properly demands appraisal of such Appraisal
Shares pursuant to, and who complies in all respects with, the provisions of
Section 262 of the DGCL ("Section 262") shall not be converted into Holdco
Capital Stock as provided in Section 2.01(c), but rather the holders of
Appraisal Shares shall be entitled to payment of the fair value of such
Appraisal Shares in accordance with the provisions of Section 262; provided,
however, that if any such holder shall fail to perfect or otherwise shall
waive, withdraw or lose the right to appraisal under Section 262 or a court of
competent jurisdiction shall determine that such holder is not entitled to the
relief provided by Section 262, then the right of such holder of Appraisal
Shares to be paid the fair value of such holder's Appraisal Shares shall cease
and such Appraisal Shares shall be treated as if they had been converted as of
the Effective Time of the Mergers into shares of Holdco Capital Stock as
provided in Section 2.01(c).
(e) Exchange Ratio for Parent Options and Parent
Warrants. (i) As of the Effective Time of the Mergers, each outstanding
Parent Option (as defined in Section 3.02(c)) and each outstanding warrant (a
"Parent Warrant") to purchase Parent Common Stock, originally issued in
connection with the first issuance of Parent Series B Preferred Stock, shall be
assumed by Holdco and converted into an option or warrant, as the case may be,
to purchase shares of Holdco Common Stock, as provided below. Following the
Effective Time of the Mergers, each Parent Option shall continue to have, and
shall be subject to, the same terms and conditions set forth in the applicable
Parent Stock Plan
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(as defined in Section 3.02(c)) pursuant to which such Parent Option was
granted, and each Parent Warrant shall continue to have, and shall be subject
to, the same terms and conditions, in each case as in effect immediately prior
to the Effective Time of the Mergers, except that each such Parent Option or
Parent Warrant shall be exercisable for the same number of shares of Holdco
Common Stock as the number of shares of Parent Common Stock for which such
Parent Option or Parent Warrant was exercisable immediately prior to the
Effective Time of the Mergers.
(ii) As of the Effective Time of the Mergers, Holdco shall
enter into an assumption agreement with respect to each Parent Option and each
Parent Warrant, which, in the case of any Parent Option, shall provide for
Holdco's assumption of the obligations of Parent under the applicable Parent
Stock Plan. Prior to the Effective Time of the Mergers, Parent shall make such
amendments, if any, to the Parent Stock Plans as shall be necessary to permit
such assumption in accordance with this Section 2.01(e).
(iii) It is the intention of the parties that, to the
extent that any Parent Option constitutes an "incentive stock option" (within
the meaning of Section 422 of the Code) immediately prior to the Effective Time
of the Mergers, such Parent Option shall continue to qualify as an incentive
stock option to the maximum extent permitted by Section 422 of the Code, and
that the assumption of the Parent Option provided by this Section 2.01(e) shall
satisfy the conditions of Section 424(a) of the Code.
(f) Treatment of Parent Capital Stock Held by Parent
Subsidiaries. Notwithstanding anything in this Agreement to the contrary, each
share of Parent Capital Stock (other than any Parent Series C Preferred Stock)
held by any Parent Subsidiary shall be converted into (i) in the case of each
share of Parent Common Stock, one one-thousandth (1/1,000th) of a fully paid
and nonassessable share of Common Stock of the TW Surviving Corporation, (ii) in
the case of each share of Parent Series D Preferred Stock, one one-thousandth
(1/1,000th) of a fully paid and nonassessable share of Series D Convertible
Preferred Stock of the TW Surviving Corporation, (iii) in the case of each share
of Parent Series E Preferred Stock, one one-thousandth (1/1,000th) of a fully
paid and nonassessable share of Series E Convertible Preferred Stock of the TW
Surviving Corporation, (iv) in the case of each share of Parent Series F
Preferred Stock, one one-thousandth (1/1,000th) of
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a fully paid and nonassessable share of Series F Convertible Preferred Stock of
the TW Surviving Corporation, (v) in the case of each share of Parent Series G
Preferred Stock, one one-thousandth (1/1,000th) of a fully paid and
nonassessable share of Series G Convertible Preferred Stock of the TW Surviving
Corporation, (vi) in the case of each share of Parent Series H Preferred Stock,
one one-thousandth (1/1,000th) of a fully paid and nonassessable share of
Series H Convertible Preferred Stock of the TW Surviving Corporation, (vii) in
the case of each share of Parent Series I Preferred Stock, one one-thousandth
(1/1,000th) of a fully paid and nonassessable share of Series I Convertible
Preferred Stock of the TW Surviving Corporation, (viii) in the case of each
share of Parent Series J Preferred Stock, one one-thousandth (1/1000th) of a
fully paid and nonassessable share of Series J Convertible Preferred Stock of
the TW Surviving Corporation, (ix) in the case of each share of Parent Series K
Preferred Stock, one one-thousandth (1/1,000th) of a fully paid and
nonassessable share of 10 1/4% Series K Exchangeable Preferred Stock of the
TW Surviving Corporation, (x) in the case of each share of Parent Series L
Preferred Stock, one one-thousandth (1/1,000th) of a fully paid and
nonassessable share of 10 1/4% Series L Exchangeable Preferred Stock of the TW
Surviving Corporation and (xi) in the case of each share of Parent Series M
Preferred Stock, one one-thousandth (1/1,000th) of a fully paid and
nonassessable share of 10 1/4% Series M Exchangeable Preferred Stock of the TW
Surviving Corporation."
(b) Section 2.03(e)(iv) of the Agreement is hereby
deleted.
(c) The definition of "Material Transaction" in the fifth
sentence of Section 5.16 of the Agreement is hereby amended and restated in its
entirety as follows:
"For purposes of this Agreement, "Material Transaction" means (i) the issuance
by Parent of more than 90,000,000 "common stock equivalents" (one common stock
equivalent being equal to one share of Parent Common Stock, including any share
of Parent Common Stock issuable by Parent upon conversion, exercise or exchange
of any other capital stock, warrant or other security or right of Parent, any
Parent Subsidiary or any other controlled affiliate of Parent) in any single
transaction or in any series of individual transactions (excluding any
transaction involving an exchange by Parent on a one-for-one basis of newly
issued shares of Parent Series J Preferred Stock for outstanding
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shares of Parent Series C Preferred Stock) each of which involves the issuance
of more than 20,000,000 common stock equivalents, whether or not such
individual transactions are related to each other, or (ii) the sale or other
disposition in any transaction or series of transactions, whether or not
related to each other, by Parent or any Parent Subsidiary of any business or
assets with an aggregate fair market value in excess of $3,500,000,000,
excluding from such amount (i) sales of inventory in the ordinary course of
business consistent with prior practice and (y) the sale or disposition, in a
single transaction or series of related transactions, of assets with an
aggregate fair market value of $500,000,000 or less."
(c) Section 6.01(c) of the Agreement is hereby amended
and restated in its entirety to read as follows:
"(c) Antitrust. The waiting periods (and any extensions thereof)
applicable to the transactions contemplated by this Agreement under the HSR Act
shall have been terminated or shall have expired. The Federal Trade Commission
(the "FTC") shall have initially accepted the FTC Agreement Containing Consent
Order relating to the Mergers and ancillary matters. Any consents, approvals
and filings under any foreign antitrust law the absence of which would prohibit
the consummation of the Mergers shall have been obtained or made."
(d) Section 6.01(h) of the Agreement is hereby deleted.
(e) Section 7.01(b)(iii) of the Agreement is hereby
amended and restated in its entirety, as follows:
"(iii) if the Mergers shall not have been consummated on or
before December 31, 1996, unless the failure to consummate the
Mergers is the result of a wilful and material breach of this
Agreement by the party seeking to terminate this Agreement;".
SECTION 2. Miscellaneous. (a) Except as expressly set forth in
Section 1, all the provisions of the Agreement are hereby ratified and confirmed
by all the parties and shall remain in full force and effect. All references in
the Agreement to "this Agreement" shall be read as references to the Agreement,
as amended by this Amendment.
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(b) Each party consents to the execution and delivery by
Parent and the Company of the Agreement Containing Consent Order referred to
in Section 6.01(c) of the Agreement, as amended by this Amendment.
(c) This Amendment may be executed in two or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when two or more counterparts have been signed by each
of the parties and delivered to the other parties.
(d) This Amendment shall be governed by, and construed in
accordance with, the laws of the State of Delaware, regardless of the laws that
might otherwise govern under applicable principles of conflicts of laws
thereof.
IN WITNESS WHEREOF, Parent, Holdco, Delaware Sub, Georgia Sub
and the Company have caused this Amendment to be signed by their respective
officers thereunto duly authorized, all as of the date first written above.
TIME WARNER INC.,
by /s/ Peter R. Haje
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Name: Peter R. Haje
Title: Executive Vice President
TW INC.,
by /s/ Thomas W. McEnerney
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Name: Thomas W. McEnerney
Title: Vice President
TIME WARNER ACQUISITION CORP.,
by /s/ Thomas W. McEnerney
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Name: Thomas W. McEnerney
Title: Vice President
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TW ACQUISITION CORP.,
by /s/ Thomas W. McEnerney
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Name: Thomas W. McEnerney
Title: Vice President
TURNER BROADCASTING SYSTEM, INC.,
by /s/ Steven W. Korn
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Name: Steven W. Korn
Title: Vice President