SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
December 1, 1995
TIME WARNER INC.
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(Exact name of registrant as specified in its charter)
Delaware 1-8637 13-1388520
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(State or other (Commission (I.R.S. Employer
jurisdiction File Number) Identification No.)
of incorporation)
75 Rockefeller Plaza, New York, NY 10019
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(Address of principal executive offices) (zip code)
(212) 484-8000
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(Registrant's telephone number, including area code)
Not Applicable
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(Former name or former address, if changed since last report)
Item 5. Other Events.
As previously reported, Time Warner Inc. ("Time
Warner") entered into an Agreement and Plan of Merger (the
"Merger Agreement") dated as of September 22, 1995, among
Time Warner, Time Warner Acquisition Corp. ("Delaware Sub"),
a Delaware corporation and a wholly owned subsidiary of Time
Warner, and Turner Broadcasting System, Inc. ("TBS"), a
Georgia corporation, that provided for the combination of
Time Warner and TBS. As contemplated by the Merger
Agreement, Time Warner and TBS have agreed to amend the
Merger Agreement to provide for a transaction in which both
Time Warner and TBS will become wholly owned subsidiaries of
a new holding company (the "Holding Company Transaction").
Time Warner, TW Inc. a Delaware corporation and currently a
wholly owned subsidiary of Time Warner ("New Time Warner"),
Delaware Sub, TW Acquisition Corp., a Georgia corporation
("Georgia Sub"), and TBS have entered into an Amended and
Restated Agreement and Plan of Merger (the "Amended and
Restated Merger Agreement") dated as of September 22, 1995,
pursuant to which (a) Delaware Sub will be merged (the "Time
Warner Merger") into Time Warner, (b) each outstanding share
of Common Stock, par value $1.00 per share, of Time Warner,
other than shares held directly or indirectly by Time
Warner, will be converted into one share of Common Stock,
par value $.01 per share, of New Time Warner ("New Time
Warner Common Stock"), (c) each outstanding share of each
series of preferred stock of Time Warner, other than shares
held directly or indirectly by Time Warner and shares with
respect to which appraisal rights are properly exercised,
will be converted into one share of a substantially
identical series of preferred stock of New Time Warner
having the same designation as the shares of preferred stock
of Time Warner so converted, (d) Georgia Sub will be merged
(the "TBS Merger") into TBS, (e) each outstanding share of
Class A Common Stock, par value $.0625 per share, of TBS
("TBS Class A Common Stock") and Class B Common Stock, par
value $.0625 per share, of TBS ("TBS Class B Common Stock"),
other than shares held directly or indirectly by Time Warner
or New Time Warner or in the treasury of TBS and shares with
respect to which dissenters' rights are properly exercised,
will be converted into 0.75 of a share of New Time Warner
Common Stock, (f) each outstanding share of Class C
Preferred Stock, par value $.125 per share, of TBS ("TBS
Class C Preferred Stock"), other than shares held directly
or indirectly by Time Warner or New Time Warner or in the
treasury of TBS and shares with respect to which dissenters'
rights are properly exercised, will be converted into 4.80
shares of New Time Warner Common Stock, (g) each of Time
Warner and TBS will become a wholly owned subsidiary of New
Time Warner and (h) New Time Warner will be renamed "Time
Warner Inc." A copy of the Amended and Restated Merger
Agreement is attached as Exhibit 2(a) hereto and
incorporated herein by reference.
The Holding Company Transaction is subject to
customary closing conditions, including the approval of the
shareholders of TBS, the approval of the stockholders of
Time Warner, all necessary approvals of the Federal
Communications Commission and appropriate antitrust
approvals. There can be no assurance that all these
approvals can be obtained in a timely fashion
or, in the case of governmental approvals, if obtained, will
not be conditioned upon changes to the terms of the Amended
and Restated Merger Agreement or the related agreements
described below.
Time Warner has entered into a Shareholders'
Agreement dated as of September 22, 1995 (the "Shareholders'
Agreement"), with R. E. Turner ("Turner") and certain
associates and affiliates of Turner (together with Turner,
the "Turner Shareholders"), a copy of which is attached as
Exhibit 10(a) to Time Warner's Current Report on Form 8-K
dated as of September 22, 1995, and incorporated herein by
reference. Time Warner and New Time Warner have entered into
an Amended and Restated LMC Agreement dated as of September
22, 1995, with Liberty Media Corporation ("LMC") and certain
direct and indirect wholly owned subsidiaries of LMC (the
"Amended and Restated LMC Agreement"), a copy of which is
attached as Exhibit 10(a) hereto and incorporated herein by
reference. In addition, LMC has agreed to grant Time Warner
an option, exercisable under certain conditions, to acquire
all the TBS shares owned by LMC and its wholly owned
subsidiaries at the same price that would be payable for
such TBS shares in the TBS Merger.
Pursuant to the Shareholders' Agreement, the
Turner Shareholders have agreed to vote all their TBS shares
in favor of the approval of the TBS Merger and each of the
other transactions contemplated by the Amended and Restated
Merger Agreement and in favor of the approval and adoption
of the Amended and Restated Merger Agreement. In addition,
pursuant to the Amended and Restated Merger Agreement and
the Shareholders' Agreement, New Time Warner and the Turner
Shareholders have agreed that, upon consummation of the
Holding Company Transaction, New Time Warner and the Turner
Shareholders will enter into Investors' Agreements and a
Registration Rights Agreement (the forms of which are
attached as Exhibits C-1 and C-2 and B, respectively, to the
Amended and Restated Merger Agreement and incorporated
herein by reference), pursuant to which (a) Turner will,
subject to certain conditions, be entitled to designate two
people for election to the Board of Directors of New Time
Warner, (b) certain of the Turner Shareholders will be
subject to certain restrictions on transfer of New Time
Warner Common Stock and certain restrictions on other
activities relating to New Time Warner and (c) New Time
Warner will grant to the Turner Shareholders rights to
require the registration of sales of shares of New Time
Warner Common Stock received in the TBS Merger under the
Securities Act of 1933, as amended (the "Securities Act").
Pursuant to the Amended and Restated LMC
Agreement, LMC and certain of its subsidiaries have agreed,
subject to certain conditions, to vote all their TBS shares
in favor of the approval of the TBS Merger and each of the
other transactions contemplated by the Amended and Restated
Merger Agreement and in favor of the approval and adoption
of the Amended and Restated Merger Agreement. Time Warner
has agreed with LMC that Time Warner will terminate the
Amended and Restated Merger Agreement and abandon the
Holding Company Transaction under certain circumstances,
including (a) the imposition by any regulatory authority of
certain restrictions or burdens on LMC and its affiliates as
a condition to approval of the Holding Company Transaction
and related transactions and (b) if New Time Warner adopts a
stockholder rights agreement and such agreement differs from
the Time Warner stockholder rights agreement in any material
respect except as set forth in Exhibit G to the Amended and
Restated LMC Agreement, which is incorporated herein by
reference.
In addition, the Amended and Restated LMC
Agreement contemplates that (a) substantially all the shares
of New Time Warner Common Stock issued in the TBS Merger to
LMC and its affiliates will be exchanged for shares of a new
series of common stock of New Time Warner economically
equivalent to the New Time Warner Common Stock ("LMC Voting
Common Stock") at a ratio of one share of New Time Warner
Common Stock for each share of LMC Voting Common Stock and
(b) subject to limited exceptions, all the shares of LMC
Voting Common Stock received by LMC and its subsidiaries,
together with all other voting securities of New Time Warner
from time to time held by LMC or any of its controlled
affiliates (and, for so long as LMC is a controlled
affiliate of Tele-Communications, Inc. ("TCI"), all voting
securities of New Time Warner from time to time held by TCI
or any of its controlled affiliates) will be deposited in a
voting trust (the "Voting Trust") to be established pursuant
to the Voting Trust Agreement (the form of which is attached
as Exhibit J to the Amended and Restated LMC Agreement and
incorporated herein by reference) to be voted by the trustee
thereunder, who initially shall be Gerald M. Levin, the
Chairman and Chief Executive Officer of Time Warner. The
terms of the LMC Voting Common Stock are set forth in the
form of certificate of designation for such security, which
is attached as Exhibit L to the Amended and Restated LMC
Agreement and incorporated herein by reference. The LMC
Voting Common Stock is the economic equivalent of the New
Time Warner Common Stock, with identical rights, except that
the LMC Voting Common Stock may not be redeemed by New Time
Warner pursuant to Section 5 of Article IV of the proposed
Restated Certificate of Incorporation of New Time Warner
(which will be substantially identical to Section 5 of
Article IV of the Restated Certificate of Incorporation of
Time Warner, as amended to date).
The Amended and Restated LMC Agreement also
provides that (a) if the Voting Trust is terminated under
certain circumstances, all shares of New Time Warner Common
Stock and LMC Voting Common Stock distributed out of the
Voting Trust will be exchanged for shares of another series
of common stock of New Time Warner ("LMC Non-voting Common
Stock") and (b) if the FCC conditions its required consent
or approval in connection with the Holding Company
Transaction upon any changes to the terms of the Voting
Trust or the identity of the trustee thereunder, or does not
accept that the Voting Trust, without such changes, would be
sufficient to preclude LMC and its subsidiaries from having
an attributable interest in the assets and businesses of New
Time Warner, and LMC is unwilling to agree to such changes,
then at the request of either Time Warner or LMC, in lieu of
entering into the Voting Trust, the shares of New Time
Warner Common Stock issued
to LMC and its subsidiaries pursuant to the TBS Merger and
the shares of LMC Voting Common Stock issued as
consideration for the Option (as defined below) will be
exchanged for shares of LMC Non-voting Common Stock. The
terms of the LMC Non-voting Common Stock are set forth in
the form of certificate of designation for such security,
which is attached as Exhibit K to the Amended and Restated
LMC Agreement and incorporated herein by reference. The LMC
Non-voting Common Stock is equivalent to the LMC Voting
Common Stock except that the holders of the LMC Non-voting
Common Stock will not be entitled to vote except on very
limited matters affecting them.
Pursuant to the Amended and Restated LMC
Agreement, if the Holding Company Transaction is
consummated, New Time Warner or TBS, on the one hand, and
LMC or one of its subsidiaries, on the other hand, will
enter into certain other agreements, and additional
agreements between TBS and LMC will take effect. These
agreements include:
(a) a Stockholders' Agreement among New Time
Warner, the Turner Shareholders, LMC and certain
subsidiaries of LMC, pursuant to which Turner and
the Turner-related stockholders, on the one hand,
and LMC and the LMC-related stockholders, on the
other hand, grant first to the other group and
then to New Time Warner a right of first refusal
with respect to dispositions of voting securities
of New Time Warner (the form of the Stockholders'
Agreement is attached as Exhibit B to the Amended
and Restated LMC Agreement and incorporated herein
by reference);
(b) an Option Agreement, for which New Time
Warner will issue to LMC 5,000,000 shares of LMC
Voting Common Stock, pursuant to which New Time
Warner will have an option (the "Option"),
exercisable for six years, to purchase for $160
million (payable in the form of additional shares
of LMC Voting Common Stock) a subsidiary of LMC
that currently provides satellite uplink services
for WTBS (the form of the Option Agreement is
attached as Exhibit D to the Amended and Restated
LMC Agreement and incorporated herein by
reference);
(c) the existing affiliation agreements
between TCI and TBS relating to the carriage by
TCI-owned cable systems of TBS-produced
programming will be amended and extended;
(d) an LMC Registration Rights Agreement,
pursuant to which New Time Warner will grant to
LMC rights to require the registration under the
Securities Act of sales of New Time Warner Common
Stock received in the TBS Merger or pursuant to
the Option, or upon conversion of LMC Voting
Common Stock or LMC Non-voting Common Stock so
received (the form of the LMC Registration Rights
Agreement is attached as Exhibit F to the Amended
and Restated LMC Agreement and incorporated herein
by reference);
(e) a SportSouth Stock Purchase Agreement,
pursuant to which TBS has agreed to sell its
interest in SportSouth, a regional sports cable
network, to LMC for approximately $60 million; and
(f) a Sunshine Option Agreement pursuant to
which Time Warner Entertainment Company, L.P.
("TWE") will grant to LMC an option to purchase
the interests of TWE and certain of its affiliates
in the Sunshine Network, a Florida-based sports
cable network, for $14 million.
Pursuant to the Amended and Restated LMC
Agreement, New Time Warner has agreed that, under certain
circumstances, if LMC or any of its controlled affiliates
(and, for so long as LMC is a controlled affiliate of TCI,
TCI and each controlled affiliate of TCI) is required as a
result of actions taken by New Time Warner to dispose of
shares of New Time Warner or suffer certain other adverse
consequences by reason of continued ownership of shares of
New Time Warner, New Time Warner will indemnify such person
for certain income tax liabilities incurred in the
disposition of shares of New Time Warner.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements of Businesses Acquired:
See Time Warner's Current Report on Form 8-K dated
as of November 14, 1995.
(b) Pro Forma Financial Information:
See Time Warner's Current Report on Form 8-K dated
as of November 14, 1995.
(c) Exhibits:
(i) Exhibit 2(a): Amended and Restated Agreement
and Plan of Merger dated as of September 22, 1995,
among Time Warner Inc., TW Inc., Time Warner
Acquisition Corp., TW Acquisition Corp., and
Turner Broadcasting System, Inc.
(ii) Exhibit 10(a): Amended and Restated LMC
Agreement dated as of September 22, 1995, among
Time Warner Inc., TW Inc., Liberty Media
Corporation, TCI Turner Preferred, Inc.,
Communication Capital Corp. and United Turner
Investment, Inc.
SIGNATURE
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York, State of
New York, on December 7, 1995.
TIME WARNER INC.,
By: /s/ Peter R. Haje
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Name: Peter R. Haje
Title: Executive Vice President
EXHIBIT INDEX
Sequential
Exhibit No. Description of Exhibit Page Number
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2(a) Amended and Restated Agreement
and Plan of Merger dated as of
September 22, 1995, among Time
Warner Inc., TW Inc., Time
Warner Acquisition Corp., TW
Acquisition Corp. and Turner
Broadcasting System, Inc.
10(a) Amended and Restated LMC
Agreement dated as of
September 22, 1995, among Time
Warner Inc., TW Inc., Liberty
Media Corporation, TCI Turner
Preferred, Inc., Communication
Capital Corp. and United
Turner Investment, Inc.