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Home My WebLink AboutCable Television-Time Warner, Inc. Franchise - 1996 05 06.,.. :- ~e8eral C.ommuniations Cason • 3ttidinttoq,AG 20.SS~ FCC 394 Approred by OMa ao6oas» ~~ oentrsc APPLICATION FOR FRANCHISE AUTHORITY CONSENT TO ASSIGNMENT OR TRANSFER OF CONTROL OF CABLE TELEVISION FRANCHISE fOR fWINCHtSEAU1'NORRY USE ONLY SECTION 1. GENERAL INFORMATION i DATE t. Community Unit Identification Number: FL0190 ~. 1lpp~utioa for: ~ Assignment of Fnatdtise ® Transfer of Control See Exhibit I 3 frmdau,angautltmaty: CITY OF WINTER SPRINGS, FL 4 ]deotifj- txmatunity where the systemlfranchise that is the subject of the assignment or transfer of control is located: WINTER SPRINGS, FL 5. Oate system was acqquuued or (for system's constructed by the transferor/assignor) the date on e aces: hi f th i b 'b ranc s e ec n srn whidt sertnce was proviaded to the first su 6 / 92 6. Proposed effedit~e date of closing of the transdciiun assigning or transferring ownership of the as soon as practicable system to transferee/assignee: 7. 1lttacla as act tadu"bit a schedule of any and all additional inforntation or materaai filed with this Exhibit No. application that is identified in the franchise as required to be provided to the franchising • authority whoa requesting its approval of the type of transaction that is the subject of this ~a r PART 1-7RANSFERORIASSIGNOR i. irlal~aLC u7e name maum ouu~caa .uu ~c.c .w..c .........~... legal saarae of Transferor/Assignor Cf individual, list last name first) Time Warner Inc. Assumed taaaae used for doing business ff any) 1Naa7uag street address or P.O. Box 75 Rockefeller Plaza lriq State ZIP Code Telephone No. Cndude area code) New York PTY 10019 212-484-8000 ~-W Attaelt as an Exhibit a copy of the contract or agreement that provides foe the assignment or Ezhbit No. transfer of cotahot Gncludutg aery exhRatts or schedules tltaeto necessary in order to understand the I _ _ t;ecros tlteceofl. If them is.oniy an onl agreement, reduce the teems to writiat= and attach... • -(Confidecttial trade, business, pridttg oe marketiats lnfomtation, oc other infoitttation"not otheiwtse' '"' ~ ~ • ~ ' publidy avaRabic, may be redacted). llla Does tfae contract submitted in response to W above embody the full and complete agreement ®Ya ~ No betw+eea the transferor/assignor and the transferedassigttee3 Jf N4, e>Spiain in alt Exhibit. Exhibit Na J.X r - pABTJI-TRATVSFERt:ElA551GNEE , legal came of TransfereelAssignee (f ind'nridual, list fast name first) Time Warner Inc. Assumed name used for doing business Gf anyl Ma6'ing street address or P.O. Box 7S Rockefeller P Caty State Z!P Code Telephone No. Cnclude area code) New York NY 212-4 - ai ~-J:~_ a_ -~~ ~~sts-- ~.rr.,.~e ~..d fd.n6..... n~~iw of n~rsnn to rnntnef _ if nth' flan fr~nef~rw~heeienw_ Name of eontad penwn gist last name first) Fogarty, John, Associate General Counsel,Time Warner Cable 1-irm or company name Cf any) Time Warner Cable Mailing street address or P.O. Box 300 First Stamford Place Gtlr State ZIP Code Telephone No. f nclude area code) Stamford CT 06902 id ~luad~ as an Exhibit the Hartle, mailing addras, and telephone number of each additional person who Exhibit No. should be contacted, if any. NONE tat lrtdiaRe tfie address where the em's records witl be maintained. Streetaddres~ 2251 LUCIEN WAY, SUITE 320 r ~ MAITLAND State FL Z1P Code 32751 _. Indicate on an attached exh~it any plans to change the current teens and conditions of service and operatiorss of the system as a consequence of the transaction for which approval is sought. NONE Exhibit No. ~cc sss tr>s~ a - . _ Odobar7l93 .. _ SEC7~ON L TRANSFEREE'SlASSIGNEE'S LEGAL QUALIFICATIONS Z Tsamsfem/Assignee ix tocporatioa ,D )united Partnership D tenenl Partnership a, jurisdiction of incorporation: ~ ~d address of registered agent in u N a Delaware n ~ i b. Date ofincorpontion: Prentice Hall Corporation 8/29/83 System, Inc. a For p-nfit ornot-for-profit: 32 Lockerman Sq . , Suite L-100 Profit Dover, DE 19901 a. jurisdiction in which forned: ju~N~ai~~d address of registered agent in b. Oate of fonmatiom a: Jurisdiction whose laws govern formation: b. Oate of formation: D Imdnndual Other. Describe in an Exhibit. Exhibit No. ~. fast the tramsfererlassignee, and, if the transferee/assignee is not a natural person, each of its officers, diredars, stockholders beneficial)y holding more than 576 of the outstanding voting shares, general partners, and limited partners holding an equity iinterest of more than 576. Use only one column for each ~~ndividua) or entity. Attach additional pagts if necessary. (Read earrful(y- the fettered items below refer to corresponding tines in the following tabled r >~ Name, residence, occupation or principal business, and principal piact of business. pf other than an individual, also show ::arn4 address and citizenship of natural person authorized to vote the votingg securities of the applicant that it holds.) List the applicant first, officers, next, then directors and, thereafter, remaining stockholders and/or partners. (b) Gt'~zenship. tc) Relatiomship to the tnnsfereelassignee (e.g., officer, director, etca. td) Number of shares or nature of parinersihp interest. (e) Number of votes. rf) Percentage of votes. See Exhibit II efreebe. i1e7 •. - 3 7f lire applicant is a corporation or a limited partnership, is the transfereelassignee formed under the ^ Yes X^ No ~ ws r duly qualified to transact business in, the State oc other jurisdiction in which the system P ]f the answer is No, explain in an Exhibit. Exhbit No. III ~• 7~as the transfereelassignee had any interest in or in connection with an application which has been ^X Yes ^ No diuaissed or denied by any franchise authorityt ]f tireanswer is Yes, desrnbe circumstances in an Exhibit. ~ E:hbit No. - - zv ~ 7tas an adverse finding been made or an adverse final action been taken by any court or ^ Yes X^ No adminrstrative body with respect to the transfereelassignee in a civil criminal or administrathro roceed'urg, brought under the provisions of any taw or regulation rc~ated to ffie following: arty ~dony,~ nwocation, suspension or involuntary transfer of arty authoriution (including able franchises) to provide video programming services; mass media related antitrust or unfair competition; fradutent statements to another governmental unit; or employment discrimination3 7f the answer is Yes, attach as an Exhibit a full description of the persons and matter(s) involved, Exhbit No. including an identification of any court or administrative body and any proceeding (by dates and file a:rrmbers, if applicable), and the disposition of such proceeding. s Arelfrere any documents, instruments, contracts or understandings relating to ownership or future Q Ya ^ No ownership rights with respell to any attributable interest as described in Question 2 Cncluding, but srot limited to, non-voting stock interests, beneficial stock ownership interests, options, warrants, debentures)i' 7f Yet,, provide particulars in an Exhibit. See Exhibit V . Z ~o documents, iinstruments, agreements or understandings for the fledge of "stock of the ^ Yes ^ No transferee/assi~rree, as security for loans or contractual performance, provide that: (a) voting rights will remain with the appPlicant, even in the event of default on the obligation; (b) in the event of default, there will be either a private or public sale of the stock; and (c) prior to the exercise of any cwrraship rights by a purchaser at a sale descrbed in (b), any prior consent of the FCC andlor of the franchising authority, if required pursuant to federal, state or local taw or pursuant to the terms of ~hefranchrseagreementwitlbeobtainedf Not Applicable if Nq,attads as an Exhibit a full explanation. ~ Euhbit No. j SEfT10N AI-TRANSFEREE'S/ASSIGNEE'S FINANCIAL QUALIFICATIONS Z The transferedassignee certifies that it has sufficient net liquid assets on hand or available from X^ Yes ^ No coasuritted resources to consummate the transaction and operate the facilities for three months. 2 .lltta2h as an 16cirbit the most recent ~nanciat statements, prcparcd in acwrdance with general)y Exhibit No. accepted accounting princiQles, including a balance sheet and income statement for at least one full VI for the tranfsereelassr~nee or parent entity that has been prepared in the ordinary course of . . - usiness; if any such financial statements are routinely prepared. Such statements, if not otherwise ppubiid~~~y available, ma be marked CONFI0ENTIA~ and will be maintained as confidential by the fraacliise authority and its agents to the extent permissible under local law. SEC770N JY-TRANSFEREE'S/ASSIGNEE'S TECHNICAL QUALIFICATIONS 3etTorfhin an Exhi3it a narrative account of the transferee's/assignee's technical qualifications, expeirence Exhibit No. Ind expertise regarding cable television systems, including, but not limited to, summary information about VII appropriate management personnel that will be involved in the system's management and operations. The 2ransfereelassignee may, but need not, list a representative sample of able systems currently. oc formtrly ~wiied or operated. SI:CJ]ON11-C.ERTIFlt.AT10NS Partl-TraasferortAssignor All the statements made in the application and attached exhbits arc considered material representations, and all the Exhibits art a .materialpartlsereofanct ue incorporated herein as if set out in full in the application. TIME WARNER INC. Srtnatrue I CERTfFY that the statements in this pliution arc true complete and correct to the best of my knowledge and belief anti _ _ are made in good faith gy . Oate 1N111f1JL FALSE STATEMENTS MADE ON THIS FORM ARE s' , PUNISHABLE SY fINE ANO/OR IMPRISONMENT. US. CODFY TITIF 78, SECTION 7001. Print full name Spencer B. Hays Check a ropriate classification: Corporate Officer indnisdual ^ Geneni Partner ^ (Indinte Tstfd ^ Other. Explain: Vie r part A -TransfereelAssignee All the statements made in the application and attached Exhibits are considered material representations, and all the Exhibits are a aaterial part hereof and art incorporated herein as if set out in full in the application. The transfereelassignee certifies that he/she: .. ~ Has a wrnent copy of the FCC's Rules governing cable television systems. tb) Has a current copy of the franchise that is the subject of this application, and of any applicable state laws or local ordinances and zelated regulations. f~ Wi11 use its best efforts to comply with the terms of the franchise and applicable state laws or local ordinances and related regulations, and to effect changes, as Promptly as practicable, in the operation of the system, if any changes are necessary to cure any ariolatioas thereof or defaults thereunder presently in effect or ongoing. TIME WARNER INC. 55gnature 7 CERTIFY flat the statements in this application are true complete and correct to the best of my knowledge and belief and are made in good faith. B vViLLFUL FALSE STATEMENTS MADE ON THIS FORM ARE Oate ,5` ~'Ej PUNISHABLE BY FINE AND/OR IMPRISONMENT. US. CODE, TITLE 78, SECTION '100). Print full name Spencer B . Hays Check a ropriate classification: ~. `- .-...: -- ~ ..: -- .._ , -- ~ ~ ...... _ .. . •tndividual ^ General Partner a A~~ir°ate T d OthK. ExPiaie: "Vice resident Exhibit I The proposed transaction involves the acquisition of all of the stock of Turner Broadcasting System, Inc. ("TBS") by Time Warner Inc. ("TWI"), the entity which controls the franchisee. In exchange, the shareholders of TBS will receive stock of TWI and, upon closing of the proposed; transaction, will hold, estimated as of the date of this filing, approximately 31 % of the outstanding common shares of TWI, or approximately 27.91% of the voting power. The terms, conditions and stracture of the TBS acquisition are described in TWI's Current Report on Form 8-K dated December 1, 1995 and its 1995 Annual Report on Form 10-K, which are submitted herewith.. As a technical matter, the TBS acquisition will be structured as a holding company merger in which TWI and TBS will each become wholly owned subsidiaries of a holding company to be called Time Warner Inc. after the merger (the "Merger"). Since the holding company will have identical ownership to TWI before the Merger, except for the issuance of approximately 31 % of the outstanding common shares of TWI or approximately 27.91% of the voting power to the stockholders of TBS, this structure is not further addressed herein and, for purposes of simplicity, references to TWI herein refer to Time Wamer Inc., the parent company prior to the Merger, and to the company that will be the parent company after the Merger. A table setting forth information as to certain beneficial owners of TWI shares prior to, and after giving effect to, the Merger is submitted herewith. The proposed transaction involves no transfer of the franchise which will continue to be held by the current franchisee. Nor is there any change in actual working control of the franchisee or TWI. However, the terms of this particular franchise may be interpreted by some to require consent of the franchising authority to the acquisition by the current shareholders of TBS of approximately 31% of the stock of TWI, or approximately 27.91% of the voting power. While neither the franchisee nor TWI believe such consent is required, this Form 394 is being filed in order to avoid any possible claim of failure to abide by the terms of the franchise. ,. Security Ownership of Certain Beneficial owners The following table sets forth information as to (a) the beneficial ownership of each person known to TWI to own more than 5~ of the outstanding shares of TWI common stock, par value $1.00 per share and associated Rights to purchase Series A Participating Cumulative Preferred Stock (collectively referred to as the "Common Stock") or any series of TWI voting preferred stock (the "Voting Preferred Stock") and (b) the anticipated beneficial ownership of each person expected by TWI to own more than 5~ of the outstanding shares of common stock after the TBS acquisition (the-"New TWI Common Stock"), anew series of voting common stock ("LMC Voting Common Stock") and each series of voting preferred stock outstanding after giving effect to the TBS acquisition (the "New TWI Voting Preferred Stock"). The information with respect to Common Stock and Voting Preferred Stock is based on information known to TWI as of February 1, 1996 regarding the beneficial ownership of voting securities of TWI and TBS. Name and Address of Beneficial Owner Number of Shares Common Stock The Capital Group Companies, inc. (4) 46,695,463 333 South Hope Street Los Angeles, CA 90671 The Seagram Company Ltd. (5) 56,763,349 1430 Peel Street Montreal, Ouebec, Canada M3A1S9 AE. Turner (6) 64,293,317 c/o Turner Broadcasting System, Inc. One CNN Center Atlanta, GA 30303 Percent of Common Stock Percent of Class (1) Upon Conversion (2) Before After Before After Trans- Trans- Trans- Trans- act(on action action action 8.51% 9.07% NA NA 14.51 11.06 NA NA - 12.52 - NA Percent of Voting Power (3) Before After Trans- Trans- action action 7.00% T.07% 12.36 8.91 - 10.09 IJiAC Votino Common Stock Tele-Communications, Inc. (7) 55,642,172 DTC Parkway Englewood, CO 80111 Voting Preferred Stock Series C Refereed Stock (8) Trust for the benefd of 769,043 Gordon Gray, Jr. Trust for the benefd of C. Boyden Gray 769,043 Trust for the benefit of Burton C. Gray 769,043 Trust for the benefit of Bernard Gray 769,043 c/o Wachovia Bank, NJ-. P.O. Box 3099 Winston-Salem, NC 27150 Nancy Maguire Gray, 188,336 Trustee of the Nancy Maguire Gray Trust u/a dated 12/16/94 P.O. Box 3199 Church Street Station New York, NY 10008 NA 100 NA 10.01 NA 8.94 23.56 23.56 23.56 23.56 23.56 23.56 23.56 23.56 5.76 5.76 -l- ~ 4 J Name and Address of Beneflclal Owner Number of Shares Percent of Class (1) Before After Trans- Trans- action action Series O Preferted Stodr Houston Industries Incorporated (9) 11,000,000 100 100 5 Post Oak Park 4400 Post Oak Parkway Houston, TX 77027 Series E and F Preferred Stodt Alan Gerry (10) Series E Loomis Road 3,107,956 Llberly, NY 12754 Series F 3,085,763 Series G Preferted Stock ltochu Corporation (11) 6,200,000 5-1, Kite Aoyama 2-Chome Minato-Ku, Tokyo 107-77 Japan Series 1 Preferred Stock Toshiba Corporation (12) 7,000,000 1-1, Shibaura 1~home Mlnato-Ku, Tokyo 105 Japan 95.60 95.60 95.60 95.60 100 100 100 100 Percent of Common Stock Uoon Conversion f21 Before Atter Trans- Trans- action adlon 5.77 4.46 3.91 3.01 4.08 3.14 3.59 2.76 Percent of Voting Power (3) Before Atter Trans- Trans- action action 5.01 3.61 3.33 2.40 2.70 1.95 3.05 2.20 -Z- ,~ , * Less than 1~ (1) The shares of Common Stock held by certain subsidiaries of TWI, which are not entitled to be voted, are excluded for purposes of calculating the percentages. (2) Each share of Voting Preferred Stock is convertible into 2.08264 shares of Common Stock or New TWI Common Stock, as applicable. Shares issuable upon such conversion are included in the "Percent of Common Stock Upon Conversion" calculation pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, as amended. (3) Each share of Voting Preferred Stock has two votes per share, as will each share of New TWI Voting Preferred Stock. (4) Beneficial ownership includes 33,080,650 shares of Common Stock beneficially owned as of December 31, 1995, which will be converted into shares of New TWI Common Stock in the Merger, and 13,614,813 shares (including 719,043 shares issuable upon conversion of convertible securities of TBS) of New TWI Common Stock which The Capital Group Companies, Inc. ("Capital Group") will be entitled to receive in the Merger as a result of its beneficial ownership of TBS stock (the"TBS Capital Stock") beneficially owned as of December 31, 1995. The Capital Group, a holding company, has filed with the Securities and Exchange Commission (the "Commission") Amendment No. 8 dated February 6, 1996 to its statement on Schedule 13G to the effect that it (directly or indirectly) has sole diapositive power over all its shares of Common Stock, that it has sole voting power over 5,972,280 of these shares and that these shares are held principally by Capital Research and Management Company, an investment adviser, and Capital Guardian Trust Company, a bank. The Capital Group has advised TWI that the shares of Common Stock reported as beneficially owned includes 920,170 shares of Common Stock issuable upon conversion of the TWI Liquid Yield Option Notes that it beneficially owns, that all of the reported shares are held for the benefit of its clients and that it and each of its subsidiary investment management companies acts separately in exercising investment discretion over its managed accounts. Based on information with respect to TBS Capital Stock filed with the Commission by Capital Group in Amendment No. 7, dated February 9, 1996, to its statement on Schedule 13G with respect to TBS Capital Stock. (5) Beneficial ownership and percentage calculations are as of February 1, 1996. The Seagram Company Ltd. has filed with the Commission Amendment No. 7, dated April 13, 1994, to its statement on Schedule 13D and a statement of Changes in Beneficial Ownership on Form 4 dated May 9, 1994 to the effect that it indirectly through its indirect wholly owned subsidiary, Seagram Inc., has sole voting and sole diapositive power over all these shares. (6) Based on information provided by TBS as of February 1, 1996. Includes (a) 839,942 shares of New TWI Common Stock expected to be owned by Turner Outdoor, Inc. a corporation that is wholly owned by Mr. Turner, (b) 2,250,000 shares of New TWI Common Stock as to which Mr. Turner is expected to have voting control but not diapositive control, (c) 1,635,670 shares of New TWI Common Stock expected to be held by the Robert E. Turner Charitable Remainder Unitrust NO. 2, as to which Mr. Turner shares voting and diapositive control, (d) 375,000 shares of New TWI Common Stock expected to be owned by Mr. Turner's wife and (e) 3,750,000 shares of New TWI Common Stock expected to be held by the Turner Foundation, Inc. Mr. Turner disclaims beneficial ownership of -3- • ~ , shares held by his spouse and the Turner Foundation, Inc. Excludes shares subject to options to purchase New TWI Common Stock which are expected to be awarded to Mr. Turner but are not expected to be exercisable within 60 days of the consummation of the Merger. (7) Based on information provided by TBS as of February 1, 1996. Consists of (a) shares held by entities in which Tele-Communications Inc. ("TCI") claims beneficial ownership, including United Cable Turner Investment, Inc. (27,938,169), Communication Capital Corporation (21,928,253) and TCI Turner Preferred, Inc. (775,750) and (b) 5,000,000 shares that are expected to be issued to a subsidiary of TCI pursuant to the Southern Satellite Systems, Inc. Option Agreement. All of the shares of LMC Voting Common Stock received by such persons will be held by a voting trust (the "Voting Trust"). TCI TRR of Southern Kentucky, Inc. and TRR Cable Company, entities in which TCI claims beneficial ownership, will also receive shares of New TWI Common Stock in the Merger (279,533 and 1,048,517, respectively), which shares will not be held by the Voting Trust. (8) This information has been provided to TWI, as of February 1, 1996, by the holders of TWI Series C Convertible Preferred Stock. The trusts for the benefit of each of Gordon Gray, Jr. and C. Boyden Gray each also holds 365,365 shares of Common Stock and the trusts for the benefit of each of Burton C. Gray and Bernard Gray each also holds 315,365 shares of Common Stock (of which 146,870 shares are, in each case, held in an escrow account subject to restrictions on disposition). The Nancy Maguire Gray Trust also holds 89,476 shares of Common Stock. (9) Beneficial ownership is as of July 17, 1995. Houston Industries Incorporated has filed with the Commission a Statement on Schedule 13D dated July 17, 1995 to the effect that it also beneficially owns 1,000,000 shares of Common Stock and has sole voting and diapositive power over all these shares. (10) Includes 41,337 shares of TWI Series F Convertible Preferred Stock held in an escrow account subject to restrictions on disposition and voting. Mr. Gerry also beneficially owns 2,922,907 shares of Common Stock, of which 5,056 shares are held in an escrow account subject to restrictions on disposition and voting. This information has been provided to TWI, as of February 1, 1996, by Mr. Gerry. (11) Includes 1,200,000 shares of TWI Series G Convertible Preferred Stock (the "Series G Preferred Stock") held by ITOCHU International Inc., 335 Madison Avenue, New York, NY 10017, a wholly owned subsidiary of ITOCHU Corporation. ITOCHU Corporation and ITOCHU International Inc. each also holds 1,440,000 and 360,000 shares, respectively, of TWI Series H Convertible Preferred Stock (the "Series H Preferred Stock"); each share of TWI Series H Preferred Stock is convertible into 2.08264 shares of TWI Common Stock but has no voting rights. This information has been provided to TWI, as of February 1, 1996, by the holders of Series G Preferred Stock. {12) Includes 177,500 shares of TWI Series I Convertible Preferred Stock (the "TWI Series I Preferred Stock") held by Toshiba America, Inc., 1251 Avenue of the Americas, New York, NY 10020, a wholly owned subsidiary of Toshiba Corporation. This information has been provided to TWI, as of February 1, 1996, by the holders of TWI Series I Preferred Stock. -4- Exhibit II Executive Officers, Directors and 5% Stockholder of Transferee/Assignee J • 'iF ~' ~' y ~ ~ A ~r :y . :+, : :fiv f. ,,:+ .~., yv.•/ ::::•.•. :: r :ti ~ i{~ \ i+ ., . • :.:Ry •. •:v .~y ` iYA''a'~ L fF , ~~y L ELC~~i/f : ? . •'•:i}i•' /.•2 ;?•~.`•'•x..,.'..., . .•.•:y:Y.• / S j+~•4~•.~. r:•.4 i>.'•:•4.• Gerald M. Levin U.S. Director, Chairman of 364,508 364,508 Less than 1% Time Wamer Inc. the Board and Chief 75 Rockefeller Plaza Executive Officer New York, NY 10019 Richard D. Parsons U.S. President and Director 10,213 10,213 Less than 1% Time Wamer Inc. 75 Rockefeller Plaza New York, NY 10019 Richard J. Bressler U.S. Senior Vice President 5,196 5,196 Less than 1% Time Wamer Inc. and Chief Financial 75 Rockefeller Plaza Officer New York, NY 10019 Peter R. Haje U.S. Executive Vice 9,525 9,525 Less than 1% Time Wamer Inc. President and General 75 Rockefeller Plaza Counsel New York, NY 10019 Tod R. Hullin U.S. Senior Vice President, 2,121 2,121 Less than 1% Time Wamer Ina Communications & 75 Rockefeller Plaza Public Affairs New York, NY 10019 Merv Adelson U.S. Director 360,999 360,999 Less than 1 East-West Capital Associates, Inc. 11111 Santa Monica Blvd Los Angeles, CA 90025 Lawrence B. Buttenweiser U.S. Director 86,577 86,577 Less than 1% Rosenman & Colin 575 Madison Avenue New York, NY 10022 Edward S. Finkelstein U.S. Director 8,927 8,927 Less than 1% Finkelstein Associates Inc. 712 Fifth Avenue New York, NY 10022 Beverly Sills Greenough U.S. Director 21,339 21,339 Less than 1% Lincoln Center 70 Lincoln Center Plaza New York, NY 10023-6583 C:~OFFICEIWP W IMWPDOCS~EXH I BTI I. W PD ' •rr ; ,t, ~. / •: i'll.C. •. •.•.`•.k.r v. :. .. .. •::. ....• r.:::' ~.. •:.v .nv. • x.r}: n •. • •.. :... ..n '•..•.•.:....• S~`•. :.. Carla A. Hills U.S. Director 3,039 3,039 Less than 1 Hill & Company 1200 Nineteenth St. NW Washington, DC 20036 David T. Keams U.S. Director 2,739 2,739 Less than 1% Xerox 100 First Stamford Place P.O. Box 10340 Stamford, CT 069042340 Henry Luce, III U.S. Director 292,033 292,033 Less than 1% The Henry Luce Foundation,lnc. 720 F'Ifth Avenue New York, NY 10019 Reuben Mark U.S. Director 10,439 10,439 Less than 1 Colgate-Palmolive Company 300 Park Avenue New York, NY 10022 Michael A. Miles U.S. Director 4,286 4,286 None Three Lakes Drive Northfield, IL 60093-2753 J. Richard Munro U.S. Director 332,492 332,492 Less than 1% Time Wamer Ina c/o Time Wamer Cable 300 First Stamford Place Stamford, CT 06902 Donald S. Perkins U.S. Director 14,116 14,116 Less than 1% 100 N. Riverside Plaza Chicago, IL 60606 Raymond S. Troubh U.S. Director 9,499 9,499 Less than 1% 10 Rockefeller Plaza New York, NY 10020 Frances T. Vncent, Jr. U.S. Director 17,439 17,439 Less than 1% Vncent Enterprises c/o Time Wamer Cable 300 First Stanford Place Stamford, CT 06902 The Capital Group Companies, Inc.' U.S. Stockholder 33,080,650 33,080,650 7.00% 333 South Hope Road (Dela- Los Angeles, CA 90071 ware) ~ As of 12/29/95 C:\OFFICEIWPWIMWPDOCSIEXHIBTII. WPD 2 As of 2/1/96 s As of 7/17/95 c:w~rcewPwrr~nv~nocs~w~rsrrr.wPv Exhibit III Time Warner Inc. ("TWI"), the applicant, transferor/assignor and the entity which controls the franchisee, is not qualified to transact business in the State in which the system operates. All business of the system is transacted by the franchisee which is qualified to transact business in the State. The proposed transaction will in no way alter this situation. exiiitwi Exhibit IV With respect to question 4 of Section 2: We believe this question is applicable to transfer applications and renewal applications. We aze aware of no instance in which an application by Time Warner Inc. ("TWI") or its affiliates for renewal of a cable television franchise has been denied. Described below aze instances of which we are awaze in which applications for consent to transfer a franchise by affiliates of TWI have been denied: (1) The City of Austin, Texas by resolution dated December 15, 1994, denied an application for consent to transfer of a franchise from Time Warner Entertainment Company, L.P. ("TWE") to Time Warner Entertainment - Advance/Newhouse Partnership. The stated basis for this denial was an ongoing dispute between TWE and the City concerning whether the franchise includes authorization for the provision over the cable system of services other than cable television service. The franchisee and the City of Austin have resolved this disagreement and franchisee has submitted a new application for consent of the transfer. (2) On February 3, 1995, the Ciry of Ithaca, New York determined to "withhold its authorization and consent" to a cable television transfer from TWE to Time Warner Entertainment - Advance/Newhouse Partnership until certain issues in dispute between the franchisee, TWE, and the City are resolved. Those issues include a disagreement about the chazge of Time Warner Cable's Plus service; a disagreement about the amount of franchise fees itemized; and a disagreement about whether certain expenses were appropriately chazged against the 2% gross revenue PEG access capital equipment funds paid by TWE pursuant to the franchise. (3) The City of Wadsworth, Ohio by resolution dated December 1, 1992 denied an application for consent to transfer the franchise from Warner Cable Communications Inc. to TWE . Representatives of the City advised that the reason for the denial was lack of time to examine the information submitted in response to the City's request for information regazding the transfer. (The terms of the franchise in Wadsworth require action on a transfer~consent application within a set time period or it is deemed approved.) The franchisee explicitly reserved the right to reapply for consent. (4) The City of Lazedo, Texas (the "City") has filed suit in the district court of Webb County, Texas against KBL Cablesystems of the Southwest, Inc. ("KBL Cable") the franchisee, and all parties involved in the acquisition of KBLCOM Incorporated (which controls the franchise) by TWI which occurred on July 6, 1995. The City claims that the acquisition violates certain transfer provisions of the franchise agreement between the City, KBLCOM and KBL Cable, because the attempt to transfer of ownership of the franchise took place without the City's consent. The allegations of the complaint include breach of contract, tortious interference and breach of trust and fiduciary duty. The parties have reached preliminary agreement on the terms• of a settlement. (5) The City of Winter Springs, Florida voted not to approve the application for consent to transfer of a franchise from TWE to Time Warner Entertainment - Advance/Newhouse Partnership. Franchisee is in the process of reviewing the City's action. (6) The City of Los Alamitos, California by resolution dated June 22, 1995 voted to disapprove the application for consent to transfer control of the franchise from KBL Cablesystems of the Southwest, Inc. dba Paragon Cable to TVVI based on the City's view that franchises fees have been underpaid. The franchisee and the City are presently attempting to resolve this situation. dniwi496 Exhibit V Description of Documents Relating to Ownership Rights Time Warner Inc. ("TWI") has entered into an amended and restated agreement and plan of merger dated as of September 22, 1995 (the "TBS Merger Agreement") providing for the merger of Turner Broadcasting System, Inc. ("TBS") with a wholly owned subsidiary of TWI and certain related transactions. See Exhibit I. The TBS Merger Agreement together with certain related agreements are described in TWI's 1995 Annual Report on Form 10-K (the "1995 Form 10-K") and Current Report on Form 8-K dated Mazch 22, 1996 (the "March 8-K") which are submitted herewith. In Januazy 1994 the Boazd of Directors of TWI approved a shazeholder rights plan designed to protect TWI's shazeholders against abusive takeover tactics, including acquisition of control without paying all shazeholders a fair premium, and to enhance the likelihood that shareholders will receive fair value in any change of control transactions. The Plan has been implemented by the issuance of one right per common shaze which becomes exercisable in certain events involving the acquisition of 15% or more of TWI common stock. Upon the occurrence of such an event, each right entitles its holders to purchase for $150 the economic equivalent of common stock of TWI, or in certain circumstances, of the acquiror, worth twice as much. In connection with the plan, 4 million shazes of preferred stock were reserved. The rights expire on January 20, 2004. TWI also has outstanding eight different series of preferred stock which are convertible, redeemable and/or exchangeable into shares of common stock at various conversion rates, times and conditions. Six of the eight series of preferred stock have voting rights. The terms of these securities are summarized in the financial statements in TWI's 1995 Form 10-K and Mazch 8-K referred to in Exhibit VI hereto which are submitted herewith. In April 1996, TWI issued $1.6 billion of non-voting Series K 10 1/4% Preferred Stock, the terms of which aze more fully described in TWI's Current Report on Form 8-K dated March 25, 1996, which is attached as an Exhibit hereto. In addition, like most lazge public companies, TWI issues stock options to its officers, employees and others pursuant to conventional stock option agreements and from time to time may enter into or commit to enter into agreements with respect to the ownership of its shazes such as the Registration Rights Agreement and the Shazeholder's Agreement contemplated by the TBS Merger Agreement referred to in Exhibit I and submitted herewith. Time Warner Entertainment Company, L.P. ("TWE"), a limited partnership all of the general partners of which aze wholly-owned subsidiaries of TWI, entered into an Admission Agreement dated as of May 16, 1993 with US West, Inc. in which US West, Inc. acquired a 25.51% pro rata priority capital and residual equity interest in TWE. On September 5, 1995 and October 2, 1995 TWI acquired the 5.61 % pro rata priority capital and residual equity interests formerly held by each of Itochu Corporation and Toshiba Corporation, respectively, so that TWI currently owns 74.49% of the pro rata priority capital and residual equity of TWE. exhvtwi Exhibit VI The most recent financial statements of Time Warner Inc. ("TWI") aze included in the following reports of TWI attached hereto: 1995 Annual Report to Shareholders and Annual Report on Form 10-K for the yeaz ended December 31,1995 and Current Report on Form 8-K dated March 22, 1996. exvitwi +v Exhibit VII Time Warner Inc. and its affiliates wholly and partially own cable systems serving a total of approximately 11.7 million cable subscribers, geographically concentrated in 35 groupings of more than 100,000 subscribers each. Time Warner Cable is the second-largest multiple system cable operator in the United States. Through a network of coaxial and fiber-optic cables, Time Warner's cable television system subscribers generally receive 36 or more channels of video programming, including local broadcast television signals, locally produced or originated video programming, distant broadcast television signals (such as WTBS, WWOR or WGN), advertiser-supported video programming (such as ESPN and CNN) and premium progranuning services (such as HBO, Cinemax, Showtime and The Movie Channel). In some systems, Time Warner also offers audio and other entertainment and information services. Time Warner's record in developing technology to expand the entertainment, information and__ _ communications options available on its cable system is unsurpassed in the industry. The significant achievements of Time Warner's highly regarded staff in areas of technical quality and innovation have been widely recognized and have been the basis for numerous awards. Time Warner is committed to giving its customers not only an array of entertainment and information choices but also high quality customer service. Time Warner Cable representatives helped to develop the National Cable Television Association's customer service standards and strive to meet and exceed those standards. Though all Time Warner cable systems may draw on the expertise of the Corporate Staff, we recognize that providing a quality product and good customer service must be accomplished locally. The subject system will be managed by experienced and qualified personnel at the local level. The office staff who are now responsible for the management and operations of the franchise will continue to operate as heretofore. techtwi