Time Warner Cable 2008 Annual Report Download - page 35

TWC’s Governing Documents
Management and Operations
The following description summarizes certain provisions of TWC’s constituent documents and certain
agreements that affect and govern TWC’s ongoing operations. Such description does not purport to be complete
and is qualified in its entirety by reference to the provisions of such agreements and constituent documents.
TWC common stock. A subsidiary of Time Warner owns 746,000,000 shares of the TWC Class A common
stock, which has one vote per share, and 75,000,000 shares of TWC’s Class B common stock, which has ten votes
per share, which together represent 90.6% of the voting power of TWC’s common stock and approximately 84% of
the common stock. TWC’s existing amended and restated certificate of incorporation (the “TWC Certificate of
Incorporation”) does not include a mechanism to convert Class B common stock into Class A common stock. The
TWC Class A common stock and Class B common stock vote together as a single class on all matters, except with
respect to the election of directors and certain matters described below. In connection with the Separation, prior to
the Distribution, TWC will file the Second Amended and Restated Certificate of Incorporation with the Secretary of
State of the State of Delaware. Effective upon the filing, each outstanding share of TWC Class A common stock and
TWC Class B common stock will be automatically converted into one fully paid and non-assessable share of TWC
Common Stock. Holders of TWC Common Stock will have identical rights and one vote per share on all matters
submitted to a vote of stockholders.
Board of directors. Under the terms of the TWC Certificate of Incorporation and TWC’s existing by-laws (the
“TWC By-laws”), the TWC Class A common stock votes as a separate class with respect to the election of the
Class A directors (the “Class A Directors”), and the Class B common stock votes as a separate class with respect to
the election of the Class B directors (the “Class B Directors”). In addition, the Class A Directors must represent not
less than one-sixth and not more than one-fifth of TWC’s directors, and the Class B Directors must represent not less
than four-fifths of TWC’s directors. As a result of its holdings, Time Warner has the ability to cause the election of
all Class A Directors and Class B Directors, subject to certain restrictions on the identity of these directors discussed
below. Under the TWC Second Amended and Restated Certificate of Incorporation, TWC will have a single class of
directors and a single class of common stock and holders of TWC Common Stock will vote as one class for the
election of all of the members of TWC’s board of directors.
Under the terms of the TWC Certificate of Incorporation, until August 1, 2009, at least 50% of TWC’s board of
directors must be independent directors as defined under the NYSE listed company rules. This provision will also be
retained in the TWC Second Amended and Restated Certificate of Incorporation.
Protections of minority Class A common stockholders. Under the terms of the TWC Certificate of Incor-
poration, the approval of the holders of a majority of the voting power of the outstanding shares of TWC Class A
common stock held by persons other than Time Warner and its subsidiaries is necessary for any merger,
consolidation or business combination in which the holders of TWC Class A common stock do not receive per
share consideration identical to that received by the holders of TWC Class B common stock (other than with respect
to voting power) or that would otherwise adversely affect the specific rights and privileges of the holders of the
TWC Class A common stock relative to the specific rights and privileges of the holders of the TWC Class B
common stock. In addition, the approval of (i) the holders of a majority of the voting power of the outstanding shares
of TWC Class A common stock held by persons other than Time Warner and (ii) the majority of the independent
directors on TWC’s board of directors is required to:
• change or adopt a provision inconsistent with the TWC Certificate of Incorporation if such change would
have a material adverse effect on the rights of the holders of TWC Class A common stock in a manner
different from the effect on the rights of the holders of TWC Class B common stock;
• through July 31, 2011, (a) change any of the provisions of the TWC By-laws concerning restrictions on
transactions between TWC and Time Warner and its affiliates or (b) adopt any provision of the TWC
Certificate of Incorporation or By-laws inconsistent with such restrictions; and
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