-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TnL5m0QiC9HGr+sSeGmQaAH/5L3gg9ktvt+K6xvrAJ91gcJFdKWqYNd/2ONhqFkh 5XQsKphxpvLPZwsGtUi3MA== 0000927356-99-001946.txt : 19991203 0000927356-99-001946.hdr.sgml : 19991203 ACCESSION NUMBER: 0000927356-99-001946 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19991202 EFFECTIVENESS DATE: 19991202 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TIME WARNER TELECOM INC CENTRAL INDEX KEY: 0001057758 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE COMMUNICATIONS (NO RADIO TELEPHONE) [4813] IRS NUMBER: 841500624 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-8 SEC ACT: SEC FILE NUMBER: 333-91963 FILM NUMBER: 99767793 BUSINESS ADDRESS: STREET 1: 5700 S QUEBEC ST CITY: GREENWOOD VILLAGE STATE: CO ZIP: 80111 BUSINESS PHONE: 3035661000 MAIL ADDRESS: STREET 1: 5700 S QUEBEC ST CITY: GREENWOOD VILLAGE STATE: CO ZIP: 80111 S-8 1 FORM S-8 As filed with the Securities and Exchange Commission on December 2, 1999 Registration No.__________ - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------ FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 TIME WARNER TELECOM INC. (Exact name of registrant as specified in its charter) DELAWARE 84-1500624 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 10475 Park Meadows Drive Littleton, CO 80124 (303) 566-1000 (Address of Principal Executive Offices) (Zip Code) ------------------ Time Warner Telecom 2000 Qualified Stock Purchase Plan (Full title of the Plan) ------------------ David J. Rayner Senior Vice President and Chief Financial Officer Time Warner Telecom Inc. 10475 Park Meadows Drive Littleton, CO 80124 (Name and Address of agent for service) (303) 566-1000 (Telephone number, including area code, of agent for service) ------------------
Title of Securities Amount to be Proposed Maximum Proposed Maximum Amount of to be Registered Registered (1) Offering Price Aggregate Offering Registration Fee Per Share (2) Price (2) - -------------------------------------------------------------------------------------------------------------------------------- Class A Common Stock, par value $.01 per share ("Class A Common Stock")..................... 750,000 $30.33 $22,747,500 $6,005.34 ================================================================================================================================
(1) This Registration Statement also relates to an indeterminate number of additional shares of Class A Common Stock pursuant to the change in capitalization provisions of the above-referenced plan. (2) Estimated solely for purposes of calculating the registration fee, pursuant to Rules 457(c) and (h) based on the average of the high and low prices of the Class A Common Stock as reported on the NASDAQ National Market Issues listing as published in the Wall Street Journal for November 29, 1999, on which day such average was $30.33. PART II This Registration Statement on Form S-8 registers 750,000 shares of the Registrant's Class A Common Stock for issuance pursuant to the terms of the Time Warner Telecom 2000 Qualified Stock Purchase Plan (the "Plan"). Item 3. Incorporation of Documents by Reference. The following documents filed with the Securities and Exchange Commission by the Registrant pursuant to the Securities Exchange Act of 1934, or as otherwise indicated, are hereby incorporated by reference in this Registration Statement: 1. The Annual Report of Time Warner Telecom LLC, predecessor to the Registrant, on Form 10-K for the year ended December 31, 1998 (the "1998 Form 10-K"); 2. The Registrant's Quarterly Reports on Form 10-Q for the quarters ended March 31, 1999, June 30, 1999 and September 30, 1999; and 3. The description of the Registrant's Class A Common Stock, par value $.01 per share, contained in its Registration Statement on Form 8-A, as filed with the SEC on May 11, 1999, pursuant to Section 12(b) of the Securities Exchange Act of 1934. All documents and reports subsequently filed by the Registrant pursuant to Sections 13(a) and (c), 14 or 15(d) of the Securities Exchange Act of 1934 after the date of this Registration Statement and prior to the filing of a post- effective amendment to this Registration Statement which indicates that all securities offered hereby have been sold, or which deregisters all such securities remaining unsold, shall be deemed to be incorporated by reference in this Registration Statement and to be a part hereof from the date of filing of such documents or reports. Any statement, information or document incorporated hereby by reference or deemed to be incorporated herein by reference and to be a part hereof may be automatically updated or replaced by documents the Registrant subsequently files which also are or are deemed to be incorporated herein by reference. Any statement, information or document so modified or superseded will not be deemed, except as so modified or superseded, to constitute a part of this Registration Statement. Item 4. Description of Securities. Not applicable. Item 5. Interests of Named Experts and Counsel. Not applicable. Item 6. Indemnification of Directors and Officers. Article VII of the Bylaws of Time Warner Telecom Inc. (the "Company") provides that to the fullest extent permitted under the General Corporation Law of the State of Delaware (the "DGCL"), the Company will indemnify and hold harmless any person that was or is made or threatened to be made a party or is otherwise involved in any action, suit or proceeding by reason of the fact that such person is or was a director or officer of the Company. II-2 Section 145 of the DGCL provides that a corporation may indemnify directors and officers as well as other employees and individuals against expenses (including attorney' fees), judgments, fines, and amounts paid in settlement in connection with specified actions, suits or proceedings, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation--a "derivative action"), if they acted in good faith and in a manner they reasonably believed to be in or not opposed to the best interests of the corporation and, with respect to any criminal actions or proceedings, had no reasonable cause to believe their conduct was unlawful. A similar standard is applicable in the case of derivative actions, except that indemnification only extends to expenses (including attorneys' fees) actually and reasonably incurred in connection with the defense or settlement or such action, except that no indemnification may be made in respect of any claim or matter as to which the person has been adjudged to be liable to the corporation unless the court determines upon application that, in view of all of the circumstances, the person is fairly and reasonably entitled to indemnity for expenses. The Company also has obtained insurance policies which provide coverage for the Registrant's directors and officers in certain situations, including some situations where the Registrant cannot directly indemnify the directors or officers. The By-laws of Time Warner Inc. ("TWI") require indemnification to the fullest extent permitted under Delaware or other applicable law of any person who is or was a director or officer of TWI, and permit such indemnification of any agent of TWI, who is or was involved or threatened to be made so involved in any action, suit or proceeding, whether criminal, civil, administrative or investigative, by reason of the fact that such person is or was serving at the request of TWI as a director, officer or employee of any other enterprise. Mr. Hays, a director, would be automatically covered by this provision; TWI has agreed to cover Messrs. Britt and Davies, directors of the Company. The Directors' and Officers' Liability and Reimbursement Insurance Policy of TWI is designed to reimburse TWI for any payments made by it pursuant to the foregoing indemnification. In addition, generally, the By-laws of American Television and Communication Corporation ("ATC"), Time Warner Companies, Inc. ("TWCI") and Warner Communications Inc. ("WCI"), subsidiaries of TWI that hold interests in the Company, provide for the indemnification of the officers and directors of ATC, TWCI and WCI to the fullest extent permitted by applicable law. Messrs. Britt, Davies and Hays are officers of ATC and Mr. Hays is also an officer of TWCT and WCI. The By-laws of MediaOne Group, Inc. ("MediaOne") require indemnification to the fullest extent permitted under Delaware law of any person who is or was a director, officer or employee of MediaOne, or was otherwise designated as an indemnified representative (as defined in the MediaOne By-laws) by MediaOne, against any liability (as defined in the MediaOne By-laws) incurred by such person in connection with any proceeding (as defined in the MediaOne By-laws) in which such person is involved by reason of their past, present or future services for, or at the request of, MediaOne as a director, officer, employee, agent, fiduciary or trustee of any other entity or enterprise. Messrs. Holmes, McPhie, and Webster, directors of the Registrant, are covered by this provision. Item 7. Exemption from Registration Claimed. Not applicable. Item 8. Exhibits. The exhibits listed on the accompanying Exhibit Index are filed or incorporated by reference as part of this Registration Statement. Item 9. Undertakings. II-3 (a) The undersigned Registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement: (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) To reflect in the prospectus any facts or events arising after the effective date of this Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective Registration Statement; (iii) To include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement; provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the Registration Statement is on Form S-3, Form S-8, or Form F-3 and the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the SEC by the Registrant pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the Registration Statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (b) The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the Registrant's annual report pursuant to II-4 Section 13(a) or 15(d) of the Securities Exchange Act of 1934 that is incorporated by reference in the Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (h) Insofar as indemnification for liabilities arising under the Securities Act of 1933 (the "Act") may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. II-5 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this registration statement to be signed on its behalf by the undersigned thereunto duly authorized, in Denver, Colorado, on December 2, 1999. TIME WARNER TELECOM INC. By: /s/ David J. Rayner ____________________________________ Name: David J. Rayner Title: Senior Vice President and Chief Financial Officer Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed below by the following persons in the capacities and on the date indicated.
Signature Title Date --------- ----- ---- (i) Principal Executive Officer: /s/ Larissa L. Herda ____________________________ President and Chief Executive Officer December 2, Larissa L. Herda and Director 1999 (ii) Principal Financial Officer: /s/ David J. Rayner ____________________________ Senior Vice President and Chief December 2, David J. Rayner Financial Officer 1999 (iii) Principal Accounting Officer: /s/ Jill Stuart ____________________________ Vice President, Accounting and Finance December 2, Jill Stuart and Chief Accounting Officer 1999 (iv) Directors: /s/ Glenn A. Britt ____________________________ Glenn A. Britt Director December 2, 1999 /s/ Bruce Claflin ____________________________ Director December 2, Bruce Claflin 1999
II-6
/s/ Richard J. Davies ____________________________ Richard J. Davies Director December 2, 1999 /s/ Spencer Hays ____________________________ Spencer Hays Director December 2, 1999 /s/ Larissa L. Herda ____________________________ Larissa L. Herda Director December 2, 1999 /s/ Douglas Holmes ____________________________ Douglas Holmes Director December 2, 1999 /s/ Lisa Hook ____________________________ Lisa Hook Director December 2, 1999 /s/ Stephen A. McPhie ____________________________ Stephen A. McPhie Director December 2, 1999 /s/ Robert J. Miron ____________________________ Robert J. Miron Director December 2, 1999 /s/ Audley M. Webster ____________________________ Audley M. Webster Director December 2, 1999
II-7 EXHIBIT INDEX
Exhibit Description Page ----------- ---- 4.1 Restated Certificate of Incorporation of the Registrant as filed * with the Secretary of State of the State of Delaware on May 10, 1999 (which is incorporated herein by reference to Exhibit 3.1 to the Registrants' Registration Statement on Form S-1 as filed with the SEC on May 11, 1999 (Registration No.333-49439) 4.2 By-laws of the Registrant as of May 10, 1999 (which are * incorporated herein by reference to Exhibit 3.2 to the Registrant's 1999 S-1 as filed with the SEC on May 11, 1999 (Registration No.333-49439). 4.3 Time Warner Telecom 2000 Qualified Stock Purchase Plan 5 Opinion of Holland & Hart LLP regarding the legality of the securities being registered. 23.1 Consent of Ernst & Young LLP, Independent Auditors. 23.2 Consent of Holland & Hart LLP (which is incorporated herein by * reference to Exhibit 5)
- ------------------------------- * Incorporated by reference II-8 EX-4.3 2 2000 QUALIFIED STOCK PURCHASE PLAN Exhibit 4.3 TIME WARNER TELECOM 2000 QUALIFIED STOCK PURCHASE PLAN 1. Purpose. The purpose of the Time Warner Telecom 2000 Qualified Stock ------- Purchase Plan (the "Plan") is to facilitate capital accumulation by Eligible Employees in the form of Common Stock of the Company and thereby to provide employee identification with and commitment to the goals of the Company. The Company intends that the Plan qualify as an "employee stock purchase plan" under section 423 of the Code. The provisions of the Plan shall be construed so as to extend and limit participation in a manner consistent with the requirements of that section of the Code. 2. Definitions. Whenever used in this Plan: ----------- A. "Board of Directors" means the Board of Directors of Time Warner Telecom. B. "Code" means the Internal Revenue Code of 1986, as amended. C. "Committee" means the Human Resources & Benefits Committee of Time Warner Telecom, or any other individual or committee that has been delegated the authority to act by and on behalf of the Human Resources & Benefits Committee, or the Board of Directors if there is no Committee. D. "Common Stock" means the Class A Common Stock, par value $.01 per share, of the Company. E. "Company" means Time Warner Telecom Inc. and any subsidiary thereof. F. "Compensation" means: in the case of a salaried employee, the base salary in effect for the employee on the respective Date of Offering annualized; in the case of an employee paid on an hourly basis, the rate of pay in effect for the employee on the respective Date of Offering times the number of hours scheduled to be worked for the year; and in the case of a sales-based or commissioned employee, the base salary in effect for the employee on the respective Date of Offering annualized plus the average of the commissions paid to the employee for the six-month period ending on the May 31 or November 30 immediately preceding the Date of Offering annualized. G. "Date of Offering" means January 1, 2000 and thereafter each July 1 and January 1. H. "Eligible Employee" means any person who is a regular employee scheduled to work at least 20 hours per week on a regular basis as of a Date of Offering during the term of this Plan. Provided, however, that "Eligible Employee" shall not include any person who immediately prior to the offering on a Date of Offering: (i) is a director of the Company; or (ii) would be deemed for purposes of Code (S) 423(b)(3) to own stock possessing five percent (5%) or more of the total combined voting power or value of all classes of stock of the Company. In the sole discretion of the Board of Directors, all employees who would be deemed to be "insiders" pursuant to Section 16 of the Securities Exchange Act of 1934 may be excluded from the definition of "Eligible Employee" for purposes of any one or more offerings under Section 4 of the Plan. I. "Market Price" means the closing sale price for Common Stock (as reported in the NASDAQ National Market Issues listing published in The Wall Street Journal) on a given day or, if no sales of Common Stock were made on that day, on the next preceding day on which sales were made and prices reported. If the Common Stock of the Company is not admitted to trading on a public market on the dates for which closing prices of the Common Stock are to be determined, then reference shall be made to the fair market value of the Common Stock on that date, as determined on such basis as shall be established or specified by the Committee and/or the Board of Directors. J. "Offering Price" means eighty-five percent (85%) of the Market Price of Common Stock on a Date of Offering. K. "Plan" means the Time Warner Telecom 2000 Qualified Stock Purchase Plan. L. "Purchase Period" means the period of January 1, 2000 to June 30, 2000 and thereafter each semi-annual period commencing on July 1 or January 1 of each year, during and with respect to which periods payroll deductions may be made from the Compensation of Eligible Employees accepting an option under an offering hereunder for the period then ending. M. "Purchase Price" means the aggregate purchase price for the Common Stock subject to an Eligible Employee's option, calculated by multiplying the number of shares of Common Stock for which the Eligible Employee accepted an option pursuant to Section 5A by the Offering Price or the Alternative Offering Price (as defined in Section 11), whichever is applicable. 3. Scope of the Plan. Options to purchase shares of Common Stock may be ----------------- granted by the Company to Eligible Employees during the no more than five year period commencing January 1, 2000, as hereinafter provided, but not more than 750,000 shares of Common Stock (subject to adjustment as provided in Paragraph 15) shall be purchased pursuant to such options. All options granted pursuant to this Plan shall be subject to the same terms, conditions, rights and privileges. The shares of Common Stock delivered by the Company pursuant to this Plan may be treasury shares, newly issued shares, or both. If a registration statement or other exemption from registration is not then in effect under the 2 Securities Act of 1933 (the "Securities Act"), the Plan shall in all cases be administered to comply with Rule 701 of the Securities Act as then in effect. 4. Offerings. Subject to the terms and conditions of this Plan, the Board of --------- Directors through the Committee shall make an offering on January 1, 2000 (the initial Date of Offering) to Eligible Employees to purchase Common Stock under this Plan on June 30, 2000, and thereafter such offering shall be as of each subsequent Date of Offering to Eligible Employees to purchase Common Stock under this Plan on the last day of each subsequent Purchase Period. The terms and conditions for each such offering shall specify such information as the Committee may deem appropriate, including (i) the aggregate number of shares of Common Stock available for purchase under the Plan with respect to that offering, (ii) the Offering Price of those shares, and (iii) the number of shares of Common Stock available for purchase under the Plan by an individual with respect to that offering. 5. Amount of Common Stock Each Eligible Employee May Purchase. ---------------------------------------------------------- A. Anything herein to the contrary notwithstanding, subject to the provisions of this Plan, and as to any offering made hereunder, each Eligible Employee shall be offered an option to purchase the number of shares of Common Stock which has on the Date of Offering a Purchase Price (determined on the basis of the Offering Price) equal to the amount designated by the Eligible Employee which is the lesser of: (i) from one percent (1%) to fifteen percent (15%) (in whole percentage points) of his or her Compensation as of the Date of Offering, or (ii) the amount of Compensation that would be required to purchase a maximum number of shares of Common Stock established by the Committee as of each Date of Offering. B. Anything herein to the contrary notwithstanding, if any Eligible Employee offered an option to purchase shares of Common Stock hereunder would be deemed for the purposes of Code (S)(S) 423(b)(3) and 424(d) to own stock (including the maximum number of shares of Common Stock covered by the option determined pursuant to the foregoing formula) possessing five percent (5%) or more of the total combined voting power or value of all classes of stock of the Company, the maximum number of shares of Common Stock covered by the option shall be reduced to that number of shares which, when added to the stock which such person is so deemed to own (excluding the maximum number of shares of Common Stock covered by the option determined pursuant to the foregoing formula), is less than such five percent (5%). C. Anything herein to the contrary notwithstanding, no Eligible Employee may be granted an option under this Plan which (within the meaning of the limitation provided by Code (S) 423(b)(8)) would permit his or her rights to purchase stock under all qualified employee stock purchase plans of the Company to accrue at a rate in excess of $25,000 of fair market value of the Common Stock (as of the time of grant) for each calendar year for which such option is outstanding at any time. If such be the case with respect to an option under this Plan determined pursuant to the foregoing formula, such option shall be reduced to cover only the 3 greatest number of shares an option for which may be granted within the limitation provided by Code (S) 423(b)(8). D. If Eligible Employees elect, in any one offering, to accept options to an extent which would result (if options were granted on that basis) in the granting of options for that offering to purchase more than the aggregate number of shares of Common Stock specified by the Committee for that offering, the Committee shall adjust such options on a pro rata basis, in accordance with the number of shares of Common Stock actually subscribed for by each such Eligible Employee, so that the aggregate number of shares subject to purchase under that offering does not exceed such specified number of shares. 6. Method of Participation. ----------------------- A. The Committee shall give notice to Eligible Employees of each offering of options to purchase shares of Common Stock pursuant to Paragraph 4 of this Plan and the terms and conditions for each offering, including the Purchase Price for the shares subject to the option to be offered to each Eligible Employee, and such other information as the Committee may determine. Such notice is subject to revision by the Company at any time prior to the Date of Offering, which is the date of grant of the option. B. Each Eligible Employee who, in accordance with Paragraph 5.A above, desires to accept all or any part of the option to purchase shares of Common Stock under an offering shall signify his or her election to do so on a date on or before the Date of Offering, as specified in the notice of offering provided to Eligible Employees pursuant to Paragraph 4. The notice of election, or a cancellation or any revision of such notice of election, shall be in writing in the form and manner prescribed by the Committee and shall be signed by the Eligible Employee. Each such Eligible Employee also shall authorize the Company, in the form and manner prescribed by the Committee, to make payroll deductions to cover the Purchase Price of those shares of Common Stock for which he or she has elected to accept an option. Such election and authorization shall continue in effect, unless and until such Eligible Employee withdraws from this Plan, modifies his or her authorization and designation, or terminates his or her employment with the Company, as hereinafter provided. C. Following each Date of Offering, the Company shall, as soon as practicable, provide each Eligible Employee accepting an option under the offering a notice confirming the number of shares covered by such option, the per share and aggregate Offering Price, any reduction in accordance with Paragraph 5 above, and the resulting amount of periodic payroll deductions. D. Any Eligible Employee who shall not make a timely election as provided in Paragraph 6.B above, shall be deemed to have elected not to accept any part of such option. Such election shall be irrevocable for such offering. 7. Payroll Deductions. ------------------ 4 A. The Offering Price for those shares of Common Stock as to which each Eligible Employee has elected to accept the option offered to him or her shall, during the Purchase Period, be deducted from the Eligible Employee's Compensation through payroll deductions, in substantially equal installments. Such payroll deduction periods shall commence with the first applicable payroll period beginning in the Purchase Period and shall continue until the last payroll period of the Purchase Period. B. In the event the amount of payroll deductions during a Purchase Period credited to the account of an Eligible Employee participating in this Plan is, because of leave of absence, temporary lay-off, temporary disability or any other reason (other than reduction as provided in Paragraph 8, withdrawal as provided in Paragraph 9 or termination of employment as provided in Paragraph 10) not sufficient to permit the purchase of the total number of shares of Common Stock for which he or she has accepted an option, the Eligible Employee may at any time prior to conclusion of the Purchase Period make a payment to the Company in one lump sum of all or any portion of the shortfall amount. To the extent of any remaining shortfall, the number of shares of Common Stock subject to purchase under the Eligible Employee's option shall be reduced automatically to that number of shares which his or her account, at the conclusion of the Purchase Period, is sufficient to purchase. The cash balance, if any, shall be refunded to the Eligible Employee without interest. 8. Right to Reduce or Stop Deductions. An Eligible Employee who has accepted ---------------------------------- an option to purchase shares of Common Stock may, at any time prior to the 30th day before the last day of the Purchase Period, direct the Company to (i) reduce his or her payroll deduction, or (ii) make no further deductions. Upon either of such actions, payroll deductions with respect to such option shall be reduced or discontinued. If the employee has directed that payroll deductions be reduced or discontinued, any sum previously deducted in respect of the offering shall be retained by the Company until the end of the Purchase Period, and shall be applied, along with any additional deductions at the reduced rate, to the exercise of the employee's option as provided in Paragraph 11. Any Eligible Employee who stops payroll deductions may not thereafter resume payroll deductions for the Purchase Period, and any Eligible Employee who decreases payroll deductions may not thereafter further decrease or increase such contributions, except that he or she may stop such contributions during the Purchase Period. Notification of an Eligible Employee's election to reduce or terminate deductions to cancel an option or otherwise withdraw funds shall be made by the filing of an appropriate notice to such effect with the Committee. 9. Right to Withdraw. In addition to the reduction or cessation of ----------------- contributions in Paragraph 8, any Eligible Employee may direct the Company to cancel the entire option prior to the 30th day before the last day of the Purchase Period or request return of any portion of his or her account. If the employee has so directed, the Company shall stop automatically any payroll deduction for the employee and shall, as soon as practicable, refund all requested amounts credited to the account of such employee with respect to the applicable offering. Notification of an Eligible Employee's election to cancel an option or 5 otherwise withdraw funds shall be made by the filing of an appropriate written and signed notice to such effect with the Committee. 10. Termination of Employment. ------------------------- A. In the event the employment of an Eligible Employee who has accepted an option to purchase shares of Common Stock is terminated prior to conclusion of the Purchase Period, because of death, permanent disability, or retirement at or after age 65 (or earlier with the Company's consent), the employee (or his or her legal representative, if applicable) may either: (1) cancel the option, in which event the Company shall, as soon as practicable, refund all amounts credited to his or her account under any offering in which he or she is participating under this Plan; or (2) elect to receive at the conclusion of the Purchase Period that number of whole shares of Common Stock (not to exceed the shares subject to the option, as the same may be adjusted hereunder) which those payroll deductions actually made are sufficient to purchase, plus the cash balance credited to his or her account, if any. For purposes of this paragraph, "permanent disability" shall mean "disability" as defined under the Company's long term disability plan or insurance policy as then in effect. In the absence of such plan or policy, "permanent disability" shall mean the inability of an individual to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months. The Committee may request reasonable proof of disability. B. The election of an Eligible Employee (or his or her legal representative, if applicable) pursuant to Paragraph 10.A above, shall be made within three (3) months of the event causing the termination of employment, but not later than the conclusion of the Purchase Period (except in the case of death). Written and signed notification of the election shall be filed with the Committee and, in the event no notification has been filed within the prescribed period, the Company shall act in accordance with provision 10.A(1) above. C. In the event the employment of an Eligible Employee who has accepted an option to purchase shares of Common Stock is terminated for any reason other than those specified in Paragraph 10.A, the Company shall, as soon as practicable, refund all amounts credited to his or her account without payment of interest under any offering in which he or she is participating under this Plan and such former employee shall have no right to purchase Common Stock under this Plan. Any Eligible Employee who is on a leave of absence for longer than ninety (90) days and whose reemployment is not guaranteed either by statute or by contract shall be deemed to have terminated employment for purposes of this Plan on the ninety-first (91) day of such absence. 6 11. Exercise of Option and Purchase of Shares. As of the last day of the ----------------------------------------- Purchase Period, the Committee shall determine an Alternative Offering Price, which shall be eighty-five percent (85%) of the Market Price of the Common Stock on such last day of the Purchase Period. Unless an Eligible Employee who has accepted an option under the offering has subsequently withdrawn from the offering pursuant to Paragraph 9 or 10.A(1) hereof, his or her option shall be deemed to have been exercised as of the last day of the applicable Purchase Period and become on such date an irrevocable obligation to purchase Common Stock in accordance with the provisions of this Plan. The number of shares of Common Stock so purchased by each such Eligible Employee shall be determined by dividing the amount accumulated in his or her account during the Purchase Period by the lower of either the Offering Price or the Alternative Offering Price. Provided, however, in no event shall the number of shares so determined and purchased by an Eligible Employee exceed the total number of shares originally covered by his or her option in accordance with Paragraph 6. Any the difference between the amount deducted under paragraphs 6B and 7 and the Purchase Price will be refunded to the Eligible Employee, without payment of interest. As soon as practicable thereafter, the Committee shall establish an account with a brokerage firm reflecting the ownership of the shares of Common Stock, determined as aforesaid, purchased by each Eligible Employee. Notwithstanding the foregoing, with an employee's written and signed election, certificates for the number of whole shares of Common Stock purchased by the employee shall be issued and delivered to him or her (for a reasonable fee as determined under the terms of the Company's administrative contract with the brokerage firm). No certificates for fractional shares will be issued under the Plan or any option. 12. Rights as a Stockholder. An Eligible Employee who has accepted an option ----------------------- to purchase shares of Common Stock under this Plan shall not be entitled to any of the rights or privileges of a stockholder of the Company with respect to such shares, including the right to receive any dividends which may be declared by the Company, until such time as he or she actually has paid the Purchase Price for such shares and certificates have been issued to him or her in accordance with Paragraph 11 hereof. 13. Rights Not Transferable. An Eligible Employee's rights under this Plan ----------------------- and options accepted by him or her hereunder are exercisable only by the Eligible Employee during his or her lifetime, and may not be sold, pledged, assigned or transferred in any manner other than by will or the laws of descent and distribution. Any attempt to sell, pledge, assign or transfer the same shall be void, and automatically shall cause the option held by the Eligible Employee to be terminated. In such event, the Company shall refund all remaining amounts credited to the account of such Eligible Employee under this Plan. 14. Administration of the Plan. -------------------------- A. This Plan shall be administered by the Committee, which is authorized to make such uniform rules as may be necessary to carry out its provisions. The Committee shall determine any questions arising in the administration, interpretation and application of this Plan, and all such determination shall be conclusive and binding on all parties. 7 B. If any option under this Plan shall be canceled, lapse or terminate unexercised, the number of shares of Common Stock covered thereby shall again become available for sale under this Plan during subsequent Purchase Periods. C. In applying any provision of the Plan that provides for a refund of monies to an Eligible Employee, such refund will be issued in accordance with the payroll practices of the Company, but not more frequently than once per month. 15. Adjustment Upon Changes in Capitalization. In the event of any change in ----------------------------------------- the Common Stock of the Company by reason of stock dividends, split-ups, corporate separations, recapitalizations, mergers, consolidations, combinations, exchanges of shares and the like, the aggregate number and class of shares available under this Plan and the number, class and Offering Price of shares under option but not yet purchased under this Plan, shall be adjusted appropriately by the Committee. 16. Registration of Certificates. Stock certificates may be registered in ---------------------------- the name of the Eligible Employee, or, if he or she so designates, in the Eligible Employee's name jointly with another individual, with right of survivorship. 17. Amendment of Plan. The Board of Directors may at any time amend this ----------------- Plan in any respect which shall not adversely affect the rights of Eligible Employees pursuant to options accepted under the Plan, except that, without stockholder approval on the same basis as required by paragraph 21.A, no amendment shall be made (i) increasing the number of shares to be reserved under this Plan, (ii) decreasing the Offering Price, or (iii) changing employees eligible to participate in the Plan. Plan amendments may be communicated to Eligible Employees by Company mail, Company electronic mail or by posting a copy of the amended plan on the Company's intranet or public drive. Upon request, the Company will provide an Eligible Employee with a paper copy of the Plan, as amended to the date of request. 18. Termination of the Plan. This Plan shall consist of an offering ----------------------- commencing January 1, 2000 and ending June 30, 2000, and thereafter consecutive semi-annual offerings beginning on the next subsequent July 1 and January 1 of each year. All rights of Eligible Employees in any offering hereunder shall terminate at the earlier of the conclusion of the last Purchase Period authorized herein on the fifth anniversary of five years after effective date or: A. On the day that Eligible Employees participating in offerings made under this Plan become entitled to purchase a number of shares of Common Stock equal to or greater than the number of shares remaining available for purchase; or B. At any time, at the discretion of the Board of Directors after thirty (30) days' notice has been given to the employees. Upon termination of this Plan, shares of Common Stock shall be issued to Eligible Employees in accordance with Paragraph 10.A, and cash, if any, remaining in the accounts of the Eligible Employees shall be refunded to them without payment of interest, as if the Plan were terminated at the end of a Purchase Period. 8 19. Governmental Regulations and Listing. All rights granted or to be ------------------------------------ granted to Eligible Employees under this Plan are expressly subject to all applicable laws and regulations and to the approval of all governmental authorities required in connection with the authorization, issuance, sale or transfer of the shares of Common Stock reserved for this Plan, including, where applicable and without limitation, there being a current registration statement of the Company under the Securities Act of 1933, as amended, covering the shares of Common Stock purchasable under options on the last day of the Purchase Period applicable to such options, options (and if such a registration statement shall not be effective at such time as it is required to be, the term of such options and the Purchase Period may, at the Company's sole discretion, be extended as the Company deems appropriate) or there being an exemption from registration available in the Company's sole judgment. If applicable, all such rights hereunder are also similarly subject to effectiveness of an appropriate listing application to the NASDAQ Stock Market, a national stock exchange, or other public market on which the Common Stock trades covering the shares of Common Stock under the Plan upon official notice of issuance. 20. Tax Consequences. No income is recognized by an Eligible Employee when ---------------- the option is granted, or when the option is exercised. However, the Eligible Employee must include as ordinary taxable income at the time of sale or other taxable disposition of the Common Stock, the 15% discount of the option price (equal to the lesser of: (1) the amount, if any, by which the fair market value of the Common Stock when the option was granted exceeds the option price; or (2) the amount, if any, by which the Common Stock's fair market value at the time of such disposition or death exceeds the exercise price paid). In general, the Eligible Employee also will recognize capital gain on any increase in fair market value in the Common Stock (in excess of the Employee's basis in the Common Stock), if the disposition occurs at least two years after the date on which the option is granted and if the Eligible Employee has held the Common Stock at least twelve months (the "Holding Period"). If the Eligible Employee disposes of the Common Stock acquired by an exercise of an option under the Plan before the expiration of the Holding Period, the Eligible Employee must recognize as ordinary compensation income in the year of the disposition the difference between the Common Stock's option price and the fair market value on the date exercised. 21. Miscellaneous. ------------- A. This Plan shall be submitted for approval by the stockholders of the Company no later than 12 months from the date of adoption of the Plan by the Board of Directors in accordance with standard corporate procedures. Exercise of options accepted prior thereto is subject to the condition that prior to such date this Plan shall be approved by such stockholders in the manner contemplated by Code (S) 423(b)(2). If not so approved prior to such date, this Plan shall terminate, all options hereunder shall be canceled and be of no further force or effect, and the Company shall, as soon as practicable, refund to all Eligible Employees, all sums credited to their respective accounts in accordance with Paragraph 7 hereof without payment of interest. B. This Plan shall not be deemed to constitute a contract of employment between the Company and any Eligible Employee, nor shall it interfere with the 9 right of the Company to terminate any Eligible Employee and treat him or her without regard to the effect which such treatment might have upon him or her under this Plan. C. This Plan shall be construed and its provisions enforced and administered in accordance with the laws of the State of Colorado, and in accordance with the applicable provisions of Code (S)(S) 421 and 423 and all related Code sections applicable to a qualified "employee stock purchase plan." D. Wherever appropriate as used herein, the masculine gender may be read as the feminine gender, the feminine gender may be read as the masculine gender, the singular may be read as the plural and the plural may be read as the singular. E. If any one or more of the terms, conditions or provisions or any part hereof contained in this Plan shall for any reason or to any extent be held invalid, illegal or unenforceable by any court or governmental agency of competent jurisdiction, such invalidity, illegality or unenforceability shall not affect the remainder of such terms, conditions or provisions, or any other provision of this Plan, and this Plan shall be construed as if the invalid, illegal or unenforceable term, condition or provision had never been contained herein, and each term, condition or provision shall be valid and enforced to the fullest extent permitted by law. IN WITNESS WHEREOF, the duly authorized representatives of the Company have executed this Plan. TIME WARNER TELECOM INC. Plan Sponsor By: /s/ Julie A. Rich ------------------------------ Title: Sr. Vice President of Human Resources & Business Administration Date: December 1, 1999 DENVER:0910392.09 10 EX-5 3 OPINION OF HOLLAND & HART LLP Exhibit 5 December 1, 1999 Board of Directors Time Warner Telecom Inc. 10475 Park Meadows Drive Littleton, CO 80124 To the Board of Directors: As counsel for Time Warner Telecom Inc. (the "Company"), a Delaware corporation, we have examined and are familiar with its Certificate of Incorporation, its Bylaws and its various corporate records and procedures relating to its incorporation. We are also familiar with the procedures taken by the Board of Directors of the Company to adopt the Time Warner Telecom 2000 Qualified Stock Purchase Plan (the "Plan"). Pursuant to the terms and conditions set forth in the Plan, the Company may issue and sell up to 750,000 shares of its Common Stock (par value $.01 per share), respectively, subject to possible adjustment, to eligible employees of the Company and its subsidiaries. The Plan specifically requires shareholder approval of the Plan within 12 months from the date of adoption of the Plan by the Board of Directors of the Company. We also have examined such other matters and have made such other inquiries as we deem relevant to our opinions expressed below. We are of the opinion that the total 750,000 shares of Common Stock of the Company, when issued in accordance with the Plan after shareholder approval of the Plan, will be legally issued and validly outstanding shares of the Common Stock of the Company, fully paid and non-assessable; provided, that the consideration for each share is not less than the par value thereof. We hereby consent to the filing of this opinion with the Securities and Exchange Commission as an Exhibit to the Company's Registration Statement on Form S-8 in connection with the Plan, and any amendments thereto. Very truly yours, Holland & Hart LLP DENVER:0957458.01 EX-23.1 4 CONSENT OF ERNST & YOUNG LLP EXHIBIT 23.1 CONSENT OF INDEPENDENT AUDITORS We consent to the incorporation by reference of our report dated February 5, 1999, with respect to the combined financial statements and schedule of Time Warner Telecom LLC, predecessor to Time Warner Telecom Inc., included in its Annual Report (Form 10-K) for the year ended December 31, 1998, filed with the Securities and Exchange Commission, in the Registration Statement (Form S-8) pertaining to the Time Warner Telecom 2000 Qualified Stock Purchase Plan. /s/ Ernst & Young LLP Denver, Colorado December 1, 1999 -----END PRIVACY-ENHANCED MESSAGE-----