SEC Filings

S-4/A
TIME WARNER INC. filed this Form S-4/A on 03/24/2000
Entire Document
 
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Interests of Certain America Online Directors and Executive Officers in the
Merger
 
   In considering the recommendation of the board of directors of America
Online to vote for the proposal to adopt the merger agreement, stockholders of
America Online should be aware that members of the America Online board of
directors and members of America Online's management team have agreements or
arrangements that provide them with interests in the merger that differ from
those of America Online stockholders. The America Online board of directors was
aware of these agreements and arrangements during its deliberations of the
merits of the merger and in determining to recommend to the stockholders of
America Online that they vote for the proposal to adopt the merger agreement.
 
   Governance Structure and Management Positions. Pursuant to the terms of the
merger agreement, upon completion of the merger:
 
  .  the board of directors of AOL Time Warner will be initially comprised of
     sixteen individuals, eight of whom will be designated by America Online
     and eight of whom will be designated by Time Warner; and
 
  .  each committee of the board of directors of AOL Time Warner will be
     initially comprised of two directors designated by America Online and
     two directors designated by Time Warner.
 
   The merger agreement also provides that, upon completion of the merger:
 
  .  Stephen M. Case, Chairman and Chief Executive Officer of America Online,
     will serve as Chairman of the Board of AOL Time Warner, and until
     December 31, 2003, he cannot be removed from this position, except upon
     a 75% vote of the entire AOL Time Warner board of directors;
 
  .  Robert W. Pittman, President and Chief Operating Officer of America
     Online, will serve as Co-Chief Operating Officer of AOL Time Warner; and
 
  .  J. Michael Kelly, Senior Vice President and Chief Financial Officer of
     America Online, will serve as Executive Vice President and Chief
     Financial Officer of AOL Time Warner.
   
   The chairman of the board of AOL Time Warner will have supervisory
responsibility over the functional areas of global public policy, particularly
with respect to the Internet, technology policy and future innovation, venture-
type investments and philanthropy, operating and discharging those
responsibilities with the assistance of the following officers reporting
directly to the chairman of the board: George Vradenburg, III, William J.
Raduchel, Kenneth J. Novack, and Kenneth B. Lerer, and those officers may be
appointed and removed only with the chairman of the board's approval or upon
action of the board of directors of AOL Time Warner.     
   
   As of January 10, 2000, the directors and executive officers of America
Online beneficially owned 38,933,662 shares, including stock options
exercisable within 60 days of January 10, 2000, representing approximately 1.7%
of the outstanding shares of America Online common stock.     
   
   America Online Employee Stock Options and Restricted Shares. As a result of
the completion of the merger, substantially all America Online employee stock
options and shares of restricted stock outstanding on January 10, 2000, by
their terms, will vest and become exercisable or free of restrictions, as the
case may be, upon the earliest to occur of their normal vesting date, the first
anniversary of the completion of the merger and the employee's termination
without cause or constructive termination. As of January 10, 2000, the number
of stock options or shares of restricted stock held by executive officers of
America Online that will vest or become free of restrictions totaled
44,062,667.     
 
   Pursuant to the terms of the merger agreement, each America Online employee
stock option outstanding immediately prior to the completion of the merger will
be converted, upon completion of the merger, into an option to acquire, on the
same terms and conditions, the same number of shares of AOL Time Warner common
stock at the same exercise price. Similarly, each restricted share of America
Online common stock outstanding immediately prior to the completion of the
merger will be converted, upon completion of the merger, into the same number
of restricted shares of AOL Time Warner common stock.
 
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