SEC Filings

S-4/A
TIME WARNER INC. filed this Form S-4/A on 03/24/2000
Entire Document
 
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   AOL Time Warner will only issue an AOL Time Warner stock certificate or a
check in lieu of a fractional share in a name other than the name in which a
surrendered America Online or Time Warner stock certificate is registered if
you present the exchange agent with all documents required to show and effect
the unrecorded transfer of ownership and show that you paid any applicable
stock transfer taxes.
 
Treatment of America Online and Time Warner Stock Options and Other Equity
Based Awards
   
   When the merger is completed, each outstanding America Online employee stock
option will be converted into an option to purchase shares of AOL Time Warner
common stock at an exercise price per share equal to the exercise price per
share of America Online common stock subject to the option before the
conversion. In addition, each outstanding restricted share of America Online
common stock will be converted into one restricted share of AOL Time Warner
common stock. 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.     
 
   Upon completion of the merger, each outstanding Time Warner stock option
will be converted into an option to purchase the number of shares of AOL Time
Warner common stock that is equal to the product of 1.5 multiplied by the
number of shares of Time Warner common stock that would have been obtained
before the merger upon the exercise of the option, rounded to the nearest whole
share. The exercise price per share will be equal to the exercise price per
share of Time Warner common stock subject to the option before the conversion
divided by 1.5. In addition, each outstanding restricted share of Time Warner
common stock will be converted into the number of restricted shares of AOL Time
Warner common stock that is equal to the product of 1.5 multiplied by the
shares of Time Warner common stock subject to the award. Each Time Warner stock
option outstanding on January 9, 2000, by its terms, accelerated and became
fully vested, and each share of restricted Time Warner common stock outstanding
on that date immediately vested, becoming free of restrictions.
 
   The other terms of each America Online and Time Warner option and restricted
shares, referred to above will continue to apply.
 
   AOL Time Warner will file a registration statement covering the issuance of
the shares of AOL Time Warner common stock subject to each America Online and
Time Warner option and restricted shares and will maintain the effectiveness of
that registration statement for as long as any of the options or restricted
shares remain outstanding.
 
Effect of the Merger on Outstanding America Online Convertible Notes
 
   As of December 31, 1999, America Online had outstanding two series of
convertible subordinated notes: (1) $248,971,000 aggregate principal amount of
4% convertible subordinated notes due November 15, 2002, and (2) $2,267,533,000
aggregate principal amount at maturity of zero coupon convertible subordinated
notes due 2019. On December 31, 1999, the underwriters exercised the
overallotment option on the notes due in 2019. As a result, America Online sold
additional notes with an aggregate principal amount at maturity of
approximately $55.6 million.
 
   The convertible notes due in 2002 were issued under an indenture dated as of
November 17, 1997 between America Online and State Street Bank and Trust
Company, as trustee. The indenture provides that after consummation of the
merger, the note holders will be entitled to convert their notes into the
number of shares of AOL Time Warner common stock that they would have received
in the merger if they had converted the notes into America Online common stock
immediately prior to the merger. If the notes are outstanding at the time the
merger is consummated, America Online and AOL Time Warner will enter into a
supplemental indenture to implement this modification in the conversion right
of the notes. The merger will not constitute a "change in control" as defined
in the indenture, which would give the note holders the right to require
America Online to repurchase the notes.
 
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