SEC Filings

S-4/A
TIME WARNER INC. filed this Form S-4/A on 03/24/2000
Entire Document
 
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  .  Time Warner materially breaches its obligations under the merger
     agreement because of its failure to call a special meeting of its
     stockholders to vote on the adoption of the merger agreement or its
     failure to mail this joint proxy statement-prospectus to its
     stockholders;
   
then Time Warner must pay America Online an amount equal to 2.75% of the Time
Warner Termination Amount, as described below. In addition, Time Warner must
pay America Online an amount equal to 1% of the Time Warner Termination Amount
if either party terminates the merger agreement because the approval of the
stockholders of Time Warner is not obtained; except that this amount need not
be paid if the termination fee has otherwise been paid in connection with the
termination of the merger agreement as described in the previous sentence.     
 
"Time Warner Termination Amount" means an amount equal to the product of:
 
     (x) the number of shares of common stock of Time Warner outstanding as
  of January 10, 2000, the date of the merger agreement, assuming the
  exercise of all outstanding options, other than the option granted to
  America Online, and the conversion into Time Warner common stock of all
  securities of Time Warner convertible into Time Warner common stock;
  multiplied by
 
     (y) 1.5; multiplied by
     
     (z) the last sale price of common stock of America Online on the New
  York Stock Exchange on January 7, 2000.     
   
   For example, consider the case in which either America Online or Time Warner
terminates the merger agreement because the approval of the Time Warner
stockholders is not obtained. Time Warner must pay to America Online:     
     
  .  an amount equal to 2.75% of the Time Warner Termination Amount if:     
       
    .  at any time prior to the termination of the merger agreement, an
       Acquisition Proposal with respect to Time Warner was publicly
       announced or otherwise communicated to Time Warner; and     
       
    .  within 12 months after the termination of the merger agreement, Time
       Warner or any of its subsidiaries enters into a definitive agreement
       with respect to, or consummates, an Acquisition Proposal involving
       40% or more of consolidated assets of Time Warner and its
       subsidiaries or 40% or more of the total voting power of Time
       Warner, or the surviving or parent entity in the transaction, or any
       of its significant subsidiaries;     
      
   otherwise     
     
  .  an amount equal to 1% of the Time Warner Termination Amount, unless Time
     Warner has previously paid a termination fee to America Online, in which
     case no additional fee will be payable.     
   
   Next, consider the case in which either America Online or Time Warner
terminates the merger agreement because the merger is not completed on or
before May 31, 2001 and the Time Warner special meeting has not occurred. Time
Warner must pay to America Online an amount equal to 2.75% of the Time Warner
Termination Amount if:     
     
  .  at any time prior to the termination of the merger agreement, an
     Acquisition Proposal with respect to Time Warner was publicly announced
     or otherwise communicated to Time Warner; and     
     
  .  within 12 months after the termination of the merger agreement, Time
     Warner or any of its subsidiaries enters into a definitive agreement
     with respect to, or consummates, an Acquisition Proposal involving 40%
     or more of consolidated assets of Time Warner and its subsidiaries or
     40% or more of the total voting power of Time Warner, or the surviving
     or parent entity in the transaction, or any of its significant
     subsidiaries.     
 
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