SEC Filings

S-4/A
TIME WARNER INC. filed this Form S-4/A on 03/24/2000
Entire Document
 
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Stock Option Agreements
 
   The following summary of the stock option agreements is qualified in its
entirety by reference to the complete text of the stock option agreements,
which are incorporated by reference and attached as Annexes B and C to this
joint proxy statement-prospectus. We urge you to read the full text of the
stock option agreements.
 
   In connection with the execution and delivery of the merger agreement,
America Online and Time Warner entered into:
 
  .  the Time Warner stock option agreement, under which Time Warner granted
     to America Online an irrevocable option to purchase, in whole or in
     part, an aggregate of up to 233,263,204 shares of Time Warner common
     stock at a price of $110.63 per share; and
 
  .  the America Online stock option agreement, under which America Online
     granted to Time Warner an irrevocable option to purchase, in whole or in
     part, an aggregate of up to 452,535,148 shares of America Online common
     stock at a price of $73.75 per share.
 
   Exercise of the Options. The option granted by Time Warner to America Online
pursuant to the Time Warner stock option agreement may be exercised, in whole
or in part, at any time, after the date on which America Online becomes
unconditionally entitled to receive the larger of the two Time Warner
termination fees pursuant to the merger agreement. Similarly, the option
granted by America Online to Time Warner pursuant to the America Online stock
option agreement may be exercised, in whole or in part, at any time, after the
date on which Time Warner becomes unconditionally entitled to receive the
larger of the two America Online termination fees pursuant to the merger
agreement.
 
   The right to purchase shares of common stock under each of the Time Warner
stock option agreement and the America Online stock option agreement will
expire on the first to occur of:
 
  .  the completion of the merger;
 
  .  written notice of termination of the Time Warner stock option agreement
     by America Online or written notice of termination of the America Online
     stock option agreement by Time Warner, as the case may be;
 
  .  in the case of the Time Warner stock option agreement, 12 months after
     the date on which America Online becomes unconditionally entitled to
     receive the larger of the two Time Warner termination fees and, in the
     case of the America Online stock option agreement, 12 months after the
     date on which Time Warner becomes unconditionally entitled to receive
     the larger of the two America Online termination fees; or
 
  .  the date of termination of the merger agreement, unless:
 
    .  in the case of the Time Warner stock option agreement, America
       Online has the right to receive the larger Time Warner termination
       fee either upon or following the termination of the merger agreement
       upon the occurrence of certain events, in which case the right to
       purchase shares of common stock under the Time Warner stock option
       agreement will not terminate until the later of:
 
      .  15 business days after the option becomes exercisable; and
 
      .  the expiration of the period in which America Online has the
         right to receive the larger Time Warner termination fee; and
     
  .  in the case of the America Online stock option agreement, Time Warner
     has the right to receive the larger America Online termination fee
     either upon or following the termination of the merger agreement upon
     the occurrence of certain events, in which case the right to purchase
     shares of common stock under the America Online stock option agreement
     will not terminate until the later of:     
 
    .  15 business days after the option becomes exercisable; and
 
    .  the expiration of the period in which Time Warner has the right to
       receive the larger America Online termination fee.
 
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