Assignability. Neither of the stock option agreements, nor any of the
rights, interests or obligations under them may be assigned by either of the
parties without the prior written consent of the other party.
Effect of Stock Option Agreements. The stock option agreements are intended
to increase the likelihood that the merger will be completed on the terms set
forth in the merger agreement. Consequently, the stock option agreements may
discourage persons who might be interested in acquiring all or a significant
interest in America Online or Time Warner before completion of the merger from
considering or proposing an acquisition, even if those persons were prepared to
offer higher consideration per share of Time Warner capital stock or America
Online common stock than the consideration implicit in the merger or a higher
price per share of Time Warner common stock or America Online common stock than
the stock market price.
The following summary of the voting agreement is qualified in its entirety
by reference to the complete text of the voting agreement, which is
incorporated by reference and attached as Annex D to this joint proxy
statement-prospectus. We urge you to read the full text of the voting
In connection with the execution and delivery of the merger agreement,
America Online entered into a voting agreement with R.E. Turner, Vice Chairman
of Time Warner, Turner Partners, L.P. and Turner Outdoor, Inc. under which
these principal stockholders agreed to vote substantially all their shares of
Time Warner common stock in favor of the adoption of the merger agreement. As
of the record date for the special meeting, these stockholders owned shares of
Time Warner common stock representing approximately [ ]% of the total voting
power of the outstanding shares of Time Warner capital stock.
The voting agreement prohibits, subject to limited exceptions, any
stockholder from selling, transferring, pledging, encumbering, assigning or
otherwise disposing of any shares of Time Warner capital stock, except to a
person who agrees in writing to be bound by the terms of the voting agreement.
The stockholders collectively may sell, transfer, pledge, encumber, assign or
otherwise dispose of an aggregate of up to 5% of the shares of Time Warner
common stock held of record by the stockholders collectively as of January 10,
2000, the date of the voting agreement, without complying with the restrictions
on transfers contained in the voting agreement.
The voting agreement terminates upon the earlier to occur of the completion
of the merger and the termination of the merger agreement in accordance with