SEC Filings

S-4/A
TIME WARNER INC. filed this Form S-4/A on 03/24/2000
Entire Document
 
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  2.8. Time Warner Stock Options and Other Equity-Based Awards.
 
   (a) Each Time Warner Stock Option (as defined in Section 4.2(b)) granted
prior to the Effective Time and which remains outstanding immediately prior to
the Effective Time shall cease to represent a right to acquire shares of Time
Warner Common Stock and shall be converted (each, as so converted, a "Time
Warner Converted Option"), at the Effective Time, into an option to acquire, on
the same terms and conditions as were applicable under the Time Warner Stock
Option (but taking into account any changes thereto, including the acceleration
thereof, provided for in the Time Warner Stock Option Plans (as defined in
Section 4.2(b)), in any award agreement or in such option by reason of this
Agreement or the transactions contemplated hereby), that number of shares of
Holdco Common Stock determined by multiplying the number of shares of Time
Warner Common Stock subject to such Time Warner Stock Option by the Exchange
Ratio, rounded, if necessary, to the nearest whole share of Holdco Common
Stock, at a price per share (rounded to the nearest one-hundredth of a cent)
equal to the per share exercise price specified in such Time Warner Stock
Option divided by the Exchange Ratio; provided, however, that in the case of
any Time Warner Stock Option to which Section 421 of the Code applies by reason
of its qualification under Section 422 of the Code, the option price, the
number of shares subject to such option and the terms and conditions of
exercise of such option shall be determined in a manner consistent with the
requirements of Section 424(a) of the Code.
 
   (b) Each restricted share of Time Warner Common Stock granted pursuant to
the Time Warner Stock Option Plans (each such share, a "Time Warner Restricted
Share" and, together with each other Time Warner Restricted Share outstanding
as of the date hereof and all other restricted shares granted by Time Warner
after the date hereof in accordance with the Time Warner Stock Option Plans and
Section 5.2, the "Time Warner Restricted Shares") which is outstanding
immediately prior to the Effective Time shall vest and become free of
restrictions to the extent provided by the terms thereof. Each award of Time
Warner Restricted Shares shall be converted, as of the Effective Time, into
that number of shares of Holdco Common Stock determined by multiplying the
number of shares subject to the award by the Exchange Ratio; and the aggregate
number of shares of Holdco Common Stock as so determined shall be delivered to
the respective holders of Time Warner Restricted Shares as soon as practicable
following the Effective Time. America Online acknowledges that the acceleration
of vesting as a result of the Time Warner Merger of all Time Warner Stock
Options outstanding as of January 9, 2000 in accordance with their terms shall
not constitute a Material Adverse Effect (as defined in Section 9.11(f)) on
Time Warner.
 
   (c) As soon as practicable after the Effective Time, Holdco shall deliver to
the holders of Time Warner Stock Options appropriate notices setting forth such
holders' rights pursuant to the respective Time Warner Stock Option Plans and
agreements evidencing the grants of such Time Warner Stock Options (including
that, in connection with the Time Warner Merger and to the extent provided by
the terms of the Time Warner Stock Option Plans, the Time Warner Stock Options
have become fully vested and exercisable) and stating that such Time Warner
Stock Options and agreements shall be assumed by Holdco and shall continue in
effect on the same terms and conditions (subject to the adjustments required by
this Section 2.8 after giving effect to the Time Warner Merger and the terms of
the Time Warner Stock Option Plans). To the extent permitted by law, Holdco
shall comply with the terms of the Time Warner Stock Option Plans and shall
take such reasonable steps as are necessary or required by, and subject to the
provisions of, such Time Warner Stock Option Plans, to have the Time Warner
Stock Options which qualified as incentive stock options prior to the Effective
Time continue to qualify as incentive stock options of Holdco after the
Effective Time.
 
   (d) Prior to the Effective Time, Holdco shall take all necessary action to
assume as of the Effective Time all obligations undertaken by, or on behalf of,
Holdco under this Section 2.8 and to adopt at the Effective Time the Time
Warner Stock Option Plans and each Time Warner Converted Option, and to take
all other actions called for by this Section 2.8, including the reservation,
issuance and listing of a number of shares of Holdco Common Stock at least
equal to the number of shares of Holdco Common Stock that will be subject to
Time Warner Converted Options. No later than the Effective Time, Holdco shall
file a registration statement on Form
 
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