SEC Filings

S-4
TIME WARNER INC. filed this Form S-4 on 02/11/2000
Entire Document
 
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Treatment of Stock Options and Restricted Stock (see page 58)
 
   America Online. 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 (1) their normal vesting date, (2) the first anniversary
of the completion of the merger and (3) the employee's termination without
cause or constructive termination.
 
   Time Warner. When the merger is completed, 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, by its terms, became fully vested and free of
restrictions.
 
Tax Consequences (see page 59)
 
   We have structured the merger so that America Online, Time Warner and their
respective stockholders who exchange their shares for shares of AOL Time Warner
capital stock will not recognize gain or loss for United States federal income
tax purposes in connection with the merger, except for taxes payable because of
cash received by Time Warner stockholders instead of fractional shares.
 
Overview of the Merger Agreement (see page 64)
 
   Conditions to the Completion of the Merger. Each of America Online's and
Time Warner's obligation to complete the merger is subject to the satisfaction
or waiver of specified conditions, including those listed below:
 
  .  the merger agreement must be adopted by both the America Online and Time
     Warner stockholders;
 
  .  no law, injunction or order preventing the completion of the merger may
     be in effect;
 
  .  the applicable waiting period under U.S. antitrust laws must expire or
     be terminated;
 
  .  we must obtain other regulatory approvals from domestic and foreign
     governmental entities;
 
  .  the shares of AOL Time Warner common stock to be issued in the merger
     must have been approved for listing on the New York Stock Exchange;
 
  .  we must have complied with our respective covenants in the merger
     agreement;
 
  .  our respective representations and warranties in the merger agreement
     must be true and correct; and
 
  .  we must each receive an opinion of tax counsel to the effect that the
     merger will qualify as a tax-free exchange or reorganization.
 
 
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