UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
AMERICA ONLINE, INC.
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(Name of Issuer)
COMMON STOCK, PAR VALUE $0.01 PER SHARE
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(Title of Class of Securities)
02364J104
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(CUSIP Number)
Christopher P. Bogart, Esq.
Executive Vice President, General Counsel and Secretary
Time Warner Inc.
75 Rockefeller Center
New York, NY 10019
(212) 484-8000
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
JANUARY 10, 2000
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of ss.ss. 240.13d-1(e), 240.13d-1(f) or
240.13d-1(g), check the following box [ ].
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See ss. 240.13d-7(b) for other
parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities,
and for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purposes of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
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CUSIP No. 02364J104
1. Name of Reporting Person: Time Warner Inc.
I.R.S. Identification Number of Above
Person: 13-3527249
2. Check the appropriate Box if a Member of (a) [ ]
a Group
(b) [X]
3. SEC Use Only
4. Source of Funds: WC
OO
5. Check Box if Disclosure of Legal
Proceedings is Required Pursuant to
Item 2(d) or 2(e): [ ]
6. Citizenship or Place of Organization: Delaware
Number of Shares Beneficially Owned by
Reporting Person With:
7. Sole Voting Power: 452,535,148*
8. Shared Voting Power: None
9. Sole Dispositive Power: 452,535,148*
10. Shared Dispositive Power: None
11. Aggregate Amount Beneficially Owned by
Reporting Person: 452,535,148*
12. Check Box if the Aggregate Amount in
Row (11) Excludes Certain Shares: [ ]
13. Percent of Class Represented by Amount
in Row (11): 19.9%
14. Type of Reporting Person: CO
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* Time Warner Inc. has the right, subject to certain conditions, to
purchase up to 452,535,148 shares of America Online Common Stock (as
defined below) upon the exercise of an option granted to Time Warner Inc.
pursuant to a Stock Option Agreement dated as of January 10, 2000,
between Time Warner Inc. and America Online, Inc. This option is not
currently exercisable, and until the option becomes exercisable and is
exercised, Time Warner Inc. does not have any right to vote (or to direct
the voting of) or dispose (or to direct the disposition of) any shares of
America Online Common Stock that may be purchased upon exercise of the
option. Accordingly, Time Warner Inc. expressly
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disclaims beneficial ownership of all shares of America Online Common
Stock that may be purchased upon exercise of the option.
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Item 1. Security and Issuer.
This statement on Schedule 13D (this "Statement") relates to the
common stock, par value $0.01 per share ("America Online Common Stock"), of
America Online, Inc., a Delaware corporation ("America Online"). The address
of the principal executive offices of America Online is 22000 AOL Way, Dulles,
Virginia 20166.
Item 2. Identity and Background.
Time Warner Inc. ("Time Warner") is a Delaware corporation with its
principal office and business at 75 Rockefeller Plaza, New York, New York
10019. Time Warner is a holding company engaged in the media and entertainment
business. Its businesses are carried on in five fundamental areas:
o Cable Networks, consisting principally of interests in cable
television programming;
o Publishing, consisting principally of interests in magazine
publishing, book publishing and direct marketing;
o Music, consisting principally of interests in recorded music
and music publishing;
o Entertainment, consisting principally of interests in filmed
entertainment, television production and television
broadcasting; and
o Cable, consisting principally of interests in cable television
systems.
The attached Schedule I is a list of the directors and executive
officers of Time Warner which contains the following information with respect
to each such person:
(a) name;
(b) business address;
(c) present principal occupation or employment and the name,
principal business and address of any corporation or other organization
in which such employment is conducted; and
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(d) citizenship.
During the last five years, neither Time Warner nor, to the best of
Time Warner's knowledge, any person named in Schedule I (i) has been convicted
in a criminal proceeding (excluding traffic violations or similar
misdemeanors) or (ii) has been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of which such
person was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, Federal or
state securities laws or finding any violation with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration.
On January 10, 2000, Time Warner entered into a Stock Option
Agreement (the "Stock Option Agreement") with America Online. Pursuant to the
Stock Option Agreement, America Online granted to Time Warner an irrevocable
option (the "Option") to purchase up to 452,535,148 shares of America Online
Common Stock (subject to adjustment) at a purchase price per share equal to
$73.75 (subject to adjustment). The Option may only be exercised upon the
happening of certain events, which are outlined in Item 5. The Option is
currently not exercisable. If the Option were to become exercisable, the
purchase price required to purchase all shares of America Online Common Stock
subject to the Option would be $33,374,467,165. Time Warner anticipates that
all funds to be paid by it upon exercise of the Option would be provided from
working capital, cash on hand and through debt and/or equity offerings.
No consideration was paid in connection with the Stock Option
Agreement. The description of the Stock Option Agreement contained herein is
qualified in its entirety by reference to the Stock Option Agreement, which is
attached hereto as Exhibit 2. For a more detailed description of the Stock
Option Agreement, see Item 5.
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Item 4. Purpose of Transaction.
Time Warner and America Online entered into the Stock Option
Agreement to facilitate the consummation of the transactions contemplated by
the Agreement and Plan of Merger dated as of January 10, 2000 (the "Merger
Agreement"), between America Online and Time Warner.
Pursuant to the Merger Agreement, Time Warner and America Online
will initially form a new corporation ("Holdco") to be organized under the
laws of the State of Delaware. Holdco will thereafter form two wholly-owned
subsidiaries. Upon the closing of the transaction, one such subsidiary, Time
Warner Merger Sub, will merge with and into Time Warner (the "Time Warner
Merger") and one such subsidiary, America Online Merger Sub, will merge with
and into America Online (the "America Online Merger" and, together with the
Time Warner Merger, the "Mergers").
In the Time Warner Merger, each issued and outstanding share of
common stock, par value $0.01 per share, of Time Warner ("Time Warner Common
Stock") not owned or held by Time Warner will be converted into the right to
receive 1.5 shares of common stock, par value $0.01 per share, of Holdco
("Holdco Common Stock"). In the America Online Merger, each issued and
outstanding share of America Online Common Stock not owned or held by America
Online will be converted into the right to receive one share of Holdco Common
Stock. In the Time Warner Merger, Time Warner will continue as the surviving
corporation and in the America Online Merger, America Online will continue as
the surviving corporation. As a result of the Mergers, Time Warner and America
Online will become wholly-owned subsidiaries of Holdco, which will be renamed
AOL Time Warner Inc. after the Merger.
Pursuant to the Merger Agreement, in connection with the America
Online Merger, the officers and directors of America Online Merger Sub
immediately prior to the effective time of the America Online Merger will be
the officers and directors of America Online upon the completion of the
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America Online Merger. In addition, the officers and directors of Time Warner
Merger Sub immediately prior to the effective time of the Time Warner Merger
will be the officers and directors of Time Warner upon the completion of the
Time Warner Merger.
The Mergers are subject to customary closing conditions, including,
among other things, the affirmative vote of the holders of a majority of the
issued and outstanding shares of both America Online Common Stock and Time
Warner Common Stock and certain regulatory approvals. There can be no
assurance that the required approvals will be obtained in a timely fashion, if
at all, or, in the case of regulatory approvals, if obtained, will not contain
certain conditions.
In connection with the Mergers, it is expected that America Online
Common Stock will be delisted from the New York Stock Exchange, Inc. and will
become eligible for termination of registration under the Securities Exchange
Act of 1934, as amended.
The descriptions of the Merger Agreement and the Stock Option
Agreement contained herein are qualified in their entirety by reference to
such agreements, which are attached hereto as Exhibits 1 and 2, respectively.
Item 5. Interest in Securities of the Issuer.
Pursuant to the terms of the Stock Option Agreement, America Online
granted Time Warner the Option, which provides for the purchase of up to
452,535,148 shares of America Online Common Stock (subject to adjustment),
representing approximately 19.9% of the shares of America Online Common Stock
issued and outstanding on January 5, 2000, at a purchase price per share equal
to $73.75 (subject to adjustment). The Option may be exercised by Time Warner
at any time after Time Warner becomes entitled to receive, pursuant to the
Merger Agreement, the America Online Termination Fee (as defined in Section
8.2(c) of the Merger
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Agreement). The Option will terminate upon the earliest of (i) the effective
time of the Mergers, (ii) written notice of termination of the Stock Option
Agreement by Time Warner, (iii) 12 months after the date Time Warner becomes
entitled to the America Online Termination Fee and (iv) the date of
termination of the Merger Agreement (unless Time Warner has the right to
receive the America Online Termination Fee, in which case the Option will not
terminate until the later of (x) 15 business days following the date the
America Online Termination Fee becomes payable and (y) the expiration of the
period in which Time Warner has the right to receive the America Online
Termination Fee).
The Option is not currently exercisable, and until the Option
becomes exercisable and is exercised, Time Warner does not have any right to
vote (or to direct the vote of) or dispose (or to direct the disposition of)
any shares of America Online Common Stock that may be purchased upon exercise
of the Option. Accordingly, Time Warner expressly disclaims beneficial
ownership of all such shares.
The description of the Stock Option Agreement herein is qualified in
its entirety by reference to the Stock Option Agreement, which is attached
hereto as Exhibit 2.
Set forth below is information on shares of America Online Common
Stock beneficially owned by Time Warner's directors and executive officers,
including a description of transactions by any directors and executive
officers within 60 days of January 10, 2000 (as adjusted to reflect America
Online's two-for-one stock split effected on November 23, 1999).
a) Merv Adelson owns 200 shares of America Online Common Stock
and his spouse owns 100 shares of America Online Common Stock.
b) Gerald Greenwald's spouse owns 500 shares of America Online
Common Stock. 400 of these shares were acquired in the open market on December
21, 1999, at a purchase price of $86.875 per share and 100 of these shares
were acquired in the open market on December 21, 1999, at a purchase price of
$86.812 per share.
c) Richard D. Parsons owns 1800 shares of America Online Common
Stock and his spouse owns 200 shares of America Online Common Stock.
d) Francis T. Vincent, Jr. owns 94 shares of America Online Common
Stock which were acquired in the open market on November 8, 1999, at a purchase
price of $145.00 per share.
e) Andrew J. Kaslow owns 100 shares of America Online Common Stock.
Time Warner expressly disclaims beneficial ownership of the shares
of America Online Common Stock owned by its directors, executive officers
and their spouses.
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer.
Except as described in Item 4 or 5 of this Statement, neither Time
Warner, nor, to the best knowledge of Time Warner, any person listed in
Schedule I, has any contract, arrangement, understanding or relationship
(legal or otherwise) with any person with respect to any securities of America
Online, including, but not limited to, the transfer or voting of any of the
securities, finder's fees, joint ventures, loan or option arrangements, puts
or calls, guarantees of profits, division of profits or losses, or the giving
or withholding of proxies.
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Item 7. Material to Be Filed as Exhibits.
1. Agreement and Plan of Merger dated as of January 10, 2000,
between America Online and Time Warner (incorporated by
reference to Exhibit 2.1 to Time Warner's Form 8-K filed on
January 14, 2000).
2. Stock Option Agreement dated as of January 10, 2000, between
Time Warner and America Online (incorporated by reference to
Exhibit 99.3 to Time Warner's Form 8-K filed on January 14,
2000).
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true, complete
and correct.
Dated: January 19, 2000
TIME WARNER INC.
By: /s/ Christopher P. Bogart
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Name: Christopher P. Bogart
Title: Executive Vice President, General
Counsel and Secretary
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SCHEDULE I
Name, business address and present
principal occupation or employment of
the directors and executive officers of
Time Warner Inc.
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Principal Occupation or
Name (Citizenship) Office Employment and Address
Merv Adelson Director Chairman
(United States of East-West Capital Associates
America) 10900 Wilshire Blvd.
Los Angeles, CA 90024
Christopher P. Bogart Executive Vice Executive Vice President,
(Canada) President, General General Counsel and Secretary
Counsel and Secretary Time Warner Inc.*
Timothy A. Boggs Senior Vice President Senior Vice President
(United States of Time Warner Inc.
America) 800 Connecticut Ave., NW
Suite 800
Washington, DC 20006
J. Carter Bacot Director Retired Chairman and Chief
(United States of Executive Officer
America) The Bank of New York
Company, Inc.
One Wall Street
New York, NY 10286
Stephen F. Bollenbach Director President and Chief Executive
(United States of Officer
America) Hilton Hotels Corporation
9336 Civic Center Drive
Beverly Hills, CA 90210
Richard J. Bressler Executive Vice Executive Vice President
(United States of President Time Warner Inc.*
America)
John C. Danforth Director Partner
(United States of Bryan Cave LLP
America) 1 Metropolitan Square
211 North Broadway
St. Louis, MO 63102-2750
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Principal Occupation or
Name (Citizenship) Office Employment and Address
Beverly Sills Greenough Director Chairman
(United States of Lincoln Center for the
America) Performing Arts
70 Lincoln Center Plaza
New York, NY 10023
Gerald Greenwald Director Chairman Emeritus
(United States of UAL Corporation
America) P.O. Box 66100
Chicago, IL 66100
Carla A. Hills Director Chairman and Chief Executive
(United States of Officer
America) Hills & Company
1200 19th Street, NW
Washington, DC 20036
Andrew J. Kaslow Senior Vice President Senior Vice President
(United States of Time Warner Inc.*
America)
John LaBarca Senior Vice President Senior Vice President
(United States of and Controller and Controller
America) Time Warner Inc.*
Gerald M. Levin Director, Chairman Chairman and Chief Executive
(United States of and Chief Executive Officer
America) Officer Time Warner Inc.*
Reuben Mark Director Chairman and Chief Executive
(United States of Officer
America) Colgate-Palmolive Company
300 Park Avenue
New York, NY 10022
Michael A. Miles Director Former Chairman and Chief
(United States of Executive Officer
America) Philip Morris Companies Inc.
1350 Lake Road
Lake Forest, IL 60045
Richard D. Parsons Director and President President
(United States of Time Warner Inc.*
America)
Joseph A. Ripp Executive Vice Executive Vice President and
(United States of President and Chief Chief Financial Officer
America) Financial Officer Time Warner Inc.*
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Principal Occupation or
Name (Citizenship) Office Employment and Address
Joan N. Sumner Senior Vice President Senior Vice President
(United States of Time Warner Inc.*
America)
Robert E. Turner, III Director and Vice Chairman
(United States of Vice Chairman Time Warner Inc.
America) One CNN Center
Atlanta, GA 30303
Francis T. Vincent, Jr. Director Chairman
(United States of Vincent Enterprises
America) 290 Harbor Drive
Stamford, CT 06902
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* The business address of Time Warner Inc. is 75 Rockefeller Plaza, New
York, NY 10019.
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