May 3, 2002

Meeting to Discuss Stock-Option Settlement

Guild financial adviser Josh Wolf-Powers to answer your questions

The Guild will hold an open meeting on the stock-option settlement for all Guild-covered employees at 1 p.m. on Thursday, May 9, in the 33rd-floor conference room (room 3352) at Money Magazine.  Josh Wolf-Powers of Keilin & Co., the Guild's adviser throughout the mediation talks with Time Inc., and Guild officials will speak briefly and then discuss any questions or concerns you have regarding the agreement.

The retroactive 2001 stock options were granted in early February, shortly after the two sides reached a settlement.  All Guild-covered employees received them, but AOL Time Warner has still not sent out notification of the grants.  The grant price (usually called "Strike price") was $24.93, almost $14 below the April 6, 2001, strike price of $38.56 for non-Guild employees.  As of April 6, 2002, 25% of the $24.93 grants became vested, as the settlement granted vesting retroactivity to Guild-covered employees.

Searching for Information

Because none of us have received paper confirmation of these grants, here are some tips on finding out about your options:

*To access information on these grants, and to set up an account so that you can exercise these and other stock options that you have received (Founder's Grants, 2002 stock options), you must choose one of two brokers, either E*Trade OptionsLink or Salomon Smith Barney.  Obviously, we can't exercise any of our options now, but by setting up an account you can access lots of information, do practice option exercises, and be ready to exercise your options in the future.

*You have two ways of choosing a broker: 1) go to the company's Benefits Online's Global Stock Plan Administration group, or 2) make your selection on the AOLTW Interactive Voice Response, by calling 1-888-265-6787.

*For information on AOLTW Stock Options (or stock options in general), take the following computer path, within the Time Traveler Intranet site:

Time Traveler-Employee Resources-Benefits-AOLTW Stock Options (or General Stock Option Info).

The Best Solution Available

As noted above, even the $24.93 price is higher than the current stock price.  Keep in mind, however, that these are 10-year options.  The Guild's feeling is that if these lower-priced options aren't "in the money" in a substantial way over that period of time, all of us are going to have much bigger problems than worthless stock options.

Also, the company, which reported an 18% growth in earnings in 2001, stated at the mediation settlement that Profit-Sharing would have been a meager 4% if it had been retained as a benefit.  Richard Parsons, the incoming CEO of AOL Time Warner, said in late April's news conference on earnings that the target for growth in 2002 was 5% to 9%. That would work out to about 1% to 2% Profit-Sharing number if the 2001 ratio were maintained.  It's unlikely that this company will be getting more generous in the future, and Profit- Sharing was always at the company's discretion.

The Guild invites all covered employees to attend the May 9 meeting and thanks all of its members for their support in this long struggle, which the Guild hopes will pay off big over the long run. 

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05/03/02