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AOL > SEC Filings for AOL > Form 8-K on 28-Feb-2014All Recent SEC Filings

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Form 8-K for AOL INC.


28-Feb-2014

Change in Directors or Principal Officers


Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

(e) 2014 AOL Inc. Annual Bonus Plan

On February 26, 2014 the Compensation and Leadership Committee of the Board of Directors (the "Committee") of AOL Inc. (the "Company") approved the material terms of the Company's 2014 Annual Bonus Plan (the "ABP"). The ABP is a cash-based annual incentive plan in which eligible employees, including our Named Executive Officers ("NEOs"), may participate.

Annual cash incentive payments pursuant to the ABP for employees directly supporting our operating segments (including certain of our executive officers) will be determined through a combination of Company performance (weighted at 20%), operating segment and/or brand performance (weighted at 50%) and individual performance (weighted at 30%). Annual cash incentive payments pursuant to the ABP for the chief executive officer and corporate executive vice presidents (including our current NEOs) will be determined through a combination of Company performance (weighted at 70%) and individual performance (weighted at 30%). The Company performance component under the ABP will be based on the following financial metrics: Adjusted OIBDA, Free Cash Flow, Revenues Net of Traffic Acquisition Costs ("TAC") and Adjusted Earnings Per Share as such terms are defined in the ABP.

The operating segment and/or brand performance component under the ABP will be based on a combination of financial and operational metrics, including but not limited to the following: Adjusted OIBDA, revenue net of TAC, domestic churn rate, domestic average monthly subscription revenue per AOL subscriber, subscription revenues and unique visitors.

Additionally, the individual performance component of the ABP is based on the Company employee's overall performance rating in his or her annual review. Company employees, including our NEOs, are eligible to receive additional discretionary cash or equity awards for individual performance from time to time.

The foregoing summary of the ABP is qualified in its entirety and is subject to the terms of the ABP which the Company currently expects to file as an exhibit to its Form 10-Q for the quarter ended March 31, 2014.

2014 Segment Performance Share Unit Program

On February 26, 2014, the Committee approved the material terms of the 2014 Segment Performance Share Unit Program ("SPSU"). The SPSU is an annual incentive program in which employees directly supporting our operating segments and/or brands, including certain of our executive officers, may participate. At inception, each SPSU participant is initially allocated a target amount of performance units. Upon the achievement of certain financial and operational targets of an operating segment and/or brand, each SPSU participant may earn a number of performance units either greater than or less than the target allocation amount. Performance units under the SPSU may only be earned if the Company performance thresholds under the ABP have been met and the operating segment and/or brand has achieved at least 100% of its financial and operational targets under the ABP. The maximum amount of performance units that can be earned by a SPSU participant may not be greater than 300% of the participant's target SPSU award. Performance units earned by a participant under the SPSU will vest in two equal installments. Fifty percent will vest as soon as practicable following the date on which the performance units are deemed earned under the SPSU and 50% will vest on the first anniversary thereof, in each case, subject to the participant's continued employment through the applicable vesting date. Each performance unit may be settled in shares of Company stock or in cash, at the Company's sole discretion. In certain circumstances (such as a breach by a participant of restrictions under his or her confidentiality agreement), unvested performance units are subject to forfeiture, and shares delivered on vested performance units (or the cash value of vested performance units, if settled in cash) are subject to clawback. The foregoing summary of the SPSU is qualified in its entirety and is subject to the terms of the SPSU which the Company currently expects to file as an exhibit to its Form 10-Q for the quarter ended March 31, 2014.


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