UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
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AOL Inc.
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AOL INC.
770 Broadway
New York, New York 10003
(212) 652-6400
SUPPLEMENT TO THE
PROXY STATEMENT DATED APRIL 8, 2014
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 22, 2014
AOL Inc. filed a definitive proxy statement on Schedule 14A with the Securities and Exchange Commission (SEC) on April 8, 2014 (the “Proxy Statement”) and made it available to our stockholders in connection with the solicitation by the Board of Directors of AOL Inc. of proxies to be voted at our Annual Meeting of Stockholders to be held on May 22, 2014 (the “Annual Meeting”).
The Proxy Statement contains important additional information. This supplement should be read in conjunction with our Proxy Statement. The purpose of this supplement is to provide additional information and context, set forth in the following presentation materials, to our stockholders regarding the AOL Inc. 2010 Stock Incentive Plan, as amended and restated, which stockholders have been asked to approve as described in Item 4 in the Proxy Statement.
 A MEDIA & TECHNOLOGY COMPANY 0 * * * * * * ************* |
 2 AOL IS REQUESTING YOUR SUPPORT IN ATTRACTING AND RETAINING TOP TALENT VOTE “FOR” ITEM 4 Amendments to AOL Inc. 2010 Stock Incentive Plan |
 TOP TALENT HAS DELIVERED STRONG RESULTS AND CREATED SIGNIFICANT VALUE FOR AOL SHAREHOLDERS 3 |
EQUITY ATTRACTS TOP TALENT AND ALIGNS SHAREHOLDER & EMPLOYEE INTERESTS ATTRACTING & RETAINING TALENT o Is essential to attract and retain talented employees to AOL o Is a necessity for AOL to compete for talent with our peers ALIGNING EMPLOYEE & SHAREHOLDER INTERESTS o Aligns the interests of employees and stockholders o Drives better operational performance o Drives increased shareholder return 4 o We believe our Equity Compensation Program: o We believe our Equity Compensation Program: |
 We believe ISS & Glass Lewis recommendations significantly impair AOL’s ability to attract & retain top talent We believe ISS & Glass Lewis recommendations significantly impair AOL’s ability to attract & retain top talent 5 |
 WHAT INVESTORS NEED TO KNOW • Equity grants are critical to the future of AOL – without equity grants, AOL would be at a distinct disadvantage to do what we need to do to retain and attract talent in our space • AOL is being unfairly penalized because its CEO has not exercised options and the company has repurchased shares – this negatively impacts proxy advisory firms’ overhang calculations • AOL competes in a space with large established companies that use equity comp extensively to incent, attract and retain talent • AOL has continuously delivered strong growth and total shareholder return • If proposed equity plan amendments are approved, we believe shares will last into 2016 PROXY ADVISORY FIRMS’ FORMULAS LACK CONTEXT FOR AOL 6 |
 AOL NEEDS ADDITIONAL SHARES IN EQUITY PLAN TO FUND 2014 GRANTS AND FUTURE GROWTH Shares at Year End 2013 Shares as of March 27, 2014 Shares Available For All Employees ~11M ~9M ~6M Shares used in 2014 *Shares under separate plans *Plan shares not generally available for grant to historic AOL employees Based upon the number of shares currently available for future grants and AOL’S anticipated equity usage over the next 12 months (allowing for potential stock price volatility), we may not have a sufficient number of shares to cover grants through 2014 7 |
 CEO Stock Options Dilutive Effect - Potential dilutive effect of outstanding equity awards and future awards available for grant expressed as a % of common shares outstanding is negatively impacted by unexercised stock options & share repurchases Share Repurchase (~$1 BILLION) AOL IS A NET ACQUIRER OF ITS OWN STOCK & AOL’s CEO HAS NOT EXERCISED HIS OPTIONS WE BELIEVE AOL IS BEING PENALIZED FOR REPURCHASING STOCK AND BECAUSE ITS CEO HAS NOT EXERCISED OPTIONS 8 • Our CEO holds approximately 3.5M stock options that are currently exercisable • Our CEO has never sold AOL shares or exercised AOL stock options • Our CEO has purchased 3 times in the open market, most recently on 5/8/2014 |
 AOL HAS A TRACK RECORD OF PRUDENTLY & CONSERVATIVELY DEPLOYING EQUITY TO TALENT AOL’s Burn Rate – the rate at which AOL grants equity awards to employees – is significantly below ISS cap AOL 6.67% < ISS Cap 7.25%* AOL’s CEO compensation is significantly below peer median 51% of AOL selected peer median* 84% of ISS selected peer median* AOL’s CEO and Named Executive Officers’ (NEO) equity compensation is significantly below GICS** median AOL CEO 3.5% < GICS 12.4%* AOL NEO 12.4% < GICS 20.8%* AOL’s EVR*** per employee – three year average dollar value of all equity awards per employee – is well below median EVR among our peers AOL $14.4K < peer median $18.1K 9 *Source: ISS AOL Inc Report dated 5/9/2014 **GICS (Global Industry Classification Standard) is a standardized classification system for equities developed jointly by Morgan Stanley Capital International (MSCI) and Standard & Poor's. The GICS methodology is used by the MSCI indexes, which include domestic and international stocks, as well as by a large portion of the professional investment management community ***EVR per employee (Equity Value Rate per employee) represents the three-year average dollar value of all equity awards (stock options, restricted stock, and performance shares) granted per employee. Source: Exequity, LLP |
 2010 2011 2012 2013 & 1Q 2014 Profit Actions / Financial Results •Reduction of ~2,300 employees post-spin and Sale of Dulles, VA real estate •$500 million cost savings relative to 2009 (excluding Patch) •Revenue stabilization / improvement in all revenue trends •Grew Advertising revenue double-digits beginning 2H13 •Exited unprofitable distribution deal, significantly reducing TAC •Ad sales grows again for the first time in three years •Search Revenue returns to growth •Global Display revenue returned to growth •Exited under-performing geographic markets •Significant cost reduction in 2H 2011 •Q4 Advertising revenue grows 13% •Consistent, strong growth in Third Party Platform revenue •$175+ million unprofitable Third Party Network revenue eliminated •Significant cost reduction •Programmatic revenue growing triple digits •Adjusted OIBDA returns to growth •Top 3 in videos viewed and video impressions sold. Video revenue consistently growing at strong double-digits •Subscription revenue declines at historical lows •Adjusted OIBDA growing consistently Strategic / Operational Actions •Acquisition of TechCrunch & 5min •Project Devil launched •Monetization significantly improved •Monetization significantly improved •New Branding & Identity •Introduced premium service bundle for subscription services •Improved consumer experience •Improved consumer experience •AOL Homepage & Mail relaunched •Restructured India Operations •2,000+ advertisers •2,000+ advertisers •New Google Search Deal •Acquisition of HuffPo & Go Viral •Meaningfully lowered subscription churn •1.5% monthly subscription churn in 1Q'14 •Enhanced Third Party Network product offering •Product Improvement: Mail & Video •1+ billion video impressions sold •3+ billion quarterly video views (2nd largest) •Content Partnership with Everyday Health, SportingNews and Move •Third Party Network growing +20% •~1 billion video impressions sold quarterly •Launched DSP •Acquired Adap.tv, Gravity & Convertro •Grew unique users 1% •Launched SSP •Grew unique users consistently – one of the fastest growers in top 10 cross-platform Divestitures/ Capital Return •Sale of Bebo resulted in significant tax benefit •$250 million share repurchase authorization announced •Tax Efficient Monetization of Patent Portfolio (~$1.1 billion) •Total of $250 million share repurchase authorization •Sale of buy.at, ICQ, DMS •Total Value of $1.7 billion unlocked to date •Repurchased ~$135 million in shares in 2013. $115 million remaining on authorization •Sold our stakes in Kayak and Brightcove •$1.1 billion capital returned to investors through buyback and special dividend •Entered into $250 million credit facility with $250 million accordion feature AOL HAS A TRACK RECORD OF CONSISTENT IMPROVEMENT 10 |
 AOL equity is a currency which has attracted and continues to attract top talent CONSISTENT IMPROVEMENT HAS DRIVEN ABOVE MARKET RETURNS * Based on publicly available information, reflects total shareholder return for 2013 11 |
 AOL IS REQUESTING YOUR SUPPORT IN CONTINUING TO ALIGN EMPLOYEE & SHAREHOLDER INTERESTS VOTE “FOR” ITEM 4 12 |
 VOTE “FOR” ITEM 4 7 13 |