SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D/A
INFORMATION TO BE INCLUDED IN
STATEMENTS FILED PURSUANT TO RULE 13d-1(a) AND
AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a)
(Amendment No. 7)
America Online Latin America, Inc.
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(Name of Issuer)
Class A Common Stock, par value $0.01 per share
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(Title of Class of Securities)
02365B100
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(CUSIP Number)
Paul T. Cappuccio, Esq.
Executive Vice President and General Counsel
AOL Time Warner Inc.
75 Rockefeller Plaza
New York, New York 10019
(212) 484-8000
Copy to:
Peter S. Malloy, Esq.
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
(212) 455-2000
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
October 3, 2002
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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 Rule 13d-1(e), Rule 13d-1(f) or Rule 13d-1(g), check the
following box |_|.
CUSIP No. 02365B100 Page 2 of 20
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1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY):
AOL Time Warner Inc. 13-4099534
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
(a) [x]
(b) [ ]
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3 SEC USE ONLY:
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4 SOURCE OF FUNDS:
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e)
|_|
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6 CITIZENSHIP OR PLACE OF ORGANIZATION:
Delaware
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-------------------- ---------- ------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY
OWNED BY 25,356,365 (1)
EACH ---------- ------------------------------------------------
REPORTING ---------- ------------------------------------------------
PERSON WITH 8 SHARED VOTING POWER
136,551,706 (2)
---------- ------------------------------------------------
---------- ------------------------------------------------
9 SOLE DISPOSITIVE POWER
25,356,365
---------- ------------------------------------------------
---------- ------------------------------------------------
10 SHARED DISPOSITIVE POWER
136,851,706 (3)
-------------------- ---------- ------------------------------------------------
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON:
162,208,071
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------------------------------
1 Represents 19,674,390 shares of Class A Common Stock, par value $0.01 per
share ("Class A Common Stock"), of America Online Latin America, Inc.
("AOL-LA") into which (ultimately) the $71,300,000 11% senior convertible
notes owned by AOL Time Warner Inc. ("AOL Time Warner"), are immediately
convertible at an initial conversion price of $3.624 plus 5,681,975 shares
of Class A Common Stock into which (ultimately) 5,681,975 shares of Series
B Redeemable Convertible Preferred Stock owned by AOL Time Warner are
immediately convertible on a one-for-one basis.
2 Calculated pursuant to Rule 13d-3, includes (i) 4,000,000 shares of Class A
Common Stock owned by America Online, Inc. ("AOL"), (ii) 116,010,456 shares
of Class A Common Stock into which (ultimately) 116,010,456 shares of
Series B Redeemable Convertible Preferred Stock owned by AOL are
immediately convertible on a one-for-one basis and (iii) 16,541,250 shares
of Class A Common Stock issuable upon exercise of AOL's immediately
exercisable warrant.
3 Calculated pursuant to Rule 13d-3, includes the 136,551,706 shares
described in number 8 above plus 300,000 shares of Class A Common Stock
issuable upon exercise of certain employee options issued by AOL-LA.
CUSIP No. 02365B100 Page 3 of 20
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES: [x]
-------- -----------------------------------------------------------------------
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11):
72.0% (4)
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14 TYPE OF REPORTING PERSON:
HC, CO
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4 For purposes of beneficial ownership calculation under Rule 13d-3, the
number of outstanding shares includes: (i) the 67,070,065 shares of Class A
Common Stock outstanding (including 4,000,000 shares of Class A Common
Stock owned by AOL) as of August 9, 2002 as reported in AOL-LA's Quarterly
Report on Form 10-Q filed by AOL-LA on August 14, 2002, (ii) 116,010,456
shares of Class A Common Stock into which (ultimately) 116,010,456 shares
of Series B Redeemable Convertible Preferred Stock owned by AOL are
immediately convertible on a one-for-one basis, (iii) 16,541,250 shares of
Class A Common Stock issuable upon exercise of AOL's immediately
exercisable warrant, (iv) 300,000 shares of Class A Common Stock issuable
upon exercise of certain AOL-LA employee options, (v) 19,674,390 shares of
Class A Common Stock issuable upon conversion of AOL Time Warner's
$71,300,000 11% senior convertible notes and (vi) 5,681,975 shares of Class
A Common Stock into which (ultimately) 5,681,975 shares of Series B
Redeemable Convertible Preferred Stock owned by AOL Time Warner are
immediately convertible on a one-for-one basis.
CUSIP No. 02365B100 Page 4 of 20
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1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY):
America Online, Inc. 54-1322110
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
(a) [x]
(b) [ ]
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3 SEC USE ONLY:
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4 SOURCE OF FUNDS:
Not Applicable
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e)
[ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION:
Delaware
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-------------------- -------- --------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 0
OWNED BY
EACH -------- --------------------------------------------------
REPORTING -------- --------------------------------------------------
PERSON WITH 8 SHARED VOTING POWER
136,551,706 (1)
-------- --------------------------------------------------
-------- --------------------------------------------------
9 SOLE DISPOSITIVE POWER
0
-------- --------------------------------------------------
-------- --------------------------------------------------
10 SHARED DISPOSITIVE POWER
136,851,706 (2)
-------------------- -------- --------------------------------------------------
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON:
136,851,706
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--------- ----------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES:
[ x ]
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------------------------------
1 Calculated pursuant to Rule 13d-3, includes (i) 4,000,000 shares of Class A
Common Stock owned by AOL, (ii) 116,010,456 shares of Class A Common Stock
into which (ultimately) 116,010,456 shares of Series B Redeemable
Convertible Preferred Stock owned by AOL are immediately convertible on a
one-for-one basis and (iii) 16,541,250 shares of Class A Common Stock
issuable upon exercise of AOL's immediately exercisable warrant.
2 Calculated pursuant to Rule 13d-3, includes the 136,551,706 shares
described in number 8 above plus 300,000 shares of Class A Common Stock
issuable upon exercise of certain AOL-LA employee options.
CUSIP No. 02365B100 Page 5 of 20
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11):
68.5%(3)
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14 TYPE OF REPORTING PERSON:
CO
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3 For purposes of beneficial ownership calculation under Rule 13d-3, the
number of outstanding shares includes: (i) the 67,070,065 shares of Class A
Common Stock outstanding (including 4,000,000 shares of Class A Common
Stock owned by AOL), (ii) 116,010,456 shares of Class A Common Stock into
which (ultimately) 116,010,456 shares of Series B Redeemable Convertible
Preferred Stock owned by AOL are immediately convertible on a one-for-one
basis, (iii) 16,541,250 shares of Class A Common Stock issuable
(ultimately) upon exercise of AOL's immediately exercisable warrant and
(iv) 300,000 shares of Class A Common Stock issuable upon exercise of
certain AOL-LA employee options.
CUSIP No. 02365B100 Page 6 of 20
AOL Time Warner Inc., a Delaware corporation ("AOL Time Warner"), and its
wholly-owned subsidiary, America Online, Inc., a Delaware corporation ("AOL")
(collectively, the "Reporting Persons"), hereby file this Amendment No. 7
("Amendment No. 7") to amend and supplement the statement on Schedule 13D
originally filed on August 22, 2000 and amended on January 22, 2001 and February
27, 2001, further amended and restated in its entirety on April 13, 2001 and
further amended on April 5, 2002 ("Amendment No. 4"), June 17, 2002 and August
29, 2002 ("Amendment No. 6") (as previously so amended, the "Statement"), with
respect to the shares of Class A Common Stock, par value $0.01 per share (the
"Class A Common Stock"), of America Online Latin America, Inc., a Delaware
corporation ("AOL-LA"). As provided in the Joint Filing Agreement filed as
Exhibit 13 to Amendment No. 4, the Reporting Persons have agreed pursuant to
Rule 13d-1(k) under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), to file one statement on Schedule 13D with respect to their
beneficial ownership of the Class A Common Stock.
Unless otherwise expressly set forth herein, capitalized terms not defined
in this Amendment No. 7 have the meanings given to such terms in the Statement.
Item 1. Security and Issuer
This Amendment No. 7 relates to the Class A Common Stock of AOL-LA. The
address of the principal executive office of AOL-LA is 6600 N. Andrews Avenue,
Suite 500, Fort Lauderdale, Florida 33309.
Item 3. Source and Amount of Funds or Other Consideration
Item 3 of the Statement is hereby amended by adding the following as the
last paragraph thereof:
In accordance with the terms of the Tranche Notes (as defined in Item 5),
on September 30, 2002, AOL-LA issued 5,681,971 shares of Series B Preferred
Stock to AOL Time Warner as payment of interest due as of such date on
$71,300,000 aggregate principal amount of AOL-LA's 11% Senior Convertible Notes
due 2007 held by AOL Time Warner.
Item 4. Purpose of Transaction
Item 4 of the Statement is hereby amended by deleting the last four
paragraphs thereof and adding the following in lieu thereof:
AOL has entered into a Preferred Stock Conversion Agreement with each of
ODC and AOL-LA, dated as of October 3, 2002 (as amended from time to time, the
"Conversion Agreement"), pursuant to which AOL and ODC are obligated to convert
a certain number of their shares of Series B Preferred Stock and Series C
Preferred Stock, as applicable, into shares of Class A Common Stock on a
one-for-one basis, subject to certain conditions described below (the "Proposed
Conversion"). The Conversion Agreement is attached hereto as Exhibit 17.
The purpose of the Conversion Agreement and the Proposed Conversion is to
facilitate the continued listing of AOL-LA's Class A Common Stock on the Nasdaq
SmallCap
CUSIP No. 02365B100 Page 7 of 20
Market (the "SmallCap Market"). On July 29, 2002, the staff of Nasdaq
(the "Staff") informed AOL-LA that the market value of its Class A Common Stock
had been below $35,000,000, the minimum amount required for continued listing by
NASDAQ Marketplace Rule 4310(c)(2)(B)(ii) (the "Rule"). Pursuant to a letter
dated September 4, 2002, AOL-LA requested an oral hearing before a panel
designated by the Board of Directors of the NASDAQ Stock Market, Inc. (the
"Listing Qualifications Panel") with respect to the continued listing of the
Class A Common Stock on the SmallCap Market. Such request stayed the pending
delisting of the Class A Common Stock. At the hearing before the Listing
Qualifications Panel, AOL-LA submitted the Proposed Conversion and the
Conversion Agreement as a plan for achieving compliance with the Rule.
In order to cure AOL-LA's non-compliance with the Rule, AOL-LA's Class A
Common Stock must have a market value of at least $35,000,000 for ten
consecutive trading days on or before a date specified by the Listing
Qualifications Panel. Pursuant to the terms of the Conversion Agreement (as
further described in Item 6), if the closing bid price of the Class A Common
Stock on the SmallCap Market is at or above $0.19 on the date on which the
Listing Qualifications Panel renders its decision to permit the continued
listing of AOL-LA on the SmallCap Market (the "Panel Decision Date"), then AOL
and ODC will be obligated to convert a number of shares of Series B Preferred
Stock and Series C Preferred Stock, as applicable, into Class A Common Stock as
follows: (1) if the closing bid price is at least $0.21 on the Panel Decision
Date, the number of shares of Series B Preferred Stock and Series C Preferred
Stock to be converted on the Panel Decision Date will be equal to the number of
shares of Class A Common Stock required for the market value of all outstanding
shares of Class A Common Stock after giving effect to the conversion to be equal
to $40,000,000 or (2) if the closing bid price is below $0.21 but equal to or
above $0.19, the number of shares of Series B Preferred Stock and Series C
Preferred Stock to be converted on the Panel Decision Date will be that number
which, after giving effect to the conversion, will cause the number of
outstanding shares of Class A Common Stock to equal 190,476,190. The Proposed
Conversion will be effected on a pro rata basis based on the total number of
outstanding shares of B Stock, C Stock and Class A Common Stock held by each of
AOL (including its wholly-owned affiliates and employees) and ODC (including its
wholly-owned affiliates, employees and Gustavo A. Cisneros, Ricardo J. Cisneros
and/or their lineal descendents, and/or any trusts for the benefit of such
persons) as of October 3, 2002. In no event, however, will the number of shares
of Series B Preferred Stock and Series C Preferred Stock converted into Class A
Common Stock pursuant to the Conversion Agreement reduce either AOL's ownership
of Series B Preferred Stock or ODC's ownership of Series C Preferred Stock to
less than 57,360,818 shares and 52,339,482 shares, respectively. The Proposed
Conversion, if consummated, will therefore not cause either AOL or ODC to lose
their respective rights as holders of B Stock and C Stock as set forth in the
Charter.
If the decision issued by the Listing Qualifications Panel on the Panel
Decision Date to permit the continued listing of the Class A Common Stock is
subject to any conditions other than that (i) the Proposed Conversion under the
terms of the Conversion Agreement shall occur and/or (ii) the Class A Common
Stock shall meet the $35,000,000 market value of listed securities test in
accordance with the Rule for ten consecutive trading days on or before a date
specified (a "Conditional Decision"), then the terms of such Conditional
Decision must be accepted in writing by each of AOL and ODC within five business
days following the Panel Decision Date (such date, the "Deferred Conversion
Date"). In the event that each of AOL and ODC accept such conditions, they will
be obligated to effect the Proposed Conversion pursuant to terms of the
Conversion Agreement on the Deferred Conversion Date, subject to, among other
CUSIP No. 02365B100 Page 8 of 20
things, the conditions that (i) the closing bid price of the Class A Common
Stock is equal to or above $0.19 and (ii) the conversion on such date shall
cause the market value of the outstanding Class A Common Stock, after giving
effect to such conversion, to equal or exceed $35,000,000.
Also in connection with the Conversion Agreement, AOL Time Warner, AOL and
ODC have entered into a certain Conversion Voting Agreement (described in Item
6), pursuant to which each party thereto agreed to vote in favor of the
Conversion Charter Amendment (described in Item 6) in the event that the
Proposed Conversion is consummated.
The Reporting Persons intend to review their investment in AOL-LA on a
continuing basis and, subject to the limitations set forth in the Second Amended
and Restated Stockholders' Agreement, reserve the right to (i) acquire
additional securities of and increase their level of investment and control in
AOL-LA, through acquisitions in the open market or in privately negotiated
transactions with AOL-LA or third parties or otherwise, (ii) maintain their
holdings at current levels or (iii) sell or otherwise dispose of all or a
portion of their holdings in the open market or in privately negotiated
transactions or otherwise or reduce their level of investment or control in
AOL-LA. Any such actions will depend upon, among other things: the availability
of such securities for purchase, or the ability to sell such securities, at
satisfactory price levels; the continuing evaluation of AOL-LA's business,
financial condition, operations and prospects; general market, economic and
other conditions; the relative attractiveness of alternative business and
investment opportunities; the availability of financing; the actions of the
management, Board and controlling stockholders of AOL-LA; and other future
developments.
As part of their ongoing review, the Reporting Persons may have additional
discussions with third parties, including other stockholders, or with the board
of directors or management of AOL-LA regarding the foregoing.
Except as set forth elsewhere in this Amendment No. 7, neither AOL Time
Warner nor AOL has any current plans or proposals which relate to or would
result in any of the actions requiring disclosure pursuant to Item 4 of Schedule
13D, although AOL Time Warner and AOL do not rule out the possibility of
effecting or seeking to effect any such actions in the future.
References to, and descriptions of, the Second Amended and Restated
Stockholders' Agreement, the Note Purchase Agreement, the Initial Notes, the PIK
Notes, the Second Amended and Restated AOL-ODC Registration Rights Agreement,
the Voting Agreements, the Conversion Agreement, the Conversion Voting Agreement
and the Conversion Charter Amendment are qualified in their entirety by
reference to the copies of such documents included as exhibits to Amendment No.
4, Amendment No. 6 and Amendment No. 7, and are incorporated in this Item 4 in
their entirety where such references and descriptions appear.
Item 5. Interest in Securities of the Issuer
Item 5 of the Statement is hereby amended and restated to read in its
entirety as follows:
The information set forth or incorporated by reference in Items 2, 3, 4, 6
and 7 is hereby incorporated herein by reference.
CUSIP No. 02365B100 Page 9 of 20
As of August 9, 2002, as reported in AOL-LA's Quarterly Report on Form 10-Q
filed by AOL-LA on August 14, 2002, there were 67,070,065 shares of Class A
Common Stock outstanding. No shares of AOL-LA's Class B Common Stock or Class C
Common Stock were outstanding. For purposes of Rule 13d-3 under the Exchange
Act, the Class A Common Stock issuable, directly or indirectly, upon conversion
of the Series B Preferred Stock currently held by AOL, upon exercise of the AOL
Warrant, and upon exercise by the Employees (defined below) of their options,
(i) with respect to percentage ownership calculations made herein for AOL,
increase the number of Class A Common Stock outstanding to 199,921,7711 and (ii)
together with the 25,356,365 shares of Class A Common Stock issuable, directly
or indirectly, upon conversion of (x) the First Tranche Notes, the Second
Tranche Notes, the Third Tranche Notes, the Fourth Tranche Notes and the Fifth
Tranche Notes (collectively, the "Tranche Notes") and (y) the 5,681,975 shares
of Series B Preferred Stock issued to AOL Time Warner by AOL-LA as payment of
interest due on the Tranche Notes as of September 30, 2002, with respect to
percentage ownership calculations made herein for AOL Time Warner, increase the
number of Class A Common Stock outstanding to 225,278,136.
As of the date hereof, the Reporting Persons (i) beneficially own 4,000,000
shares of Class A Common Stock held by AOL and (ii) pursuant to Rule 13d-3(a)
promulgated under the Exchange Act, may be deemed to beneficially own an
additional 132,551,706 shares of Class A Common Stock, which are issuable upon
conversion, directly or indirectly, of all of the shares of Series B Preferred
Stock held by AOL and upon exercise of the AOL Warrant. Shares of Series B
Preferred Stock are convertible into shares of Class B Common Stock at any time,
initially on a one share-for-one share basis, and such Class B Common Stock is
convertible into Class A Common Stock at any time, initially on a one
share-for-one share basis.
Pursuant to Rule 13d-3(a) promulgated under the Exchange Act, the Reporting
Persons may also be deemed to beneficially own options to purchase an aggregate
of 300,000 shares of Class A Common Stock. As stated in Item 6 below, upon the
consummation of AOL-LA's initial public offering, Michael Lynton, J. Michael
Kelly, and Gerald Sokol, Jr., employees of AOL or AOL Time Warner, were each
granted an option to purchase 60,000 shares of Class A Common Stock. Janice
Brandt and Joseph Ripp, employees of AOL (each an "employee" and along with
Messrs. Lynton, Kelly and Sokol, the "Employees"), were each granted an option
to purchase 60,000 shares of Class A Common Stock in connection with their
appointment to the board of directors of AOL-LA. Under the Reporting Persons'
conflicts of interest standards, each such Employee must transfer the economic
benefit of his or her options to AOL Time Warner or AOL, as applicable. Although
each such Employee is the record holder of the option, AOL and AOL Time Warner
hold or share the disposition power with respect to all of the shares of Class A
Common Stock underlying the options. The filing of Amendments to the Statement,
however, shall not be construed as an admission for the purposes of Sections
13(d) and 13(g) of the Exchange Act and Regulation 13D-G promulgated thereunder
that any of such Employees is the beneficial owner of any securities of AOL-LA
other than the options and shares of Class A Common Stock underlying the options
issued to such Employee.
---------------------------
1 Includes (i) the 67,070,065 shares of Class A Common Stock outstanding
(including 4,000,000 shares of Class A Common Stock owned by AOL), (ii)
116,010,456 shares of Class A Common Stock into which (ultimately)
116,010,456 shares of Series B Redeemable Convertible Preferred Stock owned
by AOL are immediately convertible on a one-for-one basis, (iii) 16,541,250
shares of Class A Common Stock issuable upon exercise of AOL's immediately
exercisable warrant and (iv) 300,000 shares of Class A Common Stock
issuable upon exercise of certain AOL-LA employee options.
CUSIP No. 02365B100 Page 10 of 20
Pursuant to Rule 13d-3(a) promulgated under the Exchange Act, AOL Time
Warner may also be deemed to beneficially own an additional 25,356,365 shares of
Class A Common Stock which are issuable upon conversion, directly or indirectly,
of: (i) the Tranche Notes at the conversion price of $3.624 per share, as the
same may be adjusted in accordance with the terms of the Tranche Notes and (ii)
the shares of Series B Preferred Stock issued to AOL Time Warner by AOL-LA as
payment of interest due on the Tranche Notes as of September 30, 2002. As
further described in Item 6, the Tranche Notes are convertible at any time into
Applicable Shares (as defined in Item 6 of the Statement), which may be shares
of Series B Preferred Stock or Class A Common Stock, in any case at a conversion
price of $3.624 per share.
AOL and AOL Time Warner have shared power to vote and dispose of 4,000,000
shares of Class A Common Stock held by AOL, the 116,010,456 shares of Class A
Common Stock issuable upon conversion, directly or indirectly, of all of the
Series B Preferred Stock held by AOL, and 16,541,250 shares of Class A Common
Stock issuable upon exercise of the AOL Warrant. AOL and AOL Time Warner share
the power to dispose of the 300,000 shares of Class A Common Stock issuable upon
exercise of the stock options that were granted to the Employees. AOL Time
Warner has sole power to vote and dispose of the 25,356,365 shares of Class A
Common Stock that are issuable upon conversion, directly or indirectly, of both
the Tranche Notes acquired by AOL Time Warner pursuant to the Note Purchase
Agreement and the shares of Series B Preferred Stock issued to AOL Time Warner
as payment of interest due on the Tranche Notes as of September 30, 2002.
Consequently, under Rule 13d-3(a), upon conversion of the B Stock held by
AOL, the exercise of the AOL Warrant and the exercise of the stock options
granted to the Employees, AOL would beneficially own 136,851,706 shares of Class
A Common Stock in the aggregate, or approximately 68.5% of the shares of Class A
Common Stock currently outstanding. Upon conversion of the B Stock held by AOL,
the exercise of the AOL Warrant, the exercise of the stock options granted to
the Employees, the conversion of the B Stock held by AOL Time Warner and the
conversion of the Tranche Notes, AOL Time Warner would beneficially own
162,208,071 shares of Class A Common Stock in the aggregate, or approximately
72.0% of the shares of Class A Common Stock currently outstanding. However,
assuming (i) the conversion of all B Stock and C Stock, (ii) the conversion of
all of the Tranche Notes and (iii) the exercise and conversion of all
outstanding warrants and stock options, AOL and AOL Time Warner would
beneficially own approximately 40.6% and 48.2%, respectively, of the 336,812,130
shares of Class A Common Stock of AOL-LA that would be issued and outstanding.
Pursuant to Rule 13d-5(b)(1) promulgated under the Exchange Act, to the
extent a "group" is deemed to exist by virtue of the Second Amended and Restated
Stockholders' Agreement, the ODC Voting Agreement, the Second Amended and
Restated AOL-ODC Registration Rights Agreement and the Conversion Voting
Agreement (each as defined in Item 6 of the Statement), the Reporting Persons
may be deemed to have beneficial ownership, for purposes of Sections 13(d) and
13(g) of the Exchange Act, of all of the equity securities of AOL-LA
beneficially owned by the Cisneros Group. As of the date hereof, the Cisneros
Group beneficially owns 4,000,000 shares of Class A Common Stock, 111,413,994
shares of Series C Preferred Stock, which represents all of such Series C
Preferred Stock outstanding, and currently exercisable options to purchase
120,000 shares of Class A Common Stock. Shares of Series C Preferred Stock are
convertible into AOL-LA's Class C Common Stock at any time, initially on
CUSIP No. 02365B100 Page 11 of 20
a one share-for-one share basis, and such Class C Common Stock is convertible
into Class A Common Stock at any time, initially on a one share-for-one share
basis. As of the date hereof, the Cisneros Group beneficially owns an aggregate
of 115,533,994 shares of Class A Common Stock, or approximately 34.3% of the
336,812,130 shares of Class A Common Stock that would be issued and outstanding,
assuming (i) the conversion of all B Stock and C Stock, (ii) the conversion of
all of the Tranche Notes and (iii) the exercise and conversion of all
outstanding warrants and stock options. The Reporting Persons disclaim
beneficial ownership of any AOL-LA securities owned directly or indirectly by
the Cisneros Group.
Pursuant to Rule 13d-5(b)(1) promulgated under the Exchange Act, to the
extent a "group" is deemed to exist by virtue of the Banco Itau Registration
Rights Agreement and the Itau Voting Agreement (each as defined in Item 6 of the
Statement), the Reporting Persons may be deemed to have beneficial ownership,
for purposes of Sections 13(d) and 13(g) of the Exchange Act, of all of the
equity securities of AOL-LA beneficially owned by the Banco Itau Reporting
Persons. As of the date hereof, the Banco Itau Reporting Persons beneficially
own 35,937,840 shares of Class A Common Stock, or approximately 10.7% of the
336,812,130 shares of Class A Common Stock that would be issued and outstanding,
assuming (i) the conversion of all B Stock and C Stock, (ii) the conversion of
all of the Tranche Notes and (iii) the exercise and conversion of all
outstanding warrants and stock options. The Reporting Persons disclaim
beneficial ownership of any AOL-LA securities owned directly or indirectly by
the Banco Itau Reporting Persons.
Other than as set forth herein, to the best of the Reporting Persons'
knowledge as of the date hereof, (i) neither the Reporting Persons nor any
subsidiary or affiliate of the Reporting Persons nor any of the Reporting
Persons' executive officers or directors, beneficially owns any shares of Class
A Common Stock, and (ii) there have been no transactions in the shares of Class
A Common Stock effected during the past 60 days by the Reporting Persons, nor to
the best of the Reporting Persons' knowledge, by any subsidiary or affiliate of
the Reporting Persons or any of the Reporting Persons' executive officers or
directors.
References to, and descriptions of, the Second Amended and Restated
Stockholders' Agreement, the Note Purchase Agreement, the Voting Agreements and
the Second Amended and Restated AOL-ODC Registration Rights Agreement are
qualified in their entirety by reference to the copies of such documents
included as exhibits to Amendment No. 4 and Amendment No. 6 and are incorporated
in this Item 5 in their entirety where such references and descriptions appear.
Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to
Securities of the Issuer
Item 6 of the Statement is hereby amended by deleting the last three
paragraphs thereof and adding the following in lieu thereof:
Subject to the terms of the Conversion Agreement, if the closing bid price
of the Class A Common Stock on the SmallCap Market is at or above $0.19 on the
Panel Decision Date (as defined in Item 4), then AOL and ODC will be obligated
to convert a number of shares of Series B Preferred Stock and Series C Preferred
Stock, as applicable, into Class A Common Stock as follows: (1) if the closing
bid price is at least $0.21 on the Panel Decision Date, the number of shares of
Series B Preferred Stock and Series C Preferred Stock to be converted on
CUSIP No. 02365B100 Page 12 of 20
the Panel Decision Date will be equal to the number of shares of Class A Common
Stock required for the market value of all outstanding shares of Class A Common
Stock after giving effect to the conversion to be equal to $40,000,000 or (2) if
the closing bid price is below $0.21 but equal to or above $0.19, the number of
shares of Series B Preferred Stock and Series C Preferred Stock to be converted
on the Panel Decision Date will be that number which, after giving effect to the
conversion, will cause the number of outstanding shares of Class A Common Stock
to equal 190,476,190. The Proposed Conversion will be effected on a pro rata
basis based on the total number of outstanding shares of B Stock, C Stock and
Class A Common Stock held by each of AOL (including its wholly-owned affiliates
and employees) and ODC (including its wholly-owned affiliates, employees and
Gustavo A. Cisneros, Ricardo J. Cisneros and/or their lineal descendents, and/or
any trusts for the benefit of such persons) as of October 3, 2002. In no event,
however, will the number of shares of Series B Preferred Stock and Series C
Preferred Stock converted into Class A Common Stock pursuant to the Conversion
Agreement reduce either AOL's ownership of Series B Preferred Stock or ODC's
ownership of Series C Preferred Stock to less than 57,360,818 shares and
52,339,482 shares, respectively. The Proposed Conversion, if consummated, will
therefore not cause either AOL or ODC to lose their respective rights as holders
of B Stock and C Stock as set forth in the Charter.
Neither AOL nor ODC will be obligated to effect the Proposed Conversion on
the Panel Decision Date pursuant to the terms of the Conversion Agreement, if,
among other things: (i) the Listing Qualifications Panel issues a Conditional
Decision (as defined in Item 4) on the Panel Decision Date, and such Conditional
Decision is not accepted in writing by each of AOL and ODC on or before the
Deferred Conversion Date; (ii) the representations and warranties of AOL-LA as
set forth in the Conversion Agreement are inaccurate; (iii) AOL-LA fails to
perform all its covenants, agreements and conditions set forth in the Conversion
Agreement; (iv) immediately prior to, and immediately after giving effect to,
the Proposed Conversion, AOL-LA will have met or will meet each requirement for
continued listing on the SmallCap Market, except for (x) the $35,000,000 market
value of listed securities requirement as set forth in the Rule and (y) the $1
minimum bid price per share requirement as set forth in NASDAQ Marketplace Rule
4310(c)(4) or (v) any action, suit, investigation or proceeding is pending
against AOL-LA which would materially adversely affect the consummation of the
transactions contemplated by the Conversion Agreement or the expected benefits
of the Proposed Conversion.
In the event that the terms of the Conditional Decision are accepted,
neither AOL nor ODC will be obligated to effect the Proposed Conversion pursuant
to the terms of the Conversion Agreement on the Deferred Conversion Date,
unless, among other things: (i) the closing bid price of the Class A Common
Stock is equal to or above $0.19 and (ii) the conversion on such
date shall cause the market value of the outstanding Class A Common Stock, after
giving effect to such conversion, to equal or exceed $35,000,000.
Each of AOL, ODC or AOL-LA may immediately terminate the Conversion
Agreement upon delivery of written notice to the other parties provided that:
(i) the closing bid price of a share of Class A Common Stock is less than $0.19
on the Panel Decision Date or, if applicable, the Deferred Conversion Date, (ii)
the market value of the outstanding Class A Common Stock equals or exceeds
$40,000,000 on the Panel Decision Date or, if applicable, the Deferred
Conversion Date or (iii) the Proposed Conversion will not have taken place by
March 31, 2003. In addition, AOL-LA may terminate the Conversion Agreement if,
in its reasonable
CUSIP No. 02365B100 Page 13 of 20
judgment, the decision of the Listing Qualifications Panel would, among other
things, significantly impair its ability to maintain continued listing of the
Class A Common Stock on the SmallCap Market or realize the benefit of the
Conversion Charter Amendment (as described below).
After the Proposed Conversion, in accordance with the terms of the
Conversion Agreement, AOL-LA will be required to take certain steps, subject to
certain conditions, in order to amend its Charter to reduce the number of shares
of B Stock and C Stock that each of AOL and ODC is required to own in order to
maintain their respective class rights as holders of such stock (as described in
Item 4 of the Statement). This amendment to the Charter (the "Conversion Charter
Amendment") is Exhibit A to the Conversion Agreement, which is Exhibit 17 to
Amendment No. 7. The ownership threshold applicable to each of AOL and ODC will
be reduced by the number of shares of Series B Preferred Stock and Series C
Preferred Stock that are converted into Class A Common Stock pursuant to the
Conversion Agreement or converted in the future at the request of AOL-LA in
order to meet the continued listing requirements of the NASDAQ Stock Market.
Upon a sale or transfer by AOL or ODC to any person other than their
wholly-owned affiliates (as defined in the Charter) of Class A Common Stock in
an amount which exceeds the amount of Class A Common Stock previously acquired
or acquired at any time in the future by AOL or ODC, as the case may be, other
than through the conversion of B Stock or C Stock, as applicable, the required
ownership thresholds of AOL or ODC, as applicable, will increase on a
one-for-one basis until such threshold reaches its original amount.
In connection with the Conversion Agreement, AOL Time Warner, AOL and ODC
have entered into a voting agreement, dated as of October 3, 2002 (the
"Conversion Voting Agreement"), pursuant to which each party thereto agrees to
vote its shares of AOL-LA capital stock in favor of the Conversion Charter
Amendment.
References to, and descriptions of, the Note Purchase Agreement, the Second
Amended and Restated AOL-ODC Registration Rights Agreement, the Second Amended
and Restated Stockholders Agreement, the Voting Agreements, the Conversion
Agreement, the Conversion Voting Agreement and the Conversion Charter Amendment
are qualified in their entirety by reference to the copies of such documents
included as exhibits to Amendment No. 4, Amendment No. 6 and Amendment No. 7,
which are incorporated in this Item 6 in their entirety where such references
and descriptions appear.
To the best of the Reporting Persons' knowledge, except as described in the
Statement and this Amendment No. 7, there are at present no other contracts,
arrangements, understandings or relationships among the persons named in Item 2
above, and between any such persons and any person, with respect to any
securities of AOL-LA.
The information set forth or incorporated by reference in Items 2, 3, 4, 5
and 7 is hereby incorporated by reference.
CUSIP No. 02365B100 Page 14 of 20
Item 7. Material to be Filed as Exhibits
Item 7 of the Statement is hereby amended by adding the following as the
last two Exhibits thereof:
Exhibit Number Description
17. Preferred Stock Conversion Agreement, dated as of October 3,
2002, among America Online, Inc., Aspen Investments L.L.C.,
Atlantis Investments, L.L.C. and America Online Latin
America, Inc. (filed as Exhibit 99.2 to America Online Latin
America, Inc.'s Current Report on Form 8-K filed on
October 7, 2002 and incorporated by reference herein).
18. Voting Agreement, dated as of October 3, 2002, among AOL Time
Warner Inc., America Online, Inc., Aspen Investments L.L.C.
and Atlantis Investments, L.L.C.
CUSIP No. 02365B100 Page 15 of 20
SIGNATURES
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.
Date: October 17, 2002
AOL TIME WARNER INC.
By: /s/ Wayne H. Pace
----------------------------
Name: Wayne H. Pace
Title: Executive Vice President and
Chief Financial Officer
AMERICA ONLINE, INC.
By: /s/ Joseph A. Ripp
--------------------------
Name: Joseph A. Ripp
Title: Vice Chairman and Acting
Chief Financial Officer
CUSIP No. 02365B100 Page 16 of 20
SCHEDULE I
ADDRESSES OF THE CISNEROS GROUP AND THE BANCO ITAU GROUP
AND THE BANCO ITAU REPORTING PERSONS
Atlantis Investments LLC
c/o Finser Corporation
550 Biltmore Way, Suite 900
Coral Gables, FL 33134
Aspen Investments LLC
c/o Finser Corporation
550 Biltmore Way, Suite 900
Coral Gables, FL 33134
Banco Itau, S.A.
100 Praca Alfredo Egydio de Souza Aranha - Torre Itau S.A.
04344-902 Sao Paulo, Brazil
Banco Banerj, S.A.
Rua da Alfandega 28, 9th Floor
20070-000 Rio de Janeiro, Brazil
Itau Bank Limited
Ansbacher House, 3rd Floor
20 Genesis Close -P.O. Box 2582-GT
Grand Cayman
Cayman Islands, B.W.I.
Banco Itau, S.A.-Cayman Branch
Ansbacher House, 3rd Floor
20 Genesis Close -P.O. Box 2582-GT
Grand Cayman
Cayman Islands, B.W.I.
CUSIP No. 02365B100 Page 17 of 20
SCHEDULE II
DIRECTORS AND EXECUTIVE OFFICERS OF AOL TIME WARNER
The following table sets forth the name, business address and present
principal occupation or employment of each director and executive officer of AOL
Time Warner. Except as indicated below, each such person is a U.S. citizen, and
the business address of each such person is 75 Rockefeller Plaza, New York, New
York 10019.
Board of Directors
------------------
Name and Title Present Principal Occupation
-------------- ----------------------------
Stephen M. Case Chairman of the Board; AOL Time Warner Inc.
Richard D. Parsons Chief Executive Officer; AOL Time Warner Inc.
Kenneth J. Novack Vice Chairman; AOL Time Warner Inc.
R.E. Turner Vice Chairman; AOL Time Warner Inc.
Daniel F. Akerson Chairman of the Board and Chief Executive Officer;
XO Communications, Inc.
11111 Sunset Hills Road
Reston, VA 20190
(a broadband and communications company)
James L. Barksdale President and Chief Executive Officer of
Barksdale Management Corporation
800 Woodland Parkway
Suite 118
Ridgland, MS 39157
Stephen F. Bollenbach President and Chief Executive Officer;
Hilton Hotels Corporation
9336 Civic Center Drive
Beverly Hills, CA 90210
Frank J. Caufield Partner;
Kleiner Perkins Caufield & Byers
Four Embarcadero Center
San Francisco, CA 94111
(a venture capital partnership)
Miles R. Gilburne Principal; ZG Ventures L.L.C.
1250 Connecticut Avenue
Washington, D.C. 20036
Carla A. Hills Chairman and Chief Executive
Officer;
Hills & Company
1200 19th Street, NW
Washington, DC 20036
(international trade and investment
consultants)
CUSIP No. 02365B100 Page 18 of 20
Reuben Mark Chief Executive Officer;
Colgate-Palmolive Company
300 Park Avenue
New York, NY 10022
(consumer products)
Michael A. Miles Former Chairman of the Board and
Chief Executive Officer of Phillip
Morris Companies Inc.; Director of
Various Companies
c/o AOL Time Warner Inc.
Franklin D. Raines Chairman and Chief Executive
Officer;
Fannie Mae
3900 Wisconsin Avenue, NW
Washington, DC 20016-2806
(a non-banking financial services company)
Francis T. Vincent, Jr. Chairman of Vincent Enterprises
and Director of Various Companies;
290 Harbor Drive
Stamford, CT 06902
(a private investment firm)
Executive Officers Who Are Not Directors
-----------------------------------------
Name Title and Present Principal Occupation
---- --------------------------------------
Jeffrey A. Bewkes Chairman, Entertainment & Networks Group;
AOL Time Warner Inc.
Don Logan Chairman, Media & Communications Group;
AOL Time Warner Inc.
Paul T. Cappuccio Executive Vice President, General Counsel and
Secretary; AOL Time Warner Inc.
Adolf R. DiBiasio Executive Vice President of Strategy and
Investments; AOL Time Warner Inc.
Patricia Fili-Krushel Executive Vice President of Administration;
AOL Time Warner Inc.
Robert M. Kimmitt Executive Vice President, Global & Strategic
Policy; AOL Time Warner Inc.
Kenneth B. Lerer Executive Vice President; AOL Time Warner Inc.
Michael M. Lynton Executive Vice President and President,
International; AOL Time Warner Inc.
Wayne H. Pace Executive Vice President and Chief Financial
Officer; AOL Time Warner Inc.
William J. Raduchel Executive Vice President and Chief Technology
Officer; AOL Time Warner Inc.
Mayo S. Stuntz, Jr. Executive Vice President; AOL Time Warner Inc.
CUSIP No. 02365B100 Page 19 of 20
SCHEDULE III
DIRECTORS AND EXECUTIVE OFFICERS OF AMERICA ONLINE, INC.
The following table sets forth the name, business address and present
principal occupation or employment of each director and executive officer of
America Online, Inc. unless otherwise noted, each such person is a U.S. citizen,
and the business address of each such person is 22000 AOL Way, Dulles, Virginia
20166.
Board of Directors
------------------
Name and Title Present Principal Occupation
-------------- ----------------------------
Paul T. Cappuccio Executive Vice President, General Counsel and
Secretary;
AOL Time Warner Inc.
75 Rockefeller Plaza
New York, New York 10019
J. Michael Kelly Chairman and Chief Executive Officer, AOL
International; America Online, Inc.
Wayne H. Pace Executive Vice President and Chief Financial
Officer;
AOL Time Warner Inc.
75 Rockefeller Plaza
New York, New York 10019
Executive Officers Who Are Not Directors
----------------------------------------
Jonathan F. Miller Chairman and Chief Executive Officer; America
Online, Inc.
Joseph A. Ripp Vice Chairman and Acting Chief Financial Officer;
America Online, Inc.
Theodore J. Leonsis Vice Chairman, Advanced Services Group; America
Online, Inc.
Randall J. Boe Executive Vice President, General Counsel and
Secretary; America Online, Inc.
John Buckley Executive Vice President, Corporate Communications;
America Online, Inc.
James E. de Castro President, Interactive Services; America Online,
Inc.
Martin R. Fisher President, Technology Department; America Online,
Inc.
Lisa A. Hook President, AOL Anywhere/AOL Broadband; America
Online, Inc.
Michael M. Lynton President, AOL International; America Online, Inc.
Joseph M. Redling President, Marketing; America Online, Inc.
Robert B. Sherman President, Interactive Marketing; America Online,
Inc.
Peter B. Ashkin Executive Vice President, Technology Assessment;
America Online, Inc.
James P. Bankoff Executive Vice President, Operations, Interactive
Services; America Online, Inc.
Joel M. Davidson Executive Vice President, AOL Web Properties;
America Online, Inc.
David A. Gang Executive Vice President, Product Marketing and
President, AOL Strategic Business Solutions;
America Online, Inc.
Matthew R. Korn Executive Vice President, Network and Data Center
Operations; America Online, Inc.
David Lebow Executive Vice President, Programming and Strategy;
America Online, Inc.
CUSIP No. 02365B100 Page 20 of 20
Neil Smit Executive Vice President, Member Services; America
Online, Inc.
Thomas R. Colan Senior Vice President, Controller and Treasurer;
America Online, Inc.
EXHIBIT INDEX
Exhibit Number Description
18. Voting Agreement, dated as of October 3, 2002, among
AOL Time Warner Inc., America Online, Inc., Aspen
Investments L.L.C., Atlantis Investments, L.L.C.