Exhibit 10.12

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Via Hand Delivery

Revised April 5, 2010

January 14, 2010

Ted Cahall

22000 AOL Way

Dulles, Virginia 20166

Separation Agreement and Release of Claims

Dear Ted:

This letter will serve as confirmation that your employment with AOL Inc.
(together with any successors, subsidiaries, merged entities, parent entities
and their respective affiliates, “AOL” or “the Company”) is being terminated
without cause. This Separation Agreement and Release of Claims (“Separation
Agreement”), upon your signature after your Separation Date, will constitute the
complete agreement between you and the Company regarding the terms of your
separation from employment.

1. Your employment with the Company will terminate without cause at the close of
business May 1, 2010 (your “Separation Date”) and January 14, 2010, the original
date of this letter, shall be deemed your notification date (your “Notification
Date”). Beginning on your Notification Date, you will remain an employee of the
Company through your Separation Date (“Notification Period”). You shall continue
to receive your base salary and benefits during this Notification Period. It is
expected that you will perform your job satisfactorily. The Company reserves the
right to change your Separation Date, but will notify you in writing of any
change. If you obtain other employment with AOL or with any Time Warner company
within thirty days of your Separation Date, you will not be eligible to receive
any of the benefits set forth in this Agreement, unless specified herein, and
this Agreement shall become null and void.

2. On the next regularly scheduled pay date following your Separation Date, or
sooner if local law requires, you will receive a check for all unpaid wages and
any accrued, unused vacation or paid time off from January 1, 2010, or longer if
required by state law, due through your Separation Date, less applicable
deductions and withholdings.

3. Your medical, dental and vision benefits will continue through the end of the
month in which your Separation Date occurs. With respect to the Consolidated
Omnibus Budget Reconciliation Act (“COBRA”), your COBRA period will begin on the
first day of the month following your Separation Date. You will receive separate
information regarding your option to continue health benefits under COBRA after
your Separation.

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Date. Your Company-paid life insurance will continue through the end of the
month in which your Separation Date occurs. All other benefits will terminate on
your Separation Date.

4. Prior to your departure on your Separation Date, unless otherwise instructed
by an authorized Company representative, you must:

 

  a. resign from any and all positions you hold as an officer and/or director of
AOL Inc. and from each of its direct and indirect subsidiaries and/or
affiliates; and

 

  b. return to your department manager all the Company property in your
possession, including, but not limited to, your identification badge and
SecurID, keys, computers, corporate credit cards, pagers, telephones, parking
permits and the original and all copies of any written, recorded, or computer
readable information about Company practices, procedures, trade secrets,
customer lists or product marketing associated with the Company’s business and
any other information deemed proprietary or confidential in accordance with
Company policies or the Company’s Confidential Information, Non-Competition and
Proprietary Rights Agreement (the “CNPR Agreement”). By signing this Separation
Agreement, you represent that you have returned all Company confidential or
proprietary information in your possession and that you took all reasonable
steps to protect the confidentiality of such Company information during your
employment. You agree that you are bound by (a) all the terms of the Standards
of Business Conduct through your Separation Date and (b) the Company’s CNPR
Agreement, which remains in full force and effect after your Separation Date as
specified therein.

5. In addition, pursuant to your December 15, 2006 Agreement and under the terms
and conditions as detailed below, the Company will agree to provide you
additional payments and benefits, which you acknowledge are payments and
benefits to which you are otherwise not entitled, if you sign this Separation
Agreement. If you do not sign this Separation Agreement, you will not receive
the additional payments and benefits.

6. In exchange for your execution of this Separation Agreement, the Company will
provide you the following and the following terms shall apply:

 

  a. An amount equal to eighteen (18) months of your current Base Salary
($885,000), less applicable withholdings, payable in a lump sum, subject to
paragraph 6(g) below. This payment will not be eligible for deferrals to the
Company’s 401(k) plan.

 

  b. Any unpaid bonus pursuant to the Company Retention Bonus Program, as
outlined to you in a memo dated April 1, 2009 (an amount equal to $190,000), if
you have not received such payment on or before your Separation Date, less tax
withholdings, payable in a lump sum subject to paragraph 6(g) below. This
payment will not be eligible for deferrals to the Company’s 401(k) plan.

 

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  c. Subject to the terms of the Termination paragraph of the May 13, 2008
amendment to your Agreement (“Employment Agreement Amendment”), you will receive
a bonus payment for the period from July 1, 2009 through 12/31/2009, if you have
not received such payment on or before your Separation Date, payable at the
target rate set forth in AOL’s Global Bonus Plan, (an amount equal to $181,720),
less tax withholdings, paid in a lump sum, subject to paragraph 6(g) below. This
amount represents the Bonus payment for the “Prior Year” as referenced in the
termination provision of your Employment Agreement Amendment. This payment will
not be eligible for deferrals to the Company’s 401(k) plan.

 

  d. Subject to the terms of the Termination paragraph of your Employment
Agreement Amendment, you will receive an amount equal to a pro-rated bonus
payment for the period from January 1, 2010 through your Separation Date,
payable at target (an amount equal to $184,389), less tax withholdings, paid in
a lump sum, subject to paragraph 6(g) below. This payment will not be eligible
for deferrals to the Company’s 401(k) plan.

 

  e. If you elect to enroll in COBRA benefit continuation, the Company will pay
the cost of medical, dental and vision benefit coverage under COBRA for eighteen
(18) months beginning the first day of the calendar month following the
termination of your employment.

 

  f. The services of a professional outplacement and counseling firm, as
designated by the Company, for eighteen (18) months to assist you in securing
employment following your separation from employment with the Company.

 

  g.

The payments made under paragraphs 6(a), 6(b), 6(c) and 6(d) will be paid within
thirty (30) days of the Separation Date or the “effective date” of the signed
Separation Agreement, as set forth in paragraph 15 below, whichever is later,
but no later than March 15 of the calendar year following the year of the
termination of your employment. The Company represents that you were not a
“specified employee” as of your separation from service, for purposes of 409A
application. You are relying upon this representation by the Company in
accepting the consideration in this Separation Agreement. In the event there is
a determination to the contrary, in spite of the Company’s belief and
representation that you were not a “specified employee” as of your separation
from service, within the meaning of 409A, then the Company shall take all steps
to make you whole, including any gross ups, payments of taxes, penalties and
interest, and shall further compensate you for any losses as a result of such
contrary determination, including any legal, tax and financial fees incurred by
you associated with any challenge, determination and/or compliance. If any
provision of this Agreement would cause you to incur any additional tax or
interest under Section 409A of the Internal Revenue

 

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Code of 1986, as amended (“the Code”), any regulations or Treasury guidance
promulgated thereunder, the Company shall reform such provision, provided that
the Company shall: (i) maintain, to the maximum extent practicable, the original
intent of the applicable provision without violating the provisions of
Section 409A of the Code; and (ii) notify and consult with you regarding such
amendments or modifications prior to the effective date of any such change.

In addition to the payments under this paragraph 6, if it shall be determined
that any event or any payment, vesting, distribution, or transfer by the Company
(or any successor, affiliate or by any other person) to you or for your benefit
under the terms of this Agreement or otherwise would be subject to or result in
the imposition of the excise tax under Section 4999 of the Code (and any
regulations issued thereunder, any successor provision, and any similar
provision of state or local income tax law) (collectively, the “Excise Tax”),
then the Company shall pay to you a lump sum (“Tax Equalization Payment”) in an
amount sufficient that, after payment of the federal, state or local income,
employment or other required taxes (other than taxes that may be imposed by
Section 409A of the Code)(“Regular Taxes”), you shall receive an amount equal to
the Excise Tax. Such payment shall be made within 15 days of the date which you
remit such Excise Tax. In determining the amount of any Regular Taxes, the
maximum applicable, marginal rate of tax for the year in which the Tax
Equalization Payment is payable shall be used. The amount of this Tax
Equalization Payment shall be determined by the Company’s independent
accountants.

 

  h. You shall not be entitled to notice and severance under any policy or plan
of the Company (the payments set forth in this paragraph being given in lieu
thereof).

 

  i. Except as set forth in paragraphs 6(b)-6(d), you shall not be entitled to
receive any other bonus or pro-rated bonus payment.

 

  j. The payments under paragraphs 6(a)-6(d) shall be made without regard to any
duty to mitigate damages and shall not be reduced by any compensation received
by you from any subsequent employment.

7. The payments and other benefits set forth in paragraph 6 are being offered
solely in consideration for your execution of this Separation Agreement,
including a release of all claims against the Company as set forth in paragraph
8 below. The payments are not an admission of any wrongdoing by the Company.

8. In exchange for the Company’s agreement as stated above, you agree to release
and discharge unconditionally the Company and any successors, subsidiaries,
affiliates, related entities, predecessors, merged entities and parent entities,
and their respective

 

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officers, directors, stockholders, employees, benefit plan administrators and
trustees, agents, attorneys, insurers, representatives, affiliates, successors
and assigns, from any and all claims, actions, causes of action, demands,
obligations or damages of any kind arising from your employment with the Company
and the separation of that employment or otherwise, including the notice of your
termination, whether known or unknown to you, which you ever had or now have
upon or by reason of any matter, cause or thing, up to and including the day on
which you sign this Separation Agreement. The claims you are waiving include,
but are not limited to, all claims arising out of or related to any stock
options held by you or granted to you by the Company which are scheduled to vest
subsequent to your Separation Date; all claims under Title VII of the Civil
Rights Act of 1964, as amended; all claims under the Worker Adjustment and
Retraining Notification Act (WARN) or similar state statutes; all claims under
the Americans with Disabilities Act; all claims under the Age Discrimination in
Employment Act; all claims under the National Labor Relations Act; all claims
under the Older Workers Benefit Protection Act (“OWBPA”); all claims under the
Family and Medical Leave Act, to the extent permitted by law, all claims under
the Employee Retirement Income Security Act; all claims under 42 U.S.C. § 1981;
all claims under the Sarbanes-Oxley Act of 2002; all claims under state
antidiscrimination laws; except in California, all claims for unreimbursed
business expenses; all claims under any principle of common law; all claims
concerning any right to reinstatement; and all claims for any type of relief
from the Company, whether federal, state or local, whether statutory, regulatory
or common law, and whether tort, contract or otherwise, to the fullest extent
permitted by law. This release of claims does not affect any claim for workers’
compensation benefits, unemployment benefits or other non-waivable
administrative claims, your vested rights, if any, in the Company’s 401(k) plan,
your rights to exercise any and all Company stock options held by you that are
exercisable as of your Separation Date during the applicable period of exercise
and in accordance with all other terms of those options and the stock options
plans, agreements, and notices under which such options were granted, or your
right to enforce the terms of this Separation Agreement.

Notwithstanding the foregoing, in the event any of the Company’s successors,
subsidiaries, affiliates, related entities, predecessors, merged entities and
parent entities, and their respective officers, directors, stockholders,
employees, benefit plan administrators and trustees, agents, attorneys,
insurers, representatives, affiliates, successors and assigns bring any claim
against you related to your dealings with the Company, you shall have the right
to fully defend against such claims and may bring any counterclaims against such
individuals or entities, without regard to this release.

9. In exchange for your agreement and covenants contained in this Agreement, the
Company agrees to release and discharge you unconditionally, from any and all
claims, action, causes of action, demands, obligations or damages of any kind
arising out of or relating to your employment with the Company, the separation
of that employment, whether known or unknown to them, which they ever had or now
have upon or by reason of any matter, cause or thing, up to and including the
day on which the Company signs this Separation Agreement. The claims they are
waiving include, but are not limited to, all claims under any principle of
common law; regulatory or common law, and whether tort, contract or otherwise,
to the fullest extent permitted by law. This release of claims does not affect
the Company’s right to enforce the terms of this Separation Agreement.

 

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10. The Company will provide you, within fifteen (15) days of your signature on
this Separation Agreement, a full copy of your personnel file. Within seven
(7) days of receipt of the file, you will mark any documents that you would like
removed from the personnel file. Those documents marked and any copies of those
documents will be removed from the personnel file and personnel records, and
shall be held under seal by the Legal Department of the Company. The documents
held under seal shall not be released absent Court Order, subpoena or other
compulsory process. A release signed by you shall not be sufficient to release
the documents; however, a letter requesting the release of the documents from
your personal counsel shall be sufficient. Notwithstanding anything in this
paragraph, the Company shall not be limited in its right to maintain accurate
information in its personnel records in order to appropriately respond to any
governmental agency or in any governmental or legal proceeding or to provide its
benefit vendors with accurate information. In the event the Company believes
that any of the information that you have requested be removed and kept under
seal is provided to any governmental agency or in any governmental or legal
proceeding or provided to its benefit vendors, the Company shall notify you in
writing within 10 days of such event and the reasons therefore.

11. You agree to reasonably assist the Company, in connection with any
litigation, investigation or other matter involving your tenure as an employee,
officer, or director of the Company, including, but not limited to, meetings
with Company representatives and counsel and giving testimony in any legal
proceeding involving the Company. The Company will pay you reasonable
compensation (to be mutually agreed upon at the time of request for your
services) for the time you spend on such matters and reimburse you for all
reasonable out-of-pocket expenses incurred in rendering such assistance to the
Company.

12. The parties understand and agree that the terms of this Separation Agreement
are confidential, and you agree not to disclose to others the terms of this
Separation Agreement, except as otherwise permitted by law or with the written
consent of each other, provided however, that this paragraph 13 does not
preclude disclosure to your immediate family or for purposes of securing
professional financial, tax or legal services, and for the Company, on a
strictly need to know basis, provided further that, prior to making any such
disclosure, the parties will inform any such persons that this confidentiality
clause is in effect and that they are also bound by it.

13. The parties agree not to affirmatively encourage or assist any person or
entity in litigation against each other in any manner. This provision does not
prohibit each party’s response to a valid subpoena for documents or testimony or
other lawful process; however, such receiving party agrees to provide the
Company with prompt notice of any such subpoena or process. The parties further
agree that this Separation Agreement is not admissible in any proceeding except
one to enforce the terms of this Separation Agreement.

14. You agree not to make any disparaging or untruthful remarks or statements
about the Company, its officers, directors, employees or agents. The Company
agrees not to cause its officers or senior executives to make any disparaging or
untruthful

 

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remarks or statements about your employment with the Company, in their official
or unofficial capacity. Nothing in this Agreement prevents you or the Company
from making truthful statements when required by law, court order, subpoena, or
the like, to a governmental agency or body.

15. In accordance with the terms of this Agreement, you agree that in the event
you are found in a court of law to be in breach of any of your obligations under
this Separation Agreement, the Company may be entitled to receive the full
amount paid under paragraph 6 above unless otherwise determined by the court and
the Company will be entitled to obtain all other remedies provided by law or
equity. In the event the Company is found in a court of law to be in breach of
its obligations under this Separation Agreement, you will be entitled to
appropriate relief as determined by the court.

16. If any term or clause of this Separation Agreement should ever be determined
to be unenforceable, you and the Company agree that this will not affect the
enforceability of any other term or clause of this Separation Agreement.

17. If you are under age 40 on your Separation Date:

 

  a. You should consider consulting an attorney before executing this Separation
Agreement. You have seven (7) days from your Separation Date in which to sign
and return the Separation Agreement, although you may, at your discretion, sign
and return the Separation Agreement at any earlier time, after your Separation
Date. The day you return the executed Separation Agreement is the “effective
date” of this Separation Agreement. If you have not returned the executed
Separation Agreement within the time permitted, then the Company’s offer will
expire by its own terms at such time.

 

  b. If you are age 40 or older on your Separation Date:

Pursuant to the Older Workers Benefit Protection Act of 1990 (“OWBPA”), you
acknowledge and warrant the following: (i) that you are waiving rights and
claims for age discrimination under the ADEA and OWBPA, in exchange for the
consideration described above, which is not otherwise due to you; (ii) you have
consulted with an attorney before signing this Release and Waiver; (iii) you are
not waiving rights or claims for age discrimination that may arise after the
effective date of this Release and Waiver; (iv) you have been given a period of
at least forty-five (45) days in which to consider this Release and Waiver and
the waiver of any claims you have or may have under law, including your rights
under the ADEA and OWBPA, before signing below; and (v) you understand that you
may revoke the waiver of your age discrimination claims under the ADEA and OWBPA
within seven (7) days after your execution of this Release and Waiver, and that
such waiver shall not become effective or enforceable until seven (7) days after
the date on which you execute this Release and Waiver.

 

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To revoke, you must send a written statement of revocation delivered by
certified mail to AOL Inc., Attn: Gillian Pon, 22110 Pacific Blvd, Dulles, VA
20166. The revocation must be received no later than 5:00 p.m. on the seventh
day following your execution of this Separation Agreement. If you do not so
revoke, the eighth day following your acceptance will be the “effective date” of
this Separation Agreement. If you have not returned the executed Separation
Agreement within the time permitted, then the Company’s offer will expire by its
own terms at such time.

18. This Agreement shall be governed by and construed and enforced in accordance
with the substantive laws of the Commonwealth of Virginia applicable to
agreements made and to be performed entirely in Virginia.

To accept the Separation Agreement, you must sign below on or after your
Separation Date and return one entire copy to AOL Inc., Attn: Gillian Pon, 22110
Pacific Blvd., Dulles, VA 20166. (An extra copy for your files is enclosed.)

 

Sincerely, /s/ David Harmon David Harmon Executive Vice President, Human
Resources AOL Inc.

By signing this Separation Agreement, I acknowledge that: I have had the
opportunity to review this Separation Agreement carefully with legal or other
personal advisors of my own choice; I understand that by signing this Separation
Agreement I am releasing the Company of all claims against it; I have read this
Separation Agreement and understand its terms; I have been given a reasonable
period of time to consider its terms and effect and to ask any questions I may
have; I voluntarily agree to the terms of this Separation Agreement.

 

AGREED AND ACCEPTED:      

/s/ Theodore R. Cahall, Jr.

     

4/8/10

Ted Cahall       Date

 

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