CASE

While he and the rest of the slate ran unopposed, some 22 percent of stockholders withheld votes for the re-election of Case, who engineered the merger of America Online and Time Warner.

Other directors, including media maverick Ted Turner, one of Case's harshest critics, and the newly elected chairman, Richard Parsons, who heaped praise on Case, each received more than 90 percent support, which is typical in corporate elections.

Far from realizing the potential of the merger, AOL Time Warner has been dragged down by the poor performance of the America Online unit, a crushing debt load, internal feuding and a pair of federal investigations into its bookkeeping practices. Its stock price is down 70 percent from its high when the merger was announced in 2000; it closed up 26 cents, or 1.9 percent, at $14.24 yesterday.

Against this backdrop, Case reluctantly decided to give up the chairman's post.

"As I step down as chairman, you might expect that I would be inclined to reflect back on the company and its achievements over the years or use the time to set the record straight about recent events," Case said. "If so, you'd be right. The temptation is great. But at this juncture, I think it is far more important for us to look to the future than the past. While the last few years have been difficult and disappointing for us all, and while nobody is happy about the stock price, I believe brighter days are ahead."

Case, a graduate of Punahou School, vowed to remain a player in the ongoing AOL Time Warner drama.

"For my part, as a board member and a fairly large fellow shareholder, I stand ready to help (Parsons) in any way to move this company forward and get the stock back where it should be," he said.

Parsons, who is due in Hawai'i to speak to University of Hawai'i graduates tomorrow, then ascended to the podium, where he began his tenure as chairman by recognizing Case's efforts in building America Online into an Internet giant. Since the annual meeting was held near America Online's Northern Virginia headquarters, many AOL employees, who view Case as an icon, were in attendance and they rose to their feet as Parsons publicly offered his thanks.

"Many, many words have been written about this young man over the course of many years now," Parsons said. "But I think to summarize it, I'll say Steve Case probably built not only the most successful online company the world has seen - he led a revolution that introduced the Internet and connectivity to this country and the world. That is a legacy that will be with you for the rest of your days."

Numerous stockholders rose to complain about the stock's poor performance and the robust salaries paid to senior executives. But during the meeting, Parsons kept the mood light, invoking humor, telling success stories and promising to do what he could to get the stock price up.

As for the struggling America Online unit, which is losing dial-up customers to rivals offering high-speed Internet connections, Parsons expressed optimism. He said AOL was beginning to show promise on the advertising side and by migrating subscribers to its high-speed, or broadband, offering.

"AOL is working hard to stabilize its business and put it back on a growth track," he said. "I'm confident it's going to regain its stride."