The agreement guarantees him an annual base salary of $1M, and a target annual incentive bonus of $2M. In contrast to his previous deal, from 2009 when AOL was still part of Time Warner, the new terms provide fewer benefits ”including a reduction in the amount of cash severance benefits, the payment of cash severance benefits over time rather than in a lump sum, and the elimination of supplemental life and disability insurance benefits,” the company says in an SEC filing. But Armstrong’s stock options give him a chance to score big if AOL’s price rises: Half of the options vest when the 20-day average stock price rises at least 20% from the average in the 20-day period before he receives his grants. He can score the other half when AOL’s stock prices stays up at least 30%. He’ll also receive stock if AOL meets unspecified targets for its shares in the period from the beginning of this year to the end of 2014. One of AOL’s largest shareholders, Jeffrey Smith’s Starboard Value, has been hammering the company to take actions that might increase its market value. AOL shares are -3.5% over the last 12 months.