AOL announced a $500 million one-time dividend Monday as part of a plan to distribute $1.1 billion in cash to shareholders, a defensive move for the Internet company that fought off a challenge by an activist shareholder earlier this year.
AOL ( said it will pay $5.15 a share to shareholders of record on Dec. 5. The company also announced a $600 million accelerated share repurchase agreement with )Barclays Bank (. )
Shares of AOL jumped 93 cents, or 2.8%, to $33.85 in early trading Monday. Its shares have more than doubled in value so far this year.
In April, AOL reached a deal to sell 800 patents to Microsoft ( for $1.06 billion. The company said at the time that it intended "to return a significant portion of the sale proceeds to shareholders." )
But even before reaching that deal, activist shareholder group Starboard Value LP, had been pushing for AOL to sell its patents and return cash to shareholders through a share repurchase and dividend.
Starboard was particularly critical of large purchases the company has made -- including the $315 million it spent for the Huffington Post -- since AOL was spun-off from Time Warner ( in 2009. Time Warner is the parent company of CNNMoney. )
Starboard ran a slate of three directors for the company's eight board positions, but it failed in those efforts. Since then it has cut its stake in AOL to 3.1% from its previous holding of 5.3% of the outstanding stock.
AOL also announced Monday it would ask shareholders for authority to impose new rules to deter any individual, individual fund or family of funds from acquiring a 4.9% or larger stake in the company.
AOL had already announced a $550 million share repurchase plan on Aug. 3.
Under the new share repurchase plan, AOL will increase the amount to $600 million and expects to receive shares throughout the remainder of the year, including about 4 million shares that Barclays will deliver to AOL on August 30.