<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
AMENDMENT NO. 1
Annual Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the fiscal year ended December 31, 1997 Commission file number 0-27890
MINDSPRING ENTERPRISES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 58-2113290
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1430 WEST PEACHTREE STREET, SUITE 400 30309
ATLANTA, GEORGIA (Zip Code)
(Address of principal executive offices)
(404) 815-0770
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
(Not applicable)
Securities registered pursuant to Section 12(g) of the Act:
COMMON STOCK, PAR VALUE $.01 PER SHARE
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 (the "Exchange Act") during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes X No
----- -----
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [ ]
Based upon the closing price of the registrant's Common Stock as of March 23,
1998 the aggregate market value of the Common Stock held by non-affiliates of
the registrant is $276,024,426.*
The number of shares of Common Stock outstanding as of March 23, 1998 was
7,556,630.
- --------------------
* Solely for purposes of this calculation, all executive officers and
directors of the registrant and all shareholders reporting beneficial
ownership of more than 5% of the registrant's Common Stock are considered
to be affiliates.
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C> <C>
PART III Item 10. Directors and Executive Officers of the Registrant . . . . . . . . . . 1
Item 11. Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . 4
Item 12. Security Ownership of Certain Beneficial Owners
and Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Item 13. Certain Relationships and Related Transactions . . . . . . . . . . . . 8
</TABLE>
<PAGE> 3
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Set forth below is certain information about each person who served as
a director or executive officer of MindSpring Enterprises, Inc. (the "Company")
as of December 31, 1997. The ages of the persons set forth below are as of
March 31, 1998.
<TABLE>
<CAPTION>
TERM AS
DIRECTOR
NAME AGE POSITION(S) WITH COMPANY EXPIRES
- ------------------- ---- ----------------------------------------------- ------------
<S> <C> <C> <C>
Charles M. Brewer 39 Chairman, Chief Executive Officer and Director 1998
Michael S. McQuary 38 President, Chief Operating Officer and Director 2000
Michael G. Misikoff 45 Vice President, Chief Financial Officer, 1999
Secretary, Treasurer and Director
James T. Markle 38 Executive Vice President of Network Operations --
Robert D. Sanders 24 Vice President and Chief Technical Officer --
Gregory J. Stromberg 45 Executive Vice President of Call Centers --
Alan Taetle(1) 34 Executive Vice President of Sales and Marketing --
O. Gene Gabbard(2)(3) 57 Director 1999
Campbell B. Lanier, III (2)(3) 47 Director 1998
William H. Scott, III (2)(3) 50 Director 2000
</TABLE>
- ----------------------
(1) Mr. Taetle resigned effective April 13, 1998.
(2) Member of the Audit Committee
(3) Member of the Compensation Committee
CHARLES M. BREWER founded the Company and has served as Chief Executive Officer
and Director of the Company since its inception in February 1994 and as
Chairman since March 1996. He also served as the President of the Company from
its inception until March 1996 and as the Secretary and Treasurer of the
Company from its inception until January 1995. From May 1993 to January 1994,
Mr. Brewer developed the concept for the Company and evaluated its prospects.
Prior to starting the Company, he served as Chief Executive Officer of
AudioFax, Inc. ("AudioFax"), a software company providing fax server software,
from May 1992 to April 1993 and was the Chief Financial Officer of AudioFax
from May 1989 to April 1992. Mr. Brewer received a BA in Economics from, and
was a Phi Beta Kappa graduate of, Amherst College and received a Masters in
Business Administration from Stanford University.
MICHAEL S. MCQUARY has been the President of the Company since March 1996, the
Chief Operating Officer of the Company since September 1995, and a Director of
the Company since December 1995. He also served as the Company's Executive
Vice President from October 1995 to March 1996 and the Company's Executive Vice
President of Sales and Marketing from July 1995 to September 1995. Prior to
joining the Company, Mr. McQuary served in a variety of management positions
with Mobil Chemical Co. ("Mobil"), a petrochemical company, from August 1984 to
June 1995, including Regional Sales Manager from April 1991 to February 1994
and Manager of Operations (Reengineering) from February 1994 to June 1995. Mr.
McQuary received a BA in Psychology from the University of Virginia and a
Masters in Business Administration from Pepperdine University.
MICHAEL G. MISIKOFF has served as Vice President, Chief Financial Officer,
Secretary, Treasurer and a Director of the Company since January 1995. From
January 1992 to December 1994, Mr. Misikoff was the Acting Chief Financial
Officer and a Director of InterCall Corporation, a subsidiary of ITC Holding
Company, Inc. ("ITC Holding"), the Company's largest stockholder, that provides
conference call services. From March 1991 to January 1992, Mr. Misikoff worked
as an
<PAGE> 4
independent financial consultant. Mr. Misikoff served as Chief Financial
Officer of Async Corporation ("Async"), a provider of voice messaging services,
from its startup in February 1985 until March 1991. He received a BBA in
Accounting from Georgia State University.
JAMES T. MARKLE has served as the Company's Executive Vice President of Network
Operations since March 1998 and served as Vice President of Network Operations
from April 1995 to February 1998. Prior to joining the Company, Mr. Markle
served as the Director of Technical Support for Concert Communications, Co., a
telecommunications company, from April 1994 until April 1995. From August 1990
to April 1994, Mr. Markle served as Senior Manager of Network Operations for
MCI Communications Corporation ("MCI"), a telecommunications company. Mr.
Markle attended Maryville College.
ROBERT D. SANDERS has been the Company's Vice President since September 1996
and its Chief Technical Officer since January 1995. Mr. Sanders served as the
Company's Vice President of Network Engineering from December 1995 to September
1996 and the Company's Senior Engineer from June 1994 to January 1995. Prior
to joining the Company, Mr. Sanders worked as the Software Engineer and System
Administrator of Harry's Farmers Market, Inc. from March 1994 to May 1994. Mr.
Sanders attended the Georgia Institute of Technology.
GREGORY J. STROMBERG has served as the Company's Executive Vice President of
Call Centers since March 1998 and served as Vice President of Customer Service
from October 1995 when he joined the Company to February 1998. From June 1993
to September 1994, he served as a Regional Manager for Digital Financial
Services, a computer leasing company. Mr. Stromberg worked for Digital
Equipment Corporation, a computer manufacturer, and served as Senior Sales
representative from June 1983 to May 1987, Program Manager from May 1987 to May
1990, and District Operations Manager from May 1990 to June 1993. Mr.
Stromberg received a B.S. degree in Business Management and a Masters in
Business Administration degree from the University of Utah.
ALAN J. TAETLE served as the Company's Executive Vice President of Marketing
and Business Development from June 1997 to April 13, 1998. Mr. Taetle served
as the Company's Vice President of Marketing from September 1996 to June 1997
and as the Company's Vice President of Business Development from March 1995 to
September 1996. Prior to joining the Company, Mr. Taetle served as the
Director of Operations and Product Management at CogniTech Corporation, makers
of a retail series of Contact Management software products, from November 1992
to March 1995. Mr. Taetle received a B.A. degree in Economics from the
University of Michigan and a Masters in Business Administration degree from
Harvard Business School.
O. GENE GABBARD has been a Director of the Company since December 1995. He has
worked independently as an entrepreneur and consultant since February 1993. Mr.
Gabbard currently serves as a director of ITC Holding and several of its
subsidiaries, as well as ITC/\DeltaCom, Inc. ("ITC/\DeltaCom") (a carriers'
carrier and retail telecommunications company), Powertel, Inc. ("Powertel") (a
wireless telecommunications company) (formerly known as InterCel, Inc.), KNOLOGY
Holdings, Inc. ("KNOLOGY") (a broadband telecommunications services company)
(formerly known as CyberNet Holding, Inc.), and two telecommunications
technology companies, Dynatech Corporation and Adtran, Inc. From August 1990
through January 1993, he served as Executive Vice President and Chief Financial
Officer of MCI. He served in various senior executive capacities, including
Chairman of the Board, President and Chief Executive Officer of Telecom*USA,
Inc. ("Telecom") from December 1988 until Telecom's merger with MCI in August
1990. From July 1984 to December 1988, he was Chairman and/or President of
SouthernNet, Inc. ("SouthernNet"), a long distance telecommunications company
which was the predecessor to Telecom. Mr. Gabbard has served as a Managing
Director of South Atlantic Private Equity Fund IV, Limited Partnership since
1997.
CAMPBELL B. LANIER, III has served as a Director of the Company since November
1994. Mr. Lanier has served as Chairman of the Board and Chief Executive
Officer of ITC Holding (or its predecessors) since its inception in 1985. In
addition, Mr. Lanier is an officer and director of several ITC Holding
subsidiaries. He is also the Chairman of ITC/\DeltaCom and is a director of
ITC/\DeltaCom,
- 2 -
<PAGE> 5
KNOLOGY, National Vision Associates, Ltd. (a full service optical retailer),
K&G Men's Centers (a discount retailer of men's clothing), Vice Chairman of the
Board of AvData Systems, Inc. ("AvData") (a provider of data communications
networks) and Chairman of the Board of Powertel. He served as Chairman of the
Board of AvData from 1988 to 1990. From 1984 to 1989, Mr. Lanier served as
Chairman of the Board of Async. Mr. Lanier also served as Vice President -
Industry Relations of Telecom from 1984 to 1988 and as Senior Vice President -
Industry Relations from January 1989 until Telecom's merger with MCI in August
1990. From 1984 to 1985, he served as Chief Executive Officer of SouthernNet,
and from 1985 to 1986 he was Vice Chairman of the Board of SouthernNet. Mr.
Lanier has served as a Managing Director of South Atlantic Private Equity Fund
IV, Limited Partnership since 1997.
WILLIAM H. SCOTT, III has been a Director of the Company since November 1994.
Mr. Scott has served as President of ITC Holding (or its predecessors) since
December 1991 and has been a director of ITC Holding (or its predecessors) since
May 1989. In addition, Mr. Scott is an officer and director of several ITC
Holding subsidiaries. Mr. Scott is a director of ITC/\DeltaCom, KNOLOGY,
Powertel and AvData. From 1989 to 1991, he served as Executive Vice President
of ITC Holding. From 1985 to 1989, Mr. Scott was an officer and director of
Async. Between 1984 and 1988, Mr. Scott held several offices with SouthernNet,
including Chief Operating Officer, Chief Financial Officer, and Vice President -
Administration. He was a director of SouthernNet from 1984 to 1987.
SECTION 16 BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's directors,
officers and persons who beneficially own more than ten percent of a registered
class of the Company's equity securities, to file reports of ownership and
changes in ownership with the Securities and Exchange Commission (the
"Commission"). Directors, officers and greater than ten percent beneficial
owners are required by the Commission's regulations to furnish the Company with
copies of all Section 16(a) forms they file.
Based solely on a review of copies of such forms furnished to the
Company and certain of the Company's internal records, or upon written
representations that no Form 5s were required, the Company believes that during
the year ended December 31, 1997, all Section 16(a) filing requirements
applicable to its directors, executive officers and greater than ten percent
beneficial owners were satisfied with the exception that Mr. Esa Ahola, Mr.
Lance Weatherby and Ms. Susan Nicholson each failed to file one report on a
timely basis.
- 3 -
<PAGE> 6
ITEM 11. EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth the compensation paid during the
periods indicated to the Chief Executive Officer of the Company and to each of
the other four most highly compensated executive officers of the Company during
the fiscal year ended December 31, 1997 (the "Named Executive Officers").
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION AWARDS
-------------------
ANNUAL SECURITIES UNDERLYING
COMPENSATION OPTIONS (1)
------------ ---------------------
NAME AND PRINCIPAL POSITIONS YEAR SALARY BONUS (1)
---------------------------- ---- ------ ---------
<S> <C> <C> <C> <C>
Charles M. Brewer (2) 1997 $150,000 $65,550 2,438
Chairman and Chief Executive Officer 1996 84,000 20,000 --
1995 60,000 10,000 --
Michael S. McQuary (3) 1997 $125,000 $43,700 2,438
President and Chief Operating Officer 1996 84,000 36,035 38,746
1995 47,750 23,978 51,647
Michael G. Misikoff (4) 1997 $105,000 $22,943 1,024
Vice President, Chief Financial Officer, 1996 84,000 6,300 --
Secretary and Treasurer 1995 55,000 1,500 51,647
James T. Markle (5) 1997 $96,000 $20,976 936
Executive Vice President of 1996 96,000 20,830 --
Network Operations 1995 84,000 950 25,823
Alan J. Taetle (6) (7) 1997 $92,833 $22,312 981
Executive Vice President of 1996 77,000 7,826 --
Sales and Marketing 1995 70,000 13,125 36,653
</TABLE>
- ------------------
(1) A portion of bonuses paid to Named Executive Officers of the Company are
paid or awarded in the first quarter of the fiscal year following the year
in which the bonus was earned.
(2) Mr. Brewer was granted options to purchase 2,438 shares of the Company's
Common Stock in January 1998 for services performed in 1997.
(3) Mr. McQuary was granted options to purchase 2,438 shares of the Company's
Common Stock in January 1998 for services performed in 1997 and options to
purchase 12,912 shares of the Company's Common Stock in February 1997 for
services performed in 1996.
(4) Mr. Misikoff was granted options to purchase 1,024 shares of the Company's
Common Stock in January 1998 for services performed in 1997.
(5) Mr. Markle was granted options to purchase 936 shares of the Company's
Common Stock in January 1998 for services performed in 1997.
(6) Mr. Taetle was granted options to purchase 981 shares of the Company's
Common Stock in January 1998 for services performed in 1997.
(7) Mr. Taetle resigned his position with the Company effective April 13, 1998.
- 4 -
<PAGE> 7
STOCK OPTION GRANTS IN FISCAL YEAR 1997
The following table sets forth information with respect to grants of
stock options to each of the Named Executive Officers during the year ended
December 31, 1997. All such grants were made under the 1995 Stock Option Plan.
<TABLE>
<CAPTION>
POTENTIAL REALIZED VALUE
AT ASSUMED ANNUAL RATES
OF STOCK PRICE
INDIVIDUAL GRANTS APPRECIATION FOR OPTION
------------------------------------------------------------------ TERM
-------------------------
PERCENT OF
TOTAL
NUMBER OF OPTIONS
SECURITIES GRANTED TO
UNDERLYING EMPLOYEES
OPTION IN FISCAL EXERCISE EXPIRATION
NAME GRANTED (1) YEAR PRICE GRANT DATE DATE 5% 10%
---- ----------- ---- ----- ---------- ---- -- ---
<S> <C> <C> <C> <C> <C> <C> <C>
Charles M. Brewer -- -- -- -- -- -- --
Michael S. McQuary 12,912 8.5% $9.125 2/26/97 2/26/07 $ 74,098 $ 187,778
Michael G. Misikoff -- -- -- -- -- -- --
James T. Markle -- -- -- -- -- -- --
Alan J. Taetle -- -- -- -- -- -- --
</TABLE>
- --------------------
(1) All options represent shares of Common Stock. These options become
exercisable as follows: (i) 50% of the options become exercisable two
years after the date of grant, (ii) an additional 25% of the options become
exercisable three years after the date of grant, and (iii) the remaining
25% of the options become exercisable four years after the date of grant.
Option Exercises and Fiscal Year-End Values. The following table sets
forth information with respect to the Named Executive Officers concerning the
exercise of options during fiscal year 1997, the number of securities
underlying unexercised options at the 1997 year-end and the year-end value of
all unexercised in-the-money options held by such individuals.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED OPTIONS VALUE OF UNEXERCISED
AT IN-THE-MONEY OPTIONS AT
SHARES DECEMBER 31, 1997 DECEMBER 31, 1997(2)(3)
ACQUIRED ON VALUE ----------------- -----------------------
EXERCISE REALIZED(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
-------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Charles M. Brewer -- -- -- -- -- --
Michael S. McQuary -- -- 25,824 64,569 $ 828,305 $1,813,578
Michael G. Misikoff 25,823 $ 199,741 -- 25,824 -- 851,805
James T. Markle -- -- 12,912 12,911 425,902 425,869
Alan J. Taetle 18,077 139,826 -- 18,576 -- 609,859
</TABLE>
- ---------------------------
(1) Represents the difference between the exercise price and the closing price
of the Common Stock on the Nasdaq National Market upon the date of
exercise.
(2) Represents the difference between the exercise price and the closing price
of the Common Stock on the Nasdaq National Market at December 31, 1997.
(3) Based on a per share price of $33.625 on December 31, 1997.
DIRECTOR COMPENSATION
Since the Company's inception, members of the Board of Directors have
not received any compensation for their service on the Board of Directors
except pursuant to the Company's Directors Stock Option Plan (the "Director
Plan"). Under the Directors Plan, 70,000 shares of Common Stock are authorized
for issuance to non-employee directors (in the form of grants of 10,000 options
per director) upon their initial election or appointment to the Board, or, in
the case of Messrs. Lanier, Scott and Gabbard, who joined the Board prior to
the creation of the Directors Plan, upon the adoption of the Directors Plan by
the Board. Options are exercisable at the fair market value of the Common
Stock (as determined by the Board) on the date of grant. The Directors Plan
was amended in March 1998 to provide for discretionary option grants. Each of
Messrs. Lanier, Scott and Gabbard received a grant of 5,000 options upon
adoption of this amendment.
- 5 -
<PAGE> 8
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION.
The members of the Compensation Committee for the year ended December
31, 1997 were Messrs. Lanier, Scott and Gabbard.
As of April 15, 1998, ITC Holding owned approximately 30% of the
outstanding capital stock of the Company. Both Messrs. Lanier and Scott serve
as executive officers and directors of ITC Holding. Mr. Gabbard also is a
director of ITC Holding. As of October 20, 1997, Messrs. Lanier, Scott and
Gabbard beneficially owned approximately 21.4%, 2.0% and less than 1%,
respectively, of the common stock of ITC Holding. As of October 20, 1997,
Messrs. Brewer and Misikoff each owned less than 1% of the common stock of ITC
Holding.
The Company has entered into certain business relationships with
subsidiaries of ITC Holding. The Company leases T-1 telecommunications lines
for data transport for some of its points of presence and purchases long
distance telephone services, maintenance and installation services and wide area
network transport services from ITC/\DeltaCom, which until October 20, 1997 was
owned by ITC Holding and is now owned by substantially the same stockholders as
ITC Holding. The Company pays ITC/\DeltaCom approximately $168,000 per month
for these services. Charges from ITC/\DeltaCom totaled approximately $2,143,000
for the year ended December 31, 1997, of which the Company had paid
approximately $1,888,000 as of December 31, 1997.
The Company also leases telephone lines from, and has contracts for
maintenance and installation with, Interstate Telephone Company, Inc.
("Interstate Telephone"), a wholly-owned subsidiary of ITC Holding. The
Company pays Interstate Telephone approximately $11,000 per month for these
leased telephone lines. Charges from Interstate Telephone for telephone lines
and installation charges and payments made to Interstate Telephone totaled
approximately $133,000 for the year ended December 31, 1997.
- 6 -
<PAGE> 9
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table provides information as of April 15, 1998
concerning beneficial ownership of Common Stock by (1) each person or entity
known by the Company to beneficially own more than 5% of the outstanding Common
Stock, (2) each director of the Company, (3) each Named Executive Officer, and
(4) all directors and executive officers of the Company as a group. The
information as to beneficial ownership has been furnished by the respective
stockholders, directors and executive officers of the Company, and, unless
otherwise indicated, each of the stockholders has sole voting and investment
power with respect to the shares beneficially owned.
<TABLE>
<CAPTION>
AMOUNT AND NATURE
OF PERCENT OF
BENEFICIAL COMMON
NAME OF BENEFICIAL OWNER OWNERSHIP (1) STOCK OUTSTANDING
------------------------ -------------- -----------------
<S> <C> <C>
ITC Holding Company, Inc. (2)(3) 2,274,689 30.1%
Charles M. Brewer(4)........ 840,001 11.1
O. Gene Gabbard(5)(6)...... 10,000 *
Campbell B. Lanier, III(6)(7) 10,000 *
James T. Markle(8) 19,427 *
Michael S. McQuary(9)...... 85,485 1.1
Michael G. Misikoff (10)... 94,707 1.3
William H. Scott, III(6)(11) 11,500 *
Alan J. Taetle(12) 23,288 *
All executive officers and 1,124,554 14.6
directors as a group (10
persons)(13)
- ----------
</TABLE>
* Less than one percent.
(1) In accordance with Rule 13d-3 under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), a person is deemed to be the
beneficial owner, for purposes of this table, of any shares of Common
Stock if such person has or shares voting power or investment power
with respect to such security, or has the right to acquire beneficial
ownership at any time within 60 days from April 15, 1998. As used
herein, "voting power" is the power to vote or direct the voting of
shares and "investment power" is the power to dispose or direct the
disposition of shares.
(2) ITC Holding Company, Inc. indirectly owns these shares through its
indirect, wholly owned subsidiary, ITC Service Company. The address
of both ITC Holding Company, Inc. and ITC Service Company is 1239 O.G.
Skinner Drive, West Point, Georgia 31833.
(3) ITC Holding has pledged all of its stock in the Company to certain
lenders in connection with a credit facility dated October 20, 1997.
(4) The address for Charles M. Brewer is MindSpring Enterprises, Inc.,
1430 West Peachtree Street, Suite 400, Atlanta, Georgia 30309.
(5) Includes 5,000 shares of Common Stock that Mr. Gabbard has the right
to purchase within 60 days from April 15, 1998 pursuant to options.
(6) Mr. Lanier is Chairman of the Board, Chief Executive Officer and a
beneficial owner of approximately 21.4% of the common stock of ITC
Holding (as of October 20, 1997). Mr. Scott is the President and a
director of ITC Holding and is a beneficial owner of 2.0% of its common
stock (as of October 20, 1997). Mr. Scott's beneficial ownership of
MindSpring includes 500 shares of Common Stock held by his wife and
1,000 shares of Common Stock held in trust for Mr. Scott's minor
daughter, of which Mr. Scott's wife is trustee. Mr. Gabbard is a
director of ITC Holding and a beneficial owner of less than 1% of its
common stock (as of October 20, 1997). Each of Messrs. Lanier, Scott
and Gabbard disclaims beneficial ownership of the shares of the
Company's Common Stock held by ITC Holding.
(7) Includes 5,000 shares of Common Stock that Mr. Lanier has the right to
purchase within 60 days from April 15, 1998 pursuant to options.
- 7 -
<PAGE> 10
(8) Includes 19,367 shares of Common Stock that Mr. Markle has the right
to purchase within 60 days from April 15, 1998 pursuant to options.
(9) Includes 33,565 shares of Common Stock that Mr. McQuary has the right
to purchase within 60 days from April 15, 1998 pursuant to options.
(10) Includes 12,912 shares of Common Stock that Mr. Misikoff has the right
to purchase within 60 days from April 15, 1998 pursuant to options.
(11) Includes 5,000 shares of Common Stock that Mr. Scott has the right to
purchase within 60 days from April 15, 1998 pursuant to options.
(12) Includes 9,038 shares of Common Stock that Mr. Taetle has the right to
purchase within 60 days from April 15, 1998 pursuant to options.
(13) Includes 119,828 shares of Common Stock that such persons have the
right to purchase within 60 days from April 15, 1998 pursuant to
options.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company has adopted a policy requiring that any material
transactions between the Company and persons or entities affiliated with
officers, directors or principal stockholders of the Company be on terms no
less favorable to the Company than reasonably could have been obtained in arms'
length transactions with independent third parties.
For a summary of certain transactions and relationships among the
Company and its associated entities, and among the directors, executive
officers and stockholders of the Company and its associated entities, see Item
11, "Executive Compensation--Compensation Committee Interlocks and Insider
Participation."
- 8 -
<PAGE> 11
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized as of the 30th day
of April, 1998.
MINDSPRING ENTERPRISES, INC.
By /s/ Charles M. Brewer
------------------------------
Charles M. Brewer
Chairman, Chief Executive
Officer and Director
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities indicated and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
------------------ ------------------- --------------
<S> <C> <C>
/s/ Charles M. Brewer Chairman, Chief Executive April 30, 1998
---------------------------------- Officer and Director
Charles M. Brewer (Principal Executive Officer)
/s/ Michael S. McQuary President, Chief Operating April 30, 1998
---------------------------------- Officer and Director
Michael S. McQuary
/s/ Michael G. Misikoff Vice President, Secretary, April 30, 1998
---------------------------------- Treasurer, Chief Financial
Michael G. Misikoff Officer and Director
(Principal Financial Officer and
Principal Accounting Officer)
/s/ O. Gene Gabbard Director April 30, 1998
----------------------------------
O. Gene Gabbard
/s/ Campbell B. Lanier, III Director April 30, 1998
----------------------------------
Campbell B. Lanier, III
/s/ William H. Scott, III Director April 30, 1998
----------------------------------
William H. Scott, III
</TABLE>
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