ONLINE SYSTEM SERVICES INC, PRE 14A, 1999-07-14

ONLINE SYSTEM SERVICES INC
PRE 14A, 1999-07-14
COMPUTER INTEGRATED SYSTEMS DESIGN

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<PAGE>

SCHEDULE 14A
(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )

Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]

Check the appropriate box:

[X] Preliminary Proxy Statement [_] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))

[_] Definitive Proxy Statement

[_] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12

Online System Services, Inc.
_______________________________________________________________________________
(Name of Registrant as Specified in Its Charter)

_______________________________________________________________________________
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[X] No fee required.

[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-
11.

(1) Title of each class of securities to which transaction applies:
_______________________________________________________________________________
(2) Aggregate number of securities to which transaction applies
_______________________________________________________________________________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
_______________________________________________________________________________
(4) Proposed maximum aggregate value of transaction:
_______________________________________________________________________________
(5) Total fee paid:
_______________________________________________________________________________

[_] Fee paid previously with preliminary materials.

[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:
_______________________________________________________________________________
(2) Form, Schedule or Registration Statement No.:
_______________________________________________________________________________
(3) Filing Party:
_______________________________________________________________________________
(4) Date Filed:
_______________________________________________________________________________
<PAGE>

ONLINE SYSTEM SERVICES, INC.
1800 Glenarm Place
Suite 700
Denver, Colorado 80202

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD AUGUST 5, 1999

NOTICE IS HEREBY GIVEN that the annual meeting of shareholders of Online
System Services, Inc., a Colorado corporation, will be held on Thursday, August
5, 1999, at 2:30 p..m., Mountain Time, at our offices, 1800 Glenarm Place, Suite
700, Denver, Colorado for the following purposes:

1. To elect six nominees to our board of directors to serve for a term of
one year.

2. To approve an amendment to our Articles of Incorporation to change our
name to WEBB Interactive Services, Inc.

3. To approve an amendment to the Online System Services, Inc. Stock
Option Plan of 1995 to increase the number of shares authorized under the plan
from 2,800,000 to 3,500,000.

4. To ratify the appointment of Arthur Andersen LLP as our independent
accountants for the current fiscal year.

5. To transact such other business as may properly come before the
meeting and any adjournments thereof.

Only holders of record of our common stock at the close of business on July
6, 1999 will be entitled to notice of, and to vote at, the annual meeting or any
adjournment thereof.

You are cordially invited to attend the annual meeting. Whether or not you
plan to attend the annual meeting, please complete, sign and date the enclosed
proxy and return it in the enclosed reply envelope as promptly as possible.

BY ORDER OF THE BOARD OF
DIRECTORS

Lindley S. Branson
Secretary

July 16, 1999
<PAGE>

PROXY STATEMENT

ONLINE SYSTEM SERVICES, INC.

1800 Glenarm Place
Suite 700
Denver, Colorado 80202

Annual Meeting of Shareholders - August 5, 1999

GENERAL

The enclosed proxy is solicited by the board of directors of Online System
Services, Inc., a Colorado corporation, for use at its annual meeting to be held
on Thursday, August 5, 1999, at 2:30 p.m., Mountain Time, at our offices, or any
adjournment thereof. Solicitations are being made by mail and may also be made
by our directors, officers and employees. Any proxy given pursuant to such
solicitation may be revoked by the shareholder at any time prior to the voting
thereof by so notifying us in writing at the above address, attention: Lindley
S. Branson, Secretary, or by appearing and voting in person at the meeting.
Shares represented by proxies will be voted as specified in the proxies. In the
absence of specific instructions, proxies will be voted (to the extent they are
entitled to be voted on such matters): (1) FOR the election to the board of
directors of the nominees named in this proxy statement; (2) FOR the amendment
to our Articles of Incorporation to change our name; (3) FOR the amendment to
the Online System Services, Inc. Stock Option Plan of 1995 to increase the
number of shares authorized under such plan from 2,800,000 to 3,500,000; (4) FOR
the ratification of the appointment of Arthur Andersen LLP as our independent
accountants for the current year; and (5) in the proxy's discretion upon such
other business as may properly come before the annual meeting. So far as our
management is aware, no matters other than those described in this proxy
statement will be acted upon at the annual meeting.

Votes cast by proxy or in person at the annual meeting will be tabulated by
the election inspectors appointed for the meeting and will determine whether or
not a quorum is present. The election inspectors will treat abstentions as
shares that are present and entitled to vote for purposes of determining the
presence of a quorum but as unvoted for purposes of determining the approval of
any matter submitted to the shareholders for a vote. If a broker indicates on
the proxy that it does not have discretionary authority as to certain shares to
vote on a particular matter, those shares will be considered as shares that are
present for the purposes of determining the presence of a quorum, but will not
be considered as present and entitled to vote with respect to that matter.

We will pay all of the expenses involved in preparing, assembling and
mailing this proxy statement and the material enclosed herewith. We may
reimburse banks, brokerage firms and other custodians, nominees and fiduciaries
for reasonable expenses incurred by them in sending proxy material to beneficial
owners of stock. This proxy statement and our annual report for the year ended
December 31, 1998 are being mailed to shareholders on or about July 16, 1999.
<PAGE>

OUTSTANDING STOCK

As of July 6, 1999, the record date for determining shares entitled to
notice of and to vote at our annual meeting, the following shares of our capital
stock were outstanding:

. 7,084,420 shares of our common stock;
. 85,000 shares of our 10% preferred stock; and
. 2,500 shares of our Series C preferred stock.

Each holder of our common stock and each holder of our 10% preferred stock
will be entitled to cast one vote in person or by proxy for each share of common
stock or 10% preferred stock held for the election of directors and for all
other matters voted on at the annual meeting. Each holder of Series C Preferred
stock will be entitled to cast 36 votes in person or by proxy for each share of
Series C preferred stock held for the election of directors and for all other
matters voted on at the annual meeting. The holders of our common stock, 10%
preferred stock, and Series C preferred stock will vote as a single class on all
matters voted on at the annual meeting.

Information as to the name, address and stock holdings of each person known
by OSS to be a beneficial owner of more than five percent of our common stock,
our 10% preferred stock, or our Series C preferred stock as of and as to the
name, address and stock holdings of certain officers, each director and nominee
for election to the board of directors, and by all executive officers and
directors, as a group, as of July 6, 1999 is set forth below. Except as
indicated below, we believe that each such person has the sole (or joint with
spouse) voting and investment powers with respect to such shares.

<TABLE>
<CAPTION>
Common Stock 10% Preferred Stock Series C Preferred Stock
-------------------------- ----------------------------- ----------------------------
Name/Address Amount Percent Amount Percent Amount Percent
of Beneficially of Beneficially of Beneficially of
Shareholder/Director Owned Class (1) Owned Class (1) Owned Class (1)
- ------------------------------------------------------------------ ------------------------------ ----------------------------
<S> <C> <C> <C> <C> <C> <C>
R. Steven Adams 555,584 (2) 7.8% None -- None --
1800 Glenarm Place, Suite 700
Denver, Colorado 80202

Lee E. Schlessman _______ (3) ___% 60,000 (4) 70.6% None --
1301 Pennsylvania Street, Suite 800
Denver, Colorado 80203

Susan M. Duncan _______ (5) * 15,000 (6) 17.6% None --
2651 South Wadsworth Circle
Lakewood, Colorado 80227

Cal J. and Amanda Mae Rickel _______ (7) * 5,000 5.9% None --
P.O. Box 1076
Cortez, Colorado 81321

Southwest Contracting, Inc. _______ (8) * 5,000 5.9% None --
P.O. Box 719
Cortez, Colorado 81321

Arrow Investors II LLC _______ (9) ___% None -- 1,500 100%
One World Trade Center
Suite 4563
New York, New York 10048
</TABLE>

2
<PAGE>

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
John M. Liviakis 362,850 (10) 6.5% None -- None --
2420 K Street
Suite 220
Sacramento, California 95816

William R. Cullen 72,466 (11) 1.0% None -- None --
1800 Glenarm Place, Suite 700
Denver, Colorado 80202

Gwenael Hagan 20,250 (12) * None -- None --
1800 Glenarm Place, Suite 700
Denver, Colorado 80202

Michael Murphy ______ (13) ___% None -- None --
1800 Glenarm Place, Suite 700
Denver, Colorado 80202

Edward Robinson ______ (14) ___% None -- None --
1800 Glenarm Place, Suite 700
Denver, Colorado 80202

Robert J. Lewis 98,204 (15) 1.4% None -- None --
1800 Glenarm Place, Suite 700
Denver, Colorado 80202

Richard C. Jennewine 57,500 (16) * None -- None --
1800 Glenarm Place, Suite 700
Denver, Colorado 80202

Donald J. Esters 82,353 (17) 1.2% None -- None --
1800 Glenarm Place, Suite 700
Denver, Colorado 80202

Perry Evans 71,429 (18) 1.0% None -- None --
1800 Glenarm Place, Suite 700
Denver, Colorado 80202

Directors and Executive Officers as a 987,803 (19) 13.5% None -- None --
Group (8 persons)
</TABLE>

______________
* Less than one percent of shares outstanding.

(1) In calculating percentage ownership, all shares of our common stock which
a named shareholder has the right to acquire within 60 days from the date
of this proxy statement upon exercise of options or warrants are deemed to
be outstanding for the purpose of computing the percentage of common stock
owned by that shareholder, but are not deemed to be outstanding for the
purpose of computing the percentage of common stock owned by any other
shareholders. No options or warrants to acquire either the 10% preferred
stock or Series C preferred stock are outstanding.

(2) Includes options for the purchase of 58,334 shares of common stock, but
excludes options for the purchase of 116,666 shares of common stock that
are not exercisable during the next 60 days.

(3) Includes 69,074 shares of common stock issuable upon the conversion of
shares of 10% preferred stock, including accrued but unpaid dividends
thereon, if such conversion occurred as of the close of business on July 6,
1999 plus 24,000 shares issuable upon the exercise of warrants to purchase
shares of common stock at a per share exercise price of $15.00. Upon the
actual conversion of the 10% preferred stock, the number of shares into
which the 10% preferred stock is convertible may be more or less than
69,074 shares, but in no event will be less than 60,000 shares. Pursuant to
the terms of the 10% preferred stock, on July 6, 1999 the conversion price
was approximately $10.00. Also includes shares of common stock beneficially
owned by (i) The Schlessman Family Foundation and (ii) persons who have
granted Mr. Schlessman a power of attorney with respect to such shares.

(4) Includes 5,000 shares of 10% preferred stock owned by The Schlessman Family
Foundation. Also includes 15,000 shares of 10% preferred stock owned by
persons who have granted Mr. Schlessman a power of attorney with respect to
such shares.

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<PAGE>

(5) Includes 17,268 shares of common stock issuable upon the conversion of
shares of 10% preferred stock, including accrued but unpaid dividends
thereon, if such conversion occurred as of the close of business on July
6, 1999 plus 6,000 shares issuable upon the exercise of warrants to
purchase shares of common stock at a per share exercise price of $15.00.
Upon the actual conversion of the 10% preferred stock, the number of
shares into which the 10% preferred stock is convertible may be more or
less than 17,268 shares, but in no event will be less than 15,000 shares.
Pursuant to the terms of the 10% preferred stock, on July 6, 1999 the
conversion price was approximately $10.00. Also includes shares of common
stock beneficially owned by the Susan M. Duncan Irrevocable Gift Trust.

(6) Includes 10,000 shares of 10% preferred stock owned by the Susan M. Duncan
Irrevocable Gift Trust.

(7) Includes 5,756 shares of common stock issuable upon the conversion of
shares of 10% preferred stock, including accrued but unpaid dividends
thereon, if such conversion occurred as of the close of business on July
6, 1999 plus 2,000 shares issuable upon the exercise of a warrant to
purchase shares of common stock at a per share exercise price of $15.00.
Upon the actual conversion of the 10% preferred stock, the number of
shares into which the 10% preferred stock is convertible may be more or
less than 5,756 shares, but in no event will be less than 5,000 shares.
Pursuant to the terms of the 10% preferred stock, on July 6, 1999 the
conversion price was approximately $10.00.

(8) Includes 5,756 shares of common stock issuable upon the conversion of
shares of 10% preferred stock, including accrued but unpaid dividends
thereon, if such conversion occurred as of the close of business on July
6, 1999 plus 2,000 shares issuable upon the exercise of a warrant to
purchase shares of common stock at a per share exercise price of $15.00.
Upon the actual conversion of the 10% preferred stock, the number of
shares into which the 10% preferred stock is convertible may be more or
less than 5,756 shares, but in no event will be less than 5,000 shares.
Pursuant to the terms of the 10% preferred stock, on July 6, 1999 the
conversion price was approximately $10.00.

(9) Includes 225,941 shares issuable upon the conversion of the Series C
preferred stock, including accrued but unpaid dividends thereon, if such
conversion occurred as of the close of business on July 6, 1999. Upon the
actual conversion of the Series C preferred stock, the number of shares
into which the Series C preferred stock is convertible may be more or less
than 225,941 shares, but in no event will be less than ______ shares.
Pursuant to the terms of the Series C preferred stock, on July 6, 1999 the
conversion price was approximately $11.125. Also includes 100,000 shares
issuable to affiliates of Arrow Investors II LLC upon the exercise of
warrants to purchase shares at a per share exercise price of $16.33.

(10) Includes 352,850 shares owned by Liviakis Financial Communications, Inc.
Mr. Liviakis, together with his spouse, owns all of the outstanding
securities of Liviakis Financial Communications, Inc.

(11) Includes options for the purchase of 43,333 shares of common stock, but
excludes options for the purchase of 116,667 shares of common stock that
are not exercisable during the next 60 days.

(12) Includes options for the purchase of 20,250 shares of common stock, but
excludes options for the purchase of 79,750 shares of common stock that
are not exercisable during the next 60 days.

(13) Includes options for the purchase of 250 shares of common stock, but
excludes options for the purchase of 25,000 shares of common stock that
are not exercisable during the next 60 days.

(14) Includes options for the purchase of 13,250 shares of common stock, but
excludes options for the purchase of 20,667 shares of common stock that
are not exercisable in the next 60 days.

(15) Includes options and warrants for the purchase of 70,834 shares of common
stock, but excludes options for the purchase of 6,666 shares of common
stock that are not exercisable during the next 60 days.

(16) Includes options for the purchase of 57,500 shares of common stock, but
excludes options for the purchase of 10,000 shares of common stock that
are not exercisable during the next 60 days.

(17) Includes options for the purchase of 11,131 shares of common stock.

(18) Excludes options for the purchase of 280,000 shares of common stock that
are not exercisable during the next 60 days.

(19) Includes options and warrants for the purchase of 250,501 shares of common
stock, but excludes options for the purchase of 784,749 shares of common
stock that are not exercisable during the next 60 days.

PROPOSAL 1:
ELECTION OF DIRECTORS

Nomination and Election of Directors

Our by-laws provide that the size of our board of directors shall be fixed
from time to time by resolution of the shareholders, subject to increase by
resolution of the board of directors. In the event the shareholders do not fix
by resolution the number of directors, the by-laws provide that the number of
directors shall be three, subject to

4
<PAGE>

increase by resolution of the board of directors. The board of directors has set
the size of the board at six. The proxies granted by the shareholders will be
voted at the annual meeting for the election of the six persons listed below as
our directors.

Nominees for Director
---------------------

R. Steven Adams
William R. Cullen
Robert J. Lewis
Richard C. Jennewine
Donald J. Esters
Perry Evans

In the event that one of more of the above named persons shall become
unavailable for election, votes will be cast pursuant to authority granted by
the enclosed proxy for such person or persons as may be designated by the board
of directors, unless the board of directors determines to reduce its size
appropriately.

Directors, Nominees for Director and Executive Officers

Our directors, nominees for director, and executive officers are as
follows:

<TABLE>
<CAPTION>
Name Age Director Position
- ---- --- ------- --------
Since
-----
<S> <C> <C> <C>
R. Steven Adams............... 46 1994 Chairman of the Board, Chief Executive Officer and a
Director
William R. Cullen............. 58 1998 Chief Financial Officer and a Director
Perry Evans................... 39 --- President and Nominee for Director
Lindley S. Branson............ 56 --- Executive Vice President--General Counsel and Secretary
Gwenael S. Hagan.............. 39 --- Senior Vice President-Strategic Development
Andre Durand.................. 31 --- Senior Vice President-Product Development
Robert J. Lewis............... 69 1995 Director
Richard C. Jennewine.......... 61 1996 Director
Donald J. Esters.............. 60 --- Nominee for Director
</TABLE>

R. Steven Adams, founder of OSS, has served as President, Chief Executive
Officer and a director since our incorporation in March 1994. From 1985 to 1994,
Mr. Adams was President-Sheridan Hotel Management, a full service hotel
management company. Mr. Adams was the creator and founder of HotelNet, which was
an online information system for the hospitality industry. Mr. Adams' experience
includes software development, personal computer manufacturing and management of
online information systems.

William R. Cullen, has served as either Chief Operating Officer or Chief
Financial Officer and a director since March 1998. From May 1997 to March 1998,
Mr. Cullen worked as a consultant to businesses in the cable industry. From
April 1994 to May 1997, Mr. Cullen was Chairman and CEO of Access Television
Network, Inc., a privately held company specializing in providing paid
programming to local cable systems. From January 1992 to March 1994, Mr. Cullen
was President and CEO of California News Channel, a programming project of Cox
Cable Communications. From July 1984 to December 1991, Mr. Cullen was employed
by United Artist Cable Corporation (and its predecessor United Cable Television
Corporation) as Vice President of Operations and President of its subsidiary
United Cable of Los Angeles, Inc., and as its Senior Vice President of the
Southwest Division. Prior to joining United Artist Cable Corporation, Mr. Cullen
was President of Tribune Company Cable of California, Inc. and CEO of its
United-Tribune Cable of Sacramento joint venture, served as a top financial
officer of three companies, and worked in banking.

Perry Evans, joined OSS in June 1999 in connection with the merger of OSS
and NetIgnite, Inc. ("NetIgnite"). Mr. Evans founded NetIgnite in 1998. Prior to
founding NetIgnite, Mr. Evans founded MapQuest

5
<PAGE>

Publishing Group, where he created one of the most prominent consumer brands and
one of the most widely licensed business services on the Internet. Prior to
founding MapQuest, Mr. Evans managed the new media development group with R.R.
Donnelley that was responsible for interactive yellow pages, travel and real
estate products.

Lindley S. Branson, joined OSS in May 1999 as Executive Vice President--
General Counsel and Secretary. Mr. Branson is a principal of Gray, Plant, Mooty,
Mooty & Bennett, P.A., OSS' outside legal counsel. Mr. Branson has been employed
by Gray, Plant, Mooty, Mooty & Bennett, P.A., for over thirty years. During that
time, Mr. Branson has represented numerous companies, both public and private,
in connection with securities offerings, mergers and acquisitions, and general
corporate matters.

Gwenael S. Hagan, joined OSS in January 1998 as Senior Vice President of
Strategic Development. From June 1996 to January 1998, Mr. Hagan served as Vice
President of New Business Development with International Channel, a cable
television network, where he was responsible for new revenue opportunities, both
domestically and internationally, and developing and implementing strategies to
increase revenue and position International Channel for growth via evolving
digital cable and satellite platforms. From December 1994 to June 1996, Mr.
Hagan served as the Internet Marketing Manager for Microsoft's western region.
His work with Microsoft encompassed competitive strategy development, sales
resource allocation, presentations and public relations. From March 1994 to
December 1994, Mr. Hagan worked with Missing Link Communications, Inc., a
developer of television programs to assist consumers in buying personal
computers. At Missing Link, Mr. Hagan was responsible for programming concepts
and establishing alliances. Prior to that time, Mr. Hagan spent 11 years with
Jones International, Ltd., a cable television operator and television network
development company.

Andre Durand, joined OSS in connection with the acquisition of Durand
Communications, Inc. ("DCI") and is Senior Vice President-Product Development of
OSS. Mr. Durand is the founder, President, Chief Executive Officer, Secretary
and a Director of DCI. Mr. Durand is a regular guest speaker at computer fairs,
conferences and expositions, and regularly contributes articles to trade
publications discussing Internet technologies, trends and predictions. From
January 1991 to January 1993, Mr. Durand was an auditor with KPMG Peat Marwick
in Los Angeles, California. Mr. Durand holds two degrees from the University of
California at Santa Barbara, one in Biology and one in Economics/Accounting.

Robert J. Lewis, has been a director of OSS since February 1995. Mr. Lewis
retired in October 1995 after having spent 37 years in the cable television
industry as an owner and developer of cable systems and senior executive with
several cable television companies. Beginning in March 1997, however, and
continuing through the present, Mr. Lewis has been the General Partner and Chief
Executive Officer of InterMedia Partners, an operator of cable systems in
Kentucky, Tennessee, North Carolina, South Carolina, and Georgia. From 1987
until his retirement in 1995, Mr. Lewis was employed by Western Tele-
Communications, Inc. ("TCI"), one of the largest cable television companies in
the United States. Mr. Lewis served as a Senior Vice President of TCI from 1991
to 1993 and as a Senior Advisor to TCI from 1993 until his retirement in 1995.

Richard C. Jennewine, has been a director of OSS since November 1996. From
September 1995 to the present, Mr. Jennewine has been President-International
Operations and Regional Manager-Western Operations for Computer Aid, Inc. a
leader in strategic outsourcing and information services consulting. From
December 1991 to February 1995, Mr. Jennewine served as the Senior Vice
President of the CONCORD Group, a privately held entrepreneurial group of 40
international enterprises. From January 1994 to February 1995, he served as the
President of the Concord Trading Corporation, a company focusing on trading and
business ventures in Asia, Russia, the Middle East and South America. Prior to
these positions, Mr. Jennewine spent 26 years with IBM Corporation, including
startup operations in mainland China. Mr. Jennewine is a director of Easter
Seals of Colorado and is a member of the Corporate Management Committee of
Computer Aid, Inc.

Donald J. Esters, is a nominee for director. Mr. Esters was the Chairman of
the Board of Directors of DCI and has been a director of DCI prior to its
acquisition by OSS. From 1985 to 1993, Mr. Esters served as President of Harman
International, a worldwide manufacturer of stereo equipment. Mr. Esters has
served as Chairman of the Board of Directors of the Intellisys Group Inc., a
provider of communications technology systems and services,

6
<PAGE>

since March 1994, and as Chairman of the Board of Directors of DuPuis Group,
L.L.C., a graphics design firm, since March 1996. Mr. Esters received a BBA
degree from St. Francis College and is a Certified Public Accountant.

Committees and Meetings of the Board of Directors

Messrs. Lewis and Jennewine are the current members of the Audit Committee
of the board of directors. The Audit Committee represents the Board in
discharging its responsibilities relating to our accounting, reporting, and
financial control practices. The Committee has general responsibility for review
with management of our financial controls, accounting, and audit and reporting
activities. The Committee annually reviews the qualifications and engagement of
our independent accountants, makes recommendations to the Board as to their
selection, reviews the scope, fees, and results of their audit, and reviews
their management comment letters.

Messrs. Jennewine, Lewis and Adams are the current members of the
Compensation Committee, which oversees compensation for directors, officers and
key employees of the Company.

During 1998, the board of directors met 10 times. Each director attended,
in person or by telephone, 75% or more of the aggregate total of meetings of the
board of directors and meetings of committees of the board of directors on which
such director serves. During 1998, the Audit Committee and the Compensation
Committee each met 6 times. The board of directors does not have a standing
nominating committee.

Vote Required

The affirmative vote of the holders of a majority of the voting power of
the shares of common stock, the 10% preferred stock, and the Series C preferred
stock voting together as a single class, present or represented at the annual
meeting and entitled to vote on Proposal 1, is required to approve Proposal 1.

The board of directors recommends that the shareholders vote "FOR" the
election of the nominees for director.

EXECUTIVE COMPENSATION

The following table summarizes the annual compensation paid by OSS during
years ended December 31, 1996, 1997, and 1998 to R. Steven Adams, the chief
executive officer of OSS as of December 31, 1998 and the officers of OSS, other
than Mr. Adams, whose total annual salary and bonus exceeded $100,000 for the
year ended December 31, 1998.

7
<PAGE>

<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Compensation Long-Term Compensation
---------------------------------------------------------------------------
Salary Bonus Other Securities
Name and Principal Position Year $ $ $ Underlying Options
- --------------------------- ---- ------ ----- ----- ------------------
<S> <C> <C> <C> <C> <C>
R. Steven Adams 1998 $155,203 -- -- 175,250 shs. (1)
President, Chief Executive Officer 1997 $120,217 -- -- --
and Director 1996 $110,217 -- -- --

William R. Cullen (2) 1998 $165,000 -- $271,494 (3) 160,000 shs.
Chief Operating Officer 1997 -- -- -- --
1996 -- -- -- --

Thomas S. Plunkett (4) 1998 $128,798 $25,000 -- 65,250 shs. (5)
Chief Financial Officer 1997 $103,642 -- -- 90,000 shs. (6)
1996 $ 17,641 -- -- 60,000 shs.

Gwenael Hagan (7) 1998 $ 91,549 $13,800 -- 70,000 shs. (8)
Senior Vice President-Product and 1997 -- -- -- --
Business Development 1996 -- -- -- --

Michael Murphy 1998 $100,203 $15,000 -- 250 shs. (9)
Vice President and General Manager 1997 $ 63,758 -- -- 75,000 shs.
Financial Services 1996 -- -- -- --

Edward Robinson 1998 $ 99,842 $ 3,450 -- 4,250 shs. (10)
Vice President Market Development 1997 $ 81,667 -- -- 50,000 shs.
1996 -- -- -- --
</TABLE>

_______________
(1) Includes options for the purchase of 25,000 and 250 shares of common stock
initially granted to Mr. Adams on June 3, 1998 and June 7, 1998,
respectively, but repriced on November 20, 1998.

(2) Mr. Cullen was hired as chief operating officer in March, 1998. In March,
1999 Mr. Cullen became OSS' chief fiancial officer.

(3) Includes 24,000 shares of common stock issued instead of cash compensation.
These shares have an aggregate dollar value of $228,556 (determined by
multiplying the last sale price of our common stock by the amount of common
stock on the dates such shares were earned). Also includes amounts paid to
Mr. Cullen for reimbursement of airfare expenses ($17,730) and other
commuting expenses ($15,510).

(4) Mr. Plunkett resigned as OSS' chief financial officer in March, 1999.

(5) Includes options for the purchase of 250 shares of common stock initially
granted to Mr. Plunkett on June 7, 1998 but repriced on November 20, 1998.

(6) Includes options for the purchase of 60,000 and 15,000 shares of common
stock initially granted to Mr. Plunkett on October 4, 1996 and January 9,
1997, respectively, but repriced on May 20, 1997.

(7) Mr. Hagan was hired as senior vice president-product and business
development in January 1998.

(8) Includes options for the purchase of 250 shares of common stock initially
granted to Mr. Hagan on June 7, 1998 but repriced on November 20, 1998.

(9) Represents options for the purchase of 250 shares of common stock initially
granted to Mr. Murphy on June 7, 1998 but repriced on November 20, 1998.

(10) Includes options for the purchase of 250 shares of common stock initially
granted to Mr. Robinson on June 7, 1998 but repriced on November 20, 1998.

OSS Stock Options

The following tables summarize the stock option grants and exercises during
1998 to or by the named officers and the value of all options held by the named
officers as of December 31, 1998. Unless otherwise noted,

8
<PAGE>

each of these stock options is exercisable in one-third increments on the 12th,
24th, and 36th month after the date of grant.

<TABLE>
<CAPTION>
OPTION GRANTS DURING YEAR ENDED DECEMBER 31, 1998
Percent of Total Options
Number of Securities Granted to Employees Exercise
Underlying Options During Year Ended Price Expiration
Name Granted December 31, 1998 ($/Share) Date
- --- ------- ----------------- --------- -----
<S> <C> <C> <C> <C>
R. Steven Adams 100,000 $8.50 2/18/05
25,000 (1)(3) $8.50 6/3/05
250 (2) $8.50 6/7/03
50,000 $7.63 11/24/05
---------
Total 175,250 12.4%

William R. Cullen 30,000 $6.81 2/9/05
100,000 $8.25 3/10/05
30,000 $7.63 11/24/05
---------
Total 160,000 11.3%

Thomas S. Plunkett 30,000 $8.50 2/18/05
35,000 $4.00 10/8/05
250 (2) $8.50 6/7/03
---------
Total 65,250 4.6%

Gwenael Hagan 30,000 $8.50 2/18/05
39,750 $4.00 10/8/05
250 (2) $8.50 6/7/03
---------
70,000 5.0%

Michael Murphy 250 (2) * $8.50 6/7/03

Edward Robinson 250 (2) $8.50 6/7/03
4,000 $7.63 11/24/05
---------
Total 4,250 *
</TABLE>
_______________________________________________________________________________
* Less than 1%.
(1) This option was originally granted on June 3, 1998 at an exercise price of
$13.375 per share. This option was repriced to an exercise price of $8.50
per share on November 20, 1998.

(2) These options were originally granted on June 7, 1998 at an exercise price
of $14.00 per share. These options were repriced to an exercise price of
$8.50 per share on November 20, 1998.

(3) This option was exercisable in full immediately upon grant.

9
<PAGE>

<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES DURING YEAR ENDED DECEMBER 31, 1998 AND OPTION
VALUES AT DECEMBER 31, 1998

Number of Securities Value of Unexercised
Shares Underlying Options at In-The-Money Options at
Acquired Value December 31, 1998 December 31, 1998 (2)
Name on Exercise Realized (1) Exercisable / Unexercisable Exercisable / Unexercisable
- ---- ----------- ------------ --------------------------- ---------------------------
<S> <C> <C> <C> <C>
R. Steven Adams 0 $ 0 25,000 / 150,250 $112,250 / $719,875

William R. Cullen 0 $ 0 0 / 160,000 $ 0 / $821,950

Thomas S. Plunkett 5,000 $ 35,600 35,000 / 115,250 $682,200 / $735,375

Gwenael Hagan 0 $ 0 10,000 / 90,000 $ 65,000 / $623,875

Michael Murphy 25,000 $278,000 0 / 50,250 $ 0 / $569,625

Edward Robinson 16,667 $162,170 0 / 37,583 $ 0 / $401,621
</TABLE>

_______________
(1) The value realized was determined by multiplying the number of shares
exercised by the favorable difference between the exercise price per share
and the closing bid price per share on the date of exercise.

(2) The value of unexercised in-the-money options was determined by multiplying
the number of shares subject to such options by the favorable difference
between the exercise price per share and $13.00, the closing bid price per
share on December 31, 1998.

Board of Director Compensation

Our board of directors does not receive cash compensation for their
services as directors, but they are reimbursed for their reasonable expenses in
attending meetings of the board of directors. During 1998, we compensated Robert
J. Lewis and Richard C. Jennewine for their services as consultants and issued
to them options to purchase 42,500 and 32,5000 shares, respectively, of our
common stock.

Change of Control Agreements

We have entered into employment agreements with R. Steven Adams, William R.
Cullen, Perry Evans and Gwenael Hagan which take effect only if a change of
control of 30% or more of our outstanding voting stock occurs. If a change of
control occurs, these agreements provide for the continued employment (at
similar responsibility and salary levels) of the employee for a period of three
years after the change of control. During this three year period, if we (or a
successor entity) terminate the employee's employment without cause or if the
employee terminates his employment for good reason, then we (or the successor
entity) must pay a lump sum severance to the employee equal to three years
salary (including bonus), accelerate the vesting of all outstanding options held
by the employee and allow the employee to continue to participate in our benefit
and welfare plans (or the successor entity) for a period of three years after
the employment terminates.

CERTAIN TRANSACTIONS

During November 1997, we licensed our MD Gateway Web site and related
equipment and software to Medical Education Collaborative, a nonprofit company
formed by Charles P. Spickert, a former director of OSS. We licensed MD Gateway
to MEC in connection with our strategic decision to focus our activities on non-
healthcare related activities. The license agreement provides that MEC will pay
us a license fee of 35% of revenues in excess of certain MEC expenses related to
MD Gateway services.

10
<PAGE>

Our principal offices are located in a building managed by Sheridan
Management Company prior to July 7, 1998 and owned by one of its affiliates. R.
Steven Adams' spouse is a vice president of Sheridan Management Company. The
current base monthly rental is $18,209.

Robert J. Lewis, one of our directors, is the general partner and chief
executive officer of, InterMedia Partners, one of our broadband customers.
InterMedia is an operator of cable systems in Kentucky, Tennessee, North
Carolina, South Carolina, and Georgia. We entered into a contract during August
1997, as amended, pursuant to which we provide our products and services to
several of InterMedia's markets. The expiration dates of the contracts and
related amendments range from August 1999 to July 2000. We earn revenue from the
sale of computer hardware and third party software, engineering fees, equipment
installation fees, and royalties from subscriber Internet access and content
fees. We recognized revenue in connection with these contracts totaling $185,768
and $47,092 for the years ended December 31, 1998 and 1997, respectively.
Included in accounts receivable at December 31, 1998 and 1997 are amounts due
from InterMedia totaling $22,925 and $2,052, respectively.

On March 10, 1999, we acquired a majority interest in a newly formed
company, NetIgnite 2, LLC. NetIgnite is a development stage company which we
formed with a predecessor company by the name of NetIgnite, Inc., the sole
shareholder and founder of which was Perry Evans. In connection with the
formation of NetIgnite, the predecessor company contributed all of its rights to
specific technology of NetIgnite and we agreed to provide $1,500,000 of funding
which we believe will be required to implement NetIgnite's business plan during
the next 12 to 18 months. As a result of these contributions, we acquired the
rights to 99.5% of NetIgnite's operating income and approximately 60% of any
proceeds upon the sale of NetIgnite, and the predecessor company acquired the
rights to .5% of NetIgnite's operating income and approximately 40% of any
proceeds upon the sale of NetIgnite.

Effective June 2, 1999, we acquired the predecessor company's interests in
NetIgnite through a merger of the predecessor company into OSS. As consideration
for this merger, we issued 71,429 shares of our common stock to Mr. Evans and
also granted to him an option to purchase 200,000 shares of our common stock at
an exercise price of $13.69 per share that vests in one-third increments
annually during the next three years subject to Mr. Evans' continued employment
by OSS. As a result of this merger, NetIgnite is now a wholly owned subsidiary
of OSS.

Mr. Evans has entered into an employment agreement with OSS and NetIgnite
which has an initial term of two years, provides for a minimum annual salary of
$190,000 and provides for the granting to him of options to purchase 80,000
shares of our common stock at an exercise price of $12.25 per share. These
options vest in one-third increments annually during the next three years
subject to Mr. Evans' continuous employment by OSS.

On June 30, 1999, we completed our acquisition of Durand Communications,
Inc. Mr. Durand and Mr. Esters were shareholders of DCI. Mr. Durand was the
founder and president of DCI and Mr. Esters was the chairman of the board of
directors of DCI. Mr. Esters has been nominated for election to our board of
directors pursuant to the terms of the acquisition agreement. As a result of the
DCI acquisition, Mr. Durand received 158,195 shares of our common stock and Mr.
Esters received 71,222 shares of our common stock. In addition, as a result of
the acquisition, Mr. Esters received options to purchase 5,227 shares of our
common stock at $4.30 per share at any time prior to August 1, 2004 and 5,904
shares or our common stock at $10.16 per share at any time prior to September 1,
2004 in replacement of similar options to purchase shares of DCI common stock.
In addition, Mr. Durand has been employed by OSS as its senior vice president -
product development at an annual base salary of $100,000 and has been granted a
stock option under the Online System Services, Inc. Stock Option Plan of 1995 to
purchase 75,000 shares of our common stock at an exercise price of $7.625 per
share. This stock option has a term of seven years and will become exercisable
in 1/3rd increments during the first three years.

We believe that the transactions summarized above are on terms no less
favorable than could be obtained from unaffiliated third parties. The board of
directors has determined that any transactions with officers, directors or
principal shareholders will be approved by the disinterested directors and will
be on terms no less favorable than could be obtained from an unaffiliated third
party. The board of directors will obtain independent counsel or other
independent advice to assist in that determination.

11
<PAGE>

PROPOSAL 2:
AMENDMENT TO THE ARTICLES OF INCORPORATION TO CHANGE OUR NAME

General

Under our current articles of incorporation, the name of the corporation is
"Online System Services, Inc." Proposal 2 recommends to the shareholders an
amendment to our articles of incorporation that would change our name to "WEBB
Interactive Services, Inc." Our board of directors has unanimously approved the
amendment contained in Proposal 2.

Our board of directors considers Proposal 2 to be in the best interests of
OSS and its shareholders. The purpose of this amendment is to better promote our
business and provide us with better consumer name recognition by more closing
tying our company name with:

. The tradename of our signature product--WEBBbuilder(TM);
. Our Nasdaq trading symbol WEBB; and
. The common, everyday terms (i.e. the Web or the World Wide Web) used for
the Internet.

If this name change is adopted, we intend to use the trade name WEBB
Interactive Services (along with other tradenames or trademarks that we may
decide to adopt) in our communications with shareholders, customers, the
business community and the investment community.

If this name change is adopted, you will not be required to surrender your
stock certificates in exchange for certificates containing our new name.
However, stock certificates containing the name WEBB Interactive Services, Inc.
will be issued to a shareholder upon any purchase, sale or other disposition of
our capital stock by such shareholder after the effective date of the name
change.

Resolution and Vote Required for Proposal 2

The following resolutions will be submitted for approval at the annual
meeting:

"RESOLVED, That the Articles of Incorporation of Online System Services,
Inc., as heretofore amended, be further amended by deleting in its
entirety Article I thereof and replacing it with the following:

Article I
---------

Name
----

The name of the corporation shall be WEBB Interactive Services, Inc."

"FURTHER RESOLVED, That the officers of the OSS be, and hereby are,
authorized and directed to take all steps necessary or desirable to
accomplish the purposes of the foregoing resolution."

The board of directors recommends that shareholders vote "FOR" Proposal 2
to amend OSS' articles of incorporation to change the name of the company from
Online System Services, Inc. to WEBB Interactive Services, Inc.

12
<PAGE>

PROPOSAL 3:
AMENDMENT OF ONLINE SYSTEM SERVICES, INC. 1995 STOCK OPTION PLAN

Proposed Amendment

The board of directors proposes that our shareholders approve the amendment
to the Online System Services, Inc. 1995 Stock Option Plan (the "1995 Plan") to
increase the number of shares of common stock that may be issued pursuant to the
1995 Plan from 2,800,000 to 3,500,000. The 1995 Plan was originally adopted by
the board of directors and the shareholders on March 17, 1995. The features of
the 1995 Plan, a copy of which is attached hereto as Appendix A, are summarized
below.

Summary of Plan

The 1995 Plan terminates March 17, 2005, unless sooner terminated by action
of the Board. The 1995 Plan provides for the grant of options to purchase shares
of our common stock to officers, directors, employees and consultants. As of
July 6, 1999, there were 6 executive officers, 2 directors, 63 employees and 10
consultants eligible to receive such options. Options granted under the 1995
Plan may have a term of up to ten years. Options which expire, are canceled or
are terminated without having been exercised, may be regranted to participants
under the 1995 Plan. Options granted under the 1995 Plan may be either
"incentive stock options" within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended, or options that do not qualify for special tax
treatment. No incentive stock options may be granted with a per share exercise
price less than the fair market value per share at the date of grant (or 110% of
fair market value in the case of optionees who hold 10% or more of our
outstanding common stock). Under the 1995 Plan, the exercise price of
nonqualified stock options may not be less than 85% of the fair market value of
the common stock on the date of grant. The board of directors has adopted a
policy of not granting nonqualified stock options with an exercise price less
than the fair market value of the common stock on the date of grant. Not more
than $100,000 in value of incentive stock options under all plans of the Company
may vest in any calendar year for any option holder and no incentive stock
option may be exercised more than ten years after the date of grant. The 1995
Plan is administered by the board of directors and options may be granted at
such time and in such amounts as the board of directors, in its discretion,
determines.

All of the outstanding options currently held by employees who are not
directors and officers of the Company under the 1995 Plan are incentive stock
options. Options granted under the 1995 Plan and held by non-employee directors
and consultants are nonqualified and have an exercise price equal to the fair
market value of the common stock on the date of grant.

As of July 6, 1999 options for the purchase of an aggregate of 1,993,319
shares of common stock were outstanding under the 1995 Plan, held by 81 persons,
with per share exercise prices from $.50 to $18.25 per share and a weighted
average exercise price of approximately $8.91 per share. In addition an
aggregate of 638,341 shares of common stock have been issued to 57 persons at a
weighted average exercise price of approximately $1.61 per share upon the
exercise of options granted under the 1995 Plan.

The following table shows, as of July 6, 1999, outstanding, but
unexercised, options granted to:

. Each of our nominees for directors;

. Persons holding five percent or more of our outstanding but
unexercised options;

. Certain of our executive officers;

. Our current executive officers, as a group;

. Our current directors, who are not executive officers, as a group; and

. Our current employees, excluding our executive officers, as a group.

Each of these options has a term ranging from five to ten years unless earlier
terminated as provided in the 1995 Plan, and each of these options was granted
at an exercise price equal to the fair market value of our common stock on the
date of grant.

13
<PAGE>

<TABLE>
<CAPTION>
STOCK OPTION AWARDS UNDER THE
ONLINE SYSTEM SERVICES, INC. 1995 STOCK OPTION PLAN
- -----------------------------------------------------------------------------------------------------------
Name and Position Number of Options
- ----------------- -----------------
<S> <C>
R. Steven Adams, Chief Executive Officer and a nominee for director 175,250

William R. Cullen, Chief Financial Officer and nominee for director 160,000

Robert J. Lewis, nominee for director 77,500

Richard C. Jennewine, nominee for director 67,500

Donald J. Esters, nominee for director 11,131

Perry Evans, nominee for director 280,000

Gwenael Hagan, Senior Vice President-Product and Business Development 100,000

Lindley S. Branson, Executive Vice President-General Counsel and Secretary 100,000

Chris Fanjoy 100,000

Michael Murphy 25,250

Edward Robinson 33,917

Current Executive Officers, as a group (6 persons) 815,250

Current Directors, who are not also executive officers,
as a group (2 persons) 145,000

Employees, excluding executive officers, as a group (63 persons) 663,084
</TABLE>

The last reported sale price for the common stock on the Nasdaq SmallCap
Market on July 6, 1999 was $16.375.

Federal Income Tax Consequences

The following is a brief summary of the principal federal income tax
consequences under current federal income tax laws relating to awards under the
1995 Plan. This summary is not intended to be exhaustive and, among other
things, does not describe state or local tax consequences.

In general, an optionee will be subject to tax at the time a nonqualified
stock option is exercised (but not at the time of grant), and he or she will
include in ordinary income in the taxable year in which he or she exercises a
nonqualified stock option an amount equal to the difference between the exercise
price and the fair market value of the shares acquired on the date of exercise,
and the Company will generally be entitled to deduct such amount for federal
income tax purposes except as such deductions may be limited by the Revenue
Reconciliation Act of 1993 ("1993 Tax Act"), described below. Upon disposition
of shares, the appreciation (or depreciation) after the date of exercise will be
treated by the optionee as either short-term or long-term capital gain or loss
depending on whether the shares have been held for the then-required holding
period.

In general, an optionee will not be subject to tax at the time an incentive
stock option is granted or exercised. Upon disposition of the shares acquired
upon exercise of an incentive stock option, long-term capital gain or loss will
be recognized in an amount equal to the difference between the disposition price
and the exercise price, provided that the optionee has not disposed of the
shares within two years of the date of grant or within one year from the date of
exercise. If the optionee disposes of the shares without satisfying both holding
period requirements (a "Disqualifying Disposition"), the optionee will recognize
ordinary income at the time of such Disqualifying

14
<PAGE>

Disposition to the extent of the difference between the exercise price and the
lesser of the fair market value of the share on the date the incentive stock
option was exercised or the date of sale. Any remaining gain or loss is treated
as short-term or long-term capital gain or loss depending upon how long the
shares have been held. The Company is not entitled to a tax deduction upon
either the exercise of an incentive stock option or upon disposition of the
shares acquired pursuant to such exercise, except to the extent that the
optionee recognizes ordinary income in a Disqualifying Disposition and then only
to the extent that such deduction is not limited by the 1993 Tax Act.

If the optionee pays the exercise price, in full or in part, with
previously acquired shares, the exchange will not affect the tax treatment of
the exercise. However, if such exercise is effected using shares previously
acquired through the exercise of an incentive stock option, the exchange of the
previously acquired shares will be considered a disposition of such shares for
the purpose of determining whether a Disqualifying Disposition has occurred.

Commencing with our 1995 fiscal year, the federal income tax deduction that
we may take for otherwise deductible compensation payable to executive officers
who, on the last day of the fiscal year, are treated as "named executive
officers" in our proxy statement for such year will be limited by the 1993 Tax
Act to $1,000,000. Under the provisions of the 1993 Tax Act, the deduction limit
on compensation will apply to all compensation, except compensation deemed under
the 1993 Tax Act to be "performance-based" and certain compensation related to
retirement and other employee benefit plans. The determination of whether
compensation related to the 1995 Plan is performance-based for purposes of the
1993 Tax Act will be dependent upon a number of factors, including shareholder
approval of the 1995 Plan, and the exercise price at which options are granted.
The 1993 Tax Act also prescribes certain limitations and procedural requirements
in order for compensation to qualify as performance-based, including rules which
require that in the case of compensation paid in the form of stock options, the
option price be not less than the fair market value of the stock at date of
grant and that the plan under which the options are granted states the maximum
number of shares with respect to which options may be granted during a specified
period to any employee. Although the Company has structured the 1995 Plan to
satisfy the requirements of the 1993 Tax Act with regard to its "performance-
based" criteria, there is no assurance that awards thereunder will so satisfy
such requirements, and accordingly, the Company may be limited in the deductions
it may take with respect to awards under the 1995 Plan.

Resolution and Vote Required for Proposal 3

The following resolutions will be submitted for approval at the annual
meeting:

"RESOLVED, That the total number of shares of stock hereby made
available and reserved for issuance under the Plan shall be 3,500,000.
The aggregate number of shares of stock available under this Plan
shall be subject to adjustment as provided in section 5.3. The total
number of shares of stock may be authorized but unissued shares of
stock, or shares acquired by purchase as directed by the board of
directors from time to time in its discretion, to be used for issuance
upon exercise of options granted under the Plan.

FURTHER RESOLVED, That the officers of OSS be, and hereby are,
authorized and directed to take all steps necessary or desirable to
accomplish the purposes of the foregoing resolutions."

The board of directors recommends that the shareholders vote "FOR" Proposal
3 to amend the Online System Services, Inc. Stock Option Plan of 1995.

15
<PAGE>

COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934

Section 16(a) of the Securities Exchange Act of 1934 requires OSS'
directors and executive officers, and persons who own more than ten percent of a
registered class of OSS' equity securities, to file with the Securities and
Exchange Commission initial reports of ownership and reports of changes in
ownership of our common stock and other equity securities. Officers, directors
and greater than ten-percent shareholders are also required by SEC regulation to
furnish us with copies of all Section 16(a) forms they file.

To our knowledge, based solely on review of the copies of such reports
furnished to us and written representations that no other reports were required,
during the year ended December 31, 1998, all Section 16(a) filing requirements
applicable to our officers, directors and greater than ten-percent beneficial
owners were timely complied with except for the following:

<TABLE>
<CAPTION>
Name of Individual Form Number of Late Reports Transactions Not Timely Reported
- ------------------ ---- ---------------------- --------------------------------
<S> <C> <C> <C>
R. Steven Adams 5 1 6
William R. Cullen 3 1 2
5 1 1
Thomas S. Plunkett 5 1 5
Paul E. Beckelheimer 3 1 1
5 1 1
Gwenael S. Hagan 3 1 2
5 1 4
Paul H. Spieker 5 1 5
Andre Durand 3 1 1
Robert J. Lewis 5 1 2
Richard C. Jennewine 5 1 1
</TABLE>

PROPOSAL 4:
SELECTION OF INDEPENDENT AUDITORS

The board of directors has appointed Arthur Andersen LLP as our independent
accountants for the fiscal year ending December 31, 1999. Arthur Andersen LLP
served as our independent accountants for the year ended December 31, 1998.
Representatives of Arthur Andersen LLP who are expected to be present at the
meeting, will have an opportunity to make a statement if they desire to do so,
and are expected to be available to respond to appropriate questions.

In the event the holders of the common stock do not ratify the appointment
of Arthur Andersen LLP, the selection of other independent accountants will be
considered by the board of directors. The board of directors recommends that
the holders of the common stock vote for ratification of the appointment of
Arthur Andersen LLP.

Resolution and Vote Required for Proposal 4

The following resolution will be submitted for approval at the annual
meeting:

"RESOLVED, That the appointment by the company of Arthur Andersen LLP
as the independent accounts for the company for the year ending
December 31, 1999 be, and hereby is, ratified and approved by the
shareholders of the company."

16
<PAGE>

The board of directors recommends that shareholders vote "FOR" Proposal 4
to ratify the appointment of Arthur Andersen LLP as the independent accountants
of the company.

PROPOSALS OF SHAREHOLDERS

Any shareholder proposal intended to be considered for inclusion in the
proxy statement for presentation at our 2000 annual meeting must be received
byus by April 5, 2000. The proposal must be in accordance with the provisions of
Rule 14a-8 promulgated by the Securities and Exchange Commission under the
Securities Exchange Act of 1934. We suggest that you submit your proposal by
certified mail -- return receipt requested. If you intend to present a proposal
at our 2000 annual meeting without including such proposal in our proxy
statement, then you must provide us with notice of such proposal no later than
June 1, 2000. We reserve the right to reject, rule out of order, or take other
appropriate action with respect to any proposal that does not comply with these
and other applicable requirements.

OTHER MATTERS

The board of directors does not intend to bring before the meeting any
business other than as set forth in this proxy statement, and has not been
informed that any other business is to be presented to the meeting. However, if
any matters other than those referred to above should properly come before the
meeting, it is the intention of the persons named in the enclosed proxy to vote
such proxy in accordance with their best judgment.

Please sign and return promptly the enclosed proxy in the envelope provided
if you are a holder of common stock. The signing of a proxy will not prevent
your attending the meeting and voting in person.

BY ORDER OF THE BOARD OF DIRECTORS

Lindley S. Branson
Secretary

July 16, 1999

17
<PAGE>

APPENDIX A

ONLINE SYSTEM SERVICES, INC.
----------------------------
1995 STOCK OPTION PLAN
----------------------

Article I. Establishment and Purpose
-------------------------------------

1.1 Establishment. Online System Services, Inc., a Colorado Corporation
-------------
("Company"), hereby establishes a stock option plan for employees and others
providing services to the Company and its Subsidiary Corporations, as described
herein, which shall be known as the "1995 STOCK OPTION PLAN" (the "Plan"). It
is intended that certain of the options issued pursuant to the Plan to employees
may constitute incentive stock options within the meaning of section 422A of the
Internal Revenue Code and that other options issued pursuant to the Plan shall
constitute nonstatutory options. The Board shall determine which options are to
be incentive stock options and which are to be nonstatutory options and shall
enter into option agreements with recipients accordingly.

1.2 Purpose. The purpose of this Plan is to enhance stockholder
-------
investment by attracting, retaining and motivating key employees and consultants
of the Company and its Subsidiary Corporations, and to encourage stock ownership
by such employees and consultants by providing them with a means to acquire a
proprietary interest in our success.

Article II. Definitions
------------------------

2.1 Definitions. Whenever used herein, the following terms shall have the
-----------
respective meanings set forth below, unless the context clearly requires
otherwise, and when said meaning is intended, the term shall be capitalized.

(a) "Board" means the board of directors of the Company.
-----

(b) "Code" means the Internal Revenue Code of 1986, as amended.
----

(c) "Committee" shall mean the Committee provided for by Article IV hereof
---------
which may be created at the discretion of the Board.

(d) "Company" means Online System Services, Inc., a Colorado Corporation.
-------

(e) "Consultant" means any person or entity, including an officer or
----------
director of the Company or a Subsidiary Corporation, who provides
services (other than as an Employee) to the Company or a Subsidiary
Corporation, and shall include a Non-Employee Director, as defined
below.

(f) "Date of Exercise" means the date the Company receives notice, by an
----------------
Optionee, of the exercise of an Option pursuant to section 8.1 of this
Plan. Such notice shall indicate the number of shares of Stock the
Optionee intends to exercise.

(g) "Employee" means any person, including an officer or director of the
--------
Company or a Subsidiary Corporation, who is employed by the Company or
a Subsidiary Corporation.

(h) "Fair Market Value" means the fair market value of Stock upon which an
-----------------
option is granted under this Plan.

(i) "Incentive Stock Option" means an Option granted under this Plan which
----------------------
intended to qualify as an "incentive stock option" within the meaning
of Section 422A of the Code.

A-1
<PAGE>

(j) "Non-Employee Director" means a member of the Board who is not an
---------------------
employee of the Company or of any Subsidiary Corporation at the time
an Option is granted hereunder.

(k) "Nonstatutory Option" means an Option granted under this Plan which is
-------------------
not intended to qualify as an incentive stock option within the
meaning of Section 422A of the Code. Nonstatutory Options may be
granted at such times and subject to such restrictions as the Board
shall determine without conforming to the statutory rules of Section
422A of the Code applicable to incentive stock options.

(l) "Option" means the right, granted under this Plan, to purchase Stock
------
of the Company at the option price for a specified period of time. For
purposes of this Plan, an Option may be either an Incentive Stock
Option or a Nonstatutory Option.

(m) "Optionee" means an Employee or Consultant holding an Option under the
--------
Plan.

(n) "Parent Corporation" shall have the meaning set forth in Section 425
------------------
(e) of the Code with the Company being treated as the employer
corporation for purposes of this definition.

(o) "Subsidiary Corporation" shall have the meaning set forth in Section
----------------------
425(f) of the Code with the Company being treated as the employer
corporation for purposes of this definition.

(p) "Significant Shareholder" means an individual who, within the meaning
-----------------------
of Section 422A(b)(6) of the Code, owns stock possessing more than ten
percent of the total combined voting power of all classes of stock of
the Company or of any Parent Corporation or Subsidiary Corporation of
the Company. In determining whether an individual is a Significant
Shareholder, an individual shall be treated as owning stock owned by
certain relatives of the individual and certain stock owned by
corporations in which the individual is a stockholder, partnerships in
which the individual is a partner, and estates or trusts of which the
individual is a beneficiary, all as provided in Section 425(d) of the
Code.

(q) "Stock" means the no par value common stock of the Company.
-----

2.2 Gender and Number. Except when otherwise indicated by the context,
-----------------
any masculine terminology when used in this Plan also shall include the feminine
gender, and the definition of any term herein in the singular also shall include
the plural.

Article III. Eligibility and Participation
-------------------------------------------

3.1 Eligibility and Participation. All Employees are eligible to
-----------------------------
participate in this Plan and receive Incentive Stock Options and/or Nonstatutory
Options hereunder. All Consultants are eligible to participate in this Plan and
receive Nonstatutory Options hereunder. Optionees in the Plan shall be selected
by the Board from among those Employees and Consultants who, in the opinion of
the Board, are in a position to contribute materially to our continued growth
and development and to its long-term financial success.

Article IV. Administration
---------------------------

4.1 Administration. The Board shall be responsible for administering the
--------------
Plan.

A-2
<PAGE>

The Board is authorized to interpret the Plan; to prescribe, amend, and
rescind rules and regulations relating to the Plan; to provide for conditions
and assurances deemed necessary or advisable to protect the interests of the
Company; and to make all other determinations necessary or advisable for the
administration of the Plan, but only to the extent not contrary to the express
provisions of the Plan. Determinations, interpretations, or other actions made
or taken by the Board, pursuant to the provisions of this Plan, shall be final
and binding and conclusive for all purposes and upon all persons.

At the discretion of the Board this Plan may be administered by a Committee
which shall be an executive committee of the Board, consisting of not less than
three (3) members of the Board. The members of such Committee may be directors
who are eligible to receive Options under this Plan, but Options may be granted
to such persons only by action of the full Board and not by action of the
Committee. Such Committee shall have full power and authority, subject to the
limitations of the Plan and any limitations imposed by the Board, to construe,
interpret and administer this Plan and to make determinations which shall be
final, conclusive and binding upon all persons, including, without limitation,
the Company, the stockholders, the directors and any persons having any
interests in any Options which may be granted under this Plan, and, by
resolution or resolution providing for the creation and issuance of any such
Option, to fix the terms upon which, the time or times at or within which, and
the price or prices at which any such shares may be purchased from the Company
upon the exercise of such Option, which terms, time or times and price or prices
shall, in every case, be set forth or incorporated by reference in the
instrument or instruments evidencing such Option, and shall be consistent with
the provisions of this Plan.

The Board may from time to time remove members from, or add members to, the
Committee. The Board may terminate the Committee at any time. Vacancies on the
Committee, howsoever caused, shall be filled by the Board. The Committee shall
select one of its members as Chairman, and shall hold meetings at such times and
places as the Chairman may determine. A majority of the Committee at which a
quorum is present, or acts reduced to or approved in writing by all of the
members of the Committee, shall be the valid acts of the Committee. A quorum
shall consist of two-thirds (2/3) of the members of the Committee.

Where the Committee has been created by the Board, references herein to
actions to be taken by the Board shall be deemed to refer to the Committee as
well, except where limited by this Plan or by the Board.

The Board shall have all of the enumerated powers of the Committee, but
shall not be limited to such powers. No member of the Board or the Committee
shall be liable for any action or determination made in good faith with respect
to the Plan or any Option granted under it.

Article V. Stock Subject to the Plan
-------------------------------------

5.1 Number. The total number of shares of Stock hereby made available and
------
reserved for issuance under the Plan shall be 2,800,000. The aggregate number
of shares of Stock available under this Plan shall be subject to adjustment as
provided in section 5.3. The total number of shares of Stock may be authorized
but unissued shares of Stock, or shares acquired by purchase as directed by the
Board from time to time in its discretion, to be used for issuance upon exercise
of Options granted hereunder.

5.2 Unused Stock. If an Option shall expire or terminate for any reason
------------
without having been exercised in full, the unpurchased shares of Stock subject
thereto shall (unless the Plan shall have terminated) become available for other
Options under the Plan.

5.3 Adjustment in Capitalization. In the event of any change in the
----------------------------
outstanding shares of Stock by reason of a stock dividend or split,
recapitalization, reclassification, or other similar corporate change, the
aggregate number of shares of Stock set forth in section 5.1 shall be
appropriately adjusted by the Board, whose determination shall be conclusive;
provided, however, that fractional shares shall be rounded to the nearest whole
share. In any such case, the number and kind of shares that are subject to any
Option (including any Option outstanding after termination of employment) and
the Option price per share shall be proportionately and appropriately adjusted
without any change in the aggregate Option price to be paid therefor upon
exercise of the Option.

A-3
<PAGE>

Article VI. Duration of the Plan
---------------------------------

6.1 Duration of the Plan. Subject to stockholder approval, the Plan shall
--------------------
be in effect for ten years from the date of its adoption by the Board. Any
Options outstanding at the end of said period shall remain in effect in
accordance with their terms. The Plan shall terminate before the end of said
period, if all Stock subject to it has been purchased pursuant to the exercise
of Options granted under the Plan.

Article VII. Terms of Stock Options
------------------------------------

7.1 Grant of Options. Subject to section 5.1, Options may be granted to
----------------
Employees or Consultants at any time and from time to time as determined by the
Board; provided, however, that Consultants may receive only Nonstatutory
Options, and may not receive Incentive Stock Options. The Board shall have
complete discretion in determining the number of Options granted to each
Optionee. In making such determinations, the Board may take into account the
nature of services rendered by such Employees or Consultants, their present and
potential contributions to the Company and its Subsidiary Corporations, and such
other factors as the Board in its discretion shall deem relevant. The Board
also shall determine whether an Option is to be an Incentive Stock Option or a
Nonstatutory Option.

In the case of Incentive Stock Options the total Fair Market Value
(determined at the date of grant) of shares of Stock with respect to which
incentive stock options granted after December 31, 1986 are exercisable for the
first time by the Optionee during any calendar year under all plans of the
Company under which incentive stock options may be granted (and all such plans
of any Parent Corporations and any Subsidiary Corporations of the Company) shall
not exceed $100,000. (Hereinafter, this requirement is sometimes referred to as
the "$100,000 Limitation".)

Nothing in this Article VII of the Plan shall be deemed to prevent the
grant of Options permitting exercise in excess of the maximums established by
the preceding paragraph where such excess amount is treated as a Nonstatutory
Option.

The Board is expressly given the authority to issue amended or replacement
Options with respect to shares of Stock subject to an Option previously granted
hereunder. An amended Option amends the terms of an Option previously granted
and thereby supersedes the previous Option. A replacement Option is similar to
a new Option granted hereunder except that it provides that it shall be
forfeited to the extent that a previously granted Option is exercised, or except
that its issuance is conditioned upon the termination of a previously granted
Option.

7.2 No Tandem Options. Where an Option granted under this Plan is
-----------------
intended to be an Incentive Stock Option, the Option shall not contain terms
pursuant to which the exercise of the Option would affect the Optionee's right
to exercise another Option, or vice versa, such that the Option intended to be
an Incentive Stock Option would be deemed a tandem stock option within the
meaning of the regulations under Section 422A of the Code.

7.3 Option Agreement; Terms and Conditions to Apply Unless Otherwise
----------------------------------------------------------------
Specified. As determined by the Board on the date of grant, each Option shall
- ---------
be evidenced by an Option agreement (the "Option Agreement") that includes the
nontransferability provisions required by Section 10.2 hereof and specifies:
whether the Option is an Incentive Stock Option or a Nonstatutory Option; the
Option price; the duration of the Option; the number of shares of Stock to which
the Option applies; any vesting or exercisability restrictions which the Board
may impose; in the case of an Incentive Stock Option, a provision implementing
the $100,000 Limitation; and any other terms or conditions which the Board may
impose. All such terms and conditions shall be determined by the Board at the
time of grant of the Option.

A-4
<PAGE>

If not otherwise specified by the Board, the following terms and conditions
shall apply to Options granted under the Plan:

(a) Term. The duration of the Option shall be seven (7) years from the
----
date of grant.

(b) Exercise of Option. Unless an Option is terminated as provided
------------------
hereunder, an Optionee may exercise his Option for up to, but not in
excess of, the amounts of shares subject to the Option specified
below, based on the Optionee's number of years of continuous service
with the Company or a Subsidiary Corporation of the Company from the
date on which the Option is granted. In the case of an Optionee who is
an Employee, continuous service shall mean continuous employment; in
the case of an Optionee who is a Consultant, continuous service shall
mean the continuous provision of consulting services. In applying said
limitations, the amount of shares, if any, previously purchased by the
Optionee under the Option shall be counted in determining the amount
of shares the Optionee can purchase at any time. The Optionee may
exercise his Option in the following amounts:

(i) After one year of such continuous services for up to but not in
excess of thirty-three and one-third percent (33 1/3%) of the
shares originally subject to the Option;

(ii) After two years of such continuous services, for up to but not
in excess of sixty-six and two-thirds percent (66 2/3%) of the
shares originally subject to the Option; and

(iii) At the expiration of the third year of such continuous services
the Option may be exercised at any time and from time to time
within its terms in whole or in part, but it shall not be
exercisable after the expiration of seven (7) years (five (5)
years in the case of an Incentive Stock Option granted to a
Significant Shareholder) from the date on which it was granted.

The Board shall be free to specify terms and conditions other than those set
forth above, in its discretion.

All Option Agreements shall incorporate the provisions of this Plan by
reference, with certain provisions to apply depending upon whether the Option
Agreement applies to an Incentive Stock Option or to a Nonstatutory Option.

7.4 Option Price. No Incentive Stock Option granted pursuant to this Plan
------------
shall have an Option price that is less than the Fair Market Value of Stock on
the date the Option is granted. Incentive Stock Options granted to Significant
Shareholders shall have an Option price of not less than 110 percent of the Fair
Market Value of Stock on the date of grant. The Option price for Nonstatutory
Options shall be established by the Board and shall not be less than eighty-five
percent (8Series C) of the Fair Market Value of Stock on the date this Option is
granted.

7.5 Term of Options. Each Option shall expire at such time as the Board
---------------
shall determine when it is granted, provided however that no Option shall be
exercisable later than the tenth anniversary date of its grant. By its terms,
an Incentive Stock Option granted to a Significant Shareholder shall not be
exercisable after five years from the date of grant.

7.6 Exercise of Options. Options granted under the Plan shall be
-------------------
exercisable at such times and be subject to such restrictions and conditions as
the Board shall in each instance approve, which need not be the same for all
Optionees.

A-5
<PAGE>

7.7 Payment. Payment for all shares of Stock shall be made at the time
-------
that an Option, or any part thereof, is exercised, and no shares shall be issued
until full payment therefor has been made. Payment shall be made (i) in cash,
or (ii) if acceptable to the Board, in Stock or in some other form; provided,
however, in the case of an Incentive Stock Option, that said other form of
payment does not prevent the Option from qualifying for treatment as an
"incentive stock option" within the meaning of the Code. Payment may also be
made, in the discretion of the Board, by delivery (including by FAX) to the
Company or its designated agent of an executed irrevocable option exercise form
together with irrevocable instructions to a broker-dealer to sell or margin a
sufficient portion of the shares and deliver the sale or margin loan proceeds
directly to the Company to pay for the exercise price.

Article VIII. Written Notice, Issuance of
------------------------------------------
Stock Certificates, Stockholder Privileges
------------------------------------------

8.1 Written Notice. An Optionee wishing to exercise an Option shall give
--------------
written notice to the Company, in the form and manner prescribed by the Board.
Full payment for the shares exercised pursuant to the Option must accompany the
written notice.

8.2 Issuance of Stock Certificates. As soon as practicable after the
------------------------------
receipt of written notice and payment, the Company shall deliver to the Optionee
or to a nominee of the Optionee a certificate or certificates for the requisite
number of shares of Stock.

8.3 Privileges of a Stockholder. An Optionee or any other person entitled
---------------------------
to exercise an Option under this Plan shall not have stockholder privileges with
respect to any Stock covered by the Option until the date of issuance of a stock
certificate for such stock.

Article IX. Termination of Employment or Services
--------------------------------------------------

9.1 Death. Unless provided otherwise for a Nonstatutory Option, if an
-----
Optionee's employment in the case of an Employee, or provision of services as a
Consultant, in the case of a Consultant, terminates by reason of death, the
Option may thereafter be exercised at any time prior to the expiration date of
the Option or within 12 months after the date of such death, whichever period is
the shorter, by the person or persons entitled to do so under the Optionee's
will or, if the Optionee shall fail to make a testamentary disposition of an
Option or shall die intestate, the Optionee's legal representative or
representatives. The Option shall be exercisable only to the extent that such
Option was exercisable as of the date of death.

9.2 Termination Other Than For Cause Or Due to Death. Unless provided
------------------------------------------------
otherwise for a Nonstatutory Option, in the event of an Optionee's termination
of employment, in the case of an Employee, or termination of the provision of
services as a Consultant, in the case of a Consultant, other than by reason of
death, the Optionee may exercise such portion of his Option as was exercisable
by him at the date of such termination (the "Termination Date") at any time
within three (3) months of the Termination Date; provided, however, that where
the Optionee is an Employee, and is terminated due to disability within the
meaning of Code (S) 422A, he may exercise such portion of his Option as was
exercisable by him on his Termination Date within one year of his Termination
Date. In any event, the Option cannot be exercised after the expiration of the
term of the Option. Options not exercised within the applicable period
specified above shall terminate.

In the case of an Employee, a change of duties or position within the
Company or an assignment of employment in a Subsidiary Corporation or Parent
Corporation of the Company, if any, or from such a Corporation to the Company,
shall not be considered a termination of employment for purposes of this Plan.
The Option Agreements may contain such provisions as the Board shall approve
with reference to the effect of approved leaves of absence upon termination of
employment.

A-6
<PAGE>

9.3 Termination for Cause. Unless provided otherwise for a Nonstatutory
---------------------
Option, in the event of an Optionee's termination of employment, in the case of
an Employee, or termination of the provision of services as a Consultant, in the
case of a Consultant, which termination is by the Company or a Subsidiary
Corporation for cause, any Option or Options held by him under the Plan, to the
extent not exercised before such termination, shall forthwith terminate.

Article X. Rights of Optionees
-------------------------------

10.1 Service. Nothing in this Plan shall interfere with or limit in any
-------
way the right of the Company or a Subsidiary Corporation to terminate any
Employee's employment, or any Consultant's services, at any time, nor confer
upon any Employee any right to continue in the employ of the Company or a
Subsidiary Corporation, or upon any Consultant any right to continue to provide
services to the Company or a Subsidiary Corporation.

10.2 Nontransferability. All Options granted under this Plan shall be
------------------
nontransferable by the Optionee, other than by will or the laws of descent and
distribution, and shall be exercisable during the Optionee's lifetime only by
the Optionee.

Article XI. Optionee-Employee's
--------------------------------
Transfer or Leave of Absence
----------------------------

11.1 Optionee-Employee's Transfer or Leave of Absence. For Plan purposes--
------------------------------------------------

(a) A transfer of an Optionee who is an Employee from the Company to a
Subsidiary Corporation or Parent Corporation, or from one such
Corporation to another, or

(b) a leave of absence for such an Optionee (i) which is duly authorized
in writing by the Company or a Subsidiary Corporation, and (ii) if
the Optionee holds an Incentive Stock Option, which qualifies under
the applicable regulations under the Code which apply in the case of
incentive stock options,

shall not be deemed a termination of employment. However, under no
circumstances may an Optionee exercise an Option during any leave of absence,
unless authorized by the Board.

Article XII. Amendment,
------------------------
Modification, and Termination of the Plan
-----------------------------------------

12.1 Amendment, Modification, and Termination of the Plan. The Board may
----------------------------------------------------
at any time terminate, and from time to time may amend or modify the Plan,
provided, however, that no such action of the Board, without approval of the
stockholders, may--

(a) increase the total amount of Stock which may be purchased through
Options granted under the Plan, except as provided in Article V;

(b) change the class of Employees or Consultants eligible to receive
Options;

No amendment, modification, or termination of the Plan shall in any manner
adversely affect any outstanding Option under the Plan without the consent of
the Optionee holding the Option.

A-7
<PAGE>

Article XIII. Acquisition, Merger, or Liquidation
--------------------------------------------------

13.1 Acquisition. In the event that an Acquisition occurs with respect to
-----------
the Company, the Company shall have the option, but not the obligation, to
cancel Options outstanding as of the effective date of Acquisition, whether or
not such Options are then exercisable, in return for payment to the Optionees of
an amount equal to a reasonable estimate of an amount (hereinafter the "Spread")
equal to the difference between the net amount per share payable in the
Acquisition, or as a result of the Acquisition, less the exercise price of the
Option. In estimating the Spread, appropriate adjustments to give effect to the
existence of the Options shall be made, such as deeming the Options to have been
exercised, with the Company receiving the exercise price payable thereunder, and
treating the shares receivable upon exercise of the Options as being outstanding
in determining the net amount per share. For purposes of this section, an
"Acquisition" shall mean any transaction in which substantially all of our
assets are acquired or in which a controlling amount of our outstanding shares
are acquired, in each case by a single person or entity or an affiliated group
of persons and/or entities. For purposes of this Section a controlling amount
shall mean more than 50% of the issued and outstanding shares of stock of the
Company. The Company shall have such an option regardless of how the
Acquisition is effectuated, whether by direct purchase, through a merger or
similar corporate transaction, or otherwise. In cases where the acquisition
consists of the acquisition of assets of the Company, the net amount per share
shall be calculated on the basis of the net amount receivable with respect to
shares upon a distribution and liquidation by the Company after giving effect to
expenses and charges, including but not limited to taxes, payable by the Company
before the liquidation can be completed.

Where the Company does not exercise its option under this Section 13.1 the
remaining provisions of this Article XIII shall apply, to the extent applicable.

13.2 Merger or Consolidation. Subject to any required action by the
-----------------------
stockholders, if the Company shall be the surviving corporation in any merger or
consolidation, any Option granted hereunder shall pertain to and apply to the
securities to which a holder of the number of shares of Stock subject to the
Option would have been entitled in such merger or consolidation.

13.3 Other Transactions. A dissolution or a liquidation of the Company or
------------------
a merger and consolidation in which the Company is not the surviving corporation
shall cause every Option outstanding hereunder to terminate as of the effective
date of such dissolution, liquidation, merger or consolidation. However, the
Optionee either (i) shall be offered a firm commitment whereby the resulting or
surviving corporation in a merger or consolidation will tender to the Optionee
an option (the "Substitute Option") to purchase its shares on terms and
conditions both as to number of shares and otherwise, which will substantially
preserve to the Optionee the rights and benefits of the Option outstanding
hereunder granted by the Company, or (ii) shall have the right immediately prior
to such dissolution, liquidation, merger, or consolidation to exercise any
unexercised Options whether or not then exercisable, subject to the provisions
of this Plan. The Board shall have absolute and uncontrolled discretion to
determine whether the Optionee has been offered a firm commitment and whether
the tendered Substitute Option will substantially preserve to the Optionee the
rights and benefits of the Option outstanding hereunder. In any event, any
Substitute Option for an Incentive Stock Option shall comply with the
requirements of Code Section 425(a).

Article XIV. Securities Registration
-------------------------------------

14.1 Securities Registration. In the event that the Company shall deem it
-----------------------
necessary or desirable to register under the Securities Act of 1933, as amended,
or any other applicable statute, any Options or any Stock with respect to which
an Option may be or shall have been granted or exercised, or to qualify any such
Options or Stock under the Securities Act of 1933, as amended, or any other
statute, then the Optionee shall cooperate with the Company and take such action
as is necessary to permit registration or qualification of such Options or
Stock.

Unless the Company has determined that the following representation is
unnecessary, each person exercising an Option under the Plan may be required by
the Company, as a condition to the issuance of the shares pursuant to exercise
of the Option, to make a representation in writing (a) that he is acquiring such
shares for his

A-8
<PAGE>

own account for investment and not with a view to, or for sale in
connection with, the distribution of any part thereof, (b) that before any
transfer in connection with the resale of such shares, he will obtain the
written opinion of counsel for the Company, or other counsel acceptable to the
Company, that such shares may be transferred. The Company may also require that
the certificates representing such shares contain legends reflecting the
foregoing.

Article XV. Tax Withholding
----------------------------

15.1 Tax Withholding. Whenever shares of Stock are to be issued in
---------------
satisfaction of Options exercised under this Plan, the Company shall have the
power to require the recipient of the Stock to remit to the Company an amount
sufficient to satisfy federal, state, and local withholding tax requirements.

Article XVI. Indemnification
-----------------------------

16.1 Indemnification. To the extent permitted by law, each person who is
---------------
or shall have been a member of the Board shall be indemnified and held harmless
by the Company against and from any loss, cost, liability, or expense that may
be imposed upon or reasonably incurred by him in connection with or resulting
from any claim, action, suit, or proceeding to which he may be a party or in
which he may be involved by reason of any action taken or failure to act under
the Plan and against and from any and all amounts paid by him in settlement
thereof, with our approval, or paid by him in satisfaction of judgment in any
such action, suit, or proceeding against him, provided he shall give the Company
an opportunity, at its own expense, to handle and defend the same before he
undertakes to handle and defend it on his own behalf. The foregoing right of
indemnification shall not be exclusive of any other rights of indemnification to
which such persons may be entitled under our articles of incorporation or
bylaws, as a matter of law, or otherwise, or any power that the Company or any
Subsidiary Corporation may have to indemnify them or hold them harmless.

Article XVII. Requirements of Law
----------------------------------

17.1 Requirements of Law. The granting of Options and the issuance of
-------------------
shares of Stock upon the exercise of an Option shall be subject to all
applicable laws, rules, and regulations, and to such approvals by any
governmental agencies or national securities exchanges as may be required.

17.2 Governing Law. The Plan, and all agreements hereunder, shall be
-------------
construed in accordance with and governed by the laws of the State of Colorado.

Article XVIII. Effective Date of Plan
--------------------------------------

18.1 Effective Date. The Plan shall be effective on March 17, 1995, the
--------------
effective date of its adoption by the Board.

Article XIX. Compliance with Code.
-----------------------------------

19.1 Compliance with Code. Incentive Stock Options granted hereunder are
--------------------
intended to qualify as "incentive stock options" under Code (S) 422A. If any
provision of this Plan is susceptible to more than one interpretation, such
interpretation shall be given thereto as is consistent with Incentive Stock
Options granted under this Plan being treated as incentive stock options under
the Code.

A-9
<PAGE>

Article XX. No Obligation to Exercise Option.
----------------------------------------------

20.1 No Obligation to Exercise. The granting of an Option shall impose no
-------------------------
obligation upon the holder thereof to exercise such Option.

A-10
<PAGE>

ONLINE SYSTEM SERVICES, INC.

PROXY

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned having duly received the Notice of Annual Meeting and the
Proxy Statement dated July 16, 1999, hereby appoints the Chairman and Chief
Executive Officer, R. Steven Adams, and the Secretary, Lindley S. Branson, as
proxies (each with the power to act alone and with the power of substitution and
revocation) to represent the undersigned and to vote, as designated below, all
common shares of Online System Services, Inc., all 10% Preferred Stock and all
Series C Preferred Stock held of record by the undersigned on July 6, 1999, at
the Annual Meeting of Shareholders to be held on August 5, 1999 at 1800 Glenarm
Place, Suite 700, Denver, Colorado, at 2:30 p.m. Mountain Time, and at any
adjournment thereof.

<TABLE>
<S> <C>
1. PROPOSAL TO ELECT [_] FOR all nominees listed below [_] WITHHOLD AUTHORITY
SEVEN DIRECTORS (except as marked to the contrary below) to vote for all nominees listed below

R. Steven Adams William R. Cullen Robert J. Lewis
Donald J. Esters Perry Evans Richard C. Jennewine

INSTRUCTION: To withhold authority to vote for an individual nominee or
nominees, write the person's name on the line below.

________________________________________________________________________________

2. PROPOSAL TO AMEND THE ARTICLES OF [ ] FOR [ ] AGAINST [ ] ABSTAIN
INCORPORATION TO CHANGE THE NAME OF
THE COMPANY FROM ONLINE SYSTEM
SERVICES, INC. TO WEBB INTERACTIVE SERVICES, INC.

3. PROPOSAL TO APPROVE THE AMENDMENT TO THE [ ] FOR [ ] AGAINST [ ] ABSTAIN
THE ONLINE SYSTEM SERVICES, INC. 1995
STOCK OPTION PLAN.

4. PROPOSAL TO RATIFY THE APPOINTMENT OF [ ] FOR [ ] AGAINST [ ] ABSTAIN
ARTHUR ANDERSON LLP AS THE AS THE
INDEPENDENT ACCOUNTANTS FOR THE CORPORATION.

5. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED [ ] FOR [ ] AGAINST [ ] ABSTAIN
TO VOTE UPON SUCH OTHER BUSINESS AS MAY
PROPERLY COME BEFORE THE MEETING
</TABLE>

(CONTINUED ON OTHER SIDE)
<PAGE>

(CONTINUED FROM OTHER SIDE)

This Proxy, when properly executed, will be voted in the manner directed on
the Proxy be the undersigned stockholder. If no Direction is Made, This Proxy
will be Voted for the Election of each of the Nominees to the Board Listed in
Proposal 1 and for Proposals 2, 3, 4, and 5.

Please sign exactly as your name appears on this card. When shares are
held by joint tenants, both should sign. If signing as attorney, guardian,
executor, administrator or trustee, please give full title as such. If a
corporation, please sign in the corporate name by the president or other
authorized officer. If a partnership, please sign in the partnership name by an
authorized person.

__________________________________________
(Signature)

__________________________________________
(Signature, if held jointly)

Dated: ___________________________, 1999

PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
RETURN ENVELOPE.