<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 2, 1996
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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AMERICA ONLINE, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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<S> <C>
DELAWARE 54-1322110
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
</TABLE>
22000 AOL WAY
DULLES, VIRGINIA 20166-9323
(703) 448-8700
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
STEPHEN M. CASE
CHIEF EXECUTIVE OFFICER
AMERICA ONLINE, INC.
22000 AOL WAY
DULLES, VIRGINIA 20166-9323
(703) 448-8700
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
COPY TO:
KENNETH J. NOVACK, ESQUIRE
MINTZ, LEVIN, COHN, FERRIS, GLOVSKY AND POPEO, P.C.
ONE FINANCIAL CENTER
BOSTON, MA 02111
(617) 542-6000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier registration statement for the same
offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
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<TABLE>
CALCULATION OF REGISTRATION FEE
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<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED PER UNIT(1) PRICE(1) FEE
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<S> <C> <C> <C> <C>
Common Stock, par value $.01 per
share................................ 572,221 $32 $18,311,072 $6,315
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<FN>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) of the Securities Act of 1933, based upon the
average of the high and low sale prices of the Common Stock as reported on
the New York Stock Exchange on October 1, 1996.
</TABLE>
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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<PAGE> 2
PROSPECTUS
AMERICA ONLINE, INC.
572,221 SHARES OF COMMON STOCK
(PAR VALUE $.01 PER SHARE)
------------------------
The 572,221 shares of Common Stock of American Online, Inc., a Delaware
corporation (the "Company" or "America Online"), offered hereby are being sold
by the selling stockholders identified herein (the "Selling Stockholders"). Such
offers and sales may be made on one or more exchanges, in the over-the-counter
market, or otherwise, at prices and on terms then prevailing, or at prices
related to the then-current market price, or in negotiated transactions, or by
underwriters pursuant to an underwriting agreement in customary form, or in a
combination of any such methods of sale. The Selling Stockholders may also sell
such shares in accordance with Rule 144 under the Securities Act of 1933, as
amended (the "1933 Act"). The Selling Stockholders are identified and certain
information with respect to them is provided under the caption "Selling
Stockholders" herein, to which reference is made. The expenses of the
registration of the securities offered hereby, including fees of counsel for the
Company, will be paid by the Company. The following expenses will be borne by
the Selling Stockholders: underwriting discounts and selling commissions, if
any, and the fee of legal counsel, if any, for the Selling Stockholders. The
filing by the Company of this Prospectus in accordance with the requirements of
Form S-3 is not an admission that any person whose shares are included herein is
an "affiliate" of the Company.
The Selling Stockholders have advised the Company that they have not
engaged any person as an underwriter or selling agent for any of such shares,
but they may in the future elect to do so, and they will be responsible for
paying such a person or persons customary compensation for so acting. The
Selling Stockholders and any broker executing selling orders on behalf of any
Selling Stockholders may be deemed to be "underwriters" within the meaning of
the 1933 Act, in which event commissions received by any such broker may be
deemed to be underwriting commissions under the 1933 Act. The Company will not
receive any of the proceeds from the sale of the securities offered hereby. The
Common Stock is listed on the New York Stock Exchange ("NYSE") under the symbol
AOL. On October 1, 1996, the closing sale price of the Common Stock, as reported
by the NYSE, was $32 per share.
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THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" BEGINNING ON PAGE 4 OF THIS PROSPECTUS.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
No person is authorized in connection with any offering made hereby to give
any information or to make any representations other than as contained in this
Prospectus, and, if given or made, such information or representations must not
be relied upon as having been authorized by the Company. This Prospectus is not
an offer to sell, or a solicitation of an offer to buy, by any person in any
jurisdiction in which it is unlawful for such person to make such an offer or
solicitation. Neither the delivery of this Prospectus nor any sales made
hereunder shall under any circumstances create any implication that the
information contained herein is correct as of any time subsequent to the date
hereof.
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THE DATE OF THIS PROSPECTUS IS , 1996.
<PAGE> 3
AVAILABLE INFORMATION
The Company is subject to certain informational reporting requirements of
the Securities Exchange Act of 1934, as amended (the "1934 Act"), and in
accordance therewith files reports and other information with the Securities and
Exchange Commission (the "Commission"). These reports, proxy statements and
other information can be inspected and copied at the public reference facilities
maintained by the Commission at Room 1024 of the Commission's office at 450
Fifth Street, N.W., Judiciary Plaza, Washington, DC 20549, and at its regional
offices located at 7 World Trade Center, Suite 1300, New York, NY 10048 and
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, IL 60661. Copies
of such reports, proxy statements and other information can be obtained from the
Public Reference Section of the Commission at 450 Fifth Street, N.W., Judiciary
Plaza, Washington, DC 20549 at prescribed rates. The Commission also maintains a
Web site that contains reports, proxy and information statements and other
information regarding registrants (including America Online) that file
electronically with the Commission. The address of this site is
http://www.sec.gov. Additional updating information with respect to the
securities covered herein may be provided in the future to purchasers by means
of appendices to this Prospectus.
The Company has filed with the Commission in Washington, DC a registration
statement (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the 1933 Act with respect to the securities
offered or to be offered hereby. This Prospectus does not contain all of the
information included in the Registration Statement, certain items of which are
omitted in accordance with the rules and regulations of the Commission. For
further information about the Company and the securities offered hereby,
reference is made to the Registration Statement and the exhibits thereto.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated herein by reference:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
June 30, 1996, filed pursuant to Section 13 or 15(d) of the 1934 Act (File
Number 0-19836).
(b) The description of the Company's capital stock is contained in a
registration statement on Form 8-A under the 1934 Act, including any
amendments or reports filed for the purpose of updating such description.
All reports and other documents subsequently filed by the Company with the
Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the 1934 Act, prior
to the filing of a post-effective amendment which indicates that all securities
covered by this Prospectus have been sold or which deregisters all such
securities then remaining unsold, shall be deemed to be incorporated by
reference herein and to be a part hereof from the date of the filing of such
reports and documents.
The Company will provide without charge to each person to whom this
Prospectus is delivered, on the written or oral request of such person, a copy
of any or all documents incorporated by reference herein, other than exhibits to
such documents (unless such exhibits are specifically incorporated by reference
therein). Requests for such copies should be directed to: Sheila A. Clark,
Deputy General Counsel of the Company, 22000 AOL Way, Dulles, Virginia
20166-9323, telephone number (703) 448-8700.
2
<PAGE> 4
TABLE OF CONTENTS
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PAGE
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AVAILABLE INFORMATION................................................................. 2
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE..................................... 2
RISK FACTORS.......................................................................... 4
THE COMPANY........................................................................... 9
SELLING STOCKHOLDERS.................................................................. 10
PLAN OF DISTRIBUTION.................................................................. 11
LEGALITY OF COMMON STOCK.............................................................. 11
EXPERTS............................................................................... 11
</TABLE>
3
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RISK FACTORS
An investment in the shares being offered by this Prospectus involves a
high degree of risk. In addition to the other information contained in this
Prospectus or incorporated herein by reference, prospective investors should
carefully consider the following risk factors before purchasing the shares
offered hereby. This Prospectus contains and incorporates by reference
forward-looking statements within the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995. Reference is made in particular to the
discussion set forth under "Management's Discussion and Analysis of Financial
Condition and Results of Operations" in the Company's Annual Report on Form 10-K
for the fiscal year ended June 30, 1996 (the "Form 10-K"), and under "Business"
in the Form 10-K, incorporated in this Prospectus by reference. Such statements
are based on current expectations that involve a number of uncertainties
including those set forth in the risk factors below. Actual results could differ
materially from those projected in the forward-looking statements.
COMPETITION
The online services and Internet markets are highly competitive. The
Company believes that existing competitors, which include, among others,
commercial online services such as CompuServe Corporation ("CompuServe") and
Prodigy Services Company ("Prodigy"), Internet-based services, including, among
others, the Microsoft Network, and Internet service providers, including various
national and local independent Internet service providers as well as long
distance and regional telephone companies, including, among others, AT&T Corp.
("AT&T"), MCI Communications Corporation and various regional Bell operating
companies, are likely to enhance their service offerings. In addition, new
competitors, including Internet directory services and various media and
telecommunications companies, have entered or announced plans to enter the
online services and Internet markets, resulting in greater competition for the
Company. Many of the direct competitors and possible future competitors referred
to above have significantly greater financial, technical, marketing and
personnel resources than the Company. Increased competition could require price
reductions and increased spending on marketing and product development, limit
the Company's opportunities to enter into and/or renew agreements with content
providers and distribution partners, limit its ability to develop new products
and services, limit its ability to continue to grow its subscriber bases and
result in increased attrition in the Company's membership. Any of the foregoing
events could have an adverse impact on revenues and result in an increase in
costs as a percentage of revenues. These factors may have a material adverse
effect on the Company's financial condition and operating results. In addition,
in response to increased competition, the Company may adopt additional
strategies designed to continue the growth in its subscriber base, such as new
marketing programs and promotional offers and implementation of new pricing
programs. Such strategies may result in an increase in costs as a percentage of
revenue. Although the Company has established relationships with certain of its
competitors, including Microsoft Corp. ("Microsoft"), Netscape Communications
Corporation ("Netscape"), and AT&T, to increase its exposure and presence in the
market, there can be no assurance that the Company will benefit from the
relationships.
SUBSCRIBER ATTRITION RATES
Subscriber attrition rates of the Company have been increasing. The Company
recently adopted a value pricing plan directed at heavier users of the AOL
service (the "Value Plan") which provides for 20 hours of online service for
$19.95, and also announced efforts to improve customer service and internal
infrastructure to retain customers that the Company has attracted. However,
there can be no assurance that these efforts will be successful. Further, these
proposed plans will lead to increased costs, and the Value Plan will lead to
reduced revenues from the Company's heaviest users.
NETWORK CAPACITY AND OPERATIONS
Due to the rapid growth in subscriber demand, the Company and its data
communications access providers have experienced difficulty at certain times in
providing adequate server and network capacity. As a result, members have from
time to time encountered difficulty in accessing and using the America Online
service. There can be no assurance that the Company will be able to expand
server and network capacity at a
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rate sufficient to satisfy increasing subscriber demands, and the failure to do
so could have a material adverse effect on the Company's business. The Company
currently relies on several companies, particularly U.S. Sprint, to provide data
communications access to its service. Any damage or failure that causes
interruptions in U.S. Sprint's operations could have a material adverse effect
on the Company's business.
In fiscal 1995, the Company launched AOLnet, a proprietary TCP/IP network
that is owned by the Company. The Company is building AOLnet in order to
increase its network capacity, provide its members with more reliable, higher
speed access and reduce the costs of data communication. The Company relies on
U.S. Sprint and others, as well as its subsidiary, ANS CO + RE Systems, Inc.
("ANS") to build out this network. The buildout of AOLnet requires a substantial
investment in telecommunications equipment, which the Company is financing
primarily through leasing. Any failure on the part of U.S. Sprint or other
providers could materially affect the AOLnet buildout. There can be no assurance
that the Company will be successful in building out AOLnet or that demand will
develop for the capacity it will provide.
The Company's operations are dependent on its ability to protect its
computer equipment and the information stored in its data centers against damage
by fire, power loss, telecommunications failures, unauthorized intrusions and
other events. The Company believes it has taken prudent measures to reduce the
risk of interruption in its operations. However, there can be no assurance that
these measures are sufficient. Any damage or failure that causes interruptions
in the Company's operations could have a material adverse effect on its
business. While the Company carries property and business interruption insurance
to cover its computer operations, the coverage may not be adequate to compensate
for losses that may occur.
PRESSURES ON OPERATING MARGINS
One of the Company's goals is to increase market share by rapidly growing
its subscriber base. To achieve this goal, the Company has aggressively promoted
its service offerings and has implemented pricing changes and other strategies
designed to facilitate subscriber growth. The costs associated with the rapid
growth in its subscriber base and investments in customer support have placed,
and will continue to place, pressures on the Company's operating margins. In
addition, the buildout of AOLnet is expected to place pressures on the Company's
operating margins.
As part of its marketing strategy, the Company generally provides new
subscribers with up to fifteen hours of access to its online service on a trial
basis at no charge and waives the first month's membership fees. The Company
also recently introduced the Value Plan, which it hopes will attract additional
subscribers. The Company expects that the Value Plan will result in an increased
number of hours of usage relative to revenues. In a period of rapid subscriber
growth, the Company incurs significant data communications charges in the first
month of a subscriber's membership which do not generate corresponding service
revenues. In addition, new subscribers generally require substantially more
customer support than longer-standing subscribers. This results in higher labor
and long-distance telephone costs to the Company as well as investments in
customer support infrastructure. At the same time, the Company is building its
own data communication network, AOLnet, to complement its existing network
carriers. During the buildout of AOLnet, the Company will experience cost
inefficiencies as it switches its members over to what it anticipates will be
the lower cost AOLnet services.
The Company may adopt additional strategies designed to continue the growth
in its subscriber base, such as new marketing programs and promotional offers
and implementation of new pricing programs. Such strategies may result in an
increase in costs as a percentage of revenues. In addition, an acceleration in
the growth of its subscriber base, changes in usage patterns among members or
continuing investments in content may also increase costs as a percentage of
revenues. As a result, the Company does not believe its operating margins have
stabilized. There can be no assurance that the Company's operating margins will
not be adversely affected in the future by such strategies or other conditions.
SEASONALITY
In April 1996, the Company began to see the effects of seasonality in both
member acquisitions and in the amount of time spent by customers using its
services. The Company may have experienced the effects of
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seasonality in previous periods, but the effects, if any, were not discernible
due to the masking effect resulting from the Company's substantial growth rates
in those periods. The Company expects that seasonality will have an effect in
the future. Member acquisition is expected to be highest in the second and third
fiscal quarters, when sales of new computers and computer software are highest
due to the holiday season. Customer usage is expected to be lower in the summer
months due largely to extended day light hours and competing outdoor leisure
activities.
MANAGING A RAPIDLY GROWING AND CHANGING BUSINESS
The Company continues to experience major changes in its operations
resulting from rapid expansion of its business and other factors which have
placed significant demands on its administrative, operational and financial
resources. The Company's future performance will depend in part on its ability
to manage its growth and to adapt its administrative, operational and financial
control systems to the needs of the expanded entity. The failure of management
to anticipate, respond to and manage changing business conditions could have a
material adverse effect on the Company's business and results of operations.
ACCESS TO CONTENT PROVIDERS
As competition in the online services market intensifies, it may become
more difficult or expensive to secure and retain content and/ or content
providers. The Company generally pays royalties to its content providers under
short-term renewable agreements. While no single content provider accounts for
more than one percent of usage of the Company's America Online service, and the
Company does not believe that any single content provider is material to its
operations, there can be no assurance that the loss of a number of content
providers or significantly increased costs to maintain certain content providers
would not have a material adverse effect on the Company's business.
ACQUISITIONS
Since the beginning of fiscal 1995, the Company has acquired or merged with
BookLink Technologies, Inc., Redgate Communications Corporation, ANS, NaviSoft,
Inc., Medior, Inc., Wide Area Information Servers, Inc., Global Network
Navigator, Inc., Ubique, Ltd. ("Ubique"), the Johnson-Grace Company and The
ImagiNation Network, Inc. ("INN"). Acquisitions which the Company makes involve
risks, including successful integration and management of acquired technology,
operations and personnel. The integration of acquired businesses may also lead
to the loss of key employees of the acquired companies and diversion of
management attention from other ongoing business concerns. In addition,
acquisitions may result in significant charges for in-process research and
development or other matters. Any of these factors could have a material adverse
effect on the Company's business or financial condition.
NEW BUSINESSES AND INTERNATIONAL VENTURES
The Company pursues new products and services to diversify its sources of
revenue and leverage its technological and other competencies. There can be no
assurance that the Company will be able to successfully develop, or achieve
commercial acceptance for, these new products and services.
Through its division America Online Enterprises, the Company has begun to
offer tools and services to enterprises seeking private networks and to use the
America Online service and the Internet as a medium for communications and
commerce. The market for products and services for commercial use of online
services and the Internet has only recently begun to develop, is rapidly
evolving, and is characterized by an increasing number of competitors. Demand
for and market acceptance of new products and services are subject to a high
degree of uncertainty. Moreover, critical issues concerning commercial
activities via the Internet, including security, reliability, cost, ease of use
and access, remain unresolved and may adversely impact the growth and
development of the enterprise market.
The Company has begun to offer online services internationally in Canada
and, through a joint venture with Bertelsmann AG, in Germany, the United
Kingdom, and France, and recently entered into a joint venture with Mitsui & Co.
and Nihon Keizai Shimbun Inc. to offer online services in Japan. There can be no
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assurance that the Company or its partners will be able to successfully market,
sell and deliver its services in these markets. In addition, there are certain
significant risks inherent in doing business on an international level, such as
laws governing content that differ greatly from those in the U.S., unexpected
changes in regulatory requirements, political risks, export restrictions, export
controls relating to encryption technology, tariffs and other trade barriers,
fluctuations in currency exchange rates, issues regarding intellectual property
and potentially adverse tax consequences, any or all of which could impact the
Company's international operations.
CHANGING TECHNOLOGIES
As online services evolve, the Company will be required to offer
technological advances such as improved data compression and delivery of voice
and full-motion video. Currently, online services are accessed primarily by
personal computers via modem. As online services become accessible by
screen-based telephones, television or other consumer electronic devices, and
become commercially deliverable over other wired conduits such as coaxial and
fiber optic cable, the Company may have to develop new technology or modify its
existing technology to keep pace with these developments. Pursuit of these
technological advances will require substantial expenditures, and there can be
no assurance that the Company will succeed in adapting its online service
business to alternate access devices and conduits.
GOVERNMENT REGULATION AND LEGAL UNCERTAINTIES
In the United States, the Company is not currently subject to direct
regulation other than federal and state regulation applicable to businesses
generally. However, changes in the regulatory environment relating to the
telecommunications and media industry could have an adverse effect on the
Company's business. A portion of the recently enacted Communications Decency Act
of 1996 (the "Decency Act") generally makes it illegal for persons to knowingly
use an interactive computer service to send or display "indecent" communications
to minors or to knowingly and intentionally permit a telecommunications facility
controlled by such person to be used for such purposes, subject to certain
express defenses. The Decency Act has been challenged in federal court on
constitutional grounds, but the Company cannot predict whether the Decency Act
will be upheld or if it will be interpreted in such a manner as would result in
a material liability being imposed on the Company. Other laws make it illegal to
traffic by computer in obscene or child pornographic materials. Although the
Company does not believe that its activities violate these laws, it cannot
predict how a court would interpret these laws and what duties might be imposed
on the Company. Other legislative proposals from international, federal, and
state government bodies in the areas of content regulation, intellectual
property, privacy rights and state tax issues could impose additional
regulations and obligations upon all online and Internet service providers. The
Company cannot predict the likelihood that any such legislation will pass, nor
the financial impact, if any, the resulting regulation may have.
Moreover, the applicability to online service and Internet access providers
of existing laws governing issues such as intellectual property ownership, libel
and personal privacy is uncertain. Recent events relating to the use of online
services for illegal activities has increased public focus and could lead to
increased pressure on legislatures to impose regulations on online service
providers such as the Company. The law relating to the liability of online
service companies and Internet access providers for information carried on or
disseminated through their systems is currently unsettled and has been the
subject of several recent private lawsuits. If similar actions were to be
initiated against the Company, costs incurred as a result of such actions could
have a material adverse effect on the Company's business.
RELIANCE ON KEY PERSONNEL
The Company's success depends in part upon the performance of its executive
officers and other key employees. The loss of the services of one or more of its
key personnel could have a material adverse effect on the Company. The Company
depends on its continued ability to attract and retain highly skilled and
qualified personnel. Competition for such personnel is intense, and there can be
no assurance that the Company will be successful in attracting and retaining
such personnel.
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VOLATILITY OF SHARE PRICE
The market price of the Company's Common Stock has a history of volatility.
Factors such as quarterly variations in financial results and membership growth
and usage, new pricing strategies, the announcement of technological
innovations, mergers, acquisitions, strategic partnerships or new product
offerings by the Company or its competitors, the entrance of new competitors
into the online services market and changes in content providers may have a
significant impact on the market price of the Common Stock. Moreover, the Common
Stock could experience price volatility based on market conditions. In
particular, a substantial short interest exists in the Company's Common Stock
which may tend to exacerbate volatility.
LITIGATION
The Company is a party to various litigations, investigations and
proceedings from time to time. The costs and other effects of litigation,
governmental investigations, legal and administrative cases and proceedings
(whether civil, such as environmental and product-related, or criminal),
settlements and investigations, claims and changes in those matters, and
developments or assertions by or against the Company relating to intellectual
property rights and intellectual property licenses could have a material adverse
effect on the Company in the future.
FUTURE SALES OF COMMON STOCK
Sales of substantial amounts of Common Stock in the public market could
adversely affect prevailing market prices of the Common Stock. Within 30 days of
the date hereof, holders of approximately 7,805,000 shares of America Online
Common Stock (outstanding or issuable upon exercise of certain rights) have
rights to require registration of their shares for resale. In addition, pursuant
to a stock purchase agreement, on or before February 15, 1997, the Company is
obligated to either pay in cash an amount estimated to be $15 million or issue
and register the resale of shares of the Company's Common Stock with an
estimated aggregate value of between $14.7 million and $14.8 million, at the
Company's discretion. Additional shares are subject to registration statements
on Form S-8 in connection with the Company's stock option plans. The sales of
any of the foregoing shares could have a material adverse effect on the
then-prevailing market price of Common Stock.
ANTI-TAKEOVER DEFENSE PROVISIONS
The Company's Restated Certificate of Incorporation and Restated By-laws
contain certain provisions that could have the effect of making it more
difficult for a third party to acquire, or of discouraging a third party from
attempting to acquire, control of the Company. Certain of such provisions allow
the Company to issue preferred stock with rights senior to those of its Common
Stock and impose various procedural and other requirements which could make it
more difficult for stockholders to effect certain corporate actions. In
addition, the Company has a stockholder rights plan pursuant to which holders of
Common Stock are entitled to one preferred share purchase right for each
outstanding share of Common Stock they hold, exercisable under certain defined
circumstances involving a potential change of control. The foregoing provisions
could limit the price that certain investors might be willing to pay in the
future for shares of Common Stock.
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THE COMPANY
America Online, Inc., including its subsidiaries ("America Online" or the
"Company"), is the global leader in the interactive services market, with nearly
$1.1 billion in revenue during fiscal 1996, and has led the development of a new
interactive medium. The Company has the largest subscriber base of any online
service provider, serving approximately 6.2 million members worldwide as of June
30, 1996, more than double the number of subscribers at the end of fiscal 1995.
The Company generates revenues principally through membership and usage fees, as
well as increasingly from advertising and merchandise sales, transaction fees,
royalties and the provision of network and production services to enterprises.
The Company's mission is to lead the development of a new interactive
medium that transcends traditional boundaries between people and places to
create a new kind of interactive global community that holds the potential to
change the way people obtain information, communicate with one another, buy
products and services, and learn. To accomplish this mission, the Company's
strategy is to continue investment in the growth of its subscriber base, pursue
related business opportunities and alternative revenue models, provide a full
range of interactive services and maintain technological flexibility.
Through its flagship AOL service, the Company offers its members a broad
range of features including e-mail, online conferences, entertainment, software,
computing support, an extensive "newsstand" of electronic magazines and
newspapers, seamless access to the Internet, a broad array of original
programming and informative content. The Company focuses on maximizing the
interactive nature of its service by encouraging members to share information
and ideas and provides numerous tools for members to customize the AOL service
to best suit their individual needs.
Over the past fiscal year, America Online has expanded its range of
products and services. Through strategic alliances with partners and
competitors, America Online is seeking to leverage resources to reach new
markets and improve products and services. The Company began offering its online
services in Europe and Canada, and will soon offer them in Japan. In the fall of
1995, the Company introduced GNN, a stand-alone Internet access service. The
Company has launched Digital City, a local content and community programmer, and
formed AOL Enterprise, a unit designed to develop and market interactive
services for businesses. The Company has vastly increased the scope of AOLnet,
its proprietary data communication network, building the network from 20,000
modems to 140,000 modems, resulting in increased network capacity, higher speed
access, and reduced data communication costs. The portfolio of AOL networks has
expanded to reach approximately 810 cities worldwide with over 1400 local
telephone numbers.
The Company has continued its investment in the development of engaging
content, through its own initiatives for original content, the creation of
original interactive content by entrepreneurs, and the provision of authoring
and production tools and services to assist individuals and businesses in
developing content for the AOL service and the Internet. AOL Productions, a
wholly-owned subsidiary, is a full featured multimedia production studio that
can handle all aspects of interactive content and design for the Company, its
advertisers and its media partners.
America Online was incorporated in Delaware on May 24, 1985. The Company's
principal executive offices are located at 22000 AOL Way, Dulles, Virginia
20166-9323. Its telephone number at that address is (703) 448-8700. Its Internet
address is AOL [email protected], and its America Online address is AOL IR.
9
<PAGE> 11
SELLING STOCKHOLDERS
<TABLE>
The table below sets forth certain information regarding the beneficial
ownership of Common Stock, as of September 25, 1996, by certain stockholders of
the Company who are offering Shares pursuant to this Prospectus, both before and
after giving effect to this offering.
<CAPTION>
SHARES SHARES
BENEFICIALLY BENEFICIALLY
OWNED PRIOR TO OWNED AFTER
THE OFFERING(1)(2) SHARES TO BE THE OFFERING(1)(2)
------------------- SOLD IN THE -------------------
SELLING SHAREHOLDERS NUMBER PERCENT OFFERING NUMBER PERCENT
-------------------- ------- ------- ------------ ------- -------
<S> <C> <C> <C> <C> <C>
Ehud Shapiro(3)........................... 263,314 * 171,446 91,868 *
O'Reilly & Associates, Inc................ 78,650 * 78,650 -- --
William J. Razzouk(4)..................... 65,000 * 65,000 -- --
Euro-America-I L.P........................ 45,974 * 45,974 -- --
Manakin Investments B.V................... 43,392 * 43,392 -- --
Dale Dougherty............................ 40,982 * 40,982 -- --
Yeda Research and Development Co. Ltd..... 31,696 * 31,696 -- --
Timothy F. O'Reilly &..................... 30,982 * 30,982 -- --
Christina F. O'Reilly Trust
Irving S. Reed............................ 50,453 * 15,000 35,453 *
Jose Marcelino Camarena Bolanos........... 13,304 * 11,973 1,331 *
Juan Ricardo Perez Escamilla Costas....... 11,866 * 10,679 1,187 *
Sidney Wise............................... 7,191 * 6,471 720 *
Robert Zeckhauser......................... 6,113 * 5,501 612 *
Dalbert L. Brandon........................ 15,847 * 4,000 11,847 *
Octavio Camarena Villasenor............... 3,595 * 3,235 360 *
Fabio Aversa.............................. 864 * 864 -- --
Andrew Anker.............................. 864 * 864 -- --
Shimon Shapiro............................ 862 * 862 -- --
Dan Tolkowsky............................. 862 * 862 -- --
Avi Fischer(5)............................ 786 * 786 -- --
Jacques Vallee, Ph.D...................... 786 * 786 -- --
Mark A. Graves............................ 648 * 648 -- --
Gideon Tolkowsky.......................... 646 * 646 -- --
Peter Avildsen............................ 264 * 264 -- --
WS Investment Co. 95A..................... 220 * 220 -- --
Yadin Kaufmann............................ 214 * 214 -- --
Stephen N. Livingston..................... 48,508 * 200 48,308 *
Allen L. Morgan........................... 24 * 24 -- --
<FN>
- ---------------
* Represents beneficial ownership of less than 1% of the outstanding shares of
Common Stock.
(1) Unless otherwise noted, the persons named in the table, to the Company's
knowledge, have sole voting and investment power with respect to all shares
of Common Stock shown as beneficially owned by them, subject to the
information contained in the footnotes to this table. Assumes that each
Selling Shareholder will sell all of the shares of Common Stock offered by
him hereunder. See "Plan of Distribution."
(2) Based on 93,857,943 shares of Common Stock outstanding on September 25,
1996.
(3) Includes 13,262 shares held by Mr. Shapiro as nominee for Yozma Venture
Capital Ltd. which are being registered hereby. Mr. Shapiro is an employee
of the Company, and he is the President and a Director of Ubique Ltd., a
wholly owned subsidiary of the Company ("Ubique").
(4) Does not include 100,000 shares issuable upon exercise of options held by
Mr. Razzouk that are exercisable within 60 days. Mr. Razzouk's shares are
owned jointly with his wife. Until June 21, 1996, Mr. Razzouk was the
President and Chief Operating Officer and a Director of the Company.
(5) Mr. Fischer is a partner in the law firm of I. Fischer & Co., which serves
as legal counsel to Ubique.
</TABLE>
10
<PAGE> 12
PLAN OF DISTRIBUTION
The 572,221 shares of Common Stock of the Company offered hereby (the
"Shares") may be offered and sold from time to time by the Selling Stockholders,
or by pledgees, donees, transferees or other successors in interest. Such offers
and sales may be made from time to time on one or more exchanges, including the
NYSE, or in the over-the-counter market, or otherwise, at prices and on terms
then prevailing or at prices related to the then-current market price, or in
negotiated transactions. The Shares may be sold by one or more of the following:
(a) a block trade in which the broker or dealer so engaged will attempt to sell
the Shares as agent but may position and resell a portion of the block as
principal to facilitate the transaction; (b) purchases by a broker or dealer as
principal and resale by such broker or dealer for its account; (c) an exchange
distribution in accordance with the rules of such exchange; (d) ordinary
brokerage transactions and transactions in which the broker solicits purchasers;
(e) privately negotiated transactions; and (f) a combination of any such methods
of sale. In effecting sales, brokers or dealers engaged by the Selling
Stockholders may arrange for other brokers or dealers to participate. Brokers or
dealers may receive commissions or discounts from Selling Stockholders or from
the purchasers in amounts to be negotiated immediately prior to the sale. The
Selling Stockholders may also sell the Shares in accordance with Rule 144 under
the 1933 Act.
The Company is required under the terms of agreements with the Selling
Stockholders to maintain the effectiveness of the registration of the Shares
being offered hereunder until the earlier of the date upon which the
registration of the Shares has been effective for thirty days or the date upon
which all of the Shares offered hereby have been sold.
The Selling Stockholders and any brokers participating in such sales may be
deemed to be underwriters within the meaning of the 1933 Act. There can be no
assurance that the Selling Stockholders will sell any or all of the Shares of
Common Stock offered hereunder.
All proceeds from any such sales will be the property of the Selling
Stockholders who will bear the expense of underwriting discounts and selling
commissions, if any, and their own legal fees.
LEGALITY OF COMMON STOCK
The validity of the issuance of the Shares of Common Stock offered hereby
is being passed upon for the Company by Mintz, Levin, Cohn, Ferris, Glovsky and
Popeo, P.C., Boston, Massachusetts ("Mintz Levin"). A member of Mintz Levin owns
200 shares, and options to purchase 61,000 shares (30,500 of which are held for
the account of Mintz Levin), of Common Stock. In addition, Kenneth J. Novack, a
member of Mintz Levin, is the Acting General Counsel of the Registrant.
EXPERTS
The consolidated financial statements of America Online, Inc., appearing in
its Annual Report (Form 10-K), as of June 30, 1996 and 1995 and for each of the
three years in the period ended June 30, 1996, have been audited by Ernst &
Young LLP, independent auditors, as set forth in their report thereon included
therein and incorporated herein by reference. Such consolidated financial
statements are incorporated herein by reference in reliance upon such report
given upon the authority of such firm as experts in accounting and auditing.
11
<PAGE> 13
PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
<TABLE>
The following sets forth the expenses that are expected to be incurred in
connection with the offering of the Shares. All such expenses shall be borne by
the Company. All amounts set forth below are estimates, other than the
registration fee.
<S> <C>
Registration Fee........................................................... $ 6,315
Legal Fees and Expenses.................................................... 15,000
Accounting Fees and Expenses............................................... 15,000
Miscellaneous.............................................................. 3,685
-------
TOTAL............................................................ $40,000
=======
</TABLE>
The Selling Stockholders will bear the expense of their own legal counsel
and their own miscellaneous fees and expenses, if any.
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS
Section 145(a) of the General Corporation Law of the State of Delaware
("Delaware Corporation Law") provides, in general, that a corporation shall have
the power to indemnify any person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than an action
by or in the right of the corporation), by reason of the fact that he is or was
a director or officer of the corporation. Such indemnity may be against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit or
proceeding, if the indemnified party acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation and if, with respect to any criminal action or proceeding, the
indemnified party did not have reasonable cause to believe his conduct was
unlawful.
Section 145(b) of the Delaware Corporation Law provides, in general, that a
corporation shall have the power to indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the corporation to procure a judgment in
its favor by reason of the fact that he is or was a director or officer of the
corporation, against any expenses (including attorneys' fees) actually and
reasonably incurred by him in connection with the defense or settlement of such
action or suit if he acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of the corporation.
Section 145(g) of the Delaware Corporation law provides, in general, that a
corporation shall have the power to purchase and maintain insurance on behalf of
any person who is or was a director or officer of the corporation against any
liability asserted against him in any such capacity, or arising out of his
status as such, whether or not the corporation would have the power to indemnify
him against such liability under the provisions of the law.
Pursuant to Section 102(b)(7) of the Delaware General Corporation Law (the
"Delaware Statute"), Article Ninth of the Registrant's Restated Certificate of
Incorporation (the "Certificate of Incorporation") (incorporated by reference
herein) provides that:
To the fullest extent permitted by the Delaware General Corporation
Law as the same now exists or may hereafter be amended, the Corporation
shall indemnify, and advance expenses to, its directors and officers and
any person who is or was serving at the request of the Corporation as a
director or officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise. The Corporation, by action of its
board of directors, may provide indemnification or advance expenses to
II-1
<PAGE> 14
employees and agents of the Corporation or other persons only on such terms
and conditions and to the extent determined by the board of directors in
its sole and absolute discretion.
The indemnification and advancement of expenses provided by, or
granted pursuant to, this Article Ninth shall not be deemed exclusive of
any other rights to which those seeking indemnification or advancement of
expenses may be entitled under any By-Law, agreement, vote of stockholders
or disinterested directors or otherwise, both as to action in his official
capacity and as to action in another capacity while holding such office.
The Corporation shall have the power to purchase and maintain
insurance on behalf of any person who is or was a director, officer,
employee or agent of the Corporation, or is or was serving at the request
of the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
any liability asserted against him and incurred by him in any such
capacity, or arising out of his status as such, whether or not the
Corporation would have the power to indemnify him against such liability
under this Article Ninth.
The indemnification and advancement of expenses provided by, or
granted pursuant to, this Article Ninth shall, unless otherwise provided
when authorized or ratified, continue as to a person who has ceased to be a
director or officer and shall inure to the benefit of the heirs, executors
and administrators of such officer or director. The indemnification and
advancement of expenses that may have been provided to an employee or agent
of the Corporation by action of the board of directors, pursuant to the
last sentence of Paragraph 1 of this Article Ninth, unless otherwise
provided when authorized or ratified, continue as to a person who has
ceased to be an employee or agent of the Corporation and shall inure to the
benefit of the heirs, executors and administrators of such a person, after
the time such person has ceased to be an employee or agent of the
Corporation, only on such terms and conditions and to the extent determined
by the board of directors in its sole discretion.
In addition, Article Five of the Registrant's Restated By-Laws
(Incorporated by reference herein) provides that:
Right to Indemnification. Each person who was or is made a party or
is threatened to be made a party to or is otherwise involved in any action,
suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that he is or was a director or an
officer of the Corporation or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another
corporation or of a partnership, joint venture, trust or other enterprise,
including service with respect to an employee benefit plan (hereinafter an
"Indemnitee"), whether the basis of such proceeding is alleged action in an
official capacity as a director, officer, employee or agent or in any other
capacity while serving as a director, officer, employee or agent, shall be
indemnified and held harmless by the Corporation to the fullest extent
authorized by the Delaware General Corporation Law, as the same exists or
may hereafter be amended (but, in the case of any such amendment, only to
the extent that such amendment permits the Corporation to provide broader
indemnification rights than such law permitted the Corporation to provide
prior to such amendment), against all expense, liability and loss
(including attorney's fees, judgments, fines, ERISA excise taxes or
penalties and amounts paid in settlement) reasonably incurred or suffered
by such Indemnitee in connection therewith; provided, however, that, except
as provided in the section "Right of Indemnitees to Bring Suit" of this
Article with respect to proceedings to enforce rights to indemnification,
the Corporation shall indemnify any such Indemnitee in connection with a
proceeding (or part thereof) initiated by such Indemnitee only if such
proceeding (or part thereof) was authorized by the board of directors of
the Corporation.
Right to Advancement of Expenses. The right to indemnification
conferred in Section 1 of this Article shall include the right to be paid
by the Corporation the expenses (including attorney's fees) incurred in
defending any such proceeding in advance of its final disposition;
provided, however, that, if the Delaware General Corporation Law requires,
an advancement of expenses incurred by an Indemnitee in his capacity as a
director or officer (and not in any other capacity in which service was or
is rendered by such Indemnitee, including, without limitation, service to
an employee benefit plan) shall be made only upon delivery to the
Corporation of an undertaking, by or on behalf of such Indemnitee, to repay
all
II-2
<PAGE> 15
amounts so advanced if it shall ultimately be determined by final judicial
decision from which there is no further right to appeal that such
Indemnitee is not entitled to be indemnified for such expenses under this
section or otherwise. The rights to indemnification and to the advancement
of expenses conferred in this section and the section "Right to
Indemnification" of this Article shall be contract rights and such rights
shall continue as to an Indemnitee who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the
Indemnitee's heirs, executors and administrators. Any repeal or
modification of any of the provisions of this Article shall not adversely
affect any right or protection of an Indemnitee existing at the time of
such repeal or modification.
Right of Indemnitees to Bring Suit. If a claim under the sections
"Right to Indemnification" and "Right to Advancement of Expenses" of this
Article is not paid in full by the Corporation within sixty (60) days after
a written claim has been received by the Corporation, except in the case of
a claim for an advancement of expenses, in which case the applicable period
shall be twenty (20) days, the Indemnitee may at any time thereafter bring
suit against the Corporation to recover the unpaid amount of the claim. If
successful in whole or in part in any such suit, or in a suit brought by
the Corporation to recover an advancement of expenses pursuant to the terms
of an undertaking, the Indemnitee shall also be entitled to be paid the
expenses of prosecuting or defending such suit. In (i) any suit brought by
the Indemnitee to enforce a right to indemnification hereunder (but not in
a suit brought by the Indemnitee to enforce a right to an advancement of
expenses) it shall be a defense that, and (ii) in any suit brought by the
Corporation to recover an advancement of expenses pursuant to the terms of
an undertaking, the Corporation shall be entitled to recover such expenses
upon a final adjudication that, the Indemnitee has not met any applicable
standard for indemnification set forth in the Delaware General Corporation
Law. Neither the failure of the Corporation (including its board of
directors, independent legal counsel, or its stockholders) to have made a
determination prior to the commencement of such suit that indemnification
of the Indemnitee is proper in the circumstances because the Indemnitee has
met the applicable standard of conduct set forth in the Delaware General
Corporation Law, nor an actual determination by the Corporation (including
its board of directors, independent legal counsel, or its stockholders)
that the Indemnitee has not met such applicable standard of conduct, shall
create a presumption that the Indemnitee has not met the applicable
standard of conduct or, in the case of such a suit brought by the
Indemnitee, be a defense to such suit. In any suit brought by the
Indemnitee to enforce a right to indemnification or to an advancement of
expenses hereunder, or brought by the Corporation to recover an advancement
of expenses pursuant to the terms of an undertaking, the burden of proving
that the Indemnitee is not entitled to be indemnified, or to such
advancement of expenses, under this Article or otherwise shall be on the
Corporation.
Non-Exclusivity of Rights. The rights to indemnification and to the
advancement of expenses conferred in this Article shall not be exclusive of
any other right which any person may have or hereafter acquire under any
statute, the Corporation's Certificate of Incorporation as amended from
time to time, these by-laws, any agreement, any vote of stockholders or
disinterested directors or otherwise.
Insurance. The Corporation may maintain insurance, at its expense, to
protect itself and any director, officer, employee or agent of the
Corporation or another corporation, partnership, joint venture, trust or
other enterprise against any expense, liability or loss, whether or not the
Corporation would have the power to indemnify such person against such
expense, liability or loss under the Delaware General Corporation Law.
Indemnification of Employees and Agents of the Corporation. The
Corporation may, to the extent authorized from time to time by the board of
directors, grant rights to indemnification and to the advancement of
expenses to any employee or agent of the Corporation to the fullest extent
of the provisions of this Article with respect to the indemnification and
advancement of expenses of directors and officers of the Corporation.
The directors and officers of the Registrant are covered by a policy of
liability insurance.
In addition, the Company's agreements with the Selling Stockholders each
provide for indemnification by the Registrant of the Selling Stockholders
against certain liabilities under the 1933 Act, the 1934 Act, state
II-3
<PAGE> 16
securities laws or otherwise, and each provide for indemnification by the
Selling Stockholders of the Registrant and its directors, its officers and
certain control persons against certain liabilities under the 1933 Act, the 1934
Act, state securities laws, or otherwise.
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- ------------------------------------------------------------------------------
<C> <C> <S>
2.1 -- Agreement and Plan of Reorganization dated as of May 11, 1994, as amended,
among the Registrant, RCC Acquisition Corporation and RCC Communications
Corporation (Filed as Annex A to the Registrant's Registration Statement on
Form S-4, Registration No. 33-82030, and incorporated herein by reference)
2.2 -- Agreement and Plan of Reorganization dated as of November 8, 1994, among the
Registrant, BLT Acquisition Corporation, CMG Information Services, Inc. and
Booklink Technologies, Inc. (Filed as Exhibit 1 to the Registrant's Report on
Form 8-K, filed January 9, 1995 and incorporated herein by reference)
2.3 -- Asset Purchase Agreement by and between the Registrant and Advanced Network &
Services, Inc. dated November 25, 1994 (Filed as Exhibit 1 to the Registrant's
Report on Form 8-K, filed February 28, 1995 and incorporated herein by
reference)
2.4 -- Agreement and Plan of Merger dated as of December 20, 1995, among the
Registrant, Santa's Acquisition Corp. and Johnson-Grace Company and its
Principal Shareholders (Filed as Exhibit 2.1 to the Registrants's Report on
Form 8-K, filed February 14, 1996 and incorporated herein by reference.)
2.5 -- Stock Purchase Agreement, dated as of August 5, 1996, among the Registrant,
The Imagi-Nation Network, Inc. and AT&T Corp. (Filed as Exhibit 10 to the
Registrant's Report on Form 8-K, filed August 5, 1996, and incorporated herein
by reference.)
4.1 -- Article 4, Article 6 and Article 8 of the Restated Certificate of
Incorporation of the Registrant (Filed as part of Exhibit 3.1 to the
Registrant's Report on Form 10-Q for the quarter ended September 30, 1995, and
incorporated herein by reference)
4.2 -- Form of Common Stock Certificate (Filed as Exhibit 4.3 to the Registrant's
Registration Statement on Form S-1, Registration No. 33-45585, and
incorporated herein by reference)
4.3 -- Rights Agreement dated as of April 23, 1993, including Exhibit A (Certificate
of Designation setting forth the terms of Series A Junior Participating
Preferred Stock, $.01 par value), Exhibit B (Form of Rights Certificate) and
Exhibit C (Summary of Rights to Purchase Series A Junior Participating
Preferred Shares) (Filed as Exhibit 1 to the Registrant's Registration
Statement on Form 8-A, filed on September 9, 1996, and incorporated herein by
reference)
4.4 -- First Amendment to the Rights Agreement dated as of January 31, 1995 (Filed as
Exhibit 2 to the Registrant's Registration Statement on Form 8-A, filed on
September 9, 1996, and incorporated herein by reference)
5.1 -- Opinion of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., with respect
to the legality of the securities being registered
23.1 -- Consent of Ernst & Young LLP
23.2 -- Consent of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. (included in
Exhibit 5.1)
24.1 -- Powers of Attorney (filed in Part II of this Registration Statement)
</TABLE>
II-4
<PAGE> 17
ITEM 17. UNDERTAKINGS.
A. Rule 415 Offering
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the 1933
Act;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the
effective registration statement.
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
registration statement is on Form S-3 or Form S-8, and the information
required to be included in a post-effective amendment by those paragraphs
is contained in periodic reports filed by the registrant pursuant to
Section 13 or Section 15(d) of the 1934 Act that are incorporated by
reference in the registration statement.
(2) That, for the purpose of determining any liability under the 1933 Act,
each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
B. Filings Incorporating Subsequent Exchange Act Documents by Reference
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the 1933 Act, each filing of the registrant's
annual report pursuant to section 13(a) or section 15(d) of the 1934 Act (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to section 15(d) of the 1934 Act) that is incorporated by reference in
the registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
C. Request for Acceleration of Effective Date or Filing of Registration
Statement on Form S-8
Insofar as indemnification for liabilities arising under the 1933 Act may
be permitted to directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Commission such indemnification is against
public policy as expressed in the 1933 Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than
the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the 1933 Act
and will be governed by the final adjudication of such issue.
II-5
<PAGE> 18
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Dulles, Commonwealth of Virginia on September 30,
1996.
AMERICA ONLINE, INC.
By: /s/ Lennert J. Leader
------------------------------------
Lennert J. Leader
Senior Vice President and Chief
Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Stephen M. Case and Lennert J. Leader, or either
of them, his attorney-in-fact, each with the power of substitution, for him in
any and all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement (and any other Registration Statement
for the same offering that is to be effective upon filing pursuant to Rule
462(b) under the Securities Act of 1933), and to file the same, with all
exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, hereby granting unto said attorneys-in-fact
and agents, and each of them, full power and authority to do and perform each
and every act and thing requisite or necessary to be done in and about the
premises, as full to all intents and purposes as he might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents or
any of them or their or his substitutes may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
- --------------------------------------------- ---------------------------- -------------------
<S> <C> <C>
/s/ Stephen M. Case Chairman of the Board, September 30, 1996
- --------------------------------------------- President, Chief Executive
Stephen M. Case Officer and Director
(principal executive
officer)
/s/ James V. Kimsey Chairman Emeritus and September 30, 1996
- --------------------------------------------- Director
James V. Kimsey
/s/ Lennert J. Leader Senior Vice President and September 30, 1996
- --------------------------------------------- Chief Financial Officer
Lennert J. Leader (principal financial and
accounting officer)
/s/ Frank J. Caufield Director September 30, 1996
- ---------------------------------------------
Frank J. Caufield
</TABLE>
II-6
<PAGE> 19
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
- --------------------------------------------- ---------------------------- -------------------
<S> <C> <C>
/s/ Robert J. Frankenberg Director September 30, 1996
- ---------------------------------------------
Robert J. Frankenberg
/s/ Alexander M. Haig, Jr. Director September 30, 1996
- ---------------------------------------------
Alexander M. Haig, Jr.
/s/ William N. Melton Director September 30, 1996
- ---------------------------------------------
William N. Melton
/s/ Thomas J. Middelhoff Director September 30, 1996
- ---------------------------------------------
Thomas J. Middelhoff
/s/ Robert W. Pittman Director September 30, 1996
- ---------------------------------------------
Robert W. Pittman
/s/ Scott C. Smith Director September 30, 1996
- ---------------------------------------------
Scott C. Smith
</TABLE>
II-7
<PAGE> 1
Exhibit 5.1
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
One Financial Center
Boston, Massachusetts 02111
701 Pennsylvania Avenue, N.W. Telephone: 617/542-6000
Washington, D.C. 20004 Fax: 617/542-2241
Telephone: 202/434-7300
Fax: 202/434-7400
October 2, 1996
America Online, Inc.
22000 AOL Way
Dulles, Virginia 20166-9323
Gentlemen:
We have acted as counsel to America Online, Inc., a Delaware
corporation (the "Company"), in connection with the preparation and filing with
the Securities and Exchange Commission (the "Commission") of a Registration
Statement on Form S-3 (the "Registration Statement"), pursuant to which the
Company is registering under the Securities Act of 1933, as amended, a total of
572,221 previously issued shares (the "Shares") of its common stock, $.01 par
value per share (the "Common Stock"). The Shares are to be sold by certain
shareholders of the Company (the "Selling Shareholders"). The Company has not
engaged any underwriters in connection with the proposed filing of the
Registration Statement. This opinion is being rendered in connection with the
filing of the Registration Statement.
In connection with this opinion, we have examined the Company's
Restated Certificate of Corporation and Restated By-Laws, as amended to date;
such records of the corporate proceedings of the Company as we deemed material;
and the Registration Statement and the exhibits thereto filed with the
Commission.
In our examination, we have assumed the genuineness of all signatures,
the legal capacity of natural persons, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such copies.
Based upon the foregoing, we are of the opinion that, (i) the Shares
have been duly and validly authorized by the Company, and (ii) the Shares are
duly and validly issued, fully paid and non-assessable shares of the Common
Stock, free of preemptive rights.
Our opinion is limited to the General Corporation Law of the State of
Delaware, and we express no opinion with respect to the laws of any other
jurisdiction. No opinion is expressed herein with respect to the qualification
of the Shares under the securities or blue sky laws of any state or any foreign
jurisdiction.
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Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
America Online, Inc.
October 2, 1996
Page 2
We understand that you wish to file this opinion as an exhibit to the
Registration Statement, and we hereby consent thereto. We hereby further consent
to the reference to us under the caption "Legal Matters" in the prospectus
included in the Registration Statement.
Very truly yours,
/s/ Mintz, Levin, Cohn, Ferris,
Glovsky and Popeo, P.C.
Mintz, Levin, Cohn, Ferris,
Glovsky and Popeo, P.C.
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EXHIBIT 23.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement on Form S-3 and related Prospectus of America Online,
Inc. for the registration of its common stock and to the incorporation by
reference therein of our report dated August 28, 1996, with respect to the
consolidated financial statements of America Online, Inc. included in its Annual
Report (Form 10-K) for the year ended June 30, 1996, filed with the Securities
and Exchange Commission.
/s/ ERNST & YOUNG LLP
ERNST & YOUNG LLP
Vienna, Virginia
September 30, 1996
