As filed with the Securities and Exchange Commission on February 20, 1998
Registration No. 333-___________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
___________________
AMERICA ONLINE, INC.
(Exact name of registrant as specified in charter)
Delaware 54-1322110
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
____________________
22000 AOL WAY, DULLES, VIRGINIA 20166-9323
(Address of principal executive offices)
___________________
AMERICA ONLINE, INC. 1992 EMPLOYEE, DIRECTOR AND CONSULTANT STOCK OPTION PLAN
(Full Title of the Plan)
Sheila A. Clark, Esq.
Deputy General Counsel
and Assistant Secretary
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)
___________________
CALCULATION OF REGISTRATION FEE
<TABLE>
Amount Proposed
Title of to be Maximum Proposed Amount of
Securities to Registered Offering Maximum Aggregate Registration
be (2) Price Per Offering Fee
Registered(1) Share Price
<S> <C> <C> <C> <C>
Common Stock,
$.01 par value 4,000,000 (3)(4) $278,693,014 $82,214
</TABLE>
(1) The Registrant adopted a Rights Agreement on April 23, 1993, as amended on
January 31, 1995. Pursuant to such shareholder rights plan the right to
<PAGE>
receive one-hundredth (1/100) share of preferred stock for each share of
Common Stock was provided to holders of the Common Stock under certain defined
circumstances. No such rights are currently exercisable. Value attributable
to such rights, if any, is reflected in the market price of the Common Stock.
(2) The number of shares of Common Stock to be registered consists of the
aggregate number of shares which may be sold upon the exercise of options
which have previously been granted and/or may hereafter be granted under the
America Online, Inc. 1992 Employee, Director and Consultant Stock Option Plan
(the "Plan"). The maximum number of shares which may be sold upon the
exercise of such options granted under the Plan is subject to adjustment in
accordance with certain anti-dilution and other provisions of the Plan.
(3) The maximum offering price per share has been determined solely for the
purpose of calculating the registration fee pursuant to Rules 457(c) and (h)
under the Securities Act as follows: for the 3,761,859 shares of Common Stock
which may be purchased upon exercise of outstanding options, the fee is based
on the average price of $66.99 at which options may be exercised.
(4) The maximum offering price per share has been determined solely for the
purpose of calculating the registration fee pursuant to Rules 457(c) and (h)
under the Securities Act as follows: for the 238,141 options that have not yet
been granted, the fee is based on the average of the high and low prices of
$112.06 for the Common Stock as quoted on the New York Stock Exchange within
five (5) business days prior to the above date of filing.
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Pursuant to General Instruction E on Form S-8 regarding the registration of
additional securities, America Online, Inc. (the "Company") hereby is
registering additional shares of common stock, par value $.01 per share (the
"Common Stock"), in the number set forth on the cover page of this Registration
Statement. Such shares are of the same class as other securities of the Company
for which previous registration statements have been filed with the Securities
and Exchange Commission (the "Commission") relating to the Company's 1992
Employee, Director and Consultant Stock Option Plan (the "Plan"), and such
registration statements, as listed below, are incorporated by reference herein:
Registration Statement on Form S-8, registering shares issued in connection
with the Plan, File No. 333-22027 (filed on February 19, 1997);
Registration Statement on Form S-8, registering shares issued in connection
with the Plan, File No. 333-07603 (filed on July 3, 1996);
Registration Statement on Form S-8, registering shares issued in connection
with the Plan, File No. 33-78066 (filed on April 22, 1994);
Registration Statement on Form S-8, registering shares issued in connection
with the Plan, File No. 33-46607 (filed on March 24, 1992).
Pursuant to Rule E, this Registration Statement contains such information
required by Form S-8 that is not otherwise included in the above-listed
registration statements.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
The following documents, which have been filed by America Online, Inc.,
a Delaware corporation (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, 1997, as filed with the Commission pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act") (File No.
0-19836).
(b) The Company's Quarterly Reports on Form 10-Q for the quarters
ended September 30, 1997 and December 31, 1997, as filed with the
Commission pursuant to the Exchange Act (File No. 0-19836).
(c) The Company's Current Reports on Forms 8-K for events dated
September 7, 1997, November 12, 1997, November 17, 1997, January 31, 1998
and February 13, 1998 filed pursuant to Section 13 or 15(d) of the 1934 Act
(File No. 0-19836).
(d) The description of the Common Stock contained in the Company's
Registration Statement on Form S-3, Registration Number 333-_____, filed on
February 20, 1998 with the Commission pursuant to the Securities Act of
1933, as amended.
(e) In addition, all documents filed by the Company with the
Commission pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange
Act, prior to the filing of a post-effective amendment which indicates that
all securities offered hereby have been sold or which deregisters all
securities then remaining unsold, shall be deemed to be incorporated by
reference herein and to be part hereof from the date of the filing of such
documents.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel
Not applicable.
<PAGE>
Item 6. Indemnification of Directors and Officers
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 Corporation Law, Article
Ninth of the Company's Restated Certificate of Incorporation (the "Certificate
of Incorporation") (incorporated by reference herein) provides that:
To the fullest extent permitted by the Delaware Corporation Law as
the same now exists or may hereafter be amended, the Company shall
indemnify, and advance expenses to, its directors and officers and any
person who is or was serving at the request of the Company as a director or
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise. The Company, by action of its board of directors,
may provide indemnification or advance expenses to employees and agents of
the Company 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 Company 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 Company, or is or was serving at the request of the
Company 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 Company 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 Company 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 Company 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 Company, 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 Company'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 Company or is or was serving at the request of the Company
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 Company to the fullest extent authorized by the Delaware
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 Company to provide broader indemnification rights than such law permitted
the Company 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 Company 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 Company.
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 Company the expenses (including attorney's fees) incurred in defending
any such proceeding in advance of its final disposition; provided,
however, that, if the Delaware 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 Company of an undertaking,
by or on behalf of such Indemnitee, to repay all 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 Company within sixty (60) days after a
written claim has been received by the Company, 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 Company 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 Company 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 Company to recover an
advancement of expenses pursuant to the terms of an undertaking, the Company
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 Corporation Law. Neither the failure of the Company
(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 Corporation Law, nor an actual determination by the Company
(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 Company 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
Company.
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 Company'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 Company may maintain insurance, at its expense, to
protect itself and any director, officer, employee or agent of the
Company or another corporation, partnership, joint venture, trust or other
enterprise against any expense, liability or loss, whether or not the Company
would have the power to indemnify such person against such expense,
liability or loss under the Delaware Corporation Law.
Indemnification of Employees and Agents of the Company. The
Company 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 Company 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 Company.
The directors and officers of the Company are covered by a policy of
liability insurance.
Item 7. Exemption from Registration Claimed
Not applicable.
<PAGE>
Item 8. Exhibits
Exhibit No. Description
4.1 Amendment of Section A of Article 4 of the Restated
Certificate of Incorporation of America Online,
Inc.
4.2 Section B of Article 4, Article 6 and Article 8 of
the Restated Certificate of Incorporation of
America Online, Inc. (filed as part of Exhibit 3.1
to the Form 10-K for the year ended June 30, 1997
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.)
4.5 America Online, Inc. 1992 Employee, Director and
Consultant Stock Option Plan and Forms of Non-
Qualified Stock Option Agreement
5 Opinion of Sheila A. Clark, Deputy General Counsel
to the Company (including the consent of such
deputy general counsel), regarding the legality of
securities being offered
23.1 Consent of Sheila A. Clark, Deputy General Counsel
to the Company (included in her opinion filed as
Exhibit 5 hereto)
23.2 Consent of Ernst & Young LLP, independent auditors
24 Powers of Attorney
<PAGE>
Item 9. Undertakings
(a) The Company 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 Securities Act of 1933;
(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 and 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 20 percent 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 (a)(1)(i) and (a)(1)(ii) do not apply if
this registration statement is on Form S-3, Form S-8 or Form F-3, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, 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) The undersigned Registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act of 1933, each filing of
the Registrant's annual report pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) 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) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 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
Securities and Exchange Commission such indemnification is against public
policy as expressed in the 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 Act and will be governed by the final
adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused
this registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the County of Loudoun, State of Virginia, on
this 20th day of February, 1998.
AMERICA ONLINE, INC.
By: *
Stephen M. Case
Chairman and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed on the 20th day of February, 1998,
by the following persons in the capacities indicated.
Signature Title
Chairman and Chief Executive Officer
* (Principal Executive Officer)
Stephen M. Case
* President, Chief Operating Officer and
Director
Robert W. Pittman
Senior Vice President, Chief Financial
Officer, Treasurer, Chief Accounting
Officer and Assistant Secretary
(Principal Financial and Accounting
Officer)
/S/LENNERT J. LEADER
Lennert J. Leader
* Director
Daniel F. Akerson
Director
Frank J. Caufield
* Director
Robert J. Frankenberg
* Director
Alexander M. Haig, Jr.
* Director
William N. Melton
* Director
Thomas Middelhoff
*By: /S/LENNERT J. LEADER
Lennert J. Leader
Attorney -In-Fact
<PAGE>
Exhibit Index
Exhibit No. Description
4.1 Amendment of Section A of Article 4 of the Restated
Certificate of Incorporation of America Online, Inc.
4.2 Section B of Article 4, Article 6 and Article 8 of the
Restated Certificate of Incorporation of America
Online, Inc. (filed as part of Exhibit 3.1 to the Form
10-K for the year ended June 30, 1997 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.)
4.5 America Online, Inc. 1992 Employee, Director and
Consultant Stock Option Plan and Forms of Non-Qualified
Stock Option Agreement
5 Opinion of Sheila A. Clark, Deputy General Counsel to
the Company (including the consent of such deputy
general counsel), regarding the legality of securities
being offered
23.1 Consent of Sheila A. Clark, Deputy General Counsel to
the Company (included in her opinion filed as Exhibit
5 hereto)
23.2 Consent of Ernst & Young LLP, independent auditors
24 Powers of Attorney
CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION
OF
AMERICA ONLINE, INC.
America Online, Inc., a Delaware corporation duly organized and existing
under the General Corporation Law of the State of Delaware (the "Corporation"),
does hereby certify:
FIRST: That Section A of Article FOURTH of the Restated Certificate of
Incorporation is hereby amended to read in its entirety as follows:
FOURTH: A. The total number of shares of all classes of stock
which the Corporation shall have authority to issue is 605,000,000
shares, divided into two classes, consisting of :
600,000,000 shares of Common Stock, par value one cent ($0.01) per
share (the "Common Stock"); and
5,000,000 shares of Preferred Stock, par value one cent ($0.01) per
share (the "Undesignated Preferred Stock").
SECOND: That said amendment was duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.
IN WITNESS WHEREOF, America Online, Inc. has caused this Certificate of
Amendment to be signed by its duly authorized officer this 9th day of February,
1998.
/S/SHEILA A. CLARK
Sheila A. Clark
Assistant Secretary
February 20, 1998
America Online, Inc.
22000 AOL Way
Dulles, Virginia 20166
Ladies and Gentlemen:
This opinion is furnished in connection with the filing by America Online,
Inc. (the "Company") with the Securities and Exchange Commission of a
Registration Statement on Form S-8 (the "Registration Statement") under the
Securities Act of 1933, as amended. You have requested my opinion concerning
the status under Delaware law of the ) 4,000,000 additional shares (the
"Shares") of the Company's common stock, par value $.01 per share ("Common
Stock"), and certain Common Stock Purchase Rights (the "Rights") which are being
registered under the amendment to the Registration Statement for issuance by the
Company pursuant to the terms of the America Online, Inc. 1992 Employee,
Director and Consultant Stock Option Plan (the "Plan").
I am Deputy General Counsel to the Company and have acted as counsel in
connection with the Registration Statement. In that connection, I, or a member
of my staff upon whom I have relied, have examined and am familiar with
originals or copies, certified or otherwise, identified to our satisfaction, of:
1. Restated Certificate of Incorporation of the Company, as amended, and
as presently in effect;
2. Restated By-Laws of the Company as presently in effect;
3. Certain resolutions adopted by the Company's Board of Directors;
4. America Online, Inc. 1992 Employee, Director and Consultant Stock
Option Plan; and
5. Rights Agreement of the Company, as amended.
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. We have also assumed that: (i) all of the Shares
will be issued for the consideration permitted under the Plan as currently in
effect, and none of such Shares will be issued for less than $.01; (ii) all
actions required to be taken under the Plan by the Compensation Committee and
the Board of Directors of the Company have been or will be taken by the
Compensation Committee and the Board of Directors of the Company, respectively;
and (iii) at the time of the exercise of the options under the Plan, the Company
shall continue to have sufficient authorized and unissued shares of Common Stock
reserved for issuance thereunder.
Based upon and subject to the foregoing, we are of the opinion that:
1. The shares of Common Stock and the related Common Stock Purchase
Rights which may be issued upon the exercise of the Rights have been duly
authorized for issuance.
2. If and when any Common Stock and the related Common Stock Purchase
Rights are issued in accordance with the authorization therefor (as
adjusted) established with respect to the applicable Rights in accordance
with the requirements of the Plan, and against receipt of the exercise
price therefor, and assuming the continued updating and effectiveness of
the Registration Statement and the completion of any necessary action to
permit such issuance to be carried out in accordance with applicable
securities laws, such shares of Common Stock will be validly issued, fully-
paid and nonassessable, and the accompanying Common Stock Purchase Rights,
if the Company's Common Stock Purchase Rights have not expired or been
redeemed in accordance with the terms of the Rights Agreement, will be
validly issued.
This opinion is limited to the General Corporation Law of the State of
Delaware and federal law, although the Company acknowledges that I am not
admitted to practice in the State of Delaware and am not an expert in the laws
of that jurisdiction. We express no opinion with respect to the laws of any
other jurisdiction.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement, and further consent to the use of my name wherever
appearing in the Registration Statement and any amendment thereto.
Very truly yours,
/S/SHEILA A. CLARK
Sheila A. Clark
Consent of Ernst & Young LLP, Independent Auditors
We consent to the incorporation by reference in the Registration Statement on
Form S-8 pertaining to the America Online, Inc. 1992 Employee, Director and
Consultant Stock Option Plan of our report dated September 10, 1997, 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, 1997,
filed with the Securities and Exchange Commission.
Ernst & Young LLP
Vienna, Virginia
February 19, 1998
POWER OF ATTORNEY
FOR
AMERICA ONLINE, INC.
1992 EMPLOYEE, DIRECTOR AND CONSULTANT STOCK OPTION PLAN
I, Stephen M. Case, whose signature appears below, constitute and appoint
Stephen M. Case, Robert W. Pittman, Lennert J. Leader, George Vradenburg, III,
and Sheila A. Clark, and each of them, my true and lawful attorneys-in-fact and
agents, with full power of substitution and resubstitution in each of them, for
him/her and in his/her name, place and stead, and in any and all capacities, to
sign the Registration Statement on Form S-8 for the registration of shares of
common stock, $.01 par value (the "Common Stock"), of America Online, Inc.
reserved for issuance upon the exercise of options which have been or may be
granted under the America Online, Inc. 1992 Employee, Director and Consultant
Stock Option Plan, and any required amendments or supplements thereto, and to
file the same, with all exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, 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 or
about the premises, as full to all intents and purposes as he or she 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/her substitutes may lawfully do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has caused this Power of Attorney to
be executed as of this 18th day of February, 1998.
/S/STEPHEN M. CASE
Signature
Stephen M. Case
Print Name
POWER OF ATTORNEY
FOR
AMERICA ONLINE, INC.
1992 EMPLOYEE, DIRECTOR AND CONSULTANT STOCK OPTION PLAN
I, Daniel F. Akerson, whose signature appears below, constitute and appoint
Stephen M. Case, Robert W. Pittman, Lennert J. Leader, George Vradenburg, III,
and Sheila A. Clark, and each of them, my true and lawful attorneys-in-fact and
agents, with full power of substitution and resubstitution in each of them, for
him/her and in his/her name, place and stead, and in any and all capacities, to
sign the Registration Statement on Form S-8 for the registration of shares of
common stock, $.01 par value (the "Common Stock"), of America Online, Inc.
reserved for issuance upon the exercise of options which have been or may be
granted under the America Online, Inc. 1992 Employee, Director and Consultant
Stock Option Plan, and any required amendments or supplements thereto, and to
file the same, with all exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, 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 or
about the premises, as full to all intents and purposes as he or she 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/her substitutes may lawfully do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has caused this Power of Attorney to
be executed as of this 18th day of February, 1998.
/S/DANIEL F. AKERSON
Signature
Daniel F. Akerson
Print Name
POWER OF ATTORNEY
FOR
AMERICA ONLINE, INC.
1992 EMPLOYEE, DIRECTOR AND CONSULTANT STOCK OPTION PLAN
I, Robert J. Frankenberg, whose signature appears below, constitute and
appoint Stephen M. Case, Robert W. Pittman, Lennert J. Leader, George
Vradenburg, III, and Sheila A. Clark, and each of them, my true and lawful
attorneys-in-fact and agents, with full power of substitution and resubstitution
in each of them, for him/her and in his/her name, place and stead, and in any
and all capacities, to sign the Registration Statement on Form S-8 for the
registration of shares of common stock, $.01 par value (the "Common Stock"), of
America Online, Inc. reserved for issuance upon the exercise of options which
have been or may be granted under the America Online, Inc. 1992 Employee,
Director and Consultant Stock Option Plan, and any required amendments or
supplements thereto, and to file the same, with all exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
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 or about the premises, as full to all intents and
purposes as he or she 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/her substitutes may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has caused this Power of Attorney to
be executed as of this 6th day of February, 1998.
/S/ROBERT J. FRANKENBERG
Signature
Robert J. Frankenberg
Print Name
POWER OF ATTORNEY
FOR
AMERICA ONLINE, INC.
1992 EMPLOYEE, DIRECTOR AND CONSULTANT STOCK OPTION PLAN
I, Alexander M. Haig, Jr., whose signature appears below, constitute and
appoint Stephen M. Case, Robert W. Pittman, Lennert J. Leader, George
Vradenburg, III, and Sheila A. Clark, and each of them, my true and lawful
attorneys-in-fact and agents, with full power of substitution and resubstitution
in each of them, for him/her and in his/her name, place and stead, and in any
and all capacities, to sign the Registration Statement on Form S-8 for the
registration of shares of common stock, $.01 par value (the "Common Stock"), of
America Online, Inc. reserved for issuance upon the exercise of options which
have been or may be granted under the America Online, Inc. 1992 Employee,
Director and Consultant Stock Option Plan, and any required amendments or
supplements thereto, and to file the same, with all exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
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 or about the premises, as full to all intents and
purposes as he or she 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/her substitutes may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has caused this Power of Attorney to
be executed as of this 6th day of February, 1998.
/S/ALEXANDER M. HAIG, JR.
Signature
Alexander M. Haig, Jr.
Print Name
POWER OF ATTORNEY
FOR
AMERICA ONLINE, INC.
1992 EMPLOYEE, DIRECTOR AND CONSULTANT STOCK OPTION PLAN
I, William N. Melton, whose signature appears below, constitute and appoint
Stephen M. Case, Robert W. Pittman, Lennert J. Leader, George Vradenburg, III,
and Sheila A. Clark, and each of them, my true and lawful attorneys-in-fact and
agents, with full power of substitution and resubstitution in each of them, for
him/her and in his/her name, place and stead, and in any and all capacities, to
sign the Registration Statement on Form S-8 for the registration of shares of
common stock, $.01 par value (the "Common Stock"), of America Online, Inc.
reserved for issuance upon the exercise of options which have been or may be
granted under the America Online, Inc. 1992 Employee, Director and Consultant
Stock Option Plan, and any required amendments or supplements thereto, and to
file the same, with all exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, 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 or
about the premises, as full to all intents and purposes as he or she 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/her substitutes may lawfully do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has caused this Power of Attorney to
be executed as of this 18th day of February, 1998.
/S/WILLIAM N. MELTON
Signature
William N. Melton
Print Name
POWER OF ATTORNEY
FOR
AMERICA ONLINE, INC.
1992 EMPLOYEE, DIRECTOR AND CONSULTANT STOCK OPTION PLAN
I, Thomas Middelhoff, whose signature appears below, constitute and appoint
Stephen M. Case, Robert W. Pittman, Lennert J. Leader, George Vradenburg, III,
and Sheila A. Clark, and each of them, my true and lawful attorneys-in-fact and
agents, with full power of substitution and resubstitution in each of them, for
him/her and in his/her name, place and stead, and in any and all capacities, to
sign the Registration Statement on Form S-8 for the registration of shares of
common stock, $.01 par value (the "Common Stock"), of America Online, Inc.
reserved for issuance upon the exercise of options which have been or may be
granted under the America Online, Inc. 1992 Employee, Director and Consultant
Stock Option Plan, and any required amendments or supplements thereto, and to
file the same, with all exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, 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 or
about the premises, as full to all intents and purposes as he or she 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/her substitutes may lawfully do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has caused this Power of Attorney to
be executed as of this 18th day of February, 1998.
/S/THOMAS MIDDELHOFF
Signature
Thomas Middelhoff
Print Name
POWER OF ATTORNEY
FOR
AMERICA ONLINE, INC.
1992 EMPLOYEE, DIRECTOR AND CONSULTANT STOCK OPTION PLAN
I, Robert W. Pittman, whose signature appears below, constitute and appoint
Stephen M. Case, Robert W. Pittman, Lennert J. Leader, George Vradenburg, III,
and Sheila A. Clark, and each of them, my true and lawful attorneys-in-fact and
agents, with full power of substitution and resubstitution in each of them, for
him/her and in his/her name, place and stead, and in any and all capacities, to
sign the Registration Statement on Form S-8 for the registration of shares of
common stock, $.01 par value (the "Common Stock"), of America Online, Inc.
reserved for issuance upon the exercise of options which have been or may be
granted under the America Online, Inc. 1992 Employee, Director and Consultant
Stock Option Plan, and any required amendments or supplements thereto, and to
file the same, with all exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, 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 or
about the premises, as full to all intents and purposes as he or she 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/her substitutes may lawfully do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has caused this Power of Attorney to
be executed as of this 18th day of February, 1998.
/S/ROBERT W. PITTMAN
Signature
Robert W. Pittman
Print Name
AMERICA ONLINE, INC.
1992 EMPLOYEE, DIRECTOR AND CONSULTANT STOCK OPTION PLAN
(AS AMENDED AND RESTATED THROUGH NOVEMBER 1997)
1. PURPOSES OF THE PLAN.
The Plan is intended to encourage ownership of Shares by Key Employees and
directors of and certain consultants to the Company in order to attract such
people, to induce them to work for the benefit of the Company or of an
Affiliate, and to provide additional incentive for them to promote the success
of the Company or of an Affiliate. The Plan provides for the granting of ISOs
and Non-Qualified Options.
2. DEFINITIONS.
Unless otherwise specified or unless the context otherwise requires, the
following terms, as used in this America Online, Inc. 1992 Employee,
Director and Consultant Stock Option Plan, have the following meanings:
Administrator means the Board of Directors, unless it has
delegated power to act on its behalf to the Committee, in which case
the Administrator means the Committee.
Affiliate, with respect to ISOs, means a corporation which, for
purposes of Section 424 of the Code, is a parent or subsidiary of the
Company, direct or indirect, and with respect to Non-Qualified
Options, means any corporation, company or other entity such that the
Company directly or indirectly, through one or more intermediaries,
owns or controls the greater of (i) 25% of the voting power or
outstanding securities of such corporation, company or other entity;
or (ii) such amount of voting or outstanding securities or has other
controlling interest such that the Shares and the Options would
qualify for registration on Form S-8, all as determined by the
Administrator.
Board of Directors means the Board of Directors of the Company.
Code means the United States Internal Revenue Code of 1986, as
amended.
Committee means the committee of the Board of Directors to which
the Board of Directors has delegated power to act under or pursuant to
the provisions of the Plan.
Common Stock means shares of the Company's common stock, $.01 par
value per share.
Company means America Online, Inc., a Delaware corporation.
Disability or Disabled means permanent and total disability as
defined in Section 22(e)(3) of the Code.
Fair Market Value of a Share of Common Stock means:
(1) If the Common Stock is listed on a national securities
exchange or traded in the over-the-counter market and sales prices are
regularly reported for the Common Stock, the closing or last price of
the Common Stock on the Composite Tape or other comparable reporting
system for the applicable date, or if the applicable date is not a
trading day, the trading day immediately preceding the applicable
date;
(2) If the Common Stock is not traded on a national securities
exchange but is traded on the over-the-counter market, if sales prices
are not regularly reported for the Common Stock for the trading day
referred to in clause (1), and if bid and asked prices for the Common
Stock are regularly reported, the mean between the bid and the asked
price for the Common Stock at the close of trading in the over-the-
counter market on the applicable date, or if the applicable date is
not a trading day, on the trading day immediately preceding the
applicable date; and
(3) If the Common Stock is neither listed on a national
securities exchange nor traded in the over-the-counter market, such
value as the Administrator, in good faith, shall determine.
ISO means an option meant to qualify as an incentive stock option
under Section 422 of the Code.
Key Employee means an employee of the Company or of an Affiliate
(including, without limitation, an employee who is also serving as an
officer or director of the Company or of an Affiliate), designated by
the Administrator to be eligible to be granted one or more Options
under the Plan.
Non-Qualified Option means an option which is not intended to
qualify as an ISO.
Option means an ISO or Non-Qualified Option granted under the
Plan.
Option Agreement means an agreement between the Company and a
Participant delivered pursuant to the Plan, in such form as the
Administrator shall approve.
Participant means a Key Employee, director or consultant to whom
one or more Options are granted under the Plan. As used herein,
"Participant" shall include "Participant's Survivors" where the
context requires.
Plan means this America Online, Inc. 1992 Employee, Director and
Consultant Stock Option Plan.
Shares means shares of the Common Stock as to which Options have
been or may be granted under the Plan or any shares of capital stock
into which the Shares are changed or for which they are exchanged
within the provisions of Paragraph 3 of the Plan. The Shares issued
upon exercise of Options granted under the Plan may be authorized and
unissued shares or shares held by the Company in its treasury, or
both.
Survivors means a deceased Participant's legal representatives
and/or any person or persons who acquired the Participant's rights to
an Option by will or by the laws of descent and distribution.
3. SHARES SUBJECT TO THE PLAN.
The number of Shares which may be issued from time to time pursuant to this
Plan shall be 46,080,000 or the equivalent of such number of Shares after the
Administrator, in its sole discretion, has interpreted the effect of any stock
split, stock dividend, combination, recapitalization or similar transaction in
accordance with Paragraph 16 of the Plan.
If an Option ceases to be "outstanding", in whole or in part, the Shares
which were subject to such Option shall be available for the granting of other
Options under the Plan. Any Option shall be treated as "outstanding" until such
Option is exercised in full, or terminates or expires under the provisions of
the Plan, or by agreement of the parties to the pertinent Option Agreement.
4. ADMINISTRATION OF THE PLAN.
The Administrator of the Plan will be the Board of Directors, except to the
extent the Board of Directors delegates its authority to the Committee, in which
case the Committee shall be the Administrator. Subject to the provisions of the
Plan, the Administrator is authorized to:
a. Interpret the provisions of the Plan or of any Option or Option
Agreement and to make all rules and determinations which it deems
necessary or advisable for the administration of the Plan;
b. Determine which employees of the Company or of an Affiliate shall
be designated as Key Employees and which of the Key Employees,
directors and consultants shall be granted Options;
c. Determine the number of Shares for which an Option or Options
shall be granted, provided, however, that in no event shall Options to
purchase more than 2,000,000 Shares be granted to any Participant in
any fiscal year; and
d. Specify the terms and conditions upon which an Option or Options
may be granted;
provided, however, that all such interpretations, rules, determinations, terms
and conditions shall be made and prescribed in the context of preserving the tax
status under Section 422 of the Code of those Options which are designated as
ISOs. Subject to the foregoing, the interpretation and construction by the
Administrator of any provisions of the Plan or of any Option granted under it
shall be final, unless otherwise determined by the Board of Directors, if the
Administrator is the Committee. The Administrator's determinations under the
Plan need not be uniform and may be made by it selectively among persons who
receive, or are eligible to receive, Options under the Plan (whether or not such
persons are similarly situated). Without limiting the generality of the
foregoing, the Administrator shall be entitled, among other things, to make non
uniform and selective determinations, and to enter into non uniform and
selective Option Agreements, as to (a) the persons to receive Options under the
Plan, (b) the terms and provisions of Options under the Plan, and whether a
termination of service with the Company and any Affiliate has occurred.
5. ELIGIBILITY FOR PARTICIPATION.
The Administrator will, in its sole discretion, name the Participants in
the Plan, provided, however, that each Participant must be a Key Employee,
director or consultant of the Company or of an Affiliate at the time an Option
is granted. Members of the Company's Board of Directors who are not employees
of the Company or of an Affiliate may receive options pursuant to Paragraph 6,
Subparagraph A(f), but only pursuant thereto. Notwithstanding any of the
foregoing provisions, the Administrator may authorize the grant of an Option to
a person not then an employee, director or consultant of the Company or of an
Affiliate; provided, however, that the actual grant of such Option shall be
conditioned upon such person becoming eligible to become a Participant at or
prior to the time of the execution of the Option Agreement evidencing such
Option. ISOs may be granted only to Key Employees. Non-Qualified Options may
be granted to any Key Employee, director or consultant of the Company or an
Affiliate. The granting of any Option to any individual shall neither entitle
that individual to, nor disqualify him or her from, participation in any other
grant of Options.
6. TERMS AND CONDITIONS OF OPTIONS.
Each Option shall be set forth in writing in an Option Agreement, duly
executed by the Company and, to the extent required by law or requested by the
Company, by the Participant. The Administrator may provide that Options be
granted subject to such terms and conditions, consistent with the terms and
conditions specifically required under this Plan, as the Administrator may deem
appropriate including, without limitation, subsequent approval by the
stockholders of the Company of this Plan or any amendments thereto.
A. Non-Qualified Options: Each Option intended to be a
Non-Qualified Option shall be subject to the terms and conditions
which the Administrator determines to be appropriate and in the best
interest of the Company, subject to the following minimum standards
for any such Non-Qualified Option:
a. Option Price: The option price (per share) of the Shares covered
by each Option shall be determined by the Administrator but shall
not be less than one hundred percent (100%) of the Fair Market
Value (per share) of the Shares on the date of grant of the
Option.
b. Each Option Agreement shall state the number of Shares
to which it pertains;
c. Each Option Agreement shall state the date or dates on
which it first is exercisable and the date after which it may no
longer be exercised, and may provide that the Option rights
accrue or become exercisable in installments over a period of
months or years, or upon the occurrence of certain conditions or
the attainment of stated goals or events; and
d. Exercise of any Option may be conditioned upon the
Participant's execution of a Share purchase agreement in form
satisfactory to the Administrator providing for certain
protections for the Company and its other stockholders, including
requirements that:
i. The Participant's or the Participant's
Survivors' right to sell or transfer the Shares may be
restricted; and
ii. The Participant or the Participant's
Survivors may be required to execute letters of investment
intent and must also acknowledge that the Shares will bear
legends noting any applicable restrictions.
e. Limitation on Grant of Non-Qualified Options: No Non-Qualified
Option shall be granted after the date provided in Paragraph 22
of this Plan.
f. Directors' Options: Each director of the Company who is not an
employee of the Company or any Affiliate, upon first being
elected or appointed to the Board of Directors, shall be granted
a Non-Qualified Option to purchase 10,000 shares; provided,
however, that the Administrator shall be entitled to grant an
Option for such higher number of shares as may be appropriate (as
determined by the Administrator) for recruitment purposes. On
the date following the annual meeting of stockholders of the
Company each year, giving effect to the election of any director
or directors at such annual meeting of stockholders, each
director who is not an employee of the Company or any Affiliate
and who has served at least six months as a director shall be
granted a Non-Qualified Option to purchase 10,000 Shares. In
addition, on date following the annual meeting of stockholders of
the Company each year, giving effect to the election of any
director or directors at such annual meeting of stockholders,
each director who is not an employee of the Company or any
Affiliate and who serves on the Compensation Committee or the
Audit Committee of the Board of Directors (or other committee
designated by the Board of Directors to be entitled to receive
options under this sentence) shall be granted a Non-Qualified
Option to purchase 5,000 shares; provided, further, that on such
date, each such director who serves as the Chair of such
committee shall be granted an additional Option to purchase 5,000
shares. The grants for service as a committee member or Chair
shall cover service on all eligible committees and shall not be
cumulative for service on more than one committee. Each Option
granted pursuant to this Section 6(A)(f) shall (i) have an
exercise price equal to the Fair Market Value (per share) of the
Shares on the date of grant of the Option, (ii) have a term of
ten (10) years, and (iii) be immediately exercisable (subject to
Section 16 of the Securities Exchange Act of 1934, as amended
(the "1934 Act")). The Board of Directors may amend this Section
6(A)(f) to increase, reduce, eliminate, or institute option
grants for Board, Committee, or other individual or collective
service under this Plan.
B. ISOs: Each Option intended to be an ISO shall so state and shall
be issued only to a Key Employee and be subject to at least the
following terms and conditions, with such additional restrictions or
changes as the Administrator determines are appropriate but not in
conflict with Section 422 of the Code and relevant regulations and
rulings of the Internal Revenue Service:
a. Minimum standards: The ISO shall meet the minimum
standards required of Non-Qualified Options, as described in
Paragraph 6(A) above, except clauses (a) and (f) thereunder.
b. Option Price: Immediately before the Option is
granted, if the Participant owns, directly or by reason of the
applicable attribution rules in Section 424(d) of the Code:
i. Ten percent (10%) or less of the total
combined voting power of all classes of stock of the Company
or an Affiliate, the Option price per share of the Shares
covered by each Option shall not be less than one hundred
percent (100%) of the Fair Market Value per share of the
Shares on the date of the grant of the Option.
ii. More than ten percent (10%) of the total
combined voting power of all classes of stock of the Company
or an Affiliate, the Option price per share of the Shares
covered by each Option shall not be less than one hundred
ten percent (110%) of the Fair Market Value on the date of
grant.
c. Term of Option: For Participants who own
i. Ten percent (10%) or less of the total
combined voting power of all classes of stock of the Company
or an Affiliate, each Option shall terminate not more than
ten (10) years from the date of the grant or at such earlier
time as the Option Agreement may provide.
ii. More than ten percent (10%) of the total
combined voting power of all classes of stock of the Company
or an Affiliate, each Option shall terminate not more than
five (5) years from the date of the grant or at such earlier
time as the Option Agreement may provide.
d. Limitation on Yearly Exercise: The Option Agreements
shall restrict the amount of Options which may be exercisable in
any calendar year (under this or any other ISO plan of the
Company or an Affiliate) so that the aggregate Fair Market Value
(determined at the time each ISO is granted) of the stock with
respect to which ISOs are exercisable for the first time by the
Participant in any calendar year does not exceed one hundred
thousand dollars ($100,000), provided that this subparagraph (d)
shall have no force or effect if its inclusion in the Plan is not
necessary for Options issued as ISOs to qualify as ISOs pursuant
to Section 422(d) of the Code.
e. Limitation on Grant of ISOs: No ISOs shall be granted after
February 3, 2002, the date which is the earlier of ten (10) years
from the date of the adoption of the Plan by the Company and the
date of the approval of the Plan by the shareholders of the
Company.
f. To the extent that an Option which is intended to be an ISO fails
to so qualify, it shall be treated as a Non-Qualified Option.
7. EXERCISE OF OPTIONS AND ISSUE OF SHARES.
An Option (or any part or installment thereof) shall be exercised by giving
written notice to the Company at its principal executive office address,
together with provision for payment of the full purchase price in accordance
with this Paragraph for the Shares as to which the Option is being exercised,
and upon compliance with any other condition(s) set forth in the Option
Agreement. Such written notice shall be signed by the person exercising the
Option, shall state the number of Shares with respect to which the Option is
being exercised and shall contain any representation required by the Plan or the
Option Agreement. Payment of the purchase price for the Shares as to which such
Option is being exercised shall be made (a) in United States dollars in cash or
by check, or (b) at the discretion of the Administrator, through delivery of
shares of Common Stock having a Fair Market Value equal as of the date of the
exercise to the cash exercise price of the Option, or (c) at the discretion of
the Administrator, by delivery of the grantee's personal recourse note bearing
interest payable not less than annually at no less than 100% of the applicable
Federal rate, as defined in Section 1274(d) of the Code, or (d) at the
discretion of the Administrator, in accordance with a cashless exercise program
established with a securities brokerage firm, and approved by the Administrator,
or (e) at the discretion of the Administrator, through such other method of
payment approved by the Administrator, or (f) at the discretion of the
Administrator, by any combination of (a), (b), (c), (d) and (e) above.
Notwithstanding the foregoing, the Administrator shall accept only such payment
on exercise of an ISO as is permitted by Section 422 of the Code.
The Company shall then reasonably promptly deliver the Shares as to which
such Option was exercised to the Participant (or to the Participant's Survivors,
as the case may be). In determining what constitutes "reasonably promptly," it
is expressly understood that the delivery of the Shares may be delayed by the
Company in order to comply with any law or regulation (including, without
limitation, state securities or "blue sky" laws) which requires the Company to
take any action with respect to the Shares prior to their issuance. The Shares
shall, upon delivery, be evidenced by an appropriate certificate or certificates
for fully paid, non-assessable Shares.
The Administrator shall have the right to accelerate the date of exercise
of any installment of any Option; provided that the Administrator shall not
accelerate the exercise date of any installment of any Option granted to any Key
Employee as an ISO (and not previously converted into a Non-Qualified Option
pursuant to Paragraph 19) if such acceleration would violate the annual vesting
limitation contained in Section 422(d) of the Code, as described in
Paragraph 6(B)(d).
The Administrator may, in its discretion, amend any term or condition of an
outstanding Option provided (i) such term or condition as amended is permitted
by the Plan, (ii) if any amendment is materially adverse to the Participant, any
such amendment shall be made only with the consent of the Participant to whom
the Option was granted, or in the event of the death of the Participant, the
Participant's Survivors, and (iii) any such amendment of any ISO shall be made
only after the Administrator, after consulting with counsel for the Company,
determines whether such amendment would constitute a "modification" of any
Option which is an ISO (as that term is defined in Section 424(h) of the Code)
or would cause any adverse tax consequences for the holder of such ISO.
8. RIGHTS AS A STOCKHOLDER.
No Participant to whom an Option has been granted shall have rights as a
stockholder with respect to any Shares covered by such Option, except after due
exercise of the Option and tender of the full purchase price for the Shares
being purchased pursuant to such exercise (and satisfaction of such other
conditions for the transfer of Shares as may be required pursuant to the Option)
and registration of the Shares in the Company's share register in the name of
the Participant.
9. ASSIGNABILITY AND TRANSFERABILITY OF OPTIONS.
By its terms, an Option granted to a Participant shall not be transferable
by the Participant other than (i) by will or by the laws of descent and
distribution, or (ii) as otherwise determined by the Administrator and set forth
in the applicable Option Agreement. The designation of a beneficiary of an
Option by a Participant shall not be deemed a transfer prohibited by this
Paragraph. Except as provided above, an Option shall be exercisable, during the
Participant's lifetime, only by such Participant (or by his or her legal
representative) and shall not be assigned, pledged or hypothecated in any way
(whether by operation of law or otherwise) and shall not be subject to
execution, attachment or similar process. Any attempted transfer, assignment,
pledge, hypothecation or other disposition of any Option or of any rights
granted thereunder contrary to the provisions of this Plan, or the levy of any
attachment or similar process upon an Option, shall be null and void.
10. EFFECT OF TERMINATION OF SERVICE OTHER THAN "FOR CAUSE" OR DEATH OR
DISABILITY.
Except as otherwise provided in the pertinent Option Agreement, in the
event of a termination of service (whether as an employee, director or
consultant) with the Company or an Affiliate before the Participant has
exercised all Options, the following rules apply:
a. A Participant who ceases to be an employee, director or
consultant of the Company or of an Affiliate (for any reason other
than termination "for cause", Disability, or death for which events
there are special rules in Paragraphs 11, 12, and 13, respectively),
may exercise any Option granted to him or her to the extent that the
Option is exercisable on the date of such termination of service, but
only within such term as the Administrator has designated in the
pertinent Option Agreement.
b. Except as provided in Subparagraph (c) below, or Paragraph 12 or
13, in no event may an Option Agreement provide, if the Option is
intended to be an ISO, that the time for exercise be later than three
(3) months after the Participant's termination of employment.
c. The provisions of this Paragraph, and not the provisions of
Paragraph 12 or 13, shall apply to a Participant who subsequently
becomes Disabled or dies after the termination of employment, director
status or consultancy, provided, however, in the case of a
Participant's Disability or death within three (3) months after the
termination of employment, director status or consultancy, the
Participant or the Participant's Survivors may exercise the Option
within one (1) year after the date of the Participant's termination of
employment, but in no event after the date of expiration of the term
of the Option.
d. Notwithstanding anything herein to the contrary, if subsequent to
a Participant's termination of employment, termination of director
status or termination of consultancy, but prior to the exercise of an
Option, the Board of Directors determines that, either prior or
subsequent to the Participant's termination, the Participant engaged
in conduct which would constitute "cause" (as defined in Section 11
below), then such Participant shall forthwith cease to have any right
to exercise any Option.
e. A Participant to whom an Option has been granted under the Plan
who is absent from work with the Company or with an Affiliate because
of temporary disability (any disability other than a permanent and
total Disability as defined in Paragraph 2 hereof), or who is on leave
of absence for any purpose, shall not, during the period of any such
absence, be deemed, by virtue of such absence alone, to have
terminated such Participant's employment, director status or
consultancy with the Company or with an Affiliate, except as the
Administrator or the Option Agreement may otherwise expressly provide.
f. Except as required by law or as set forth in the pertinent Option
Agreement, Options granted under the Plan shall not be affected by any
change of a Participant's status within or among the Company and any
Affiliates, so long as the Participant continues to be an employee,
director or consultant of the Company or any Affiliate.
11. EFFECT OF TERMINATION OF SERVICE "FOR CAUSE".
Except as otherwise provided in the pertinent Option Agreement, the
following rules apply if the Participant's service (whether as an employee,
director or consultant) with the Company or an Affiliate is terminated "for
cause" prior to the time that all his or her outstanding Options have been
exercised:
a. All outstanding and unexercised Options as of the time the
Participant is notified his or her service is terminated for "cause"
will immediately be forfeited.
b. For purposes of this Plan, "cause" shall include (and is not
limited to) dishonesty with respect to the Company or any Affiliate,
insubordination, substantial malfeasance or non-feasance of duty,
unauthorized disclosure of confidential information, and conduct
substantially prejudicial to the business of the Company or any
Affiliate. The determination of the Administrator as to the existence
of "cause" will be conclusive on the Participant and the Company.
c. "Cause" is not limited to events which have occurred prior to a
Participant's termination of service, nor is it necessary that the
Administrator's finding of "cause" occur prior to termination. If the
Administrator determines, subsequent to a Participant's termination of
service but prior to the exercise of an Option, that either prior or
subsequent to the Participant's termination the Participant engaged in
conduct which would constitute "cause," then the right to exercise any
Option is forfeited.
d. Any definition in an agreement between the Participant and the
Company or an Affiliate, which contains a conflicting definition of
"cause" for termination and which is in effect at the time of such
termination, shall supersede the definition in this Plan with respect
to such Participant.
12. EFFECT OF TERMINATION OF SERVICE FOR DISABILITY.
Except as otherwise provided in the pertinent Option Agreement, a
Participant who ceases to be an employee, director or consultant of the Company
or of an Affiliate by reason of Disability may exercise any Option granted to
such Participant:
a. To the extent exercisable but not exercised on the date of
Disability; and
b. In the event rights to exercise the Option accrue periodically,
to the extent of a pro rata portion of any additional rights as would
have accrued had the Participant not become Disabled prior to the end
of the accrual period which next ends following the date of
Disability. The proration shall be based upon the number of days of
such accrual period prior to the date of Disability.
A Disabled Participant may exercise such rights only within the period
ending one (1) year after the date of the Participant's termination of
employment, directorship or consultancy, as the case may be, notwithstanding
that the Participant might have been able to exercise the Option as to some or
all of the Shares on a later date if the Participant had not become disabled and
had continued to be an employee, director or consultant or, if earlier, within
the originally prescribed term of the Option.
The Administrator shall make the determination both of whether Disability
has occurred and the date of its occurrence (unless a procedure for such
determination is set forth in another agreement between the Company and such
Participant, in which case such procedure shall be used for such determination).
If requested, the Participant shall be examined by a physician selected or
approved by the Administrator, the cost of which examination shall be paid for
by the Company.
13. EFFECT OF DEATH WHILE AN EMPLOYEE, DIRECTOR OR CONSULTANT.
Except as otherwise provided in the pertinent Option Agreement, in the
event of the death of a Participant while the Participant is an employee,
director or consultant of the Company or of an Affiliate, such Option may be
exercised by the Participant's Survivors:
a. To the extent exercisable but not exercised on the date of death;
and
b. In the event rights to exercise the Option accrue periodically,
to the extent of a pro rata portion of any additional rights which
would have accrued had the Participant not died prior to the end of
the accrual period which next ends following the date of death. The
proration shall be based upon the number of days of such accrual
period prior to the Participant's death.
If the Participant's Survivors wish to exercise the Option, they must take
all necessary steps to exercise the Option within one (1) year after the date of
death of such Participant, notwithstanding that the decedent might have been
able to exercise the Option as to some or all of the Shares on a later date if
he or she had not died and had continued to be an employee, director or
consultant or, if earlier, within the originally prescribed term of the Option.
14. PURCHASE FOR INVESTMENT.
Unless the offering and sale of the Shares to be issued upon the particular
exercise of an Option shall have been effectively registered under the
Securities Act of 1933, as now in force or hereafter amended (the "1933 Act"),
the Company shall be under no obligation to issue the Shares covered by such
exercise unless and until the following conditions have been fulfilled:
a. The person(s) who exercise(s) such Option shall warrant to the
Company, prior to the receipt of such Shares, that such person(s) are
acquiring such Shares for their own respective accounts, for
investment, and not with a view to, or for sale in connection with,
the distribution of any such Shares, in which event the person(s)
acquiring such Shares shall be bound by the provisions of the
following legend which shall be endorsed upon the certificate(s)
evidencing their Shares issued pursuant to such exercise of such
grant:
"The shares represented by this certificate have been
taken for investment and they may not be sold or otherwise
transferred by any person, including a pledgee, unless (1) either
(a) a Registration Statement with respect to such shares shall be
effective under the Securities Act of 1933, as amended, or (b)
the Company shall have received an opinion of counsel
satisfactory to it that an exemption from registration under such
Act is then available, and (2) there shall have been compliance
with all applicable state securities laws."
b. At the discretion of the Administrator, the Company shall have
received an opinion of its counsel that the Shares may be issued upon
such particular exercise in compliance with the 1933 Act without
registration thereunder.
The Company may delay issuance of the Shares until completion of any action
or obtaining of any consent which the Company deems necessary under any
applicable law (including, without limitation, state securities or "blue sky"
laws.)
15. DISSOLUTION OR LIQUIDATION OF THE COMPANY.
Upon the dissolution or liquidation of the Company, all Options granted
under this Plan which as of such date shall not have been exercised will
terminate and become null and void; provided, however, that if the rights of a
Participant or a Participant's Survivors have not otherwise terminated and
expired, the Participant or the Participant's Survivors will have the right
immediately prior to such dissolution or liquidation to exercise any Option to
the extent that the Option is exercisable as of the date immediately prior to
such dissolution or liquidation.
16. ADJUSTMENTS.
Upon the occurrence of any of the following events, a Participant's rights
with respect to any Option granted to him or her hereunder which has not
previously been exercised in full shall be adjusted as hereinafter provided,
unless otherwise specifically provided in the pertinent Option Agreement:
A. Stock Dividends and Stock Splits. If (i) the shares of Common Stock
shall be subdivided or combined into a greater or smaller number of shares or if
the Company shall issue any shares of Common Stock as a stock dividend on its
outstanding Common Stock, or (ii) additional shares or new or different shares
or other securities of the Company or other non-cash assets are distributed with
respect to such shares of Common Stock, the number of shares of Common Stock
deliverable upon the exercise of such Option may be appropriately increased or
decreased proportionately, and appropriate adjustments may be made in the
purchase price per share to reflect such subdivision, combination or stock
dividend. The number of Shares subject to options to be granted (i) to
directors pursuant to Paragraph 6(A)(f) or (ii) pursuant to Paragraph 4(c),
shall also be proportionately adjusted upon the occurrence of such events.
B. Consolidations or Mergers. If the Company is to be consolidated with
or acquired by another entity in a merger, sale of all or substantially all of
the Company's assets or capital stock of the Company or otherwise (an
"Acquisition"), the Administrator or the board of directors of any entity
assuming the obligations of the Company hereunder (the "Successor Board"),
shall, as to outstanding Options, either (i) make appropriate provision for the
continuation of such Options by substituting on an equitable basis for the
Shares then subject to such Options either the consideration payable with
respect to the outstanding shares of Common Stock in connection with the
Acquisition or securities of any successor or acquiring entity; or (ii) upon
written notice to the Participants, provide that all Options must be exercised
(either to the extent then exercisable or, at the discretion of the
Administrator, all Options being made fully exercisable for purposes of this
Subparagraph), within a specified number of days of the date of such notice, at
the end of which period the Options shall terminate; or (iii) terminate all
Options in exchange for a cash payment equal to the excess of the Fair Market
Value of the shares subject to such Options (either to the extent then
exercisable or, at the discretion of the Administrator, all Options being made
fully exercisable for purposes of this Subparagraph) over the exercise price
thereof.
C. Recapitalization or Reorganization. In the event of a
recapitalization or reorganization of the Company (other than a transaction
described in Subparagraph B above) pursuant to which securities of the Company
or of another corporation are issued with respect to the outstanding shares of
Common Stock, a Participant upon exercising an Option shall be entitled to
receive for the purchase price paid upon such exercise the securities which
would have been received if such Option had been exercised prior to such
recapitalization or reorganization.
D. Modification of ISOs. Notwithstanding the foregoing, any adjustments
made pursuant to Subparagraph A, B or C with respect to ISOs shall be made only
after the Administrator, after consulting with counsel for the Company,
determines whether such adjustments would constitute a "modification" of such
ISOs (as that term is defined in Section 424(h) of the Code) or would cause any
adverse tax consequences for the holders of such ISOs. If the Administrator
determines that such adjustments made with respect to ISOs would constitute a
"modification" of such ISOs, it may refrain from making such adjustments, unless
the holder of an ISO specifically requests in writing that such adjustment be
made and such writing indicates that the holder has full knowledge of the
consequences of such "modification" on his or her income tax treatment with
respect to the ISO.
17. ISSUANCES OF SECURITIES.
Except as expressly provided herein, no issuance by the Company of shares
of stock of any class, or securities convertible into shares of stock of any
class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares subject to Options. Except as
expressly provided herein, no adjustments shall be made for dividends paid in
cash or in property (including without limitation, securities) of the Company.
18. FRACTIONAL SHARES.
No fractional shares shall be issued under the Plan and the person
exercising such right shall receive from the Company cash in lieu of such
fractional shares equal to the Fair Market Value thereof.
19. CONVERSION OF ISOs INTO NON-QUALIFIED OPTIONS; TERMINATION OF ISOs.
The Administrator, at the written request of any Participant, may in its
discretion take such actions as may be necessary to convert such Participant's
ISOs (or any portions thereof) that have not been exercised on the date of
conversion into Non-Qualified Options at any time prior to the expiration of
such ISOs, regardless of whether the Participant is an employee of the Company
or an Affiliate at the time of such conversion. Such actions may include, but
not be limited to, extending the exercise period or reducing the exercise price
of the appropriate installments of such Options. At the time of such
conversion, the Administrator (with the consent of the Participant) may impose
such conditions on the exercise of the resulting Non-Qualified Options as the
Administrator in its discretion may determine, provided that such conditions
shall not be inconsistent with this Plan. Nothing in the Plan shall be deemed
to give any Participant the right to have such Participant's ISOs converted into
Non-Qualified Options, and no such conversion shall occur until and unless the
Administrator takes appropriate action. The Administrator, with the consent of
the Participant, may also terminate any portion of any ISO that has not been
exercised at the time of such conversion.
20. WITHHOLDING.
In the event that any federal, state, or local income taxes, employment
taxes, Federal Insurance Contributions Act ("F.I.C.A.") withholdings or other
amounts are required by applicable law or governmental regulation to be withheld
from the Participant's salary, wages or other remuneration in connection with
the exercise of an Option or a Disqualifying Disposition (as defined in
Paragraph 21), the Company may withhold from the Participant's compensation, if
any, or may require that the Participant advance in cash to the Company, or to
any Affiliate of the Company which employs or employed the Participant, the
amount of such withholdings unless a different withholding arrangement,
including the use of shares of the Company's Common Stock or a promissory note,
is authorized by the Administrator (and permitted by law). For purposes hereof,
the fair market value of the shares withheld for purposes of payroll withholding
shall be determined in the manner provided in Paragraph 2 above, as of the most
recent practicable date prior to the date of exercise. If the fair market value
of the shares withheld is less than the amount of payroll withholdings required,
the Participant may be required to advance the difference in cash to the Company
or the Affiliate employer. The Administrator in its discretion may condition
the exercise of an Option for less than the then Fair Market Value on the
Participant's payment of such additional withholding.
21. NOTICE TO COMPANY OF DISQUALIFYING DISPOSITION.
Each Key Employee who receives an ISO must agree to notify the Company in
writing immediately after the Key Employee makes a Disqualifying Disposition of
any shares acquired pursuant to the exercise of an ISO. A Disqualifying
Disposition is any disposition (including any sale) of such shares before the
later of (a) two years after the date the Key Employee was granted the ISO, or
(b) one year after the date the Key Employee acquired Shares by exercising the
ISO. If the Key Employee has died before such stock is sold, these holding
period requirements do not apply and no Disqualifying Disposition can occur
thereafter.
22. TERMINATION OF THE PLAN.
The Plan will terminate on February 3, 2002, the date which is ten (10)
years from the earlier of the date of its adoption and the date of its approval
by the stockholders of the Company. The Plan may be terminated at an earlier
date by vote of the stockholders of the Company; provided, however, that any
such earlier termination will not affect any Options granted or Option
Agreements executed prior to the effective date of such termination.
23. AMENDMENT OF THE PLAN AND AGREEMENTS.
The Plan may be amended by the stockholders of the Company. The Plan may
also be amended by the Board of Directors or the Administrator, including,
without limitation, to the extent necessary to qualify any or all outstanding
Options granted under the Plan or Options to be granted under the Plan for
favorable federal income tax treatment (including deferral of taxation upon
exercise) as may be afforded incentive stock options under Section 422 of the
Code, for as long as the Company has a class of stock registered pursuant to
Section 12 of the 1934 Act and to the extent necessary to qualify the shares
issuable upon exercise of any outstanding Options granted, or Options to be
granted, under the Plan for listing on any national securities exchange or
quotation in any national automated quotation system of securities dealers. Any
amendment approved by the Administrator which the Administrator determines is of
a scope that requires stockholder approval shall be subject to obtaining such
stockholder approval. Any modification or amendment of the Plan shall not,
without the consent of a Participant, materially adversely affect his or her
rights under an Option previously granted to him or her. With the consent of
the Participant affected, the Administrator may amend outstanding Option
Agreements in a manner which may be materially adverse to the Participant but
which is not inconsistent with the Plan. In the discretion of the
Administrator, outstanding Option Agreements may be amended by the Administrator
in a manner which is not materially adverse to the Participant.
24. EMPLOYMENT OR OTHER RELATIONSHIP.
Nothing in this Plan or any Option Agreement shall be deemed to prevent the
Company or an Affiliate from terminating the employment, consultancy or director
status of a Participant, nor to prevent a Participant from terminating his or
her own employment, consultancy or director status or to give any Participant a
right to be retained in employment or other service by the Company or any
Affiliate for any period of time.
All Options shall constitute a special incentive payment to the Participant
and shall not be taken into account in computing the amount of salary or
compensation of the Participant for the purpose of determining any benefits
under any pension, retirement, profit-sharing, bonus, life insurance or other
benefit plan of the Company or under any agreement between the Company and the
Participant, unless such plan or agreement specifically provides otherwise.
25. GOVERNING LAW.
This Plan shall be construed and enforced in accordance with the law of the
State of Delaware.
1992 Plan/Version 1
NON-QUALIFIED STOCK OPTION AGREEMENT
AMERICA ONLINE, INC.
AGREEMENT made as of the Date of Grant set forth on the Notice Of Grant of
Stock Options attached hereto (the "Notice"), between AMERICA ONLINE, INC. (the
"Company"), a Delaware corporation having a principal place of business in
Vienna, Virginia and the Participant.
WHEREAS, the Company desires to grant to the Participant an Option to
purchase shares of its common stock, $.01 par value (the "Shares") under and for
the purposes of the 1992 Employee, Director and Consultant Stock Option Plan of
the Company (the "Plan");
WHEREAS, the Company and the Participant understand and agree that any
terms used and not defined herein have the same meanings as in the Plan or the
Notice as applicable;
WHEREAS, the Company and the Participant each intend that the Option
granted herein shall be a Non-Qualified Stock Option.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set
forth and for other good and valuable consideration, the parties hereto agree as
follows:
1. GRANT OF OPTION.
The Company hereby irrevocably grants to the Participant the right and
option to purchase all or any part of an aggregate of such number of Shares as
is set forth in the Notice, on the terms and conditions and subject to all the
limitations set forth herein and in the Plan, which is incorporated herein by
reference. The Participant acknowledges receipt of a copy of the Plan.
2. PURCHASE PRICE.
The purchase price of the Shares covered by the Option shall be as set
forth in the Notice, subject to adjustment, as provided in the Plan, in the
event of a stock split, reverse stock split or other events affecting the
holders of Shares. Payment shall be made in accordance with Paragraph 7 of the
Plan.
3. EXERCISE OF OPTION.
Subject to the terms and conditions set forth in this Agreement and the
Plan, the Option granted hereby shall be exercisable according to the Vesting
Schedule as set forth in the Notice.
Such rights are cumulative and are subject to the other terms and
conditions of this Agreement and the Plan.
Should the Company (i) merge or consolidate with another corporation under
circumstances where the Company is not the surviving corporation, (ii) sell all
or substantially all of its assets, (iii) liquidate or dissolve, or (iv)
register the transfer of eighty percent (80%) or more of its outstanding Common
Stock to persons who were not owners (or considered to be owners pursuant to
Section 318 of the Code) of Common Stock immediately prior to such transfer, and
the Participant continues his/her employment with the Company, or its successor,
for a period of not less than twelve (12) months from the date of the merger,
sale or transfer then 100% of such Option not yet vested shall vest at the end
of such 12-month term, and the holder of this Option shall have the right to
exercise any and all of the Option shares, unless this Option has otherwise
expired or been terminated pursuant to its terms or the terms hereof.
At any time after the Company is involved in a merger, consolidation, sale
or transfer as described above, and
a) the Participant shall fail to be vested with power and authority
analogous to the Participant's title and/or office prior to the merger,
consolidation, sale or transfer, or
b) the Participant shall lose any significant duties or responsibilities
attending such office, or
c) if there shall occur a reduction in the Participant's base
compensation, or
d) the Participant's employment with the Company, or its successor, is
terminated without cause, then 100% of such option not yet vested shall
immediately vest and the holder of this Option shall have the right, immediately
prior to the effectiveness of consummation of such event, to exercise any and
all of the Option shares, unless this option has otherwise expired or been
terminated pursuant to its terms or the terms hereof.
4. TERM OF OPTION.
The Option shall terminate ten (10) years from the date of this Agreement,
but shall be subject to earlier termination as provided herein or in the Plan.
If the Participant ceases to be an employee, director or consultant of the
Company or of an Affiliate (for any reason other than death or Disability or
termination for "cause" as defined in the Plan), the Option may be exercised
within ninety (90) days after the date the Participant ceases to be an employee,
director or consultant of the Company or an Affiliate, or within the originally
prescribed term of the Option, whichever is earlier, but may not be exercised
thereafter. In such event, the Option shall be exercisable only to the extent
that the right to purchase Shares under this Agreement or the Plan has accrued
and is in effect at the date of such cessation of employment, consultancy or
directorship. The provisions of this paragraph shall apply if the Participant
subsequently becomes disabled or dies after ceasing to be an employee,
consultant or director, provided, however, in the case of the Participant's
death within three (3) months after ceasing to be an employee, consultant or
director, the Option may be exercised by the Participant's Survivors within one
(1) year after the date of the Participant's death but in no event after the
date of expiration of the term of the Option.
In the event the Participant's employment, directorship or consultancy is
terminated for "cause" (as defined in the Plan), the Participant's right to
exercise any unexercised portion of this Option shall cease forthwith, and this
Option shall thereupon terminate. Notwithstanding anything herein to the
contrary, if subsequent to the Participant's termination as an employee,
director or consultant but prior to the exercise of the Option, the Board of
Directors of the Company determines that, either prior or subsequent to the
Participant's termination, the Participant engaged in conduct which would
constitute "cause," then the Participant shall forthwith cease to have any right
to exercise the Option.
In the event of the Disability of the Participant, as determined in
accordance with the Plan, the Option shall be exercisable within one (1) year
after the date of such Disability or, if earlier, the term originally prescribed
by the Option. In such event, the Option shall be exercisable:
a) to the extent that the right to purchase the Shares hereunder has
accrued on the date the Participant becomes Disabled and is in effect as of the
date of Disability; and
b) in the event rights to exercise the Option accrue periodically, to the
extent of a pro rata portion of any additional rights as would have accrued had
the Participant not become Disabled prior to the end of the particular year.
The proration shall be based upon the number of days of the accrual period
during which the Participant was not Disabled.
In the event of the death of the Participant while an employee, consultant
or director of the Company or of an Affiliate, the Option:
x) to the extent exercisable but not exercised as of the date of death;
and
y) in the event rights to exercise the Option accrue periodically, to the
extent of a pro rata portion of any additional rights to exercise the Option as
would have accrued had the Participant not died during that year.
may be exercised by the Participant's Survivors. The proration shall be based
upon the number of days during the accrual period prior to the Participant's
death. In such event, the Option must be exercised, if at all, within one (1)
year after the date of death of the Participant or, if earlier, within the
originally prescribed term of the Option.
5. METHOD OF EXERCISING OPTION.
Subject to the terms and conditions of this Agreement, the Option may be
exercised by written notice to the Company, at the principal executive office of
the Company. Such notice shall state the election to exercise the Option and
the number of Shares in respect of which it is being exercised, shall be signed
by the person or persons so exercising the Option, and shall be in substantially
the form attached hereto as Exhibit A. Payment of the full purchase price for
such Shares shall be made in accordance with Paragraph 7 of the Plan, and the
Company shall deliver a certificate or certificates representing such Shares as
soon as practicable after the notice shall be received, provided, however, that
the Company may delay issuance of such Shares until completion of any action or
obtaining of any consent, which the Company deems necessary under any applicable
law (including, without limitation, state securities or "blue sky" laws). The
certificate or certificates for the Shares as to which the Option shall have
been so exercised shall be registered in the name of the person or persons so
exercising the Option (or, if the Option shall be exercised by the Participant
and if the Participant shall so request in the notice exercising the Option,
shall be registered in the name of the Participant and another person jointly,
with right of survivorship) and shall be delivered as provided above to or upon
the written order of the person or persons exercising the Option. In the event
the Option shall be exercised, pursuant to Section 4 hereof, by any person or
persons other than the Participant, such notice shall be accompanied by
appropriate proof of the right of such person or persons to exercise the Option.
All Shares that shall be purchased upon the exercise of the Option as provided
herein shall be fully paid and non-assessable.
6. PARTIAL EXERCISE.
Exercise of this Option to the extent above stated may be made in part at
any time and from time-to-time within the above limits, except that no
fractional share shall be issued pursuant to this Option.
7. NON-ASSIGNABILITY.
The Option shall not be transferable by the Participant otherwise than by
will or by the laws of descent and distribution and shall be exercisable, during
the Participant's lifetime, only by the Participant. Except as provided in the
preceding sentence, the Option shall not be assigned, pledged or hypothecated in
any way (whether by operation of law or otherwise) and shall not be subject to
execution, attachment or similar process. Any attempted transfer, assignment,
pledge, hypothecation or other disposition of the Option or of any rights
granted hereunder contrary to the provisions of this Section 7, or the levy of
any attachment or similar process upon the Option or such rights, shall be null
and void.
8. NO RIGHTS AS STOCKHOLDER UNTIL EXERCISE.
The Participant shall have no rights as a stockholder with respect to
Shares subject to this Agreement until a stock certificate therefore has been
issued to the Participant and is fully paid for. Except as is expressly
provided in the Plan with respect to certain changes in the capitalization of
the Company, no adjustment shall be made for dividends or similar rights for
which the record date is prior to the date such stock certificate is issued.
9. CAPITAL CHANGES AND BUSINESS SUCCESSIONS.
The Plan contains provisions covering the treatment of Options in a number
of contingencies such as stock splits and mergers. Provisions in the Plan for
adjustment with respect to stock subject to Options and the related provisions
with respect to successors to the business of the Company are hereby made
applicable hereunder and are incorporated herein by reference.
10. TAXES AND WITHHOLDING.
The Participant acknowledges that upon exercise of the Option the
Participant will be deemed to have taxable income measured by the difference
between the then fair market value of the Shares received upon exercise and the
price paid for such Shares pursuant to this Agreement (the "Taxable Income").
The Participant acknowledges that any income or other taxes due from him or her
with respect to this Option or the Shares issuable pursuant to this Option shall
be the Participant's responsibility.
If the Company in its discretion determines that it is obligated to
withhold income taxes with respect to the exercise of the Option, the
Participant hereby agrees that the Company may withhold from the Participant
remuneration, if any, the appropriate amount of federal, state and local
withholding attributable to such amount that is considered compensation
includible in such person's gross income.
11. PURCHASE FOR INVESTMENT.
Unless the offering and sale of the Shares to be issued upon the particular
exercise of the Option shall have been effectively registered under the
Securities Act of 1933, as now in force or hereafter amended (the "Act"), the
Company shall be under no obligation to issue the Shares covered by such
exercise unless and until the following conditions have been fulfilled:
a) The person(s) who exercise the Option shall warrant to the Company, at
the time of such exercise, that such person(s) are acquiring such Shares
for their own respective accounts, for investment, and not with a view to,
or for sale in connection with, the distribution of any such Shares, in
which event the person(s) acquiring such Shares shall be bound by the
provisions of the following legend which shall be endorsed upon the
certificate(s) evidencing their Option Shares issued pursuant to such
exercise:
"The shares represented by this certificate have been taken for
investment and they may not be sold or otherwise transferred by any person,
including a pledgee, unless (1) either (a) a Registration Statement with
respect to such shares shall be effective under the Securities Act of 1933,
as amended, or (b) the Company shall have received an opinion of counsel
satisfactory to it that an exemption from registration under such Act is
then available, and (2) there shall have been compliance with all
applicable state securities laws; and
b) If the Company so requires, the Company shall have received an opinion
of its counsel that the Shares may be issued upon such particular exercise
in compliance with the Act without registration thereunder. Without
limiting the generality of the foregoing, the Company may delay issuance of
the Shares until completion of any action or obtaining of any consent,
which the Company deems necessary under any applicable law (including
without limitation state securities or "blue sky" laws).
12. NO OBLIGATION TO EMPLOY.
The Company is not by the Plan or this Option or any other agreement
obligated to continue the Participant as an employee, consultant or director of
the Company.
13. NOTICES.
Any notices required or permitted by the terms of this Agreement or the
Plan shall be given by recognized courier service, facsimile, registered or
certified mail, return receipt requested, addressed as follows:
To the Company: AMERICA ONLINE, INC.
8619 Westwood Center Drive
Vienna, Virginia 22182
To the Participant: As set forth in the Notice.
or to such other address or addresses of which notice in the same manner has
previously been given. Any such notice shall be deemed to have been given when
mailed in accordance with the foregoing provisions.
14. GOVERNING LAW.
This Agreement shall be construed and enforced in accordance with the law
of the State of Delaware.
15. BENEFIT OF AGREEMENT.
Subject to the provisions of the Plan and the other provisions hereof, this
Agreement shall be for the benefit of and shall be binding upon the heirs,
executors, administrators, successors and assigns of the parties hereto.
16. ENTIRE AGREEMENT.
This Agreement, together with the Plan, embodies the entire agreement and
understanding between the parties hereto with respect to the subject matter
hereof and supersedes all prior oral or written agreements and understandings
relating to the subject matter hereof. No statement, representation, warranty,
covenant or agreement not expressly set forth in this Agreement shall affect or
be used to interpret, change or restrict, the express terms and provisions of
this Agreement, provided, however, in any event, this Agreement shall be subject
to and governed by the Plan.
17. MODIFICATIONS AND AMENDMENTS.
The terms and provisions of this Agreement may be modified or amended only
by written agreement executed by all parties hereto.
18. WAIVERS AND CONSENTS.
The terms and provisions of this Agreement may be waived, or consent for
the departure therefrom granted, only by written document executed by the party
entitled to the benefits of such terms or provisions. No such waiver or consent
shall be deemed to be or shall constitute a waiver or consent with respect to
any other terms or provisions of this Agreement, whether or not similar. Each
such waiver or consent shall be effective only in the specific instance and for
the purpose for which it was given, and shall not constitute a continuing waiver
or consent.
19. HOLDING PERIOD APPLICABLE TO PERSONS SUBJECT TO
SECTION 16 OF THE SECURITIES EXCHANGE ACT OF 1934.
If the Participant to whom the Option has been granted pursuant to this
Agreement is subject to Section 16 of the Securities Exchange Act of 1934, then
at least six (6) months must elapse from the date of grant of the Option to the
date of disposition of the Shares.
Exhibit A
NOTICE OF EXERCISE OF NON-QUALIFIED STOCK OPTION
To: AMERICA ONLINE, INC.
IMPORTANT NOTICE: This form of Notice of Exercise may only be used at such time
as the Company has filed a Registration Statement with the Securities and
Exchange Commission under which the issuance of the Shares for which this
exercise is being made are registered and such Registration Statement remains
effective.
Ladies and Gentlemen:
I hereby exercise my Non-qualified Stock Option to purchase
shares (the "Shares") of the common stock, $.01 par value, of AMERICA ONLINE,
INC. (the "Company"), at the exercise price of $ per share,
pursuant to and subject to the terms of that certain Non-qualified Stock Option
Agreement between the undersigned and the Company dated , 199
.
I understand the nature of the investment I am making and the financial
risks thereof. I am aware that it is my responsibility to have consulted with
competent tax and legal advisors about the relevant national, state and local
income tax and securities laws affecting the exercise of the Option and the
purchase and subsequent sale of the Shares.
I am paying the option exercise price for the Shares as follows:
_____________________________________________________________________________.
If I am subject to Section 16 of the Securities Exchange Act of 1934, I
understand that at least six (6) months must elapse from the date of grant of
the Option to the date of disposition of the Shares.
Please issue the stock certificate for the Shares (check one):
_____ to me
_____ to me and _______ as joint tenants with right of
survivorship
and mail the certificate to me at the following address:
________________________________________________________________
________________________________________________________________
My mailing address, if different from the address listed above, for
shareholder communications is:
________________________________________________________________
________________________________________________________________
Very truly yours,
__________________________________
Participant (signature)
__________________________________
Print Name
__________________________________
Date
__________________________________
Social Security Number
1992 Plan/Version 2
NON-QUALIFIED STOCK OPTION AGREEMENT
AMERICA ONLINE, INC.
THIS AGREEMENT is made as of the Date of Grant set forth on the Notice of
Grant of Stock Options attached hereto (the "Notice") between America Online,
Inc. (the "Company"), a Delaware corporation having a principal place of
business in Dulles, Virginia, and the Participant.
WHEREAS, the Company desires to grant to the Participant an Option to
purchase shares of its common stock, $.01 par value per share (the "Shares"),
under and for the purposes set forth in the Company's 1992 Employee, Director
and Consultant Stock Option Plan (the "Plan");
WHEREAS, the Company and the Participant understand and agree that any
terms used and not defined herein have the same meanings as in the Plan; and
WHEREAS, the Company and the Participant each intend that the Option
granted herein shall be a Non-Qualified Option.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set
forth and for other good and valuable consideration, the parties hereto agree as
follows:
1. GRANT OF OPTION.
The Company hereby grants to the Participant the right and option to
purchase all or any part of an aggregate of such number of Shares as is set
forth in the Notice, on the terms and conditions and subject to all the
limitations set forth herein and in the Plan, which is incorporated herein by
reference.
2. PURCHASE PRICE.
The purchase price of the Shares covered by the Option shall be as set
forth in the Notice, subject to adjustment, as provided in the Plan, in the
event of a stock split, reverse stock split or other events affecting the
holders of Shares. Payment shall be made in accordance with Paragraph 7 of the
Plan.
3. EXERCISE OF OPTION.
Subject to the terms and conditions set forth in this Agreement and the
Plan, the Option granted hereby shall be exercisable according to the Vesting
Schedule set forth on the Notice.
The foregoing rights are cumulative and are subject to the other terms and
conditions of this Agreement and the Plan.
4. TERM OF OPTION.
Unless earlier terminated pursuant to the provisions of this Agreement or
the Plan, the unexercised portion of the Option shall expire and cease to be
exercisable at 5:00 p.m. on the tenth anniversary of the date of this Agreement.
If the Participant ceases to be an employee, director or consultant of the
Company or of an Affiliate (for any reason other than the death or Disability of
the Participant or termination of the Participant for "cause" (as defined in the
Plan)) the Option may be exercised, if it has not previously terminated, within
ninety (90) days after the date the Participant ceases to be an employee,
director or consultant of the Company or an Affiliate, or within the originally
prescribed term of the Option, whichever is earlier, but may not be exercised
thereafter. In such event, the Option shall be exercisable only to the extent
that the Option has become exercisable and is in effect at the date of such
cessation of employment, directorship or consultancy.
Notwithstanding the foregoing, in the event of the Participant's Disability
or death within three (3) months after the termination of employment,
directorship or consultancy, the Participant or the Participant's Survivors may
exercise the Option within one (1) year after the date of the Participant's
termination of employment, directorship or consultancy, but in no event after
the date of expiration of the term of the Option.
In the event the Participant's employment, directorship or consultancy is
terminated by the Company or an Affiliate for "cause" (as defined in the Plan),
the Participant's right to exercise any unexercised portion of this Option shall
cease as of such termination, and this Option shall thereupon terminate.
Notwithstanding anything herein to the contrary, if subsequent to the
Participant's termination, but prior to the exercise of the Option, the Board of
Directors of the Company determines that, either prior or subsequent to the
Participant's termination, the Participant engaged in conduct which would
constitute "cause," then the Participant shall immediately cease to have any
right to exercise the Option and this Option shall thereupon terminate.
In the event of the Disability of the Participant, as determined in
accordance with the Plan, the Option shall be exercisable within one (1) year
after the date of such Disability or, if earlier, the term originally prescribed
by the Option. In such event, the Option shall be exercisable:
(a) to the extent exercisable but not exercised as of the date of
Disability; and
(b) in the event rights to exercise the Option accrue periodically, to the
extent of a pro rata portion of any additional rights to exercise the
Option as would have accrued had the Participant not become Disabled
prior to the end of the accrual period which next ends following the
date of Disability. The proration shall be based upon the number of
days during the accrual period prior to the date of Disability.
In the event of the death of the Participant while an employee, director or
consultant of the Company or of an Affiliate, the Option shall be exercisable by
the Participant's Survivors within one (1) year after the date of death of the
Participant or, if earlier, within the originally prescribed term of the Option.
In such event, the Option shall be exercisable:
(x) to the extent exercisable but not exercised as of the date of death;
and
(y) in the event rights to exercise the Option accrue periodically, to the
extent of a pro rata portion of any additional rights to exercise the
Option as would have accrued had the Participant not died prior to the
end of the accrual period which next ends following the date of death.
The proration shall be based upon the number of days during the
accrual period prior to the Participant's death.
5. METHOD OF EXERCISING OPTION.
Subject to the terms and conditions of this Agreement, the Option may be
exercised by written notice to the Company at its principal executive office, in
substantially the form of Exhibit A attached hereto. Such notice shall state
the number of Shares with respect to which the Option is being exercised and
shall be signed by the person exercising the Option. Payment of the purchase
price for such Shares shall be made in accordance with Paragraph 7 of the Plan.
The Company shall deliver a certificate or certificates representing such Shares
as soon as practicable after the notice shall be received, provided, however,
that the Company may delay issuance of such Shares until completion of any
action or obtaining of any consent, which the Company deems necessary or
appropriate under any applicable law (including, without limitation, state
securities or "blue sky" laws and satisfaction of applicable tax withholding
requirements) and such Shares shall be subject to the restrictions set forth in
Section 7 of the Agreement and such other restrictions as the Administrator may
determine in accordance with the Plan. The certificate or certificates for the
Shares as to which the Option shall have been so exercised shall be registered
in the name of the person or persons so exercising the Option (or, if the Option
shall be exercised by the Participant and if the Participant shall so request in
the notice exercising the Option, shall be registered in the name of the
Participant and another person jointly, with right of survivorship) and shall be
delivered as provided above to or upon the written order of the person or
persons exercising the Option. In the event the Option shall be exercised,
pursuant to Section 4 hereof, by any person or persons other than the
Participant, such notice shall be accompanied by appropriate proof of the right
of such person or persons to exercise the Option. All Shares that shall be
purchased upon the exercise of the Option as provided herein shall be fully paid
and nonassessable.
6. PARTIAL EXERCISE.
Exercise of this Option to the extent above stated may be made in part at
any time and from time to time within the above limits, except that no
fractional share shall be issued pursuant to this Option.
7. NON-ASSIGNABILITY.
The Option shall not be transferable by the Participant otherwise than by
will or by the laws of descent and distribution or pursuant to an applicable
order of a court of competent jurisdiction. Except as provided in the previous
sentence, the Option shall be exercisable, during the Participant's lifetime,
only by the Participant (or, in the event of legal incapacity or incompetency,
by the Participant's guardian or representative) and shall not be assigned,
pledged or hypothecated in any way (whether by operation of law or otherwise)
and shall not be subject to execution, attachment or similar process. Any
attempted transfer, assignment, pledge, hypothecation or other disposition of
the Option or of any rights granted hereunder contrary to the provisions of this
Section 7, or the levy of any attachment or similar process upon the Option or
such rights shall be null and void.
8. NO RIGHTS AS STOCKHOLDER UNTIL EXERCISE.
The Participant shall have no rights as a stockholder with respect to
Shares subject to this Agreement until registration of the Shares in the
Company's share register in the name of the Participant. Except as is expressly
provided in the Plan with respect to certain changes in the capitalization of
the Company, no adjustment shall be made for dividends or similar rights for
which the record date is prior to the date of such registration.
9. CAPITAL CHANGES AND BUSINESS SUCCESSIONS.
The Plan contains provisions covering the treatment of Options in a number
of contingencies such as stock splits and mergers. Provisions in the Plan for
adjustment with respect to stock subject to Options and the related provisions
with respect to successors to the business of the Company are hereby made
applicable hereunder and are incorporated herein by reference.
10. TAXES.
The Participant acknowledges that upon exercise of the Option the
Participant will be deemed to have taxable income measured by the difference
between the then fair market value of the Shares received upon exercise and the
price paid for such Shares pursuant to this Agreement. The Participant
acknowledges that any income or other taxes due from him or her with respect to
this Option or the Shares issuable pursuant to this Option shall be the
Participant's responsibility.
The Participant agrees that the Company may withhold from the Participant's
remuneration, if any, the appropriate amount of federal, state and local
withholding attributable to such amount that is considered compensation
includable in such person's gross income. At the Company's discretion, the
amount required to be withheld may be withheld in cash from such remuneration,
or in kind from the Shares otherwise deliverable to the Participant on exercise
of the Option. The Participant further agrees that, if the Company does not
withhold an amount from the Participant's remuneration sufficient to satisfy the
Company's income tax withholding obligation, the Participant will reimburse the
Company on demand, in cash, for the amount under-withheld.
11. PURCHASE FOR INVESTMENT.
Unless the offering and sale of the Shares to be issued upon the particular
exercise of the Option shall have been effectively registered under the
Securities Act of 1933, as now in force or hereafter amended (the "1933 Act"),
the Company shall be under no obligation to issue the Shares covered by such
exercise unless and until the following conditions have been fulfilled:
(a) The person(s) who exercise the Option shall warrant to the Company, at
the time of such exercise, that such person(s) are acquiring such
Shares for their own respective accounts, for investment, and not with
a view to, or for sale in connection with, the distribution of any
such Shares, in which event the person(s) acquiring such Shares shall
be bound by the provisions of the following legend which shall be
endorsed upon the certificate(s) evidencing the Shares issued pursuant
to such exercise:
"The shares represented by this certificate have been taken for
investment and they may not be sold or otherwise transferred by
any person, including a pledgee, unless (1) either (a) a
Registration Statement with respect to such shares shall be
effective under the Securities Act of 1933, as amended, or (b)
the Company shall have received an opinion of counsel
satisfactory to it that an exemption from registration under such
Act is then available, and (2) there shall have been compliance
with all applicable state securities laws;" and
(b) If the Company so requires, the Company shall have received an opinion
of its counsel that the Shares may be issued upon such particular
exercise in compliance with the 1933 Act without registration
thereunder. Without limiting the generality of the foregoing, the
Company may delay issuance of the Shares until completion of any
action or obtaining of any consent, which the Company deems necessary
under any applicable law (including without limitation state
securities or "blue sky" laws).
12. NO OBLIGATION TO MAINTAIN RELATIONSHIP.
The Company is not by the Plan or this Option obligated to continue the
Participant as an employee, director or consultant of the Company.
13. NOTICES.
Any notices required or permitted by the terms of this Agreement or the
Plan shall be given by recognized courier service, facsimile, registered or
certified mail, return receipt requested, addressed as follows:
If to the Company: America Online, Inc.
22000 AOL Way
Dulles, Virginia 20166
Attn:
If to the Participant: As set forth in the Notice
or to such other address or addresses of which notice in the same manner has
previously been given. Any such notice shall be deemed to have been given upon
the earlier of receipt, one business day following delivery to a recognized
courier service or three business days following mailing by registered or
certified mail.
14. GOVERNING LAW.
This Agreement shall be construed and enforced in accordance with the law
of the State of Delaware, without giving effect to the conflict of law
principles thereof.
15. BENEFIT OF AGREEMENT.
Subject to the provisions of the Plan and the other provisions hereof, this
Agreement shall be for the benefit of and shall be binding upon the heirs,
executors, administrators, successors and assigns of the parties hereto.
16. ENTIRE AGREEMENT.
This Agreement, together with the Plan, embodies the entire agreement and
understanding between the parties hereto with respect to the subject matter
hereof and supersedes all prior oral or written agreements and understandings
relating to the subject matter hereof. No statement, representation, warranty,
covenant or agreement not expressly set forth in this Agreement shall affect or
be used to interpret, change or restrict, the express terms and provisions of
this Agreement, provided, however, in any event, this Agreement shall be subject
to and governed by the Plan.
17. MODIFICATIONS AND AMENDMENTS.
The terms and provisions of this Agreement may be modified or amended as
provided in the Plan.
18. WAIVERS AND CONSENTS.
Except as provided in the Plan, the terms and provisions of this Agreement
may be waived, or consent for the departure therefrom granted, only by written
document executed by the party entitled to the benefits of such terms or
provisions. No such waiver or consent shall be deemed to be or shall constitute
a waiver or consent with respect to any other terms or provisions of this
Agreement, whether or not similar. Each such waiver or consent shall be
effective only in the specific instance and for the purpose for which it was
given, and shall not constitute a continuing waiver or consent.
19. FORMATION; SEVERABILITY.
If any provision of this Agreement (including any provision of the Plan
that is incorporated herein by reference) shall hereafter be held to be invalid,
unenforceable or illegal, in whole or in part, in any jurisdiction under any
circumstances for any reason, (i) such provision shall be reformed to the
minimum extent necessary to cause such provision to be valid, enforceable and
legal while preserving the intent of the parties as expressed in, and the
benefits of the parties provided by, this Agreement and the Plan or (ii) if such
provision cannot be so reformed, such provision shall be severed from this
Agreement and an equitable adjustment shall be made to this Agreement
(including, without limitation, addition of necessary further provisions to this
Agreement) so as to give effect to the intent as so expressed and the benefits
so provided. Such holding shall not affect or impair the validity,
enforceability or legality of such provision in any other jurisdiction or under
any other circumstances. Neither such holding nor such reformation or severance
shall affect the legality, validity or enforceability of any other provision of
this Agreement or the Plan.
Exhibit A
NOTICE OF EXERCISE OF NON-QUALIFIED STOCK OPTION
[Form of Registered Shares]
TO: America Online, Inc.
IMPORTANT NOTICE: This form of Notice of Exercise may only be used for such
time as the Company has filed a Registration Statement with the Securities and
Exchange Commission under which the issuance of the Shares for which this
exercise is being made is registered and such Registration Statement remains
effective.
Ladies and Gentlemen:
I hereby exercise my Non-Qualified Stock Option to purchase _________
shares (the "Shares") of the common stock, $.01 par value of America Online,
Inc. (the "Company"), at the exercise price of $________ per share, pursuant to
and subject to the terms of that certain Non-Qualified Stock Option Agreement
between the undersigned and the Company dated _______________, ______.
I understand the nature of the investment I am making and the financial
risks thereof. I am aware that it is my responsibility to have consulted with
competent tax and legal advisors about the relevant national, state and local
income tax and securities laws affecting the exercise of the Option and the
purchase and subsequent sale of the Shares.
If I am subject to Section 16 of the Securities Exchange Act of 1934, I
understand that at least six (6) months must elapse from the date of grant of
the Option to the date of disposition of the Shares.
I am paying the option exercise price for the Shares as follows:
Please issue the stock certificate for the Shares (check one):
[ ] to me; or
[ ] to me and ____________________________, as joint tenants with right of
survivorship,
and mail the certificate to me at the following address:
My mailing address for shareholder communications, if different from the
address listed above, is:
Very truly yours,
Participant (signature)
Print Name
Date
Social Security Number
