As filed with the Securities and Exchange Commission on March 17, 1999
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 its Charter)
DELAWARE 54-1322110
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
22000 AOL Way
Dulles, Virginia 20166-9323
(Address of Principal Executive Offices,
including Zip Code)
Insoft, Inc. 1993 Stock Option Plan
Sheila A. Clark, Esq.
Acting General Counsel
America Online, Inc.
22000 AOL Way
Dulles, Virginia 20166-9323
(703) 265-1000
(Name, Address, including Zip Code, and Telephone Number,
including Area Code, of Agent for Service)
CALCULATION OF REGISTRATION FEE
<TABLE>
Proposed Maximum Proposed Maximum
Title of Each Securities Amount to be Offering Price Per Aggregate Offering Amount of
to be Registered (1) Registered Share (2) Price Registration Fee
<S> <C> <C> <C> <C>
Common Stock, par value 7,750 shares $9.32 $72,230.00 $20.08
$0.01 per share
</TABLE>
(1) Common Stock being registered hereby includes associated Preferred
Share Purchase Rights, which initially are attached to and traded with
the shares of the Registrant's Common Stock. Value attributable to such
rights, if any, is reflected in the market price of the Common Stock.
(2) 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 7,750 shares of
Common Stock , which may be purchased upon exercise of outstanding
options, the fee is based on the average price of $9.32 at which
options may be exercised.
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The documents containing the information specified in Part I will be
sent or given to employees as specified by Rule 428(b)(1). Such documents are
not being filed with the Securities and Exchange Commission (the "Commission")
either as part of this Registration Statement or as prospectuses or prospectus
supplements pursuant to Rule 424. Such documents and the documents incorporated
by reference in this Registration Statement pursuant to Item 3 of Part II of
this Form, taken together, constitute a prospectus that meets the requirements
of Section 10(a) of the Securities Act.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents have been filed by America Online, Inc., a Delaware
corporation (the "Company"), with the Commission and are incorporated herein by
reference:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended June
30, 1998 (SEC file number 001-12143 and filing date of September 28,
1998)
(b) The Company's Quarterly Report on Form 10-Q, for the quarterly period
ended September 30, 1998 (SEC file number 001-12143 and filing date of
November 6, 1998)
(c) The Company's Quarterly Report on Form 10-Q, for the quarterly period
ended December 31, 1998 (SEC file number 001-12143 and filing date of
February 10, 1999)
(d) The Company's Proxy Statement on Schedule 14A for the Company's 1998
Annual Meeting (SEC file number 001-12143 and filing date of September
28, 1998)
(e) The Company's Current Report on Form 8-K dated August 4, 1998 (SEC file
number 001-12143 and filing date of August 5, 1998)
(f) The Company's Current Report on Form 8-K dated September 28, 1998 (SEC
file number 001-12143 and filing date of September 29, 1998)
(g) The Company's Current Report on Form 8-K dated November 23, 1998 (SEC
file number 001-12143 and filing date of November 24, 1998)
(h) The Company's Current Report on Form 8-K dated February 1, 1999 (SEC
file number 001-12143 and filing date of February 11, 1999)
(i) The Company's Current Report on Form 8-K dated November 9, 1998 (SEC
file number 001-12143 and filing date of February 17, 1999)
(j) The description of the common stock set forth in the Company's
Registration Statement on Form S-3 dated June 24, 1998 (SEC file number
333-57153 and filing date of June 24, 1998) filed pursuant to Section
12 of the Securities Exchange Act
(k) The description of the preferred share purchase rights contained in the
Company's Quarterly Report on Form 10-Q for the quarter ended March 31,
1998 (SEC file number 001-12143 and filing date of May 15, 1998)
(l) 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.
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), because the person 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 the person in connection with such action, suit or
proceeding, if the person acted in good faith and in a manner the person
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
person did not have reasonable cause to believe the person's 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 because the person is or was a director or officer of the
corporation, against any expenses (including attorneys' fees) actually and
reasonably incurred by the person in connection with the defense or settlement
of such action or suit if the person acted in good faith and in a manner the
person 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 the person in any such capacity, or
arising out of the person's status as such, whether or not the corporation would
have the power to indemnify the person against such liability under the
provisions of the law.
Article Ninth of the Registrant's Restated Certificate of Incorporation
(incorporated by reference herein) provides for indemnification of directors,
officers and other persons as follows:
To the fullest extent permitted by the Delaware
General Corporation Law as the same now exists or may hereafter be
amended, the Corporation shall indemnify, and advance expenses to, its
directors and officers and any person who is or was serving at the
request of the Corporation as a director or officer, employee or agent
of another corporation, partnership, joint venture, trust or other
enterprise. The Corporation, by action of its board of directors, may
provide indemnification or advance expenses to employees and agents of
the Corporation or other persons only on such terms and conditions and
to the extent determined by the board of directors in its sole and
absolute discretion.
The indemnification and advancement of expenses
provided by, or granted pursuant to, this Article Ninth shall not be
deemed exclusive of any other rights to which those seeking
indemnification or advancement of expenses may be entitled under any
By-law, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in his official capacity and as to action
in another capacity while holding such office.
The Corporation shall have the power to purchase and
maintain insurance on behalf of any person who is or was a director,
officer, employee or agent of the Corporation, or is or was serving at
the request of the Corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or
other enterprise, against any liability asserted against him and
incurred by him in any such capacity, or arising out of his status as
such, whether or not the Corporation would have the power to indemnify
him against such liability under this Article Ninth.
The indemnification and advancement of expenses
provided by, or granted pursuant to, this Article Ninth shall, unless
otherwise provided when authorized or ratified, continue as to a person
who has ceased to be a director or officer and shall inure to the
benefit of the heirs, executors and administrators of such officer or
director. The indemnification and advancement of expenses that may have
been provided to an employee or agent of the Corporation by action of
the board of directors, pursuant to the last sentence of Paragraph 1 of
this Article Ninth, shall, unless otherwise provided when authorized or
ratified, continue as to a person who has ceased to be an employee or
agent of the Corporation and shall inure to the benefit of the heirs,
executors and administrators of such a person, after the time such
person has ceased to be an employee or agent of the Corporation, only
on such terms and conditions and to the extent determined by the board
of directors in its sole discretion.
Article Five of the Registrant's Restated By-Laws (incorporated by
reference herein) provides that:
Right to Indemnification. Each person who was or is made a party or is
threatened to be made a party to or is otherwise involved in any
action, suit or proceeding, whether civil, criminal, administrative or
investigative, because he is or was a director or an officer of the
Corporation or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation or of a
partnership, joint venture, trust or other enterprise, including
service with respect to an employee benefit plan (hereinafter an
"Indemnitee"), whether the basis of such proceeding is alleged action
in an official capacity as a director, officer, employee or agent or in
any other capacity while serving as a director, officer, employee or
agent, shall be indemnified and held harmless by the Corporation to the
fullest extent authorized by the Delaware General Corporation Law, as
the same exists or may hereafter be amended (but, in the case of any
such amendment, only to the extent that such amendment permits the
Corporation to provide broader indemnification rights than such law
permitted the Corporation to provide before such amendment), against
all expense, liability and loss (including attorney's fees, judgments,
fines, ERISA excise taxes or penalties and amounts paid in settlement)
reasonably incurred or suffered by such Indemnitee in connection
therewith; provided, however, that, except as provided in the section
"Right of Indemnitees to Bring Suit" of this Article with respect to
proceedings to enforce rights to indemnification, the Corporation shall
indemnify any such Indemnitee in connection with a proceeding (or part
thereof) initiated by such Indemnitee only if such proceeding (or part
thereof) was authorized by the board of directors of the Corporation.
Right to Advancement of Expenses. The right to indemnification
conferred in the section "Right to Indemnification" of this Article
shall include the right to be paid by the Corporation the expenses
(including attorney's fees) incurred in defending any such proceeding
in advance of its final disposition; provided, however, that, if the
Delaware General Corporation Law requires, an advancement of expenses
incurred by an Indemnitee in his capacity as a director or officer (and
not in any other capacity in which service was or is rendered by such
Indemnitee, including, without limitation, service to an employee
benefit plan) shall be made only upon delivery to the Corporation of an
undertaking, by or on behalf of such Indemnitee, to repay all 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 section "Right
to Indemnification" or "Right to Advancement of Expenses" of this
Article is not paid in full by the Corporation within sixty (60) days
after a written claim has been received by the Corporation, except in
the case of a claim for an advancement of expenses, in which case the
applicable period shall be twenty (20) days, the Indemnitee may at any
time thereafter bring suit against the Corporation to recover the
unpaid amount of the claim. If successful in whole or in part in any
such suit, or in a suit brought by the Corporation to recover an
advancement of expenses pursuant to the terms of an undertaking, the
Indemnitee shall also be entitled to be paid the expenses of
prosecuting or defending such suit. In (1) 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 (2) in any suit brought by
the Corporation to recover an advancement of expenses pursuant to the
terms of an undertaking, the Corporation shall be entitled to recover
such expenses upon a final adjudication that, the Indemnitee has not
met any applicable standard for indemnification set forth in the
Delaware General Corporation Law. Neither the failure of the
Corporation (including its board of directors, independent legal
counsel, or its stockholders) to have made a determination prior to the
commencement of such suit that indemnification of the Indemnitee is
proper in the circumstances because the Indemnitee has met the
applicable standard of conduct set forth in the Delaware General
Corporation Law, nor an actual determination by the Corporation
(including its board of directors, independent legal counsel, or its
stockholders) that the Indemnitee has not met such applicable standard
of conduct, shall create a presumption that the Indemnitee has not met
the applicable standard of conduct or, in the case of such a suit
brought by the Indemnitee, be a defense to such suit. In any suit
brought by the Indemnitee to enforce a right to indemnification or to
an advancement of expenses hereunder, or brought by the Corporation to
recover an advancement of expenses pursuant to the terms of an
undertaking, the burden of proving that the Indemnitee is not entitled
to be indemnified, or to such advancement of expenses, under this
Article or otherwise shall be on the Corporation.
Non-Exclusivity of Rights. The rights to indemnification and to the
advancement of expenses conferred in this Article shall not be
exclusive of any other right which any person may have or hereafter
acquire under any statute, the Corporation's Certificate of
Incorporation as amended from time to time, these By-Laws, any
agreement, any vote of stockholders or disinterested directors or
otherwise.
Insurance. The Corporation may maintain insurance, at its expense, to
protect itself and any director, officer, employee or agent of the
Corporation or another corporation, partnership, joint venture, trust
or other enterprise against any expense, liability or loss, whether or
not the Corporation would have the power to indemnify such person
against such expense, liability or loss under the Delaware General
Corporation Law.
Indemnification of Employees and Agents of the Corporation. The
Corporation may, to the extent authorized from time to time by the
board of directors, grant rights to indemnification and to the
advancement of expenses to any employee or agent of the Corporation to
the fullest extent of the provisions of this Article with respect to
the indemnification and advancement of expenses of directors and
officers of the Corporation.
The directors and officers of the Registrant are covered by a policy of
liability insurance.
Item 7. Exemption From Registration Claimed.
Not applicable.
Item 8. Exhibits.
Exhibit
Number Description
4.1 Article 4, Article 6, Article 8 and Article 11 of the Restated
Certificate of Incorporation of America Online, Inc. (filed as part of
Exhibit 3.1 to America Online, Inc.'s Form 10-K for the year ended
June 30, 1997 and incorporated herein by reference)
4.2 Amendment of Section A of Article 4 of the Restated Certificate of
Incorporation of America Online, Inc. (filed as Exhibit 3.1 to America
Online, Inc.'s Quarterly Report on Form 10-Q for the quarter ended
September 30, 1998 and incorporated herein by reference)
4.3 Rights Agreement dated as of May 12, 1998, between America Online,
Inc. and BankBoston, N.A., as Rights Agent (filed as Exhibit 4.1 to
America Online, Inc.'s Quarterly Report on Form 10-Q for the quarter
ended March 31, 1998 and incorporated herein by reference)
4.4 Restated By-Laws of America Online, Inc. (filed as Exhibit 3.5 to
America Online, Inc.'s Annual Report on Form 10-K for the fiscal year
ended June 30, 1998 and incorporated herein by reference)
4.5 Insoft, Inc. 1993 Stock Option Plan
5.1 Opinion of Sheila A. Clark, Acting General Counsel to the Company
(including the consent of such acting general counsel) regarding the
legality of the securities being offered
23.1 Consent of Ernst & Young LLP
23.2 Consent of Sheila A. Clark (included in her opinion filed as Exhibit
5.1 and incorporated herein by reference)
24.1 Powers of Attorney (filed as Exhibit 24.1 to America Online, Inc.'s
Registration Statement on Form S-8 for the AtWeb, Inc. 1997 Stock Plan
filed on March 17, 1999 and incorporated herein by reference)
Item 9. Undertakings.
(a) The Registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this
registration statement:
(i) To include any prospectus required by Section
10(a)(3) of the 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; and
(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.
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, hereunto duly
authorized, in the County of Loudoun, State of Virginia, on this 17th day of
March, 1999.
AMERICA ONLINE, INC.
By: /s/J.Michael Kelly
Name: J. Michael Kelly
Title: Senior Vice President,
Chief Financial Officer,
Treasurer and Assistant Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed on the 17th day of March, 1999, by the
following persons in the capacities indicated.
Signature Title
* Chairman of the Board and Chief Executive Officer
Stephen M. Case (Principal Executive Officer)
* President, Chief Operating Officer and Director
Robert W. Pittman
Senior Vice President, Chief Financial Officer,
/s/J. Michael Kelly Treasurer and Assistant Secretary
J. Michael Kelly (Principal Financial Officer)
* Vice President, Controller, Chief Accounting and
James F. MacGuidwin Budget Officer (Principal Accounting Officer)
* Director
Daniel F. Akerson
* Director
Frank J. Caufield
* Director
Alexander M. Haig, Jr.
* Director
William N. Melton
* Director
Thomas Middelhoff
* Director
Colin L. Powell
* Director
Franklin D. Raines
* By: /s/J. Michael Kelly
J. Michael Kelly
Attorney-In-Fact
Exhibit Index
Exhibit
Number Description
4.5 Insoft, Inc. 1993 Stock Option Plan
5.1 Opinion of Sheila A. Clark, Acting General Counsel to the Company
(including the consent of such acting general counsel) regarding the
legality of the securities being offered
23.1 Consent of Ernst & Young LLP
23.2 Consent of Sheila A. Clark (included in her opinion filed as Exhibit
5.1 and incorporated herein by reference)
INSOFT, INC.
1993 STOCK OPTION PLAN
Adopted: October 7, 1993
Effective: October 8, 1993
INSOFT, INC.
1993 STOCK OPTION PLAN
Section 1.
Title
This plan shall be known as the "InSoft, Inc. 1993 Stock Option Plan."
Section 2.
Purpose
This InSoft, Inc. 1993 Stock Option Plan establishes a method of
granting options to purchase the Common Stock of the Corporation in order to
encourage stock ownership by officers, key employees and key consultants and
directors of the Corporation, to provide an incentive for such persons to expand
and improve the profits and prosperity of the Corporation, and to assist the
Corporation in attracting key personnel.
Section 3.
Definitions
The following definitions shall be in effect under this Plan:
3.1 "Board" means the Board of Directors of the Corporation.
3.2 "Common Stock" means shares of the capital common stock of
the Corporation, $.01 par value.
3.3 "Corporation" means InSoft, Inc., a Delaware corporation.
3.4 "Disability" means inability to engage in any substantial
gainful activity by reason of any medically determinable physical or mental
impairment that can be expected to result in death or that has lasted or can be
expected to last for a continuous period of not less than twelve months, as
determined pursuant to Section 22(e)(3) of the Internal Revenue Code.
3.5 "Employee" means an employee, officer, director or consultant
of any Participating Corporation.
3.6 "Incentive Stock Option" means an Option that is an incentive
stock option as defined in Section 422A(b) of the Internal Revenue Code.
3.7 "Internal Revenue Code" means the United States Internal
Revenue Code of 1986, or any of its successors, and applicable rules and
regulations promulgated thereunder, each as amended through the date of adoption
of the Plan, or as each may in the future be amended and applicable to the Plan.
3.8 "Non-Qualified Stock Option" means an Option that is not an
Incentive Stock Option.
3.9 "Option" means any option granted under the Plan, including
both Incentive Stock Options and Non-Qualified Stock Options.
3.10 "Option Agreement" means any written agreement pursuant to
the Plan between the Corporation and a Participant regarding any Option.
3.11 "Optionee" means a Participant who has delivered to the
Corporation or a Participating Corporation a signed Option Agreement pursuant to
Section 6.6 of the Plan.
3.12 "Option Shares" means shares of stock of the Corporation
that are issued or may be required to be issued upon exercise of an Option and
shares that are issued thereafter with respect to such shares, including shares
issued by reason of a stock split, consolidation, dividend, stock exchange,
recapitalization, reclassification or the like.
3.13 "Participant" means a person to whom an Option has been
granted.
3.14 "Participating Corporation" means the Corporation and any
present or future parent or subsidiary of the Corporation that: (a) the Board
elects to treat as a Participating Corporation, and (b) agrees to be a
Participating Corporation.
3.15 "Plan" means this InSoft, Inc. 1993 Stock Option Plan.
Section 4.
Stock Reserved for Options
4.1 Subject to adjustment in accordance with the provisions of
section 14.1 of the Plan, [105,507] [92,507] shares of Common Stock shall be
reserved for issuance upon the exercise of Options granted under the Plan.
4.2 Any or all of the shares subject to Options under the Plan
may be authorized but unissued shares of Common Stock, or issued shares of
Common Stock that have been or shall have been reacquired by the Corporation, as
the Board shall from time to time determine.
4.3 If any Option shall expire or terminate for any reason
without having been exercised in full, the unpurchased shares previously subject
to the Option shall again be available for the purposes of the Plan.
Section 5.
Eligibility
5.1 The Board may grant Incentive Stock Options under the
following rules of eligibility:
(a) Incentive Stock Options may be granted only to individuals
determined by the Board to be employees who are key personnel of a participating
Corporation and who are in a position to contribute materially to the
Participating Corporation's continued growth and development and to its future
financial success.
(b) A director, officer or consultant of any Participating
Corporation who is not also an employee of that or any other Participating
Corporation shall not be eligible to receive an Incentive Stock Option.
5.2 The Board may grant Non-Qualified Stock Options to such
employees, directors, officers and consultants of any Participating Corporation,
or to such other persons, as the board deems appropriate in its sole and
exclusive discretion, without regard to the provisions of Section 5.1(a) and
(b).
Section 6.
Grants of Options
6.1 The Board shall clearly designate and identify each Option at
the time it is granted as either an Incentive Stock Option or a Non-Qualified
Stock Option, as the case may be.
6.2 The Board may grant both Incentive Stock Options and
Non-Qualified Stock Options to the same Employee, provided that the exercise of
one such Option does not in any way affect the Employee's right to exercise the
other.
6.3 Nothing contained in the Plan shall be construed to limit the
right of a Participating Corporation to grant options otherwise than under the
Plan for any corporate purpose, including the acquisition, by purchase, lease,
merger, consolidation or otherwise, of the business or assets of any corporation
or other entity.
6.4 The date of granting of an Option shall be the date that the
Board shall have granted the Option or such other date the board, in its
discretion, may specify at the time that it grants such Option.
6.5 Upon granting an Option, the Board shall notify the
Participant to whom the Option shall have been granted and shall deliver an
Option Agreement to such Participant.
6.6 An Option shall expire thirty (30) days after delivery of the
Option Agreement to the Participant unless an Option Agreement shall have been
signed by the Participant to whom the Option is granted and returned to the
Corporation within such period.
Section 7.
Purchase Price
7.1 Subject to section 7.2 of the Plan, the purchase price of
Option shares granted under an Incentive Stock Option shall be one hundred
(100%) percent of the fair market value of the Option Shares at the time of
granting of the Incentive Stock Option, or such greater amount as the Board, in
its discretion, may fix. If shares of Common Stock shall then be traded on a
national securities exchange, such fair market value shall not be less than the
mean of the highest and lowest sales prices of the Common Stock upon such
exchange on the day on which the Incentive Stock Option shall have been granted,
or if no sale shall have been made on such day, upon the next preceding day upon
which such a sale shall have been made. If shares of Common Stock shall then be
traded "over the counter," such fair market value shall not be less than the
mean between the dealer "bid" and "ask" prices quoted by a recognized specialist
of the Common Stock on the date upon which the Incentive Stock Option shall have
been granted, or if no such quotation shall have been made on such day, on the
next preceding day on which such a quotation shall have been made. If the shares
of Common Stock are not traded either over-the-counter or on a national
securities exchange at the time that an Incentive Stock Option is granted, the
board shall determine such fair market value. In so determining the fair market
value of Common Stock, the board shall disregard any restrictions other than
restriction that, by its terms, will never lapse.
7.2 The purchase price of Option Shares granted under an
Incentive Stock Option granted to an Employee who owns, immediately prior to the
grant to such employee of an Incentive Stock Option, stock possessing more than
ten (10%) percent of the total combined voting power of all classes of stock of
the Participating Corporation by which he is employed, or any parent or
subsidiary corporation, shall be at least one hundred ten (110%) percent of the
fair market value of the Common Stock (determined in accordance with the
provisions of Section 7.1) at the time that such Incentive Stock Option is
granted. The provisions of section 425(d) of the Internal Revenue Code shall
control determination of the percentage of stock ownership for the purpose of
this section 7.2.
7.3 The purchase price of Option Shares granted under a
Non-Qualified Stock Options shall be determined by the Board, operating in its
sole and exclusive discretion, without regard to the provisions of sections 7.1
and 7.2.
7.4 No variable price Options shall be permitted.
Section 8.
Term of Options
8.1 The Board, in its discretion, may prescribe in the Option
Agreement the period during which Options may be exercised, provided, that an
Incentive Stock Option shall not be exercisable more than ten years from the
date upon which is granted, and, provided further, that an Incentive Stock
Option granted to an Employee described in section 7.2 above shall not be
exercisable more than five years from the date upon which it is granted.
8.2 In the Option Agreement, the Board, in its discretion, may
prescribe any conditions or events upon which the period during which an Option
may be exercised may be shortened or terminated.
8.3 Notwithstanding ht the provisions of Sections 8.1 and 8.2, if
any of the following events shall occur, the corporation shall provide written
notice thereof to each Optionee, who shall thereupon have the right to exercise
all unexpired Options granted under this Plan for a period of at least thirty
(30) days prior to the consummation of said agreement or immediately following
said acquisition or increase: (a) the Corporation shall execute a definitive
agreement to merge or consolidate with or into another corporation (other than a
Participating Corporation) and the Corporation shall not be the surviving
corporation in the merger (or shall become a subsidiary of any other corporation
or party to such merger agreement); (b) the Corporation shall enter into a
definitive agreement to sell or otherwise dispose of all or substantially all of
its assets and the shareholders of the Corporation shall have approved the terms
of such agreement; or (c ) any person or group shall acquire, or increase its
ownership to, more than 50% of the Corporation's then outstanding voting stock.
Section 9.
Exercise of Options
9.1 Subject to the provision of ht section 9.3, the Board, in its
discretion, may prescribe in the Option Agreement the manner in which, the
number and size of the installments (which need not be equal) for which, and the
contingencies upon which an Option may be exercised during its term.
9.2 No Option or installment thereof shall be exercisable except
in respect of whole shares. Fractional share interests shall be disregarded,
except that they may be accumulated. If an Optionee does not purchase all the
shares that the Optionee shall be entitled to purchase in any given installment
period, or if a fractional share interest shall remain, then the Optionee's
right to purchase the remaining shares or fractional shares shall continue until
expiration of such Option. No less than one hundred (100) shares may be
purchased at one time unless the number purchased is the total number that may
then be purchased under the Option.
9.3 During any calendar year, an Optionee may exercise an
Incentive Stock Option only to the extent that the aggregate fair market value
of the Common Stock (determined in accordance with the provisions of section 7.1
of the Plan) with respect to which Incentive Stock Options are exercisable for
the first time by the Optionee during such calendar year (under this Plan and
all similar plans of the Participating Corporation by which the Optionee is
employed and its parent or subsidiary corporations) does not exceed One Hundred
Thousand Dollars ($100,000).
9.4 Except as otherwise provided in section s9.5, 9.6 and 9.7, no
Incentive Stock Option may be exercised unless, at the time of exercise, the
Optionee shall be an Employee or the Optionee's status as an Employee with a
Participating Corporation shall have terminated within the preceding ninety (90)
days. Incentive Stock Options granted under the Plan shall not be affected by
any change of nature of the Optionee's employment so long as the Optionee
continues to be an Employee. Option Agreements may contain such provisions as
the Board may approve with reference to the effect of approved leaves of
absence. Nothing in the Plan, or in any Option Agreement, or any Option, shall
confer upon any individual any right to continue in the employ of any
Participating Corporation, or shall interfere in any way with the right of any
Participating Corporation to terminate the status of any Employee at any time.
9.5 If the holder of an Incentive Stock Option retires at the
normal retirement date as prescribed from time to time under any policy of the
Participating Corporation then in force by which is employed, or at any other
date with the consent of such Participating Corporation or under any policy of
such Participating Corporation then in force, he may exercise his Incentive
Stock Option at any time within three months after such retirement, to the
extent of the number of shares that shall have been purchasable by him on the
date of his retirement.
9.6 If the holder of an Incentive Stock Option ceases to be
employed by a Participating Corporation because of Disability, he may exercise
his Incentive Stock Option within twelve months from the date of such
termination of his employment, to the extent of the number of shares that shall
have been purchasable by him on the date his employment terminated.
9.7 If the holder of an Incentive Stock Option dies: (a) while he
is an Employee, (b) within three months after termination of his employment
(other than by death), or (c ) within twelve months after termination of his
employment on account of Disability, his legatee or legatees or his personal
representatives or distributees (collectively, "legal representatives") may
exercise his Incentive Stock Option to the extent of the number of shares that
shall have been purchasable by the Optionee on the date of death.
9.8 The Board, in its discretion, shall determine the extent, if
any, to which the holder of a NQ may exercise said Option upon his termination
as an Employee, his retirement or Disability, or to which a legal representative
of a deceased holder of a NQ may exercise said Option after the death of the
holder.
Section 10.
Payment for Option Shares
10.1 Upon exercise of an Incentive Stock Option the purchase
price of the Option Shares shall be paid in full in cash or by certified or bank
cashier's check, or by transfer to the Corporation by the Optionee of stock of
the Corporation owned by the Optionee having a fair market value, on the date of
such a transfer, equal to the purchase price of the Option Shares.
10.2 The means of payment for Option Shares purchased under a
Non-Qualified Stock Option shall be determined by the Board, operating in its
sole discretion.
10.3 The proceeds received from a sale of Option Shares pursuant
to exercise of Options shall be added to the general funds of the Corporation
and used for such of its corporate purposes as the Board shall determine.
Section 11.
Administration of the Plan
11.1 The Plan shall be administered by the Board.
11.2 Subject to the express provisions of the Plan the board
shall have the plenary authority in its discretion to: (a) grant or refrain from
granting Options; (b) determine the individuals to whom, and the time or times
at which, Options shall be granted; the type of Option to be granted; the number
of shares of Common Stock to be subject to each Option; the class of shares of
Common Stock to be subject to each Option; and the purchase price of the Common
Stock subject to each Option; (c ) interpret the Plan; (d) prescribe, amend and
rescind rules and regulations relating to the Plan; (e) determine the terms,
conditions and provisions of all Option Agreements entered into pursuant to the
Plan (which need not be identical); and (f) make all other determinations
necessary or advisable for administration of the Plan.
11.3 The Board's determinations of all matters referred to the
Board's discretion shall be final and conclusive. In making such determinations,
the Board may take into account such factors as the Board, in its discretion,
may deem relevant, including the nature of the services rendered by the
individuals involved and the present and potential contributions of such
individuals to the success of the Corporation.
11.4 Any director to whom an Option is proposed to be granted
shall be ineligible to vote upon the granting of, and other matters relating to,
such Option, but the remainder of the Board may grant Options to any such
director, subject to the limitations contained in section 5.1 of the Plan.
11.5 The Board may appoint from its number a Stock Option
Committee consisting of at least two directors and, if and to the extent
authorized by the Certificate of Incorporation or By-Laws of the Corporation,
may delegate thereto some or all of its powers under the Plan. Except as the
Board may otherwise determine, the Stock Option Committee may make rules for the
conduct of its business, but, unless otherwise provided by the Board or in such
rules, its business shall, to the greatest extent possible, be conducted in the
same manner as is provided by the By-Laws of the Corporation for the Board.
11.6 No member of the Board, nor of the board of directors of any
Participating Corporation, nor any officer, director, employee or agent of the
Corporation or any Participating Corporation, shall be liable for any action or
determination made, or other action taken, in good faith with respect to the
Plan or any Option.
Section 12.
Transferability of Options
12.1 No Incentive Stock Option granted under the Plan shall be
transferable otherwise than by will or the laws of descent and distribution, and
an Incentive Stock Option may be exercised, during the lifetime of the Optionee,
only by him.
12.2 The Board, operating in its sole and exclusive discretion,
shall determine the restrictions, if any, on transferability of Non-Qualified
Stock Options without regard to the provisions of section 12.1.
12.3 Each Option Agreement shall contain a warranty and
representation by the Optionee that the Optionee is taking the Option for his
own account and not with a view to its resale, distribution or division among
others.
12.4 Each Option Agreement may contain such provisions consistent
with this Plan as the Board, in its discretion, may determine to be appropriate
for restriction on transfer, and redemption by the Corporation, or other
disposition, of all Option Shares received by the Optionee (or his legal
representatives), notwithstanding any tax consequences to the Optionee of such
restriction, redemption or other disposition.
Section 13.
No Rights as Shareholder
The holder of an Option shall have none of the rights of a shareholder
of the corporation with respect to the Option Shares until such shares shall
have been issued to him upon exercise of his Option in accordance with the terms
of the Plan.
Section 14.
Adjustments Upon Changes in Capitalization and the Like
14.1 If any change in the outstanding Common Stock of the
Corporation by reason of stock dividends, stock splits, subdivisions, exchanges
of shares, or recapitalization, is effected after the effective date of the Plan
without receipt of consideration by the Corporation, then the aggregate number
of shares reserved for issuance upon the exercise of Options granted under the
Plan shall be appropriately adjusted by the Board, whose determination shall be
conclusive. Each Option Agreement may contain such provisions as the Board, in
its discretion, shall determine to be appropriate for adjustment of the number
of Option shares and of the purchase price provided for in such Option. Any such
adjustments may provide for elimination of any fractional shares that might
otherwise become subject to any Option.
14.2 Each Option Agreement may contain such provision as the
Board, in its discretion, shall determine to be appropriate for the termination
of, adjustment in or vesting or repurchase of Shares and Options, in the event
of the dissolution or liquidation of the Corporation, or upon any consolidation
or merger involving the Corporation, or upon sale or transfer of all or
substantially all of the assets of the Corporation, or upon exchange by the
stockholders of the Corporation of 80% or more of the shares of the Corporation
for securities of another entity.
14.3 Existence of any Option shall not in any way prevent any
Participating Corporation from engaging in any of the transaction described in
this section 14, nor shall it confer any rights upon the holder of any such
Option to participate in any such transaction, except those expressly conferred
by the Plan and the Option Agreement pursuant to which such Option shall have
been granted.
14.4 Nothing contained in the Plan shall prevent the assumption
of any Option, or the substitution of a new option for an Option, by any
corporation, or the parent or subsidiary of any corporation, that becomes the
employer of any Optionee by reason of a merger, consolidation, acquisition,
reorganization or liquidation; provided, however, that with respect to an
Incentive Stock Option, the following additional conditions are applicable:
(a) the excess of the aggregate fair market value of the
shares subject to the option immediately after the substitution or assumption
over the aggregate option price of such shares is not more than the excess of
the aggregate fair market value of the Option Shares immediately before such
substitution or assumption over the aggregate purchase price of the Option
Shares; and
(b) the new option or the assumption of the old Option does
not give the Optionee additional benefits that the Optionee did not have under
the old Option.
Section 15.
Amendment and Termination
15.1 Unless the Plan shall have been terminated sooner, the Plan
shall terminate on, and no Option shall be granted after the earlier of: (a) the
earlier of the tenth (10th) anniversary of: (i) the date upon or as of which the
plan is adopted, or (ii) the date upon which the plan is approved by the
shareholders of the Corporation; or (b) the date upon which the total number of
shares set forth in Section 4.1 of the Plan shall have been issued pursuant to
the Plan.
15.2 The shareholders of the Corporation may terminate, modify or
amend the plan at any time.
15.3 The Board also may terminate, modify or amend the Plan at
any time, provided that, without the approval of the shareholders of the
Corporation, the Board shall not change: (a) the maximum number of shares as to
which Options may be granted under the Plan (except as the number provided in
section 4.1 may be adjusted from time to time in accordance with section 14.1),
or (b) the class of Employees eligible to receive Incentive Stock Options.
15.4 Except as may be set forth in a Plan Agreement, no
termination, modification or amendment of the Plan shall adversely affect the
rights of any Optionee under an Option Agreement without such Optionee's written
consent.
Section 16.
Effectiveness of the Plan
The Plan shall become effective only upon: (a) adoption by the Board,
(b) approval by the shareholders of the Corporation within twelve (12) months
before or after the date of such adoption by the Board, and (c ) the filing of
the Restated Certificate of Incorporation of the Corporation effecting, among
other things, the increase in the number of shares of the Corporation's
authorized Common Stock to [1,800,000] shares.
Section 17.
Governing Law
This Plan shall be governed by and construed under the laws of the
State of Delaware.
EXECUTED as of the 7th day of October, 1993.
INSOFT, INC.
By:
Daniel L. Harple, Jr.
President
(Seal)
Exhibit 5.1
March 17, 1999
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 7,750 shares (the "Shares") of the Company's
common stock, par value $.01 per share ("Common Stock"), and certain Preferred
Stock Purchase Rights (the "Rights") which are being registered under the
Registration Statement for issuance by the Company pursuant to the terms of the
Insoft, Inc. 1993 Stock Option Plan (the "Plan").
I am Acting 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. Rights Agreement of the Company adopted on May 12, 1998 (the "Rights
Agreement"); and
5. The Plan.
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 and
Management Development Committee and the Board of Directors of the Company have
been or will be taken by the Compensation and Management Development 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 Preferred 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 Preferred 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 Preferred Stock Purchase Rights, if the Company's
Preferred Stock Purchase Rights have not expired or been redeemed in
accordance with the terms of the Rights Agreement, will be validly
issued.
You acknowledge that I am admitted to practice only in Massachusetts,
Texas and the District of Columbia and am not an expert in the laws of any other
jurisdiction. No one other than the addressees and their assigns are permitted
to rely on or distribute this opinion without the prior written consent of the
undersigned.
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, Esq.
Sheila A. Clark, Esq.
Acting General Counsel
Exhibit 23.1
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement (Form
S-8 No. 333-______) pertaining to the Insoft, Inc. 1993 Stock Option Plan of our
report dated September 25, 1998, except for the last paragraph of Note 17, as to
which the date is February 15, 1999, with respect to the consolidated financial
statements of America Online, Inc., included in its Current Report on Form 8-K
dated November 9, 1998, filed with the Securities and Exchange Commission on
February 17, 1999.
/S/ ERNST & YOUNG LLP
Ernst & Young LLP
Vienna, Virginia
March 16, 1999
