As filed with the Securities and Exchange Commission on June 30, 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 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)
---------------------------
Spinner Networks Incorporated
1997 Stock Plan
(Full Title of the Plan)
--------------------------
SHEILA A. CLARK, ESQ.
Senior Vice President and
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)
<TABLE>
CALCULATION OF REGISTRATION FEE
- ---------------------------- ------------------- ----------------------- ---------------------- ----------------------
Title of securities to Amount to be Proposed maximum Proposed maximum Amount of
be registered (1) registered offering price per aggregate offering registration fee
share (2) price
- ---------------------------- ------------------- ----------------------- ---------------------- ----------------------
Common Stock,
<S> <C> <C> <C> <C>
$.01 par value per share 220,500 $15.18 $3,347,190 $930.52
- ---------------------------- ------------------- ----------------------- ---------------------- ----------------------
</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 220,500 shares of Common
Stock which may be purchased upon exercise of outstanding options, the fee
is based on the average price of $15.18 at which options may be exercised.
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The documents(s) 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.
<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, 1998, as filed with the Commission on September 28, 1998
pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act") (File No. 001-12143).
(b) The Company's Quarterly Reports on Form 10-Q for the quarters ended
September 30, 1998, December 31, 1998 and March 31, 1999, as filed
with the Commission on November 6, 1998, February 10, 1999, and May
7, 1999 respectively, pursuant to the Exchange Act (File No.
001-12143).
(c) 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).
(d) The Company's Current Report on Form 8-K dated August 4, 1998 (File
No. 001-12143 and filing date of August 5, 1998).
(e) The Company's Current Report on Form 8-K dated September 28, 1998
(File No. 001-12143 and filing date of September 29, 1998).
(f) The Company's Current Report on Form 8-K dated November 23, 1998
(File No. 001-12143 and filing date of November 24, 1998).
(g) The Company's Current Report on Form 8-K dated February 1, 1999 (File
No. 001-12143 and filing date of February 11, 1999).
(h) The Company's Current Report on Form 8-K dated November 9, 1998 (File
No. 001-12143 and filing date of February 17, 1999).
(i) The Company's Current Report on Form 8-K dated March 17, 1999 (File
No. 001-12143 and filing date of March 26, 1999).
(j) The Company's Current Report on Form 8-K/A dated March 17, 1999 (File
No. 001-12143 and filing date of April 21, 1999).
(k) The Company's Current Report on Form 8-K dated April 21, 1999 (File
No. 001-12143 and filing date of April 21, 1999).
(l) The Company's Current Report on Form 8-K dated May 21, 1999 (File No.
001-12143 and filing date of May 27, 1999).
(m) The descriptions of the Company's Common Stock, including preferred
share purchase rights, which are contained in registration statements
on Form 8-A under the Exchange Act, including any amendments or
reports filed for the purpose of updating such description.
(n) 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), by reason of the
fact that he is or was a director or officer of the corporation. Such indemnity
may be against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in connection
with such action, suit or proceeding, if the indemnified party acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation and if, with respect to any criminal action or
proceeding, the indemnified party did not have reasonable cause to believe his
conduct was unlawful.
Section 145(b) of the Delaware Corporation Law provides, in
general, that a corporation shall have the power to indemnify any person who was
or is a party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the corporation to procure a
judgment in its favor by reason of the fact that he is or was a director or
officer of the corporation, against any expenses (including attorneys' fees)
actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation.
Section 145(g) of the Delaware Corporation law provides, in
general, that a corporation shall have the power to purchase and maintain
insurance on behalf of any person who is or was a director or officer of the
corporation against any liability asserted against him in any such capacity, or
arising out of his status as such, whether or not the corporation would have the
power to indemnify him against such liability under the provisions of the law.
Pursuant to Section 102(b)(7) of the Delaware General Corporation
Law (the "Delaware Statute"), Article Ninth of the Registrant's Restated
Certificate of Incorporation (incorporated by reference herein) provides that:
To the fullest extent permitted by the Delaware General
Corporation Law as the same now exists or may hereafter be
amended, the Corporation shall indemnify, and advance expenses to,
its directors and officers and any person who is or was serving at
the request of the Corporation as a director or officer, employee
or agent of another corporation, partnership, joint venture, trust
or other enterprise. The Corporation, by action of its board of
directors, may provide indemnification or advance expenses to
employees and agents of the Corporation or other persons only on
such terms and conditions and to the extent determined by the
board of directors in its sole and absolute discretion.
The indemnification and advancement of expenses provided by,
or granted pursuant to, this Article Ninth shall not be deemed
exclusive of any other rights to which those seeking
indemnification or advancement of expenses may be entitled under
any by-law, agreement, vote of stockholders or disinterested
directors or otherwise, both as to action in his official capacity
and as to action in another capacity while holding such office.
The Corporation shall have the power to purchase and maintain
insurance on behalf of any person who is or was a director,
officer, employee or agent of the Corporation, or is or was
serving at the request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against any liability asserted
against him and incurred by him in any such capacity, or arising
out of his status as such, whether or not the Corporation would
have the power to indemnify him against such liability under this
Article Ninth.
The indemnification and advancement of expenses provided by,
or granted pursuant to, this Article Ninth shall, unless otherwise
provided when authorized or ratified, continue as to a person who
has ceased to be a director or officer and shall inure to the
benefit of the heirs, executors and administrators of such officer
or director. The indemnification and advancement of expenses that
may have been provided to an employee or agent of the Corporation
by action of the board of directors, pursuant to the last sentence
of Paragraph 1 of this Article Ninth, unless otherwise provided
when authorized or ratified, continue as to a person who has
ceased to be an employee or agent of the Corporation and shall
inure to the benefit of the heirs, executors and administrators of
such a person, after the time such person has ceased to be an
employee or agent of the Corporation, only on such terms and
conditions and to the extent determined by the board of directors
in its sole discretion.
In addition, Article Five of the Registrant's Restated By-Laws
(incorporated by reference herein) provides that:
Right to Indemnification. Each person who was or is made a party
or is threatened to be made a party to or is otherwise involved in any action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he is or was a director or an officer of the Corporation
or is or was serving at the request of the Corporation as a director, officer,
employee or agent of another corporation or of a partnership, joint venture,
trust or other enterprise, including service with respect to an employee benefit
plan (hereinafter an "Indemnitee"), whether the basis of such proceeding is
alleged action in an official capacity as a director, officer, employee or agent
or in any other capacity while serving as a director, officer, employee or
agent, shall be indemnified and held harmless by the Corporation to the fullest
extent authorized by the Delaware General Corporation Law, as the same exists or
may hereafter be amended (but, in the case of any such amendment, only to the
extent that such amendment permits the Corporation to provide broader
indemnification rights than such law permitted the Corporation to provide prior
to such amendment), against all expense, liability and loss (including
attorney's fees, judgments, fines, ERISA excise taxes or penalties and amounts
paid in settlement) reasonably incurred or suffered by such Indemnitee in
connection therewith; provided, however, that, except as provided in the section
"Right of Indemnitees to Bring Suit" of this Article with respect to proceedings
to enforce rights to indemnification, the Corporation shall indemnify any such
Indemnitee in connection with a proceeding (or part thereof) initiated by such
Indemnitee only if such proceeding (or part thereof) was authorized by the board
of directors of the Corporation.
Right to Advancement of Expenses. The right to indemnification
conferred in the "Right to Indemnification" section 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 sections
"Right to Indemnification" and "Right to Advancement of Expenses" of this
Article is not paid in full by the Corporation within sixty (60) days after a
written claim has been received by the Corporation, except in the case of a
claim for an advancement of expenses, in which case the applicable period shall
be twenty (20) days, the Indemnitee may at any time thereafter bring suit
against the Corporation to recover the unpaid amount of the claim. If successful
in whole or in part in any such suit, or in a suit brought by the Corporation to
recover an advancement of expenses pursuant to the terms of an undertaking, the
Indemnitee shall also be entitled to be paid the expenses of prosecuting or
defending such suit. In (i) any suit brought by the Indemnitee to enforce a
right to indemnification hereunder (but not in a suit brought by the Indemnitee
to enforce a right to an advancement of expenses) it shall be a defense that,
and (ii) in any suit brought by the Corporation to recover an advancement of
expenses pursuant to the terms of an undertaking, the Corporation shall be
entitled to recover such expenses upon a final adjudication that, the Indemnitee
has not met any applicable standard for indemnification set forth in the
Delaware General Corporation Law. Neither the failure of the Corporation
(including its board of directors, independent legal counsel, or its
stockholders) to have made a determination prior to the commencement of such
suit that indemnification of the Indemnitee is proper in the circumstances
because the Indemnitee has met the applicable standard of conduct set forth in
the Delaware General Corporation Law, nor an actual determination by the
Corporation (including its board of directors, independent legal counsel, or its
stockholders) that the Indemnitee has not met such applicable standard of
conduct, shall create a presumption that the Indemnitee has not met the
applicable standard of conduct or, in the case of such a suit brought by the
Indemnitee, be a defense to such suit. In any suit brought by the Indemnitee to
enforce a right to indemnification or to an advancement of expenses hereunder,
or brought by the Corporation to recover an advancement of expenses pursuant to
the terms of an undertaking, the burden of proving that the Indemnitee is not
entitled to be indemnified, or to such advancement of expenses, under this
Article or otherwise shall be on the Corporation.
Non-Exclusivity of Rights. The rights to indemnification and to
the advancement of expenses conferred in this Article shall not be exclusive of
any other right which any person may have or hereafter acquire under any
statute, the Corporation's Certificate of Incorporation as amended from time to
time, these By-Laws, any agreement, any vote of stockholders or disinterested
directors or otherwise.
Insurance. The Corporation may maintain insurance, at its expense,
to protect itself and any director, officer, employee or agent of the
Corporation or another corporation, partnership, joint venture, trust or other
enterprise against any expense, liability or loss, whether or not the
Corporation would have the power to indemnify such person against such expense,
liability or loss under the Delaware General Corporation Law.
Indemnification of Employees and Agents of the Corporation. The
Corporation may, to the extent authorized from time to time by the board of
directors, grant rights to indemnification and to the advancement of expenses to
any employee or agent of the Corporation to the fullest extent of the provisions
of this Article with respect to the indemnification and advancement of expenses
of directors and officers of the Corporation.
The directors and officers of the Registrant are covered by a
policy of liability insurance.
<PAGE>
Item 7. Exemption from Registration Claimed
Not applicable.
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. (filed as Exhibit 3.1 to the
Registrant's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1998 and incorporated herein by reference)
4.2 Section B of Article 4, Article 6 and Article 8 of the Restated
Certificate of Incorporation of the Registrant (filed as part of
Exhibit 3.1 to the Registrant's Form 10-K for the year ended June
30, 1997 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, 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 4.1 to the Registrant'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 Registrant (filed as Exhibit 3.5 to
Registrant's Annual Report on Form 10-K for the fiscal year ended
June 30, 1998 and incorporated herein by reference)
4.5 Spinner Networks Incorporated 1997 Stock Plan
5.1 Opinion of Brenda C. Karickhoff, Assistant General Counsel to the
Company, regarding the legality of securities being offered
23.1 Consent of Brenda C. Karickhoff, Assistant General Counsel to the
Company (included in her opinion filed as Exhibit 5.1 and
incorporated herein by reference)
23.2 Consent of Ernst & Young LLP
24.1 Powers of Attorney
Item 9. Undertakings
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement;
(i) To include any prospectus required by Section 10(a)(3) of
the 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.
<PAGE>
(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 30th day of
June, 1999.
AMERICA ONLINE, INC.
By: /s/J. Michael Kelly
J. Michael Kelly
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 30th day of June, 1999, by the following
persons in the capacities indicated.
Signature Title
* Chairman of the Board and Chief Executive
Stephen M. Case Officer (Principal Executive Officer)
* President, Chief Operating Officer and
Robert W. Pittman Director
/s/J. Michael Kelly Senior Vice President, Chief Financial
J. Michael Kelly Officer, Treasurer and Assistant Secretary
(Principal Financial Officer)
* Vice President, Controller, Chief
James F. MacGuidwin Accounting and Budget Officer (Principal
Accounting Officer)
* Director
Daniel F. Akerson
* Director
James L. Barksdale
* 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
<PAGE>
Exhibit Index
Exhibit No. Description
4.5 Spinner Networks Incorporated 1997 Stock Plan
5.1 Opinion of Brenda C. Karickhoff, Assistant General Counsel to the
Company, regarding the legality of securities being offered
23.1 Consent of Brenda C. Karickhoff, Assistant General Counsel to the
Company (included in her opinion filed as Exhibit 5.1 and
incorporated herein by reference)
23.2 Consent of Ernst & Young LLP
24.1 Powers of Attorney
Exhibit 4.5
SPINNER NETWORKS INCORPORATED
1997 STOCK PLAN
TABLE OF CONTENTS
Page
SECTION 1. ESTABLISHMENT AND PURPOSE.........................................1
SECTION 2. ADMINISTRATION....................................................1
(a) Committees of the Board of Directors...................................1
(b) Authority of the Board of Directors....................................1
SECTION 3. ELIGIBILITY.......................................................1
(a) General Rule...........................................................1
(b) Ten-Percent Shareholders...............................................1
SECTION 4. STOCK SUBJECT TO PLAN.............................................1
(a) Basic Limitation.......................................................1
(b) Additional Shares......................................................2
SECTION 5. TERMS AND CONDITIONS OF AWARDS OR SALES...........................2
(a) Stock Purchase Agreement...............................................2
(b) Duration of Offers and Nontransferability of Rights....................2
(c) Purchase Price.........................................................2
(d) Withholding Taxes......................................................2
(e) Restrictions on Transfer of Shares and Minimum Vesting.................2
(f) Accelerated Vesting....................................................2
SECTION 6. TERMS AND CONDITIONS OF OPTIONS...................................3
(a) Stock Option Agreement.................................................3
(b) Number of Shares.......................................................3
(c) Exercise Price.........................................................3
(d) Withholding Taxes......................................................3
(e) Exercisability.........................................................3
(f) Accelerated Exercisability.............................................3
(g) Basic Term.............................................................4
(h) Nontransferability.....................................................4
(i) Termination of Service (Except by Death)...............................4
(j) Leaves of Absence......................................................4
(k) Death of Optionee......................................................4
(l) No Rights as a Shareholder.............................................4
(m) Modification, Extension and Assumption of Options......................5
(n) Restrictions on Transfer of Shares and Minimum Vesting.................5
(o) Accelerated Vesting....................................................5
SECTION 7. PAYMENT FOR SHARES................................................5
(a) General Rule...........................................................5
(b) Surrender of Stock.....................................................5
(c) Services Rendered......................................................5
(d) Promissory Note........................................................5
(e) Exercise/Sale..........................................................5
(f) Exercise/Pledge........................................................6
SECTION 8. ADJUSTMENT OF SHARES..............................................6
(a) General................................................................6
(b) Mergers and Consolidations.............................................6
(c) Reservation of Rights..................................................6
SECTION 9. SECURITIES LAW REQUIREMENTS.......................................6
(a) General................................................................6
(b) Financial Reports......................................................6
SECTION 10. NO RETENTION RIGHTS..............................................7
SECTION 11. DURATION AND AMENDMENTS..........................................7
(a) Term of the Plan.......................................................7
(b) Right to Amend or Terminate the Plan...................................7
(c) Effect of Amendment or Termination.....................................7
SECTION 12. DEFINITIONS......................................................7
<PAGE>
SPINNER NETWORKS INCORPORATED
1997 STOCK PLAN
SECTION 1. ESTABLISHMENT AND PURPOSE.
The purpose of the Plan is to offer selected individuals an opportunity
to acquire a proprietary interest in the success of the Company, or to increase
such interest, by purchasing Shares of the Company's Stock. The Plan provides
both for the direct award or sale of Shares and for the grant of Options to
purchase Shares. Options granted under the Plan may include Nonstatutory Options
as well as ISOs intended to qualify under Section 422 of the Code.
Capitalized terms are defined in Section 12.
SECTION 2. ADMINISTRATION.
(a)......Committees of the Board of Directors. The Plan may be
administered by one or more Committees. Each Committee shall consist of two or
more members of the Board of Directors who have been appointed by the Board of
Directors. Each Committee shall have such authority and be responsible for such
functions as the Board of Directors has assigned to it. If no Committee has been
appointed, the entire Board of Directors shall administer the Plan. Any
reference to the Board of Directors in the Plan shall be construed as a
reference to the Committee (if any) to whom the Board of Directors has assigned
a particular function.
(b)......Authority of the Board of Directors. Subject to the provisions
of the Plan, the Board of Directors shall have full authority and discretion to
take any actions it deems necessary or advisable for the administration of the
Plan. All decisions, interpretations and other actions of the Board of Directors
shall be final and binding on all Purchasers, all Optionees and all persons
deriving their rights from a Purchaser or Optionee.
SECTION 3. ELIGIBILITY.
(a)......General Rule. Only Employees, Outside Directors and
Consultants shall be eligible for the grant of Options or the direct award or
sale of Shares. Only Employees shall be eligible for the grant of ISOs.
(b)......Ten-Percent Shareholders. An individual who owns more than 10%
of the total combined voting power of all classes of outstanding stock of the
Company, its Parent or any of its Subsidiaries shall not be eligible for
designation as an Optionee or Purchaser unless (i) the Exercise Price is at
least 110% of the Fair Market Value of a Share on the date of grant, (ii) the
Purchase Price (if any) is at least 100% of the Fair Market Value of a Share and
(iii) in the case of an ISO, such ISO by its terms is not exercisable after the
expiration of five years from the date of grant. For purposes of this Subsection
(b), in determining stock ownership, the attribution rules of Section 424(d) of
the Code shall be applied.
SECTION 4. STOCK SUBJECT TO PLAN.
(a)......Basic Limitation. The aggregate number of Shares that may be
issued under the Plan (upon exercise of Options or other rights to acquire
Shares) shall not exceed 2,650,000 (1) Shares, subject to adjustment pursuant to
Section 8. The number of Shares that are subject to Options or other rights
outstanding at any time under the Plan shall not exceed the number of Shares
that then remain available for issuance under the Plan. The Company, during the
term of the Plan, shall at all times reserve and keep available sufficient
Shares to satisfy the requirements of the Plan.
(b)......Additional Shares. In the event that any outstanding Option or
other right for any reason expires or is canceled or otherwise terminated, the
Shares allocable to the unexercised portion of such Option or other right shall
again be available for the purposes of the Plan. In the event that Shares issued
under the Plan are reacquired by the Company pursuant to any forfeiture
provision, right of repurchase or right of first refusal, such Shares shall
again be available for the purposes of the Plan, except that the aggregate
number of Shares which may be issued upon the exercise of ISOs shall in no event
exceed 2,650,000 Shares (subject to adjustment pursuant to Section 8).
- --------
1/ Reflects (i) initial allocation of 612,000 shares on January 15, 1997; (ii)
943,000 share increase approved by the Board of Directors on January 13, 1998;
(iii) 320,000 share increase approved by the Board of Directors on March 31,
1998; (iv) 375,000 share increase approved by the Board of Directors on August
24, 1998; (v) 400,000 share increase approved by the Board of Directors on
December 4, 1998.
<PAGE>
SECTION 5. TERMS AND CONDITIONS OF AWARDS OR SALES.
(a)......Stock Purchase Agreement. Each award or sale of Shares under
the Plan (other than upon exercise of an Option) shall be evidenced by a Stock
Purchase Agreement between the Purchaser and the Company. Such award or sale
shall be subject to all applicable terms and conditions of the Plan and may be
subject to any other terms and conditions which are not inconsistent with the
Plan and which the Board of Directors deems appropriate for inclusion in a Stock
Purchase Agreement. The provisions of the various Stock Purchase Agreements
entered into under the Plan need not be identical.
(b)......Duration of Offers and Nontransferability of Rights. Any right
to acquire Shares under the Plan (other than an Option) shall automatically
expire if not exercised by the Purchaser within 30 days after the grant of such
right was communicated to the Purchaser by the Company. Such right shall not be
transferable and shall be exercisable only by the Purchaser to whom such right
was granted.
(c)......Purchase Price. The Purchase Price of Shares to be offered
under the Plan shall not be less than 85% of the Fair Market Value of such
Shares, and a higher percentage may be required by Section 3(b). Subject to the
preceding sentence, the Purchase Price shall be determined by the Board of
Directors at its sole discretion. The Purchase Price shall be payable in a form
described in Section 7.
(d)......Withholding Taxes. As a condition to the purchase of Shares,
the Purchaser shall make such arrangements as the Board of Directors may require
for the satisfaction of any federal, state, local or foreign withholding tax
obligations that may arise in connection with such purchase.
(e)......Restrictions on Transfer of Shares and Minimum Vesting. Any
Shares awarded or sold under the Plan shall be subject to such special
forfeiture conditions, rights of repurchase, rights of first refusal and other
transfer restrictions as the Board of Directors may determine. Such restrictions
shall be set forth in the applicable Stock Purchase Agreement and shall apply in
addition to any restrictions that may apply to holders of Shares generally. Any
right to repurchase a Purchaser's Shares at the original Purchase Price (if any)
upon termination of the Purchaser's Service shall lapse at least as rapidly as
the following schedule if the Purchaser is not an officer of the Company, an
Outside Director or a Consultant:
Anniversary of Date Percentage of
of Sale or Award Shares Vested
---------------- -------------
First 20%
Second 40%
Third 60%
Fourth 80%
Fifth 100%
Any such repurchase right may be exercised only within 90 days after the
termination of the Purchaser's Service for cash or for cancellation of
indebtedness incurred in purchasing the Shares.
(f)......Accelerated Vesting. Unless the applicable Stock Purchase
Agreement provides otherwise, any right to repurchase a Purchaser's Shares at
the original Purchase Price (if any) upon termination of the Purchaser's Service
shall lapse and all of such Shares shall become vested if (i) the Company is
subject to a Change in Control and (ii) the repurchase right is not assigned to
the entity that employs the Purchaser immediately after the Change m Control or
to its parent or subsidiary.
SECTION 6. TERMS AND CONDITIONS OF OPTIONS.
(a)......Stock Option Agreement. Each grant of an Option under the Plan
shall be evidenced by a Stock Option Agreement between the Optionee and the
Company. Such Option shall be subject to all applicable terms and conditions of
the Plan and may be subject to any other terms and conditions which are not
inconsistent with the Plan and which the Board of Directors deems appropriate
for inclusion in a Stock Option Agreement. The provisions of the various Stock
Option Agreements entered into under the Plan need not be identical.
(b)......Number of Shares. Each Stock Option Agreement shall specify
the number of Shares that are subject to the Option and shall provide for the
adjustment of such number in accordance with Section 8. The Stock Option
Agreement shall also specify whether the Option is an ISO or a Nonstatutory
Option.
<PAGE>
(c)......Exercise Price. Each Stock Option Agreement shall specify the
Exercise Price. The Exercise Price of an ISO shall not be less than 100% of the
Fair Market Value of a Share on the date of grant, and a higher percentage may
be required by Section 3(b). The Exercise Price of a Nonstatutory Option shall
not be less than 85% of the Fair Market Value of a Share on the date of grant,
and a higher percentage may be required by Section 3(b). Subject to the
preceding two sentences, the Exercise Price under any Option shall be determined
by the Board of Directors at its sole discretion. The Exercise Price shall be
payable in a form described in Section 7.
(d)......Withholding Taxes. As a condition to the exercise of an
Option, the Optionee shall make such arrangements as the Board of Directors may
require for the satisfaction of any federal, state, local or foreign withholding
tax obligations that may arise in connection with such exercise. The Optionee
shall also make such arrangements as the Board of Directors may require for the
satisfaction of any federal, state, local or foreign withholding tax obligations
that may arise in connection with the disposition of Shares acquired by
exercising an Option.
(e)......Exercisability. Each Stock Option Agreement shall specify the
date when all or any installment of the Option is to become exercisable. An
Option that is not granted to an officer of the Company, an Outside Director or
a Consultant shall become exercisable at least as rapidly as set forth in the
following schedule:
Anniversary of Date Percentage of
of Option Grant Shares Exercisable
--------------- ------------------
First 20%
Second 40%
Third 60%
Fourth 80%
Fifth 100%
Subject to the preceding sentence, the exercisability provisions of any Stock
Option Agreement shall be determined by the Board of Directors at its sole
discretion.
(f)......Accelerated Exercisability. Unless the applicable Stock Option
Agreement provides otherwise, all of an Optionee's Options shall become
exercisable in fill if (i) the Company is subject to a Change in Control, (ii)
such Options do not remain outstanding, (iii) such Options are not assumed by
the surviving corporation or its parent and (iv) the surviving corporation or
its parent does not substitute options with substantially the same terms for
such Options.
(g)......Basic Term. The Stock Option Agreement shall specify the term
of the Option. The term shall not exceed 10 years from the date of grant, and a
shorter term may be required by Section 3(b). Subject to the preceding sentence,
the Board of Directors at its sole discretion shall determine when an Option is
to expire.
(h)......Nontransferability. No Option shall be transferable by the
Optionee other than by beneficiary designation, will or the laws of descent and
distribution. An Option may be exercised during the lifetime of the Optionee
only by the Optionee or by the Optionee's guardian or legal representative. No
Option or interest therein may be transferred, assigned, pledged or hypothecated
by the Optionee during the Optionee's lifetime, whether by operation of law or
otherwise, or be made subject to execution, attachment or similar process.
(i)......Termination of Service (Except by Death). If an Optionee's
Service terminates for any reason other than the Optionee's death, then the
Optionee's Options shall expire on the earliest of the following occasions:
(i) The expiration date determined pursuant to Subsection
(g) above;
(ii) The date three months after the termination of the
Optionee's Service for any reason other than Disability; or
(iii) The date six months after the termination of the
Optionee's Service by reason of Disability.
The Optionee may exercise all or part of the Optionee's Options at any time
before the expiration of such Options under the preceding sentence, but only to
the extent that such Options had become exercisable before the Optionee's
Service terminated (or became exercisable as a result of the termination) and
the underlying Shares had vested before the Optionee's Service terminated (or
vested as a result of the termination). The balance of such Options shall lapse
when the Optionee's Service terminates. In the event that the Optionee dies
after the termination of the Optionee's Service but before the expiration of the
Optionee's Options, all or part of such Options may be exercised (prior to
expiration) by the executors or administrators of the Optionee's estate or by
any person who has acquired such Options directly from the Optionee by
beneficiary designation, bequest or inheritance, but only to the extent that
such Options had become exercisable before the Optionee's Service terminated (or
became exercisable as a result of the termination) and the underlying Shares had
vested before the Optionee's Service terminated (or vested as a result of the
termination).
<PAGE>
(j)......Leaves of Absence. For purposes of Subsection (i) above,
Service shall be deemed to continue while the Optionee is on a bona fide leave
of absence, if such leave was approved by the Company in writing and if
continued crediting of Service for this purpose is expressly required by the
terms of such leave or by applicable law (as determined by the Company).
(k)......Death of Optionee. If an Optionee dies while the Optionee is
in Service, then the Optionee's Options shall expire on the earlier of the
following dates:
(i) The expiration date determined pursuant to Subsection
(g) above; or
(ii) The date 12 months after the Optionee's death.
All or part of the Optionee's Options may be exercised at any time before the
expiration of such Options under the preceding sentence by the executors or
administrators of the Optionee's estate or by any person who has acquired such
Options directly from the Optionee by beneficiary designation, bequest or
inheritance, but only to the extent that such Options had become exercisable
before the Optionee's death or became exercisable as a result of the death. The
balance of such Options shall lapse when the Optionee dies.
(l)......No Rights as a Shareholder. An Optionee, or a transferee of an
Optionee, shall have no rights as a shareholder with respect to any Shares
covered by the Optionee's Option until such person becomes entitled to receive
such Shares by filing a notice of exercise and paying the Exercise Price
pursuant to the terms of such Option.
(m)......Modification, Extension and Assumption of Options. Within the
limitations of the Plan, the Board of Directors may modify, extend or assume
outstanding Options or may accept the cancellation of outstanding Options
(whether granted by the Company or another issuer) in return for the grant of
new Options for the same or a different number of Shares and at the same or a
different Exercise Price. The foregoing notwithstanding, no modification of an
Option shall, without the consent of the Optionee, impair the Optionee's rights
or increase the Optionee's obligations under such Option.
(n)......Restrictions on Transfer of Shares and Minimum Vesting. Any
Shares issued upon exercise of an Option shall be subject to such special
forfeiture conditions, rights of repurchase, rights of first refusal and other
transfer restrictions as the Board of Directors may determine. Such restrictions
shall be set forth in the applicable Stock Option Agreement and shall apply in
addition to any restrictions that may apply to holders of Shares generally. Any
right to repurchase an Optionee's Shares at the original Exercise Price upon
termination of the Optionee's Service shall lapse at least as rapidly as the
schedule set forth in Subsection (e) above. Any such repurchase right may be
exercised only within 90 days after the termination of the Optionee's Service
for cash or for cancellation of indebtedness incurred in purchasing the Shares.
(o)......Accelerated Vesting. Unless the applicable Stock Option
Agreement provides otherwise, any right to repurchase an Optionee's Shares at
the original Exercise Price upon termination of the Optionee's Service shall
lapse and all of such Shares shall become Vested if (i) the Company is subject
to a Change in Control and (ii) the repurchase right is not assigned to the
entity that employs the Optionee immediately after the Change in Control or to
its parent or subsidiary.
SECTION 7. PAYMENT FOR SHARES.
(a)......General Rule. The entire Purchase Price or Exercise Price of
Shares issued under the Plan shall be payable in cash or cash equivalents at the
time when such Shares are purchased, except as otherwise provided in this
Section 7.
(b)......Surrender of Stock. To the extent that a Stock Option
Agreement so provides, payment may be made all or in part with Shares owned by
the Optionee or the Optionee's representative. Such Shares shall be surrendered
to the Company in good form for transfer and shall be valued at their Fair
Market Value on the date when the Option is exercised. This Subsection (b) shall
not apply to the extent that acceptance of Shares in payment of the Exercise
Price would cause the Company to recognize compensation expense with respect to
the Option for financial reporting purposes.
(c)......Services Rendered. At the discretion of the Board of
Directors, Shares may be awarded under the Plan in consideration of services
rendered to the Company, a Parent or a Subsidiary prior to the award.
(d)......Promissory Note. To the extent that a Stock Option Agreement
or Stock Purchase Agreement so provides, all or a portion of the Exercise Price
or Purchase Price (as the case may be) of Shares issued under the Plan may be
paid with a full-recourse promissory note. The Shares shall be pledged as
security for payment of the principal amount of the promissory note and interest
thereon. The interest rate payable under the terms of the promissory note shall
not be less than the minimum rate (if any) required to avoid the imputation of
additional interest under the Code. Subject to the foregoing, the Board of
Directors (at its sole discretion) shall specify the term, interest rate,
amortization requirements (if any) and other provisions of such note.
<PAGE>
(e)......Exercise/Sale. To the extent that a Stock Option Agreement so
provides, and if Stock is publicly traded, payment may be made all or in part by
the delivery (on a form prescribed by the Company) of an irrevocable direction
to a securities broker approved by the Company to sell Shares and to deliver all
or part of the sales proceeds to the Company in payment of all or part of the
Exercise Price and any withholding taxes.
(f)......Exercise/Pledge. To the extent that a Stock Option Agreement
so provides, and if Stock is publicly traded, payment may be made all or in part
by the delivery (on a form prescribed by the Company) of an irrevocable
direction to pledge Shares to a securities broker or lender approved by the
Company, as security for a loan, and to deliver all or part of the loan proceeds
to the Company in payment of all or part of the Exercise Price and any
withholding taxes.
SECTION 8. ADJUSTMENT OF SHARES.
(a)......General. In the event of a subdivision of the outstanding
Stock, a declaration of a dividend payable in Shares, a declaration of an
extraordinary dividend payable in a form other than Shares in an amount that has
a material effect on the Fair Market Value of the Stock, a combination or
consolidation of the outstanding Stock into a lesser number of Shares, a
recapitalization, a spin-off, a reclassification or a similar occurrence, the
Board of Directors shall make appropriate adjustments in one or more of (i) the
number of Shares available for future grants under Section 4, (ii) the number of
Shares covered by each outstanding Option or (iii) the Exercise Price under each
outstanding Option.
(b)......Mergers and Consolidations. In the event that the Company is a
party to a merger or consolidation, outstanding Options shall be subject to the
agreement of merger or consolidation. Such agreement, without the Optionees'
consent, may provide for:
(i) The continuation of such outstanding Options by the
Company (if the Company is the surviving corporation);
(ii) The assumption of the Plan and such outstanding Options
by the surviving corporation or its parent;
(iii) The substitution by the surviving corporation or its
parent of options with substantially the same terms for such
outstanding Options; or
(iv) The cancellation of such outstanding Options without
payment of any consideration.
(c)......Reservation of Rights. Except as provided in this Section 8,
an Optionee or Purchaser shall have no rights by reason of (i) any subdivision
or consolidation of shares of stock of any class, (ii) the payment of any
dividend or (iii) any other increase or decrease in the number of shares of
stock of any class. Any issuance by the Company of shares of stock of any class,
or securities convertible into shares of stock of any class, shall not affect,
and no adjustment by reason thereof shall be made with respect to, the number or
Exercise Price of Shares subject to an Option. The grant of an Option pursuant
to the Plan shall not affect in any way the right or power of the Company to
make adjustments, reclassifications, reorganizations or changes of its capital
or business structure, to merge or consolidate or to dissolve, liquidate, sell
or transfer all or any part of its business or assets.
SECTION 9. SECURITIES LAW REQUIREMENTS.
(a)......General. Shares shall not be issued under the Plan unless the
issuance and delivery of such Shares comply with (or are exempt from) all
applicable requirements of law, including (without limitation) the Securities
Act of 1933, as amended, the rules and regulations promulgated thereunder, state
securities laws and regulations, and the regulations of any stock exchange or
other securities market on which the Company's securities may then be traded.
(b)......Financial Reports. The Company each year shall furnish to
Optionees, Purchasers and shareholders who have received Stock under the Plan
its balance sheet and income statement, unless such Optionees, Purchasers or
shareholders are key Employees whose duties with the Company assure them access
to equivalent information. Such balance sheet and income statement need not be
audited.
SECTION 10. NO RETENTION RIGHTS.
Nothing in the Plan or in any right or Option granted under the Plan
shall confer upon the Purchaser or Optionee any right to continue in Service for
any period of specific duration or interfere with or otherwise restrict in any
way the rights of the Company (or any Parent or Subsidiary employing or
retaining the Purchaser or Optionee) or of the Purchaser or Optionee, which
rights are hereby expressly reserved by each, to terminate his or her Service at
any time and for any reason, with or without cause.
<PAGE>
SECTION 11. DURATION AND AMENDMENTS.
(a)......Term of the Plan. The Plan, as set forth herein, shall become
effective on the date of its adoption by the Board of Directors, subject to the
approval of the Company's shareholders. In the event that the shareholders fail
to approve the Plan within 12 months after its adoption by the Board of
Directors, any grants of Options or sales or awards of Shares that have already
occurred shall be rescinded, and no additional grants, sales or awards shall be
made thereafter under the Plan. The Plan shall terminate automatically 10 years
after its adoption by the Board of Directors and may be terminated on any
earlier date pursuant to Subsection (b) below.
(b)......Right to Amend or Terminate the Plan. The Board of Directors
may amend, suspend or terminate the Plan at any time and for any reason;
provided, however, that any amendment of the Plan which increases the number of
Shares available for issuance under the Plan (except as provided in Section 8),
or which materially changes the class of persons who are eligible for the grant
of ISOs, shall be subject to the approval of the Company's shareholders.
Shareholder approval shall not be required for any other amendment of the Plan.
(c)......Effect of Amendment or Termination. No Shares shall be issued
or sold under the Plan after the termination thereof, except upon exercise of an
Option granted prior to such termination. The termination of the Plan, or any
amendment thereof, shall not affect any Share previously issued or any Option
previously granted under the Plan.
SECTION 12. DEFINITIONS.
(a)......"Board of Directors" shall mean the Board of Directors of the
Company, as constituted from time to time.
(b)......"Change in Control" shall mean:
(i) The consummation of a merger or consolidation of the
Company with or into another entity or any other corporate
reorganization, if more than 50% of the combined voting power of the
continuing or surviving entity's securities outstanding immediately
after such merger, consolidation or other reorganization is owned by
persons who were not shareholders of the Company immediately prior to
such merger, consolidation or other reorganization; or
(ii) The sale, transfer or other disposition of all or
substantially all of the Company's assets.
A transaction shall not constitute a Change in Control if its sole purpose is to
change the state of the Company's incorporation or to create a holding company
that will be owned in substantially the same proportions by the persons who held
the Company's securities immediately before such transaction.
(c)......"Code" shall mean the Internal Revenue Code of 1986, as
amended.
(d)......"Committee" shall mean a committee of the Board of Directors,
as described in Section 2(a).
(e)......"Company" shall mean Spinner Networks Incorporated, a
California corporation.
(f)......"Consultant" shall mean an individual who performs bona fide
services for the Company, a Parent or a Subsidiary as a consultant or advisor,
excluding Employees and Outside Directors.
(g)......"Disability" shall mean that the Optionee is unable to engage
in any substantial gainful activity by reason of any medically determinable
physical or mental impairment.
(h)......"Employee" shall mean any individual who is a common-law
employee of the Company, a Parent or a Subsidiary.
(i)......"Exercise Price" shall mean the amount for which one Share may
be purchased upon exercise of an Option, as specified by the Board of Directors
in the applicable Stock Option Agreement.
(j)......"Fair Market Value" shall mean the fair market value of a
Share, as determined by the Board of Directors in good faith. Such determination
shall be conclusive and binding on all persons.
(k)......"ISO" shall mean an employee incentive stock option described
in Section 422(b) of the Code.
(1)......"Nonstatutory Option" shall mean a stock option not described
in Sections 422(b) or 423(b) of the Code.
(m)......"Option" shall mean an ISO or Nonstatutory Option granted
under the Plan and entitling the holder to purchase Shares.
(n)......"Optionee" shall mean an individual who holds an Option.
(o)......"Outside Director" shall mean a member of the Board of
Directors who is not an Employee.
<PAGE>
(p)......"Parent" shall mean any corporation (other than the Company)
in an unbroken chain of corporations ending with the Company, if each of the
corporations other than the Company owns stock possessing 50% or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain. A corporation that attains the status of a Parent on
a date after the adoption of the Plan shall be considered a Parent commencing as
of such date.
(q)......"Plan" shall mean this Spinner Networks Incorporated 1997
Stock Plan.
(r)......"Purchase Price" shall mean the consideration for which one
Share may be acquired under the Plan (other than upon exercise of an Option), as
specified by the Board of Directors.
(s)......"Purchaser" shall mean an individual to whom the Board of
Directors has offered the right to acquire Shares under the Plan (other than
upon exercise of an Option).
(t)......"Service" shall mean service as an Employee, Outside Director
or Consultant.
(u)......"Share" shall mean one share of Stock, as adjusted in
accordance with Section 8 (if applicable).
(v)......"Stock" shall mean the Common Stock of the Company.
(w)......"Stock Option Agreement" shall mean the agreement between the
Company and an Optionee which contains the terms, conditions and restrictions
pertaining to the Optionee's Option.
(x)......"Stock Purchase Agreement" shall mean the agreement between
the Company and a Purchaser who acquires Shares under the Plan which contains
the terms, conditions and restrictions pertaining to the acquisition of such
Shares.
(y)......"Subsidiary" means any corporation (other than the Company) in
an unbroken chain of corporations beginning with the Company, if each of the
corporations other than the last corporation in the unbroken chain owns stock
possessing 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain. A corporation that attains
the status of a Subsidiary on a date after the adoption of the Plan shall be
considered a Subsidiary commencing as of such date.
SPINNER NETWORKS INCORPORATED 1997 STOCK PLAN:
STOCK PURCHASE AGREEMENT
SECTION 1. ACQUISITION OF SHARES.
(a)......Transfer. On the terms and conditions set forth in the Summary
of Stock Purchase and this Agreement, the Company agrees to transfer to the
Purchaser the number of Shares set forth in the Summary of Stock Purchase. The
transfer shall occur at the offices of the Company on the date of purchase set
forth in the Summary of Stock Purchase or at such other place and time as the
parties may agree.
(b)......Consideration. The Purchaser agrees to pay the Purchase Price
set forth in the Summary of Stock Purchase for each Purchased Share. The
Purchase Price is agreed to be at least 100% of the Fair Market Value of the
Purchased Shares. Payment shall be made on the transfer date in cash or cash
equivalents.
(c)......Stock Plan and Defined Terms. The transfer of the Purchased
Shares is subject to the Plan, a copy of which the Purchaser acknowledges having
received. The provisions of the Plan are incorporated into this Agreement by
this reference. Capitalized terms are defined in Section 12 of this Agreement.
SECTION 2. RIGHT OF REPURCHASE.
(a)......Scope of Repurchase Right. All Purchased Shares initially
shall be Restricted Shares and shall be subject to a right (but not an
obligation) of repurchase by the Company. The Purchaser shall not transfer,
assign, encumber or otherwise dispose of any Restricted Shares, except as
provided in the following sentence. The Purchaser may transfer Restricted Shares
(i) by beneficiary designation, will or intestate succession or (ii) to the
Purchaser's spouse, children or grandchildren or to a trust established by the
Purchaser for the benefit of the Purchaser or the Purchaser's spouse, children
or grandchildren, provided in either case that the Transferee agrees in writing
on a form prescribed by the Company to be bound by all provisions of this
Agreement. If the Purchaser transfers any Restricted Shares, then this Section 2
shall apply to the Transferee to the same extent as to the Purchaser.
(b)......Condition Precedent to Exercise. The Right of Repurchase shall
be exercisable only during the 60-day period next following the date when the
Purchaser's Service terminates for any reason, with or without cause, including
(without limitation) death or disability.
(c)......Lapse of Repurchase Right. The Right of Repurchase shall lapse
with respect to the Purchased Shares in accordance with the vesting schedule set
forth in the Summary of Stock Purchase. The Right of Repurchase shall lapse and
all of the remaining Restricted Shares shall become vested if (i) the Company is
subject to a Change in Control and (ii) the Right of Repurchase is not assigned
to the entity that employs the Purchaser immediately after the Change in Control
or to its parent or subsidiary.
(d)......Repurchase Cost. If the Company exercises the Right of
Repurchase, it shall pay the Purchaser an amount equal to the Purchase Price for
each of the Restricted Shares being repurchased.
(e)......Exercise of Repurchase Right. The Right of Repurchase shall be
exercisable only by written notice delivered to the Purchaser prior to the
expiration of the 60-day period specified in Subsection (b) above. The notice
shall set forth the date on which the repurchase is to be effected. Such date
shall not be more than 30 days after the date of the notice. The certificate(s)
representing the Restricted Shares to be repurchased shall, prior to the close
of business on the date specified for the repurchase, be delivered to the
Company properly endorsed for transfer. The Company shall, concurrently with the
receipt of such certificate(s), pay to the Purchaser the purchase price
determined according to Subsection (d) above. Payment shall be made in cash or
cash equivalents or by canceling indebtedness to the Company incurred by the
Purchaser in the purchase of the Restricted Shares. The Right of Repurchase
shall terminate with respect to any Restricted Shares for which it has not been
timely exercised pursuant to this Subsection (e).
(f)......Additional Shares or Substituted Securities. In the event of
the declaration of a stock dividend, the declaration of an extraordinary
dividend payable in a form other than stock, a spin-off, a stock split, an
adjustment in conversion ratio, a recapitalization or a similar transaction
affecting the Company's outstanding securities without receipt of consideration,
any new, substituted or additional securities or other property (including money
paid other than as an ordinary cash dividend) which are by reason of such
transaction distributed with respect to any Restricted Shares or into which such
Restricted Shares thereby become convertible shall immediately be subject to the
Right of Repurchase. Appropriate adjustments to reflect the distribution of such
securities or property shall be made to the number and/or class of the
Restricted Shares. Appropriate adjustments shall also, after each such
transaction, be made to the price per share to be paid upon the exercise of the
Right of Repurchase in order to reflect any change in the Company's outstanding
securities effected without receipt of consideration therefor; provided,
however, that the aggregate purchase price payable for the Restricted Shares
shall remain the same.
(g)......Termination of Rights as Shareholder. If the Company makes
available, at the time and place and in the amount and form provided in this
Agreement, the consideration for the Restricted Shares to be repurchased in
accordance with this Section 2, then after such time the person from whom such
Restricted Shares are to be repurchased shall no longer have any rights as a
holder of such Restricted Shares (other than the right to receive payment of
such consideration in accordance with this Agreement). Such Restricted Shares
shall be deemed to have been repurchased in accordance with the applicable
provisions hereof, whether or not the certificate(s) therefor have been
delivered as required by this Agreement.
(h)......Escrow. Upon issuance, the certificates for Restricted Shares
shall be deposited in escrow with the Company to be held in accordance with the
provisions of this Agreement. Any new, substituted or additional securities or
other property described in Subsection (f) above shall immediately be delivered
to the Company to be held in escrow, but only to the extent the Purchased Shares
are at the time Restricted Shares. All regular cash dividends on Restricted
Shares (or other securities at the time held in escrow) shall be paid directly
to the Purchaser and shall not be held in escrow. Restricted Shares, together
with any other assets or securities held in escrow hereunder, shall be (i)
surrendered to the Company for repurchase and cancellation upon the Company's
exercise of its Right of Repurchase or Right of First Refusal or (ii) released
to the Purchaser upon the Purchaser's request to the extent the Purchased Shares
are no longer Restricted Shares (but not more frequently than once every six
months). In any event, all Purchased Shares which have vested (and any other
vested assets and securities attributable thereto) shall be released within 60
days after the earlier of (i) the Purchaser's cessation of Service or (ii) the
lapse of the Right of First Refusal.
<PAGE>
SECTION 3. RIGHT OF FIRST REFUSAL.
(a)......Right of First Refusal. In the event that the Purchaser
proposes to sell, pledge or otherwise transfer to a third party any Purchased
Shares, or any interest in such Purchased Shares, the Company shall have the
Right of First Refusal with respect to all (and not less than all) of such
Purchased Shares. If the Purchaser desires to transfer Purchased Shares, the
Purchaser shall give a written Transfer Notice to the Company describing fully
the proposed transfer, including the number of Purchased Shares proposed to be
transferred, the proposed transfer price, the name and address of the proposed
Transferee and proof satisfactory to the Company that the proposed sale or
transfer will not violate any applicable federal or state securities laws. The
Transfer Notice shall be signed both by the Purchaser and by the proposed
Transferee and must constitute a binding commitment of both parties to the
transfer of the Purchased Shares. The Company shall have the right to purchase
all, and not less than all, of the Purchased Shares on the terms of the proposal
described in the Transfer Notice (subject, however, to any change in such terms
permitted under Subsection (b) below) by delivery of a notice of exercise of the
Right of First Refusal within 30 days after the date when the Transfer Notice
was received by the Company. The Company's rights under this Subsection (a)
shall be freely assignable, in whole or in part.
(b)......Transfer of Shares. If the Company fails to exercise its Right
of First Refusal within 30 days after the date when it received the Transfer
Notice, the Purchaser may, not later than 90 days following receipt of the
Transfer Notice by the Company, conclude a transfer of the Purchased Shares
subject to the Transfer Notice on the terms and conditions described in the
Transfer Notice, provided that any such sale is made in compliance with
applicable federal and state securities laws and not in violation of any other
contractual restrictions to which the Purchaser is bound. Any proposed transfer
on terms and conditions different from those described in the Transfer Notice,
as well as any subsequent proposed transfer by the Purchaser, shall again be
subject to the Right of First Refusal and shall require compliance with the
procedure described in Subsection (a) above. If the Company exercises its Right
of First Refusal, the parties shall consummate the sale of the Purchased Shares
on the terms set forth in the Transfer Notice within 60 days after the date when
the Company received the Transfer Notice (or within such longer period as may
have been specified in the Transfer Notice); provided, however, that in the
event the Transfer Notice provided that payment for the Purchased Shares was to
be made in a form other than cash or cash equivalents paid at the time of
transfer, the Company shall have the option of paying for the Purchased Shares
with cash or cash equivalents equal to the present value of the consideration
described in the Transfer Notice.
(c)......Additional Shares or Substituted Securities. In the event of
the declaration of a stock dividend, the declaration of an extraordinary
dividend payable in a form other than stock, a spin-off, a stock split, an
adjustment in conversion ratio, a recapitalization or a similar transaction
affecting the Company's outstanding securities without receipt of consideration,
any new, substituted or additional securities or other property (including money
paid other than as an ordinary cash dividend) which are by reason of such
transaction distributed with respect to any Purchased Shares subject to this
Section 3 or into which such Purchased Shares thereby become convertible shall
immediately be subject to this Section 3. Appropriate adjustments to reflect the
distribution of such securities or property shall be made to the number and/or
class of Purchased Shares subject to this Section 3.
(d)......Termination of Right of First Refusal. Any other provision of
this Section 3 notwithstanding, in the event that the Stock is readily tradable
on an established securities market when the Purchaser desires to transfer
Purchased Shares, the Company shall have no Right of First Refusal, and the
Purchaser shall have no obligation to comply with the procedures prescribed by
Subsections (a) and (b) above.
(e)......Permitted Transfers. This Section 3 shall not apply to (i) a
transfer by beneficiary designation, will or intestate succession or (ii) a
transfer to the Purchaser's spouse, children or grandchildren or to a trust
established by the Purchaser for the benefit of the Purchaser or the Purchaser's
spouse, children or grandchildren, provided in either case that the Transferee
agrees in writing on a form prescribed by the Company to be bound by all
provisions of this Agreement. If the Purchaser transfers any Purchased Shares,
either under this Subsection (e) or after the Company has failed to exercise the
Right of First Refusal, then this Section 3 shall apply to the Transferee to the
same extent as to the Purchaser.
(f)......Termination of Rights as Shareholder. If the Company makes
available, at the time and place and in the amount and form provided in this
Agreement, the consideration for the Purchased Shares to be purchased in
accordance with this Section 3, then after such time the person from whom such
Purchased Shares are to be purchased shall no longer have any rights as a holder
of such Purchased Shares (other than the right to receive payment of such
consideration in accordance with this Agreement). Such Purchased Shares shall be
deemed to have been purchased in accordance with the applicable provisions
hereof, whether or not the certificate(s) therefor have been delivered as
required by this Agreement.
<PAGE>
SECTION 4. OTHER RESTRICTIONS ON TRANSFER.
(a)......Purchaser Representations. In connection with the issuance and
acquisition of Shares under this Agreement, the Purchaser hereby represents and
warrants to the Company as follows:
(i) The Purchaser is acquiring and will hold the Purchased
Shares for investment for his or her account only and not with a view
to, or for resale in connection with, any "distribution" thereof within
the meaning of the Securities Act.
(ii) The Purchaser understands that the Purchased Shares have
not been registered under the Securities Act by reason of a specific
exemption therefrom and that the Purchased Shares must be held
indefinitely, unless they are subsequently registered under the
Securities Act or the Purchaser obtains an opinion of counsel, in form
and substance satisfactory to the Company and its counsel, that such
registration is not required. The Purchaser further acknowledges and
understands that the Company is under no obligation to register the
Purchased Shares.
(iii) The Purchaser is aware of the adoption of Rule 144 by
the Securities and Exchange Commission under the Securities Act, which
permits limited public resales of securities acquired in a non-public
offering, subject to the satisfaction of certain conditions, including
(without limitation) the availability of certain current public
information about the issuer, the resale occurring only after the
holding period required by Rule 144 has been satisfied, the sale
occurring through an unsolicited "broker's transaction," and the amount
of securities being sold during any three-month period not exceeding
specified limitations. The Purchaser acknowledges and understands that
the conditions for resale set forth in Rule 144 have not been satisfied
and that the Company has no plans to satisfy these conditions in the
foreseeable future.
(iv) The Purchaser will not sell, transfer or otherwise
dispose of the Purchased Shares in violation of the Securities Act, the
Securities Exchange Act of 1934, or the rules promulgated thereunder,
including Rule 144 under the Securities Act. The Purchaser agrees that
he or she will not dispose of the Purchased Shares unless and until he
or she has complied with all requirements of this Agreement applicable
to the disposition of Purchased Shares and he or she has provided the
Company with written assurances, in substance and form satisfactory to
the Company, that (A) the proposed disposition does not require
registration of the Purchased Shares under the Securities Act or all
appropriate action necessary for compliance with the registration
requirements of the Securities Act or with any exemption from
registration available under the Securities Act (including Rule 144)
has been taken and (B) the proposed disposition will not result in the
contravention of any transfer restrictions applicable to the Purchased
Shares under the Rules of the California Corporations Commissioner.
(v) The Purchaser has been furnished with, and has had access
to, such information as he or she considers necessary or appropriate
for deciding whether to invest in the Purchased Shares, and the
Purchaser has had an opportunity to ask questions and receive answers
from the Company regarding the terms and conditions of the issuance of
the Purchased Shares.
(vi) The Purchaser is aware that his or her investment in the
Company is a speculative investment which has limited liquidity and is
subject to the risk of complete loss. The Purchaser is able, without
impairing his or her financial condition, to hold the Purchased Shares
for an indefinite period and to suffer a complete loss of his or her
investment in the Purchased Shares.
(b)......Securities Law Restrictions. Regardless of whether the
offering and sale of Shares under the Plan have been registered under the
Securities Act or have been registered or qualified under the securities laws of
any state, the Company at its discretion may impose restrictions upon the sale,
pledge or other transfer of the Purchased Shares (including the placement of
appropriate legends on stock certificates or the imposition of stop-transfer
instructions) if, in the judgment of the Company, such restrictions are
necessary or desirable in order to achieve compliance with the Securities Act,
the securities laws of any state or any other law.
(c)......Market Stand-Off. In connection with any underwritten public
offering by the Company of its equity securities pursuant to an effective
registration statement filed under the Securities Act, including the Company's
initial public offering, the Purchaser shall not directly or indirectly sell,
make any short sale of, loan, hypothecate, pledge, offer, grant or sell any
option or other contract for the purchase of, purchase any option or other
contract for the sale of, or otherwise dispose of or transfer, or agree to
engage in any of the foregoing transactions with respect to, any Purchased
Shares without the prior written consent of the Company or its underwriters.
Such restriction (the "Market Stand-Off') shall be in effect for such period of
time following the date of the final prospectus for the offering as may be
requested by the Company or such underwriters. In no event, however, shall such
period exceed 180 days. The Market Stand-Off shall in any event terminate two
years after the date of the Company's initial public offering. In the event of
the declaration of a stock dividend, a spin-off, a stock split, an adjustment in
conversion ratio, a recapitalization or a similar transaction affecting the
Company's outstanding securities without receipt of consideration, any new,
substituted or additional securities which are by reason of such transaction
distributed with respect to any Shares subject to the Market Stand-Off, or into
which such Shares thereby become convertible, shall immediately be subject to
the Market Stand-Off. In order to enforce the Market Stand-Off, the Company may
impose stop-transfer instructions with respect to the Purchased Shares until the
end of the applicable stand-off period. The Company's underwriters shall be
beneficiaries of the agreement set forth in this Subsection (c). This Subsection
(c) shall not apply to Shares registered in the public offering under the
Securities Act, and the Purchaser shall be subject to this Subsection (c) only
if the directors and officers of the Company are subject to similar
arrangements.
<PAGE>
(d)......Rights of the Company. The Company shall not be required to
(i) transfer on its books any Purchased Shares that have been sold or
transferred in contravention of this Agreement or (ii) treat as the owner of
Purchased Shares, or otherwise to accord, voting, dividend or liquidation rights
to, any transferee to whom Purchased Shares have been transferred in
contravention of this Agreement.
SECTION 5. SUCCESSORS AND ASSIGNS.
Except as otherwise expressly provided to the contrary, the provisions
of this Agreement shall inure to the benefit of, and be binding upon, the
Company and its successors and assigns and be binding upon the Purchaser and the
Purchaser's legal representatives, heirs, legatees, distributees, assigns and
transferees by operation of law, whether or not any such person has become a
party to this Agreement or has agreed in writing to join herein and to be bound
by the terms, conditions and restrictions hereof.
SECTION 6. NO RETENTION RIGHTS.
Nothing in this Agreement or in the Plan shall confer upon the
Purchaser any right to continue in Service for any period of specific duration
or interfere with or otherwise restrict in any way the rights of the Company (or
any Parent or Subsidiary employing or retaining the Purchaser) or of the
Purchaser, which rights are hereby expressly reserved by each, to terminate his
or her Service at any time and for any reason, with or without cause.
SECTION 7. TAX ELECTION.
The acquisition of the Purchased Shares may result in adverse tax
consequences that may be avoided or mitigated by filing an election under Code
Section 83(b). Such election may be filed only within 30 days after the date of
purchase set forth in the Summary of Stock Purchase. The form for making the
Code Section 83(b) election is attached to this Agreement as an Exhibit. The
Purchaser should consult with his or her tax advisor to determine the tax
consequences of acquiring the purchased shares and the advantages and
disadvantages of filing the code Section 83(b) election. The Purchaser
acknowledges that it is his or her sole responsibility, and not the company's,
to file a timely election under code section 83(b), even if the purchaser
requests the company or its representatives to make this filing on his or her
behalf.
SECTION 8. LEGENDS.
Legends. All certificates evidencing Purchased Shares shall bear the
following legends:
"THE SHARES REPRESENTED HEREBY MAY NOT BE SOLD, ASSIGNED, TRANSFERRED,
ENCUMBERED OR IN ANY MANNER DISPOSED OF, EXCEPT IN COMPLIANCE WITH THE
TERMS OF A WRITTEN AGREEMENT BETWEEN THE COMPANY AND THE REGISTERED
HOLDER OF THE SHARES (OR THE PREDECESSOR IN INTEREST TO THE SHARES).
SUCH AGREEMENT GRANTS TO THE COMPANY CERTAIN RIGHTS OF FIRST REFUSAL
UPON AN ATTEMPTED TRANSFER OF THE SHARES AND CERTAIN REPURCHASE RIGHTS
UPON TERMINATION OF SERVICE WITH THE COMPANY. THE SECRETARY OF THE
COMPANY WILL UPON WRITTEN REQUEST FURNISH A COPY OF SUCH AGREEMENT TO
THE HOLDER HEREOF WITHOUT CHARGE."
THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR
OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER
SUCH ACT OR AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY AND ITS
COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED."
If required by the authorities of any state in connection with the issuance of
the Purchased Shares, the legend or legends required by such state authorities
shall also be endorsed on all such certificates.
SECTION 9. NOTICE.
Any notice required by the terms of this Agreement shall be given in
writing and shall be deemed effective upon personal delivery or upon deposit
with the United States Postal Service, by registered or certified mail, with
postage and fees prepaid. Notice shall be addressed to the Company at its
principal executive office and to the Purchaser at the address that he or she
most recently provided to the Company.
<PAGE>
SECTION 10. ENTIRE AGREEMENT.
The Summary of Stock Purchase, this Agreement and the Plan constitute
the entire contract between the parties hereto with regard to the subject matter
hereof. They supersede any other agreements, representations or understandings
(whether oral or written and whether express or implied) which relate to the
subject matter hereof.
SECTION 11. CHOICE OF LAW.
This Agreement shall be governed by, and construed in accordance with,
the laws of the State of California, as such laws are applied to contracts
entered into and performed in such State.
SECTION 12. DEFINITIONS.
(a)...."Agreement" shall mean this Stock Purchase Agreement.
(b)...."Board of Directors" shall mean the Board of Directors of the
Company, as constituted from time to time or, if a Committee has been appointed,
such Committee.
(c)...."Change in Control" shall mean:
(i) The consummation of a merger or consolidation of the
Company with or into another entity or any other corporate
reorganization, if more than 50% of the combined voting power of the
continuing or surviving entity's securities outstanding immediately
after such merger, consolidation or other reorganization is owned by
persons who were not shareholders of the Company immediately prior to
such merger, consolidation or other reorganization; or
(ii) The sale, transfer or other disposition of all or
substantially all of the Company's assets.
A transaction shall not constitute a Change in Control if its sole
purpose is to change the state of the Company's incorporation or to create a
holding company that will be owned in substantially the same proportions by the
persons who held the Company's securities immediately before such transaction.
(d)...."Code" shall mean the Internal Revenue Code of 1986, as amended.
(e)...."Committee" shall mean a committee of the Board of Directors,
as described in Section 2 of the Plan.
(f)...."Company" shall mean Spinner Networks Incorporated, a
California corporation.
(g)...."Consultant" shall mean an individual who performs bona fide
services for the Company, a Parent or a Subsidiary as a consultant or advisor,
excluding Employees and Outside Directors.
(h)...."Employee" shall mean any individual who is a common-law
employee of the Company, a Parent or a Subsidiary.
(i)...."Fair Market Value" shall mean the fair market value of a
Share, as determined by the Board of Directors in good faith. Such determination
shall be conclusive and binding on all persons.
(j)...."Outside Director" shall mean a member of the Board of
Directors who is not an Employee.
(k)...."Parent" shall mean any corporation (other than the Company)
in an unbroken chain of corporations ending with the Company, if each of the
corporations other than the Company owns stock possessing 50% or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain.
(l)...."Plan" shall mean the Spinner Networks Incorporated 1997 Stock
Plan, as amended.
(m)...."Purchased Shares" shall mean the Shares purchased by the
Purchaser pursuant to this Agreement.
(n)...."Purchase Price" shall mean the amount for which one Share may
be purchased pursuant to this Agreement, as specified in the Summary of Stock
Purchase.
(o)...."Purchaser" shall mean the individual named in the Summary of
Stock Purchase.
(p)...."Restricted Share" shall mean a Purchased Share that is
subject to the Right of Repurchase.
(q)...."Right of First Refusal" shall mean the Company's right of
first refusal described in Section 3.
(r)...."Right of Repurchase" shall mean the Company's right of
repurchase described in Section 2.
(s)...."Securities Act" shall mean the Securities Act of 1933, as
amended.
<PAGE>
(t)...."Service" shall mean service as an Employee, Outside Director
or Consultant.
(u)...."Share" shall mean one share of Stock, as adjusted in
accordance with Section 8 of the Plan (if applicable).
(v)...."Stock" shall mean the Common Stock of the Company.
(w)...."Subsidiary" shall mean any corporation (other than the
Company) in an unbroken chain or corporations beginning with the Company, if
each of the corporations other than the last corporation in the unbroken chain
owns stock possessing 50% or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain.
(x)...."Summary of Stock Purchase" shall mean the document so
entitled to which this Agreement is attached.
(y)...."Transferee" shall mean any person to whom the Purchaser has
directly or indirectly transferred any Purchased Share.
(z)...."Transfer Notice" shall mean the notice of a proposed transfer
of Purchased Shares described in Section 3.
<PAGE>
EXHIBIT I
SECTION 83(b) ELECTION
This statement is made under Section 83(b) of the Internal Revenue Code of 1986,
as amended, pursuant to Treasury Regulations Section 1.83-2.
(1) The taxpayer who performed the services is:
Name:
Address:
Social Security No.:
(2) The property with respect to which the election is made is _______
shares of the common stock of Spinner Networks Incorporated.
(3) The property was transferred on ___________, 199_.
(4) The taxable year for which the election is made is the calendar year
199_.
(5) The property is subject to a repurchase right pursuant to which the
issuer has the right to acquire the property at the original purchase
price if for any reason taxpayer's employment with the issuer is
terminated. The issuer's repurchase right lapses in a series of
installments over a _______-year period ending on ____________ ___,
____.
(6) The fair market value of such property at the time of transfer
(determined without regard to any restriction other than a restriction
which by its terms will never lapse) is $___ per share.
(7) The amount paid for such property is $____ per share.
(8) A copy of this statement was furnished to Spinner Networks
Incorporated, for whom taxpayer rendered the services underlying the
transfer of such property.
(9) This statement is executed on ___________ __, 199_.
Spouse (if any) Taxpayer
This election must be filed with the Internal Revenue Service Center with which
the Purchaser files his or her Federal income tar returns and must be filed
within 30 days after the date of purchase. This filing should be made by
registered or certified mail, return receipt requested The Purchaser must retain
two copies of the completed form for filing with his or her Federal and state
tar returns for the current tar year and an additional copy for his or her
records.
<PAGE>
THE OPTION GRANTED PURSUANT TO THIS AGREEMENT AND THE SHARES ISSUABLE UPON THE
EXERCISE THEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT AN
EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR AN OPINION OF COUNSEL,
SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT
REQUIRED.
SPINNER NETWORKS INCORPORATED 1997 STOCK PLAN
STOCK OPTION AGREEMENT
SECTION 1. GRANT OF OPTION.
(a) Option. On the terms and conditions set forth in the
Notice of Stock Option Grant and this Agreement, the Company grants to the
Optionee on the Date of Grant the option to purchase at the Exercise Price the
number of Shares set forth in the Notice of Stock Option Grant. The Exercise
Price is agreed to be at least 100% of the Fair Market Value per Share on the
Date of Grant (110% of Fair Market Value if Section 3(b) of the Plan applies).
This option is intended to be an ISO or a Nonstatutory Option, as provided in
the Notice of Stock Option Grant.
(b) Stock Plan and Defined Terms. This option is granted
pursuant to the Plan, a copy of which the Optionee acknowledges having received.
The provisions of the Plan are incorporated into this Agreement by this
reference. Capitalized terms are defined in Section 14 of this Agreement.
SECTION 2. RIGHT TO EXERCISE.
(a) Exercisability. Subject to Subsections (b) and (c) below
and the other conditions set forth in this Agreement, all or part of this option
may be exercised prior to its expiration at the time or times set forth in the
Notice of Stock Option Grant. Shares purchased by exercising this option may be
subject to the Right of Repurchase under Section 7.
(b) $100,000 Limitation. If this Option is designated as an
ISO in the Notice of Stock Option Grant, then the Optionee's right to exercise
this option shall be deferred to the extent (and only to the extent) that this
option otherwise would not be treated as an ISO by reason of the $100,000 annual
limitation under Section 422(d) of the Code, except that:
(i) The Optionee's right to exercise this option
shall not be deferred with respect to that portion of the Shares
subject to this option whose Fair Market Value as of the Date of Grant
exceeds $500,000; and
(ii) The Optionee's right to exercise this option
shall no longer be deferred in the event that (A) a Change in Control
occurs, (B) this option is not assumed by the surviving corporation or
its parent and (C) the surviving corporation or its parent does not
substitute its own option for this option.
(c) Shareholder Approval. Any other provision of this
Agreement notwithstanding, no portion of this option shall be exercisable at any
time prior to the approval of the Plan by the Company's shareholders.
SECTION 3. NO TRANSFER OR ASSIGNMENT OF OPTION.
Except as otherwise provided in this Agreement, this option
and the rights and privileges conferred hereby shall not be sold, pledged or
otherwise transferred (whether by operation of law or otherwise) and shall not
be subject to sale under execution, attachment, levy or similar process.
SECTION 4. EXERCISE PROCEDURES.
(a) Notice of Exercise. The Optionee or the Optionee's
representative may exercise this option by giving written notice to the Company
pursuant to Section 13(c). The notice shall specify the election to exercise
this option, the number of Shares for which it is being exercised and the form
of payment. The notice shall be signed by the person exercising this option. In
the event that this option is being exercised by the representative of the
Optionee, the notice shall be accompanied by proof (satisfactory to the Company)
of the representative's right to exercise this option. The Optionee or the
Optionee' s representative shall deliver to the Company, at the time of giving
the notice, payment in a form permissible under Section 5 for the full amount of
the Purchase Price.
(b) Issuance of Shares. After receiving a proper notice of
exercise, the Company shall cause to be issued a certificate or certificates for
the Shares as to which this option has been exercised, registered in the name of
the person exercising this option (or in the names of such person and his or her
spouse as community property or as joint tenants with right of survivorship).
The Company shall cause such certificate or certificates to be deposited in
escrow or delivered to or upon the order of the person exercising this option.
<PAGE>
(c) Withholding Taxes. In the event that the Company
determines that it is required to withhold any tax as a result of the exercise
of this option, the Optionee, as a condition to the exercise of this option,
shall make arrangements satisfactory to the Company to enable it to satisfy all
withholding requirements. The Optionee shall also make arrangements satisfactory
to the Company to enable it to satisfy any withholding requirements that may
arise in connection with the vesting or disposition of Shares purchased by
exercising this option.
SECTION 5. PAYMENT FOR STOCK.
(a) Cash. All or part of the Purchase Price may be paid in
cash or cash equivalents.
(b) Surrender of Stock. All or part of the Purchase Price may
be paid by the surrender of Shares in good form for transfer. Such Shares must
have a fair market value (as determined by the Board of Directors) on the date
of exercise of this option which, together with any amount paid in another form
permissible under this Section 5, is equal to the Purchase Price. The Optionee
shall not surrender Shares in payment of the Exercise Price if such surrender
would cause the Company to recognize compensation expense with respect to the
option for financial reporting purposes.
(c) Exercise/Sale. If Stock is publicly traded, all or part of
the Purchase Price and any withholding taxes may be paid by the delivery (on a
form prescribed by the Company) of an irrevocable direction to a securities
broker approved by the Company to sell Shares and to deliver all or part of the
sales proceeds to the Company.
(d) Exercise/Pledge. If Stock is publicly traded, all or part
of the Purchase Price and any withholding taxes may be paid by the delivery (on
a form prescribed by the Company) of an irrevocable direction to pledge Shares
to a securities broker or lender approved by the Company, as security for a
loan, and to deliver all or part of the loan proceeds to the Company.
SECTION 6. TERM AND EXPIRATION.
(a) Basic Term. This option shall in any event expire on the
expiration date set forth in the Notice of Stock Option Grant, which date is 10
years after the Date of Grant (five years after the Date of Grant if this option
is designated as an ISO in the Notice of Stock Option Grant and Section 3(b) of
the Plan applies).
(b) Termination of Service (Except by Death). If the
Optionee's Service terminates for any reason other than death, then this option
shall expire on the earliest of the following occasions:
(i) The expiration date determined pursuant to
Subsection (a) above;
(ii) The date three months after the termination of
the Optionee' s Service for any reason other than Disability; or
(iii) The date six months after the termination of
the Optionee's Service by reason of Disability.
The Optionee may exercise all or part of this option at any time before its
expiration under the preceding sentence, but only to the extent that this option
had become exercisable before the Optionee's Service terminated. When the
Optionee's Service terminates, this option shall expire immediately with respect
to the number of Shares for which this option is not yet exercisable and with
respect to any Restricted Shares. In the event that the Optionee dies after
termination of Service but before the expiration of this option, all or part of
this option may be exercised (prior to expiration) by the executors or
administrators of the Optionee's estate or by any person who has acquired this
option directly from the Optionee by beneficiary designation, bequest or
inheritance, but only to the extent that this option had become exercisable
before the Optionee's Service terminated.
(c) Death of the Optionee. If the Optionee dies while in
Service, then this option shall expire on the earlier of the following dates:
(i) The expiration date determined pursuant to
Subsection (a) above; or
(ii) The date 12 months after the Optionee's
death.
All or part of this option may be exercised at any time before its expiration
under the preceding sentence by the executors or administrators of the
Optionee's estate or by any person who has acquired this option directly from
the Optionee by beneficiary designation, bequest or inheritance, but only to the
extent that this option had become exercisable before the Optionee's death. When
the Optionee dies, this option shall expire immediately with respect to the
number of Shares for which this option is not yet exercisable and with respect
to any Restricted Shares.
<PAGE>
(d) Leaves of Absence. For any purpose under this Agreement,
Service shall be deemed to continue while the Optionee is on a bona fide leave
of absence, if such leave was approved by the Company in writing and if
continued crediting of Service for such purpose is expressly required by the
terms of such leave or by applicable law (as determined by the Company).
(e) Notice Concerning ISO Treatment. If this option is
designated as an ISO in the Notice of Stock Option Grant, it ceases to qualify
for favorable tax treatment as an ISO to the extent it is exercised (i) more
than three months after the date the Optionee ceases to be an Employee for any
reason other than death or permanent and total disability (as defined in Section
22(e)(3) of the Code), (ii) more than 12 months after the date the Optionee
ceases to be an Employee by reason of such permanent and total disability or
(iii) after the Optionee has been on a leave of absence for more than 90 days,
unless the Optionee's reemployment rights are guaranteed by statute or by
contract.
SECTION 7. RIGHT OF REPURCHASE.
(a) Scope of Repurchase Right. Unless they have become vested
in accordance with the Notice of Stock Option Grant and Subsection (c) below,
the Shares acquired under this Agreement initially shall be Restricted Shares
and shall be subject to a right (but not an obligation) of repurchase by the
Company. The Optionee shall not transfer, assign, encumber or otherwise dispose
of any Restricted Shares, except as provided in the following sentence. The
Optionee may transfer Restricted Shares (i) by beneficiary designation, will or
intestate succession or (ii) to the Optionee's spouse, children or grandchildren
or to a trust established by the Optionee for the benefit of the Optionee or the
Optionee's spouse, children or grandchildren, provided in either case that the
Transferee agrees in writing on a form prescribed by the Company to be bound by
all provisions of this Agreement. If the Optionee transfers any Restricted
Shares, then this Section 7 shall apply to the Transferee to the same extent as
to the Optionee.
(b) Condition Precedent to Exercise. The Right of Repurchase
shall be exercisable only during the 60-day period next following the later of:
(i) The date when the Optionee's Service terminates
for any reason, with or without cause, including (without limitation)
death or disability; or
(ii) The date when this option was exercised by the
Optionee, the executors or administrators of the Optionee's estate or
any person who has acquired this option directly from the Optionee by
bequest, inheritance or beneficiary designation.
(c) Lapse of Repurchase Right. The Right of Repurchase shall
lapse with respect to the Shares subject to this option in accordance with the
vesting schedule set forth in the Notice of Stock Option Grant. The Right of
Repurchase shall lapse and all of the remaining Restricted Shares shall become
vested if (i) the Company is subject to a Change in Control and (ii) the Right
of Repurchase is not assigned to the entity that employs the Optionee
immediately after the Change in Control or to its parent or subsidiary.
(d) Repurchase Cost. If the Company exercises the Right of
Repurchase, it shall pay the Optionee an amount equal to the Exercise Price for
each of the Restricted Shares being repurchased.
(e) Exercise of Repurchase Right. The Right of Repurchase
shall be exercisable only by written notice delivered to the Optionee prior to
the expiration of the 60-day period specified in Subsection (b) above. The
notice shall set forth the date on which the repurchase is to be effected. Such
date shall not be more than 30 days after the date of the notice. The
certificate(s) representing the Restricted Shares to be repurchased shall, prior
to the close of business on the date specified for the repurchase, be delivered
to the Company properly endorsed for transfer. The Company shall, concurrently
with the receipt of such certificate(s), pay to the Optionee the purchase price
determined according to Subsection (d) above. Payment shall be made in cash or
cash equivalents or by canceling indebtedness to the Company incurred by the
Optionee in the purchase of the Restricted Shares. The Right of Repurchase shall
terminate with respect to any Restricted Shares for which it has not been timely
exercised pursuant to this Subsection (e).
(f) Additional Shares or Substituted Securities. In the event
of the declaration of a stock dividend, the declaration of an extraordinary
dividend payable in a form other than stock, a spin-off, a stock split, an
adjustment in conversion ratio, a recapitalization or a similar transaction
affecting the Company's outstanding securities without receipt of consideration,
any new, substituted or additional securities or other property (including money
paid other than as an ordinary cash dividend) which are by reason of such
transaction distributed with respect to any Restricted Shares or into which such
Restricted Shares thereby become convertible shall immediately be subject to the
Right of Repurchase. Appropriate adjustments to reflect the distribution of such
securities or property shall be made to the number and/or class of the
Restricted Shares. Appropriate adjustments shall also, after each such
transaction, be made to the price per share to be paid upon the exercise of the
Right of Repurchase in order to reflect any change in the Company's outstanding
securities effected without receipt of consideration therefor; provided,
however, that the aggregate purchase price payable for the Restricted Shares
shall remain the same.
<PAGE>
(g) Termination of Rights as Shareholder. If the Company makes
available, at the time and place and in the amount and form provided in this
Agreement, the consideration for the Restricted Shares to be repurchased in
accordance with this Section 7, then after such time the person from whom such
Restricted Shares are to be repurchased shall no longer have any rights as a
holder of such Restricted Shares (other than the right to receive payment of
such consideration in accordance with this Agreement). Such Restricted Shares
shall be deemed to have been repurchased in accordance with the applicable
provisions hereof, whether or not the certificate(s) therefor have been
delivered as required by this Agreement.
(h) Escrow. Upon issuance, the certificates for Restricted
Shares shall be deposited in escrow with the Company to be held in accordance
with the provisions of this Agreement. Any new, substituted or additional
securities or other property described in Subsection (f) above shall immediately
be delivered to the Company to be held in escrow, but only to the extent the
Shares are at the time Restricted Shares. All regular cash dividends on
Restricted Shares (or other securities at the time held in escrow) shall be paid
directly to the Optionee and shall not be held in escrow. Restricted Shares,
together with any other assets or securities held in escrow hereunder, shall be
(i) surrendered to the Company for repurchase and cancellation upon the
Company's exercise of its Right of Repurchase or Right of First Refusal or (ii)
released to the Optionee upon the Optionee's request to the extent the Shares
are no longer Restricted Shares (but not more frequently than once every six
months). In any event, all Shares which have vested (and any other vested assets
and securities attributable thereto) shall be released within 60 days after the
earlier of (i) the Optionee's cessation of Service or (ii) the lapse of the
Right of First Refusal.
SECTION 8. RIGHT OF FIRST REFUSAL.
(a) Right of First Refusal. In the event that the Optionee
proposes to sell, pledge or otherwise transfer to a third party any Shares
acquired under this Agreement, or any interest in such Shares, the Company shall
have the Right of First Refusal with respect to all (and not less than all) of
such Shares. If the Optionee desires to transfer Shares acquired under this
Agreement, the Optionee shall give a written Transfer Notice to the Company
describing fully the proposed transfer, including the number of Shares proposed
to be transferred, the proposed transfer price, the name and address of the
proposed Transferee and proof satisfactory to the Company that the proposed sale
or transfer will not violate any applicable federal or state securities laws.
The Transfer Notice shall be signed both by the Optionee and by the proposed
Transferee and must constitute a binding commitment of both parties to the
transfer of the Shares. The Company shall have the right to purchase all, and
not less than all, of the Shares on the terms of the proposal described in the
Transfer Notice (subject, however, to any change in such terms permitted under
Subsection (b) below) by delivery of a notice of exercise of the Right of First
Refusal within 30 days after the date when the Transfer Notice was received by
the Company. The Company's rights under this Subsection (a) shall be freely
assignable, in whole or in part.
(b) Transfer of Shares. If the Company fails to exercise its
Right of First Refusal within 30 days after the date when it received the
Transfer Notice, the Optionee may, not later than 90 days following receipt of
the Transfer Notice by the Company, conclude a transfer of the Shares subject to
the Transfer Notice on the terms and conditions described in the Transfer
Notice, provided that any such sale is made in compliance with applicable
federal and state securities laws and not in violation of any other contractual
restrictions to which the Optionee is bound. Any proposed transfer on terms and
conditions different from those described in the Transfer Notice, as well as any
subsequent proposed transfer by the Optionee, shall again be subject to the
Right of First Refusal and shall require compliance with the procedure described
in Subsection (a) above. If the Company exercises its Right of First Refusal,
the parties shall consummate the sale of the Shares on the terms set forth in
the Transfer Notice within 60 days after the date when the Company received the
Transfer Notice (or within such longer period as may have been specified in the
Transfer Notice); provided, however, that in the event the Transfer Notice
provided that payment for the Shares was to be made in a form other than cash or
cash equivalents paid at the time of transfer, the Company shall have the option
of paying for the Shares with cash or cash equivalents equal to the present
value of the consideration described in the Transfer Notice.
(c) Additional Shares or Substituted Securities. In the event
of the declaration of a stock dividend, the declaration of an extraordinary
dividend payable in a form other than stock, a spin-off, a stock split, an
adjustment in conversion ratio, a recapitalization or a similar transaction
affecting the Company's outstanding securities without receipt of consideration,
any new, substituted or additional securities or other property (including money
paid other than as an ordinary cash dividend) which are by reason of such
transaction distributed with respect to any Shares subject to this Section 8 or
into which such Shares thereby become convertible shall immediately be subject
to this Section 8. Appropriate adjustments to reflect the distribution of such
securities or property shall be made to the number andlor class of the Shares
subject to this Section 8.
(d) Termination of Right of First Refusal. Any other provision
of this Section 8 notwithstanding, in the event that the Stock is readily
tradable on an established securities market when the Optionee desires to
transfer Shares, the Company shall have no Right of First Refusal, and the
Optionee shall have no obligation to comply with the procedures prescribed by
Subsections (a) and (b) above.
<PAGE>
(e) Permitted Transfers. This Section 8 shall not apply to (i)
a transfer by beneficiary designation, will or intestate succession or (ii) a
transfer to the Optionee's spouse, children or to a trust established by the
Optionee for the benefit of the Optionee or the Optionee's spouse, children or
grandchildren, provided in either case that the Transferee agrees in writing on
a form prescribed by the Company to be bound by all provisions of this
Agreement. If the Optionee transfers any Shares acquired under this Agreement,
either under this Subsection (e) or after the Company has failed to exercise the
Right of First Refusal, then this Section 8 shall apply to the Transferee to the
same extent as to the Optionee.
(f) Termination of Rights as Shareholder. If the Company makes
available, at the time and place and in the amount and form provided in this
Agreement, the consideration for the Shares to be purchased in accordance with
this Section 8, then after such time the person from whom such Shares are to be
purchased shall no longer have any rights as a holder of such Shares (other than
the right to receive payment of such consideration in accordance with this
Agreement). Such Shares shall be deemed to have been purchased in accordance
with the applicable provisions hereof, whether or not the certificate(s)
therefor have been delivered as required by this Agreement.
SECTION 9. LEGALITY OF INITIAL ISSUANCE.
No Shares shall be issued upon the exercise of this option
unless and until the Company has determined that:
(a) It and the Optionee have taken any actions required to
register the Shares under the Securities Act or to perfect an exemption from the
registration requirements thereof,
(b) Any applicable listing requirement of any stock exchange
on which Stock is listed has been satisfied; and
(c) Any other applicable provision of state or federal law has
been satisfied.
SECTION 10. NO REGISTRATION RIGHTS.
The Company may, but shall not be obligated to, register or
qualify the sale of Shares under the Securities Act or any other applicable law.
The Company shall not be obligated to take any affirmative action in order to
cause the sale of Shares under this Agreement to comply with any law.
SECTION 11. RESTRICTIONS ON TRANSFER.
(a) Securities Law Restrictions. Regardless of whether the
offering and sale of Shares under the Plan have been registered under the
Securities Act or have been registered or qualified under the securities laws of
any state, the Company at its discretion may impose restrictions upon the sale,
pledge or other transfer of such Shares (including the placement of appropriate
legends on stock certificates or the imposition of stop-transfer instructions)
if, in the judgment of the Company, such restrictions are necessary or desirable
in order to achieve compliance with the Securities Act, the securities laws of
any state or any other law.
(b) Market Stand-Off. In connection with any underwritten
public offering by the Company of its equity securities pursuant to an effective
registration statement filed under the Securities Act, including the Company's
initial public offering, the Optionee shall not directly or indirectly sell,
make any short sale of, loan, hypothecate, pledge, offer, grant or sell any
option or other contract for the purchase of, purchase any option or other
contract for the sale of, or otherwise dispose of or transfer, or agree to
engage in any of the foregoing transactions with respect to, any Shares acquired
under this Agreement without the prior written consent of the Company or its
underwriters. Such restriction (the "Market Stand-Off') shall be in effect for
such period of time following the date of the final prospectus for the offering
as may be requested by the Company or such underwriters. In no event, however,
shall such period exceed 180 days. The Market Stand-Off shall in any event
terminate two years after the date of the Company's initial public offering. In
the event of the declaration of a stock dividend, a spin-off, a stock split, an
adjustment in conversion ratio, a recapitalization or a similar transaction
affecting the Company's outstanding securities without receipt of consideration,
any new, substituted or additional securities which are by reason of such
transaction distributed with respect to any Shares subject to the Market
Stand-Off, or into which such Shares thereby become convertible, shall
immediately be subject to the Market Stand-Off. In order to enforce the Market
Stand-Off, the Company may impose stop-transfer instructions with respect to the
Shares acquired under this Agreement until the end of the applicable stand-off
period. The Company's underwriters shall be beneficiaries of the agreement set
forth in this Subsection (b). This Subsection (b) shall not apply to Shares
registered in the public offering under the Securities Act, and the Optionee
shall be subject to this Subsection (b) only if the directors and officers of
the Company are subject to similar arrangements.
<PAGE>
(c) Investment Intent at Grant. The Optionee represents and
agrees that the Shares to be acquired upon exercising this option will be
acquired for investment, and not with a view to the sale or distribution
thereof.
(d) Investment Intent at Exercise. In the event that the sale
of Shares under the Plan is not registered under the Securities Act but an
exemption is available which requires an investment representation or other
representation, the Optionee shall represent and agree at the time of exercise
that the Shares being acquired upon exercising this option are being acquired
for investment, and not with a view to the sale or distribution thereof, and
shall make such other representations as are deemed necessary or appropriate by
the Company and its counsel.
(e) Legends. All certificates evidencing Shares purchased
under this Agreement shall bear the following legend:
"THE SHARES REPRESENTED HEREBY MAY NOT BE SOLD, ASSIGNED, TRANSFERRED,
ENCUMBERED OR iN ANY MANNER DISPOSED OF, EXCEPT IN COMPLIANCE WITH THE
TERMS OF A WRITTEN AGREEMENT BETWEEN THE COMPANY AND THE REGISTERED
HOLDER OF THE SHARES (OR THE PREDECESSOR IN INTEREST TO THE SHARES).
SUCH AGREEMENT GRANTS TO THE COMPANY CERTAIN RIGHTS OF FIRST REFUSAL
UPON AN ATTEMPTED TRANSFER OF THE SHARES AND CERTAIN REPURCHASE RIGHTS
UPON TERMINATION OF SERVICE WITH THE COMPANY. THE SECRETARY OF THE
COMPANY WILL UPON WRITTEN REQUEST FURNISH A COPY OF SUCH AGREEMENT TO
THE HOLDER HEREOF WITHOUT CHARGE."
All certificates evidencing Shares purchased under this Agreement in an
unregistered transaction shall bear the following legend (and such other
restrictive legends as are required or deemed advisable under the provisions of
any applicable law):
"THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR
OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER
SUCH ACT OR AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY AND ITS
COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED."
(f) Removal of Legends. If, in the opinion of the Company and
its counsel, any legend placed on a stock certificate representing Shares sold
under this Agreement is no longer required, the holder of such certificate shall
be entitled to exchange such certificate for a certificate representing the same
number of Shares but without such legend.
(g) Administration. Any determination by the Company and its
counsel in connection with any of the matters set forth in this Section 11 shall
be conclusive and binding on the Optionee and all other persons.
SECTION 12. ADJUSTMENT OF SHARES.
In the event of any transaction described in Section 8(a) of
the Plan, the terms of this option (including, without limitation, the number
and kind of Shares subject to this option and the Exercise Price) shall be
adjusted as set forth in Section 8(a) of the Plan. In the event that the Company
is a party to a merger or consolidation, this option shall be subject to the
agreement of merger or consolidation, as provided in Section 8(b) of the Plan.
SECTION 13. MISCELLANEOUS PROVISIONS.
(a) Rights as a Shareholder. Neither the Optionee nor the
Optionee's representative shall have any rights as a shareholder with respect to
any Shares subject to this option until the Optionee or the Optionee's
representative becomes entitled to receive such Shares by filing a notice of
exercise and paying the Purchase Price pursuant to Sections 4 and 5.
(b) No Retention Rights. Nothing in this option or in the Plan
shall confer upon the Optionee any right to continue in Service for any period
of specific duration or interfere with or otherwise restrict in any way the
rights of the Company (or any Parent or Subsidiary employing or retaining the
Optionee) or of the Optionee, which rights are hereby expressly reserved by
each, to terminate his or her Service at any time and for any reason, with or
without cause.
(c) Notice. Any notice required by the terms of this Agreement
shall be given in writing and shall be deemed effective upon personal delivery
or upon deposit with the United States Postal Service, by registered or
certified mail, with postage and fees prepaid. Notice shall be addressed to the
Company at its principal executive office and to the Optionee at the address
that he or she most recently provided to the Company.
(d) Entire Agreement. The Notice of Stock Option Grant, this
Agreement and the Plan constitute the entire contract between the parties hereto
with regard to the subject matter hereof. They supersede any other agreements,
representations or understandings (whether oral or written and whether express
or implied) which relate to the subject matter hereof.
(e) Choice of Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of California, as such laws
are applied to contracts entered into and performed in such State.
<PAGE>
SECTION 14. DEFINITIONS.
(a) "Agreement" shall mean this Stock Option Agreement.
(b) "Board of Directors" shall mean the Board of Directors of
the Company, as constituted from time to time or, if a Committee has been
appointed, such Committee.
(c) "Change in Control" shall mean:
(i) The consummation of a merger or consolidation of
the Company with or into another entity or any other corporate
reorganization, if more than 50% of the combined voting power of the
continuing or surviving entity's securities outstanding immediately
after such merger, consolidation or other reorganization is owned by
persons who were not shareholders of the Company immediately prior to
such merger, consolidation or other reorganization; or
(ii) The sale, transfer or other disposition of all
or substantially all of the Company's assets.
A transaction shall not constitute a Change in Control if its
sole purpose is to change the state of the Company's incorporation or to create
a holding company that will be owned in substantially the same proportions by
the persons who held the Company's securities immediately before such
transaction.
(d) "Code" shall mean the Internal Revenue Code of 1986, as
amended.
(e) "Committee" shall mean a committee of the Board of
Directors, as described in Section 2 of the Plan.
(f) "Company" shall mean Spinner Networks Incorporated, a
California corporation.
(g) "Consultant" shall mean an individual who performs bona
fide services for the Company, a Parent or a Subsidiary as a consultant or
advisor, excluding Employees and Outside Directors.
(h) "Date of Grant" shall mean the date specified in the
Notice of Stock Option Grant, which date shall be the later of (i) the date on
which the Board of Directors resolved to grant this option or (ii) the first day
of the Optionee's Service.
(i) "Disability" shall mean that the Optionee is unable to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment.
(j) "Employee" shall mean any individual who is a common-law
employee of the Company, a Parent or a Subsidiary.
(k) "Exercise Price" shall mean the amount for which one Share
may be purchased upon exercise of this option, as specified in the Notice of
Stock Option Grant.
(1) "Fair Market Value" shall mean the fair market value of a
Share, as determined by the Board of Directors in good faith. Such determination
shall be conclusive and binding on all persons.
(m) "ISO" shall mean an employee incentive stock option
described in Section 422(b) of the Code.
(n) "Nonstatutory Option" shall mean a stock option not
described in Sections 422(b) or 423(b) of the Code.
(o) "Notice of Stock Option Grant" shall mean the document so
entitled to which this Agreement is attached.
(p) "Optionee" shall mean the individual named in the Notice
of Stock Option Grant.
(q) "Outside Director" shall mean a member of the Board of
Directors who is not an Employee.
(r) "Parent" shall mean any corporation (other than the
Company) in an unbroken chain of corporations ending with the Company, if each
of the corporations other than the Company owns stock possessing 50% or more of
the total combined voting power of all classes of stock in one of the other
corporations in such chain.
(s) "Plan" shall mean the Spinner Networks Incorporated 1997
Stock Plan, as in effect on the Date of Grant.
(t) "Purchase Price" shall mean the Exercise Price multiplied
by the number of Shares with respect to which this option is being exercised.
(u) "Restricted Share" shall mean a Share that is subject to
the Right of Repurchase.
(v) "Right of First Refusal" shall mean the Company's right of
first refusal described in Section 8.
<PAGE>
(w) "Right of Repurchase" shall mean the Company's right of
repurchase described in Section 7.
(x) "Securities Act" shall mean the Securities Act of 1933, as
amended.
(y) "Service" shall mean service as an Employee, Outside
Director or Consultant.
(z) "Share" shall mean one share of Stock, as adjusted in
accordance with Section 8 of the Plan (if applicable).
(aa) "Stock" shall mean the Common Stock of the Company.
(bb) "Subsidiary" shall mean any corporation (other than the
Company) in an unbroken chain of corporations beginning with the Company, if
each of the corporations other than the last corporation in the unbroken chain
owns stock possessing 50% or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain.
(cc) "Transferee" shall mean any person to whom the Optionee
has directly or indirectly transferred any Share acquired under this Agreement.
(dd) "Transfer Notice" shall mean the notice of a proposed
transfer of Shares described in Section 8.
SPINNER NETWORKS INCORPORATED 1997 STOCK PLAN
NOTICE OF STOCK OPTION GRANT
You have been granted the following option to purchase Common
Stock of Spinner Networks Incorporated (the "Company"):
Name of Optionee:
Total Number of Shares Granted:
Type of Option: Incentive Stock Option
Nonstatutory Option
Exercise Price Per Share:
Date of Grant:
Date Exercisable: This option may be exercised, in whole or
in part, for 100% of the Share subject to
this option at any time after the Date of
Grant.
Vesting Commencement Date:
Vesting Schedule:The Right of Repurchase shall lapse
with respect to the first 25% of the Shares
subject to this option upon the Optionee's
completion of 12 months of Service from the
Vesting Commencement Date and an additional
1/48 of the Shares on the ____________ day
of each month thereafter.
Expiration Date:
By your signature and the signature of the Company's representative below, you
and the Company agree that this option is granted under and governed by the
terms and conditions of the 1997 Stock Plan and the Stock Option Agreement, both
of which are attached to and made a part of this document.
OPTIONEE: SPINNER NETWORKS
INCORPORATED
__________________________ By: _________________________
__________________________ Title: _______________________
Exhibit 5.1
June 30, 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 220,500 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
Spinner Networks Incorporated 1997 Stock Plan (the "Plan").
I am Assistant 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 California and
Texas 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.
<PAGE>
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/BRENDA C. KARICKHOFF, ESQ.
Brenda C. Karickhoff, Esq.
Assistant General Counsel
Exhibit 23.2
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement (Form
S-8 No. 333-______) pertaining to the Spinner Networks Incorporated 1997 Stock
Plan of our report dated September 25, 1998, with respect to the consolidated
financial statements of America Online, Inc. included in its Annual Report on
Form 10-K for the year ended June 30, 1998, 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, and our
report dated September 25, 1998 (except for the second paragraph of Note 19, as
to which the date is February 15, 1999 and the third paragraph of Note 19, as to
which the date is April 15, 1999), with respect to the supplemental consolidated
financial statements of America Online, Inc. included in its Current Report on
Form 8-K/A filed on April 21, 1999, filed with the Securities and Exchange
Commission.
/s/ Ernst & Young LLP
Vienna, Virginia
June 30, 1999
Exhibit 24.1
POWER OF ATTORNEY
FOR
SPINNER NETWORKS, INC. 1997 STOCK PLAN
I, Stephen M. Case, whose signature appears below, constitute and
appoint Stephen M. Case, Kenneth J. Novack, J. Michael Kelly, Sheila A. Clark
and James F. MacGuidwin, 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 under the Spinner Networks, Inc. Stock 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 30th day of June, 1999.
By: /s/Stephen M. Case
Signature
STEPHEN M. CASE
Print Name
POWER OF ATTORNEY
FOR
SPINNER NETWORKS, INC. 1997 STOCK PLAN
I, Daniel F. Akerson, whose signature appears below, constitute and
appoint Stephen M. Case, Kenneth J. Novack, J. Michael Kelly, Sheila A. Clark
and James F. MacGuidwin, 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 under the Spinner Networks, Inc. Stock 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 30th day of June, 1999.
By: /s/Daniel F. Akerson
Signature
DANIEL F. AKERSON
Print Name
POWER OF ATTORNEY
FOR
SPINNER NETWORKS, INC. 1997 STOCK PLAN
I, Robert W. Pittman, whose signature appears below, constitute and
appoint Stephen M. Case, Kenneth J. Novack, J. Michael Kelly, Sheila A. Clark
and James F. MacGuidwin, 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 under the Spinner Networks, Inc. Stock 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 30th day of June, 1999.
By: /s/Robert W. Pittman
Signature
ROBERT W. PITTMAN
Print Name
POWER OF ATTORNEY
FOR
SPINNER NETWORKS, INC. 1997 STOCK PLAN
I, William N. Melton, whose signature appears below, constitute and
appoint Stephen M. Case, Kenneth J. Novack, J. Michael Kelly, Sheila A. Clark
and James F. MacGuidwin, 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 under the Spinner Networks, Inc. Stock 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 30th day of June, 1999.
By: /s/William N. Melton
Signature
WILLIAM N. MELTON
Print Name
POWER OF ATTORNEY
FOR
SPINNER NETWORKS, INC. 1997 STOCK PLAN
I, Alexander M. Haig, Jr., whose signature appears below, constitute
and appoint Stephen M. Case, Kenneth J. Novack, J. Michael Kelly, Sheila A.
Clark and James F. MacGuidwin, 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 under the Spinner Networks, Inc.
Stock 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 30th day of June , 1999.
By: /s/Alexander M. Haig, Jr.
Signature
ALEXANDER M. HAIG, JR.
Print Name
POWER OF ATTORNEY
FOR
SPINNER NETWORKS, INC. 1997 STOCK PLAN
I, Frank J. Caufield, whose signature appears below, constitute and
appoint Stephen M. Case, Kenneth J. Novack, J. Michael Kelly, Sheila A. Clark
and James F. MacGuidwin, 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 under the Spinner Networks, Inc. Stock 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 30th day of June, 1999.
By: /s/Frank J. Caufield
Signature
FRANK J. CAUFIELD
Print Name
POWER OF ATTORNEY
FOR
SPINNER NETWORKS, INC. 1997 STOCK PLAN
I, James F. MacGuidwin, whose signature appears below, constitute and
appoint Stephen M. Case, Kenneth J. Novack, J. Michael Kelly, Sheila A. Clark
and James F. MacGuidwin, 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 under the Spinner Networks, Inc. Stock 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 30th day of June, 1999.
By: /s/James F. MacGuidwin
Signature
JAMES F. MACGUIDWIN
Print Name
POWER OF ATTORNEY
FOR
SPINNER NETWORKS, INC. 1997 STOCK PLAN
I, James L. Barksdale, whose signature appears below, constitute and
appoint Stephen M. Case, Kenneth J. Novack, J. Michael Kelly, Sheila A. Clark
and James F. MacGuidwin, 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 under the Spinner Networks, Inc. Stock 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 30th day of June, 1999.
By: /s/James L. Barksdale
Signature
JAMES L. BARKSDALE
Print Name
POWER OF ATTORNEY
FOR
SPINNER NETWORKS, INC. 1997 STOCK PLAN
I, Thomas Middelhoff, whose signature appears below, constitute and
appoint Stephen M. Case, Kenneth J. Novack, J. Michael Kelly, Sheila A. Clark
and James F. MacGuidwin, 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 under the Spinner Networks, Inc. Stock 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 30th day of June, 1999.
By: /s/Thomas Middelhoff
Signature
THOMAS MIDDELHOFF
Print Name
POWER OF ATTORNEY
FOR
SPINNER NETWORKS, INC. 1997 STOCK PLAN
I, Colin L. Powell, whose signature appears below, constitute and
appoint Stephen M. Case, Kenneth J. Novack, J. Michael Kelly, Sheila A. Clark
and James F. MacGuidwin, 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 under the Spinner Networks, Inc. Stock 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 30th day of June, 1999.
By: /s/Colin L. Powell
Signature
COLIN L. POWELL
Print Name
POWER OF ATTORNEY
FOR
SPINNER NETWORKS, INC. 1997 STOCK PLAN
I, Franklin D. Raines, whose signature appears below, constitute and
appoint Stephen M. Case, Kenneth J. Novack, J. Michael Kelly, Sheila A. Clark
and James F. MacGuidwin, 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 under the Spinner Networks, Inc. Stock 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 30th day of June, 1999.
By: /s/Franklin D. Raines
Signature
FRANKLIN D. RAINES
Print Name
