As filed with the Securities and Exchange Commission on April 21, 1999
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
AMERICA ONLINE, INC.
(Exact Name of Registrant as Specified in its Charter)
22000 AOL Way
Dulles, Virginia 20166-9323
(Address of Principal Executive Offices,
including Zip Code)
DELAWARE 54-1322110
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
When Inc. 1998 Stock Plan
Sheila A. Clark, Esq.
Acting General Counsel
America Online, Inc.
22000 AOL Way
Dulles, Virginia 20166-9323
(703) 265-1000
(Name, Address, including Zip Code, and Telephone Number,
including Area Code, of Agent for Service)
CALCULATION OF REGISTRATION FEE
<TABLE>
Proposed Maximum Proposed Maximum Amount of
Title of Each Securities Amount to be Offering Price Per Aggregate Offering Registration
to be Registered (1) Registered Share (2) Price Fee
<S> <C> <C> <C> <C>
Common Stock, par value 192,000 shares $12.55 $2,409,600 $669.87
$0.01 per share
</TABLE>
(1) Common Stock being registered hereby includes associated Preferred
Share Purchase Rights, which initially are attached to and traded with
the shares of the Registrant's Common Stock. Value attributable to such
rights, if any, is reflected in the market price of the Common Stock.
(2) The maximum offering price per share has been determined solely for the
purpose of calculating the registration fee pursuant to Rules 457(c)
and (h) under the Securities Act as follows: for the 192,000 shares of
Common Stock, which may be purchased upon exercise of outstanding
options, the fee is based on the average price of $12.55 at which
options may be exercised.
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The documents containing the information specified in Part I will be
sent or given to employees as specified by Rule 428(b)(1). Such documents are
not being filed with the Securities and Exchange Commission (the "Commission")
either as part of this Registration Statement or as prospectuses or prospectus
supplements pursuant to Rule 424. Such documents and the documents incorporated
by reference in this Registration Statement pursuant to Item 3 of Part II of
this Form, taken together, constitute a prospectus that meets the requirements
of Section 10(a) of the Securities Act.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents have been filed by America Online, Inc., a Delaware
corporation (the "Company"), with the Commission and are incorporated herein by
reference:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended June
30, 1998 (SEC file number 001-12143 and filing date of September 28,
1998)
(b) The Company's Quarterly Report on Form 10-Q, for the quarterly period
ended September 30, 1998 (SEC file number 001-12143 and filing date of
November 6, 1998)
(c) The Company's Quarterly Report on Form 10-Q, for the quarterly period
ended December 31, 1998 (SEC file number 001-12143 and filing date of
February 10, 1999)
(d) The Company's Proxy Statement on Schedule 14A for the Company's 1998
Annual Meeting (SEC file number 001-12143 and filing date of September
28, 1998)
(e) The Company's Current Report on Form 8-K dated August 4, 1998 (SEC file
number 001-12143 and filing date of August 5, 1998)
(f) The Company's Current Report on Form 8-K dated September 28, 1998 (SEC
file number 001-12143 and filing date of September 29, 1998)
(g) The Company's Current Report on Form 8-K dated November 23, 1998 (SEC
file number 001-12143 and filing date of November 24, 1998)
(h) The Company's Current Report on Form 8-K dated February 1, 1999 (SEC
file number 001-12143 and filing date of February 11, 1999)
(i) The Company's Current Report on Form 8-K dated November 9, 1998 (SEC
file number 001-12143 and filing date of February 17, 1999)
(j) The Company's Current Report on Form 8-K dated March 17, 1999 (SEC file
number 001-12143 and filing date of March 26, 1999)
(k) The Company's Current Report on Form 8-K/A dated March 17, 1999 (SEC
file number 001-12143 and filing date of April 21, 1999)
(l) The Company's Current Report on Form 8-K dated April 21, 1999 (SEC file
number 001-12143 and filing date of April 21, 1999)
(m) The description of the Company's capital stock, including preferred
share purchase rights, which is 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), because the person is or was a director
or officer of the corporation. Such indemnity may be against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by the person in connection with such action, suit or
proceeding, if the person acted in good faith and in a manner the person
reasonably believed to be in or not opposed to the best interests of the
corporation and if, with respect to any criminal action or proceeding, the
person did not have reasonable cause to believe the person's conduct was
unlawful.
Section 145(b) of the Delaware Corporation Law provides, in general,
that a corporation shall have the power to indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the corporation to procure a
judgment in its favor because the person is or was a director or officer of the
corporation, against any expenses (including attorneys' fees) actually and
reasonably incurred by the person in connection with the defense or settlement
of such action or suit if the person acted in good faith and in a manner the
person reasonably believed to be in or not opposed to the best interests of the
corporation.
Section 145(g) of the Delaware Corporation Law provides, in general,
that a corporation shall have the power to purchase and maintain insurance on
behalf of any person who is or was a director or officer of the corporation
against any liability asserted against the person in any such capacity, or
arising out of the person's status as such, whether or not the corporation would
have the power to indemnify the person against such liability under the
provisions of the law.
Article Ninth of the Registrant's Restated Certificate of Incorporation
(incorporated by reference herein) provides for indemnification of directors,
officers and other persons as follows:
To the fullest extent permitted by the Delaware
General Corporation Law as the same now exists or may hereafter be
amended, the Corporation shall indemnify, and advance expenses to, its
directors and officers and any person who is or was serving at the
request of the Corporation as a director or officer, employee or agent
of another corporation, partnership, joint venture, trust or other
enterprise. The Corporation, by action of its board of directors, may
provide indemnification or advance expenses to employees and agents of
the Corporation or other persons only on such terms and conditions and
to the extent determined by the board of directors in its sole and
absolute discretion.
The indemnification and advancement of expenses
provided by, or granted pursuant to, this Article Ninth shall not be
deemed exclusive of any other rights to which those seeking
indemnification or advancement of expenses may be entitled under any
By-law, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in his official capacity and as to action
in another capacity while holding such office.
The Corporation shall have the power to purchase and
maintain insurance on behalf of any person who is or was a director,
officer, employee or agent of the Corporation, or is or was serving at
the request of the Corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or
other enterprise, against any liability asserted against him and
incurred by him in any such capacity, or arising out of his status as
such, whether or not the Corporation would have the power to indemnify
him against such liability under this Article Ninth.
The indemnification and advancement of expenses
provided by, or granted pursuant to, this Article Ninth shall, unless
otherwise provided when authorized or ratified, continue as to a person
who has ceased to be a director or officer and shall inure to the
benefit of the heirs, executors and administrators of such officer or
director. The indemnification and advancement of expenses that may have
been provided to an employee or agent of the Corporation by action of
the board of directors, pursuant to the last sentence of Paragraph 1 of
this Article Ninth, shall, unless otherwise provided when authorized or
ratified, continue as to a person who has ceased to be an employee or
agent of the Corporation and shall inure to the benefit of the heirs,
executors and administrators of such a person, after the time such
person has ceased to be an employee or agent of the Corporation, only
on such terms and conditions and to the extent determined by the board
of directors in its sole discretion.
Article Five of the Registrant's Restated By-Laws (incorporated by
reference herein) provides that:
Right to Indemnification. Each person who was or is made a party or is
threatened to be made a party to or is otherwise involved in any
action, suit or proceeding, whether civil, criminal, administrative or
investigative, because he is or was a director or an officer of the
Corporation or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation or of a
partnership, joint venture, trust or other enterprise, including
service with respect to an employee benefit plan (hereinafter an
"Indemnitee"), whether the basis of such proceeding is alleged action
in an official capacity as a director, officer, employee or agent or in
any other capacity while serving as a director, officer, employee or
agent, shall be indemnified and held harmless by the Corporation to the
fullest extent authorized by the Delaware General Corporation Law, as
the same exists or may hereafter be amended (but, in the case of any
such amendment, only to the extent that such amendment permits the
Corporation to provide broader indemnification rights than such law
permitted the Corporation to provide before such amendment), against
all expense, liability and loss (including attorney's fees, judgments,
fines, ERISA excise taxes or penalties and amounts paid in settlement)
reasonably incurred or suffered by such Indemnitee in connection
therewith; provided, however, that, except as provided in the section
"Right of Indemnitees to Bring Suit" of this Article with respect to
proceedings to enforce rights to indemnification, the Corporation shall
indemnify any such Indemnitee in connection with a proceeding (or part
thereof) initiated by such Indemnitee only if such proceeding (or part
thereof) was authorized by the board of directors of the Corporation.
Right to Advancement of Expenses. The right to indemnification
conferred in the section "Right to Indemnification" of this Article
shall include the right to be paid by the Corporation the expenses
(including attorney's fees) incurred in defending any such proceeding
in advance of its final disposition; provided, however, that, if the
Delaware General Corporation Law requires, an advancement of expenses
incurred by an Indemnitee in his capacity as a director or officer (and
not in any other capacity in which service was or is rendered by such
Indemnitee, including, without limitation, service to an employee
benefit plan) shall be made only upon delivery to the Corporation of an
undertaking, by or on behalf of such Indemnitee, to repay all amounts
so advanced if it shall ultimately be determined by final judicial
decision from which there is no further right to appeal that such
Indemnitee is not entitled to be indemnified for such expenses under
this section or otherwise. The rights to indemnification and to the
advancement of expenses conferred in this section and the section
"Right to Indemnification" of this Article shall be contract rights and
such rights shall continue as to an Indemnitee who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of
the Indemnitee's heirs, executors and administrators. Any repeal or
modification of any of the provisions of this Article shall not
adversely affect any right or protection of an Indemnitee existing at
the time of such repeal or modification.
Right of Indemnitees to Bring Suit. If a claim under the section "Right
to Indemnification" or "Right to Advancement of Expenses" of this
Article is not paid in full by the Corporation within sixty (60) days
after a written claim has been received by the Corporation, except in
the case of a claim for an advancement of expenses, in which case the
applicable period shall be twenty (20) days, the Indemnitee may at any
time thereafter bring suit against the Corporation to recover the
unpaid amount of the claim. If successful in whole or in part in any
such suit, or in a suit brought by the Corporation to recover an
advancement of expenses pursuant to the terms of an undertaking, the
Indemnitee shall also be entitled to be paid the expenses of
prosecuting or defending such suit. In (1) any suit brought by the
Indemnitee to enforce a right to indemnification hereunder (but not in
a suit brought by the Indemnitee to enforce a right to an advancement
of expenses) it shall be a defense that, and (2) in any suit brought by
the Corporation to recover an advancement of expenses pursuant to the
terms of an undertaking, the Corporation shall be entitled to recover
such expenses upon a final adjudication that, the Indemnitee has not
met any applicable standard for indemnification set forth in the
Delaware General Corporation Law. Neither the failure of the
Corporation (including its board of directors, independent legal
counsel, or its stockholders) to have made a determination prior to the
commencement of such suit that indemnification of the Indemnitee is
proper in the circumstances because the Indemnitee has met the
applicable standard of conduct set forth in the Delaware General
Corporation Law, nor an actual determination by the Corporation
(including its board of directors, independent legal counsel, or its
stockholders) that the Indemnitee has not met such applicable standard
of conduct, shall create a presumption that the Indemnitee has not met
the applicable standard of conduct or, in the case of such a suit
brought by the Indemnitee, be a defense to such suit. In any suit
brought by the Indemnitee to enforce a right to indemnification or to
an advancement of expenses hereunder, or brought by the Corporation to
recover an advancement of expenses pursuant to the terms of an
undertaking, the burden of proving that the Indemnitee is not entitled
to be indemnified, or to such advancement of expenses, under this
Article or otherwise shall be on the Corporation.
Non-Exclusivity of Rights. The rights to indemnification and to the
advancement of expenses conferred in this Article shall not be
exclusive of any other right which any person may have or hereafter
acquire under any statute, the Corporation's Certificate of
Incorporation as amended from time to time, these By-Laws, any
agreement, any vote of stockholders or disinterested directors or
otherwise.
Insurance. The Corporation may maintain insurance, at its expense, to
protect itself and any director, officer, employee or agent of the
Corporation or another corporation, partnership, joint venture, trust
or other enterprise against any expense, liability or loss, whether or
not the Corporation would have the power to indemnify such person
against such expense, liability or loss under the Delaware General
Corporation Law.
Indemnification of Employees and Agents of the Corporation. The
Corporation may, to the extent authorized from time to time by the
board of directors, grant rights to indemnification and to the
advancement of expenses to any employee or agent of the Corporation to
the fullest extent of the provisions of this Article with respect to
the indemnification and advancement of expenses of directors and
officers of the Corporation.
The directors and officers of the Registrant are covered by a policy of
liability insurance.
Item 7. Exemption From Registration Claimed.
Not applicable.
Item 8. Exhibits.
Exhibit
Number Description
4.1 Article 4, Article 6, Article 8 and Article 11 of the Restated
Certificate of Incorporation of America Online, Inc. (filed as part of
Exhibit 3.1 to America Online, Inc.'s Form 10-K for the year ended
June 30, 1997 and incorporated herein by reference)
4.2 Amendment of Section A of Article 4 of the Restated Certificate of
Incorporation of America Online, Inc. (filed as Exhibit 3.1 to America
Online, Inc.'s Quarterly Report on Form 10-Q for the quarter ended
September 30, 1998 and incorporated herein by reference)
4.3 Rights Agreement dated as of May 12, 1998, between America Online,
Inc. and BankBoston, N.A., as Rights Agent (filed as Exhibit 4.1 to
America Online, Inc.'s Quarterly Report on Form 10-Q for the quarter
ended March 31, 1998 and incorporated herein by reference)
4.4 Restated By-Laws of America Online, Inc. (filed as Exhibit 3.5 to
America Online, Inc.'s Annual Report on Form 10-K for the fiscal year
ended June 30, 1998 and incorporated herein by reference)
4.5 When Inc. 1998 Stock Plan
5.1 Opinion of Brenda C. Karickhoff, Assistant General Counsel to America
Online, Inc., regarding the legality of the securities being offered
23.1 Consent of Ernst & Young LLP
23.2 Consent of Brenda C. Karickhoff, Assistant General Counsel to America
Online, Inc. (included in her opinion filed as Exhibit 5.1 and
incorporated herein by reference)
24.1 Powers of Attorney
Item 9. Undertakings.
(a) The Registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this
registration statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the
registration statement (or the most recent
post-effective amendment thereof) which,
individually or in the aggregate, represent a
fundamental change in the information set forth
in the registration statement. Notwithstanding
the foregoing, any increase or decrease in
volume of securities offered (if the total
dollar value of securities offered would not
exceed that which was registered) and any
deviation from the low or high and of the
estimated maximum offering range may be
reflected in the form of prospectus filed with
the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price
represent no more than 20 percent change in the
maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in
the effective registration statement; and
(iii)To include any material information with
respect to the plan of distribution not
previously disclosed in the registration
statement or any material change to such
information in the registration statement;
provided, however, that paragraphs (a) (1) (i)
and (a) (1) (ii) do not apply if this
registration statement is on Form S-3, Form S-8
or Form F-3, and the information required to be
included in a post-effective amendment by those
paragraphs is contained in periodic reports
filed with or furnished to the Commission by the
registrant pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934
that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such
post-effective amendment shall be deemed to be a new
registration statement relating to the securities
offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being
registered which remain unsold at the termination of
the offering.
(b) The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act
of 1933, each filing of the Registrant's annual report
pursuant to Section 13(a) or 15(d) of the Securities Exchange
Act of 1934 (and, where applicable, each filing of an employee
benefit plan's annual report pursuant to Section 15 (d) of the
Securities Exchange Act of 1934) that is incorporated by
reference in the registration statement shall be deemed to be
a new registration statement relating to the securities
offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering
thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers
and controlling persons of the Registrant pursuant to the
foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of
expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense
of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it
is against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, hereunto duly
authorized, in the County of Loudoun, State of Virginia, on this 21st day of
April, 1999.
AMERICA ONLINE, INC.
By: /s/ J. MICHAEL KELLY
Name: J. Michael Kelly
Title: Senior Vice President, Chief
Financial Officer, Treasurer and
Assistant Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed on the 21st day of April, 1999, by the
following persons in the capacities indicated.
Signature Title
* Chairman of the Board and Chief Executive Officer
Stephen M. Case (Principal Executive Officer)
* President, Chief Operating Officer and Director
Robert W. Pittman
Senior Vice President, Chief Financial Officer,
/S/ J. MICHAEL KELLY J. Treasurer and Assistant Secretary
Michael Kelly (Principal Financial Officer)
* Vice President, Controller, Chief Accounting and
James F. MacGuidwin 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
Exhibit Index
Exhibit
Number Description
4.5 When Inc. 1998 Stock Plan
5.1 Opinion of Brenda C. Karickhoff, Assistant General Counsel to America
Online, Inc., regarding the legality of the securities being offered
23.1 Consent of Ernst & Young LLP
23.2 Consent of Brenda C. Karickhoff, Assistant General Counsel to America
Online, Inc. (included in her opinion filed as Exhibit 5.1 and
incorporated herein by reference)
24.1 Powers of Attorney
Exhibit 4.5
WHEN INC.
1998 STOCK PLAN
(As amended on 8/21/98)
1. Purposes of the Plan. The purposes of this 1998 Stock Plan are to
attract and retain the best available personnel for positions of substantial
responsibility, to provide additional incentive to Employees and Consultants of
the Company and its Subsidiaries and to promote the success of the Company's
business. Options granted under the Plan may be Incentive Stock Options (as
defined under Section 422 of the Code) or Nonstatutory Stock Options, as
determined by the Administrator at the time of grant of an option and subject to
the applicable provisions of Section 422 of the Code, as amended, and the
regulations promulgated thereunder. Stock purchase rights may also be granted
under the Plan.
2. Definitions. As used herein, the following definitions shall apply:
(a) "Administrator" means the Board or any of its Committees
appointed pursuant to Section 4 of the Plan.
(b) "Board" means the Board of Directors of the Company.
(c) "Code" means the Internal Revenue Code of 1986, as amended.
(d) "Committee" means the Committee appointed by the Board of
Directors in accordance with Section 4(a) and (b) of the Plan.
(e) "Common Stock" means the Common Stock of the Company.
(f) "Company" means When Inc., a Delaware corporation.
(g) "Consultant" means any person, including an advisor, who is
engaged by the Company or any Parent or Subsidiary to render services and is
compensated for such services, and any director of the Company whether
compensated for such services or not; provided, however, that if and in the
event the Company registers any class of any equity security pursuant to the
Exchange Act, the term Consultant shall thereafter not include directors who are
not compensated for their services or are paid only a director's fee by the
Company.
(h) "Continuous Status as an Employee or Consultant" means the
absence of any interruption or termination of service as an Employee or
Consultant. Continuous Status as an Employee or Consultant shall not be
considered interrupted in the case of: (i) sick leave; (ii) military leave;
(iii) any other leave of absence approved by the Administrator, provided that
such leave is for a period of not more than 90 days, unless reemployment upon
the expiration of such leave is guaranteed by contract or statute, or unless
provided otherwise pursuant to Company policy adopted from time to time; or (iv)
in the case of transfers between locations of the Company or between the
Company, its Subsidiaries or their respective successors. For purposes of this
Plan, a change in status from an Employee to a Consultant or from a Consultant
to an Employee will not constitute an interruption of Continuous Status as an
Employee or Consultant.
(i) "Employee" means any person, including officers and
directors, employed by the Company or any Parent or Subsidiary of the Company,
with the status of employment determined based upon such minimum number of hours
or periods worked as shall be determined by the Administrator in its discretion,
subject to any requirements of the Code. The payment by the Company of a
director's fee to a director shall not be sufficient to constitute "employment"
of such director by the Company.
(j) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(k) "Fair Market Value" means, as of any date, the fair market
value of Common Stock determined as follows:
(i) If the Common Stock is listed on any established stock
exchange or a national market system including without limitation the National
Market of the National Association of Securities Dealers, Inc. Automated
Quotation ("Nasdaq") System, its Fair Market Value shall be the closing sales
price for such stock (or the closing bid, if no sales were reported), as quoted
on such system or exchange, or the exchange with the greatest volume of trading
in Common Stock for the last market trading day prior to the time of
determination, as reported in The Wall Street Journal or such other source as
the Administrator deems reliable;
(ii) If the Common Stock is quoted on the Nasdaq System (but
not on the National Market thereof) or regularly quoted by a recognized
securities dealer but selling prices are not reported, its Fair Market Value
shall be the mean between the high bid and low asked prices for the Common Stock
for the last market trading day prior to the time of determination, as reported
in The Wall Street Journal or such other source as the Administrator deems
reliable; or
(iii) In the absence of an established market for the Common
Stock, the Fair Market Value thereof shall be determined in good faith by the
Administrator.
(l) "Incentive Stock Option" means an Option intended to qualify
as an incentive stock option within the meaning of Section 422 of the Code, as
designated in the applicable written Option Agreement.
(m) "Nonstatutory Stock Option" means an Option not intended to
qualify as an Incentive Stock Option, as designated in the applicable written
Option Agreement.
(n) "Option" means a stock option granted pursuant to the Plan.
(o) "Option Agreement" means a written agreement between an
Optionee and the Company reflecting the terms of an Option granted under the
Plan and includes any documents attached to such Option Agreement, including,
but not limited to, a notice of stock option grant and a form of exercise
notice.
(p) "Optioned Stock" means the Common Stock subject to an Option
or a Stock Purchase Right.
(q) "Optionee" means an Employee or Consultant who receives an
Option or a Stock Purchase Right.
(r) "Parent" means a "parent corporation," whether now or
hereafter existing, as defined in Section 424(e) of the Code, or any successor
provision.
(s) "Plan" means this 1998 Stock Plan.
(t) "Reporting Person" means an officer, director, or greater
than 10% stockholder of the Company within the meaning of Rule 16a-2 under the
Exchange Act, who is required to file reports pursuant to Rule 16a-3 under the
Exchange Act.
(u) "Restricted Stock" means shares of Common Stock acquired
pursuant to a grant of a Stock Purchase Right under Section 10 below.
(v) "Restricted Stock Purchase Agreement" means a written
agreement between a holder of a Stock Purchase Right and the Company reflecting
the terms of a Stock Purchase Right granted under the Plan and includes any
documents attached to such agreement.
(w) "Rule 16b-3" means Rule 16b-3 promulgated under the Exchange
Act, as the same may be amended from time to time, or any successor provision.
(x) "Share" means a share of the Common Stock, as adjusted in
accordance with Section 12 of the Plan.
(y) "Stock Exchange" means any stock exchange or consolidated
stock price reporting system on which prices for the Common Stock are quoted at
any given time.
(z) "Stock Purchase Right" means the right to purchase Common
Stock pursuant to Section 10 below.
(aa) "Subsidiary" means a "subsidiary corporation," whether now
or hereafter existing, as defined in Section 424(f) of the Code, or any
successor provision.
3. Stock Subject to the Plan. Subject to the provisions of Section 12
of the Plan, the maximum aggregate number of Shares that may be optioned and
sold under the Plan is 1,841,000 shares of Common Stock. The Shares may be
authorized, but unissued, or reacquired Common Stock. If an Option should expire
or become unexercisable for any reason without having been exercised in full,
the unpurchased Shares that were subject thereto shall, unless the Plan shall
have been terminated, become available for future grant under the Plan. In
addition, any Shares of Common Stock which are retained by the Company upon
exercise of an Option or Stock Purchase Right in order to satisfy the exercise
or purchase price for such Option or Stock Purchase Right or any withholding
taxes due with respect to such exercise shall be treated as not issued and shall
continue to be available under the Plan. Shares repurchased by the Company
pursuant to any repurchase right which the Company may have shall not be
available for future grant under the Plan.
4. Administration of the Plan.
(a) Initial Plan Procedure. Prior to the date, if any, upon which
the Company becomes subject to the Exchange Act, the Plan shall be administered
by the Board or a Committee appointed by the Board.
(b) Plan Procedure After the Date, if any, Upon Which the Company
Becomes Subject to the Exchange Act.
(i) Multiple Administrative Bodies. If permitted by Rule
16b-3, grants under the Plan may be made by different bodies with respect to
directors, non-director officers and Employees or Consultants who are not
Reporting Persons.
(ii) Administration With Respect to Reporting Persons. With
respect to grants of Options or Stock Purchase Rights to Employees who are
Reporting Persons, such grants shall be made by (A) the Board if the Board may
make grants to Reporting Persons under the Plan in compliance with Rule 16b-3,
or (B) a Committee designated by the Board to make grants to Reporting Persons
under the Plan, which Committee shall be constituted in such a manner as to
permit grants under the Plan to comply with Rule 16b-3. Once appointed, such
Committee shall continue to serve in its designated capacity until otherwise
directed by the Board. From time to time the Board may increase the size of the
Committee and appoint additional members thereof, remove members (with or
without cause) and appoint new members in substitution therefor, fill vacancies,
however caused, and remove all members of the Committee and thereafter directly
make grants to Reporting Persons under the Plan, all to the extent permitted by
Rule 16b-3.
(iii) Administration With Respect to Consultants and Other
Employees. With respect to grants of Options or Stock Purchase Rights to
Employees or Consultants who are not Reporting Persons, the Plan shall be
administered by (A) the Board or (B) a Committee designated by the Board, which
Committee shall be constituted in such a manner as to satisfy the legal
requirements relating to the administration of Incentive Stock Option plans, if
any, of applicable corporate and securities laws, of the Code and of any
applicable Stock Exchange (the "Applicable Laws"). Once appointed, such
Committee shall continue to serve in its designated capacity until otherwise
directed by the Board. From time to time the Board may increase the size of the
Committee and appoint additional members thereof, remove members (with or
without cause) and appoint new members in substitution therefor, fill vacancies,
however caused, and remove all members of the Committee and thereafter directly
administer the Plan, all to the extent permitted by the Applicable Laws.
(c) Powers of the Administrator. Subject to the provisions of the
Plan and in the case of a Committee, the specific duties delegated by the Board
to such Committee, and subject to the approval of any relevant authorities,
including the approval, if required, of any Stock Exchange, the Administrator
shall have the authority, in its discretion:
(i) to determine the Fair Market Value of the Common
Stock, in accordance with Section 2(k) of the Plan;
(ii) to select the Consultants and Employees to whom
Options and Stock Purchase Rights or any combination thereof may from time to
time be granted hereunder;
(iii) to determine whether and to what extent Options
and Stock Purchase Rights or any combination thereof are granted hereunder;
(iv) to determine the number of shares of Common Stock
to be covered by each such award granted hereunder;
(v) to approve forms of agreement for use under the
Plan;
(vi) to determine the terms and conditions, not
inconsistent with the terms of the Plan, of any award granted hereunder;
(vii) to determine whether and under what circumstances
an Option may be settled in cash under Section 9(f) instead of Common Stock;
(viii) to reduce the exercise price of any Option to
the then current Fair Market Value if the Fair Market Value of the Common Stock
covered by such Option shall have declined since the date the Option was
granted;
(ix) to determine the terms and restrictions applicable
to Stock Purchase Rights and the Restricted Stock purchased by exercising such
Stock Purchase Rights;
(x) to construe and interpret the terms of the Plan and
awards granted pursuant to the Plan; and
(xi) in order to fulfill the purposes of the Plan and
without amending the Plan, to modify grants of Options or Stock Purchase Rights
to participants who are foreign nationals or employed outside of the United
States in order to recognize differences in local law, tax policies or customs.
(d) Effect of Administrator's Decision. All decisions,
determinations and interpretations of the Administrator shall be final and
binding on all holders of Options or Stock Purchase Rights.
5. Eligibility.
(a) Recipients of Grants. Nonstatutory Stock Options and Stock
Purchase Rights may be granted to Employees and Consultants. Incentive Stock
Options may be granted only to Employees. An Employee or Consultant who has been
granted an Option or Stock Purchase Right may, if he or she is otherwise
eligible, be granted additional Options or Stock Purchase Rights.
(b) Type of Option. Each Option shall be designated in the
Option Agreement as either an Incentive Stock Option or a Nonstatutory Stock
Option. However, notwithstanding such designations, to the extent that the
aggregate Fair Market Value of Shares with respect to which Options designated
as Incentive Stock Options are exercisable for the first time by any Optionee
during any calendar year (under all plans of the Company or any Parent or
Subsidiary) exceeds $100,000, such excess Options shall be treated as
Nonstatutory Stock Options. For purposes of this Section 5(b), Incentive Stock
Options shall be taken into account in the order in which they were granted, and
the Fair Market Value of the Shares subject to an Incentive Stock Option shall
be determined as of the date of the grant of such Option.
(c) The Plan shall not confer upon the holder of any Option or
Stock Purchase Right any right with respect to continuation of employment or
consulting relationship with the Company, nor shall it interfere in any way with
such holder's right or the Company's right to terminate his or her employment or
consulting relationship at any time, with or without cause.
6. Term of Plan. The Plan shall become effective upon the earlier to
occur of its adoption by the Board of Directors or its approval by the
stockholders of the Company as described in Section 19 of the Plan. It shall
continue in effect for a term of ten years unless sooner terminated under
Section 15 of the Plan.
7. Term of Option. The term of each Option shall be the term stated in
the Option Agreement; provided, however, that the term shall be no more than ten
years from the date of grant thereof or such shorter term as may be provided in
the Option Agreement and provided further that, in the case of an Incentive
Stock Option granted to an Optionee who, at the time the Option is granted, owns
stock representing more than 10% of the total combined voting power of all
classes of stock of the Company or any Parent or Subsidiary, the term of the
Option shall be five years from the date of grant thereof or such shorter term
as may be provided in the Option Agreement.
8. Option Exercise Price and Consideration.
(a) The per share exercise price for the Shares to be issued
pursuant to exercise of an Option shall be such price as is determined by the
Board and set forth in the applicable agreement, but shall be subject to the
following:
(i) In the case of an Incentive Stock Option that is:
(A) granted to an Employee who, at the time of the
grant of such Incentive Stock Option, owns stock representing more than 10% of
the total combined voting power of all classes of stock of the Company or any
Parent or Subsidiary, the per Share exercise price shall be no less than 110% of
the Fair Market Value per Share on the date of grant.
(B) granted to any other Employee, the per Share
exercise price shall be no less than 100% of the Fair Market Value per Share on
the date of grant.
(ii) In the case of a Nonstatutory Stock Option that
is:
(A) granted to a person who, at the time of the
grant of such Option, owns stock representing more than 10% of the total
combined voting power of all classes of stock of the Company or any Parent or
Subsidiary, the per Share exercise price shall be no less than 110% of the Fair
Market Value per Share on the date of the grant.
(B) granted to any person, the per Share exercise
price shall be no less than 85% of the Fair Market Value per Share on the date
of grant.
(b) The consideration to be paid for the Shares to be issued
upon exercise of an Option, including the method of payment, shall be determined
by the Administrator (and, in the case of an Incentive Stock Option, shall be
determined at the time of grant) and may consist entirely of (1) cash, (2)
check, (3) promissory note (subject to the provisions of Section 153 of the
Delaware General Corporation Law), (4) other Shares that (x) in the case of
Shares acquired upon exercise of an Option, have been owned by the Optionee for
more than six months on the date of surrender or such other period as may be
required to avoid a charge to the Company's earnings, and (y) have a Fair Market
Value on the date of surrender equal to the aggregate exercise price of the
Shares as to which such Option shall be exercised, (5) authorization for the
Company to retain from the total number of Shares as to which the Option is
exercised that number of Shares having a Fair Market Value on the date of
exercise equal to the exercise price for the total number of Shares as to which
the Option is exercised, (6) delivery of a properly executed exercise notice
together with such other documentation as the Administrator and the broker, if
applicable, shall require to effect an exercise of the Option and delivery to
the Company of the sale or loan proceeds required to pay the exercise price and
any applicable income or employment taxes, (7) delivery of an irrevocable
subscription agreement for the Shares that irrevocably obligates the option
holder to take and pay for the Shares not more than twelve months after the date
of delivery of the subscription agreement, (8) any combination of the foregoing
methods of payment, or (9) such other consideration and method of payment for
the issuance of Shares to the extent permitted under the Applicable Laws. In
making its determination as to the type of consideration to accept, the
Administrator shall consider if acceptance of such consideration may be
reasonably expected to benefit the Company.
9. Exercise of Option.
(a) Procedure for Exercise; Rights as a Stockholder. Any
Option granted hereunder shall be exercisable at such times and under such
conditions as determined by the Administrator and reflected in the Option
Agreement, which may include vesting requirements and/or performance criteria
with respect to the Company and/or the Optionee; provided, however, that such
Option shall become exercisable at the rate of at least 20% per year over five
years from the date the Option is granted. In the event that any of the Shares
issued upon exercise of an Option should be subject to a right of repurchase in
the Company's favor, such repurchase right shall lapse at the rate of at least
20% per year over five years from the date the Option is granted.
Notwithstanding the above, in the case of an Option granted to an officer,
director or Consultant of the Company or any Parent or Subsidiary of the
Company, the Option may become fully exercisable, and a repurchase right, if
any, in favor of the Company shall lapse, at any time or during any period
established by the Administrator.
An Option may not be exercised for a fraction of a Share.
An Option shall be deemed to be exercised when written notice of such
exercise has been given to the Company in accordance with the terms of the
Option by the person entitled to exercise the Option and the Company has
received full payment for the Shares with respect to which the Option is
exercised. Full payment may, as authorized by the Board, consist of any
consideration and method of payment allowable under Section 8(b) of the Plan.
Until the issuance (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company) of the stock
certificate evidencing such Shares, no right to vote or receive dividends or any
other rights as a stockholder shall exist with respect to the Optioned Stock,
not withstanding the exercise of the Option. The Company shall issue (or cause
to be issued) such stock certificate promptly upon exercise of the Option. No
adjustment will be made for a dividend or other right for which the record date
is prior to the date the stock certificate is issued, except as provided in
Section 12 of the Plan.
Exercise of an Option in any manner shall result in a decrease in the
number of Shares that thereafter may be available, both for purposes of the Plan
and for sale under the Option, by the number of Shares as to which the Option is
exercised.
(b) Termination of Employment or Consulting Relationship.
Subject to Section 9(c) below, in the event of termination of an Optionee's
Continuous Status as an Employee or Consultant with the Company, such Optionee
may, but only within three months (or such other period of time not less than 30
days as is determined by the Administrator, with such determination in the case
of an Incentive Stock Option being made at the time of grant of the Option and
not exceeding three months) after the date of such termination (but in no event
later than the expiration date of the term of such Option as set forth in the
Option Agreement), exercise his or her Option to the extent that the Optionee
was entitled to exercise it at the date of such termination. To the extent that
the Optionee was not entitled to exercise the Option at the date of such
termination, or if the Optionee does not exercise such Option to the extent so
entitled within the time specified herein, the Option shall terminate. No
termination shall be deemed to occur and this Section 9(b) shall not apply if
(i) the Optionee is a Consultant who becomes an Employee, or (ii) the Optionee
is an Employee who becomes a Consultant.
(c) Disability of Optionee.
(i) Notwithstanding Section 9(b) above, in the
event of termination of an Optionee's Continuous Status as an Employee or
Consultant as a result of his or her total and permanent disability (within the
meaning of Section 22(e)(3) of the Code), such Optionee may, but only within
twelve months from the date of such termination (but in no event later than the
expiration date of the term of such Option as set forth in the Option
Agreement), exercise the Option to the extent otherwise entitled to exercise it
at the date of such termination. To the extent that the Optionee was not
entitled to exercise the Option at the date of termination, or if the Optionee
does not exercise such Option to the extent so entitled within the time
specified herein, the Option shall terminate.
(ii) In the event of termination of an Optionee's
Continuous Status as an Employee or Consultant as a result of a disability which
does not fall within the meaning of total and permanent disability (as set forth
in Section 22(e)(3) of the Code), such Optionee may, but only within six months
from the date of such termination (but in no event later than the expiration
date of the term of such Option as set forth in the Option Agreement), exercise
the Option to the extent otherwise entitled to exercise it at the date of such
termination. However, to the extent that such Optionee fails to exercise an
Option which is an Incentive Stock Option (within the meaning of Section 422 of
the Code) within three months of the date of such termination, the Option will
not qualify for Incentive Stock Option treatment under the Code. To the extent
that the Optionee was not entitled to exercise the Option at the date of
termination, or if the Optionee does not exercise such Option to the extent so
entitled within six months from the date of termination, the Option shall
terminate.
(d) Death of Optionee. In the event of the death of an
Optionee during the period of Continuous Status as an Employee or Consultant
since the date of grant of the Option, or within 30 days following termination
of the Optionee's Continuous Status as an Employee or Consultant, the Option may
be exercised, at any time within six months following the date of death (but in
no event later than the expiration date of the term of such Option as set forth
in the Option Agreement), by such Optionee's estate or by a person who acquired
the right to exercise the Option by bequest or inheritance, but only to the
extent of the right to exercise that had accrued at the date of death or, if
earlier, the date of termination of the Optionee's Continuous Status as an
Employee or Consultant. To the extent that the Optionee was not entitled to
exercise the Option at the date of death or termination, as the case may be, or
if the Optionee does not exercise such Option to the extent so entitled within
the time specified herein, the Option shall terminate.
(e) Rule 16b-3. Options granted to Reporting Persons shall
comply with Rule 16b-3 and shall contain such additional conditions or
restrictions as may be required thereunder to qualify for the maximum exemption
for Plan transactions.
10. Stock Purchase Rights.
(a) Rights to Purchase. Stock Purchase Rights may be issued
either alone, in addition to, or in tandem with other awards granted under the
Plan and/or cash awards made outside of the Plan. After the Administrator
determines that it will offer Stock Purchase Rights under the Plan, it shall
advise the offeree in writing of the terms, conditions and restrictions related
to the offer, including the number of Shares that such person shall be entitled
to purchase, the price to be paid (which price shall not be less than 85% of the
Fair Market Value of the Shares as of the date of the offer, or, in the case of
a person owning stock representing more than 10% of the total combined voting
power of all classes of stock of the Company or any Parent or Subsidiary, the
price shall not be less than 100% of the Fair Market Value of the Shares as of
the date of the offer), and the time within which such person must accept such
offer, which shall in no event exceed 30 days from the date upon which the
Administrator made the determination to grant the Stock Purchase Right. The
offer shall be accepted by execution of a Restricted Stock Purchase Agreement in
the form determined by the Administrator.
(b) Repurchase Option. Unless the Administrator determines
otherwise, the Restricted Stock Purchase Agreement shall grant the Company a
repurchase option exercisable upon the voluntary or involuntary termination of
the purchaser's employment with the Company for any reason (including death or
disability). The purchase price for Shares repurchased pursuant to the
Restricted Stock Purchase Agreement shall be the original purchase price paid by
the purchaser and may be paid by cancellation of any indebtedness of the
purchaser to the Company. The repurchase option shall lapse at such rate as the
Administrator may determine; provided, however, that with respect to an Optionee
who is not an officer, director or Consultant of the Company or of any Parent or
Subsidiary of the Company, it shall lapse at a minimum rate of 20% per year.
(c) Other Provisions. The Restricted Stock Purchase Agreement
shall contain such other terms, provisions and conditions not inconsistent with
the Plan as may be determined by the Administrator in its sole discretion. In
addition, the provisions of Restricted Stock Purchase Agreements need not be the
same with respect to each purchaser.
(d) Rights as a Stockholder. Once the Stock Purchase Right is
exercised, the purchaser shall have the rights equivalent to those of a
stockholder, and shall be a stockholder when his or her purchase is entered upon
the records of the duly authorized transfer agent of the Company. No adjustment
will be made for a dividend or other right for which the record date is prior to
the date the Stock Purchase Right is exercised, except as provided in Section 12
of the Plan.
11. Stock Withholding to Satisfy Withholding Tax Obligations. At the
discretion of the Administrator, Optionees may satisfy withholding obligations
as provided in this paragraph. When an Optionee incurs tax liability in
connection with an Option or Stock Purchase Right, which tax liability is
subject to tax withholding under applicable tax laws, and the Optionee is
obligated to pay the Company an amount required to be withheld under applicable
tax laws, the Optionee may satisfy the withholding tax obligation by one or some
combination of the following methods: (a) by cash or check payment, (b) out of
the Optionee's current compensation, (c) if permitted by the Administrator, in
its discretion, by surrendering to the Company Shares that (i) in the case of
Shares previously acquired from the Company, have been owned by the Optionee for
more than six months on the date of surrender, and (ii) have a fair market value
on the date of surrender equal to or less than the Optionee's marginal tax rate
times the ordinary income recognized, or (d) by electing to have the Company
withhold from the Shares to be issued upon exercise of the Option, or the Shares
to be issued in connection with the Stock Purchase Right, if any, that number of
Shares having a Fair Market Value equal to the amount required to be withheld.
For this purpose, the fair market value of the Shares to be withheld shall be
determined on the date that the amount of tax to be withheld is to be determined
(the "Tax Date").
Any surrender by a Reporting Person of previously owned Shares to
satisfy tax withholding obligations arising upon exercise of this Option must
comply with the applicable provisions of Rule 16b-3.
All elections by an Optionee to have Shares withheld to satisfy tax
withholding obligations shall be made in writing in a form acceptable to the
Administrator and shall be subject to the following restrictions:
(a) the election must be made on or prior to the applicable
Tax Date;
(b) once made, the election shall be irrevocable as to the
particular Shares of the Option or Stock Purchase Right as to which the election
is made; and
(c) all elections shall be subject to the consent or
disapproval of the Administrator.
In the event the election to have Shares withheld is made by an
Optionee and the Tax Date is deferred under Section 83 of the Code because no
election is filed under Section 83(b) of the Code, the Optionee shall receive
the full number of Shares with respect to which the Option or Stock Purchase
Right is exercised but such Optionee shall be unconditionally obligated to
tender back to the Company the proper number of Shares on the Tax Date.
12. Adjustments Upon Changes in Capitalization, Merger or Certain Other
Transactions.
(a) Changes in Capitalization. Subject to any required action
by the stockholders of the Company, the number of shares of Common Stock covered
by each outstanding Option or Stock Purchase Right, and the number of shares of
Common Stock that have been authorized for issuance under the Plan but as to
which no Options or Stock Purchase Rights have yet been granted or that have
been returned to the Plan upon cancellation or expiration of an Option or Stock
Purchase Right, as well as the price per share of Common Stock covered by each
such outstanding Option or Stock Purchase Right, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination, recapitalization or reclassification of the Common Stock, or any
other increase or decrease in the number of issued shares of Common Stock
effected without receipt of consideration by the Company; provided, however,
that conversion of any convertible securities of the Company shall not be deemed
to have been "effected without receipt of consideration." Such adjustment shall
be made by the Board, whose determination in that respect shall be final,
binding and conclusive. Except as expressly provided herein, no issuance by the
Company of shares of stock of any class, or securities convertible into shares
of stock of any class, shall affect, and no adjustment by reason thereof shall
be made with respect to, the number or price of shares of Common Stock subject
to an Option or Stock Purchase Right.
(b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, the Board shall notify the Optionee
at least 15 days prior to such proposed action. To the extent it has not been
previously exercised, the Option or Stock Purchase Right will terminate
immediately prior to the consummation of such proposed action.
(c) Merger or Sale of Assets. In the event of a proposed sale
of all or substantially all of the Company's assets or a merger of the Company
with or into another corporation where the successor corporation issues its
securities to the Company's stockholders, each outstanding Option or Stock
Purchase Right shall be assumed or an equivalent option or right shall be
substituted by such successor corporation or a parent or subsidiary of such
successor corporation, unless the successor corporation does not agree to assume
the Option or Stock Purchase Right or to substitute an equivalent option or
right, in which case such Option or Stock Purchase Right shall terminate upon
the consummation of the merger or sale of assets. For purposes of this Section
12(c), an Option or a Stock Purchase Right shall be considered assumed, without
limitation, if, at the time of issuance of the stock or other consideration upon
such merger or sale of assets, each holder of an Option or a Stock Purchase
Right would be entitled to receive upon exercise of the Option or Stock Purchase
Right the same number and kind of shares of stock or the same amount of
property, cash or securities as such holder would have been entitled to receive
upon the occurrence of such transaction if the holder had been, immediately
prior to such transaction, the holder of the number of Shares of Common Stock
covered by the Option or the Stock Purchase Right at such time (after giving
effect to any adjustments in the number of Shares covered by the Option or Stock
Purchase Right as provided for in this Section 12).
(d) Certain Distributions. In the event of any distribution to
the Company's stockholders of securities of any other entity or other assets
(other than dividends payable in cash or stock of the Company) without receipt
of consideration by the Company, the Administrator may, in its discretion,
appropriately adjust the price per share of Common Stock covered by each
outstanding Option or Stock Purchase Right to reflect the effect of such
distribution.
13. Non-Transferability of Options and Stock Purchase Rights. Options
and Stock Purchase Rights may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or by the laws of
descent or distribution and may be exercised or purchased during the lifetime of
the Optionee or the holder of Stock Purchase Rights only by the Optionee or the
holder of Stock Purchase Rights.
14. Time of Granting Options and Stock Purchase Rights. The date of
grant of an Option or Stock Purchase Right shall, for all purposes, be the date
on which the Administrator makes the determination granting such Option or Stock
Purchase Right, or such other date as is determined by the Board; provided,
however, that in the case of any Incentive Stock Option, the grant date shall be
the later of the date on which the Administrator makes the determination
granting such Incentive Stock Option or the date of commencement of the
Optionee's employment relationship with the Company. Notice of the determination
shall be given to each Employee or Consultant to whom an Option or Stock
Purchase Right is so granted within a reasonable time after the date of such
grant.
15. Amendment and Termination of the Plan.
(a) Authority to Amend or Terminate. The Board may at any time
amend, alter, suspend or discontinue the Plan, but no amendment, alteration,
suspension or discontinuation shall be made that would impair the rights of any
Optionee under any grant theretofore made, without his or her consent. In
addition, to the extent necessary and desirable to comply with Rule 16b-3 or
with Section 422 of the Code (or any other applicable law or regulation,
including the requirements of any Stock Exchange), the Company shall obtain
stockholder approval of any Plan amendment in such a manner and to such a degree
as required.
(b) Effect of Amendment or Termination. No amendment or
termination of the Plan shall adversely affect Options already granted, unless
mutually agreed otherwise between the Optionee and the Board, which agreement
must be in writing and signed by the Optionee and the Company.
16. Conditions Upon Issuance of Shares. Shares shall not be issued
pursuant to the exercise of an Option or Stock Purchase Right unless the
exercise of such Option or Stock Purchase Right and the issuance and delivery of
such Shares pursuant thereto shall comply with all relevant provisions of law,
including, without limitation, the Securities Act of 1933, as amended, the
Exchange Act, the rules and regulations promulgated thereunder, and the
requirements of any Stock Exchange.
As a condition to the exercise of an Option, the Company may require
the person exercising such Option to represent and warrant at the time of any
such exercise that the Shares are being purchased only for investment and
without any present intention to sell or distribute such Shares if, in the
opinion of counsel for the Company, such a representation is required by law.
17. Reservation of Shares. The Company, during the term of this Plan,
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan. The inability of the Company
to obtain authority from any regulatory body having jurisdiction, which
authority is deemed by the Company's counsel to be necessary to the lawful
issuance and sale of any Shares hereunder, shall relieve the Company of any
liability in respect of the failure to issue or sell such Shares as to which
such requisite authority shall not have been obtained.
18. Agreements. Options and Stock Purchase Rights shall be evidenced by
written Option Agreements and Restricted Stock Purchase Agreements,
respectively, in such form(s) as the Administrator shall approve from time to
time.
19. Stockholder Approval. Continuance of the Plan shall be subject to
approval by the stockholders of the Company within twelve months before or after
the date the Plan is adopted. Such stockholder approval shall be obtained in the
degree and manner required under applicable state and federal law and the rules
of any Stock Exchange upon which the Common Stock is listed. All Options and
Stock Purchase Rights issued under the Plan shall become void in the event such
approval is not obtained.
20. Information and Documents to Optionees and Purchasers. The Company
shall provide financial statements at least annually to each Optionee and to
each individual who acquired Shares pursuant to the Plan, during the period such
Optionee or purchaser has one or more Options or Stock Purchase Rights
outstanding, and in the case of an individual who acquired Shares pursuant to
the Plan, during the period such individual owns such Shares. The Company shall
not be required to provide such information if the issuance of Options or Stock
Purchase Rights under the Plan is limited to key employees whose duties in
connection with the Company assure their access to equivalent information. In
addition, at the time of issuance of any securities under the Plan, the Company
shall provide to the Optionee or the purchaser a copy of the Plan and any
agreement(s) pursuant to which securities granted under the Plan are issued.
April 21, 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 192,000 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
When Inc. 1998 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.
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
Brenda C. Karickhoff, Esq.
Assistant General Counsel
Exhibit 23.1
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement (Form
S-8 No. 333-______) pertaining to the When Inc. 1998 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
April 15, 1999
Exhibit 24.1
POWER OF ATTORNEY
FOR
WHEN INC. 1998 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 When Inc. 1998 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 21st day of April, 1999.
/s/STEPHEN M. CASE
Signature
POWER OF ATTORNEY
FOR
WHEN INC. 1998 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 When Inc. 1998 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 21st day of April, 1999.
/s/ROBERT W. PITTMAN
Signature
POWER OF ATTORNEY
FOR
WHEN INC. 1998 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 When Inc. 1998 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 21st day of April, 1999.
/s/JAMES F. MACGUIDWIN
Signature
POWER OF ATTORNEY
FOR
WHEN INC. 1998 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 When Inc. 1998 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 21st day of April, 1999.
/s/JAMES L. BARKSDALE
Signature
POWER OF ATTORNEY
FOR
WHEN INC. 1998 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 When Inc. 1998 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 21st day of April, 1999.
/s/FRANK J. CAUFIELD
Signature
POWER OF ATTORNEY
FOR
WHEN INC. 1998 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 When Inc. 1998 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 21st day of April, 1999.
/s/ALEXANDER M. HAIG, JR.
Signature
POWER OF ATTORNEY
FOR
WHEN INC. 1998 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 When Inc. 1998 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 21st day of April, 1999.
/s/WILLIAM N. MELTON
Signature
POWER OF ATTORNEY
FOR
WHEN INC. 1998 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 When Inc. 1998 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 21st day of April, 1999.
/s/THOMAS MIDDELHOFF
Signature
POWER OF ATTORNEY
FOR
WHEN INC. 1998 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 When Inc. 1998 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 21st day of April, 1999.
/s/COLIN L. POWELL
Signature
POWER OF ATTORNEY
FOR
WHEN INC. 1998 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 When Inc. 1998 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 21st day of April, 1999.
/s/FRANKLIN D. RAINES
Signature
