Exhibit 4.6
AMERICA ONLINE, INC.
1999 STOCK PLAN
1. PURPOSES OF THE PLAN.
The Plan is intended to encourage ownership of Shares by Key Employees
and directors of and certain consultants to the Company or its Affiliates in
order to attract and retain such people, to motivate them to work for the
benefit of the Company or an Affiliate, and to provide an additional incentive
for them to promote the success of the Company or of an Affiliate. The Plan
provides for the granting of ISOs and Non-Qualified Options and awards of Stock
Purchase Rights.
2. DEFINITIONS.
Unless otherwise specified or unless the context otherwise requires,
the following terms, as used in this America Online, Inc. 1999 Stock
Plan, have the following meanings:
Administrator means the Board of Directors, unless it has
delegated power to act on its behalf to the Committee, in which
case the Administrator means the Committee.
Affiliate, with respect to ISOs, means a corporation which, for
purposes of Section 424 of the Code, is a parent or subsidiary of
the Company, direct or indirect, and, with respect to
Non-Qualified Options, means any corporation, company or other
entity whose financial results are consolidated with those of the
Company in accordance with U.S. generally accepted accounting
principles, all as determined by the Administrator.
Board of Directors means the Board of Directors of the Company.
Change in Control means either a Corporate Change in Control or a
Transactional Change in Control.
Code means the United States Internal Revenue Code of 1986, as
amended.
Committee means the Compensation and Management Development
Committee of the Board of Directors, or its successor, or such
other committee of the Board of Directors to which the Board of
Directors has delegated power to act under or pursuant to the
provisions of the Plan.
Common Stock means shares of the Company's common stock, $.01 par
value per share.
Company means America Online, Inc., a Delaware corporation.
Corporate Change in Control means the happening of any of the
following events:
(1) the acquisition by any individual, entity or group (an
"Entity"), including any "person" within the meaning of
Section 13(d)(3) or 14(d)(2) of the Exchange Act, of
beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 30% or more of either
(i) the then outstanding shares of common stock of the Company
(the "Outstanding Company Common Stock") or (ii) the combined
voting power of the then outstanding securities of the Company
entitled to vote generally in the election of directors (the
"Outstanding Company Voting Securities"); excluding, however,
the following: (A) any acquisition directly from the Company
(excluding any acquisition by virtue of the exercise of an
exercise, conversion or exchange privilege unless the security
being so exercised, converted or exchanged was itself acquired
directly from the Company), (B) any acquisition by the
Company, or (C) any acquisition by an employee benefit plan
(or related trust) sponsored or maintained by the Company or
by any corporation controlled by the Company; or
(2) a change in the composition of the Board since October 28,
1999, such that the individuals who, as of such date,
constituted the Board of Directors (the "Incumbent Board")
cease for any reason to constitute at least a majority of such
Board; provided that any individual who becomes a director of
the Company subsequent to October 28, 1999 whose election, or
nomination for election by the Company's stockholders, was
approved by the vote of at least a majority of the directors
then comprising the Incumbent Board shall be deemed a member
of the Incumbent Board; and provided further, that any
individual who was initially elected as a director of the
Company as a result of an actual or threatened election
contest, as such terms are used in Rule 14a-11 of Regulation
14A promulgated under the Exchange Act, or any other actual or
threatened solicitation of proxies or consents by or on behalf
of any person or Entity other than the Board shall not be
deemed a member of the Incumbent Board.
Disability or Disabled means permanent and total disability as
defined in Section 22(e)(3) of the Code.
Fair Market Value of a Share of Common Stock means:
(1) If the Common Stock is listed on a national securities
exchange or traded in the over-the-counter market and sales
prices are regularly reported for the Common Stock, the
closing or last price of the Common Stock on the Composite
Tape or other comparable reporting system for the applicable
date, or if the applicable date is not a trading day, the
trading day immediately preceding the applicable date;
(2) If the Common Stock is not traded on a national securities
exchange but is traded on the over-the-counter market, if
sales prices are not regularly reported for the Common Stock
for the trading day referred to in clause (1), and if bid and
asked prices for the Common Stock are regularly reported, the
mean between the bid and the asked price for the Common Stock
at the close of trading in the over-the-counter market on the
applicable date, or if the applicable date is not a trading
day, on the trading day immediately preceding the applicable
date; and
(3) If the Common Stock is neither listed on a national
securities exchange nor traded in the over-the-counter market,
such value as the Administrator, in good faith, shall
determine.
Involuntary Employment Action shall mean any change in the terms
and conditions of the Participant's employment with the Company
or any successor, without cause (as defined herein), to such
extent that:
(1) the Participant shall fail to be vested with power,
authority and resources analogous to the Participant's title
and/or office prior to the Change in Control, or
(2) the Participant shall lose any significant duties or
responsibilities attending such office, or
(3) there shall occur a reduction in the Participant's base
compensation, or
(4) the Participant's employment with the Company, or its
successor, is terminated without cause (as defined herein).
ISO means an option meant to qualify as an incentive stock option
under Section 422 of the Code.
Key Employee means an employee of the Company or of an Affiliate
(including, without limitation, an employee who is also serving
as an officer or director of the Company or of an Affiliate),
designated by the Administrator to be eligible to be granted one
or more Options or Stock Purchase Rights under the Plan; provided
however, that Key Employee shall not include any person who: (i)
is not on the payroll of the Company or an Affiliate as a
full-time or part-time employee or (ii) directly or indirectly
provides services to the Company or an Affiliate pursuant to a
contractual or other arrangement, written or otherwise between
the Company or an Affiliate and either that person or a third
party, which does not designate such person as an employee
(regardless of whether a government agency, court or other entity
subsequently determines that such person is an employee of the
Company or an Affiliate for purposes of employment taxes or for
any other purpose). Anything in the prior sentence to the
contrary notwithstanding, a person who is providing services
pursuant to a contractual or other arrangement may be eligible
for participation in the Plan as a consultant who is designated
by the Administrator in accordance with Paragraph 5 of the Plan.
.
Non-Qualified Option means an option which is not intended to
qualify as an ISO.
Option means an ISO or Non-Qualified Option granted under the
Plan.
Option Agreement means an agreement between the Company and a
Participant delivered pursuant to the Plan, in such form as the
Administrator shall approve.
Participant means a Key Employee, director or consultant of the
Company or of an Affiliate to whom one or more Options are
granted under the Plan. As used herein, "Participant" shall
include "Participant's Survivors" where the context requires.
Plan means this America Online, Inc. 1999 Stock Plan.
Restricted Stock means shares of Common Stock acquired pursuant
to a grant of Stock Purchase Rights under Paragraph 14 below.
Restricted Stock Purchase Agreement means a written agreement
between the Company and a Participant evidencing the terms and
restrictions applying to stock purchased under a Stock Purchase
Right, in such form as the Administrator shall approve.
Shares means shares of the Common Stock as to which Options or
Stock Purchase Rights have been or may be granted under the Plan
or any shares of capital stock into which the Shares are changed
or for which they are exchanged within the provisions of
Paragraph 3 of the Plan. The Shares issued upon exercise of
Options or Stock Purchase Rights granted under the Plan may be
authorized and unissued shares or shares held by the Company in
its treasury, or both.
Stock Purchase Right means the right to purchase Common Stock
pursuant to Paragraph 14 of the Plan, as evidenced by a
Restricted Stock Purchase Agreement.
Survivors means a deceased Participant's legal representatives
and/or any person or persons who acquired the Participant's
rights to an Option or Stock Purchase Right by will or by the
laws of descent and distribution.
Transactional Change in Control shall mean any of the following
transactions to which the Company is a party:
(1) a reorganization, recapitalization, merger or
consolidation (a "Corporate Transaction") of the Company,
unless securities representing 60% or more of either the
outstanding shares of common stock or the combined voting
power of the then outstanding voting securities entitled to
vote generally in the election of directors of the Company or
the corporation resulting from such Corporate Transaction (or
the parent of such corporation) are held subsequent to such
transaction by the person or persons who were the beneficial
holders of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to
such Corporate Transaction, in substantially the same
proportions as their ownership immediately prior to such
Corporate Transaction; or
(2) the sale, transfer or other disposition of all or
substantially all of the assets of the Company.
To Vest means that you have obtained a contingent right to
exercise or purchase a defined number of your stock options, as
defined by and subject to the terms and conditions set forth in
the pertinent Option Agreement and this Plan. Unless and until
your stock options Vest pursuant to the terms of the pertinent
Option Agreement and this Plan, as well as the vesting schedule
included in your notice of grant, you have not obtained any such
right to exercise or purchase any of your unvested stock options
(except as may be provided in Paragraphs 12 and 13 of this Plan
and in the pertinent Option Agreement in the event of
Participant's Disability or death, respectively).
3. SHARES SUBJECT TO THE PLAN.
The number of Shares which may be issued from time to time pursuant to
this Plan shall be 50,000,000 or the equivalent of such number of Shares after
the effect of any stock split, stock dividend, combination, recapitalization or
similar transaction in accordance with Paragraph 17 of the Plan. No more than 5%
of such number of Shares may be issued in connection with grants of Stock
Purchase Rights.
If an Option ceases to be "outstanding", in whole or in part, the
Shares which were subject to such Option shall be available for the granting of
other Options under the Plan. Any Option shall be treated as "outstanding" until
such Option is exercised in full, or terminates or expires under the provisions
of the Plan, or by agreement of the parties to the pertinent Option Agreement.
Shares that have actually been issued under the Plan upon exercise of a Stock
Purchase Right shall not be returned to the Plan and shall not become available
for the granting of other Options or Stock Purchase Rights under the Plan.
4. ADMINISTRATION OF THE PLAN.
Subject to the provisions of the Plan, the Administrator is authorized
to:
a. Interpret the provisions of the Plan or of any Option, Option
Agreement, Stock Purchase Right, or Restricted Stock Purchase
Agreement and to make all rules and determinations which it deems
necessary or advisable for the administration of the Plan;
b. Determine which employees of the Company or of an Affiliate shall
be designated as Key Employees and which of the Key Employees,
directors and consultants shall be granted Options or Stock
Purchase Rights;
c. Determine the number of Shares for which an Option, Options or
Stock Purchase Rights shall be granted, provided, however, that
in no event shall Options or Stock Purchase Rights to purchase
more than 2,000,000 Shares be granted to any Participant in any
fiscal year;
d. Specify the terms and conditions upon which an Option, Options or
Stock Purchase Rights may be granted; and
e. Award Options or Stock Purchase Rights to Participants who are
foreign nationals or employed or located outside the United
States, or both, on such terms and conditions, including imposing
conditions on the exercise or Vesting of Options or Stock
Purchase Rights, different from those applicable to Options or
Stock Purchase Rights granted to Participants employed or located
in the United States as may, in the judgment of the
Administrator, be necessary or desirable in order to recognize
differences in local law, tax policy or customs;
provided, however, that all such interpretations, rules, determinations, terms
and conditions shall be made and prescribed in the context of preserving the tax
status under Section 422 of the Code of those Options which are designated as
ISOs. Subject to the foregoing, the interpretation and construction by the
Administrator of any provisions of the Plan or of any Option or Stock Purchase
Right granted under it shall be final, unless otherwise determined by the Board
of Directors, if the Administrator is the Committee. The Administrator's
determinations under the Plan need not be uniform and may be made by it
selectively among persons who receive, or are eligible to receive, Options or
Stock Purchase Rights under the Plan (whether or not such persons are similarly
situated). Without limiting the generality of the foregoing, the Administrator
shall be entitled, among other things, to make non-uniform and selective
determinations, and to enter into non-uniform and selective Option Agreements or
Restricted Stock Purchase Agreements as to (a) the persons to receive Options or
Stock Purchase Rights under the Plan, (b) the terms and provisions of Options or
Stock Purchase Rights under the Plan, and (c) whether a termination of service
with the Company and any Affiliate has occurred.
No member of the Board of Directors or the Administrator shall be
liable for any action or determination made in good faith with respect to the
Plan or any Option.
5. ELIGIBILITY FOR PARTICIPATION.
The Administrator will, in its sole discretion, name the Participants
in the Plan, provided, however, that each Participant must be a Key Employee,
director or consultant of the Company or of an Affiliate at the time an Option
or Stock Purchase Right is granted. Members of the Company's Board of Directors
who are not employees of the Company or of an Affiliate may receive Options or
Stock Purchase Rights pursuant to Paragraph 6, Subparagraph A (f), but only
pursuant thereto. Notwithstanding any of the foregoing provisions, the
Administrator may authorize the grant of an Option or Stock Purchase Right to a
person not then a Key Employee, director or consultant of the Company or of an
Affiliate. The actual grant of such Option or Stock Purchase Right, however,
shall be conditioned upon such person becoming eligible to become a Participant
at or prior to the time of the execution of the Option Agreement or Restricted
Stock Purchase Agreement evidencing such Option or Stock Purchase Right, as
applicable. ISOs may be granted only to Key Employees. Non-Qualified Options may
be granted to any Key Employee, director or consultant of the Company or an
Affiliate. Stock Purchase Rights shall be granted only in connection with the
hiring or retention of a Key Employee. The granting of any Option or Stock
Purchase Right to any individual shall neither entitle that individual to, nor
disqualify him or her from, participation in any other grant of Options or Stock
Purchase Rights.
6. TERMS AND CONDITIONS OF OPTIONS.
Each Option shall be set forth in writing in an Option Agreement, duly
executed by the Company and, to the extent required by law or requested by the
Company, by the Participant. The Administrator may provide that Options be
granted subject to such terms and conditions as the Administrator may deem
appropriate including, without limitation, subsequent approval by the
stockholders of the Company of this Plan or any amendments thereto. The Option
Agreements shall be subject to at least the following terms and conditions:
A. Non-Qualified Options: Each Option intended to be a
Non-Qualified Option shall be subject to the terms and
conditions which the Administrator determines to be
appropriate and in the best interest of the Company, subject
to the following minimum standards for any such Non-Qualified
Option:
a. Option Price: The option price (per share) of the
Shares covered by each Option shall be determined by
the Administrator but shall not be less than one
hundred percent (100%) of the Fair Market Value (per
share) of the Shares on the date of grant of the
Option.
b. Each Option Agreement shall state the number of Shares
to which it pertains;
c. Each Option Agreement shall state the date or dates on
which it first is exercisable and the date after which
it may no longer be exercised, and may provide that the
Option rights Vest or become exercisable in
installments over a period of months or years, or upon
the occurrence of certain conditions or the attainment
of stated goals or events; and
d. Exercise of any Option may be conditioned upon the
Participant's execution of a stock purchase agreement
in form satisfactory to the Administrator providing for
certain protections for the Company and its other
stockholders, including requirements that:
i. The Participant's or the Participant's Survivors'
right to sell or transfer the Shares may be
restricted; and
ii. The Participant or the Participant's Survivors may
be required to execute letters of investment
intent and must also acknowledge that the Shares
will bear legends noting any applicable
restrictions.
e. Limitation on Grant of Non-Qualified Options: No
Non-Qualified Option shall be granted after the date
provided in Paragraph 23 of this Plan.
f. Directors' Options: Each director of the Company who is
not an employee of the Company or any Affiliate, upon
first being elected or appointed to the Board of
Directors, shall be granted a Non-Qualified Option to
purchase 20,000 Shares; provided, however, that the
Administrator shall be entitled to grant an Option for
such higher number of Shares as may be appropriate (as
determined by the Administrator) for recruitment
purposes. On the date following the annual meeting of
stockholders of the Company each year, giving effect to
the election of any director or directors at such
annual meeting of stockholders, each director who is
not an employee of the Company or any Affiliate and who
has served at least six months as a director shall be
granted a Non-Qualified Option to purchase 20,000
Shares. In addition, on the date following the annual
meeting of stockholders of the Company each year,
giving effect to the election of any director or
directors at such annual meeting of stockholders, each
director who is not an employee of the Company or any
Affiliate and who serves on the Compensation and
Management Development Committee or the Audit Committee
of the Board of Directors (or other committee
designated by the Board of Directors to be entitled to
receive options under this sentence) shall be granted a
Non-Qualified Option to purchase 10,000 Shares;
provided, further, that on such date, each such
director who serves as the Chair of such committee
shall be granted an additional Option to purchase
10,000 Shares. The grants for service as a committee
member or Chair shall cover service on all eligible
committees and shall not be cumulative for service on
more than one committee. Each Option granted pursuant
to this Section 6(A)(f) shall (i) have an exercise
price equal to the Fair Market Value (per share) of the
Shares on the date of grant of the Option, (ii) have a
term of ten (10) years, and (iii) be immediately
exercisable (subject to Section 16 of the Securities
Exchange Act of 1934, as amended (the "1934 Act")). The
Board of Directors may amend this Section 6(A)(f) to
increase, reduce, eliminate, or institute option grants
for Board, Committee, or other individual or collective
service under this Plan.
B. ISOs: Each Option intended to be an ISO shall so state and
shall be issued only to a Key Employee and be subject to at
least the following terms and conditions, with such additional
restrictions or changes as the Administrator determines are
appropriate but not in conflict with Section 422 of the Code
and relevant regulations and rulings of the Internal Revenue
Service:
a. Minimum standards: The ISO shall meet the minimum
standards required of Non-Qualified Options, as
described in Paragraph 6(A) above, except clauses (a)
and (f) thereunder.
b. Option Price: Immediately before the Option is granted,
if the Participant owns, directly or by reason of the
applicable attribution rules in Section 424(d) of the
Code:
i. Ten percent (10%) or less of the total combined
voting power of all classes of stock of the
Company or an Affiliate, the Option price per
share of the Shares covered by each Option shall
not be less than one hundred percent (100%) of the
Fair Market Value per share of the Shares on the
date of the grant of the Option.
ii. More than ten percent (10%) of the total combined
voting power of all classes of stock of the
Company or an Affiliate, the Option price per
share of the Shares covered by each Option shall
not be less than one hundred ten percent (110%) of
the Fair Market Value on the date of grant.
c. Term of Option: For Participants who own
i. Ten percent (10%) or less of the total combined
voting power of all classes of stock of the
Company or an Affiliate, each Option shall
terminate ten (10) years from the date of the
grant or at such earlier time as the Option
Agreement may provide.
ii. More than ten percent (10%) of the total combined
voting power of all classes of stock of the
Company or an Affiliate, each Option shall
terminate five (5) years from the date of the
grant or at such earlier time as the Option
Agreement may provide.
d. Limitation on Yearly Exercise: The Option Agreements
shall restrict the amount of Options which may be
exercisable in any calendar year (under this or any
other ISO plan of the Company or an Affiliate) so that
the aggregate Fair Market Value (determined at the time
each ISO is granted) of the stock with respect to which
ISOs are exercisable for the first time by the
Participant in any calendar year does not exceed one
hundred thousand dollars ($100,000), provided that this
subparagraph (d) shall have no force or effect if its
inclusion in the Plan is not necessary for Options
issued as ISOs to qualify as ISOs pursuant to Section
422(d) of the Code.
e. Limitation on Grant of ISOs: No ISOs shall be granted
after the date provided in Paragraph 23 of this Plan.
f. To the extent that an Option which is intended to be an
ISO fails to so qualify, it shall be treated as a
Non-Qualified Option.
7. EXERCISE OF OPTIONS AND ISSUANCE OF SHARES.
An Option (or any part or installment thereof) shall be exercised in
accordance with procedures established by the Company by giving written notice
to the Company at its principal executive office address, together with
provision for payment of the full purchase price in accordance with this
Paragraph for the Shares as to which the Option is being exercised, and upon
compliance with any other condition(s) set forth in the Option Agreement. Such
written notice shall be signed by the person exercising the Option, shall state
the number of Shares with respect to which the Option is being exercised and
shall contain any representation required by the Plan or the Option Agreement.
Payment of the purchase price for the Shares as to which such Option is being
exercised shall be made (a) in United States dollars in cash or by check, or (b)
at the discretion of the Administrator, through delivery of shares of Common
Stock having a Fair Market Value equal as of the date of the exercise to the
cash exercise price of the Option, or (c) at the discretion of the
Administrator, by delivery of the grantee's personal recourse note bearing
interest payable not less than annually at no less than 100% of the applicable
Federal rate, as defined in Section 1274(d) of the Code, or (d) at the
discretion of the Administrator, in accordance with a cashless exercise program
established with a securities brokerage firm, and approved by the Administrator,
or (e) at the discretion of the Administrator, through such other method of
payment approved by the Administrator, or (f) at the discretion of the
Administrator, by any combination of (a), (b), (c), (d) and (e) above.
Notwithstanding the foregoing, the Administrator shall accept only such payment
on exercise of an ISO as is permitted by Section 422 of the Code.
The Company shall then reasonably promptly deliver the Shares as to
which such Option was exercised to the Participant (or to the Participant's
Survivors, as the case may be). In determining what constitutes "reasonably
promptly," it is expressly understood that the delivery of the Shares may be
delayed by the Company in order to comply with any law or regulation (including,
without limitation, state securities or "blue sky" laws) which requires the
Company to take any action with respect to the Shares prior to their issuance.
The Shares shall, upon delivery, be evidenced by an appropriate certificate or
certificates for fully paid, non-assessable Shares.
The Administrator shall have the right to accelerate the date of
exercise of any installment of any Option; provided that the Administrator shall
not accelerate the exercise date of any installment of any Option granted to any
Key Employee as an ISO (and not previously converted into a Non-Qualified Option
pursuant to Paragraph 20) if such acceleration would violate the annual vesting
limitation contained in Section 422(d) of the Code, as described in Paragraph
6(B)(d).
The Administrator may, in its discretion, amend any term or condition
of an outstanding Option provided (i) such term or condition as amended is
permitted by the Plan, (ii) if any amendment is materially adverse to the
Participant, any such amendment shall be made only with the consent of the
Participant to whom the Option was granted, or in the event of the death of the
Participant, the Participant's Survivors, and (iii) any such amendment of any
ISO shall be made only after the Administrator, after consulting with counsel
for the Company, determines whether such amendment would constitute a
"modification" of any Option which is an ISO (as that term is defined in Section
424(h) of the Code) or would cause any adverse tax consequences for the holder
of such ISO.
8. RIGHTS AS A STOCKHOLDER.
No Participant to whom an Option has been granted shall have rights as a
stockholder with respect to any Shares covered by such Option, except after due
exercise of the Option and tender of the full purchase price for the Shares
being purchased pursuant to such exercise (and satisfaction of such other
conditions for the transfer of Shares as may be required pursuant to the Option)
and registration of the Shares in the Company's share register in the name of
the Participant. No Participant to whom a Stock Purchase Right has been granted
shall have rights as a stockholder with respect to any Shares covered by such
Stock Purchase Right, except after tender of the full purchase price for the
Shares being purchased (and satisfaction of such other conditions for the
transfer of Shares as may be required pursuant to the Stock Purchase Right) and
registration of the Shares in the Company's share register in the name of the
purchaser. 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 17 of the Plan.
9. ASSIGNABILITY AND TRANSFERABILITY OF OPTIONS AND STOCK PURCHASE RIGHTS.
By its terms, an Option or Stock Purchase Right granted to a
Participant shall not be transferable by the Participant other than (i) by will
or by the laws of descent and distribution, or (ii) as otherwise determined by
the Administrator and set forth in the applicable Option Agreement or Restricted
Stock Purchase Agreement. The designation of a beneficiary of an Option by a
Participant shall not be deemed a transfer prohibited by this Paragraph. Except
as provided above, an Option or Stock Purchase Right shall be exercisable,
during the Participant's lifetime, only by such Participant (or by his or her
legal representative) and shall not be assigned, pledged or hypothecated in any
way (whether by operation of law or otherwise) and shall not be subject to
execution, attachment or similar process. Any attempted transfer, assignment,
pledge, hypothecation or other disposition of any Option or Stock Purchase Right
or of any rights granted thereunder contrary to the provisions of this Plan, or
the levy of any attachment or similar process upon an Option or Stock Purchase
Right, shall be null and void.
10. EFFECT OF TERMINATION OF SERVICE OTHER THAN "FOR CAUSE" OR DEATH
OR DISABILITY.
Except as otherwise provided in the pertinent Option Agreement, in the
event of a termination of service (whether as an employee, director or
consultant) with the Company or an Affiliate before the Participant has
exercised all Options, the following rules apply:
a. A Participant who ceases to be an employee, director or
consultant of the Company or of an Affiliate (for any reason
other than termination "for cause", Disability, or death for
which events there are special rules in Paragraphs 11, 12, and
13, respectively), may exercise any Option granted to him or her
to the extent that the Option is exercisable on the date of such
termination of service, but only within such term as the
Administrator has designated in the pertinent Option Agreement.
An Option that is not exercisable on the date of termination of
service is canceled on such date and may not be exercised. An
Option that is exercisable on the date of termination of service,
but not exercised within the term as the Administrator has
designated in the pertinent Option Agreement is canceled and may
not be exercised thereafter.
b. Except as provided in Paragraph 12, in no event may an Option
Agreement provide, if the Option is intended to be an ISO, that
the time for exercise be later than three (3) months after the
Participant's termination of employment.
c. The provisions of this Paragraph, and not the provisions of
Paragraph 12 or 13, shall apply to a Participant who subsequently
becomes Disabled or dies after the termination of employment,
director status or consultancy, provided, however, in the case of
a Participant's Disability or death within three (3) months after
the termination of employment, director status or consultancy,
the Participant or the Participant's Survivors may exercise the
Option within one (1) year after the date of the Participant's
termination of employment, but in no event after the date of
expiration of the term of the Option.
d. Notwithstanding anything herein to the contrary, if subsequent to
a Participant's termination of employment, termination of
director status or termination of consultancy, but prior to the
exercise of an Option, the Board of Directors determines that,
either prior or subsequent to the Participant's termination, the
Participant engaged in conduct which would constitute "cause" (as
defined in Paragraph 11 below), then such Participant shall
forthwith cease to have any right to exercise any Option, whether
or not such Option was previously exercisable.
e. A Participant to whom an Option has been granted under the Plan
who is absent from work with the Company or with an Affiliate
because of temporary disability (any disability other than a
permanent and total Disability as defined in Paragraph 2 hereof),
or who is on leave of absence for any purpose, shall not, during
the period of any such absence, be deemed, by virtue of such
absence alone, to have terminated such Participant's employment,
director status or consultancy with the Company or with an
Affiliate, except to the extent that the Administrator so
determines as Company policy or to the extent that the Option
Agreement may otherwise expressly provide.
f. Except as required by law or as set forth in the pertinent Option
Agreement, Options granted under the Plan shall not be affected
by any change of a Participant's status within or among the
Company and any Affiliates, so long as the Participant continues
to be a Key Employee, director or consultant of the Company or
any Affiliate.
11. EFFECT OF TERMINATION OF SERVICE "FOR CAUSE".
Except as otherwise provided in the pertinent Option Agreement, the
following rules apply if the Participant's service (whether as an employee,
director or consultant) with the Company or an Affiliate is terminated for
"cause" prior to the time that all his or her outstanding Options have been
exercised:
a. All outstanding and unexercised Options as of the time the
Participant is notified his or her service is terminated for
"cause" will immediately be forfeited.
b. For purposes of this Plan, except as otherwise provided in the
pertinent Option Agreement or Restricted Stock Purchase
Agreement, "cause" shall include (and is not limited to)
dishonesty with respect to the Company or any Affiliate,
insubordination, substantial malfeasance or non-feasance of duty,
unauthorized disclosure of confidential information, and conduct
substantially prejudicial to the business of the Company or any
Affiliate. The determination of the Administrator as to the
existence of "cause" will be conclusive on the Participant and
the Company.
c. "Cause" is not limited to events which have occurred prior to a
Participant's termination of service, nor is it necessary that
the Administrator's finding of "cause" occur prior to
termination. If the Administrator determines, subsequent to a
Participant's termination of service but prior to the exercise of
an Option, that either prior or subsequent to the Participant's
termination the Participant engaged in conduct which would
constitute "cause," then the right to exercise any Option is
forfeited.
d. Any definition in an agreement between the Participant and the
Company or an Affiliate, which contains a conflicting definition
of "cause" for termination and which is in effect at the time of
such termination, shall supersede the definition in this Plan
with respect to such Participant.
12. EFFECT OF TERMINATION OF SERVICE FOR DISABILITY.
Except as otherwise provided in the pertinent Option Agreement, a
Participant who terminates his or her employment, directorship or consultancy
with the Company or an Affiliate by reason of Disability may exercise any Option
granted to such Participant:
a. To the extent exercisable but not exercised on the date of such
cessation; and
b. In the event rights to exercise the Option Vest periodically, to
the extent of a pro rata portion of any additional rights as
would have Vested had the Participant not terminated his or her
employement, directorship or consultancy by reason of such
Disability, prior to the end of the Vesting period which next
ends following the date of such termination. The proration shall
be based upon the number of days of such Vesting period prior to
the date of such termination.
Except as otherwise provided in the pertinent Option Agreement, a
Disabled Participant may exercise such rights only within the period ending one
(1) year after the date of the Participant's termination of employment,
directorship or consultancy, as the case may be, notwithstanding that the
Participant might have been able to exercise the Option as to some or all of the
Shares on a later date if the Participant had not become disabled and had
continued to be an employee, director or consultant or, if earlier, within the
originally prescribed term of the Option.
The Company shall make the determination both of whether Disability has
occurred and the date of its occurrence (unless a procedure for such
determination is set forth in another agreement between the Company and such
Participant, in which case such procedure shall be used for such determination).
If requested, the Participant shall be examined by a physician selected or
approved by the Company, the cost of which examination shall be paid for by the
Company.
13. EFFECT OF DEATH WHILE AN EMPLOYEE, DIRECTOR OR CONSULTANT.
Except as otherwise provided in the pertinent Option Agreement, in the
event of the death of a Participant while the Participant is an employee,
director or consultant of the Company or of an Affiliate, such Option may be
exercised by the Participant's Survivors:
a. To the extent exercisable but not exercised on the date of death;
and
b. In the event rights to exercise the Option Vest periodically, to
the extent of a pro rata portion of any additional rights which
would have Vested had the Participant not died prior to the end
of the Vesting period which next ends following the date of
death. The proration shall be based upon the number of days of
such Vesting period prior to the Participant's death.
Except as otherwise provided in the pertinent Option Agreement, if the
Participant's Survivors wish to exercise the Option, they must take all
necessary steps to exercise the Option within one (1) year after the date of
Participant's termination of employment, directorship or consultancy, as the
case may be, notwithstanding that the decedent might have been able to exercise
the Option as to some or all of the Shares on a later date if he or she had not
died and had continued to be an employee, director or consultant or, if earlier,
within the originally prescribed term of the Option.
14. 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. After the
Administrator determines that it will offer Stock Purchase Rights under the
Plan, it shall advise the offeree in writing, by means of an Agreement, of the
terms, conditions and restrictions related to the offer, including the number of
Shares that the offeree shall be entitled to purchase, the price to be paid
(which shall not be less than the par value of the Shares), and the time within
which the offeree must accept such offer, which shall in no event exceed six (6)
months 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 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 a rate determined by the Administrator.
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.
15. PURCHASE FOR INVESTMENT.
Unless the offering and sale of the Shares to be issued upon the
particular exercise of an Option or Stock Purchase Right shall have been
effectively registered under the Securities Act of 1933, as now in force or
hereafter amended (the "1933 Act"), the Company shall be under no obligation to
issue the Shares covered by such exercise unless and until the following
conditions have been fulfilled:
a. The person(s) who exercise(s) such Option or Stock Purchase
Right shall warrant to the Company, prior to the receipt of
such Shares, that such person(s) are acquiring such Shares for
their own respective accounts, for investment, and not with a
view to, or for sale in connection with, the distribution of
any such Shares, in which event the person(s) acquiring such
Shares shall be bound by the provisions of the following
legend which shall be endorsed upon the certificate(s)
evidencing their Shares issued pursuant to such exercise of
such grant:
"The shares represented by this certificate have been
taken for investment and they may not be sold or
otherwise transferred by any person, including a
pledgee, unless (1) either (a) a Registration
Statement with respect to such shares shall be
effective under the Securities Act of 1933, as
amended, or (b) the Company shall have received an
opinion of counsel satisfactory to it that an
exemption from registration under such Act is then
available, and (2) there shall have been compliance
with all applicable state securities laws."
b. At the discretion of the Administrator, the Company shall have
received an opinion of its counsel that the Shares may be
issued upon such particular exercise in compliance with the
1933 Act without registration thereunder.
The Company may delay issuance of the Shares until completion of any
action or obtaining of any consent which the Company deems necessary under any
applicable law (including, without limitation, state securities or "blue sky"
laws.)
16. DISSOLUTION OR LIQUIDATION OF THE COMPANY.
Upon the dissolution or liquidation of the Company, all Options or
Stock Purchase Rights granted under this Plan which as of such date shall not
have been exercised will terminate and become null and void; provided, however,
that if the rights of a Participant or a Participant's Survivors have not
otherwise terminated and expired, (i) the Participant or the Participant's
Survivors will have the right immediately prior to such dissolution or
liquidation to exercise any Option or Stock Purchase Right to the extent that
the Option or Stock Purchase Right is exercisable as of the date immediately
prior to such dissolution or liquidation; and (ii) if a Change in Control shall
have occurred within the twelve months immediately prior to the date of such
dissolution or liquidation, such Participant or such Participant's Survivors
will have the right immediately prior to such dissolution or liquidation to
exercise any Option or Stock Purchase Right then outstanding whether or not such
Option or Stock Purchase Right is exercisable as of such date.
17. ADJUSTMENTS.
Upon the occurrence of any of the following events, the adjustments as
hereinafter provided shall be made, unless otherwise specifically provided in a
pertinent Option Agreement or Restricted Stock Purchase Agreement:
A. Stock Dividends and Stock Splits. If (i) the shares of Common
Stock shall be subdivided or combined into a greater or smaller number of shares
or if the Company shall issue any shares of Common Stock as a stock dividend on
its outstanding Common Stock, or (ii) additional shares or new or different
shares or other securities of the Company or other non-cash assets are
distributed with respect to such shares of Common Stock, the number of shares of
Common Stock deliverable upon the exercise of an Option or Stock Purchase Right
may be appropriately increased or decreased proportionately, and appropriate
adjustments may be made in the purchase price per share to reflect such
subdivision, combination or stock dividend. The number of Shares subject to
options to be granted (i) pursuant to Paragraph 3 or to directors pursuant to
Paragraph 6(A)(f) shall also be proportionately adjusted upon the occurrence of
such events, except as the Administrator shall otherwise determine in its sole
discretion or (ii) pursuant to Paragraph 4(c) shall also be proportionately
adjusted upon the occurrence of such events.
B. Corporate Changes in Control. In the event of a Corporate
Change in Control,
(i) Each Option or Stock Purchase Right outstanding as of the date such
Corporate Change in Control is determined to have occurred, and which is not
then exercisable by reason of Vesting requirements, shall automatically
accelerate the Vesting so that the Option or Stock Purchase Right shall become
fully exercisable and Vested on the first to occur of (x) the date the Option or
Stock Purchase Right becomes Vested and exercisable under its original terms
(with respect only to such Options or Stock Purchase Rights as otherwise would
Vest during such one-year period under their terms), (y) the first anniversary
of the date such Corporate Change in Control is determined to have occurred, and
(z) the occurrence of an Involuntary Employment Action; and
(ii) The Options or Stock Purchase Rights so accelerated shall remain
so exercisable until the earlier of the original expiration date of the Option
or Stock Purchase Right and the earlier termination of the Option or Stock
Purchase Right in accordance with the Plan and the Agreement.
C. Transactional Changes in Control. In the event of a
Transactional Change in Control,
(i) Each Option or Stock Purchase Right outstanding as of the
date such Transactional Change in Control is determined to have occurred shall
be either: (a) assumed by the successor corporation (or its parent) or replaced
with a comparable option or stock purchase right to purchase shares of the
capital stock of the successor corporation (or its parent) on an equitable
basis, (b) terminated upon written notice to the Participants stating that all
Options or Stock Purchase Rights (for purposes of this Subparagraph all Options
or Stock Purchase Rights then outstanding shall be deemed to be exercisable)
must be exercised within a specified number of days (which shall not be less
than 15 days) from the date such notice is given, at the end of which period the
Options or Stock Purchase Rights shall terminate, or (c) terminated in exchange
for a cash payment equal to the excess of the Fair Market Value of the shares
subject to such Options or Stock Purchase Rights (for purposes of this
Subparagraph all Options then outstanding shall be deemed to be exercisable)
over the exercise price thereof; provided, however, that if any of the
treatments of Options or Stock Purchase Rights pursuant to this Plan set forth
in clauses (a), (b) or (c) above would make a Transactional Change in Control
transaction ineligible for pooling-of-interest accounting under APB No. 16 such
that but for the nature of such treatment such transaction would otherwise be
eligible for such accounting treatment, the Committee (or the Administrator if
no Committee has been appointed) shall have the ability to substitute for any
cash or other consideration payable under such treatment shares of Common Stock
with a Fair Market Value or other consideration with value equal to the cash or
other consideration that would otherwise be payable pursuant to such treatment.
The determination of which of the treatments set forth in clauses (a), (b) and
(c) above to provide and of comparability under clause (a) above shall be made
by the Administrator and its determinations shall be final, binding and
conclusive.
(ii) Each Option or Stock Purchase Right that is assumed or
replaced in connection with a Transactional Change in Control shall
automatically accelerate so that the Option or Stock Purchase Right shall become
fully exercisable and Vested on the first to occur of (x) the date the Option
becomes Vested and exercisable under its original terms (with respect only to
such Options or Stock Purchase Rights as otherwise would Vest during such
one-year period under their terms), (y) the first anniversary of the date such
Transactional Change in Control is determined to have occurred, and (z) the
occurrence of an Involuntary Employment Action. The Options or Stock Purchase
Rights so accelerated shall remain so exercisable until the earlier of the
original expiration date of the Option and the earlier termination of the Option
in accordance with the Plan and the Agreement.
D. Corporate Transaction. In the event of a Corporate Transaction
that does not constitute a Transactional Change in Control or in the event of a
similar event, pursuant to which securities of the Company or of another
corporation or entity are issued with respect to the outstanding shares of
Common Stock, a Participant upon exercising an Option or Stock Purchase Right
shall be entitled to receive for the purchase price paid upon such exercise the
securities which would have been received if such Option or Stock Purchase Right
had been exercised prior to such Corporate Transaction.
E. Modification of ISOs. Notwithstanding the foregoing, any
adjustments made pursuant to Subparagraph A, B, C, or D with respect to ISOs
shall be made only after the Administrator, after consulting with counsel for
the Company, determines whether such adjustments would constitute a
"modification" of such ISOs (as that term is defined in Section 424(h) of the
Code) or would cause any adverse tax consequences for the holders of such ISOs.
If the Administrator determines that such adjustments made with respect to ISOs
would constitute a "modification" of such ISOs, it may refrain from making such
adjustments, unless the holder of an ISO specifically requests in writing that
such adjustment be made and such writing indicates that the holder has full
knowledge of the consequences of such "modification" on his or her income tax
treatment with respect to the ISO.
18. ISSUANCES OF SECURITIES.
Except as expressly provided herein, no issuance by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares subject to Options or Stock Purchase
Rights. Except as expressly provided herein, no adjustments shall be made for
dividends paid in cash or in property (including without limitation, securities)
of the Company.
19. FRACTIONAL SHARES.
No fractional shares shall be issued under the Plan and the person
exercising such right shall receive from the Company cash in lieu of such
fractional shares equal to the Fair Market Value thereof.
20. CONVERSION OF ISOs INTO NON-QUALIFIED OPTIONS; TERMINATION OF ISOs.
The Administrator, at the written request of any Participant, may in
its discretion take such actions as may be necessary to convert such
Participant's ISOs (or any portions thereof) that have not been exercised on the
date of conversion into Non-Qualified Options at any time prior to the
expiration of such ISOs, regardless of whether the Participant is an employee of
the Company or an Affiliate at the time of such conversion. Such actions may
include, but not be limited to, extending the exercise period or reducing the
exercise price of the appropriate installments of such Options. At the time of
such conversion, the Administrator (with the consent of the Participant) may
impose such conditions on the exercise of the resulting Non-Qualified Options as
the Administrator in its discretion may determine, provided that such conditions
shall not be inconsistent with this Plan. Nothing in the Plan shall be deemed to
give any Participant the right to have such Participant's ISOs converted into
Non-Qualified Options, and no such conversion shall occur until and unless the
Administrator takes appropriate action. The Administrator, with the consent of
the Participant, may also terminate any portion of any ISO that has not been
exercised at the time of such conversion.
21. WITHHOLDING.
In the event that any federal, state, or local income taxes, employment
taxes, Federal Insurance Contributions Act ("F.I.C.A.") withholdings or other
amounts are required by applicable law or regulation to be withheld from the
Participant's salary, wages or other remuneration in connection with the
exercise of an Option or a Disqualifying Disposition (as defined in Paragraph
22) or the Vesting of Shares issued pursuant to Stock Purchase Rights, the
Company may deduct from any amounts due to the Participant, such as compensation
or reimbursements, or may require that the Participant advance in cash to the
Company, or to any Affiliate of the Company which employs or employed the
Participant, the amount of such withholdings unless a different withholding
arrangement, including the use of shares of the Company's Common Stock or a
promissory note, is authorized by the Administrator (and permitted by law),
provided, however, that with respect to persons subject to Section 16 of the
1934 Act, any such withholding arrangement shall be in compliance with any
applicable provisions of Rule 16b-3 promulgated under Section 16 of the 1934
Act. For purposes hereof, the fair market value of the shares withheld for
purposes of payroll withholding shall be determined in the manner provided in
Paragraph 2 above, as of the most recent practicable date prior to the date of
exercise. If the fair market value of the shares withheld is less than the
amount of payroll withholdings required, the Participant may be required to
advance the difference in cash to the Company or the Affiliate employer. The
Administrator in its discretion may condition the exercise of an Option for less
than the then Fair Market Value on the Participant's payment of such additional
withholding.
22. NOTICE TO COMPANY OF DISQUALIFYING DISPOSITION.
Each Key Employee who receives an ISO must agree to notify the Company
in writing immediately after the Key Employee makes a Disqualifying Disposition
of any shares acquired pursuant to the exercise of an ISO. A Disqualifying
Disposition is any disposition (including any sale) of such shares before the
later of (a) two years after the date the Key Employee was granted the ISO, or
(b) one year after the date the Key Employee acquired Shares by exercising the
ISO. If the Key Employee has died before such stock is sold, these holding
period requirements do not apply and no Disqualifying Disposition can occur
thereafter.
23. TERMINATION OF THE PLAN.
Unless sooner terminated by the Board of Directors, the Plan shall
terminate on October 28, 2009, and no Options or Stock Purchase Rights shall
thereafter be granted under the Plan. All Options or Stock Purchase Rights
granted under the Plan prior to that date shall remain in effect until such
Options or Stock Purchase Rights shall have been exercised or terminated in
accordance with the terms and provisions of the Plan and the applicable Option
Agreements or Restricted Stock Purchase Agreements. The Board of Directors may
terminate the Plan at any time; provided, however, that any such termination
will not materially impair any rights under any Option or Stock Purchase Right
theretofore made under the Plan without the consent of the Participant.
24. AMENDMENT OF THE PLAN AND AGREEMENTS.
The Plan may be amended by the stockholders of the Company. The Plan
may also be amended by the Board of Directors or the Administrator, including,
without limitation, to the extent necessary to qualify any or all outstanding
Options granted under the Plan or Options to be granted under the Plan for
favorable federal income tax treatment (including deferral of taxation upon
exercise) as may be afforded incentive stock options under Section 422 of the
Code, for as long as the Company has a class of stock registered pursuant to
Section 12 of the 1934 Act and to the extent necessary to qualify the shares
issuable upon exercise of any outstanding Options granted, or Options to be
granted, under the Plan for listing on any national securities exchange or
quotation in any national automated quotation system of securities dealers. Any
amendment approved by the Administrator which the Administrator determines is of
a scope that requires stockholder approval shall be subject to obtaining such
stockholder approval. Any modification or amendment of the Plan shall not,
without the consent of a Participant, materially adversely affect his or her
rights under an Option or Stock Purchase Right previously granted to him or her.
With the consent of the Participant affected, the Administrator may amend
outstanding Option Agreements or Restricted Stock Purchase Agreements in a
manner which may be materially adverse to the Participant but which is not
inconsistent with the Plan. In the discretion of the Administrator, outstanding
Option Agreements or Restricted Stock Purchase Agreements may be amended by the
Administrator in a manner which is not materially adverse to the Participant.
25. EMPLOYMENT OR OTHER RELATIONSHIP.
Nothing in this Plan or any Option Agreement or Restricted Stock
Purchase Agreement shall be deemed to prevent the Company or an Affiliate from
terminating the employment, consultancy or director status of a Participant, nor
to prevent a Participant from terminating his or her own employment, consultancy
or director status or to give any Participant a right to be retained in
employment or other service by the Company or any Affiliate for any period of
time.
All Options and Stock Purchase Rights shall constitute a special
incentive payment to the Participant and shall not be taken into account in
computing the amount of salary or compensation of the Participant for the
purpose of determining any benefits under any pension, retirement,
profit-sharing, bonus, life insurance or other benefit plan of the Company or
under any agreement between the Company and the Participant, unless such plan or
agreement specifically provides otherwise.
26. GOVERNING LAW.
This Plan shall be governed by and construed in accordance with the
laws of the State of Delaware, the Company's state of incorporation. Except as
otherwise provided in the pertinent Option Agreement or Restricted Stock
Purchase Agreement, the United States District Court for the Eastern District of
Virginia shall have exclusive jurisdiction over any and all disputes between a
Participant and the Company related to or arising out of Options or Restricted
Stock Purchase Rights granted under this Plan.
Notice Of Grant Of Stock Options
1999 Stock Plan, Version ___
America Online, Inc. Post 11/22/99 Split
ID: 54-1322110
22110 Pacific Blvd.
Dulles, VA 20166
I, _______________________, am the Participant.
ID: ______________________
I understand that by clicking on each of the boxes below and typing in "I Agree"
at the bottom, I am giving America Online, Inc. or its parent or successor
("AOL") the equivalent of my written signature for all legal purposes.
Participant has been granted options to buy AOL Common Stock (the "Stock
Options") as follows:
Non-Qualified Stock Option Grant Number: ____________
Date of Grant: ____________
Purchase Price per Share: ____________*
Total Number of Shares Granted: ____________*
AOL and I agree that these options are granted under and governed by the terms
and conditions of the AOL 1999 Stock Plan (the "Plan") and the Non-Qualified
Stock Option Agreement, Version 1 (the "Agreement"), all of which are
incorporated by reference into, and made a part of, this document, and which I
can access and review through the HR website at http://anvil.office.aol.com. I
am also advised to refer to the Plan Description of the Plan (the "Plan
Summary"), which also may be accessed through the HR Website. I hereby consent
to receive the Plan, the Agreement and the Plan Summary electronically via the
HR Website, and I agree that I have had an opportunity to review these records.
I understand that my Stock Options shall become vested and exercisable only in
accordance with the following vesting schedule, subject to the Plan and
Agreement terms:
Shares Vesting Date Expiration Date
I understand that the vesting of my Stock Options will cease in certain
circumstances, including but not limited to, termination of employment, as
provided in the Plan and Agreement.
I understand that in general, any vested and exercisable Stock Options will be
canceled no later than 90 calendar days following a termination of employment,
and that if vested and exercisable Stock Options are not exercised within this
90 day period, they will be canceled and cannot ever be exercised, as provided
in the Plan and Agreement.
I understand that my unvested Stock Options will be canceled upon a termination
of employment and cannot ever be exercised.
I understand that termination of my employment for "cause" may result in
forfeiture of all vested but unexercised Stock Options.
I further agree that I have read and will comply with AOL's Securities Trading
Policy (also accessible on the HR Website), which I understand may be updated
from time to time.
I understand that I may be entitled now and from time to time to receive certain
other documents, including AOL's annual report to stockholders and proxy
statements (which become available each year approximately three months after
AOL's fiscal year end), and I hereby consent to receive such documents
electronically on the Web or as AOL otherwise directs.
*Purchase price and number of shares are expressed in this document are in
post--11/22/99 terms.
Signed Online By __________________ On __________ At ________ PM
NON-QUALIFIED STOCK OPTION AGREEMENT
AMERICA ONLINE, INC.
THIS AGREEMENT is made as of the Date of Grant set forth on the Notice
of Grant of Stock Options attached hereto (the "Notice") between America Online,
Inc. (the "Company"), a Delaware corporation having a principal place of
business in Dulles, Virginia, and the Participant.
WHEREAS, the Company desires to grant to the Participant an Option to
purchase shares of its common stock, $.01 par value per share (the "Shares"),
under and for the purposes set forth in the Company's 1999 Stock Plan (the
"Plan");
WHEREAS, the Company and the Participant understand and agree that any
terms used and not defined herein have the same meanings as in the Plan; and
WHEREAS, the Company and the Participant each intend that the Option
granted herein shall be a Non-Qualified Option.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
set forth and for other good and valuable consideration, the parties hereto
agree as follows:
1. GRANT OF OPTION.
The Company hereby grants to the Participant the right and option to
purchase all or any part of an aggregate of such number of Shares as is set
forth in the Notice, on the terms and conditions and subject to all the
limitations set forth herein and in the Plan, which is incorporated herein by
reference.
2. PURCHASE PRICE.
The purchase price of the Shares covered by the Option shall be as set
forth in the Notice, subject to adjustment, as provided in the Plan, in the
event of a stock split, reverse stock split or other events affecting the
holders of Shares. Payment shall be made in accordance with Paragraph 7 of the
Plan.
3. EXERCISE OF OPTION.
Subject to the terms and conditions set forth in this Agreement and the
Plan, the Option granted hereby shall be exercisable according to the Vesting
Schedule set forth on the Notice.
The foregoing rights are cumulative and are subject to the other terms
and conditions of this Agreement and the Plan.
4. TERM OF OPTION.
Unless earlier terminated pursuant to the provisions of this Agreement
or the Plan, the unexercised portion of the Option shall expire and cease to be
exercisable at 5:00 p.m. Eastern Time on the tenth anniversary of the date of
this Agreement.
If the Participant ceases to be an employee, director or consultant of
the Company or of an Affiliate (for any reason other than the death or
Disability of the Participant or termination of the Participant for "cause" (as
defined in the Plan)), the Option may be exercised, if it has not previously
terminated, within ninety (90) days after the date the Participant ceases to be
an employee, director or consultant of the Company or an Affiliate, or within
the originally prescribed term of the Option, whichever is earlier, but may not
be exercised thereafter. In such event, the Option shall be exercisable only to
the extent that the Option has become exercisable and is in effect at the date
of such cessation of employment, directorship or consultancy. As authorized
pursuant to Paragraph 10(f) of the Plan, a change in the status of the
Participant within or among the Company and its Affiliate shall not affect the
Option, except that a change in status of the Participant from a Key Employee of
the Company or an Affiliate to a consultant of the Company or an Affiliate shall
be treated and have the same effect as if the Participant had ceased to be an
employee, director or consultant of the Company, unless the Administrator shall
determine otherwise.
Notwithstanding the foregoing paragraph, in the event of any of the
following, the Option may be exercised as provided in the Plan, but in no event
after the date of expiration of the term of the Option:
(a) the Participant's Disability or death within three (3) months after
the termination of employment, directorship or consultancy;
(b) Participant's termination of employment, directorship or consultancy
by reason of Participant's Disability, as determined in accordance
with the Plan; and
(c) the death of the Participant while an employee, director or consultant
of the Company or of an Affiliate.
In the event the Participant's employment, directorship or consultancy
is terminated by the Company or an Affiliate for "cause" (as defined in the
Plan), the Participant's right to exercise any unexercised portion of this
Option shall cease as of such termination, and this Option shall thereupon
terminate. Notwithstanding anything herein to the contrary, if subsequent to the
Participant's termination, but prior to the exercise of the Option, the Board of
Directors of the Company determines that, either prior or subsequent to the
Participant's termination, the Participant engaged in conduct which would
constitute "cause," then the Participant shall immediately cease to have any
right to exercise the Option and this Option shall thereupon terminate, whether
or not this Option was previously exercisable.
5. METHOD OF EXERCISING OPTION.
Subject to the terms and conditions of this Agreement, the Option may
be exercised by written notice to the Company in such form as is provided by the
Company or pursuant to other procedures established by the Company. Such notice
shall state the number of Shares with respect to which the Option is being
exercised and shall be signed (whether or not in electronic form) by the person
exercising the Option. Payment of the purchase price for such Shares shall be
made in accordance with Paragraph 7 of the Plan. The Company shall deliver a
certificate or certificates representing such Shares as soon as practicable
after the notice shall be received, provided, however, that the Company may
delay issuance of such Shares until completion of any action or obtaining of any
consent, which the Company deems necessary or appropriate under any applicable
law (including, without limitation, state securities or "blue sky" laws and
satisfaction of applicable tax withholding requirements) and such Shares shall
be subject to the restrictions set forth in Section 7 of the Agreement and such
other restrictions as the Administrator may determine in accordance with the
Plan. The certificate or certificates for the Shares as to which the Option
shall have been so exercised shall be registered in the name of the person or
persons so exercising the Option (or, if the Option shall be exercised by the
Participant and if the Participant shall so request in the notice exercising the
Option, shall be registered in the name of the Participant and another person
jointly, with right of survivorship) and shall be delivered as provided above to
or upon the written order of the person or persons exercising the Option. In the
event the Option shall be exercised, pursuant to Section 4 hereof, by any person
or persons other than the Participant, such notice shall be accompanied by
appropriate proof of the right of such person or persons to exercise the Option.
All Shares that shall be purchased upon the exercise of the Option as provided
herein shall be fully paid and nonassessable.
6. PARTIAL EXERCISE.
Exercise of this Option to the extent above stated may be made in part
at any time and from time to time within the above limits, except that no
fractional share shall be issued pursuant to this Option.
7. NON-ASSIGNABILITY.
The Option shall not be transferable by the Participant otherwise than
by will or by the laws of descent and distribution or as may be permitted under
policies that may be adopted from time to time by the Administrator in its sole
discretion. The Option shall be exercisable, during the Participant's lifetime,
only by the Participant (or, in the event of legal incapacity or incompetency,
by the Participant's guardian or representative) and shall not be assigned,
pledged or hypothecated in any way (whether by operation of law or otherwise)
and shall not be subject to execution, attachment or similar process. Any
attempted transfer, assignment, pledge, hypothecation or other disposition of
the Option or of any rights granted hereunder contrary to the provisions of this
Section 7, or the levy of any attachment or similar process upon the Option or
such rights shall be null and void.
8. NO RIGHTS AS STOCKHOLDER UNTIL EXERCISE.
The Participant shall have no rights as a stockholder with respect to
Shares subject to this Agreement until registration of the Shares in the
Company's share register in the name of the Participant. Except as is expressly
provided in the Plan with respect to certain changes in the capitalization of
the Company, no adjustment shall be made for dividends or similar rights for
which the record date is prior to the date of such registration.
9. CAPITAL CHANGES AND BUSINESS SUCCESSIONS.
The Plan contains provisions covering the treatment of Options in a
number of contingencies such as stock splits and mergers. Provisions in the Plan
for adjustment with respect to stock subject to Options and the related
provisions with respect to successors to the business of the Company are hereby
made applicable hereunder and are incorporated herein by reference; provided,
however, that in accordance with the introductory paragraph to Section 17 of the
Plan, the transactions described in the Agreement and Plan of Merger Dated as of
January 10, 2000 between America Online, Inc. and Time Warner Inc. (the
"Merger") shall not cause the vesting of the Options to accelerate as described
in Sections 17(B) and 17(C) of the Plan.
10. TAXES.
The Participant acknowledges that the exercise of the Option is likely
to have Federal, state and/or local income tax consequences on the Participant.
The Participant acknowledges that any income or other taxes due from him or her
with respect to this Option or the Shares issuable pursuant to this Option shall
be the Participant's responsibility.
The Participant agrees that the Company may withhold from the
Participant's remuneration, if any, the appropriate amount of federal, state and
local withholding attributable to such amount that the Company believes it is
obligated to withhold under the Internal Revenue Code of 1986, as amended,
including but not limited to, income and employment taxes. At the Company's
discretion, the amount required to be withheld may be withheld in cash from such
remuneration, or in kind from the Shares otherwise deliverable to the
Participant on exercise of the Option. The Participant further agrees that, if
the Company does not withhold an amount from the Participant's remuneration
sufficient to satisfy the Company's income tax withholding obligation, the
Participant will reimburse the Company, in cash, for the amount under-withheld
within thirty (30) days after the Company has given the Participant notice of
such under-withheld amount.
11. PURCHASE FOR INVESTMENT.
Unless the offering and sale of the Shares to be issued upon the
particular exercise of the Option shall have been effectively registered under
the Securities Act of 1933, as now in force or hereafter amended (the "1933
Act"), the Company shall be under no obligation to issue the Shares covered by
such exercise unless and until the following conditions have been fulfilled:
(a) The person(s) who exercise the Option shall warrant to the
Company, at the time of such exercise, that such person(s) are
acquiring such Shares for their own respective accounts, for
investment, and not with a view to, or for sale in connection
with, the distribution of any such Shares, in which event the
person(s) acquiring such Shares shall be bound by the
provisions of the following legend which shall be endorsed
upon the certificate(s) evidencing the Shares issued pursuant
to such exercise:
"The shares represented by this certificate have been
taken for investment and they may not be sold or
otherwise transferred by any person, including a
pledgee, unless (1) either (a) a Registration
Statement with respect to such shares shall be
effective under the Securities Act of 1933, as
amended, or (b) the Company shall have received an
opinion of counsel satisfactory to it that an
exemption from registration under such Act is then
available, and (2) there shall have been compliance
with all applicable state securities laws;" and
(b) If the Company so requires, the Company shall have received an
opinion of its counsel that the Shares may be issued upon such
particular exercise in compliance with the 1933 Act without
registration thereunder. Without limiting the generality of
the foregoing, the Company may delay issuance of the Shares
until completion of any action or obtaining of any consent,
including satisfaction of applicable tax withholding
requirements, which the Company deems necessary or appropriate
under any applicable law, including without limitation state
securities or "blue sky" laws.
12. NO OBLIGATION TO MAINTAIN RELATIONSHIP.
The Company is not by the Plan or this Option obligated to continue the
Participant as an employee, director or consultant of the Company.
13. NOTICES.
Any notices required or permitted by the terms of this Agreement or the
Plan shall be given by recognized courier service, facsimile, registered or
certified mail, return receipt requested, addressed as follows:
If to the Company: America Online, Inc.
22000 AOL Way
Dulles, Virginia 20166
Attn: Senior Vice President of Human Resources
If to the Participant: As set forth in the Notice
or to such other address or addresses of which notice in the same manner has
previously been given. Any such notice shall be deemed to have been given upon
the earlier of receipt, one business day following delivery to a nationally
recognized overnight courier service or three business days following mailing by
registered or certified mail.
14. GOVERNING LAW.
This Agreement shall be governed by and construed in accordance with the laws of
the State of Delaware, the Company's state of incorporation. The parties further
agree that any and all disputes related to the subject matter of this Agreement
shall be brought only in the United States District Court for the Eastern
District of Virginia (Alexandria Division), the forum encompassing the Company's
headquarters in all cases in which federal jurisdiction is proper. Accordingly,
for all cases in which federal jurisdiction is proper, the parties irrevocably
submit to the jurisdiction of the United States District Court for the Eastern
District of Virginia (Alexandria Division), and irrevocably agree that venue for
any such action shall be in that Court only. For all cases in which federal
jurisdiction is not proper, the parties further agree that any and all disputes
related to the subject matter of this Agreement shall be brought only in the
Circuit Court for Loudoun County, Virginia
15. BENEFIT OF AGREEMENT.
Subject to the provisions of the Plan and the other provisions hereof,
this Agreement shall be for the benefit of and shall be binding upon the heirs,
executors, administrators, successors and assigns of the parties hereto.
16. ENTIRE AGREEMENT.
This Agreement, together with the Plan, embodies the entire agreement
and understanding between the parties hereto with respect to the subject matter
hereof and supersedes all prior oral or written agreements and understandings
relating to the subject matter hereof. No statement, representation, warranty,
covenant or agreement not expressly set forth in this Agreement shall affect or
be used to interpret, change or restrict, the express terms and provisions of
this Agreement, provided, however, in any event, this Agreement shall be subject
to and governed by the Plan.
17. MODIFICATIONS AND AMENDMENTS.
The terms and provisions of this Agreement may be modified or amended
as provided in the Plan.
18. WAIVERS AND CONSENTS.
Except as provided in the Plan, the terms and provisions of this
Agreement may be waived, or consent for the departure therefrom granted, only by
written document executed by the party entitled to the benefits of such terms or
provisions. No such waiver or consent shall be deemed to be or shall constitute
a waiver or consent with respect to any other terms or provisions of this
Agreement, whether or not similar. Each such waiver or consent shall be
effective only in the specific instance and for the purpose for which it was
given, and shall not constitute a continuing waiver or consent.
19. FORMATION; SEVERABILITY.
If any provision of this Agreement (including any provision of the Plan
that is incorporated herein by reference) shall hereafter be held to be invalid,
unenforceable or illegal, in whole or in part, in any jurisdiction under any
circumstances for any reason, (i) such provision shall be reformed to the
minimum extent necessary to cause such provision to be valid, enforceable and
legal while preserving the intent of the parties as expressed in, and the
benefits of the parties provided by, this Agreement and the Plan or (ii) if such
provision cannot be so reformed, such provision shall be severed from this
Agreement and an equitable adjustment shall be made to this Agreement
(including, without limitation, addition of necessary further provisions to this
Agreement) so as to give effect to the intent as so expressed and the benefits
so provided. Such holding shall not affect or impair the validity,
enforceability or legality of such provision in any other jurisdiction or under
any other circumstances. Neither such holding nor such reformation or severance
shall affect the legality, validity or enforceability of any other provision of
this Agreement or the Plan.
FORM OF RESTRICTED STOCK AGREEMENT
This AGREEMENT is made as of the ____ day of ________ (the "Grant
Date") by and between America Online, Inc., a Delaware corporation having a
principal place of business in Dulles, Virginia ("AOL" or the "Company"), and
______________ (the "Key Employee").
W I T N E S S E T H
WHEREAS, the Company has made an offer of employment to the Key
Employee to be employed by AOL, which the Key Employee has accepted pursuant to
the terms of an employment agreement dated _________________, (the "Employment
Agreement"), and the Company desires to offer and grant to the Key Employee the
right to purchase shares of Company common stock, par value $.01 per share (the
"Common Stock"), in accordance with the terms and conditions hereinafter set
forth;
WHEREAS, the Company maintains the America Online, Inc. 1999 Stock
Plan, pursuant to which it has the right to grant to key employees stock
purchase rights in connection with their hiring or for retention purposes;
NOW, THEREFORE, in consideration of the promises and the mutual
covenants contained herein and for other good and valuable consideration, the
parties hereby agree as follows:
1. Terms of Purchase. The Key Employee hereby accepts the offer of the
Company to grant to the Key Employee, in accordance with the terms of this
Agreement and the 1999 Stock Plan, the right to purchase ______________
(_________) shares of the Company's Common Stock (such shares, subject to
adjustment pursuant to Subsections 2(i) and (j) hereof, the "Shares") at a
purchase price per share of one cent ($.01) (the "Purchase Price"), receipt of
which is hereby acknowledged by the Company.
2. Company's Lapsing Repurchase Right.
(a) Lapsing Repurchase Right. Except as set forth in Subsections 2(b),
2(c) and 2(d), in the event for any reason, whether with or without notice and
whether or not the Company or the Affiliate of the Company has acted lawfully in
terminating the employment, the Key Employee ceases to be an employee of the
Company or an Affiliate of the Company prior to the ___________ anniversary of
the Grant Date, the Company or its designee shall have the option, but not the
obligation, to purchase from the Key Employee (or his successor in interest),
and the Key Employee (or his successor in interest) shall be obligated to sell
to the Company or its designee, at a price per Share equal to the Purchase
Price, all or any part of the Shares set forth in clauses (i), (ii) and (iii)
below (the "Lapsing Repurchase Right"). The Company's Lapsing Repurchase Right
shall be valid for a period of six (6) months commencing with the date of such
termination. Notwithstanding any other provision hereof, in the event the
Company is prohibited during such six (6) months from exercising its Lapsing
Repurchase Right by Section 160 of the Delaware General Corporation Law as
amended from time to time (or any successor provision), then the time period
such Lapsing Repurchase Right may be exercised shall be extended until twenty
(20) days after the Company is first not so prohibited.
(i) If such termination of employment is prior to the _____
anniversary of the Grant Date, the Company shall have the option to
repurchase all of the Shares acquired by the Key Employee hereunder.
(ii) If such termination of employment is on or after the
______ anniversary of the Grant Date and prior to the _________
anniversary of the Grant Date, the Company shall have the option to
repurchase __________ (rounded up to the nearest whole number of the
Shares; if such termination of employment is on or after the _________
anniversary of the Grant Date and prior to the ___________ anniversary
of the Grant Date, the Company shall have the option to repurchase
__________ (rounded up to the nearest whole number) of the Shares, as
provided in this Agreement.
(iii) Notwithstanding anything to the contrary contained in
this Agreement, except as otherwise provided in Subsection 2(b) below,
in the event the Company or the Affiliate of the Company terminates the
Key Employee's employment for Cause (as defined below) or in the event
the Company determines, subsequent to the Key Employee's termination of
service but during the ninety (90) days after the termination of
service (or if the Key Employee shall die during such period, during
the one year period following such termination of service) that either
prior or subsequent to the Key Employee's termination the Key Employee
engaged in conduct that would constitute Cause, the Company shall have
the option to repurchase all of the Shares acquired by the Key Employee
hereunder.
(b) Effect of Termination for Disability or upon Death. Notwithstanding
the provisions of clauses (i), (ii) and (iii) immediately above, if such
termination of employment is as a result of the Key Employee's Disability or
death, then the Company's Lapsing Repurchase Right shall terminate, and the Key
Employee's (or the Key Employee's Survivors') ownership of all Shares then owned
by him shall become vested.
(c) Effect of Termination without Cause. The Company's Lapsing
Repurchase Right shall terminate, and the Key Employee's ownership of all Shares
then owned by him shall become vested, if the Company of the Affiliate of the
Company terminates the Key Employee's employment other than for Cause or if the
Officer terminates his employment with the Company for Good Reason; provided
that the Officer shall deliver to the Company a valid release of all claims
against the Company.
(d) Effect of Change in Control. The Company's Lapsing Repurchase Right
shall terminate, and the Key Employee's ownership of all Shares then owned by
him shall become vested, in the event of a Change in Control upon the first to
occur of (x) the date the Lapsing Repurchase Right otherwise expires under the
terms of this Agreement, (y) the first anniversary of the date such Corporate
Change in Control is determined to have occurred, and (z) the occurrence of an
Involuntary Employment Action.
(e) Closing. In the event that the Company exercises the Lapsing
Repurchase Right, the Company shall notify the Key Employee, or, in the case of
his death, his representative, in writing of its intent to repurchase the
Shares. Such notice may be mailed by the Company up to and including the last
day of the time period provided for above for exercise of the Lapsing Repurchase
Right. The notice shall specify the place, time and date for payment of the
repurchase price (the "Closing"). The date specified shall be not less than ten
(10) days nor more than sixty (60) days from the date of mailing of the notice,
and the Key Employee or his successor in interest with respect to the Shares
which the Company elects to repurchase shall have no further rights as the owner
thereof from and after the date specified in the notice. At the Closing, the
repurchase price shall be delivered to the Key Employee or his successor in
interest and the Shares being purchased, duly endorsed for transfer, shall, to
the extent that they are not in the possession of the Company, be delivered to
the Company by the Key Employee or his successor in interest.
(f) Escrow. The certificates representing all Shares acquired by the
Key Employee hereunder which from time to time are subject to the Lapsing
Repurchase Right shall be delivered to the Company and the Company shall hold
such Shares in escrow as provided in this Subsection 2(f). Promptly following a
request from the Key Employee, the Company shall release from escrow and deliver
to the Key Employee a certificate for the number of Shares, if any, as to which
the Lapsing Repurchase Right has lapsed. In the event of a repurchase by the
Company of Shares subject to the Lapsing Repurchase Right, the Company shall
release from escrow and cancel a certificate for the number of Shares so
repurchased. Any securities distributed in respect of the Shares held in escrow,
including, without limitation, shares issued as a result of stock splits, stock
dividends or other recapitalizations, shall also be held in escrow in the same
manner as the Shares.
(g) Prohibition on Transfer. The Key Employee recognizes and agrees
that all Shares which are subject to the Lapsing Repurchase Right may not be
sold, transferred, assigned, hypothecated, pledged, encumbered or otherwise
disposed of, whether voluntarily or by operation of law (other than to the
Company or its designee). The Company shall not be required to transfer any
Shares on its books which shall have been sold, assigned or otherwise
transferred in violation of this Subsection 2(g), or to treat as the owner of
such Shares, or to accord the right to vote as such owner or to pay dividends
to, any person or organization to which any such Shares shall have been so sold,
assigned or otherwise transferred, in violation of this Subsection 2(g).
(h) In the event that the Key Employee or his successor in interest
fails to deliver the Shares to be repurchased by the Company under this
Agreement, the Company may elect (i) to establish a segregated account in the
amount of the repurchase price, such account to be turned over to the Key
Employee or his successor in interest upon delivery of such Shares, and (ii)
immediately to take such action as is appropriate to transfer record title of
such Shares from the Key Employee to the Company and to treat the Key Employee
and such Shares in all respects as if delivery of such Shares had been made as
required by this Agreement. The Key Employee hereby irrevocably grants the
Company a power of attorney which shall be coupled with an interest for the
purpose of effectuating the preceding sentence. The Key Employee agrees as a
condition to the performance by the Company of this Agreement to execute and
deliver the Stock Power attached hereto as Exhibit A.
(i) If the Company shall pay a stock dividend or declare a stock split
on or with respect to any of its Common Stock, or otherwise distribute
securities of the Company to the holders of its Common Stock, the number of
shares of stock or other securities of the Company issued with respect to the
Shares then subject to the restrictions contained in this Agreement shall be
added to the Shares subject to the Company's rights of repurchase pursuant to
this Agreement. If the Company shall distribute to its stockholders securities
of another corporation, the securities of such other corporation, distributed
with respect to the Shares then subject to the restrictions contained in this
Agreement, shall be added to the Shares subject to the Company's rights to
repurchase pursuant to this Agreement.
(j) If the outstanding shares of the Company's Common Stock shall be
subdivided into a greater number of shares or combined into a smaller number of
shares, or in the event of a reclassification of the outstanding shares of the
Company's Common Stock, or if the Company shall be a party to a merger,
consolidation or capital reorganization, there shall be substituted for the
Shares then subject to the restrictions contained in this Agreement such amount
and kind of securities as are issued in such subdivision, combination,
reclassification, merger, consolidation or capital reorganization in respect of
the Shares subject immediately prior thereto to the Company's rights of
repurchase pursuant to this Agreement.
3. Legend. All certificates representing the Shares to be issued to
the Key Employee pursuant to this Agreement shall have endorsed thereon a legend
substantially as follows:
"The shares represented by this certificate are subject to
restrictions set forth in a Restricted Stock Purchase
Agreement dated __________, with America Online, Inc., and the
America Online, Inc. 1999 Stock Plan, copies of which
Agreement and Plan are available for inspection at the offices
of the Company or will be made available upon request."
4. Defined Terms. Capitalized terms not otherwise defined herein shall
have the meanings set forth below or the meanings ascribed to them in the Plan,
as applicable; provided, however, that any terms defined herein and in the Plan
shall have the meanings set forth in this Agreement:
"Cause" shall mean (a) the Key Employee's conviction of a
felony involving moral turpitude, (b) his willful and continued failure
substantially to perform his required duties under the Employment
Agreement, (c) his intentional or repeated violation of the
Confidentiality, Non-Competition, and Proprietary Rights Agreement, or
(d) his intentional or improper conduct substantially prejudicial to
the business of the Company or any of its affiliates.
"Corporate Change in Control" shall have the meaning ascribed
to it in the Plan, except that the dates referred to in paragraph
(2) of such definition shall be deemed replaced with the words
"the Grant Date."
5. Tax Liability of the Key Employee and Payment of Taxes. The Key
Employee acknowledges and agrees that any income or other taxes due from him
with respect to the Shares issued pursuant to this Agreement, including, without
limitation, the lapsing of the Company's right of repurchase, shall be the Key
Employee's responsibility. Without limiting the foregoing, the Key Employee
agrees that, to the extent that the lapsing of restrictions on disposition of
any of the Shares or the declaration of dividends on any such shares before the
lapse of such restrictions on disposition results in the Key Employee's being
deemed to be in receipt of earned income under the provisions of the Code, the
Company shall be entitled to immediate payment from the Key Employee of the
amount of any tax required to be withheld by the Company.
6. Securities Law Compliance. The Key Employee represents that any
sales of Shares at a time when the Key Employee may be deemed an "affiliate" of
the Company for purposes of the Securities Act of 1933, as amended (the "Act"),
shall be made in accordance with the requirements of Rule 144 under the Act (or
any successor rule) applicable to sales by an "affiliate" of shares registered
under the Act or in a transaction otherwise exempt from the registration
requirements of the Act and as to which the Company shall have received an
opinion of counsel satisfactory to it confirming such exemption.
7. Equitable Relief. The Key Employee specifically acknowledges and
agrees that in the event of a breach or threatened breach of the provisions of
this Agreement, including the attempted transfer of the Shares by the Key
Employee, monetary damages may not be adequate to compensate the Company, and,
therefore, in the event of such a breach or threatened breach, in addition to
any right to damages, the Company shall be entitled to equitable relief in any
court having competent jurisdiction. Nothing herein shall be construed as
prohibiting the Company from pursuing any other remedies available to it for any
such breach or threatened breach.
8. No Obligation to Employ. The Company is not by this Agreement
obligated to continue the Key Employee as an employee of the Company or of any
Affiliate of the Company.
9. Notices. Any notices required or permitted by the terms of this
Agreement shall be given by recognized courier service, registered or certified
mail, return receipt requested, postage prepaid, or facsimile, addressed as
follows:
If to the Company:
America Online, Inc.
22000 AOL Way
Dulles, Virginia 20166
Attention: General Counsel
If to the Key Employee:
to the Key Employee's last address as set forth in the records
of the Company,
or to such other address(es) of which notice in the same manner has previously
been given. Any such notice shall be deemed to have been given on the earliest
of receipt, one (1) business day following delivery by the sender to a
recognized courier service, or three (3) business days following mailing by
registered or certified mail.
10. Binding Effect. This Agreement shall be for the benefit of and
shall be binding upon the parties hereto, upon their respective successors and
assigns and upon the Key Employee's heirs, executors and administrators.
11. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, the Company's state of
incorporation. The parties further agree that any and all disputes related to
the subject matter of this Agreement shall be brought only in the United States
District Court for the Eastern District of Virginia (Alexandria Division), the
forum encompassing the Company's headquarters in all cases in which federal
jurisdiction is proper. Accordingly, for all cases in which federal jurisdiction
is proper, the parties irrevocably submit to the jurisdiction of the United
States District Court for the Eastern District of Virginia (Alexandria
Division), and irrevocably agree that venue for any such action shall be in that
Court only. For all cases in which federal jurisdiction is not proper, the
parties further agree that any and all disputes related to the subject matter of
this Agreement shall be brought only in the Circuit Court for Loudoun County,
Virginia.
12. Severability. If any provision of this Agreement is held to be
invalid or unenforceable by a court of competent jurisdiction, then such
provision or provisions shall be modified to the extent necessary to make such
provision valid and enforceable, and to the extent that this is impossible, then
such provision shall be deemed to be excised from this Agreement, and the
validity, legality and enforceability of the rest of this Agreement shall not be
affected thereby.
13. Entire Agreement. This Agreement constitutes the entire agreement
and understanding between the parties hereto with respect to the subject matter
hereof and supersedes all prior oral or written agreements and understandings
relating to the subject matter hereof. No statement, representation, warranty,
covenant or agreement not expressly set forth in this Agreement shall affect or
be used to interpret, change or restrict the express terms and provisions of
this Agreement.
14. Modifications and Amendments; Waivers and Consents. The terms and
provisions of this Agreement may not be modified, amended, renewed, or
terminated, nor may any term, condition or breach of any term or condition be
waived, except by a writing signed by the person or persons sought to be bound
by such modification, amendment, renewal, termination or waiver. Any waiver of
any term, condition or breach hereof shall not be a waiver of any other term or
condition or of the same term or condition for the future, or of any subsequent
breach.
15. Consent of Spouse. If the Key Employee is married as of the date of
this Agreement, the Key Employee's spouse shall execute a Consent of Spouse in
the form of Exhibit B hereto, effective as of the date hereof. Such consent
shall not be deemed to confer or convey to the spouse any rights in the Shares
that do not otherwise exist by operation of law or the agreement of the parties.
If the Key Employee marries or remarries subsequent to the date hereof, the Key
Employee shall, not later than sixty (60) days thereafter, obtain hisnew
spouse's acknowledgement of and consent to the existence and binding effect of
all restrictions contained in this Agreement by such spouse's executing and
delivering a Consent of Spouse in the form of Exhibit B.
16. Counterparts. This Agreement may be executed in one or more
counterparts, and by different parties hereto on separate counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
AMERICA ONLINE, INC.
By:
Printed Name:
Title:
KEY EMPLOYEE:
[Name]
EXHIBIT A
STOCK POWER
For value received, I hereby sell, assign, and transfer to America
Online, Inc. ______________ shares of Common Stock of America Online, Inc.,
standing in the undersigned's name on the books and records of the aforesaid
Company, represented by Certificate No(s). ___________________________, and do
hereby irrevocably constitute and appoint the Corporate Secretary of America
Online, Inc. attorney, with full power of substitution, to transfer this stock
on the books and records of the aforesaid Company.
-----------------------------
[Name]
Dated As Of:
______________,
In the presence of:
Printed Name:
-----------------
EXHIBIT B
CONSENT OF SPOUSE
I, , spouse of _________________, acknowledge that I have read the
RESTRICTED STOCK AGREEMENT dated as of ___________________, (the "Agreement") to
which this Consent is attached as Exhibit B and that I know its contents.
Capitalized terms used and not defined herein shall have the meanings assigned
to such terms in the Agreement. I am aware that by its provisions the Shares
granted to my spouse pursuant to the Agreement are subject to a Lapsing
Repurchase Right in favor of America Online, Inc. (the "Company") and that,
accordingly, the Company has the right to repurchase up to all of the Shares of
which I may become possessed as a result of a gift from my spouse, operation of
law or a court decree and/or any property settlement in any domestic litigation.
I hereby agree that my interest, if any, in the Shares subject to the
Agreement shall be irrevocably bound by the Agreement and further understand and
agree that any community property interest I may have in the Shares shall be
similarly bound by the Agreement.
I agree to the Lapsing Repurchase Right described in the Agreement and
I hereby consent to the repurchase of the Shares by the Company and the sale of
the Shares by my spouse or his legal representative in accordance with the
provisions of the Agreement. Further, as part of the consideration for the
Agreement, I agree that at my death, if I have not disposed of any interest of
mine in the Shares by an outright bequest of the Shares to my spouse, then the
Company shall have the same rights against my legal representative to exercise
its rights of repurchase with respect to any interest of mine in the Shares as
it would have had pursuant to the Agreement if I had acquired the Shares
pursuant to a court decree in domestic litigation.
I AM AWARE THAT THE LEGAL, FINANCIAL AND RELATED MATTERS CONTAINED IN
THE AGREEMENT ARE COMPLEX AND THAT I AM FREE TO SEEK INDEPENDENT PROFESSIONAL
GUIDANCE OR COUNSEL WITH RESPECT TO THIS CONSENT. I HAVE EITHER SOUGHT SUCH
GUIDANCE OR COUNSEL OR DETERMINED AFTER REVIEWING THE AGREEMENT CAREFULLY THAT I
WILL WAIVE SUCH RIGHT.
Dated as of the day of .
---- -------------------
Printed name:
