-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HGndg37MlzlsMetF5SxO+Bqmg33mJyGZIDNQZvGcBpjoc40bu42TadJuBywoBiri ITV8nFd/7Z8xCLAfHgc8HQ== 0001047469-99-032904.txt : 19990819 0001047469-99-032904.hdr.sgml : 19990819 ACCESSION NUMBER: 0001047469-99-032904 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19990818 EFFECTIVENESS DATE: 19990818 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EARTHLINK NETWORK INC /DE/ CENTRAL INDEX KEY: 0001061566 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROGRAMMING, DATA PROCESSING, ETC. [7370] IRS NUMBER: 582389244 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-8 SEC ACT: SEC FILE NUMBER: 333-85477 FILM NUMBER: 99695332 BUSINESS ADDRESS: STREET 1: 3100 NEW YORK DR CITY: PASADENA STATE: CA ZIP: 91107 MAIL ADDRESS: STREET 1: 3100 NEW YORK DR CITY: PASADENA STATE: CA ZIP: 91107 S-8 1 FORM S-8 As filed with the Securities and Exchange Commission on August 18, 1999 Registration No. 333-_______ - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------ FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ------------------- EARTHLINK NETWORK, INC. (Exact Name of Registrant as Specified in Its Charter) DELWARE 58-2389244 (State or Other Jurisdiction of (I.R.S. Employer Identification No.) Incorporation or Organization) 3100 NEW YORK DRIVE SUITE 210 PASADENA, CALIFORNIA 91107 (Address of Principal Executive Offices) ------------------- EARTHLINK NETWORK, INC. 1995 STOCK OPTION PLAN (Full Title of the Plan) ------------------- Kirsten L. Hansen Secretary and Director of Legal Affairs 3100 New York Drive Suite 210 Pasadena, California 91107 (626) 296-2400 (Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent for Service) ------------------- CALCULATION OF REGISTRATION FEE
- ----------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------- Proposed maximum Proposed maximum Title of securities Amount to be offering price aggregate Amount of to be registered registered(1) per share(2) offering price(2) registration fee - ------------------------- ------------- ---------------- ----------------- ---------------- Common Stock, $.01 2,000,000 $48.3125 $96,625,000 $26,861.75 par value................ shares - ----------------------------------------------------------------------------------------------- - -----------------------------------------------------------------------------------------------
- ---------- (1) Pursuant to Rule 416(a) the number of shares of Common Stock registered hereunder includes such indeterminate number of additional shares of Common Stock as may be offered or issued in the future to prevent dilution resulting from stock splits, stock dividends or similar transactions. (2) Estimated solely for the purpose of computing the registration fee. This amount was calculated pursuant to Rule 457(c) on the basis of $48.3125 per share, which was the average of the high and low prices of the Registrant's Common Stock on August 16, 1999, as reported in THE WALL STREET JOURNAL. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- EXPLANATION STATEMENT This Registration Statement on Form S-8 is being filed by EarthLink Network, Inc., a Delaware corporation (the "Company"), to register 2,000,000 additional shares of the Company's Common Stock, $.01 par value per share, under the 1995 Stock Option Plan. PART I INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS ITEM 1. PLAN INFORMATION. Not required to be filed with the Securities and Exchange Commission (the "Commission"). ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION. Not required to be filed with the Commission. PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE. The following documents, filed by the Company with the Commission are incorporated herein by reference and made a part hereof: (i) The Company's Annual Report on Form 10-K for the year ended December 31, 1998; (ii) The Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1999; (iii) The description of the Company's Common Stock, $.01 par value per share, contained in the Company's Registration Statement on Form 8-A filed on January 9, 1997 (Registration No. 000-20799). All documents subsequently filed by the Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), prior to the filing of a post-effective amendment which indicates that all securities offered have been sold or which deregisters all securities then remaining unsold, shall be deemed to be incorporated by reference in the Registration Statement and to be part hereof from the date of filing of such documents. Any statement contained in a document incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Registration Statement to the extent that a statement contained herein or in any other subsequently filed document that is incorporated by reference herein modifies or supersedes such earlier statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Registration Statement. ITEM 4. DESCRIPTION OF SECURITIES. Not applicable. II-1 ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL. Not applicable. ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Under Section 145 of the General Corporation Law of the State of Delaware, as amended, the Registrant has the power to indemnify directors and officers under certain prescribed circumstances and subject to certain limitations against certain costs and expenses, including attorneys' fees actually and reasonably incurred in connection with any action, suit or proceeding, whether civil, criminal, administrative or investigative, to which any of them is a party by reason of his or her being a director or officer of the Registrant if it is determined that he acted in accordance with the applicable standard of conduct set forth in such statutory provision. Article XII of the Registrant's By-laws generally permits indemnification of directors and officers to the fullest extent authorized by the General Corporation Law of the State of Delaware. In addition, the Company maintains customary directors' and officers' liability insurance. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling the Registrant pursuant to the foregoing provisions, the Registrant has been informed that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable. ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED. Not applicable. ITEM 8. EXHIBITS. The following exhibits are filed with or incorporated by reference into this Registration Statement pursuant to Item 601 of Regulation S-K:
EXHIBIT NO. DESCRIPTION ----------- ----------- 4.1 Certificate of Incorporation (incorporated herein by reference to Exhibit 3.1 of the Registrant's Registration Statement on Form S-4, Reg. No. 333-52507). 4.2 Bylaws (incorporated herein by reference to Exhibit 3.2 of the Registrant's Registration Statement on Form S-4, Reg. No. 333-52507). 4.3 Specimen Stock Certificate (incorporated herein by reference to Exhibit 4.2 of the Registrant's Registration Statement on Form S-1, Reg. No. 333-15781). 4.4 EarthLink Network, Inc. 1995 Stock Option Plan 5 Opinion of Hunton & Williams, as counsel with respect to the securities being registered. 23.1 Consent of Hunton & Williams (included in Exhibit 5). 23.2 Consent of PricewaterhouseCoopers LLP, independent accountants. 24 Power of Attorney (see signature pages to this Registration Statement).
ITEM 9. UNDERTAKINGS. (a) The Company hereby undertakes: II-2 1. To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933, as amended (the "Securities Act"); (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high and of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; 2. That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial BONA FIDE offering thereof. 3. To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (b) The Company hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the Company's annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial BONA FIDE offering thereof. (c) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Company pursuant to the foregoing provisions or otherwise, the Company has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act, and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Company of expenses incurred or paid by a director, officer or controlling person of the Company in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Company will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. II-3 SIGNATURES Pursuant to the requirements of the Securities Act, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Pasadena, California on this 17th day of August, 1999. EARTHLINK NETWORK, INC. By: /s/ CHARLES G. BETTY -------------------- Charles G. Betty President, Chief Executive Officer and Director POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints each of Charles G. Betty and Grayson L. Hoberg as his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this Registration Statement, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto each of said attorneys-in-fact and agents, full power and authority to do and perform each and every act and thing required or necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that each of said attorneys-in-fact and agents, or their substitutes, could lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act, this Registration Statement has been signed below on August 18, 1999 by the following persons in the capacities indicated. /s/ CHARLES G. BETTY President, Chief Executive Officer and - ----------------------------- Director (principal executive officer) Charles G. Betty /s/ GRAYSON L. HOBERG Senior Vice President, Finance and Chief - ----------------------------- Financial Officer (principal financial Grayson L. Hoberg and principal accounting officer) /s/ SKY D. DAYTON Founder and Chairman of the Board of - ---------------------------- Directors Sky D. Dayton /s/ SIDNEY AZEEZ Director - ----------------------------- Sidney Azeez /s/ ROBERT M. KAVNER Director - ----------------------------- Robert M. Kavner II-4 /s/ LINWOOD A. LACY, JR. Director - ----------------------------- Linwood A. Lacy, Jr. /s/ PAUL MCNULTY Director - ----------------------------- Paul McNulty /s/ KEVIN M. O'DONNELL Director - ----------------------------- Kevin M. O'Donnell /s/ WILLIAM T. ESREY Director - ----------------------------- William T. Esrey /s/ REED E. SLATKIN Director - ----------------------------- Reed E. Slatkin /s/ LEN J. LAUER Director - ----------------------------- Len J. Lauer II-5 EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION - ----------- ----------- 4.1 Certificate of Incorporation (incorporated herein by reference to Exhibit 3.1 of the Registrant's Registration Statement on Form S-4, Reg. No. 333-52507). 4.2 Bylaws (incorporated herein by reference to Exhibit 3.2 of the Registrant's Registration Statement on Form S-4, Reg. No. 333-52507). 4.3 Specimen Stock Certificate (incorporated herein by reference to Exhibit 4.2 of the Registrant's Registration Statement on Form S-1, Reg. No. 333-15781). 4.4 EarthLink Network, Inc. 1995 Stock Option Plan 5 Opinion of counsel with respect to the securities being registered. 23.1 Consent of counsel (included in Exhibit 5). 23.2 Consent of PricewaterhouseCoopers LLP, independent accountants. 24 Power of Attorney (see signature pages to this Registration Statement).
1 EX-4.4 2 EXHIBIT 4.4 EXHIBIT 4.4 EARTHLINK NETWORK, INC. 1995 STOCK OPTION PLAN 1. PURPOSES OF THE PLAN. The purposes of this 1995 Stock Option Plan are to attract and retain the best available personnel, to provide additional incentive to the Employees of the Company and its Subsidiaries, to promote the success of the Company's business and to enable the Employees to share in the growth and prosperity of the Company by providing them with an opportunity to purchase stock in the Company. Options granted hereunder may be either Incentive Stock Options or Nonstatutory Stock Options, at the discretion of the Board and as reflected in the terms of the written stock option agreement. 2. DEFINITIONS. As used herein, the following definitions shall apply: (a) "AFFILIATE" shall mean any entity that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the Company. (b) "BOARD" shall mean the Board of Directors of the Company. (c) "CODE" shall mean the Internal Revenue Code of 1986, as amended from time to time. References in the Plan to any section of the Code shall be deemed to include any amendment or successor provisions to such section and any regulations issued under such section. (d) "COMMON STOCK" shall mean the Common Stock of the Company. (e) "COMPANY" shall mean EarthLink Network, Inc., a California corporation. (f) "COMMITTEE" shall mean the Committee the Board appoints in accordance with Section 4(a) of the Plan. (g) "CONTINUOUS EMPLOYMENT" or "CONTINUOUS STATUS AS AN EMPLOYEE" shall mean the absence of any interruption or termination of employment or service as an Employee by or to the Company or any Parent or Subsidiary of the Company. Continuous Employment shall not be considered interrupted in the case of authorized sick leave, authorized military leave or any other authorized leave of absence the Board approves or in the case of transfers between locations of the Company or between the Company, its Parent, or any of its Subsidiaries or their successors. (h) "DISABILITY" shall mean the inability of the Optionee to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or has lasted or can be expected to last for a continuous period of not less than 12 months. In determining the Disability of an Optionee, the Board may require the Optionee to furnish proof of the existence of Disability and may select a physician to examine the Optionee. The final determination as to the Disability of the Optionee shall be made by the Board. 1 (i) "EMPLOYEE" shall mean any person, including officers and directors, employed by the Company, its Parent, any of its Subsidiaries or its successors. A person shall not be deemed to be employed by the Company merely because such person is a member of the Board of Directors of the Company or a consultant to the Company. (j) "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended. (k) "INCENTIVE STOCK OPTION" shall mean an Option intended to qualify as an incentive stock option within the meaning of Section 422 of the Code. (l) "NON-EMPLOYEE DIRECTORS" shall mean directors who (i) are not current officers or employees of the Company or its Parent or any Subsidiary, (ii) do not, either directly or indirectly, receive compensation from the Company or its Parent or any Subsidiary for services rendered in any capacity other than a director, except for any amount not in excess of the amount for which disclosure would be required pursuant to Regulation S-K 404(a) promulgated under the Securities Exchange Act of 1934, (iii) do not possess an interest in any transaction for which disclosure would be required pursuant to Regulation S-K 404(a) promulgated under the Securities Exchange Act of 1934, and (iv) are not engaged in any business relationship for which disclosure would be required pursuant to Regulation S-K 404(b) promulgated under the Securities and Exchange Act of 1934. (m) "NONSTATUTORY STOCK OPTION" shall mean an Option which is not an Incentive Stock Option. (n) "OPTION" shall mean a stock option granted pursuant to the Plan evidencing the grant of a right to an Employee pursuant to the Plan to purchase a specified number of Shares at a specified exercise price. (o) "OPTION AGREEMENT" shall mean a written agreement substantially in one of the forms attached hereto as Exhibit A, or such other form or forms as the Board (subject to the terms and conditions of this Plan) may from time to time approve, evidencing and reflecting the terms of an Option. (p) "OPTIONED STOCK" shall mean the Common Stock subject to an Option. (q) "OPTIONEE" shall mean an Employee who is granted an Option. (r) "PARENT" shall mean a "parent corporation," whether now or hereafter existing, as described in Sections 424(e) and (g) of the Code. (s) "PLAN" shall mean this 1995 Stock Option Plan. (t) "SHARE" or "SHARES" shall mean shares of the Common Stock, as adjusted in accordance with Section 10 of the Plan. (u) "STOCK PURCHASE AGREEMENT" shall mean an agreement substantially in the form attached hereto as Exhibit B, or such other form as the Board may from time to time approve, which is to be executed as a condition of purchasing Optioned Stock upon exercise of an Option. 2 (v) "SUBSIDIARY" OR "SUBSIDIARIES" shall mean a subsidiary corporation or corporations, whether now or hereafter existing, as defined in Sections 424(f) and (g) of the Code. (w) "TERMINATION FOR CAUSE" shall mean termination of employment as a result of (i) (A) any act by the Optionee constituting a felony under any federal, state or local law; (B) the Optionee's willful and continued failure to perform the duties assigned to him or her as an Employee; (C) any material breach by the Optionee of any agreement with the Company concerning his or her employment or other understanding concerning the terms and conditions of employment by the Company; (D) dishonesty, gross negligence or malfeasance by the Optionee in the performance of his or her duties as an Employee or any conduct by the Optionee which involves a material conflict of interest with any business of the Company or Affiliate; or (E) the Optionee's taking or knowingly omitting to take any other action in the performance of Optionee's duties as an Employee without informing appropriate members of management to whom such Optionee reports, which action, in the determination of the Board, has caused or substantially contributed to the material deterioration in the business or financial condition of the Company or any Affiliate, taken as a whole or (ii) any other reason as defined in a written employment agreement between the Company and the Optionee which the Board approves. 3. STOCK SUBJECT TO THE PLAN. Subject to the provisions of Section 10 of the Plan, the maximum aggregate number of Shares which may be optioned and sold pursuant to the exercise of Options under the Plan is 7,700,000 Shares. The Shares may be authorized but unissued or reacquired Shares. If an Option should expire or become unexercisable for any reason without having been exercised in full or if the Company repurchases Shares from the Optionee pursuant to the terms of a Stock Purchase Agreement, the unpurchased or repurchased Shares, respectively, which were subject thereto shall, unless the Plan shall have been terminated, return to the Plan and become available for other Options under the Plan. 4. ADMINISTRATION OF THE PLAN. (a) PROCEDURE. The Board shall administer the Plan. Members of the Board who are eligible for Options or have been granted Options may vote on any matters affecting the administration of the Plan or the grant of any Options pursuant to the Plan, except that no such member shall act upon the granting of an Option to himself or herself, but any such member may be counted in determining the existence of a quorum at any meeting of the Board during which action is taken with respect to the granting of Options to him or her. The Board may at any time appoint a Committee consisting of not less than two Non-Employee Directors to administer the Plan on behalf of the Board, subject to such terms and conditions as the Board may prescribe. Members of the Committee shall serve for such period of time as the Board may determine. From time to time the Board may increase the size of the Committee and appoint additional members thereto, remove members (with or without cause) and appoint new members in substitution therefor, fill vacancies however caused or remove all members of the Committee and thereafter directly administer the Plan. (b) POWERS OF THE BOARD. Subject to the provisions of the Plan, the Board shall have the authority, in its discretion: (i) to grant Incentive Stock Options and Nonstatutory Stock Options; (ii) to determine, upon review of relevant information and in accordance with Section 7 of the Plan, the fair market value per Share; (iii) to determine the terms and conditions of vesting of Options, the exercise price of the Options and the consideration to be paid for shares upon the exercise of Options (which exercise price and consideration shall be determined in accordance with Section 7 of the Plan); (iv) to determine the Employees to whom, and the times at which, Options shall be granted, and the number of Shares to be subject to each Option; (v) to prescribe, amend and rescind rules and regulations relating to the Plan; (vi) to determine the terms and provisions of each Option Agreement and each Stock Purchase Agreement (each of which need not be identical with the terms of other Option Agreements and Stock Purchase Agreements) and, with the consent of the holder thereof, to modify or amend each Option and Stock Purchase Agreement; (vii) to determine whether any Employee, as a condition to the exercise of an Option, will have to 3 execute a stock repurchase agreement or other agreement and to determine the terms and provisions of any such agreement (which need not be identical with the terms of any other such agreement) and, with the consent of the Optionee, to amend any such agreement; (viii) to interpret the Plan, the Option Agreements, the Stock Purchase Agreements or any agreement entered into with respect to the grant or exercise of Options; (ix) to authorize any person to execute on behalf of the Company any instrument required to effectuate the grant of an Option the Board previously granted or to take such other actions as may be necessary or appropriate with respect to the Company's rights pursuant to Options or agreements relating to the grant or exercise thereof; and (x) to make such other determinations and establish such other procedures as it deems necessary or advisable for the administration of the Plan. (c) EFFECT OF THE BOARD'S DECISION. All decisions, determinations and interpretations of the Board shall be final and binding on all Optionees and any other holders of Options. 5. ELIGIBILITY. Options may be granted only to Employees (including employees of the Company who are also directors of the Company). 6. TERM OF PLAN. Effectiveness of the Plan shall be subject to approval by the shareholders of the Company within 12 months before or after the date the Plan is adopted; provided, however, that Options may be granted pursuant to the Plan prior to such shareholder approval subject to and conditioned upon subsequent approval of the Plan by such shareholders. Shareholder approval shall be obtained by the affirmative votes of the holders of a majority of voting shares of the Company's capital stock present or represented and entitled to vote at a meeting of shareholders duly held in accordance with the laws of the State of Delaware or by such other means authorized under law. The Plan shall continue in effect for a term of ten years unless sooner terminated in accordance with the terms and provisions of the Plan. 7. OPTION PRICE AND CONSIDERATION. (a) EXERCISE PRICE. The exercise price per Share for the Shares to be issued pursuant to the exercise of a Nonstatutory Stock Option shall be not less than 85% of the fair market value per Share, as described below. The exercise price per Share for the Shares to be issued pursuant to the exercise of an Incentive Option shall be the fair market value per Share. However, with respect to both Incentive Stock Options and Nonstatutory Stock Options, the exercise price shall be 110% of the fair market value per Share on the date of grant in the case of any Optionee who, at the time the Option is granted, owns stock (as determined under Section 424(d) of the Code) possessing more than 10% of the total combined voting power of all classes of stock of the Company or its Parent or Subsidiaries. (b) FAIR MARKET VALUE. The Board in its sole discretion, exercised in good faith, shall determine the fair market value per Share on the date of grant. (c) PAYMENT OF CONSIDERATION. The Board in its discretion on the date of grant shall determine the consideration to be paid for the Shares to be issued upon exercise of an Option, including the method of payment, and the consideration may consist of cash, check, promissory notes or other forms of legally permitted consideration. 8. OPTIONS. (a) TERMS AND PROVISIONS OF OPTIONS. As provided in Section 4 of this Plan and subject to any limitations specified herein, the Board shall have the authority to determine the terms and provisions of any Option 4 granted under the Plan or any agreement required to be executed in connection with the grant or exercise of an Option. Each Option granted pursuant to this Plan shall be evidenced by an Option Agreement. Options granted under the Plan are conditioned upon the Company obtaining any required permit or order from appropriate governmental agencies, authorizing the Company to issue such Options and Shares issuable upon exercise thereof. (b) NUMBER OF SHARES. Each Option Agreement shall state the number of Shares to which it pertains and whether such Option is intended to constitute an Incentive Stock Option or a Nonstatutory Stock Option. The maximum number of Shares which may be awarded as Options under the Plan during any calendar year to any Optionee is 250,000 Shares. If an Option that an Employee holds is canceled, the canceled Option shall continue to be counted against the maximum number of Shares for which Options may be granted to such Employee and any replacement Option granted to such Employee shall also count against such limit. (c) TERM OF OPTION. The term of each Option shall be specified in the Option Agreement and may be up to ten years from the date of grant thereof, except that the term of an Incentive Stock Option granted to an Employee who, at the time the Incentive Stock Option is granted, owns stock representing more than ten percent of the total combined voting power of all classes of stock of the Company or its Parent or Subsidiaries, shall not exceed five years from the date of grant thereof. (d) EXERCISE OF OPTION. (i) PROCEDURE FOR EXERCISE; RIGHTS AS A SHAREHOLDER. Any Option shall vest and become exercisable at such times, in such installments and under such conditions as the Board may determine, specified in the Option Agreement and as shall be permissible under the terms of the Plan, including performance criteria with respect to the Company and/or the Optionee. An Option may be exercised from time to time during the term of the Option in accordance with the provisions of this Plan as to all or any portion of the Shares then exercisable under an Option. An Option may not be exercised for a fraction of a Share. An Option shall be deemed to be exercised when written notice of such exercise has been given to the Company at its principal business office in accordance with the terms of the Option Agreement by the person entitled to exercise the Option and the Company has received full payment for the Shares with respect to which the Option is exercised, accompanied by an executed Stock Purchase Agreement (including the attachments thereto) substantially in the form of Exhibit B hereto and as may be modified by the Board from time to time, and any other agreements required by the terms of the Plan and/or the Option Agreement. Full payment may consist of such consideration and method of payment allowable under Section 7 of the Plan. Until the Option is properly exercised in accordance with the terms of this Section 8(d), no right to vote or to receive dividends or any other rights as a shareholder shall exist with respect to the Optioned Stock. No adjustment shall be made for a dividend or other right for which the record date is prior to the date the Option is exercised, except as provided in Section 10 of the Plan. As soon as practicable after any proper exercise of an Option in accordance with the provisions of the Plan, the Company shall, without transfer or issue tax to the Optionee, deliver to the Optionee at the principal executive office of the Company or such other place as shall be mutually agreed upon between the Company and the Optionee, a certificate or certificates representing the Shares for which the Option shall have been exercised. The Company may postpone the time of issuance and delivery of the certificate(s) representing the Shares for which the Option shall have been exercised for such period as the Company may require, to comply with any applicable listing requirements of any national or regional securities exchange or any law or regulation applicable to the issuance or delivery of such Shares. No Option may be exercised unless the shareholders of the Company have duly approved the Plan in accordance with applicable law. Notwithstanding anything to the contrary herein, the terms of a Stock Purchase Agreement required to be executed and delivered in connection with the exercise of an Option may require the certificate or certificates representing the Shares purchased upon the exercise of an Option to be delivered and 5 deposited with the Company as security for the Optionee's faithful performance of the terms and conditions of his or her Stock Purchase Agreement. Exercise of an Option in any manner shall result in a decrease in the number of Shares which thereafter may be available, both for purposes of the Plan and for sale under the Option, by the number of Shares as to which the Option is exercised. (ii) TERMINATION OF STATUS AS AN EMPLOYEE. If an Optionee ceases to serve as an Employee for any reason other than death or Disability, and thereby terminates his or her Continuous Status As An Employee, to the extent that such Optionee was entitled to exercise the Option at the date of such termination, such Optionee shall have the right to exercise the Option at any time within 30 days subsequent to the last day of such Optionee's Continuous Status As An Employee (unless at the time of grant of such Option the Board specified a longer period, not to exceed 90 days), PROVIDED, however, that no Option shall be exercisable after the expiration of the term set forth in the Option Agreement. To the extent that such Optionee was not entitled to exercise the Option at the date of the terminating event, or if such Optionee does not exercise such Option (which such Optionee was entitled to exercise) within the time specified herein, the Option shall terminate. In the event that an Optionee's Continuous Status As An Employee terminates due to death or Disability, to the extent that such Optionee was entitled to exercise the Option at the date of such termination, the Option may be exercised any time within 180 days subsequent to the death or Disability of the Optionee (unless at the time of grant of such Option the Board specified a longer period, not to exceed one year), PROVIDED, however, that no Option shall be exercisable after the expiration of the Option term set forth in the Option Agreement. To the extent that such Optionee was not entitled to exercise such Option at the date of his or her termination due to death or Disability or if such Option is not exercised (to the extent it could be exercised) within the time specified herein, the Option shall terminate. (e) LIMIT ON VALUE OF OPTIONED STOCK. To the extent that the aggregate fair market value (determined at the time an Incentive Stock Option is granted) of the Shares with respect to which Incentive Stock Options are exercisable for the first time by an Optionee during any calendar year under all incentive stock option plans of the Company, its Parent or its Subsidiaries, if any, exceeds $100,000, the Options in excess of such limit shall be treated as Nonstatutory Stock Options. (f) EXPIRATION OF OPTION. Notwithstanding any provision in the Plan, including but not limited to the provisions set forth in this Section 8, an Option may not be exercised, under any circumstances, after the expiration of its term. 9. NONTRANSFERABILITY OF OPTIONS. Options granted under this Plan may not be sold, pledged, assigned, hypothecated, given, transferred or disposed of in any manner, either voluntarily or involuntarily by operation of law, other than by will or by the laws of descent or distribution or as a transfer between spouses incident to a divorce within the meaning of Section 1041(a) of the Code, and any such attempt may result, at the discretion of the Board, in the termination of such Options. During the lifetime of the Optionee, only he or she or his or her legal guardian may exercise the Option. 10. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION OR MERGER. (a) Subject to any required action by the shareholders of the Company, the number of Shares covered by each outstanding Option, and the number of Shares which have been authorized for issuance under the Plan but as to which no Options have yet been granted or which have been returned to the Plan upon cancellation or expiration of an Option or repurchase of Shares from an Optionee upon termination of employment or service, as well as the exercise price per Share covered by each such outstanding Option, shall be proportionately adjusted for any increase or decrease in the number of issued Shares resulting from a stock split, reverse stock split, combination, recapitalization or reclassification of the Common Stock, or the payment of a stock dividend (but only on the 6 Common Stock) or any other increase or decrease in the number of issued shares of Common Stock effected without receipt of full and adequate consideration by the Company (other than stock bonuses to Employees or directors); provided, however, that the conversion of any convertible securities of the Company shall not be deemed to have been effected without the receipt of consideration. The Board shall make such adjustment and its determination in that respect shall be final, binding and conclusive. Except as expressly provided herein, no issue 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 the Plan or an Option. (b) In the event of a proposed dissolution or liquidation of the Company or the sale of all or substantially all of the assets of the Company (other than in the ordinary course of business), or the merger, consolidation or reorganization of the Company with or into another corporation as a result of which the Company is not the surviving corporation or as a result of which the outstanding Shares are exchanged for or converted into cash or property or securities not of the Company, the Board shall (i) make provision for the assumption of all outstanding Options by the successor corporation or a Parent or a Subsidiary thereof, or (ii) declare that outstanding Options shall terminate as of a date fixed by the Board which is at least thirty (30) days after the notice thereof to the Optionee (unless such thirty (30) day period is waived by the Optionee) and shall give each Optionee the right to exercise his or her Option as to all or any part of the shares underlying such Option to the extent then exercisable, provided such exercise does not violate Section 8(d)(ii) of the Plan. (c) No fractional shares of Common Stock shall be issuable on account of any action described in this Section, and the aggregate number of shares into which Shares then covered by the Option, when changed as the result of such action, shall be reduced to the largest number of whole shares resulting from such action, unless the Board, in its sole discretion, shall determine to issue scrip certificates in respect to any fractional shares, which scrip certificates, in such event, shall be in a form and have such terms and conditions as the Board in its discretion shall prescribe. 11. TIME OF GRANTING OPTIONS. The date of grant of an Option shall, for all purposes, be the date on which the Board makes the determination granting such Option, PROVIDED, however, that if the Board determines that such grant shall be as of some future date, the date of grant shall be such future date. Notice of the determination shall be given to each Employee to whom an Option is so granted within a reasonable time after the date of such grant. 12. AMENDMENT AND TERMINATION OF THE PLAN. (a) AMENDMENT AND TERMINATION. The Board may from time to time amend or terminate the Plan in such respects as the Board may deem advisable and shall make any amendments which may be required so that Options intended to be Incentive Stock Options shall at all times continue to be Incentive Stock Options for the purpose of the Code, except that, without approval of the holders of a majority of the shares of the Company's capital stock represented or present and entitled to vote at a valid meeting of the Company's shareholders at which action is taken on an amendment or revision, no such amendment shall: (i) Increase the number of Shares subject to the Plan, other than in connection with an adjustment under Section 10 of the Plan; (ii) Materially change the designation of the class of Employees eligible to be granted Options; (iii) Extend the term of the Plan; or 7 (iv) Remove the administration of the Plan from the Board or the Committee. (b) EFFECT OF AMENDMENT OR TERMINATION. Except as Section 10 otherwise provides, any amendment or termination of the Plan shall not affect Options already granted and such Options shall remain in full force and effect as if this Plan had not been amended or terminated, unless the Optionee and the Company mutually agree otherwise in writing. 13. CONDITIONS UPON ISSUANCE OF SHARES. (a) Shares shall not be issued pursuant to the exercise of an Option unless the exercise of such Option and the issuance and delivery of such Shares pursuant thereto shall comply with all relevant provisions of law, including, without limitation, the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, applicable state securities laws, the rules and regulations promulgated under such laws, and the requirements of any stock exchange upon which the Shares may then be listed, and shall be further subject to the approval of counsel for the Company with respect to such compliance. (b) As a condition to the exercise of an Option, the Board may require the person exercising such Option to execute an agreement with, and/or may require the person exercising such Option to make any representation and warranty to, the Company as may in the judgment of counsel to the Company be required under applicable law or regulation, including but not limited to a representation and warranty that the Shares are being purchased only for investment and without any present intention to sell or to distribute such Shares if, in the opinion of counsel for the Company, such a representation and warranty is appropriate under any of the aforementioned relevant provisions of law. 14. RESERVATION OF SHARES. The Company, during the term of this Plan, shall at all times reserve and keep available such number of Shares as shall be sufficient to satisfy the requirements of the Plan. The Company, during the term of this Plan, shall use its best efforts to seek to obtain from appropriate regulatory agencies any requisite authorization in order to issue and to sell such number of Shares as shall be sufficient to satisfy the requirements of the Plan. The inability of the Company to obtain from any such regulatory agency having jurisdiction the requisite authorizations that the Company's counsel deemed to be necessary for the lawful issuance and sale of any Shares hereunder, or the inability of the Company to confirm to its satisfaction that any issuance and sale of any Shares hereunder will meet applicable legal requirements, shall relieve the Company of any liability in respect to the failure to issue or to sell such Shares as to which such requisite authority shall not have been obtained. 8 15. STOCK OPTION AND STOCK PURCHASE AGREEMENTS. Options shall be evidenced by written Option Agreements in such form or forms as the Board shall approve from time to time. Upon the exercise of an Option, the Optionee shall sign and deliver to the Company a Stock Purchase Agreement in such form or forms as the Board shall approve from time to time. 16. EFFECTIVE DATE AND TERM OF PLAN. The Plan shall become effective upon shareholder approval as provided in Section 17 of the Plan. The Plan shall continue in effect for a term of ten years unless sooner terminated under Section 12 of the Plan. 17. SHAREHOLDER APPROVAL. Continuance of the Plan shall be subject to approval by the shareholders of the Company within 12 months before or after the date the Board adopts the Plan. Shareholder approval at a duly held shareholders' meeting may be obtained by the affirmative of the holders of a majority of the shares of the Company represented or present and entitled to vote thereon. All Options granted prior to shareholder approval of the Plan are subject to such approval, and if such approval is not obtained within 12 months before or after the date the Board adopts the Plan, all such Options shall expire and shall be of no further force or effect. 18. TAXES, FEES, EXPENSES AND WITHHOLDING OF TAXES. (a) The Company shall pay all original issue and transfer taxes (but not income taxes, if any) with respect to the grant of Options and/or the issue and transfer of Shares pursuant to the exercise thereof, and all other fees and expenses the Company necessarily incurs in connection therewith, and will from time to time use its best efforts to comply with all laws and regulations which, in the opinion of counsel for the Company, shall be applicable thereto. (b) The grant of Options hereunder and the issuance of Shares pursuant to the exercise thereof is conditioned upon the Company's reservation of the right to withhold, in accordance with any applicable law, from any compensation or other amounts payable to the Optionee, any taxes that federal, state or local law requires to be withheld as a result of the grant or exercise of such Option or the sale of the Shares issued upon exercise thereof. To the extent that compensation or other amounts, if any, payable to the Optionee are insufficient to pay any taxes required to be so withheld, the Company may, in its sole discretion, require the Optionee, as a condition of the exercise of an Option, to pay in cash to the Company an amount sufficient to cover such tax liability or otherwise to make adequate provision for the Company's satisfaction of its withholding obligations under federal, state and local law. 9 19. LIABILITY OF COMPANY. The Company, its Parent or any Subsidiary which is in existence or hereafter comes into existence shall not be liable to an Optionee or other person if the Internal Revenue Service or any court having jurisdiction determines for any reason that any Options intended to be Incentive Stock Options granted hereunder do not qualify as incentive stock options within the meaning of Section 422 of the Code. 20. INFORMATION TO OPTIONEE. The Company shall provide without charge at least annually to each Optionee during the period his or her Option is outstanding a balance sheet and income statement of the Company. In the event that the Company provides annual reports or periodic reports to its shareholders during the period in which an Optionee's Option is outstanding, the Company shall provide to each Optionee a copy of each such report. 21. INDEMNIFICATION. No member of the Committee or of the Board shall be liable for any action taken or for any omission, except in circumstances involving actual bad faith, or for any action taken or for any omission, by any other member or by any officer, agent or Employee. In addition to such other rights of indemnification they may have as members of the Board, or as members of the Committee, the Committee shall be indemnified by the Company against reasonable expenses, including attorneys' fees actually and necessarily incurred in connection with the defense of any action, suit or proceeding, or in connection with any appeal therein, to which they or any of them may be a party by reason of any action or omission in connection with the Plan or any Option taken thereunder, and against all amounts they pay in settlement thereof (provided independent legal counsel the Company has selected approves the settlement) or they pay in satisfaction of a judgment in any action, suit or proceeding, except in relation to matters as to which it shall be adjudged in such action, suit or proceeding that such Committee or Board member is liable for actual bad faith in the performance of his or her duties; provided that within 60 days after institution of any such action, suit or proceeding, a Committee or Board member shall in writing offer the Company the opportunity, at its own expense, to handle and defend the same. 22. NOTICES. Any notice to be given to the Company pursuant to the provisions of this Plan shall be given in writing, addressed to the Company at its principal office in care of its Secretary, and any notice to be given to an Employee to whom an Option is granted hereunder shall be delivered personally or addressed to him or her at the address given beneath his or her signature on his Option Agreement or Stock Purchase Agreement or at such other address as such Optionee or his or her transferee (upon the transfer of the Optioned Stock) may hereafter designate in writing to the Company. Any such notice shall be deemed duly given when enclosed in a properly sealed envelope or wrapper addressed as aforesaid, registered or certified, and deposited, postage and registry or certification fee prepaid, in a post office or branch post office the United States Postal Service regularly maintains. It shall be the obligation of each Optionee and each transferee holding Shares purchased upon exercise of an Option to provide the Secretary of the Company, by letter mailed as provided hereinabove, with written notice of his or her direct mailing address. 23. NO ENLARGEMENT OF EMPLOYEE RIGHTS. This Plan is purely voluntary on the part of the Company, and the continuance of the Plan shall not be deemed to constitute a contract between the Company and any Employee, or to be consideration for or a condition of the employment or service of any Employee. Nothing contained in this Plan shall be deemed to give any Employee the right to be retained in the employ or service of the Company, its Parent, Subsidiary or a successor corporation, or to interfere with the right of the Company or any such corporations to discharge or to retire any Employee at any time with or without cause and with or without notice. No Employee shall have any right to or interest in Options authorized hereunder prior to the grant thereof to such Employee, and upon such grant he or she shall have only such rights and interests as are expressly provided herein, subject, however, to all applicable provisions of the Company's Articles of Incorporation, as the same may be amended from time to time. 10 24. LEGENDS ON CERTIFICATES. (a) FEDERAL LAW. Unless an appropriate registration statement is filed pursuant to the Securities Act of 1933, as amended, with respect to the Options and Shares issuable under this Plan, each document or certificate representing such Options or Shares shall be endorsed thereon with a legend substantially as follows: "THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE, TRANSFER OR DISTRIBUTION THEREOF. NO SUCH SALE, TRANSFER OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATING THERETO OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED. " (b) ADDITIONAL LEGENDS. Each document or certificate representing the Options or Shares issuable under the Plan shall also contain legends as may be required under applicable blue sky laws or by any Stock Purchase Agreement or other agreement the execution of which is a condition to the exercise of an Option under this Plan. 25. AVAILABILITY OF PLAN. A copy of this Plan shall be delivered to the Secretary of the Company and he or she shall show it to any eligible person making reasonable inquiry concerning it. 26. INVALID PROVISIONS. In the event that any provision of this Plan is found to be invalid or otherwise unenforceable under any applicable law, such invalidity or unenforceability shall not be construed as rendering any other provisions contained herein as invalid or unenforceable, and all such other provisions shall be given full force and effect to the same extent as though the invalid or unenforceable provision was not contained herein. 27. SEVERABILITY. In the event that any provision of the Plan is found to be invalid or otherwise unenforceable under any applicable law, such invalidity or unenforceability shall not be construed as rendering any other provisions contained herein as invalid or unenforceable, and all such other provisions shall be given full force and effect to the saline extent as though the invalid or unenforceable provision was not contained herein. 28. APPLICABLE LAW. To the extent that federal laws do not otherwise control, this Plan shall be governed by and construed in accordance with the laws of the State of California without regard to the conflict of laws principles thereof. 11 EX-5 3 EXHIBIT 5 EXHIBIT 5 Bank of America Plaza Suite 4100 600 Peachtree Street, N.E. Atlanta, Georgia 30308-2216 August 18, 1999 EarthLink Network, Inc. 3100 New York Drive Pasadena, California 91107 Re: Registration Statement on Form S-8 1995 Stock Option Plan Ladies and Gentlemen: We have served as counsel for EarthLink Network, Inc., a Delaware corporation (the "Company"), in connection with the registration under the Securities Act of 1933, as amended, pursuant to a Registration Statement on Form S-8 (the "Registration Statement"), of an aggregate of 2,000,000 shares (the "Shares") of common stock, $.01 par value, of the Company, to be issued and sold by the Company to eligible employees, officers and directors of the Company pursuant to the EarthLink Network, Inc., 1995 Stock Option Plan (the "Plan"). We have examined and are familiar with originals or copies (certified, photostatic or otherwise identified to our satisfaction) of such documents, corporate records and other instruments relating to the incorporation of the Company and the authorization of the grants of securities pursuant to the Plan as we have deemed necessary and advisable. In such examinations, we have assumed the genuineness of all signatures on all originals and copies of documents we have examined, the authenticity of all documents submitted to us as originals and the conformity to original documents of all certified, conformed or photostatic copies. As to questions of fact material and relevant to our opinion, we have relied upon certificates or representations of Company officials and of appropriate governmental officials. We express no opinion as to matters under or involving the laws of any jurisdiction other than the corporate law of the State of Delaware. Based upon and subject to the foregoing and having regard for such legal considerations as we have deemed relevant, it is our opinion that: 1. The Shares have been duly authorized; and 2. Upon the issuance and delivery of the Shares and the receipt of payment therefor as provided in the Plan and as contemplated by the Registration Statement, such Shares will be validly issued, fully paid and non-assessable. We hereby consent to the filing of this opinion as Exhibit 5 to the Registration Statement. Very truly yours, HUNTON & WILLIAMS EX-23.2 4 EXHIBIT 23.2 EXHIBIT 23.2 Consent of Independent Accountants We hereby consent to the incorporation by reference in this Registration Statement on Form S-8 of our report dated February 16, 1999, except as to Note 14, which is as of February 24, 1999, relating to the consolidated financial statements, which appears in EarthLink Network, Inc.'s Annual Report on Form 10-K for the year ended December 31, 1998. PricewaterhouseCoopers LLP Century City, California August 18, 1999 -----END PRIVACY-ENHANCED MESSAGE-----