As filed with the Securities and Exchange Commission on August 16, 1999
                                                          Registration No. 333-

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM S-8
                             REGISTRATION STATEMENT
                                      UNDER
                           THE SECURITIES ACT OF 1933

                              AMERICA ONLINE, INC.
               (Exact name of registrant as specified in charter)

                               Delaware 54-1322110
                (State or other jurisdiction of (I.R.S. Employer
              incorporation or organization) Identification Number)

                   22000 AOL WAY, DULLES, VIRGINIA 20166-9323
                    (Address of principal executive offices)

           Restricted Stock Agreement between America Online, Inc. and
                                Raymond G. Murphy
                            (Full Title of the Plan)

                              SHEILA A. CLARK, ESQ.
                          Senior Vice President, Legal
                              America Online, Inc.
                                  22000 AOL Way
                           Dulles, Virginia 20166-9323
                                 (703) 265-1000

            (Name, address, including zip code, and telephone number,
                   including area code, of agent for service)

                         CALCULATION OF REGISTRATION FEE

<TABLE>
  Title of securities to        Amount to be        Proposed maximum       Proposed maximum           Amount of
     be registered (1)           registered        offering price per     aggregate offering      registration fee
                                                       share (2)               price
<S>                               <C>                  <C>                  <C>                       <C>
Common Stock,
$.01 par value per share          35,000               $83.1875             $2,911,562.50             $809.41

</TABLE>

(1)  Common Stock being registered  hereby includes  associated  Preferred Stock
     Purchase Rights, which initially are attached to and traded with the shares
     of the Registrant's  Common Stock.  Value  attributable to such rights,  if
     any, is reflected in the market price of the Common Stock.
(2)  The maximum  offering  price per share has been  determined  solely for the
     purpose of calculating  the  registration  fee pursuant to Rules 457(c) and
     (h)  under the  Securities  Act  based on the  average  of the high and low
     prices of $83.1875 as quoted on the New York Stock Exchange within five (5)
     business days prior to the above filing date.

                                     PART I

       INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS

       The documents(s)  containing the information  specified in Part I will be
       sent or given to Raymond G. Murphy as specified by Rule  428(b)(1).  Such
       documents are not being filed with the Securities and Exchange Commission
       (the  "Commission")  either as part of this Registration  Statement or as
       prospectuses  or  prospectus  supplements  pursuant  to  Rule  424.  Such
       documents   and  the   documents   incorporated   by  reference  in  this
       Registration  Statement pursuant to Item 3 of Part II of this Form, taken
       together,  constitute a prospectus that meets the requirements of Section
       10(a) of the Securities Act.

                                     PART II

               INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

Item 3.               Incorporation of Documents by Reference

The  following  documents,  which  have been filed by America  Online,  Inc.,  a
Delaware  corporation  (the  "Company"),  with the Commission,  are incorporated
herein by reference:

       (a) The  Company's  Annual  Report on Form 10-K for the fiscal year ended
           June 30,  1999,  as filed  with the  Commission  on August  13,  1999
           pursuant to the  Securities  Exchange  Act of 1934,  as amended  (the
           "Exchange Act") (File No. 001-12143).

       (b) The descriptions of the Company's Common Stock,  including  preferred
           stock purchase rights, which are contained in registration statements
           on Form 8-A under the  Exchange  Act,  including  any  amendments  or
           reports filed for the purpose of updating such description.

       (c) In addition,  all documents  filed by the Company with the Commission
           pursuant to Sections 13(a),  13(c), 14 and 15(d) of the Exchange Act,
           prior to the filing of a  post-effective  amendment  which  indicates
           that  all   securities   offered  hereby  have  been  sold  or  which
           deregisters all securities then remaining unsold,  shall be deemed to
           be  incorporated  by reference  herein and to be part hereof from the
           date of the filing of such documents.

Item 4.       Description of Securities.

              Not applicable.

Item 5.       Interests of Named Experts and Counsel

              Not applicable.

Item 6.       Indemnification of Directors and Officers

              Section  145(a)  of the  General  Corporation  Law of the State of
Delaware ("Delaware  Corporation Law") provides,  in general, that a corporation
shall  have  the  power  to  indemnify  any  person  who was or is a party or is
threatened to be made a party to any  threatened,  pending or completed  action,
suit or proceeding,  whether civil,  criminal,  administrative  or investigative
(other than an action by or in the right of the  corporation),  by reason of the
fact that he is or was a director or officer of the corporation.  Such indemnity
may be  against  expenses  (including  attorneys'  fees),  judgments,  fines and
amounts paid in settlement actually and reasonably incurred by him in connection
with such action,  suit or proceeding,  if the  indemnified  party acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the  corporation  and if, with  respect to any  criminal  action or
proceeding,  the indemnified  party did not have reasonable cause to believe his
conduct was unlawful.

              Section  145(b)  of the  Delaware  Corporation  Law  provides,  in
general, that a corporation shall have the power to indemnify any person who was
or is a party or is threatened to be made a party to any threatened,  pending or
completed  action or suit by or in the  right of the  corporation  to  procure a
judgment  in its favor by reason  of the fact  that he is or was a  director  or
officer of the  corporation,  against any expenses  (including  attorneys' fees)
actually  and  reasonably  incurred  by him in  connection  with the  defense or
settlement  of such  action or suit if he acted in good faith and in a manner he
reasonably  believed  to be in or not  opposed  to  the  best  interests  of the
corporation.

              Section  145(g)  of the  Delaware  Corporation  law  provides,  in
general,  that a  corporation  shall  have the power to  purchase  and  maintain
insurance  on behalf of any person  who is or was a  director  or officer of the
corporation against any liability asserted against him in any such capacity,  or
arising out of his status as such, whether or not the corporation would have the
power to indemnify him against such liability under the provisions of the law.

              Pursuant to Section 102(b)(7) of the Delaware General  Corporation
Law  (the  "Delaware  Statute"),  Article  Ninth  of the  Registrant's  Restated
Certificate of Incorporation (incorporated by reference herein) provides that:

                  To  the  fullest  extent  permitted  by the  Delaware  General
              Corporation  Law as the  same  now  exists  or  may  hereafter  be
              amended, the Corporation shall indemnify, and advance expenses to,
              its directors and officers and any person who is or was serving at
              the request of the Corporation as a director or officer,  employee
              or agent of another corporation, partnership, joint venture, trust
              or other  enterprise.  The Corporation,  by action of its board of
              directors,  may  provide  indemnification  or advance  expenses to
              employees and agents of the  Corporation  or other persons only on
              such  terms and  conditions  and to the extent  determined  by the
              board of directors in its sole and absolute discretion.

                  The  indemnification  and advancement of expenses provided by,
              or granted  pursuant  to, this  Article  Ninth shall not be deemed
              exclusive   of  any   other   rights   to  which   those   seeking
              indemnification  or  advancement of expenses may be entitled under
              any  by-law,  agreement,  vote of  stockholders  or  disinterested
              directors or otherwise, both as to action in his official capacity
              and as to action in another capacity while holding such office.

                  The Corporation  shall have the power to purchase and maintain
              insurance  on  behalf  of any  person  who  is or was a  director,
              officer,  employee  or  agent  of  the  Corporation,  or is or was
              serving at the request of the Corporation as a director,  officer,
              employee  or  agent of  another  corporation,  partnership,  joint
              venture, trust or other enterprise, against any liability asserted
              against him and incurred by him in any such  capacity,  or arising
              out of his status as such,  whether or not the  Corporation  would
              have the power to indemnify him against such liability  under this
              Article Ninth.

                  The  indemnification  and advancement of expenses provided by,
              or granted pursuant to, this Article Ninth shall, unless otherwise
              provided when authorized or ratified,  continue as to a person who
              has ceased to be a  director  or  officer  and shall  inure to the
              benefit of the heirs, executors and administrators of such officer
              or director.  The indemnification and advancement of expenses that
              may have been provided to an employee or agent of the  Corporation
              by action of the board of directors, pursuant to the last sentence
              of Paragraph 1 of this Article Ninth,  unless  otherwise  provided
              when  authorized  or  ratified,  continue  as to a person  who has
              ceased to be an  employee  or agent of the  Corporation  and shall
              inure to the benefit of the heirs, executors and administrators of
              such a  person,  after the time such  person  has  ceased to be an
              employee  or  agent of the  Corporation,  only on such  terms  and
              conditions and to the extent  determined by the board of directors
              in its sole discretion.

              In addition,  Article Five of the  Registrant's  Restated  By-Laws
(incorporated by reference herein) provides that:

              Right to  Indemnification.  Each person who was or is made a party
or is threatened  to be made a party to or is otherwise  involved in any action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he is or was a director or an officer of the Corporation
or is or was serving at the request of the  Corporation as a director,  officer,
employee or agent of another  corporation  or of a  partnership,  joint venture,
trust or other enterprise, including service with respect to an employee benefit
plan  (hereinafter  an  "Indemnitee"),  whether the basis of such  proceeding is
alleged action in an official capacity as a director, officer, employee or agent
or in any other  capacity  while  serving as a  director,  officer,  employee or
agent,  shall be indemnified and held harmless by the Corporation to the fullest
extent authorized by the Delaware General Corporation Law, as the same exists or
may hereafter be amended (but,  in the case of any such  amendment,  only to the
extent  that  such  amendment   permits  the   Corporation  to  provide  broader
indemnification  rights than such law permitted the Corporation to provide prior
to  such  amendment),   against  all  expense,  liability  and  loss  (including
attorney's fees,  judgments,  fines, ERISA excise taxes or penalties and amounts
paid in  settlement)  reasonably  incurred  or suffered  by such  Indemnitee  in
connection therewith; provided, however, that, except as provided in the section
"Right of Indemnitees to Bring Suit" of this Article with respect to proceedings
to enforce rights to  indemnification,  the Corporation shall indemnify any such
Indemnitee in connection  with a proceeding (or part thereof)  initiated by such
Indemnitee only if such proceeding (or part thereof) was authorized by the board
of directors of the Corporation.

              Right to  Advancement  of Expenses.  The right to  indemnification
conferred  in the  "Right to  Indemnification"  section  of this  Article  shall
include  the  right  to be  paid  by the  Corporation  the  expenses  (including
attorney's  fees)  incurred in defending  any such  proceeding in advance of its
final disposition;  provided, however, that, if the Delaware General Corporation
Law  requires,  an  advancement  of expenses  incurred by an  Indemnitee  in his
capacity  as a  director  or  officer  (and not in any other  capacity  in which
service was or is rendered by such Indemnitee,  including,  without  limitation,
service to an employee  benefit  plan)  shall be made only upon  delivery to the
Corporation of an undertaking,  by or on behalf of such Indemnitee, to repay all
amounts so advanced  if it shall  ultimately  be  determined  by final  judicial
decision from which there is no further right to appeal that such  Indemnitee is
not  entitled  to be  indemnified  for  such  expenses  under  this  section  or
otherwise.  The rights to  indemnification  and to the  advancement  of expenses
conferred in this  section and the section  "Right to  Indemnification"  of this
Article  shall be  contract  rights  and such  rights  shall  continue  as to an
Indemnitee who has ceased to be a director, officer, employee or agent and shall
inure to the benefit of the Indemnitee's  heirs,  executors and  administrators.
Any repeal or  modification  of any of the  provisions of this Article shall not
adversely  affect any right or protection of an Indemnitee  existing at the time
of such repeal or modification.

              Right of  Indemnitees to Bring Suit. If a claim under the sections
"Right to  Indemnification"  and  "Right to  Advancement  of  Expenses"  of this
Article is not paid in full by the  Corporation  within  sixty (60) days after a
written  claim has been  received  by the  Corporation,  except in the case of a
claim for an advancement of expenses,  in which case the applicable period shall
be twenty  (20)  days,  the  Indemnitee  may at any time  thereafter  bring suit
against the Corporation to recover the unpaid amount of the claim. If successful
in whole or in part in any such suit, or in a suit brought by the Corporation to
recover an advancement of expenses pursuant to the terms of an undertaking,  the
Indemnitee  shall also be entitled to be paid the  expenses  of  prosecuting  or
defending  such suit.  In (i) any suit  brought by the  Indemnitee  to enforce a
right to indemnification  hereunder (but not in a suit brought by the Indemnitee
to enforce a right to an  advancement  of expenses) it shall be a defense  that,
and (ii) in any suit brought by the  Corporation  to recover an  advancement  of
expenses  pursuant  to the terms of an  undertaking,  the  Corporation  shall be
entitled to recover such expenses upon a final adjudication that, the Indemnitee
has not  met any  applicable  standard  for  indemnification  set  forth  in the
Delaware  General  Corporation  Law.  Neither  the  failure  of the  Corporation
(including  its  board  of  directors,   independent   legal  counsel,   or  its
stockholders)  to have made a  determination  prior to the  commencement of such
suit that  indemnification  of the  Indemnitee  is  proper in the  circumstances
because the Indemnitee  has met the applicable  standard of conduct set forth in
the  Delaware  General  Corporation  Law,  nor an  actual  determination  by the
Corporation (including its board of directors, independent legal counsel, or its
stockholders)  that the  Indemnitee  has not met  such  applicable  standard  of
conduct,  shall  create  a  presumption  that  the  Indemnitee  has  not met the
applicable  standard  of conduct  or, in the case of such a suit  brought by the
Indemnitee,  be a defense to such suit. In any suit brought by the Indemnitee to
enforce a right to indemnification  or to an advancement of expenses  hereunder,
or brought by the Corporation to recover an advancement of expenses  pursuant to
the terms of an  undertaking,  the burden of proving that the  Indemnitee is not
entitled to be  indemnified,  or to such  advancement  of  expenses,  under this
Article or otherwise shall be on the Corporation.

              Non-Exclusivity of Rights.  The rights to  indemnification  and to
the advancement of expenses  conferred in this Article shall not be exclusive of
any other  right  which  any  person  may have or  hereafter  acquire  under any
statute, the Corporation's  Certificate of Incorporation as amended from time to
time,  these By-Laws,  any agreement,  any vote of stockholders or disinterested
directors or otherwise.

              Insurance. The Corporation may maintain insurance, at its expense,
to  protect  itself  and  any  director,  officer,  employee  or  agent  of  the
Corporation or another corporation,  partnership,  joint venture, trust or other
enterprise  against  any  expense,   liability  or  loss,  whether  or  not  the
Corporation  would have the power to indemnify such person against such expense,
liability or loss under the Delaware General Corporation Law.

              Indemnification  of Employees and Agents of the  Corporation.  The
Corporation  may,  to the  extent  authorized  from time to time by the board of
directors, grant rights to indemnification and to the advancement of expenses to
any employee or agent of the Corporation to the fullest extent of the provisions
of this Article with respect to the  indemnification and advancement of expenses
of directors and officers of the Corporation.

              The  directors  and  officers of the  Registrant  are covered by a
policy of liability insurance.

Item 7.       Exemption from Registration Claimed

              Not applicable.

Item 8.       Exhibits

                            Exhibit No. Description

4.1           Amendment of Section A of Article 4 of the Restated Certificate of
              Incorporation of America Online, Inc. (filed as Exhibit 3.1 to the
              Registrant's  Quarterly  Report on Form 10-Q for the quarter ended
              September 30, 1998 and incorporated herein by reference)

4.2           Section B of Article 4,  Article 6 and  Article 8 of the  Restated
              Certificate of Incorporation  of the Registrant  (filed as part of
              Exhibit 3.1 to the Registrant's  Form 10-K for the year ended June
              30, 1997 and incorporated herein by reference)

4.3           Rights  Agreement dated as of May 12, 1998 between America Online,
              Inc. and BankBoston,  N.A., as Rights Agent,  including  Exhibit A
              (Certificate  of  Designation  setting forth the terms of Series A
              Junior Participating  Preferred Stock, $.01 par value),  Exhibit B
              (Form of Rights  Certificate)  and Exhibit C (Summary of Rights to
              Purchase Series A Junior Participating Preferred Shares) (filed as
              Exhibit 4.1 to the Registrant's  Quarterly Report on Form 10-Q for
              the  quarter  ended  March  31,  1998 and  incorporated  herein by
              reference)

4.4           Restated   By-Laws  of   Registrant   (filed  as  Exhibit  3.5  to
              Registrant's  Annual Report on Form 10-K for the fiscal year ended
              June 30, 1998 and incorporated herein by reference)

4.5           Form of Restricted  Stock Agreement  between America Online,  Inc.
              and Raymond G. Murphy

5.1           Opinion of Sheila A. Clark,  Senior Vice  President,  Legal of the
              Company, regarding the legality of securities being offered

23.1          Consent of Sheila A. Clark,  Senior Vice  President,  Legal of the
              Company  (included  in  her  opinion  filed  as  Exhibit  5.1  and
              incorporated herein by reference)

23.2          Consent of Ernst & Young LLP

24.1          Powers  of  Attorney  (included  in  the  signature  page  to the
              Registration Statement)

Item 9.       Undertakings

       (a) The undersigned registrant hereby undertakes:

           (1) To file,  during  any  period in which  offers or sales are being
           made, a post-effective amendment to this registration statement;

               (i)  To include any  prospectus  required by Section  10(a)(3) of
                    the Securities Act of 1933;

               (ii) To reflect  in the  prospectus  any facts or events  arising
                    after the effective date of the  registration  statement (or
                    the most recent  post-effective  amendment  thereof)  which,
                    individually  or in the  aggregate,  represent a fundamental
                    change  in the  information  set  forth in the  registration
                    statement.  Notwithstanding  the foregoing,  any increase or
                    decrease  in  volume  of  securities  offered  (if the total
                    dollar  value of  securities  offered  would not exceed that
                    which was registered) and any deviation from the low or high
                    and of the estimated maximum offering range may be reflected
                    in the form of prospectus filed with the Commission pursuant
                    to Rule 424(b) if, in the  aggregate,  the changes in volume
                    and price  represent  no more than 20 percent  change in the
                    maximum   aggregate   offering   price   set  forth  in  the
                    "Calculation  of  Registration  Fee" table in the  effective
                    registration statement.

               (iii)To include any material information with respect to the plan
                    of distribution not previously disclosed in the registration
                    statement or any material change to such  information in the
                    registration statement;  provided,  however, that paragraphs
                    (a)(1)(i) and  (a)(1)(ii) do not apply if this  registration
                    statement  is on Form  S-3,  Form S-8 or Form  F-3,  and the
                    information  required  to be  included  in a  post-effective
                    amendment  by those  paragraphs  is  contained  in  periodic
                    reports  filed with or  furnished to the  Commission  by the
                    registrant  pursuant  to Section 13 or Section  15(d) of the
                    Securities  Exchange  Act of 1934 that are  incorporated  by
                    reference in the registration statement.

           (2)  That,  for the purpose of  determining  any liability  under the
                Securities Act of 1933, each such post-effective amendment shall
                be deemed to be a new  registration  statement  relating  to the
                securities offered therein,  and the offering of such securities
                at that  time  shall  be  deemed  to be the  initial  bona  fide
                offering thereof.

           (3)  To  remove  from  registration  by  means  of  a  post-effective
                amendment any of the securities  being  registered  which remain
                unsold at the termination of the offering.

       (b) The undersigned  registrant  hereby  undertakes that, for purposes of
           determining  any liability  under the  Securities  Act of 1933,  each
           filing of the Registrant's annual report pursuant to Section 13(a) or
           15(d) of the Securities  Exchange Act of 1934 (and, where applicable,
           each filing of an employee  benefit plan's annual report  pursuant to
           Section  15(d)  of the  Securities  Exchange  Act of  1934)  that  is
           incorporated  by reference  in the  registration  statement  shall be
           deemed to be a new registration  statement relating to the securities
           offered  therein,  and the offering of such  securities  at that time
           shall be deemed to be the initial bona fide offering thereof.

       (c) Insofar  as  indemnification   for  liabilities   arising  under  the
           Securities  Act of 1933 may be permitted to  directors,  officers and
           controlling  persons  of the  Registrant  pursuant  to the  foregoing
           provisions, or otherwise, the Registrant has been advised that in the
           opinion   of   the   Securities   and   Exchange    Commission   such
           indemnification  is against public policy as expressed in the Act and
           is,  therefore,   unenforceable.  In  the  event  that  a  claim  for
           indemnification  against such liabilities  (other than the payment by
           the Registrant of expenses incurred or paid by a director, officer or
           controlling person of the Registrant in the successful defense of any
           action, suit or proceeding) is asserted by such director,  officer or
           controlling   person  in  connection   with  the   securities   being
           registered, the Registrant will, unless in the opinion of its counsel
           the matter has been  settled by  controlling  precedent,  submit to a
           court  of  appropriate   jurisdiction   the  question   whether  such
           indemnification  by it is against  public  policy as expressed in the
           Act and will be governed by the final adjudication of such issue.

                                   SIGNATURES

         Pursuant  to the  requirements  of the  Securities  Act  of  1933,  the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this registration
statement  to be  signed  on its  behalf  by  the  undersigned,  thereunto  duly
authorized, in the County of Loudoun, Commonwealth of Virginia, on this 16th day
of August, 1999.

                              AMERICA ONLINE, INC.



                              By: /s/J. Michael Kelly
                                  J. Michael Kelly, Senior Vice
                                  President, Chief Financial Officer
                                  and Assistant Secretary

                                POWER OF ATTORNEY

         KNOW ALL MEN BY THESE PRESENTS,  that each  individual  whose signature
appears below  constitutes and appoints Stephen M. Case,  Kenneth J. Novack,  J.
Michael  Kelly,  Sheila A. Clark and James F.  MacGuidwin  and each of them, his
true and lawful attorneys-in-fact and agents 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)
or  supplements  to this  registration  statement  and to file the same with all
exhibits thereto, and all documents in connection therewith, with the Securities
and Exchange Commission,  granting unto said  attorneys-in-fact  and agents, and
each of them,  full power and authority to do and perform each and every act and
thing  requisite  and necessary to be done, as fully to all intents and purposes
as he might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact  and  agents  or any of them,  or their or his  substitute  or
substitutes, may lawfully do or cause to be done by virtue hereof. This power of
attorney may be executed in counterparts.

         Pursuant  to the  requirements  of the  Securities  Act of  1933,  this
registration  statement  has  been  signed  by  the  following  persons  in  the
capacities and on the dates indicated in one or more counter-parts.


SIGNATURE                               TITLE                          DATE


/s/Stephen M. Case       Chairman of the Board and Chief         August 16, 1999
Stephen M. Case          Executive Officer (principal executive
                         officer)


/s/Robert W. Pittman     President, Chief Operating Officer and  August 16, 1999
Robert W. Pittman        Director


/s/J. Michael Kelly      Senior Vice President, Chief Financial  August 16, 1999
J. Michael Kelly         Officer and Assistant Secretary (principal
                         financial officer)


/s/James F. MacGuidwin   Vice President, Controller, Chief       August 16, 1999
James F. MacGuidwin      Accounting and Budget Officer (principal
                         accounting officer)


/s/Daniel F. Akerson     Director                                August 16, 1999
Daniel F. Akerson


/s/James L. Barksdale    Director                                August 16, 1999
James L. Barksdale


/s/Frank J. Caufield     Director                                August 16, 1999
Frank J. Caufield


/s/Alexander M. Haig, Jr. Director                               August 16, 1999
Alexander M. Haig, Jr.


/s/William N. Melton     Director                                August 16, 1999
William N. Melton


/s/Thomas Middelhoff     Director                                August 16, 1999
Thomas Middelhoff


/s/Colin L. Powell       Director                                August 16, 1999
Colin L. Powell


/s/Franklin D. Raines    Director                                August 16, 1999
Franklin D. Raines


                                  Exhibit Index

Exhibit   Description
No.

4.        Form of Restricted  Stock Agreement  between America Online,  Inc. and
          Raymond G. Murphy

5.1       Opinion  of Sheila  A.  Clark,  Senior  Vice  President,  Legal of the
          Company, regarding the legality of securities being offered

23.1      Consent  of Sheila  A.  Clark,  Senior  Vice  President,  Legal of the
          Company (included in her opinion filed as Exhibit 5.1 and incorporated
          herein by reference)

23.2      Consent of Ernst & Young LLP

24.1      Powers of Attorney (included in the signature page to the Registration
          Statement)

                           RESTRICTED STOCK AGREEMENT

         This  AGREEMENT is made as of the ____ day of ________ 1999 (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
Raymond G. Murphy (the "Officer").

                               W I T N E S S E T H

         WHEREAS,  the  Company has made an offer of  employment  to the Officer
that the Officer has  accepted  pursuant to the terms of an offer  letter  dated
June 14, 1999 (the "Offer  Letter"),  and the Company desires to offer and grant
to the Officer  shares of Company  common  stock,  par value $.01 per share (the
"Common  Stock"),  in accordance  with the terms and conditions  hereinafter set
forth;

         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  Officer  hereby  accepts  the offer of the
Company to issue to the Officer, in accordance with the terms of this Agreement,
thirty-five thousand (35,000) 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 the Officer  ceases to be an employee
of the Company prior to the third  anniversary of the Grant Date, the Company or
its designee shall have the option, but not the obligation, to purchase from the
Officer (or his  successor in  interest),  and the Officer (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 first
         anniversary  of the Grant Date,  the  Company  shall have the option to
         repurchase all of the Shares acquired by the Officer hereunder.

                  (ii) If such  termination  of  employment  is on or after  the
         first anniversary of the Grant Date and prior to the second anniversary
         of the Grant  Date,  the  Company  shall have the option to  repurchase
         23,333 of the Shares;  if such termination of employment is on or after
         the  second  anniversary  of the  Grant  Date and  prior  to the  third
         anniversary  of the Grant Date,  the  Company  shall have the option to
         repurchase 11,666 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 terminates the Officer's  employment for Cause
         (as  defined  below)  or in the  event  the  Administrator  determines,
         subsequent  to the  Officer's  termination  of  service  but during the
         ninety  (90) days after the  termination  of service (or if the Officer
         shall die during such period, during the one year period following such
         termination  of  service)  that  either  prior  or  subsequent  to  the
         Officer's  termination  the  Officer  engaged  in  conduct  that  would
         constitute  Cause,  the Company shall have the option to repurchase all
         of the Shares acquired by the Officer 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 Officer's  Disability or death,
then the Company's Lapsing  Repurchase Right shall terminate,  and the Officer's
(or the  Officer's  Survivors')  ownership of all Shares then owned by him shall
become vested.

         (c)  Effect  of  Termination  without  Cause  or for Good  Reason.  The
Company's Lapsing Repurchase Right shall terminate,  and the Officer's ownership
of all Shares then owned by him shall become vested,  if the Company  terminates
the Officer's  employment other than for Cause or if the Officer  terminates his
employment with the Company for Good Reason.

         (d) Effect of Change in Control. The Company's Lapsing Repurchase Right
shall  terminate,  and the  Officer'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 Officer,  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
Officer 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 Officer 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 Officer or his successor in interest.

         (f) Escrow.  The  certificates  representing all Shares acquired by the
Officer 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 Officer,  the Company shall release from escrow and deliver to the Officer 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 Officer 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 Officer 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 Officer 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
Officer to the Company and to treat the Officer and such Shares in all  respects
as if delivery of such Shares had been made as required by this  Agreement.  The
Officer 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 Officer  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
Officer  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 Agreement dated
                  __________,  1999 with America  Online,  Inc., a copy of which
                  Agreement is 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 following meanings:

               "Board of Directors" means the Board of Directors of the Company.

               "Cause"  shall  mean  (a) the  Officer's  conviction  of a felony
          involving  moral  turpitude,  (b) his  willful and  continued  failure
          substantially  to perform his required  duties under the Offer Letter,
          (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.

               "Change  in  Control"  means a  Corporate  Change in Control or a
          Transactional Change in Control.

               "Code" means the United States Internal  Revenue Code of 1986, as
          amended.

               "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 the Grant Date,
              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 the
              Grant Date 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.

               A  termination  by the  Officer  for "Good  Reason"  shall mean a
          termination  by the  Officer,  upon  60  days'  notice  following  the
          Officer's transfer to an office outside the Company's headquarters, or
          a change by the Company in the Officer's reporting relationship or his
          authority  which  causes the  Officer's  position  with the Company to
          become of materially less  responsibility  than the Officer's position
          immediately  following  the Grant Date,  provided  that such  material
          change  is  not in  connection  with a  termination  of the  Officer's
          employment  by the  Company,  and provided  further,  that the Company
          shall  not  have  taken  action  within  30  days of  such  notice  of
          termination  such that the  circumstances  constituting  a Good Reason
          shall have ceased.

               "Involuntary  Employment  Action"  shall  mean any  change in the
          terms and conditions of the Officer's  employment  with the Company or
          any successor, without Cause, to such extent that:

                    (1)  the  Officer  shall  fail  to  be  vested  with  power,
               authority and resources  analogous to the Officer's  title and/or
               office prior to the Change in Control, or

                    (2)  the  Officer  shall  lose  any  significant  duties  or
               responsibilities attending such office, or

                    (3) there  shall  occur a reduction  in the  Officer's  base
               compensation, or

                    (4)  the  Officer's  employment  with  the  Company,  or its
               successor, is terminated without Cause.

               "Survivors"  means a  deceased  Officer's  legal  representatives
          and/or any person or persons who  acquired the  Officer's  rights to a
          Stock Grant 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.

         5. Tax  Liability  of the  Officer  and  Payment of Taxes.  The Officer
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  Officer's
responsibility.  Without limiting the foregoing, the Officer 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  Officer'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 Officer of the amount of any tax required
to be withheld by the Company.

         6. Securities Law Compliance.  The Officer represents that any sales of
Shares at a time when the  Officer 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  and  Consent  to   Jurisdiction.   The  Officer
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 Officer,  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.

         The Officer specifically  consents to the jurisdiction of the courts of
the Commonwealth of Virginia in any action, whether at law or in equity, brought
by the Company to protect any of its rights hereunder.

         8. No  Obligation  to  Employ.  The  Company  is not by this  Agreement
obligated  to  continue  the  Officer 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 Officer:

                  to the Officer'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 Officer's heirs, executors and administrators.

         11.  Governing Law. This  Agreement  shall be construed and enforced in
accordance  with the laws of the State of Delaware  without giving effect to the
conflict of law principles thereof.

         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 Officer is married as of the date of this
Agreement, the Officer'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
Officer marries or remarries  subsequent to the date hereof,  the Officer shall,
not  later   than  sixty  (60)  days   thereafter,   obtain  his  new   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:

                                                     OFFICER:

                                                     Raymond G. Murphy


                                    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.


                                               -----------------------------
                                               Raymond G. Murphy


Dated As Of:

______________, 1999

In the presence of:


Printed Name:

                                    EXHIBIT B

                                CONSENT OF SPOUSE

         I, , spouse of  Raymond  G.  Murphy,  acknowledge  that I have read the
RESTRICTED   STOCK  AGREEMENT  dated  as  of   ___________________,   1999  (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                      1999.


                                                     Printed name:
[{"type": "S-8", "sequence": "1", "description": "REGISTRATION STATEMENT", "secsgml_size_bytes": 60660}]
{"company-data": {"conformed-name": "AMERICA ONLINE INC", "cik": "0000883780", "assigned-sic": "7370", "irs-number": "541322110", "state-of-incorporation": "DE", "fiscal-year-end": "0630"}, "filing-values": {"form-type": "S-8", "act": "33", "file-number": "333-85343", "film-number": "99693961"}, "business-address": {"street1": "22000 AOL WAY", "street2": "C/O LENNERT J LEADER CFO", "city": "DULLES", "state": "VA", "zip": "20166", "phone": "7032651000"}, "mail-address": {"street1": "22000 AOL WAY", "city": "DULLES", "state": "VA", "zip": "20166"}}
As filed with the Securities and Exchange Commission on August 16, 1999
                                                          Registration No. 333-

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM S-8
                             REGISTRATION STATEMENT
                                      UNDER
                           THE SECURITIES ACT OF 1933

                              AMERICA ONLINE, INC.
               (Exact name of registrant as specified in charter)

                               Delaware 54-1322110
                (State or other jurisdiction of (I.R.S. Employer
              incorporation or organization) Identification Number)

                   22000 AOL WAY, DULLES, VIRGINIA 20166-9323
                    (Address of principal executive offices)

           Restricted Stock Agreement between America Online, Inc. and
                                Raymond G. Murphy
                            (Full Title of the Plan)

                              SHEILA A. CLARK, ESQ.
                          Senior Vice President, Legal
                              America Online, Inc.
                                  22000 AOL Way
                           Dulles, Virginia 20166-9323
                                 (703) 265-1000

            (Name, address, including zip code, and telephone number,
                   including area code, of agent for service)

                         CALCULATION OF REGISTRATION FEE

  Title of securities to        Amount to be        Proposed maximum       Proposed maximum           Amount of
     be registered (1)           registered        offering price per     aggregate offering      registration fee
                                                       share (2)               price
Common Stock,
$.01 par value per share          35,000               $83.1875             $2,911,562.50             $809.41
(1)  Common Stock being registered  hereby includes  associated  Preferred Stock
     Purchase Rights, which initially are attached to and traded with the shares
     of the Registrant's  Common Stock.  Value  attributable to such rights,  if
     any, is reflected in the market price of the Common Stock.
(2)  The maximum  offering  price per share has been  determined  solely for the
     purpose of calculating  the  registration  fee pursuant to Rules 457(c) and
     (h)  under the  Securities  Act  based on the  average  of the high and low
     prices of $83.1875 as quoted on the New York Stock Exchange within five (5)
     business days prior to the above filing date.

                                     PART I

       INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS

       The documents(s)  containing the information  specified in Part I will be
       sent or given to Raymond G. Murphy as specified by Rule  428(b)(1).  Such
       documents are not being filed with the Securities and Exchange Commission
       (the  "Commission")  either as part of this Registration  Statement or as
       prospectuses  or  prospectus  supplements  pursuant  to  Rule  424.  Such
       documents   and  the   documents   incorporated   by  reference  in  this
       Registration  Statement pursuant to Item 3 of Part II of this Form, taken
       together,  constitute a prospectus that meets the requirements of Section
       10(a) of the Securities Act.

                                     PART II

               INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

Item 3.               Incorporation of Documents by Reference

The  following  documents,  which  have been filed by America  Online,  Inc.,  a
Delaware  corporation  (the  "Company"),  with the Commission,  are incorporated
herein by reference:

       (a) The  Company's  Annual  Report on Form 10-K for the fiscal year ended
           June 30,  1999,  as filed  with the  Commission  on August  13,  1999
           pursuant to the  Securities  Exchange  Act of 1934,  as amended  (the
           "Exchange Act") (File No. 001-12143).

       (b) The descriptions of the Company's Common Stock,  including  preferred
           stock purchase rights, which are contained in registration statements
           on Form 8-A under the  Exchange  Act,  including  any  amendments  or
           reports filed for the purpose of updating such description.

       (c) In addition,  all documents  filed by the Company with the Commission
           pursuant to Sections 13(a),  13(c), 14 and 15(d) of the Exchange Act,
           prior to the filing of a  post-effective  amendment  which  indicates
           that  all   securities   offered  hereby  have  been  sold  or  which
           deregisters all securities then remaining unsold,  shall be deemed to
           be  incorporated  by reference  herein and to be part hereof from the
           date of the filing of such documents.

Item 4.       Description of Securities.

              Not applicable.

Item 5.       Interests of Named Experts and Counsel

              Not applicable.

Item 6.       Indemnification of Directors and Officers

              Section  145(a)  of the  General  Corporation  Law of the State of
Delaware ("Delaware  Corporation Law") provides,  in general, that a corporation
shall  have  the  power  to  indemnify  any  person  who was or is a party or is
threatened to be made a party to any  threatened,  pending or completed  action,
suit or proceeding,  whether civil,  criminal,  administrative  or investigative
(other than an action by or in the right of the  corporation),  by reason of the
fact that he is or was a director or officer of the corporation.  Such indemnity
may be  against  expenses  (including  attorneys'  fees),  judgments,  fines and
amounts paid in settlement actually and reasonably incurred by him in connection
with such action,  suit or proceeding,  if the  indemnified  party acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the  corporation  and if, with  respect to any  criminal  action or
proceeding,  the indemnified  party did not have reasonable cause to believe his
conduct was unlawful.

              Section  145(b)  of the  Delaware  Corporation  Law  provides,  in
general, that a corporation shall have the power to indemnify any person who was
or is a party or is threatened to be made a party to any threatened,  pending or
completed  action or suit by or in the  right of the  corporation  to  procure a
judgment  in its favor by reason  of the fact  that he is or was a  director  or
officer of the  corporation,  against any expenses  (including  attorneys' fees)
actually  and  reasonably  incurred  by him in  connection  with the  defense or
settlement  of such  action or suit if he acted in good faith and in a manner he
reasonably  believed  to be in or not  opposed  to  the  best  interests  of the
corporation.

              Section  145(g)  of the  Delaware  Corporation  law  provides,  in
general,  that a  corporation  shall  have the power to  purchase  and  maintain
insurance  on behalf of any person  who is or was a  director  or officer of the
corporation against any liability asserted against him in any such capacity,  or
arising out of his status as such, whether or not the corporation would have the
power to indemnify him against such liability under the provisions of the law.

              Pursuant to Section 102(b)(7) of the Delaware General  Corporation
Law  (the  "Delaware  Statute"),  Article  Ninth  of the  Registrant's  Restated
Certificate of Incorporation (incorporated by reference herein) provides that:

                  To  the  fullest  extent  permitted  by the  Delaware  General
              Corporation  Law as the  same  now  exists  or  may  hereafter  be
              amended, the Corporation shall indemnify, and advance expenses to,
              its directors and officers and any person who is or was serving at
              the request of the Corporation as a director or officer,  employee
              or agent of another corporation, partnership, joint venture, trust
              or other  enterprise.  The Corporation,  by action of its board of
              directors,  may  provide  indemnification  or advance  expenses to
              employees and agents of the  Corporation  or other persons only on
              such  terms and  conditions  and to the extent  determined  by the
              board of directors in its sole and absolute discretion.

                  The  indemnification  and advancement of expenses provided by,
              or granted  pursuant  to, this  Article  Ninth shall not be deemed
              exclusive   of  any   other   rights   to  which   those   seeking
              indemnification  or  advancement of expenses may be entitled under
              any  by-law,  agreement,  vote of  stockholders  or  disinterested
              directors or otherwise, both as to action in his official capacity
              and as to action in another capacity while holding such office.

                  The Corporation  shall have the power to purchase and maintain
              insurance  on  behalf  of any  person  who  is or was a  director,
              officer,  employee  or  agent  of  the  Corporation,  or is or was
              serving at the request of the Corporation as a director,  officer,
              employee  or  agent of  another  corporation,  partnership,  joint
              venture, trust or other enterprise, against any liability asserted
              against him and incurred by him in any such  capacity,  or arising
              out of his status as such,  whether or not the  Corporation  would
              have the power to indemnify him against such liability  under this
              Article Ninth.

                  The  indemnification  and advancement of expenses provided by,
              or granted pursuant to, this Article Ninth shall, unless otherwise
              provided when authorized or ratified,  continue as to a person who
              has ceased to be a  director  or  officer  and shall  inure to the
              benefit of the heirs, executors and administrators of such officer
              or director.  The indemnification and advancement of expenses that
              may have been provided to an employee or agent of the  Corporation
              by action of the board of directors, pursuant to the last sentence
              of Paragraph 1 of this Article Ninth,  unless  otherwise  provided
              when  authorized  or  ratified,  continue  as to a person  who has
              ceased to be an  employee  or agent of the  Corporation  and shall
              inure to the benefit of the heirs, executors and administrators of
              such a  person,  after the time such  person  has  ceased to be an
              employee  or  agent of the  Corporation,  only on such  terms  and
              conditions and to the extent  determined by the board of directors
              in its sole discretion.

              In addition,  Article Five of the  Registrant's  Restated  By-Laws
(incorporated by reference herein) provides that:

              Right to  Indemnification.  Each person who was or is made a party
or is threatened  to be made a party to or is otherwise  involved in any action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he is or was a director or an officer of the Corporation
or is or was serving at the request of the  Corporation as a director,  officer,
employee or agent of another  corporation  or of a  partnership,  joint venture,
trust or other enterprise, including service with respect to an employee benefit
plan  (hereinafter  an  "Indemnitee"),  whether the basis of such  proceeding is
alleged action in an official capacity as a director, officer, employee or agent
or in any other  capacity  while  serving as a  director,  officer,  employee or
agent,  shall be indemnified and held harmless by the Corporation to the fullest
extent authorized by the Delaware General Corporation Law, as the same exists or
may hereafter be amended (but,  in the case of any such  amendment,  only to the
extent  that  such  amendment   permits  the   Corporation  to  provide  broader
indemnification  rights than such law permitted the Corporation to provide prior
to  such  amendment),   against  all  expense,  liability  and  loss  (including
attorney's fees,  judgments,  fines, ERISA excise taxes or penalties and amounts
paid in  settlement)  reasonably  incurred  or suffered  by such  Indemnitee  in
connection therewith; provided, however, that, except as provided in the section
"Right of Indemnitees to Bring Suit" of this Article with respect to proceedings
to enforce rights to  indemnification,  the Corporation shall indemnify any such
Indemnitee in connection  with a proceeding (or part thereof)  initiated by such
Indemnitee only if such proceeding (or part thereof) was authorized by the board
of directors of the Corporation.

              Right to  Advancement  of Expenses.  The right to  indemnification
conferred  in the  "Right to  Indemnification"  section  of this  Article  shall
include  the  right  to be  paid  by the  Corporation  the  expenses  (including
attorney's  fees)  incurred in defending  any such  proceeding in advance of its
final disposition;  provided, however, that, if the Delaware General Corporation
Law  requires,  an  advancement  of expenses  incurred by an  Indemnitee  in his
capacity  as a  director  or  officer  (and not in any other  capacity  in which
service was or is rendered by such Indemnitee,  including,  without  limitation,
service to an employee  benefit  plan)  shall be made only upon  delivery to the
Corporation of an undertaking,  by or on behalf of such Indemnitee, to repay all
amounts so advanced  if it shall  ultimately  be  determined  by final  judicial
decision from which there is no further right to appeal that such  Indemnitee is
not  entitled  to be  indemnified  for  such  expenses  under  this  section  or
otherwise.  The rights to  indemnification  and to the  advancement  of expenses
conferred in this  section and the section  "Right to  Indemnification"  of this
Article  shall be  contract  rights  and such  rights  shall  continue  as to an
Indemnitee who has ceased to be a director, officer, employee or agent and shall
inure to the benefit of the Indemnitee's  heirs,  executors and  administrators.
Any repeal or  modification  of any of the  provisions of this Article shall not
adversely  affect any right or protection of an Indemnitee  existing at the time
of such repeal or modification.

              Right of  Indemnitees to Bring Suit. If a claim under the sections
"Right to  Indemnification"  and  "Right to  Advancement  of  Expenses"  of this
Article is not paid in full by the  Corporation  within  sixty (60) days after a
written  claim has been  received  by the  Corporation,  except in the case of a
claim for an advancement of expenses,  in which case the applicable period shall
be twenty  (20)  days,  the  Indemnitee  may at any time  thereafter  bring suit
against the Corporation to recover the unpaid amount of the claim. If successful
in whole or in part in any such suit, or in a suit brought by the Corporation to
recover an advancement of expenses pursuant to the terms of an undertaking,  the
Indemnitee  shall also be entitled to be paid the  expenses  of  prosecuting  or
defending  such suit.  In (i) any suit  brought by the  Indemnitee  to enforce a
right to indemnification  hereunder (but not in a suit brought by the Indemnitee
to enforce a right to an  advancement  of expenses) it shall be a defense  that,
and (ii) in any suit brought by the  Corporation  to recover an  advancement  of
expenses  pursuant  to the terms of an  undertaking,  the  Corporation  shall be
entitled to recover such expenses upon a final adjudication that, the Indemnitee
has not  met any  applicable  standard  for  indemnification  set  forth  in the
Delaware  General  Corporation  Law.  Neither  the  failure  of the  Corporation
(including  its  board  of  directors,   independent   legal  counsel,   or  its
stockholders)  to have made a  determination  prior to the  commencement of such
suit that  indemnification  of the  Indemnitee  is  proper in the  circumstances
because the Indemnitee  has met the applicable  standard of conduct set forth in
the  Delaware  General  Corporation  Law,  nor an  actual  determination  by the
Corporation (including its board of directors, independent legal counsel, or its
stockholders)  that the  Indemnitee  has not met  such  applicable  standard  of
conduct,  shall  create  a  presumption  that  the  Indemnitee  has  not met the
applicable  standard  of conduct  or, in the case of such a suit  brought by the
Indemnitee,  be a defense to such suit. In any suit brought by the Indemnitee to
enforce a right to indemnification  or to an advancement of expenses  hereunder,
or brought by the Corporation to recover an advancement of expenses  pursuant to
the terms of an  undertaking,  the burden of proving that the  Indemnitee is not
entitled to be  indemnified,  or to such  advancement  of  expenses,  under this
Article or otherwise shall be on the Corporation.

              Non-Exclusivity of Rights.  The rights to  indemnification  and to
the advancement of expenses  conferred in this Article shall not be exclusive of
any other  right  which  any  person  may have or  hereafter  acquire  under any
statute, the Corporation's  Certificate of Incorporation as amended from time to
time,  these By-Laws,  any agreement,  any vote of stockholders or disinterested
directors or otherwise.

              Insurance. The Corporation may maintain insurance, at its expense,
to  protect  itself  and  any  director,  officer,  employee  or  agent  of  the
Corporation or another corporation,  partnership,  joint venture, trust or other
enterprise  against  any  expense,   liability  or  loss,  whether  or  not  the
Corporation  would have the power to indemnify such person against such expense,
liability or loss under the Delaware General Corporation Law.

              Indemnification  of Employees and Agents of the  Corporation.  The
Corporation  may,  to the  extent  authorized  from time to time by the board of
directors, grant rights to indemnification and to the advancement of expenses to
any employee or agent of the Corporation to the fullest extent of the provisions
of this Article with respect to the  indemnification and advancement of expenses
of directors and officers of the Corporation.

              The  directors  and  officers of the  Registrant  are covered by a
policy of liability insurance.

Item 7.       Exemption from Registration Claimed

              Not applicable.

Item 8.       Exhibits

                            Exhibit No. Description

4.1           Amendment of Section A of Article 4 of the Restated Certificate of
              Incorporation of America Online, Inc. (filed as Exhibit 3.1 to the
              Registrant's  Quarterly  Report on Form 10-Q for the quarter ended
              September 30, 1998 and incorporated herein by reference)

4.2           Section B of Article 4,  Article 6 and  Article 8 of the  Restated
              Certificate of Incorporation  of the Registrant  (filed as part of
              Exhibit 3.1 to the Registrant's  Form 10-K for the year ended June
              30, 1997 and incorporated herein by reference)

4.3           Rights  Agreement dated as of May 12, 1998 between America Online,
              Inc. and BankBoston,  N.A., as Rights Agent,  including  Exhibit A
              (Certificate  of  Designation  setting forth the terms of Series A
              Junior Participating  Preferred Stock, $.01 par value),  Exhibit B
              (Form of Rights  Certificate)  and Exhibit C (Summary of Rights to
              Purchase Series A Junior Participating Preferred Shares) (filed as
              Exhibit 4.1 to the Registrant's  Quarterly Report on Form 10-Q for
              the  quarter  ended  March  31,  1998 and  incorporated  herein by
              reference)

4.4           Restated   By-Laws  of   Registrant   (filed  as  Exhibit  3.5  to
              Registrant's  Annual Report on Form 10-K for the fiscal year ended
              June 30, 1998 and incorporated herein by reference)

4.5           Form of Restricted  Stock Agreement  between America Online,  Inc.
              and Raymond G. Murphy

5.1           Opinion of Sheila A. Clark,  Senior Vice  President,  Legal of the
              Company, regarding the legality of securities being offered

23.1          Consent of Sheila A. Clark,  Senior Vice  President,  Legal of the
              Company  (included  in  her  opinion  filed  as  Exhibit  5.1  and
              incorporated herein by reference)

23.2          Consent of Ernst & Young LLP

24.1          Powers  of  Attorney  (included  in  the  signature  page  to the
              Registration Statement)

Item 9.       Undertakings

       (a) The undersigned registrant hereby undertakes:

           (1) To file,  during  any  period in which  offers or sales are being
           made, a post-effective amendment to this registration statement;

               (i)  To include any  prospectus  required by Section  10(a)(3) of
                    the Securities Act of 1933;

               (ii) To reflect  in the  prospectus  any facts or events  arising
                    after the effective date of the  registration  statement (or
                    the most recent  post-effective  amendment  thereof)  which,
                    individually  or in the  aggregate,  represent a fundamental
                    change  in the  information  set  forth in the  registration
                    statement.  Notwithstanding  the foregoing,  any increase or
                    decrease  in  volume  of  securities  offered  (if the total
                    dollar  value of  securities  offered  would not exceed that
                    which was registered) and any deviation from the low or high
                    and of the estimated maximum offering range may be reflected
                    in the form of prospectus filed with the Commission pursuant
                    to Rule 424(b) if, in the  aggregate,  the changes in volume
                    and price  represent  no more than 20 percent  change in the
                    maximum   aggregate   offering   price   set  forth  in  the
                    "Calculation  of  Registration  Fee" table in the  effective
                    registration statement.

               (iii)To include any material information with respect to the plan
                    of distribution not previously disclosed in the registration
                    statement or any material change to such  information in the
                    registration statement;  provided,  however, that paragraphs
                    (a)(1)(i) and  (a)(1)(ii) do not apply if this  registration
                    statement  is on Form  S-3,  Form S-8 or Form  F-3,  and the
                    information  required  to be  included  in a  post-effective
                    amendment  by those  paragraphs  is  contained  in  periodic
                    reports  filed with or  furnished to the  Commission  by the
                    registrant  pursuant  to Section 13 or Section  15(d) of the
                    Securities  Exchange  Act of 1934 that are  incorporated  by
                    reference in the registration statement.

           (2)  That,  for the purpose of  determining  any liability  under the
                Securities Act of 1933, each such post-effective amendment shall
                be deemed to be a new  registration  statement  relating  to the
                securities offered therein,  and the offering of such securities
                at that  time  shall  be  deemed  to be the  initial  bona  fide
                offering thereof.

           (3)  To  remove  from  registration  by  means  of  a  post-effective
                amendment any of the securities  being  registered  which remain
                unsold at the termination of the offering.

       (b) The undersigned  registrant  hereby  undertakes that, for purposes of
           determining  any liability  under the  Securities  Act of 1933,  each
           filing of the Registrant's annual report pursuant to Section 13(a) or
           15(d) of the Securities  Exchange Act of 1934 (and, where applicable,
           each filing of an employee  benefit plan's annual report  pursuant to
           Section  15(d)  of the  Securities  Exchange  Act of  1934)  that  is
           incorporated  by reference  in the  registration  statement  shall be
           deemed to be a new registration  statement relating to the securities
           offered  therein,  and the offering of such  securities  at that time
           shall be deemed to be the initial bona fide offering thereof.

       (c) Insofar  as  indemnification   for  liabilities   arising  under  the
           Securities  Act of 1933 may be permitted to  directors,  officers and
           controlling  persons  of the  Registrant  pursuant  to the  foregoing
           provisions, or otherwise, the Registrant has been advised that in the
           opinion   of   the   Securities   and   Exchange    Commission   such
           indemnification  is against public policy as expressed in the Act and
           is,  therefore,   unenforceable.  In  the  event  that  a  claim  for
           indemnification  against such liabilities  (other than the payment by
           the Registrant of expenses incurred or paid by a director, officer or
           controlling person of the Registrant in the successful defense of any
           action, suit or proceeding) is asserted by such director,  officer or
           controlling   person  in  connection   with  the   securities   being
           registered, the Registrant will, unless in the opinion of its counsel
           the matter has been  settled by  controlling  precedent,  submit to a
           court  of  appropriate   jurisdiction   the  question   whether  such
           indemnification  by it is against  public  policy as expressed in the
           Act and will be governed by the final adjudication of such issue.

                                   SIGNATURES

         Pursuant  to the  requirements  of the  Securities  Act  of  1933,  the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this registration
statement  to be  signed  on its  behalf  by  the  undersigned,  thereunto  duly
authorized, in the County of Loudoun, Commonwealth of Virginia, on this 16th day
of August, 1999.

                              AMERICA ONLINE, INC.

                              By: /s/J. Michael Kelly
                                  J. Michael Kelly, Senior Vice
                                  President, Chief Financial Officer
                                  and Assistant Secretary

                                POWER OF ATTORNEY

         KNOW ALL MEN BY THESE PRESENTS,  that each  individual  whose signature
appears below  constitutes and appoints Stephen M. Case,  Kenneth J. Novack,  J.
Michael  Kelly,  Sheila A. Clark and James F.  MacGuidwin  and each of them, his
true and lawful attorneys-in-fact and agents 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)
or  supplements  to this  registration  statement  and to file the same with all
exhibits thereto, and all documents in connection therewith, with the Securities
and Exchange Commission,  granting unto said  attorneys-in-fact  and agents, and
each of them,  full power and authority to do and perform each and every act and
thing  requisite  and necessary to be done, as fully to all intents and purposes
as he might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact  and  agents  or any of them,  or their or his  substitute  or
substitutes, may lawfully do or cause to be done by virtue hereof. This power of
attorney may be executed in counterparts.

         Pursuant  to the  requirements  of the  Securities  Act of  1933,  this
registration  statement  has  been  signed  by  the  following  persons  in  the
capacities and on the dates indicated in one or more counter-parts.

SIGNATURE                               TITLE                          DATE

/s/Stephen M. Case       Chairman of the Board and Chief         August 16, 1999
Stephen M. Case          Executive Officer (principal executive
                         officer)

/s/Robert W. Pittman     President, Chief Operating Officer and  August 16, 1999
Robert W. Pittman        Director

/s/J. Michael Kelly      Senior Vice President, Chief Financial  August 16, 1999
J. Michael Kelly         Officer and Assistant Secretary (principal
                         financial officer)

/s/James F. MacGuidwin   Vice President, Controller, Chief       August 16, 1999
James F. MacGuidwin      Accounting and Budget Officer (principal
                         accounting officer)

/s/Daniel F. Akerson     Director                                August 16, 1999
Daniel F. Akerson

/s/James L. Barksdale    Director                                August 16, 1999
James L. Barksdale

/s/Frank J. Caufield     Director                                August 16, 1999
Frank J. Caufield

/s/Alexander M. Haig, Jr. Director                               August 16, 1999
Alexander M. Haig, Jr.

/s/William N. Melton     Director                                August 16, 1999
William N. Melton

/s/Thomas Middelhoff     Director                                August 16, 1999
Thomas Middelhoff

/s/Colin L. Powell       Director                                August 16, 1999
Colin L. Powell

/s/Franklin D. Raines    Director                                August 16, 1999
Franklin D. Raines

                                  Exhibit Index

Exhibit   Description
No.

4.        Form of Restricted  Stock Agreement  between America Online,  Inc. and
          Raymond G. Murphy

5.1       Opinion  of Sheila  A.  Clark,  Senior  Vice  President,  Legal of the
          Company, regarding the legality of securities being offered

23.1      Consent  of Sheila  A.  Clark,  Senior  Vice  President,  Legal of the
          Company (included in her opinion filed as Exhibit 5.1 and incorporated
          herein by reference)

23.2      Consent of Ernst & Young LLP

24.1      Powers of Attorney (included in the signature page to the Registration
          Statement)

                           RESTRICTED STOCK AGREEMENT

         This  AGREEMENT is made as of the ____ day of ________ 1999 (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
Raymond G. Murphy (the "Officer").

                               W I T N E S S E T H

         WHEREAS,  the  Company has made an offer of  employment  to the Officer
that the Officer has  accepted  pursuant to the terms of an offer  letter  dated
June 14, 1999 (the "Offer  Letter"),  and the Company desires to offer and grant
to the Officer  shares of Company  common  stock,  par value $.01 per share (the
"Common  Stock"),  in accordance  with the terms and conditions  hereinafter set
forth;

         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  Officer  hereby  accepts  the offer of the
Company to issue to the Officer, in accordance with the terms of this Agreement,
thirty-five thousand (35,000) 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 the Officer  ceases to be an employee
of the Company prior to the third  anniversary of the Grant Date, the Company or
its designee shall have the option, but not the obligation, to purchase from the
Officer (or his  successor in  interest),  and the Officer (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 first
         anniversary  of the Grant Date,  the  Company  shall have the option to
         repurchase all of the Shares acquired by the Officer hereunder.

                  (ii) If such  termination  of  employment  is on or after  the
         first anniversary of the Grant Date and prior to the second anniversary
         of the Grant  Date,  the  Company  shall have the option to  repurchase
         23,333 of the Shares;  if such termination of employment is on or after
         the  second  anniversary  of the  Grant  Date and  prior  to the  third
         anniversary  of the Grant Date,  the  Company  shall have the option to
         repurchase 11,666 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 terminates the Officer's  employment for Cause
         (as  defined  below)  or in the  event  the  Administrator  determines,
         subsequent  to the  Officer's  termination  of  service  but during the
         ninety  (90) days after the  termination  of service (or if the Officer
         shall die during such period, during the one year period following such
         termination  of  service)  that  either  prior  or  subsequent  to  the
         Officer's  termination  the  Officer  engaged  in  conduct  that  would
         constitute  Cause,  the Company shall have the option to repurchase all
         of the Shares acquired by the Officer 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 Officer's  Disability or death,
then the Company's Lapsing  Repurchase Right shall terminate,  and the Officer's
(or the  Officer's  Survivors')  ownership of all Shares then owned by him shall
become vested.

         (c)  Effect  of  Termination  without  Cause  or for Good  Reason.  The
Company's Lapsing Repurchase Right shall terminate,  and the Officer's ownership
of all Shares then owned by him shall become vested,  if the Company  terminates
the Officer's  employment other than for Cause or if the Officer  terminates his
employment with the Company for Good Reason.

         (d) Effect of Change in Control. The Company's Lapsing Repurchase Right
shall  terminate,  and the  Officer'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 Officer,  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
Officer 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 Officer 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 Officer or his successor in interest.

         (f) Escrow.  The  certificates  representing all Shares acquired by the
Officer 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 Officer,  the Company shall release from escrow and deliver to the Officer 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 Officer 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 Officer 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 Officer 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
Officer to the Company and to treat the Officer and such Shares in all  respects
as if delivery of such Shares had been made as required by this  Agreement.  The
Officer 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 Officer  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
Officer  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 Agreement dated
                  __________,  1999 with America  Online,  Inc., a copy of which
                  Agreement is 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 following meanings:

               "Board of Directors" means the Board of Directors of the Company.

               "Cause"  shall  mean  (a) the  Officer's  conviction  of a felony
          involving  moral  turpitude,  (b) his  willful and  continued  failure
          substantially  to perform his required  duties under the Offer Letter,
          (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.

               "Change  in  Control"  means a  Corporate  Change in Control or a
          Transactional Change in Control.

               "Code" means the United States Internal  Revenue Code of 1986, as
          amended.

               "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 the Grant Date,
              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 the
              Grant Date 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.

               A  termination  by the  Officer  for "Good  Reason"  shall mean a
          termination  by the  Officer,  upon  60  days'  notice  following  the
          Officer's transfer to an office outside the Company's headquarters, or
          a change by the Company in the Officer's reporting relationship or his
          authority  which  causes the  Officer's  position  with the Company to
          become of materially less  responsibility  than the Officer's position
          immediately  following  the Grant Date,  provided  that such  material
          change  is  not in  connection  with a  termination  of the  Officer's
          employment  by the  Company,  and provided  further,  that the Company
          shall  not  have  taken  action  within  30  days of  such  notice  of
          termination  such that the  circumstances  constituting  a Good Reason
          shall have ceased.

               "Involuntary  Employment  Action"  shall  mean any  change in the
          terms and conditions of the Officer's  employment  with the Company or
          any successor, without Cause, to such extent that:

                    (1)  the  Officer  shall  fail  to  be  vested  with  power,
               authority and resources  analogous to the Officer's  title and/or
               office prior to the Change in Control, or

                    (2)  the  Officer  shall  lose  any  significant  duties  or
               responsibilities attending such office, or

                    (3) there  shall  occur a reduction  in the  Officer's  base
               compensation, or

                    (4)  the  Officer's  employment  with  the  Company,  or its
               successor, is terminated without Cause.

               "Survivors"  means a  deceased  Officer's  legal  representatives
          and/or any person or persons who  acquired the  Officer's  rights to a
          Stock Grant 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.

         5. Tax  Liability  of the  Officer  and  Payment of Taxes.  The Officer
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  Officer's
responsibility.  Without limiting the foregoing, the Officer 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  Officer'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 Officer of the amount of any tax required
to be withheld by the Company.

         6. Securities Law Compliance.  The Officer represents that any sales of
Shares at a time when the  Officer 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  and  Consent  to   Jurisdiction.   The  Officer
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 Officer,  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.

         The Officer specifically  consents to the jurisdiction of the courts of
the Commonwealth of Virginia in any action, whether at law or in equity, brought
by the Company to protect any of its rights hereunder.

         8. No  Obligation  to  Employ.  The  Company  is not by this  Agreement
obligated  to  continue  the  Officer 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 Officer:

                  to the Officer'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 Officer's heirs, executors and administrators.

         11.  Governing Law. This  Agreement  shall be construed and enforced in
accordance  with the laws of the State of Delaware  without giving effect to the
conflict of law principles thereof.

         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 Officer is married as of the date of this
Agreement, the Officer'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
Officer marries or remarries  subsequent to the date hereof,  the Officer shall,
not  later   than  sixty  (60)  days   thereafter,   obtain  his  new   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:

                                                     OFFICER:

                                                     Raymond G. Murphy

                                    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.

                                               -----------------------------
                                               Raymond G. Murphy

Dated As Of:

______________, 1999

In the presence of:

Printed Name:

                                    EXHIBIT B

                                CONSENT OF SPOUSE

         I, , spouse of  Raymond  G.  Murphy,  acknowledge  that I have read the
RESTRICTED   STOCK  AGREEMENT  dated  as  of   ___________________,   1999  (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                      1999.

                                                     Printed name: