<PAGE> 1
================================================================================
As filed with the Securities and Exchange Commission on February 10, 1999.
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM S-8
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
---------------
INTERNET AMERICA, INC.
(Exact name of registrant as specified in its charter)
Texas 86-0778979
(State or other jurisdiction of (I.R.S. employer identification number)
incorporation or organization)
One Dallas Centre
350 N. St. Paul, Suite 3000
Dallas, Texas 75201
(Address of principal executive offices)
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INTERNET AMERICA, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT--SCOTT W. STEVENS
NON-QUALIFIED STOCK OPTION AGREEMENT--ROBERT GREEN
NON-QUALIFIED STOCK OPTION AGREEMENT--WILLIAM S. HARRIS
NON-QUALIFIED STOCK OPTION AGREEMENT--STEVE TEFERTILLER
NON-QUALIFIED STOCK OPTION AGREEMENT--DOUGLAS L. DAVIS
NON-QUALIFIED STOCK OPTION AGREEMENT--DOUGLAS L. DAVIS
NON-QUALIFIED STOCK OPTION AGREEMENT--WILLIAM O. HUNT
NON-QUALIFIED STOCK OPTION AGREEMENT--JACK T. SMITH
NON-QUALIFIED STOCK OPTION AGREEMENT--DOUGLAS G. SHELDON
NON-QUALIFIED STOCK OPTION AGREEMENT--DOUGLAS G. SHELDON
NON-QUALIFIED STOCK OPTION AGREEMENT--JAMES T. CHANEY
NON-QUALIFIED STOCK OPTION AGREEMENT--JOHN J. STEWART
NON-QUALIFIED STOCK OPTION AGREEMENT--FRANK J. DURDA
(Full title of the Plan)
---------------
MICHAEL T. MAPLES
One Dallas Centre
350 N. St. Paul, Suite 3000
Dallas, Texas 75201
(Name and address of agent for service of agent for service)
(214) 861-2500
(Telephone number, including area code,
of agent for service)
----------------
COPY TO:
RICHARD F. DAHLSON
Jackson Walker L.L.P.
901 Main Street
Suite 6000
Dallas, Texas 75202
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<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
=========================================================================================================================
Proposed Proposed
Title of Amount Maximum Maximum Amount of
Securities to be Offering Price Aggregate Registration
to be Registered Registered Per Share (1) Offering Price (1) Fee (1)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $0.01 par value 45,000 shares $ .09 $ 4,050.00 $ 210.04
11,250 shares $ 1.67 $ 18,787.50
11,250 shares $ 1.67 $ 18,787.50
11,250 shares $ 1.67 $ 18,787.50
11,250 shares $ 1.67 $ 18,787.50
101,250 shares $ 1.67 $ 169,087.50
22,500 shares $ 1.67 $ 37,575.00
22,500 shares $ 1.67 $ 37,575.00
22,500 shares $ 1.67 $ 37,575.00
67,500 shares $ 1.67 $ 112,725.00
78,750 shares $ 1.67 $ 131,512.50
56,250 shares $ 1.67 $ 93,937.50
33,750 shares $ 1.67 $ 56,362.50
=========================================================================================================================
</TABLE>
(1) Computed pursuant to Rule 457 solely for the purpose of calculating the
registration fee, based upon the prices at which the options may be
exercised.
<PAGE> 3
PROSPECTUS
INTERNET AMERICA, INC.
495,000 SHARES OF COMMON STOCK
This Prospectus relates to the offer and sale of up to 495,000 shares
(the "Shares") of common stock, par value $0.01 per share (the "Common Stock")
of Internet America, Inc. (the "Company"), issued pursuant to the provisions of
various Nonqualified Stock Option Agreements between the Company and its
officers, directors, employees and former employees (the "Agreements").
The Shares may be sold from time to time by the Selling Shareholders or
by permitted transferees. The Common Stock is quoted through the National
Association of Securities Dealers Automated Quotation National Market System
(the "Nasdaq/NMS") under the symbol "GEEK" and may be sold from time to time by
the Selling Shareholders either directly in private transactions, or through one
or more brokers or dealers on the Nasdaq/NMS, or any other over-the-counter
market or exchange on which the Common Stock is quoted or listed for trading, at
such prices and upon such terms as may be obtainable. On February 8, 1999, the
last reported sale price of the Common Stock, as reported on the Nasdaq/NMS, was
$34.44.
Upon any sale of the Common Stock offered hereby, the Selling
Shareholders and participating agents, brokers, dealers or marketmakers may be
deemed to be underwriters as that term is defined in the Securities Act of 1933,
as amended (the "Securities Act"), and commissions or discounts or any profit
realized on the resale of such securities purchased by them may be deemed to be
underwriting commissions or discounts under the Securities Act. See "Plan of
Distribution." The Company will not receive any of the proceeds from the sales
by the Selling Shareholders.
No underwriter is being utilized in connection with this offering. The
Company will pay all expenses incurred within this offering. The expenses
incurred in connection with the offering are estimated to be approximately
$4,000.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THE PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is February 9, 1999.
<PAGE> 4
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith, files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company with the Commission can be
inspected and copied at the public reference facilities maintained by the
Commission at Judiciary Plaza, 450 Fifth Street, N.W., Room 1024, Washington,
D.C. 20549; at the Commission's Chicago Regional office located at Northwestern
Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511; and at the Commission's New York Regional office located at 7 World
Trade Center, Room 1300, New York, New York 10048. Copies of such material may
also be obtained at prescribed rates from the Public Reference Section of the
Commission at Judiciary Plaza, 450 Fifth Street, N.W., Room 1024, Washington,
D.C. 20549. Additionally, the Commission maintains a website
(http://www.sec.gov) that contains reports, proxy statements and information
statements and other information regarding registrants that file electronically
with the Commission. The Common Stock is listed on the Nasdaq/NMS. Reports,
proxy statements and other information concerning the Company can be inspected
at the offices of the Nasdaq/NMS.
The Company has filed with the Commission in Washington, D.C., a
Registration Statement on Form S-8 (the "Registration Statement") in connection
with the offer and sale of the Common Stock offered hereby under the Securities
Act. This Prospectus does not contain all of the information set forth or
incorporated by reference in the Registration Statement and the exhibits
thereto. For further information with respect to the Company and the Common
Stock, reference is made to the Registration Statement and the exhibits thereto.
Copies of the Registration Statement are available from the Commission.
Statements contained in this Prospectus concerning the provisions of documents
filed with the Registration Statement are necessarily summaries of such
documents, and each statement is qualified in its entirety by reference to the
copy of the applicable document filed with the Commission.
The Company's principal executive offices are located at One Dallas
Centre, 350 N. St. Paul, Suite 3000, Dallas, Texas 75201 and its telephone
number is (214) 861-2500.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which have been filed with the Commission by
the Company, are incorporated herein by reference and made a part hereof:
(i) Prospectus dated December 9, 1998 and filed with the Commission
pursuant to Rule 424(b) on December 10, 1998 (the "424(b) Prospectus");
(ii) All other reports filed with the Commission pursuant to Section
13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), since the end of the fiscal year covered by the 424(b)
Prospectus; and
(iii) Description of the Common Stock contained in the Company's
Registration Statement on Form SB-2 (No. 333-59527) and Registration
Statement on Form 8-A (No. 000-25147), effective as of December 9,
1998.
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 and 15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the termination of the offering of the
2
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Common Stock to be made hereunder shall be deemed to be incorporated by
reference herein and to be a part hereof from the date of filing of such
documents. Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
The Company will provide, without charge, to each person to whom a copy
of this Prospectus is delivered, upon the written or oral request of such
person, a copy of any or all of the documents incorporated herein by reference
(other than exhibits to such documents unless such exhibits are specifically
incorporated by reference into the information that this Prospectus
incorporates). Written or telephone requests for such documents should be
directed to James T. Chaney, One Dallas Centre, 350 N. St. Paul, Suite 3000,
Dallas, Texas 75201, telephone number (214) 861-2500.
SELLING SHAREHOLDERS
This Prospectus covers the offer and resale of Shares issued to certain
Shareholders pursuant to the Agreements. The table below sets forth information
concerning the Common Stock owned by the following Selling Shareholders, none of
whom has, or within the past three years has had, any position, office or other
material relationship with the Company or any of its predecessors or affiliates,
except as set forth below:
<TABLE>
<CAPTION>
OWNERSHIP OF COMMON STOCK AMOUNT AND PERCENTAGE
COMMON STOCK OFFERED FOR SELLING OF CLASS AFTER
NAME PRIOR TO OFFERING(1) SHAREHOLDERS OFFERING(2)
- ---- -------------------- ------------------- ---------------------
<S> <C> <C> <C>
Douglas L. Davis 225,000 112,500 112,500
Executive Vice President 1.8%
and Chief Operating Officer
William O. Hunt 1,134,990 22,500 1,112,490
Chairman of the Board 17.6%
Jack T. Smith 471,811 22,500 449,311
Director 7.1%
Douglas G. Sheldon 382,502(3) 90,000 292,502
Vice President - Marketing 4.6%
and Director
James T. Chaney 78,750(4) 78,750 0
Vice President, Chief *
Financial Officer, Secretary
and Treasurer
John James Stewart III 59,945(5) 56,250 3,695
Vice President - Customer *
Care
</TABLE>
- ----------------------------
* less than 1%
(1) Based on ownership as of February 8, 1999. Includes Shares to be acquired
upon exercise of Options granted under the Agreements, some of which may not be
exercisable within 60 days of the date of this Prospectus.
(2) Based on 6,310,328 shares of Common Stock outstanding on February 8, 1999.
Assumes the exercise of all Options granted under the Agreements, the exercise
of which are covered by this Prospectus, and the sale of the Shares acquired
thereby.
3
<PAGE> 6
(3) Includes 50,625 shares purchasable pursuant to an Agreement but which are
not exercisable within 60 days of the date of this Prospectus.
(4) Includes 59,062 shares purchasable pursuant to an Agreement but which are
not exercisable within 60 days of the date of this Prospectus.
(5) Includes 3,695 shares purchasable pursuant to options not granted under an
Agreement, some of which are not exercisable within 60 days of the date of this
Prospectus. Includes 42,187 shares purchasable pursuant to an Agreement but
which are not exercisable within 60 days of the date of this Prospectus.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the Common
Stock hereby.
PLAN OF DISTRIBUTION
The Shares may be sold from time to time by any of the Selling
Shareholders, or permitted transferees. The Shares may be disposed of from time
to time in one or more transactions through any one or more of the following:
(i) to purchasers directly, (ii) in ordinary brokerage transactions and
transactions in which the broker solicits purchasers, (iii) through underwriters
or dealers who may receive compensation in the form of underwriting discounts,
concessions or commissions from the Selling Shareholders or such permitted
transferees or from the purchasers of the Shares for whom they may act as agent,
(iv) the writing of options on the Shares, (v) the pledge of the Shares as
security for any loan or obligation, including pledges to brokers or dealers who
may, from time to time, themselves effect distributions of the Shares or
interests therein, (vi) purchases by a broker or dealer as principal and resale
by such broker or dealer for its own account pursuant to this Prospectus, (vii)
a block trade in which the broker or dealer so engaged will attempt to sell the
Shares as agent but may position and resell a portion of the block as principal
to facilitate the transaction and (viii) an exchange distribution in accordance
with the rules of such exchange, including the Nasdaq/NMS, or in transactions in
the over the counter market. Such sales may be made at prices and at terms then
prevailing or at prices related to the then current market price or at
negotiated prices and terms. In effecting sales, brokers or dealers may arrange
for other brokers or dealers to participate. The Selling Shareholders or such
successors in interest, and any underwriters, brokers, dealers or agents that
participate in the distribution of the Shares, may be deemed to be
"underwriters" within the meaning of the Securities Act, and any profit on the
sale of the Shares by them and any discounts, commissions or concessions
received by any such underwriters, brokers, dealers or agents may be deemed to
be underwriting commissions or discounts under the Securities Act.
The Company will pay all expenses incident to the offering and sale of
the Shares to the public and all underwriting discounts or commissions, brokers'
fees and the fees and expenses of any counsel to the Selling Shareholders
related thereto.
In the event of a material change in the plan of distribution disclosed
in this Prospectus, the Selling Shareholders will not be able to effect
transactions in the Shares pursuant to this Prospectus until such time as a
post-effective amendment to the Registration Statement is filed with, and
declared effective by, the Commission.
LEGAL MATTERS
Certain legal matters in connection with the Common Stock offered
hereby have been passed upon for the Company by Jackson Walker L.L.P., 901 Main
Street, Suite 6000, Dallas, Texas 75202.
4
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EXPERTS
The financial statements as of June 30, 1997 and 1998 and for each of
the three years in the period ended June 30, 1998, incorporated in this
prospectus by reference from the Company's Registration Statement on Form SB-2
(No. 333-59527) have been audited by Deloitte & Touche, LLP independent
auditors, as stated in their report, which is incorporated herein by reference,
and have been so incorporated in reliance upon the report of such firm given
upon their authority as experts in accounting and auditing.
INDEMNIFICATION
The Articles of Incorporation of the Company provide that to the
fullest extent permitted by applicable law, a director of the Company will not
be liable to the Company or its shareholders for monetary damages for an act or
omission in the director's capacity as a director.
The Texas Business Corporation Act ("TBCA") permits the indemnification
of directors, employees, officers and agents to Texas corporations. The
Company's Articles and Bylaws provide that the Company shall indemnify any
person to the fullest extent permitted by law. Under the TBCA, an officer or
director may be indemnified if he acted in good faith and reasonably believed
that his conduct (i) was in the best interests of the Company if he acted in his
official capacity or (ii) was not opposed to the best interests of the Company
in all other cases. In addition, the indemnitee may not have reasonable cause to
believe that his conduct was unlawful in the case of a criminal proceeding. In
any case, the indemnitee may not have been found liable to the Company for
improperly receiving a personal benefit or for willful or intentional misconduct
in the performance of his duty to the Company. The Company (i) must indemnify an
officer or director for reasonable expenses if he is successful, (ii) may
indemnify an officer or director for such reasonable expenses unless he was
found liable for willful or intentional misconduct in the performance of his
duty to the Company and (iii) may advance reasonable defense expenses if the
officer or director undertakes to reimburse the Company if he is later found not
to satisfy the standard for indemnification expenses. Insofar as indemnification
for liabilities arising under the Securities Act may be permitted to directors,
officers and controlling persons of the Company pursuant to the foregoing
provisions, or otherwise, the Company has been advised that in the opinion of
the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable. This
provision in the Articles does not eliminate the duty of care, and in
appropriate circumstances equitable remedies such as an injunction or other
forms of nonmonetary relief would remain available under Texas law. This
provision also does not affect a director's responsibilities under any other
laws, such as the federal securities laws or state or federal environmental
laws.
5
<PAGE> 8
No person has been authorized to give any information or to make any
representations other than those contained in this Prospectus, and if given or
made, such information or representations must not be relied upon. This
Prospectus does not constitute an offer to sell or a solicitation to buy any
securities other than registered securities to which it relates, or an offer to
or a solicitation of any person in any jurisdiction where such offer or
solicitation would be unlawful. The delivery of this Prospectus at any time does
not imply that the information herein is correct as of any time subsequent to
its date.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Available Information.............................2
Incorporation of Certain Documents
by Reference...................................2
Selling Shareholders..............................3
Use of Proceeds...................................4
Plan of Distribution..............................4
Legal Matters.....................................4
Experts...........................................5
Indemnification...................................5
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</TABLE>
495,000 Shares
Common Stock
INTERNET AMERICA, INC.
February 9, 1999
6
<PAGE> 9
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents, which have been filed with the Commission by
Internet America, Inc. (the "Company"), are incorporated herein by reference and
made a part hereof:
(i) Prospectus dated December 9, 1998 and filed with the Commission
pursuant to Rule 424(b) on December 10, 1998 (the "424(b) Prospectus");
(ii) All other reports filed with the Commission pursuant to Section
13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), since the end of the fiscal year covered by the 424(b)
Prospectus; and
(iii) Description of the Common Stock contained in the Company's
Registration Statement on Form SB-2 (No. 333-59527) and Registration
Statement on Form 8-A (No.
000-25147), effective as of December 9, 1998.
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 and 15(d) of the Exchange Act subsequent to the date of this Registration
Statement and prior to the filing of a post-effective amendment that indicates
that all of the Common Stock offered hereunder has been sold or which
deregisters all of such Common Stock then remaining unsold, shall be deemed to
be incorporated by reference herein and to be a part hereof from the date of
filing of such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Registration Statement to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Registration
Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
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<PAGE> 10
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Articles of Incorporation of the Company provide that to the
fullest extent permitted by applicable law, a director of the Company will not
be liable to the Company or its shareholders for monetary damages for an act or
omission in the director's capacity as a director.
The Texas Business Corporation Act ("TBCA") permits the indemnification
of directors, employees, officers and agents to Texas corporations. The
Company's Articles and Bylaws provide that the Company shall indemnify any
person to the fullest extent permitted by law. Under the TBCA, an officer or
director may be indemnified if he acted in good faith and reasonably believed
that his conduct (i) was in the best interests of the Company if he acted in his
official capacity or (ii) was not opposed to the best interests of the Company
in all other cases. In addition, the indemnitee may not have reasonable cause to
believe that his conduct was unlawful in the case of a criminal proceeding. In
any case, the indemnitee may not have been found liable to the Company for
improperly receiving a personal benefit or for willful or intentional misconduct
in the performance of his duty to the Company. The Company (i) must indemnify an
officer or director for reasonable expenses if he is successful, (ii) may
indemnify an officer or director for such reasonable expenses unless he was
found liable for willful or intentional misconduct in the performance of his
duty to the Company and (iii) may advance reasonable defense expenses if the
officer or director undertakes to reimburse the Company if he is later found not
to satisfy the standard for indemnification expenses. Insofar as indemnification
for liabilities arising under the Securities Act may be permitted to directors,
officers and controlling persons of the Company pursuant to the foregoing
provisions, or otherwise, the Company has been advised that in the opinion of
the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable. This
provision in the Articles does not eliminate the duty of care, and in
appropriate circumstances equitable remedies such as an injunction or other
forms of nonmonetary relief would remain available under Texas law. This
provision also does not affect a director's responsibilities under any other
laws, such as the federal securities laws or state or federal environmental
laws.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
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ITEM 8. EXHIBITS.
The following is a list of all exhibits filed as a part of this
Registration Statement on Form S-8, including those incorporated herein by
reference.
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibit
- -------- ----------------------
<S> <C>
3.1 Internet America, Inc.'s Articles of Incorporation (1)
3.2 Internet America, Inc.'s Article of Amendment to Articles of Incorporation (1)
3.3 Internet America, Inc.'s Bylaws (1)
3.4 Internet America Inc.'s Amendment to Bylaws (1)
3.5 Application for Certificate of Withdrawal of Internet America, Inc.(1)
3.6 Articles of Merger merging Internet America, Inc., an Arizona corporation, with and
into INTRNTUSA, INC., a Texas corporation (1)
4.1 Specimen Common Stock certificate (1)
4.2 Certificate of Designation of the Series A Preferred Stock of Internet America, Inc.(1)
4.3 Amended Certificate of Designation of the Series A Preferred Stock of Internet
America, Inc.(1)
4.4 Certificate of Designation of the Series B Preferred Stock of Internet America, Inc.(1)
5.1 Opinion of Jackson Walker L.L.P.*
23.1 Consent of Jackson Walker L.L.P. (included in its opinion filed as Exhibit 5.1)
23.2 Consent of Deloitte & Touche LLP*
24 Power of Attorney (included in Part II hereof)
99.1 Nonqualified Stock Option Agreement dated July 21, 1995 by and between Internet
America, Inc. and Scott W. Stevens.*
99.2 Nonqualified Stock Option Agreement dated December 5, 1995 by and between
Internet America, Inc. and Robert Green.*
99.3 Nonqualified Stock Option Agreement dated December 5, 1995 by and between
Internet America, Inc. and William S. Harris.*
</TABLE>
-3-
<PAGE> 12
<TABLE>
<S> <C>
99.4 Nonqualified Stock Option Agreement dated January 23, 1997 by and between
Internet America, Inc. and Steve Tefertiller.*
99.5 Nonqualified Stock Option Agreement dated December 1, 1995 by and between
Internet America, Inc. and Douglas L. Davis.*
99.6 Nonqualified Stock Option Agreement dated December 15, 1995 by and between
Internet America, Inc. and Douglas L. Davis.*
99.7 Nonqualified Stock Option Agreement dated April 5, 1996 by and between Internet
America, Inc. and William O. Hunt.*
99.8 Nonqualified Stock Option Agreement dated April 5, 1996 by and between Internet
America, Inc. and Jack T. Smith.*
99.9 Nonqualified Stock Option Agreement dated June 6, 1996 by and between Internet
America, Inc. and Douglas G. Sheldon.*
99.10 Nonqualified Stock Option Agreement dated March 24, 1998 by and between
Internet America, Inc. and Douglas G. Sheldon.*
99.11 Nonqualified Stock Option Agreement dated March 24, 1998 by and between
Internet America, Inc. and James T. Chaney.*
99.12 Nonqualified Stock Option Agreement dated March 24, 1998 by and between
Internet America, Inc. and John J. Stewart.*
99.13 Nonqualified Stock Option Agreement dated March 24, 1998 by and between
Internet America, Inc. and Frank J. Durda.*
</TABLE>
- -----------------------
* Filed herewith. Option granted prior to the 2.25-for-1.00 stock split
of the Company's Common Stock effected on July 13, 1998.
(1) Previously filed as an exhibit to the Company's Registration Statement
on Form SB-2 (file No. 333-59527) originally filed on July 21, 1998, as
amended, and incorporated herein by reference.
-4-
<PAGE> 13
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, as amended;
(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
end 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 a 20% 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
the information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Company pursuant to
Section 13 or Section 15(d) of the Exchange Act of 1934, as amended, that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, as amended, 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, as amended, each
filing of the registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Exchange Act of 1934, as amended, that is incorporated by reference
in the registration statement shall be deemed to be a new registration
-5-
<PAGE> 14
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, as amended, 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 Securities 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
Securities Act and will be governed by the final adjudication of such issue.
-6-
<PAGE> 15
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
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 City of Dallas, State of Texas on the 9th day of
February, 1999.
INTERNET AMERICA, INC.
By: /s/ JAMES T. CHANEY
-------------------------------------------------
James T. Chaney, Vice President, Chief
Financial Officer, Secretary and Treasurer
(Principal Accounting and Financial Officer)
-7-
<PAGE> 16
POWER OF ATTORNEY
Each person whose signature appears below authorizes Michael T. Maples
and James T. Chaney, and each of them, each of whom may act without joinder of
the other, to execute in the name of each such person who is then an officer or
director of the Registrant, and to file any amendments to this Registration
Statement necessary or advisable to enable the Registrant to comply with the
Securities Act of 1933, as amended, and any rules, regulations and requirements
of the Commission, in respect thereof, in connection with the registration of
the securities which are the subject of this Registration Statement, which
amendments may make such changes in such Registration Statement as such attorney
may deem appropriate.
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ MICHAEL T. MAPLES
- ------------------------ Chief Executive Officer, February 9, 1999
Michael T. Maples President and Director
(Principal Executive Officer)
/s/ JAMES T. CHANEY
- ------------------------ Chief Financial Officer, Vice February 9, 1999
James T. Chaney President, Secretary and Treasurer
(Principal Financial and Accounting Officer)
/s/ DOUGLAS G. SHELDON
- ------------------------ Vice President -- Marketing, February 9, 1999
Douglas G. Sheldon Director
/s/ WILLIAM O. HUNT
- ------------------------ Chairman of the Board February 9, 1999
William O. Hunt
/s/ JACK T. SMITH
- ------------------------ Director February 9, 1999
Jack T. Smith
/s/ GARY L. CORONA
- ------------------------ Director February 9, 1999
Gary L. Corona
</TABLE>
-8-
<PAGE> 17
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibit
- -------- ----------------------
<S> <C>
3.1 Internet America, Inc.'s Articles of Incorporation (1)
3.2 Internet America, Inc.'s Article of Amendment to Articles of Incorporation (1)
3.3 Internet America, Inc.'s Bylaws (1)
3.4 Internet America Inc.'s Amendment to Bylaws (1)
3.5 Application for Certificate of Withdrawal of Internet America, Inc.(1)
3.6 Articles of Merger merging Internet America, Inc., an Arizona corporation, with and
into INTRNTUSA, INC., a Texas corporation (1)
4.1 Specimen Common Stock certificate (1)
4.2 Certificate of Designation of the Series A Preferred Stock of Internet America, Inc.(1)
4.3 Amended Certificate of Designation of the Series A Preferred Stock of Internet
America, Inc.(1)
4.4 Certificate of Designation of the Series B Preferred Stock of Internet America, Inc.(1)
5.1 Opinion of Jackson Walker L.L.P.*
23.1 Consent of Jackson Walker L.L.P. (included in its opinion filed as Exhibit 5.1)
23.2 Consent of Deloitte & Touche LLP*
24 Power of Attorney (included in Part II hereof)
99.1 Nonqualified Stock Option Agreement dated July 21, 1995 by and between Internet
America, Inc. and Scott W. Stevens.*
99.2 Nonqualified Stock Option Agreement dated December 5, 1995 by and between
Internet America, Inc. and Robert Green.*
99.3 Nonqualified Stock Option Agreement dated December 5, 1995 by and between
Internet America, Inc. and William S. Harris.*
99.4 Nonqualified Stock Option Agreement dated January 23, 1997 by and between
Internet America, Inc. and Steve Tefertiller.*
</TABLE>
-9-
<PAGE> 18
<TABLE>
<S> <C>
99.5 Nonqualified Stock Option Agreement dated December 1, 1995 by and between
Internet America, Inc. and Douglas L. Davis.*
99.6 Nonqualified Stock Option Agreement dated December 15, 1995 by and between
Internet America, Inc. and Douglas L. Davis.*
99.7 Nonqualified Stock Option Agreement dated April 5, 1996 by and between Internet
America, Inc. and William O. Hunt.*
99.8 Nonqualified Stock Option Agreement dated April 5, 1996 by and between Internet
America, Inc. and Jack T. Smith.*
99.9 Nonqualified Stock Option Agreement dated June 6, 1996 by and between Internet
America, Inc. and Douglas G. Sheldon.*
99.10 Nonqualified Stock Option Agreement dated March 24, 1998 by and between
Internet America, Inc. and Douglas G. Sheldon.*
99.11 Nonqualified Stock Option Agreement dated March 24, 1998 by and between
Internet America, Inc. and James T. Chaney.*
99.12 Nonqualified Stock Option Agreement dated March 24, 1998 by and between
Internet America, Inc. and John J. Stewart.*
99.13 Nonqualified Stock Option Agreement dated March 24, 1998 by and between
Internet America, Inc. and Frank J. Durda.*
</TABLE>
- ----------------------
* Filed herewith. Option granted prior to the 2.25-for-1.00 stock split
of the Company's Common Stock effected on July 13, 1998.
(1) Previously filed as an exhibit to the Company's Registration Statement
on Form SB-2 (file No. 333-59527) originally filed on July 21, 1998,
as amended, and incorporated herein by reference.
-10-
<PAGE> 1
EXHIBIT 5.1
February 9, 1999
Internet America, Inc.
One Dallas Centre
350 N. St. Paul, Suite 3000
Dallas, Texas 75201
Re: Registration Statement on Form S-8 of Internet America, Inc.
Gentlemen:
We are acting as counsel for Internet America, Inc., a Texas
corporation (the "Company"), in connection with the registration under the
Securities Act of 1933, as amended (the "Act"), and the offering and sale of up
to 495,000 shares of the Company's Common Stock, par value $0.01 per share (the
"Shares") by certain Selling Shareholders. The Selling Shareholders acquired the
Shares pursuant to the Nonqualified Stock Option Agreements (the "Agreements")
filed as exhibits to the Registration Statement on Form S-8 covering the
offering and sale of the Shares (the "Registration Statement") that is expected
to be filed with the Securities and Exchange Commission on or about the date
hereof.
In reaching the conclusions expressed in this opinion, we have examined
and relied upon the originals or certified copies of all documents, certificates
and instruments as we have deemed necessary to the opinions expressed herein,
including the Articles of Incorporation, as amended, and the Bylaws of the
Company and copies of the Agreements. In making the foregoing examinations, we
have assumed the genuineness of all signatures on original documents, the
authenticity of all documents submitted to us as originals and the conformity to
original documents of all copies submitted to us.
Based solely upon the foregoing, subject to the comments hereinafter
stated, and limited in all respects to the laws of the State of Texas and the
federal laws of the United States of America, it is our opinion that the Shares
have been duly authorized and, when issued and delivered, against receipt by the
Company of the agreed consideration therefore, will be validly issued, fully
paid and nonassessable.
We hereby consent to the use of this opinion as an Exhibit to the
Registration Statement. In giving this consent, we do not admit that we come
within the category of persons whose consent is required under Section 7 of the
Act or the rules and regulations of the Commission promulgated thereunder.
Very truly yours,
/s/ Jackson Walker L.L.P.
<PAGE> 1
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration
Statement of Internet America, Inc. ("the Company") on Form S-8 of our
report dated August 12, 1998, appearing in the Company's Registration
Statement on Form SB-2 (No. 333- 59527). We also consent to the
reference to us under the heading "Experts" in the Prospectus, which is
part of this Registration Statement.
/s/ Deloitte & Touche LLP
Dallas, Texas
February 8, 1999
<PAGE> 1
EXHIBIT 99.1
NON-QUALIFIED STOCK OPTION AGREEMENT
Agreement made effective as of the 21st day of July, 1995 by and
between INTERNET AMERICA, INC. (the "Company") and SCOTT W. STEVENS (the
"Optionee").
1. Definitions. For purposes of this Agreement:
a. "Board" means the Board of Directors of the Company.
b. "Change in Capitalization" means any increase or reduction in the
number of Shares, or any change (including, but not limited to, a change
in value) in the Shares or exchange of Shares for a different number or
kind of Shares or other securities of the Company, by reason of a
reclassification, recapitalization, merger, consolidation,
reorganization, stock dividend, stock split or reverse stock split,
combination or exchange of shares or other similar events.
c. "Code" means the Internal Revenue Code of 1986, as amended.
d. "Company" means Internet America, Inc., a Texas corporation.
e. "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
f. "Fair Market Value" on any date means the closing price of Shares
on such date on the principal national securities exchange on which
Shares are listed or admitted to trading, the arithmetic mean of the per
Share closing bid priced and per Share closing asked price on such date
as quoted on the National Association of Securities Dealers Automated
Quotation System or such then market in which such prices are regularly
quoted, or, if there have been no published bid or asked quotations with
respect to Shares on such date, the Fair Market Value shall be the value
established by the Board in good faith and in accordance with Section
422 of the Code.
g. "Shares" means the common stock, par value $.01 per share, of the
Company.
2. Grant of Option.
The Company hereby grants to the Optionee, for valuable consideration,
receipt of which is hereby acknowledged, a Non-Qualified Stock Option ("Option")
to purchase from the Company an aggregate of 20,000 shares at a purchase price
(the "Option Price") of $.20 per share.
3. Exercise Period. The Option is non-forfeitable and shall hereafter be
exercisable in whole or in part. The option may be exercised only with respect
to full Shares and may not be exercised after the close of business on the day
(the "Termination Date") preceding the tenth anniversary of the date hereof. The
Option shall have no effect after the Termination Date.
<PAGE> 2
4. Exercise of an Option. The exercise of an Option shall be made only by a
written notice delivered in person or by mail to the Secretary of the Company at
the Company's principal executive office, specifying the number of Shares to be
purchased and accompanied by payment therefor. The purchase price for any Shares
purchased pursuant to the exercise of an Option shall be paid in full upon such
exercise by delivery of cash or personal check in amount of purchase price. The
written notice may provide instructions from the Optionee to the Company that
upon receipt of the purchase price in cash from the Optionee's broker or dealer,
designated as such on the written notice, in payment for any Shares purchased
pursuant to the exercise of an Option, the Company shall issue such Shares
directly to the broker or dealer. If requested by the Board, the Optionee shall
deliver this Agreement to the Secretary of the Company who shall endorse thereon
a notation of such exercise and return such Agreement to the Optionee. No
fractional Shares (or cash in lieu thereof) shall be issued upon exercise of an
Option and the number of Shares that may be purchased upon exercise shall be
rounded to the nearest number of whole Shares.
5. Rights of Optionee. The Optionee shall not be deemed for any purpose to be
the owner of any Shares subject to any Option unless and until (i) the Option
shall have been exercised pursuant to the terms thereof, (ii) the Company shall
have issued and delivered the Shares to the Optionee and (iii) the Optionee's
name shall have been entered as a stockholder of record on the books of the
Company. Thereupon, the Optionee shall have full voting, dividend and other
ownership rights with respect to such Shares.
6. Adjustment Upon Changes in Capitalization.
a. Subject to Section 7, in the event of a Change in Capitalization,
the number and class of Shares or other stock or securities which are
subject to the Option, and the purchase price therefor, if applicable,
shall be appropriately and equitably adjusted.
b. If, by reason of a Change in Capitalization, the Optionee shall be
entitled to exercise an Option with respect to new, additional or
different shares of stock or securities, such new, additional or different
shares shall thereupon be subject to all of the conditions which were
applicable to the Shares subject to the Option, as the case may be, prior
to such Change in Capitalization.
7. Effect of Change in Control.
Notwithstanding anything contained in the Plan or this
Agreement to the contrary, in the event of a Change in Control, all Options
outstanding on the date of such Change in Control shall become immediately and
fully exercisable.
Non-Qualified Option Agreement Page 2
<PAGE> 3
8. Effect of Certain Transactions.
In the event of (i) the liquidation or dissolution of the
Company or (ii) a merger or consolidation of the Company (a "Transaction"), the
Option issued hereunder shall continue in effect in accordance with its terms
and the Optionee shall be entitled to receive in respect of each Share subject
to any outstanding Option, upon exercise of any Option, the same number and kind
of stock, securities, cash, property, or other consideration that each holder of
a Share was entitled to receive in the Transaction in respect of a Share. In the
event that, after a Transaction, there occurs any Change in Capitalization with
respect to the shares of a surviving or resulting corporation, then adjustments
similar to, and subject to the same conditions as, those in Section 6 hereof
shall be made by the Board.
9. Effect of Certain Transactions.
a. Notwithstanding anything to the contrary or in the Agreement, the
Optionee shall forfeit 100% of the Options granted pursuant to this
Agreement, whether or not vested, if the Optionee breaches the provisions
of subsections (b) or (d) of this Section 9.
b. During the period that the Optionee is employed by the Company or
any affiliate of the Company (the "Service Term") and for a period of one
year thereafter, the Optionee shall not, in the continental United States,
directly or indirectly, own, manage, operate, join, control, be employed
by, or participate in the ownership, management, operation or control of
or be connected in any manner, including but not limited to holding the
positions of shareholder, director, officer, consultant, independent
contractor, employee, partner, or investor, with any Competing Enterprise.
For purposes of this Section, the term "Competing Enterprise" shall mean
any person, corporation, partnership or other entity engaged in the
operation of an internet service provider. The prohibition of this Section
9 shall not be deemed to prevent Optionee from owning 2% or less of any
class of equity securities registered under Section 12 of the Exchange
Act. During the Service Term and for a period of one year thereafter, the
Optionee shall not interfere with the Company's relationship with, or
endeavor to entice away from the Company, any person who at any time
during the Service Term was an employee or customer of the Company or
otherwise had a material business relationship with the Company.
c. The necessity for protection of the Company and its affiliates
against the Optionee's competition, as well as the nature and scope of
such protection, has been carefully considered by the parties hereto in
light of the uniqueness of the Optionee's talent and his importance to the
Company. Accordingly, the Optionee agrees that, in addition to any other
relief to which the Company may be entitled, the Company shall be entitled
to seek and obtain injunctive relief (without the requirement of any bond)
from a court of competent jurisdiction for the purpose of restraining the
Optionee from any actual or threatened breach of the covenant contained in
this Section 9. If for any reason a final decision of any court determines
that the restrictions under this Section 9 are not reasonable or that
consideration therefor is inadequate, such restrictions shall be
interpreted, modified or rewritten by such court to include as much of the
duration,
Non-Qualified Option Agreement Page 3
<PAGE> 4
scope and geographic area identified in this Section 9 as will render
such restrictions valid and enforceable.
d. The Optionee shall not intentionally disclose or reveal to an
unauthorized person, during the Service Term or for a two year period
thereafter, any information relating to the confidential affairs of the
company or any of its affiliates, including but not limited to technical
information, business and marketing plans, strategies, customer
information, other information concerning the Company's products,
promotions, development, financing, expansion plans, business policies and
practices, and other forms of information considered by the Company to be
confidential and in the nature of trade secrets. The Optionee shall hold
as property of the Company and its affiliates all memoranda, books,
papers, letters and other data, and all copies thereof or therefrom, which
are in any way substantially related to the business of the company or its
affiliates, whether made by him or otherwise coming into his possession
and, on a prior written demand of the Company made within two years after
the end of the Service Term, shall deliver the same to the company.
10. General Rules
a. The obligation of the Company to sell or deliver Shares with respect
to the Options granted shall be subject to all applicable laws, rules and
regulations, including all applicable federal and state securities laws,
and the obtaining of all such approvals by governmental agencies as may be
deemed necessary or appropriate by the Board.
b. The Company shall have the right to deduct from any distribution of
cash to Optionee, an amount equal to the federal, state and local income
taxes and other amounts as may be required by law to be withheld (the
"Withholding Taxes") with respect to any Option. If Optionee is entitled
to receive Shares upon exercise of an Option, the Optionee shall pay the
Withholding Taxes to the Company prior to the issuance, or release from
escrow, of such Shares. In satisfaction of the Withholding Taxes to the
Company, the Optionee may make a written election (the "Tax Election"),
which may be accepted or rejected in the discretion of the Board, to have
withheld a portion of the Shares issuable to him or her upon exercise of
the Option having an aggregate Fair Market Value, on the date preceding
the date of exercise, equal to the Withholding Taxes, provided that in
respect of an Optionee who may be subject to liability under Section 16(b)
of the Exchange Act either (i)(A) the Optionee makes the Tax Election at
least six (6) months after the date the Option was granted, (B) the Option
is exercised during the ten day period beginning on the third business day
and ending on the twelfth business day following the release for
publication of the Company's quarterly or annual statements of earnings (a
"Window Period") and (C the Tax Election is made during the Window Period
in which the Option is exercised prior to such Window Period and
subsequent to the immediately preceding Window Period or (ii)(A) the Tax
Election is made at least six (6) months prior to the date the Option is
exercised prior to the expiration of six (6) months following an election
to revoke the Tax Election. Notwithstanding the foregoing, the Board may,
by the adoption or rules
Non-Qualified Option Agreement Page 4
<PAGE> 5
or otherwise, (i) modify the provisions in the preceding sentence or
impose such other restrictions or limitations on Tax Elections as may be
necessary to ensure that the Tax Elections will be exempt transactions
under Section 16(b) of the Exchange Act, an (ii) permit Tax Elections to
be made at such other times and subject to such other conditions as the
Board determines will constitute exempt transactions under Section 16b of
the Exchange Act.
If Optionee makes a disposition, within the meaning of Section
424(c)of the Code and regulations promulgated thereunder, of any Share or
Shares issued to such Optionee pursuant to the exercise of an Option
within the two-year period commencing on the day after the date of the
grant or within the one-year period commencing on the day after the date
of transfer of such Share or Shares to the Optionee pursuant to such
exercise, the Optionee shall, within ten (10) days of such disposition,
notify the Company thereof, by delivery of written notice to the Company
at its principal executive office, and immediately deliver to the Company
the amount of Withholding Taxes.
c. No Option granted hereunder shall be transferable by the Optionee to
whom granted otherwise than by will or the laws of descent and
distribution, and an Option may be exercised during the lifetime of such
Optionee only by the Optionee or his or her guardian or legal
representative. The terms of such an Option shall be final, binding and
conclusive upon the beneficiaries, executors, administrators, heirs and
successors of the Optionee.
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed
and the Optionee has hereunto set his hand, as of the day and year first above
written.
INTERNET AMERICA, INC.
/s/ ROBERT J. MAYNARD, JR.
----------------------------------------
Robert J. Maynard, Jr.
Chief Executive Officer
OPTIONEE
/s/ SCOTT W. STEVENS
----------------------------------------
Scott W. Stevens
Non-Qualified Option Agreement Page 5
<PAGE> 1
EXHIBIT 99.2
NON-QUALIFIED STOCK OPTION AGREEMENT
Agreement made effective as of the 5th day of December, 1995 by and
between INTERNET AMERICA, INC. (the "Company") and ROBERT GREEN (the
"Optionee").
1. Definitions. For purposes of this Agreement:
a. "Board" means the Board of Directors of the Company.
b. "Change in Capitalization" means any increase or reduction in the
number of Shares, or any change (including, but not limited to, a change
in value) in the Shares or exchange of Shares for a different number or
kind of Shares or other securities of the Company, by reason of a
reclassification, recapitalization, merger, consolidation, reorganization,
stock dividend, stock split or reverse stock split, combination or
exchange of shares or other similar events.
c. "Code" means the Internal Revenue Code of 1986, as amended.
d. "Company" means Internet America, Inc., a Texas corporation.
e. "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
f. "Fair Market Value" on any date means the closing price of Shares
on such date on the principal national securities exchange on which Shares
are listed or admitted to trading, the arithmetic mean of the per Share
closing bid priced and per Share closing asked price on such date as
quoted on the National Association of Securities Dealers Automated
Quotation System or such then market in which such prices are regularly
quoted, or, if there have been no published bid or asked quotations with
respect to Shares on such date, the Fair Market Value shall be the value
established by the Board in good faith and in accordance with Section 422
of the Code.
g. "Shares" means the common stock, par value $.01 per share, of the
Company.
2. Grant of Option. The Company hereby grants to the Optionee, for valuable
consideration, receipt of which is hereby acknowledged, a Non-Qualified Stock
Option ("Option") to purchase from the Company an aggregate of 5,000 Shares at a
purchase price (the "Option Price") of $3.75 per share.
3. Exercise Period. The Option shall become non-forfeitable according to
the following schedule and shall hereafter be exercisable in whole or in part:
<TABLE>
<S> <C>
First Installment: With respect to 500 shares, on December 25, 1996
Second Installment: With respect to 1,500 shares, on December 25, 1997
Third Installment: With respect to 1,500 shares, on December 25, 1998
Third Installment: With respect to 1,500 shares, on December 25, 1999
</TABLE>
The Option may be exercised only with respect to full Shares and may not be
exercised after the close of business on the day (the "Termination Date")
preceding the tenth anniversary of the date hereof. The Option shall have no
effect after the Termination Date.
<PAGE> 2
4. Exercise of an Option. The exercise of an Option shall be made only by a
written notice delivered in person or by mail to the Secretary of the Company at
the Company's principal executive office, specifying the number of Shares to be
purchased and accompanied by payment therefor. The purchase price for any Shares
purchased pursuant to the exercise of an Option shall be paid in full upon such
exercise by delivery of cash or personal check in amount of purchase price. The
written notice may provide instructions from the Optionee to the Company that
upon receipt of the purchase price in cash from the Optionee's broker or dealer,
designated as such on the written notice, in payment for any Shares purchased
pursuant to the exercise of an Option, the Company shall issue such Shares
directly to the broker or dealer. If requested by the Board, the Optionee shall
deliver this Agreement to the Secretary of the Company who shall endorse thereon
a notation of such exercise and return such Agreement to the Optionee. No
fractional Shares (or cash in lieu thereof) shall be issued upon exercise of an
Option and the number of Shares that may be purchased upon exercise shall be
rounded to the nearest number of whole Shares.
5. Rights of Optionee. The Optionee shall not be deemed for any purpose to
be the owner of any Shares subject to any Option unless and until (i) the Option
shall have been exercised pursuant to the terms thereof, (ii) the Company shall
have issued and delivered the Shares to the Optionee and (iii) the Optionee's
name shall have been entered as a stockholder of record on the books of the
Company. Thereupon, the Optionee shall have full voting, dividend and other
ownership rights with respect to such Shares.
6. Adjustment Upon Changes in Capitalization.
a. Subject to Section 7, in the event of a Change in Capitalization,
the number and class of Shares or other stock or securities which are
subject to the Option, and the purchase price therefor, if applicable,
shall be appropriately and equitably adjusted.
b. If, by reason of a Change in Capitalization, the Optionee shall
be entitled to exercise an Option with respect to new, additional or
different shares of stock or securities, such new, additional or
different shares shall thereupon be subject to all of the conditions
which were applicable to the Shares subject to the Option, as the case
may be, prior to such Change in Capitalization.
7. Effect of Certain Transactions.
In the event of (i) the liquidation or dissolution of the
Company or (ii) a merger or consolidation of the Company (a "Transaction"), the
Option issued hereunder shall continue in effect in accordance with its terms
and the Optionee shall be entitled to receive in respect of each Share subject
to any outstanding Option, upon exercise of any Option, the same number and kind
of stock, securities, cash, property, or other consideration that each holder of
a Share was entitled to receive in the Transaction in respect of a Share. In the
event that, after a Transaction, there occurs any Change in Capitalization with
respect to the shares of a surviving or resulting corporation, then adjustments
similar to, and subject to the same conditions as, those in Section 6 hereof
shall be made by the Board.
8. Effect of Certain Transactions.
a. Notwithstanding anything to the contrary or in the Agreement, the
Optionee shall forfeit 100% of the Options granted pursuant to this
Agreement, whether or not vested, if the Optionee breaches the
provisions of subsections (b) or (d) of this Section 9.
b. During the period that the Optionee is employed by the Company or
any affiliate of the Company (the "Service Term") and for a period of
one year thereafter, the Optionee shall not, in the continental United
States, directly or indirectly, own, manage, operate, join, control, be
employed by, or participate in the ownership, management, operation or
control of or be connected in any manner, including but not limited to
holding the positions of shareholder, director, officer, consultant,
independent contractor, employee, partner, or investor, with any
Competing Enterprise. For purposes of this Section,
Non-Qualified Option Agreement Page 2
<PAGE> 3
the term "Competing Enterprise" shall mean any person, corporation,
partnership or other entity engaged in the operation of an internet
service provider. The prohibition of this Section 9 shall not be deemed
to prevent Optionee from owning 2% or less of any class of equity
securities registered under Section 12 of the Exchange Act. During the
Service Term and for a period of one year thereafter, the Optionee
shall not interfere with the Company's relationship with, or endeavor
to entice away from the Company, any person who at any time during the
Service Term was an employee or customer of the Company or otherwise
had a material business relationship with the Company.
c. The necessity for protection of the Company and its affiliates
against the Optionee's competition, as well as the nature and scope of
such protection, has been carefully considered by the parties hereto in
light of the uniqueness of the Optionee's talent and his importance to
the Company. Accordingly, the Optionee agrees that, in addition to any
other relief to which the Company may be entitled, the Company shall be
entitled to seek and obtain injunctive relief (without the requirement
of any bond) from a court of competent jurisdiction for the purpose of
restraining the Optionee from any actual or threatened breach of the
covenant contained in this Section 9. If for any reason a final decision
of any court determines that the restrictions under this Section 9 are
not reasonable or that consideration therefor is inadequate, such
restrictions shall be interpreted, modified or rewritten by such court
to include as much of the duration, scope and geographic area identified
in this Section 9 as will render such restrictions valid and
enforceable.
d. The Optionee shall not intentionally disclose or reveal to an
unauthorized person, during the Service Term or for a two year period
thereafter, any information relating to the confidential affairs of the
company or any of its affiliates, including but not limited to technical
information, business and marketing plans, strategies, customer
information, other information concerning the Company's products,
promotions, development, financing, expansion plans, business policies
and practices, and other forms of information considered by the Company
to be confidential and in the nature of trade secrets. The Optionee
shall hold as property of the Company and its affiliates all memoranda,
books, papers, letters and other data, and all copies thereof or
therefrom, which are in any way substantially related to the business of
the company or its affiliates, whether made by him or otherwise coming
into his possession and, on a prior written demand of the Company made
within two years after the end of the Service Term, shall deliver the
same to the company.
9. General Rules
a. The obligation of the Company to sell or deliver Shares with
respect to the Options granted shall be subject to all applicable laws,
rules and regulations, including all applicable federal and state
securities laws, and the obtaining of all such approvals by governmental
agencies as may be deemed necessary or appropriate by the Board.
b. The Company shall have the right to deduct from any distribution
of cash to Optionee, an amount equal to the federal, state and local
income taxes and other amounts as may be required by law to be withheld
(the "Withholding Taxes") with respect to any Option. If Optionee is
entitled to receive Shares upon exercise of an Option, the Optionee
shall pay the Withholding Taxes to the Company prior to the issuance, or
release from escrow, of such Shares. In satisfaction of the Withholding
Taxes to the Company, the Optionee may make a written election (the "Tax
Election"), which may be accepted or rejected in the discretion of the
Board, to have withheld a portion of the Shares issuable to him or her
upon exercise of the Option having an aggregate Fair Market Value, on
the date preceding the date of exercise, equal to the Withholding Taxes,
provided that in respect of an Optionee who may be subject to liability
under Section 16(b) of the Exchange Act either (i)(A) the Optionee makes
the Tax Election at least six (6) months after the date the Option was
granted, (B) the Option is exercised during the ten day period beginning
on the third business day and ending on the twelfth business day
following the release for publication of the Company's quarterly or
annual statements of earnings (a "Window Period") and (C the Tax
Election is made during the Window Period in which the Option is
exercised prior to such Window Period and subsequent to the immediately
preceding Window Period or (ii)(A) the Tax Election
Non-Qualified Option Agreement Page 3
<PAGE> 4
is made at least six (6) months prior to the date the Option is
exercised prior to the expiration of six (6) months following an
election to revoke the Tax Election. Notwithstanding the foregoing, the
Board may, by the adoption or rules or otherwise, (i) modify the
provisions in the preceding sentence or impose such other restrictions
or limitations on Tax Elections as may be necessary to ensure that the
Tax Elections will be exempt transactions under Section 16(b) of the
Exchange Act, an (ii) permit Tax Elections to be made at such other
times and subject to such other conditions as the Board determines will
constitute exempt transactions under Section 16b of the Exchange Act.
c. If Optionee makes a disposition, within the meaning of Section
424(c)of the Code and regulations promulgated thereunder, of any Share
or Shares issued to such Optionee pursuant to the exercise of an Option
within the two-year period commencing on the day after the date of the
grant or within the one-year period commencing on the day after the date
of transfer of such Share or Shares to the Optionee pursuant to such
exercise, the Optionee shall, within ten (10) days of such disposition,
notify the Company thereof, by delivery of written notice to the Company
at its principal executive office, and immediately deliver to the
Company the amount of Withholding Taxes.
d. No Option granted hereunder shall be transferable by the Optionee
to whom granted otherwise than by will or the laws of descent and
distribution, and an Option may be exercised during the lifetime of such
Optionee only by the Optionee or his or her guardian or legal
representative. The terms of such an Option shall be final, binding and
conclusive upon the beneficiaries, executors, administrators, heirs and
successors of the Optionee.
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed
and the Optionee has hereunto set his hand, as of the day and year first above
written.
INTERNET AMERICA, INC.
/s/ ROBERT J. MAYNARD, JR.
---------------------------------------
Robert J. Maynard, Jr.
Chief Executive Officer
OPTIONEE
/s/ ROBERT GREEN
---------------------------------------
Robert Green
Non-Qualified Option Agreement Page 4
<PAGE> 1
EXHIBIT 99.3
NON-QUALIFIED STOCK OPTION AGREEMENT
Agreement made effective as of the 5th day of December, 1995 by and
between INTERNET AMERICA, INC. (the "Company") and WILLIAM S. HARRIS (the
"Optionee").
1. Definitions. For purposes of this Agreement:
a. "Board" means the Board of Directors of the Company.
b. "Change in Capitalization" means any increase or reduction in
the number of Shares, or any change (including, but not limited to, a
change in value) in the Shares or exchange of Shares for a different
number or kind of Shares or other securities of the Company, by reason of
a reclassification, recapitalization, merger, consolidation,
reorganization, stock dividend, stock split or reverse stock split,
combination or exchange of shares or other similar events.
c. "Code" means the Internal Revenue Code of 1986, as amended.
d. "Company" means Internet America, Inc., a Texas corporation.
e. "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
f. "Fair Market Value" on any date means the closing price of
Shares on such date on the principal national securities exchange on which
Shares are listed or admitted to trading, the arithmetic mean of the per
Share closing bid priced and per Share closing asked price on such date as
quoted on the National Association of Securities Dealers Automated
Quotation System or such then market in which such prices are regularly
quoted, or, if there have been no published bid or asked quotations with
respect to Shares on such date, the Fair Market Value shall be the value
established by the Board in good faith and in accordance with Section 422
of the Code.
g. "Shares" means the common stock, par value $.01 per share, of
the Company.
2. Grant of Option. The Company hereby grants to the Optionee, for valuable
consideration, receipt of which is hereby acknowledged, a Non-Qualified Stock
Option ("Option") to purchase from the Company an aggregate of 5,000 Shares at a
purchase price (the "Option Price") of $3.75 per share.
3. Exercise Period. The Option shall become non-forfeitable according to
the following schedule and shall hereafter be exercisable in whole or in part:
First Installment: With respect to 500 shares, on December 25, 1996
Second Installment: With respect to 1,500 shares, on December 25, 1997
Third Installment: With respect to 1,500 shares, on December 25, 1998
Third Installment: With respect to 1,500 shares, on December 25, 1999
The Option may be exercised only with respect to full Shares and may not be
exercised after the close of business on the day (the "Termination Date")
preceding the tenth anniversary of the date hereof. The Option shall have no
effect after the Termination Date.
<PAGE> 2
4. Exercise of an Option. The exercise of an Option shall be made only by a
written notice delivered in person or by mail to the Secretary of the Company at
the Company's principal executive office, specifying the number of Shares to be
purchased and accompanied by payment therefor. The purchase price for any Shares
purchased pursuant to the exercise of an Option shall be paid in full upon such
exercise by delivery of cash or personal check in amount of purchase price. The
written notice may provide instructions from the Optionee to the Company that
upon receipt of the purchase price in cash from the Optionee's broker or dealer,
designated as such on the written notice, in payment for any Shares purchased
pursuant to the exercise of an Option, the Company shall issue such Shares
directly to the broker or dealer. If requested by the Board, the Optionee shall
deliver this Agreement to the Secretary of the Company who shall endorse thereon
a notation of such exercise and return such Agreement to the Optionee. No
fractional Shares (or cash in lieu thereof) shall be issued upon exercise of an
Option and the number of Shares that may be purchased upon exercise shall be
rounded to the nearest number of whole Shares.
5. Rights of Optionee. The Optionee shall not be deemed for any purpose to be
the owner of any Shares subject to any Option unless and until (i) the Option
shall have been exercised pursuant to the terms thereof, (ii) the Company shall
have issued and delivered the Shares to the Optionee and (iii) the Optionee's
name shall have been entered as a stockholder of record on the books of the
Company. Thereupon, the Optionee shall have full voting, dividend and other
ownership rights with respect to such Shares.
6. Adjustment Upon Changes in Capitalization.
a. Subject to Section 7, in the event of a Change in
Capitalization, the number and class of Shares or other stock or
securities which are subject to the Option, and the purchase price
therefor, if applicable, shall be appropriately and equitably adjusted.
b. If, by reason of a Change in Capitalization, the Optionee
shall be entitled to exercise an Option with respect to new, additional or
different shares of stock or securities, such new, additional or different
shares shall thereupon be subject to all of the conditions which were
applicable to the Shares subject to the Option, as the case may be, prior
to such Change in Capitalization.
7. Effect of Certain Transactions.
In the event of (i) the liquidation or dissolution of the Company or
(ii) a merger or consolidation of the Company (a "Transaction"), the Option
issued hereunder shall continue in effect in accordance with its terms and the
Optionee shall be entitled to receive in respect of each Share subject to any
outstanding Option, upon exercise of any Option, the same number and kind of
stock, securities, cash, property, or other consideration that each holder of a
Share was entitled to receive in the Transaction in respect of a Share. In the
event that, after a Transaction, there occurs any Change in Capitalization with
respect to the shares of a surviving or resulting corporation, then adjustments
similar to, and subject to the same conditions as, those in Section 6 hereof
shall be made by the Board.
8. Effect of Certain Transactions.
a. Notwithstanding anything to the contrary or in the Agreement,
the Optionee shall forfeit 100% of the Options granted pursuant to this
Agreement, whether or not vested, if the Optionee breaches the provisions
of subsections (b) or (d) of this Section 9.
b. During the period that the Optionee is employed by the Company
or any affiliate of the Company (the "Service Term") and for a period of
one year thereafter, the Optionee shall not, in the continental United
States, directly or indirectly, own, manage, operate, join, control, be
employed by, or participate in the ownership, management, operation or
control of or be connected in any manner,
Non-Qualified Option Agreement Page 2
<PAGE> 3
including but not limited to holding the positions of shareholder,
director, officer, consultant, independent contractor, employee, partner,
or investor, with any Competing Enterprise. For purposes of this Section,
the term "Competing Enterprise" shall mean any person, corporation,
partnership or other entity engaged in the operation of an internet
service provider. The prohibition of this Section 9 shall not be deemed to
prevent Optionee from owning 2% or less of any class of equity securities
registered under Section 12 of the Exchange Act. During the Service Term
and for a period of one year thereafter, the Optionee shall not interfere
with the Company's relationship with, or endeavor to entice away from the
Company, any person who at any time during the Service Term was an
employee or customer of the Company or otherwise had a material business
relationship with the Company.
c. The necessity for protection of the Company and its affiliates
against the Optionee's competition, as well as the nature and scope of
such protection, has been carefully considered by the parties hereto in
light of the uniqueness of the Optionee's talent and his importance to the
Company. Accordingly, the Optionee agrees that, in addition to any other
relief to which the Company may be entitled, the Company shall be entitled
to seek and obtain injunctive relief (without the requirement of any bond)
from a court of competent jurisdiction for the purpose of restraining the
Optionee from any actual or threatened breach of the covenant contained in
this Section 9. If for any reason a final decision of any court determines
that the restrictions under this Section 9 are not reasonable or that
consideration therefor is inadequate, such restrictions shall be
interpreted, modified or rewritten by such court to include as much of the
duration, scope and geographic area identified in this Section 9 as will
render such restrictions valid and enforceable.
d. The Optionee shall not intentionally disclose or reveal to an
unauthorized person, during the Service Term or for a two year period
thereafter, any information relating to the confidential affairs of the
company or any of its affiliates, including but not limited to technical
information, business and marketing plans, strategies, customer
information, other information concerning the Company's products,
promotions, development, financing, expansion plans, business policies and
practices, and other forms of information considered by the Company to be
confidential and in the nature of trade secrets. The Optionee shall hold
as property of the Company and its affiliates all memoranda, books,
papers, letters and other data, and all copies thereof or therefrom, which
are in any way substantially related to the business of the company or its
affiliates, whether made by him or otherwise coming into his possession
and, on a prior written demand of the Company made within two years after
the end of the Service Term, shall deliver the same to the company.
9. General Rules
a. The obligation of the Company to sell or deliver Shares with
respect to the Options granted shall be subject to all applicable laws,
rules and regulations, including all applicable federal and state
securities laws, and the obtaining of all such approvals by governmental
agencies as may be deemed necessary or appropriate by the Board.
b. The Company shall have the right to deduct from any
distribution of cash to Optionee, an amount equal to the federal, state
and local income taxes and other amounts as may be required by law to be
withheld (the "Withholding Taxes") with respect to any Option. If Optionee
is entitled to receive Shares upon exercise of an Option, the Optionee
shall pay the Withholding Taxes to the Company prior to the issuance, or
release from escrow, of such Shares. In satisfaction of the Withholding
Taxes to the Company, the Optionee may make a written election (the "Tax
Election"), which may be accepted or rejected in the discretion of the
Board, to have withheld a portion of the Shares issuable to him or her
upon exercise of the Option having an aggregate Fair Market Value, on the
date preceding the date of exercise, equal to the Withholding Taxes,
provided that in respect of an Optionee who may be subject to liability
under Section 16(b) of the Exchange Act either (i)(A) the Optionee makes
the Tax Election at least six (6) months after the date the Option was
granted, (B) the Option is exercised during the ten day period beginning
on the third business day and ending on the twelfth business day following
the release
Non-Qualified Option Agreement Page 3
<PAGE> 4
for publication of the Company's quarterly or annual statements of
earnings (a "Window Period") and (C the Tax Election is made during the
Window Period in which the Option is exercised prior to such Window Period
and subsequent to the immediately preceding Window Period or (ii)(A) the
Tax Election is made at least six (6) months prior to the date the Option
is exercised prior to the expiration of six (6) months following an
election to revoke the Tax Election. Notwithstanding the foregoing, the
Board may, by the adoption or rules or otherwise, (i) modify the
provisions in the preceding sentence or impose such other restrictions or
limitations on Tax Elections as may be necessary to ensure that the Tax
Elections will be exempt transactions under Section 16(b) of the Exchange
Act, an (ii) permit Tax Elections to be made at such other times and
subject to such other conditions as the Board determines will constitute
exempt transactions under Section 16b of the Exchange Act.
c. If Optionee makes a disposition, within the meaning of Section
424(c)of the Code and regulations promulgated thereunder, of any Share or
Shares issued to such Optionee pursuant to the exercise of an Option
within the two-year period commencing on the day after the date of the
grant or within the one-year period commencing on the day after the date
of transfer of such Share or Shares to the Optionee pursuant to such
exercise, the Optionee shall, within ten (10) days of such disposition,
notify the Company thereof, by delivery of written notice to the Company
at its principal executive office, and immediately deliver to the Company
the amount of Withholding Taxes.
d. No Option granted hereunder shall be transferable by the
Optionee to whom granted otherwise than by will or the laws of descent and
distribution, and an Option may be exercised during the lifetime of such
Optionee only by the Optionee or his or her guardian or legal
representative. The terms of such an Option shall be final, binding and
conclusive upon the beneficiaries, executors, administrators, heirs and
successors of the Optionee.
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed
and the Optionee has hereunto set his hand, as of the day and year first above
written.
INTERNET AMERICA, INC.
/s/ ROBERT J. MAYNARD, JR.
-----------------------------------------
Robert J. Maynard, Jr.
Chief Executive Officer
OPTIONEE
/s/ WILLIAM W. HARRIS
-----------------------------------------
William S. Harris
Non-Qualified Option Agreement Page 4
<PAGE> 1
EXHIBIT 99.4
NON-QUALIFIED STOCK OPTION AGREEMENT
Agreement made effective as of the 23rd day of January, 1997 by and between
INTERNET AMERICA, INC. (the "Company") and STEVE TEFERTILLER (the "Optionee").
1. Definitions. For purposes of this Agreement:
a. "Board" means the Board of Directors of the Company.
b. "Change in Capitalization" means any increase or reduction
in the number of Shares, or any change (including, but not limited to,
a change in value) in the Shares or exchange of Shares for a different
number or kind of Shares or other securities of the Company, by reason
of a reclassification, recapitalization, merger, consolidation,
reorganization, stock dividend, stock split or reverse stock split,
combination or exchange of shares or other similar events.
c. "Change in Control" shall be deemed to have occurred when
the first of the following events occurs:
(i) when the Company acquires actual knowledge that
any person or group (as such terms are used in
Sections 13(d) and 14(d) (2) of the Exchange Act),
other than an employee benefit plan established or
maintained by the Company or any of its
subsidiaries or the current largest stockholder,
is or becomes the beneficial owner (as defined
under rule 13d-3 of the Exchange Act) directly or
indirectly, or securities of the Company
representing 30 percent or more of the combined
voting power of the Company's directors;
(ii) upon the approval by the Company's stockholders of
(A) a merger or consolidation of the Company with
or into another Corporation (other than a merger
or consolidation in which the Company is the
surviving corporation and which does not result in
any capital reorganization or reclassification or
other change in the Company's the outstanding
shares of common stock), (B) a sale of disposition
of all or substantially all of the Company's
assets of (C) a plan of liquidation of dissolution
of the Company; or
(iii) if, at any time, two-thirds of the members of the
Board are not "Continuing Directors". For this
purpose " Continuing Directors" shall mean the
members of the Board of Directors as of September
30, 1995, and any individual who becomes a member
of the Board thereafter if his or her election or
nomination for election as a director was approved
by a vote of at least two-third of the Continuing
Directors then in office.
d. "Code" means the Internal Revenue Code of 1986, as amended.
<PAGE> 2
e. "Company" means Internet America, Inc., a Texas corporation.
f. "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
g. "Fair Market Value" on any date means the closing price of
Shares on such date on the principal national securities exchange on
which Shares are listed or admitted to trading, the arithmetic mean of
the per Share closing bid priced and per Share closing asked price on
such date as quoted on the National Association of Securities Dealers
Automated Quotation System or such then market in which such prices
are regularly quoted, or, if there have been no published bid or asked
quotations with respect to Shares on such date, the Fair Market Value
shall be the value established by the Board in good faith and in
accordance with Section 422 of the Code.
h. "Shares" means the common stock, par value $.01 per share,
of the Company.
2. Grant of Option. The Company hereby grants to the Optionee, for
valuable consideration, receipt of which is hereby acknowledged, a Non-Qualified
Stock Option ("Option") to purchase from the Company an aggregate of 5,000
Shares at a purchase price (the "Option Price") of $3.75 per share.
3. Exercise Period. The Option shall become non-forfeitable according to
the following schedule and shall hereafter be exercisable in whole or in part:
(i) First Installment: 500 on June 10, 1997;
(ii) Second Installment: 1,500 on June 10, 1998;
(iii) Third Installment: 1,500 on June 10, 1999; and
(iv) Fourth Installment: 1,500 on June 10, 2000.
The Option may be exercised only with respect to full Shares and may
not be exercised after the close of business on the day (the "Termination Date")
preceding the tenth anniversary of the date hereof. The Option shall have no
effect after the Termination Date.
4. Exercise of an Option. The exercise of an Option shall be made only by
a written notice delivered in person or by mail to the Secretary of the Company
at the Company's principal executive office, specifying the number of Shares to
be purchased and accompanied by payment therefor. The purchase price for any
Shares purchased pursuant to the exercise of an Option shall be paid in full
upon such exercise by delivery of cash or personal check in amount of purchase
price. The written notice may provide instructions from the Optionee to the
Company that upon receipt of the purchase price in cash from the Optionee's
broker or dealer, designated as such on the written notice, in payment for any
Shares purchased pursuant to the exercise of an Option, the Company shall issue
such Shares directly to the broker or dealer. If requested by the Board, the
Non-Qualified Option Agreement Page 2
<PAGE> 3
Optionee shall deliver this Agreement to the Secretary of the Company who shall
endorse thereon a notation of such exercise and return such Agreement to the
Optionee. No fractional Shares (or cash in lieu thereof) shall be issued upon
exercise of an Option and the number of Shares that may be purchased upon
exercise shall be rounded to the nearest number of whole Shares.
5. Rights of Optionee. The Optionee shall not be deemed for any purpose
to be the owner of any Shares subject to any Option unless and until (i) the
Option shall have been exercised pursuant to the terms thereof, (ii) the Company
shall have issued and delivered the Shares to the Optionee and (iii) the
Optionee's name shall have been entered as a stockholder of record on the books
of the Company. Thereupon, the Optionee shall have full voting, dividend and
other ownership rights with respect to such Shares.
6. Adjustment Upon Changes in Capitalization.
a. Subject to Section 7, in the event of a Change in
Capitalization, the number and class of Shares or other stock or
securities which are subject to the Option, and the purchase price
therefor, if applicable, shall be appropriately and equitably
adjusted.
b. If, by reason of a Change in Capitalization, the Optionee
shall be entitled to exercise an Option with respect to new,
additional or different shares of stock or securities, such new,
additional or different shares shall thereupon be subject to all of
the conditions which were applicable to the Shares subject to the
Option, as the case may be, prior to such Change in Capitalization.
7. Effect of Certain Transactions. In the event of (i) the liquidation or
dissolution of the Company or (ii) a merger or consolidation of the Company (a
"Transaction"), the Option issued hereunder shall continue in effect in
accordance with its terms and the Optionee shall be entitled to receive in
respect of each Share subject to any outstanding Option, upon exercise of any
Option, the same number and kind of stock, securities, cash, property, or other
consideration that each holder of a Share was entitled to receive in the
Transaction in respect of a Share. In the event that, after a Transaction, there
occurs any Change in Capitalization with respect to the shares of a surviving or
resulting corporation, then adjustments similar to, and subject to the same
conditions as, those in Section 6 hereof shall be made by the Board.
8. Effect of Change in Control.
a. Notwithstanding anything contained in the Plan or an
Agreement to the contrary, in the event of a Change in Control, all
Options outstanding on the date of such Change in Control shall become
immediately and fully exercisable.
9. Effect of Certain Transactions.
a. Notwithstanding anything to the contrary or in the
Agreement, the Optionee shall forfeit 100% of the Options granted
pursuant to this Agreement, whether or not vested, if the Optionee
breaches the provisions of subsections (b) or (d) of this Section 9.
Non-Qualified Option Agreement Page 3
<PAGE> 4
b. During the period that the Optionee is employed by the
Company or any affiliate of the Company (the "Service Term") and for a
period of one year thereafter, the Optionee shall not, in the
continental United States, directly or indirectly, own, manage,
operate, join, control, be employed by, or participate in the
ownership, management, operation or control of or be connected in any
manner, including but not limited to holding the positions of
shareholder, director, officer, consultant, independent contractor,
employee, partner, or investor, with any Competing Enterprise. For
purposes of this Section, the term "Competing Enterprise" shall mean
any person, corporation, partnership or other entity engaged in the
operation of an internet service provider. The prohibition of this
Section 9 shall not be deemed to prevent Optionee from owning 2% or
less of any class of equity securities registered under Section 12 of
the Exchange Act. During the Service Term and for a period of one year
thereafter, the Optionee shall not interfere with the Company's
relationship with, or endeavor to entice away from the Company, any
person who at any time during the Service Term was an employee or
customer of the Company or otherwise had a material business
relationship with the Company.
c. The necessity for protection of the Company and its
affiliates against the Optionee's competition, as well as the nature
and scope of such protection, has been carefully considered by the
parties hereto in light of the uniqueness of the Optionee's talent and
his importance to the Company. Accordingly, the Optionee agrees that,
in addition to any other relief to which the Company may be entitled,
the Company shall be entitled to seek and obtain injunctive relief
(without the requirement of any bond) from a court of competent
jurisdiction for the purpose of restraining the Optionee from any
actual or threatened breach of the covenant contained in this Section
9. If for any reason a final decision of any court determines that the
restrictions under this Section 9 are not reasonable or that
consideration therefor is inadequate, such restrictions shall be
interpreted, modified or rewritten by such court to include as much of
the duration, scope and geographic area identified in this Section 9
as will render such restrictions valid and enforceable.
d. The Optionee shall not intentionally disclose or reveal to
an unauthorized person, during the Service Term or for a two year
period thereafter, any information relating to the confidential
affairs of the company or any of its affiliates, including but not
limited to technical information, business and marketing plans,
strategies, customer information, other information concerning the
Company's products, promotions, development, financing, expansion
plans, business policies and practices, and other forms of information
considered by the Company to be confidential and in the nature of
trade secrets. The Optionee shall hold as property of the Company and
its affiliates all memoranda, books, papers, letters and other data,
and all copies thereof or therefrom, which are in any way
substantially related to the business of the company or its
affiliates, whether made by him or otherwise coming into his
possession and, on a prior written demand of the Company made within
two years after the end of the Service Term, shall deliver the same to
the company.
Non-Qualified Option Agreement Page 4
<PAGE> 5
10. General Rules
a. The obligation of the Company to sell or deliver Shares with
respect to the Options granted shall be subject to all applicable
laws, rules and regulations, including all applicable federal and
state securities laws, and the obtaining of all such approvals by
governmental agencies as may be deemed necessary or appropriate by the
Board.
b. The Company shall have the right to deduct from any
distribution of cash to Optionee, an amount equal to the federal,
state and local income taxes and other amounts as may be required by
law to be withheld (the "Withholding Taxes") with respect to any
Option. If Optionee is entitled to receive Shares upon exercise of an
Option, the Optionee shall pay the Withholding Taxes to the Company
prior to the issuance, or release from escrow, of such Shares. In
satisfaction of the Withholding Taxes to the Company, the Optionee may
make a written election (the "Tax Election"), which may be accepted or
rejected in the discretion of the Board, to have withheld a portion of
the Shares issuable to him or her upon exercise of the Option having
an aggregate Fair Market Value, on the date preceding the date of
exercise, equal to the Withholding Taxes, provided that in respect of
an Optionee who may be subject to liability under Section 16(b) of the
Exchange Act either (i)(A) the Optionee makes the Tax Election at
least six (6) months after the date the Option was granted, (B) the
Option is exercised during the ten day period beginning on the third
business day and ending on the twelfth business day following the
release for publication of the Company's quarterly or annual
statements of earnings (a "Window Period") and (C the Tax Election is
made during the Window Period in which the Option is exercised prior
to such Window Period and subsequent to the immediately preceding
Window Period or (ii)(A) the Tax Election is made at least six (6)
months prior to the date the Option is exercised prior to the
expiration of six (6) months following an election to revoke the Tax
Election. Notwithstanding the foregoing, the Board may, by the
adoption or rules or otherwise, (i) modify the provisions in the
preceding sentence or impose such other restrictions or limitations on
Tax Elections as may be necessary to ensure that the Tax Elections
will be exempt transactions under Section 16(b) of the Exchange Act,
an (ii) permit Tax Elections to be made at such other times and
subject to such other conditions as the Board determines will
constitute exempt transactions under Section 16b of the Exchange Act.
c. If Optionee makes a disposition, within the meaning of
Section 424(c)of the Code and regulations promulgated thereunder, of
any Share or Shares issued to such Optionee pursuant to the exercise
of an Option within the two-year period commencing on the day after
the date of the grant or within the one-year period commencing on the
day after the date of transfer of such Share or Shares to the Optionee
pursuant to such exercise, the Optionee shall, within ten (10) days of
such disposition, notify the Company thereof, by delivery of written
notice to the Company at its principal executive office, and
immediately deliver to the Company the amount of Withholding Taxes.
Non-Qualified Option Agreement Page 5
<PAGE> 6
d. No Option granted hereunder shall be transferable by the
Optionee to whom granted otherwise than by will or the laws of descent
and distribution, and an Option may be exercised during the lifetime
of such Optionee only by the Optionee or his or her guardian or legal
representative. The terms of such an Option shall be final, binding
and conclusive upon the beneficiaries, executors, administrators,
heirs and successors of the Optionee.
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed
and the Optionee has hereunto set his hand, as of the day and year first above
written.
INTERNET AMERICA, INC.
/s/ ROBERT J. MAYNARD, JR.
--------------------------
Robert J. Maynard, Jr.
Chief Executive Officer
OPTIONEE
/s/ STEVEN R. TEFERTILLER
--------------------------
Steven R. Tefertiller
Non-Qualified Option Agreement Page 6
<PAGE> 1
EXHIBIT 99.5
NON-QUALIFIED STOCK OPTION AGREEMENT
Agreement made effective as of the 1st day of December, 1995 by and between
INTERNET AMERICA, INC. (the "Company") and DOUG DAVIS (the "Optionee").
1. Definitions. For purposes of this Agreement:
a. "Board" means the Board of Directors of the Company.
b. "Change in Capitalization" means any increase or reduction in
the number of Shares, or any change (including, but not limited to, a
change in value) in the Shares or exchange of Shares for a different
number or kind of Shares or other securities of the Company, by reason of
a reclassification, recapitalization, merger, consolidation,
reorganization, stock dividend, stock split or reverse stock split,
combination or exchange of shares or other similar events.
c. "Change in Control" shall be deemed to have occurred when the
first of the following events occurs:
(i) when the Company acquires actual knowledge that any
person or group (as such terms are used in Sections
13(d) and 14(d) (2) of the Exchange Act), other than an
employee benefit plan established or maintained by the
Company or any of its subsidiaries or the current
largest stockholder, is or becomes the beneficial owner
(as defined under rule 13d-3 of the Exchange Act)
directly or indirectly, or securities of the Company
representing 30 percent or more of the combined voting
power of the Company's directors;
(ii) upon the approval by the Company's stockholders of (A) a
merger or consolidation of the Company with or into
another Corporation (other than a merger or
consolidation in which the Company is the surviving
corporation and which does not result in any capital
reorganization or reclassification or other change in
the Company's the outstanding shares of common stock),
(B) a sale of disposition of all or substantially all of
the Company's assets of (C) a plan of liquidation of
dissolution of the Company; or
(iii) if, at any time, two-thirds of the members of the Board
are not "Continuing Directors". For this purpose "
Continuing Directors" shall mean the members of the
Board of Directors as of September 30, 1995, and any
individual who becomes a member of the Board thereafter
if his or her election or nomination for election as a
director was approved by a vote of at least two-third of
the Continuing Directors then in office.
d. "Code" means the Internal Revenue Code of 1986, as amended.
<PAGE> 2
e. "Company" means Internet America, Inc., a Texas corporation.
f. "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
g. "Fair Market Value" on any date means the closing price of
Shares on such date on the principal national securities exchange on which
Shares are listed or admitted to trading, the arithmetic mean of the per
Share closing bid priced and per Share closing asked price on such date as
quoted on the National Association of Securities Dealers Automated
Quotation System or such then market in which such prices are regularly
quoted, or, if there have been no published bid or asked quotations with
respect to Shares on such date, the Fair Market Value shall be the value
established by the Board in good faith and in accordance with Section 422
of the Code.
h. "Shares" means the common stock, par value $.01 per share, of
the Company.
2. Grant of Option. The Company hereby grants to the Optionee, for valuable
consideration, receipt of which is hereby acknowledged, a Non-Qualified Stock
Option ("Option") to purchase from the Company an aggregate of 5,000 Shares at a
purchase price (the "Option Price") of $3.75 per share.
3. Exercise Period. The Option shall become non-forfeitable according to the
following schedule and shall hereafter be exercisable in whole or in part:
First Installment: With respect to 2,500 shares, on December 1, 1995
Second Installment: With respect to 2,500 shares, on April 1, 1996
The Option may be exercised only with respect to full Shares and may not be
exercised after the close of business on the day (the "Termination Date")
preceding the tenth anniversary of the date hereof. The Option shall have no
effect after the Termination Date.
4. Exercise of an Option. The exercise of an Option shall be made only by a
written notice delivered in person or by mail to the Secretary of the Company at
the Company's principal executive office, specifying the number of Shares to be
purchased and accompanied by payment therefor. The purchase price for any Shares
purchased pursuant to the exercise of an Option shall be paid in full upon such
exercise by delivery of cash or personal check in amount of purchase price. The
written notice may provide instructions from the Optionee to the Company that
upon receipt of the purchase price in cash from the Optionee's broker or dealer,
designated as such on the written notice, in payment for any Shares purchased
pursuant to the exercise of an Option, the Company shall issue such Shares
directly to the broker or dealer. If requested by the Board, the Optionee shall
deliver this Agreement to the Secretary of the Company who shall endorse thereon
a notation of such exercise and return such Agreement to the Optionee. No
fractional Shares (or cash in lieu thereof) shall be issued upon exercise of an
Option and the number of
Non-Qualified Option Agreement Page 2
<PAGE> 3
Shares that may be purchased upon exercise shall be rounded to the nearest
number of whole Shares.
5. Rights of Optionee. The Optionee shall not be deemed for any purpose to
be the owner of any Shares subject to any Option unless and until (i) the Option
shall have been exercised pursuant to the terms thereof, (ii) the Company shall
have issued and delivered the Shares to the Optionee and (iii) the Optionee's
name shall have been entered as a stockholder of record on the books of the
Company. Thereupon, the Optionee shall have full voting, dividend and other
ownership rights with respect to such Shares.
6. Adjustment Upon Changes in Capitalization.
a. Subject to Section 7, in the event of a Change in
Capitalization, the number and class of Shares or other stock or
securities which are subject to the Option, and the purchase price
therefor, if applicable, shall be appropriately and equitably adjusted.
b. If, by reason of a Change in Capitalization, the Optionee
shall be entitled to exercise an Option with respect to new, additional or
different shares of stock or securities, such new, additional or different
shares shall thereupon be subject to all of the conditions which were
applicable to the Shares subject to the Option, as the case may be, prior
to such Change in Capitalization.
7. Effect of Certain Transactions.
In the event of (i) the liquidation or dissolution of the Company
or (ii) a merger or consolidation of the Company (a "Transaction"), the Option
issued hereunder shall continue in effect in accordance with its terms and the
Optionee shall be entitled to receive in respect of each Share subject to any
outstanding Option, upon exercise of any Option, the same number and kind of
stock, securities, cash, property, or other consideration that each holder of a
Share was entitled to receive in the Transaction in respect of a Share. In the
event that, after a Transaction, there occurs any Change in Capitalization with
respect to the shares of a surviving or resulting corporation, then adjustments
similar to, and subject to the same conditions as, those in Section 6 hereof
shall be made by the Board.
8. Effect of Certain Transactions.
a. Notwithstanding anything to the contrary or in the Agreement,
the Optionee shall forfeit 100% of the Options granted pursuant to this
Agreement, whether or not vested, if the Optionee breaches the provisions
of subsections (b) or (d) of this Section 9.
b. During the period that the Optionee is employed by the Company
or any affiliate of the Company (the "Service Term") and for a period of
one year thereafter, the Optionee shall not, in the continental United
States, directly or indirectly, own,
Non-Qualified Option Agreement Page 3
<PAGE> 4
manage, operate, join, control, be employed by, or participate in the
ownership, management, operation or control of or be connected in any
manner, including but not limited to holding the positions of shareholder,
director, officer, consultant, independent contractor, employee, partner,
or investor, with any Competing Enterprise. For purposes of this Section,
the term "Competing Enterprise" shall mean any person, corporation,
partnership or other entity engaged in the operation of an internet
service provider. The prohibition of this Section 9 shall not be deemed to
prevent Optionee from owning 2% or less of any class of equity securities
registered under Section 12 of the Exchange Act. During the Service Term
and for a period of one year thereafter, the Optionee shall not interfere
with the Company's relationship with, or endeavor to entice away from the
Company, any person who at any time during the Service Term was an
employee or customer of the Company or otherwise had a material business
relationship with the Company.
c. The necessity for protection of the Company and its affiliates
against the Optionee's competition, as well as the nature and scope of
such protection, has been carefully considered by the parties hereto in
light of the uniqueness of the Optionee's talent and his importance to the
Company. Accordingly, the Optionee agrees that, in addition to any other
relief to which the Company may be entitled, the Company shall be entitled
to seek and obtain injunctive relief (without the requirement of any bond)
from a court of competent jurisdiction for the purpose of restraining the
Optionee from any actual or threatened breach of the covenant contained in
this Section 9. If for any reason a final decision of any court determines
that the restrictions under this Section 9 are not reasonable or that
consideration therefor is inadequate, such restrictions shall be
interpreted, modified or rewritten by such court to include as much of the
duration, scope and geographic area identified in this Section 9 as will
render such restrictions valid and enforceable.
d. The Optionee shall not intentionally disclose or reveal to an
unauthorized person, during the Service Term or for a two year period
thereafter, any information relating to the confidential affairs of the
company or any of its affiliates, including but not limited to technical
information, business and marketing plans, strategies, customer
information, other information concerning the Company's products,
promotions, development, financing, expansion plans, business policies and
practices, and other forms of information considered by the Company to be
confidential and in the nature of trade secrets. The Optionee shall hold
as property of the Company and its affiliates all memoranda, books,
papers, letters and other data, and all copies thereof or therefrom, which
are in any way substantially related to the business of the company or its
affiliates, whether made by him or otherwise coming into his possession
and, on a prior written demand of the Company made within two years after
the end of the Service Term, shall deliver the same to the company.
Non-Qualified Option Agreement Page 4
<PAGE> 5
9. General Rules
a. The obligation of the Company to sell or deliver Shares with
respect to the Options granted shall be subject to all applicable laws,
rules and regulations, including all applicable federal and state
securities laws, and the obtaining of all such approvals by governmental
agencies as may be deemed necessary or appropriate by the Board.
b. The Company shall have the right to deduct from any
distribution of cash to Optionee, an amount equal to the federal, state
and local income taxes and other amounts as may be required by law to be
withheld (the "Withholding Taxes") with respect to any Option. If Optionee
is entitled to receive Shares upon exercise of an Option, the Optionee
shall pay the Withholding Taxes to the Company prior to the issuance, or
release from escrow, of such Shares. In satisfaction of the Withholding
Taxes to the Company, the Optionee may make a written election (the "Tax
Election"), which may be accepted or rejected in the discretion of the
Board, to have withheld a portion of the Shares issuable to him or her
upon exercise of the Option having an aggregate Fair Market Value, on the
date preceding the date of exercise, equal to the Withholding Taxes,
provided that in respect of an Optionee who may be subject to liability
under Section 16(b) of the Exchange Act either (i)(A) the Optionee makes
the Tax Election at least six (6) months after the date the Option was
granted, (B) the Option is exercised during the ten day period beginning
on the third business day and ending on the twelfth business day following
the release for publication of the Company's quarterly or annual
statements of earnings (a "Window Period") and (C the Tax Election is made
during the Window Period in which the Option is exercised prior to such
Window Period and subsequent to the immediately preceding Window Period or
(ii)(A) the Tax Election is made at least six (6) months prior to the date
the Option is exercised prior to the expiration of six (6) months
following an election to revoke the Tax Election. Notwithstanding the
foregoing, the Board may, by the adoption or rules or otherwise, (i)
modify the provisions in the preceding sentence or impose such other
restrictions or limitations on Tax Elections as may be necessary to ensure
that the Tax Elections will be exempt transactions under Section 16(b) of
the Exchange Act, an (ii) permit Tax Elections to be made at such other
times and subject to such other conditions as the Board determines will
constitute exempt transactions under Section 16b of the Exchange Act.
c. If Optionee makes a disposition, within the meaning of Section
424(c)of the Code and regulations promulgated thereunder, of any Share or
Shares issued to such Optionee pursuant to the exercise of an Option
within the two-year period commencing on the day after the date of the
grant or within the one-year period commencing on the day after the date
of transfer of such Share or Shares to the Optionee pursuant to such
exercise, the Optionee shall, within ten (10) days of such disposition,
notify the Company thereof, by delivery of written notice to the Company
at its principal executive office, and immediately deliver to the Company
the amount of Withholding Taxes.
d. No Option granted hereunder shall be transferable by the
Optionee to whom granted otherwise than by will or the laws of descent and
distribution, and an Option may be exercised during the lifetime of such
Optionee only by the Optionee or his or her
Non-Qualified Option Agreement Page 5
<PAGE> 6
guardian or legal representative. The terms of such an Option shall be
final, binding and conclusive upon the beneficiaries, executors,
administrators, heirs and successors of the Optionee.
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed
and the Optionee has hereunto set his hand, as of the day and year first above
written.
INTERNET AMERICA, INC.
/s/ ROBERT J. MAYNARD, JR.
-----------------------------------------
Robert J. Maynard, Jr.
Chief Executive Officer
OPTIONEE
/s/ DOUG DAVIS
-----------------------------------------
Doug Davis
Non-Qualified Option Agreement Page 6
<PAGE> 1
EXHIBIT 99.6
NON-QUALIFIED STOCK OPTION AGREEMENT
Agreement made effective as of the 15th day of December, 1995 by and between
INTERNET AMERICA, INC. (the "Company") and DOUG DAVIS (the "Optionee").
1. Definitions. For purposes of this Agreement:
a. "Board" means the Board of Directors of the Company.
b. "Change in Capitalization" means any increase or reduction
in the number of Shares, or any change (including, but not limited
to, a change in value) in the Shares or exchange of Shares for a
different number or kind of Shares or other securities of the
Company, by reason of a reclassification, recapitalization, merger,
consolidation, reorganization, stock dividend, stock split or
reverse stock split, combination or exchange of shares or other
similar events.
c. "Change in Control" shall be deemed to have occurred when
the first of the following events occurs:
(i) when the Company acquires actual knowledge that any
person or group (as such terms are used in Sections
13(d) and 14(d) (2) of the Exchange Act), other than an
employee benefit plan established or maintained by the
Company or any of its subsidiaries or the current
largest stockholder, is or becomes the beneficial owner
(as defined under rule 13d-3 of the Exchange Act)
directly or indirectly, or securities of the Company
representing 30 percent or more of the combined voting
power of the Company's directors;
(ii) upon the approval by the Company's stockholders of (A) a
merger or consolidation of the Company with or into
another Corporation (other than a merger or
consolidation in which the Company is the surviving
corporation and which does not result in any capital
reorganization or reclassification or other change in
the Company's the outstanding shares of common stock),
(B) a sale of disposition of all or substantially all of
the Company's assets of (C) a plan of liquidation of
dissolution of the Company; or
(iii) if, at any time, two-thirds of the members of the Board
are not "Continuing Directors". For this purpose "
Continuing Directors" shall mean the members of the
Board of Directors as of September 30, 1995, and any
individual who becomes a member of the Board thereafter
if his or her election or nomination for election as a
director was approved by a vote of at least two-third of
the Continuing Directors then in office.
d. "Code" means the Internal Revenue Code of 1986, as amended.
<PAGE> 2
e. "Company" means Internet America, Inc., a Texas
corporation.
f. "Exchange Act" means the Securities Exchange Act of 1934,
as amended.
g. "Fair Market Value" on any date means the closing price of
Shares on such date on the principal national securities exchange on
which Shares are listed or admitted to trading, the arithmetic mean
of the per Share closing bid priced and per Share closing asked
price on such date as quoted on the National Association of
Securities Dealers Automated Quotation System or such then market in
which such prices are regularly quoted, or, if there have been no
published bid or asked quotations with respect to Shares on such
date, the Fair Market Value shall be the value established by the
Board in good faith and in accordance with Section 422 of the Code.
h. "Shares" means the common stock, par value $.01 per share,
of the Company.
2. Grant of Option. The Company hereby grants to the Optionee, for
valuable consideration, receipt of which is hereby acknowledged, a Non-Qualified
Stock Option ("Option") to purchase from the Company an aggregate of 45,000
Shares at a purchase price (the "Option Price") of $3.75 per share.
3. Exercise Period. The Option shall become non-forfeitable according
to the following schedule and shall hereafter be exercisable in whole or in
part:
First Installment: With respect to 7,500 shares, on December 13, 1995
Second Installment: With respect to 17,500 shares, on March 1, 1996
Third Installment: With respect to 20,000 shares, on August 31, 1996
The Option may be exercised only with respect to full Shares and may not
be exercised after the close of business on the day (the "Termination Date")
preceding the tenth anniversary of the date hereof. The Option shall have no
effect after the Termination Date.
4. Exercise of an Option. The exercise of an Option shall be made only
by a written notice delivered in person or by mail to the Secretary of the
Company at the Company's principal executive office, specifying the number of
Shares to be purchased and accompanied by payment therefor. The purchase price
for any Shares purchased pursuant to the exercise of an Option shall be paid in
full upon such exercise by delivery of cash or personal check in amount of
purchase price. The written notice may provide instructions from the Optionee to
the Company that upon receipt of the purchase price in cash from the Optionee's
broker or dealer, designated as such on the written notice, in payment for any
Shares purchased pursuant to the exercise of an Option, the Company shall issue
such Shares directly to the broker or dealer. If requested by the Board, the
Optionee shall deliver this Agreement to the Secretary of the Company who shall
endorse thereon a notation of such exercise and return such Agreement to the
Optionee. No fractional
Non-Qualified Option Agreement Page 2
<PAGE> 3
Shares (or cash in lieu thereof) shall be issued upon exercise of an Option and
the number of Shares that may be purchased upon exercise shall be rounded to the
nearest number of whole Shares.
5. Rights of Optionee. The Optionee shall not be deemed for any purpose
to be the owner of any Shares subject to any Option unless and until (i) the
Option shall have been exercised pursuant to the terms thereof, (ii) the Company
shall have issued and delivered the Shares to the Optionee and (iii) the
Optionee's name shall have been entered as a stockholder of record on the books
of the Company. Thereupon, the Optionee shall have full voting, dividend and
other ownership rights with respect to such Shares.
6. Adjustment Upon Changes in Capitalization.
a. Subject to Section 7, in the event of a Change in
Capitalization, the number and class of Shares or other stock or
securities which are subject to the Option, and the purchase price
therefor, if applicable, shall be appropriately and equitably
adjusted.
b. If, by reason of a Change in Capitalization, the Optionee
shall be entitled to exercise an Option with respect to new,
additional or different shares of stock or securities, such new,
additional or different shares shall thereupon be subject to all of
the conditions which were applicable to the Shares subject to the
Option, as the case may be, prior to such Change in Capitalization.
7. Effect of Certain Transactions.
In the event of (i) the liquidation or dissolution of the
Company or (ii) a merger or consolidation of the Company (a "Transaction"), the
Option issued hereunder shall continue in effect in accordance with its terms
and the Optionee shall be entitled to receive in respect of each Share subject
to any outstanding Option, upon exercise of any Option, the same number and kind
of stock, securities, cash, property, or other consideration that each holder of
a Share was entitled to receive in the Transaction in respect of a Share. In the
event that, after a Transaction, there occurs any Change in Capitalization with
respect to the shares of a surviving or resulting corporation, then adjustments
similar to, and subject to the same conditions as, those in Section 6 hereof
shall be made by the Board.
8. Effect of Certain Transactions.
a. Notwithstanding anything to the contrary or in the
Agreement, the Optionee shall forfeit 100% of the Options granted
pursuant to this Agreement, whether or not vested, if the Optionee
breaches the provisions of subsections (b) or (d) of this Section 9.
b. During the period that the Optionee is employed by the
Company or any affiliate of the Company (the "Service Term") and for
a period of one year thereafter,
Non-Qualified Option Agreement Page 3
<PAGE> 4
the Optionee shall not, in the continental United States, directly
or indirectly, own, manage, operate, join, control, be employed by,
or participate in the ownership, management, operation or control of
or be connected in any manner, including but not limited to holding
the positions of shareholder, director, officer, consultant,
independent contractor, employee, partner, or investor, with any
Competing Enterprise. For purposes of this Section, the term
"Competing Enterprise" shall mean any person, corporation,
partnership or other entity engaged in the operation of an internet
service provider. The prohibition of this Section 9 shall not be
deemed to prevent Optionee from owning 2% or less of any class of
equity securities registered under Section 12 of the Exchange Act.
During the Service Term and for a period of one year thereafter, the
Optionee shall not interfere with the Company's relationship with,
or endeavor to entice away from the Company, any person who at any
time during the Service Term was an employee or customer of the
Company or otherwise had a material business relationship with the
Company.
c. The necessity for protection of the Company and its
affiliates against the Optionee's competition, as well as the nature
and scope of such protection, has been carefully considered by the
parties hereto in light of the uniqueness of the Optionee's talent
and his importance to the Company. Accordingly, the Optionee agrees
that, in addition to any other relief to which the Company may be
entitled, the Company shall be entitled to seek and obtain
injunctive relief (without the requirement of any bond) from a court
of competent jurisdiction for the purpose of restraining the
Optionee from any actual or threatened breach of the covenant
contained in this Section 9. If for any reason a final decision of
any court determines that the restrictions under this Section 9 are
not reasonable or that consideration therefor is inadequate, such
restrictions shall be interpreted, modified or rewritten by such
court to include as much of the duration, scope and geographic area
identified in this Section 9 as will render such restrictions valid
and enforceable.
d. The Optionee shall not intentionally disclose or reveal to
an unauthorized person, during the Service Term or for a two year
period thereafter, any information relating to the confidential
affairs of the company or any of its affiliates, including but not
limited to technical information, business and marketing plans,
strategies, customer information, other information concerning the
Company's products, promotions, development, financing, expansion
plans, business policies and practices, and other forms of
information considered by the Company to be confidential and in the
nature of trade secrets. The Optionee shall hold as property of the
Company and its affiliates all memoranda, books, papers, letters and
other data, and all copies thereof or therefrom, which are in any
way substantially related to the business of the company or its
affiliates, whether made by him or otherwise coming into his
possession and, on a prior written demand of the Company made within
two years after the end of the Service Term, shall deliver the same
to the company.
Non-Qualified Option Agreement Page 4
<PAGE> 5
9. General Rules
a. The obligation of the Company to sell or deliver Shares
with respect to the Options granted shall be subject to all
applicable laws, rules and regulations, including all applicable
federal and state securities laws, and the obtaining of all such
approvals by governmental agencies as may be deemed necessary or
appropriate by the Board.
b. The Company shall have the right to deduct from any
distribution of cash to Optionee, an amount equal to the federal,
state and local income taxes and other amounts as may be required by
law to be withheld (the "Withholding Taxes") with respect to any
Option. If Optionee is entitled to receive Shares upon exercise of
an Option, the Optionee shall pay the Withholding Taxes to the
Company prior to the issuance, or release from escrow, of such
Shares. In satisfaction of the Withholding Taxes to the Company, the
Optionee may make a written election (the "Tax Election"), which may
be accepted or rejected in the discretion of the Board, to have
withheld a portion of the Shares issuable to him or her upon
exercise of the Option having an aggregate Fair Market Value, on the
date preceding the date of exercise, equal to the Withholding Taxes,
provided that in respect of an Optionee who may be subject to
liability under Section 16(b) of the Exchange Act either (i)(A) the
Optionee makes the Tax Election at least six (6) months after the
date the Option was granted, (B) the Option is exercised during the
ten day period beginning on the third business day and ending on the
twelfth business day following the release for publication of the
Company's quarterly or annual statements of earnings (a "Window
Period") and (C the Tax Election is made during the Window Period in
which the Option is exercised prior to such Window Period and
subsequent to the immediately preceding Window Period or (ii)(A) the
Tax Election is made at least six (6) months prior to the date the
Option is exercised prior to the expiration of six (6) months
following an election to revoke the Tax Election. Notwithstanding
the foregoing, the Board may, by the adoption or rules or otherwise,
(i) modify the provisions in the preceding sentence or impose such
other restrictions or limitations on Tax Elections as may be
necessary to ensure that the Tax Elections will be exempt
transactions under Section 16(b) of the Exchange Act, an (ii) permit
Tax Elections to be made at such other times and subject to such
other conditions as the Board determines will constitute exempt
transactions under Section 16b of the Exchange Act.
c. If Optionee makes a disposition, within the meaning of
Section 424(c)of the Code and regulations promulgated thereunder, of
any Share or Shares issued to such Optionee pursuant to the exercise
of an Option within the two-year period commencing on the day after
the date of the grant or within the one-year period commencing on
the day after the date of transfer of such Share or Shares to the
Optionee pursuant to such exercise, the Optionee shall, within ten
(10) days of such disposition, notify the Company thereof, by
delivery of written notice to the Company at its principal executive
office, and immediately deliver to the Company the amount of
Withholding Taxes.
d. No Option granted hereunder shall be transferable by the
Optionee to whom granted otherwise than by will or the laws of
descent and distribution, and an Option may be exercised during the
lifetime of such Optionee only by the Optionee or his or her
Non-Qualified Option Agreement Page 5
<PAGE> 6
guardian or legal representative. The terms of such an Option shall
be final, binding and conclusive upon the beneficiaries, executors,
administrators, heirs and successors of the Optionee.
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed
and the Optionee has hereunto set his hand, as of the day and year first above
written.
INTERNET AMERICA, INC.
/s/ ROBERT J. MAYNARD, JR.
--------------------------------------------
Robert J. Maynard, Jr.
Chief Executive Officer
OPTIONEE
/s/ DOUG DAVIS
--------------------------------------------
Doug Davis
Non-Qualified Option Agreement Page 6
<PAGE> 1
EXHIBIT 99.7
NON-QUALIFIED STOCK OPTION AGREEMENT
Agreement made this 5th day of April , 1996 by and between Internet
America, Inc. (the "Company") and WILLIAM O. HUNT (the "Optionee").
1. Definitions. For purposes of this Agreement:
(a) "Board" means the Board of Directors of the Company.
(b) "Business Services Division" is defined as the scope of
the Business Services Division as configured on the execution
date of this agreement.
(c) "Business Services Revenues" is defined as the sum of all
revenues as reported under generally accepted accounting
principles (GAAP") for any fiscal year ended June 30 ("Fiscal
Year").
(d) "Change in Capitalization" means any increase or reduction
in the number of Shares, or any change (including, but not limited to, a change
in value) in the Shares or exchange of Shares for a different number or kind of
Shares or other securities of the Company, by reason of a reclassification,
recapitalization, merger, consolidation, reorganization, stock dividend, stock
split or reverse stock split, combination or exchange of shares or other similar
events.
(d) "Code" means the Internal Revenue Code of 1986, as amended.
(e) "Company" means Internet America, Inc., a Texas corporation.
(f) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(g) "Fair Market Value" on any date means the closing price of
Shares on such date on the principal national securities exchange on which
Shares are listed or admitted to trading, the arithmetic mean of the per Share
closing bid priced and per Share closing asked price on such date as quoted on
the National Association of Securities Dealers Automated Quotation System or
such then market in which such prices are regularly quoted, or, if there have
been no published bid or asked quotations with respect to Shares on such date,
the Fair Market Value shall be the value established by the Board in good faith
and in accordance with Section 422 of the Code.
(h) "Shares" means the common stock, par value $.01 per share, of
the Company.
(i) "Total Revenues" means the sum of revenues reported under GAAP
for any Fiscal Year ended June 30 ("Fiscal Year")
2. Grant of Option. The Company hereby grants to the Optionee, for
valuable consideration, receipt of which is hereby acknowledged, a Non-Qualified
Stock Option ("Option") to purchase from the Company an aggregate of 10,000
Shares at a purchase price (the "Option Price") of $3.75 per share.
3. Exercise Period. The Option is non-forfeitable and shall hereafter
be exercisable in whole or in part on APRIL 5, 1996. The Option may be exercised
only with respect to full Shares and may not be exercised after the close of
business on the day (the "Termination Date") preceding the tenth anniversary of
the date hereof. The Option shall have no effect after the Termination Date.
4. Exercise of an Option. The exercise of an Option shall be made only
by a written notice delivered in person or by mail to the Secretary of the
Company at the Company's principal executive office, specifying the number of
Shares to be purchased and accompanied by payment therefor. The purchase price
for any Shares
<PAGE> 2
purchased pursuant to the exercise of an Option shall be paid in full upon such
exercise by delivery of cash or personal check in amount of purchase price. The
written notice may provide instructions from the Optionee to the Company that
upon receipt of the purchase price in cash from the Optionee's broker or dealer,
designated as such on the written notice, in payment for any Shares purchased
pursuant to the exercise of an Option, the Company shall issue such Shares
directly to the broker or dealer. If requested by the Board, the Optionee shall
deliver this Agreement to the Secretary of the Company who shall endorse thereon
a notation of such exercise and return such Agreement to the Optionee. No
fractional Shares (or cash in lieu thereof) shall be issued upon exercise of an
Option and the number of Shares that may be purchased upon exercise shall be
rounded to the nearest number of whole Shares.
5. Rights of Optionee. The Optionee shall not be deemed for any purpose
to be the owner of any Shares subject to any Option unless and until (i) the
Option shall have been exercised pursuant to the terms thereof, (ii) the Company
shall have issued and delivered the Shares to the Optionee and (iii) the
Optionee's name shall have been entered as a stockholder of record on the books
of the Company. Thereupon, the Optionee shall have full voting, dividend and
other ownership rights with respect to such Shares.
6. Rights of the Company. In the event Optionee terminates his
employment with the Company for any reason, whether voluntary or involuntary, at
any time prior to April 5, 1998, Optionee agrees that the Company, upon notice
delivered to Optionee within Sixty (60) days of such termination, (I) may either
repurchase the Option at a price of $.10 per share which has vested under the
Option or (ii) repurchase the Shares, If the Option has been exercised by the
Optionee, at a price of $3.85 per share. The repurchase price contemplated by
this paragraph will be paid to Optionee within thirty (30) days of such notice
and the Option or Shares, as appropriate, will be canceled.
7. Adjustment Upon Changes in Capitalization.
(a) Subject to Section 7, in the event of a Change in
Capitalization, the number and class of Shares or other stock or securities
which are subject to the Option, and the purchase price therefor, if applicable,
shall be appropriately and equitably adjusted.
(b) If, by reason of a Change in Capitalization, the Optionee
shall be entitled to exercise an Option with respect to new, additional or
different shares of stock or securities, such new, additional or different
shares shall thereupon be subject to all of the conditions which were applicable
to the Shares subject to the Option, as the case may be, prior to such Change in
Capitalization.
8. Effect of Certain Transactions. In the event of (i) the liquidation
or dissolution of the Company or (ii) a merger or consolidation of the Company
(a "Transaction"), the Option issued hereunder shall continue in effect in
accordance with its terms and the Optionee shall be entitled to receive in
respect of each Share subject to any outstanding Option, upon exercise of any
Option, the same number and kind of stock, securities, cash, property, or other
consideration that each holder of a Share was entitled to receive in the
Transaction in respect of a Share. In the event that, after a Transaction, there
occurs any Change in Capitalization with respect to the shares of a surviving or
resulting corporation, then adjustments similar to, and subject to the same
conditions as, those in Section 6 hereof shall be made by the Board.
9. Effect of Certain Transactions.
(a) Notwithstanding anything to the contrary or in the Agreement,
the Optionee shall forfeit 100% of the Options granted pursuant to this
Agreement, whether or not vested, if the Optionee breaches the provisions of
subsections (b) or (d) of this Section 8.
(b) During the period that the Optionee is employed by the Company
or any affiliate of the Company (the "Service Term") and for a period of one
year thereafter, the Optionee shall not, in the continental United States,
directly or indirectly, own, manage, operate, join, control, be employed by, or
participate in the ownership, management, operation or control of or be
connected in any manner, including but not limited to holding the positions of
shareholder, director, officer, consultant, independent contractor, employee,
partner, or investor, with
<PAGE> 3
any Competing Enterprise. For purposes of this Section, the term "Competing
Enterprise" shall mean any person, corporation, partnership or other entity
engaged in the operation of an internet service provider. The prohibition of
this Section 8 shall not be deemed to prevent Optionee from owning 2% or less of
any class of equity securities registered under Section 12 of the Exchange Act.
During the Service Term and for a period of one year thereafter, the Optionee
shall not interfere with the Company's relationship with, or endeavor to entice
away from the Company, any person who at any time during the Service Term was an
employee or customer of the Company or otherwise had a material business
relationship with the Company.
(c) The necessity for protection of the Company and its affiliates
against the Optionee's competition, as well as the nature and scope of such
protection, has been carefully considered by the parties hereto in light of the
uniqueness of the Optionee's talent and his importance to the Company.
Accordingly, the Optionee agrees that, in addition to any other relief to which
the Company may be entitled, the Company shall be entitled to seek and obtain
injunctive relief (without the requirement of any bond) from a court of
competent jurisdiction for the purpose of restraining the Optionee from any
actual or threatened breach of the covenant contained in this Section 8. If for
any reason a final decision of any court determines that the restrictions under
this Section 8 are not reasonable or that consideration therefor is inadequate,
such restrictions shall be interpreted, modified or rewritten by such court to
include as much of the duration, scope and geographic area identified in this
Section 8 as will render such restrictions valid and enforceable.
10. General Rules
(a) The obligation of the Company to sell or deliver Shares with
respect to the Options granted shall be subject to all applicable laws, rules
and regulations, including all applicable federal and state securities laws, and
the obtaining of all such approvals by governmental agencies as may be deemed
necessary or appropriate by the Board.
(b) The Company shall have the right to deduct from any
distribution of cash to Optionee, an amount equal to the federal, state and
local income taxes and other amounts as may be required by law to be withheld
(the "Withholding Taxes") with respect to any Option. If Optionee is entitled to
receive Shares upon exercise of an Option, the Optionee shall pay the
Withholding Taxes to the Company prior to the issuance, or release from escrow,
of such Shares. In satisfaction of the Withholding Taxes to the Company, the
Optionee may make a written election (the "Tax Election"), which may be accepted
or rejected in the discretion of the Board, to have withheld a portion of the
Shares issuable to him or her upon exercise of the Option having an aggregate
Fair Market Value, on the date preceding the date of exercise, equal to the
Withholding Taxes, provided that in respect of an Optionee who may be subject to
liability under Section 16(b) of the Exchange Act either (i)(A) the Optionee
makes the Tax Election at least six (6) months after the date the Option was
granted, (B) the Option is exercised during the ten day period beginning on the
third business day and ending on the twelfth business day following the release
for publication of the Company's quarterly or annual statements of earnings (a
"Window Period") and (C the Tax Election is made during the Window Period in
which the Option is exercised prior to such Window Period and subsequent to the
immediately preceding Window Period or (ii)(A) the Tax Election is made at least
six (6) months prior to the date the Option is exercised prior to the expiration
of six (6) months following an election to revoke the Tax Election.
Notwithstanding the foregoing, the Board may, by the adoption or rules or
otherwise, (i) modify the provisions in the preceding sentence or impose such
other restrictions or limitations on Tax Elections as may be necessary to ensure
that the Tax Elections will be exempt transactions under Section 16(b) of the
Exchange Act, an (ii) permit Tax Elections to be made at such other times and
subject to such other conditions as the Board determines will constitute exempt
transactions under Section 16b of the Exchange Act.
(c) If Optionee makes a disposition, within the meaning of Section
424(c) of the Code and regulations promulgated thereunder, of any Share or
Shares issued to such Optionee pursuant to the exercise of an Option within the
two-year period commencing on the day after the date of the grant or within the
one-year period commencing on the day after the date of transfer of such Share
or Shares to the Optionee pursuant to such exercise, the Optionee shall, within
ten (10) days of such disposition, notify the Company thereof, by delivery of
written notice to the Company at its principal executive office, and immediately
deliver to the Company the amount of Withholding Taxes.
<PAGE> 4
(d) No Option granted hereunder shall be transferable by the
Optionee to whom granted otherwise than by will or the laws of descent and
distribution, and an Option may be exercised during the lifetime of such
Optionee only by the Optionee or his or her guardian or legal representative.
The terms of such an Option shall be final, binding and conclusive upon the
beneficiaries, executors, administrators, heirs and successors of the Optionee.
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed and the Optionee has hereunto set his hand, as of the day and year
first above written.
INTERNET AMERICA, INC.
/s/ ROBERT J. MAYNARD, JR.
--------------------------
Robert J. Maynard, Jr.
Chief Executive Office
OPTIONEE
/s/ WILLIAM O. HUNT
--------------------------
William O. Hunt
<PAGE> 1
Exhibit 99.8
NON-QUALIFIED STOCK OPTION AGREEMENT
Agreement made this 5th day of April , 1996 by and between Internet
America, Inc. (the "Company") and JACK T. SMITH (the "Optionee").
1. Definitions. For purposes of this Agreement:
(a) "Board" means the Board of Directors of the Company.
(b) "Business Services Division" is defined as the scope of
the Business Services Division as configured on the execution
date of this agreement.
(c) "Business Services Revenues" is defined as the sum of all
revenues as reported under generally accepted accounting
principles (GAAP") for any fiscal year ended June 30 ("Fiscal
Year").
(d) "Change in Capitalization" means any increase or reduction
in the number of Shares, or any change (including, but not limited to, a change
in value) in the Shares or exchange of Shares for a different number or kind of
Shares or other securities of the Company, by reason of a reclassification,
recapitalization, merger, consolidation, reorganization, stock dividend, stock
split or reverse stock split, combination or exchange of shares or other similar
events.
(d) "Code" means the Internal Revenue Code of 1986, as amended.
(e) "Company" means Internet America, Inc., a Texas corporation.
(f) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(g) "Fair Market Value" on any date means the closing price of
Shares on such date on the principal national securities exchange on which
Shares are listed or admitted to trading, the arithmetic mean of the per Share
closing bid priced and per Share closing asked price on such date as quoted on
the National Association of Securities Dealers Automated Quotation System or
such then market in which such prices are regularly quoted, or, if there have
been no published bid or asked quotations with respect to Shares on such date,
the Fair Market Value shall be the value established by the Board in good faith
and in accordance with Section 422 of the Code.
(h) "Shares" means the common stock, par value $.01 per share, of
the Company.
(i) "Total Revenues" means the sum of revenues reported under GAAP
for any Fiscal Year ended June 30 ("Fiscal Year")
2. Grant of Option. The Company hereby grants to the Optionee, for
valuable consideration, receipt of which is hereby acknowledged, a Non-Qualified
Stock Option ("Option") to purchase from the Company an aggregate of 10,000
Shares at a purchase price (the "Option Price") of $3.75 per share.
3. Exercise Period. The Option is non-forfeitable and shall hereafter
be exercisable in whole or in part on APRIL 5, 1996. The Option may be exercised
only with respect to full Shares and may not be exercised after the close of
business on the day (the "Termination Date") preceding the tenth anniversary of
the date hereof. The Option shall have no effect after the Termination Date.
4. Exercise of an Option. The exercise of an Option shall be made only
by a written notice delivered in person or by mail to the Secretary of the
Company at the Company's principal executive office, specifying the number of
Shares to be purchased and accompanied by payment therefor. The purchase price
for any Shares purchased pursuant to the exercise of an Option shall be paid in
full upon such exercise by delivery of cash or
<PAGE> 2
personal check in amount of purchase price. The written notice may provide
instructions from the Optionee to the Company that upon receipt of the purchase
price in cash from the Optionee's broker or dealer, designated as such on the
written notice, in payment for any Shares purchased pursuant to the exercise of
an Option, the Company shall issue such Shares directly to the broker or dealer.
If requested by the Board, the Optionee shall deliver this Agreement to the
Secretary of the Company who shall endorse thereon a notation of such exercise
and return such Agreement to the Optionee. No fractional Shares (or cash in lieu
thereof) shall be issued upon exercise of an Option and the number of Shares
that may be purchased upon exercise shall be rounded to the nearest number of
whole Shares.
5. Rights of Optionee. The Optionee shall not be deemed for any purpose
to be the owner of any Shares subject to any Option unless and until (i) the
Option shall have been exercised pursuant to the terms thereof, (ii) the Company
shall have issued and delivered the Shares to the Optionee and (iii) the
Optionee's name shall have been entered as a stockholder of record on the books
of the Company. Thereupon, the Optionee shall have full voting, dividend and
other ownership rights with respect to such Shares.
6. Rights of the Company. In the event Optionee terminates his
employment with the Company for any reason, whether voluntary or involuntary, at
any time prior to April 5, 1998, Optionee agrees that the Company, upon notice
delivered to Optionee within Sixty (60) days of such termination, (I) may either
repurchase the Option at a price of $.10 per share which has vested under the
Option or (ii) repurchase the Shares, If the Option has been exercised by the
Optionee, at a price of $3.85 per share. The repurchase price contemplated by
this paragraph will be paid to Optionee within thirty (30) days of such notice
and the Option or Shares, as appropriate, will be canceled.
7. Adjustment Upon Changes in Capitalization.
(a) Subject to Section 7, in the event of a Change in
Capitalization, the number and class of Shares or other stock or securities
which are subject to the Option, and the purchase price therefor, if applicable,
shall be appropriately and equitably adjusted.
(b) If, by reason of a Change in Capitalization, the Optionee
shall be entitled to exercise an Option with respect to new, additional or
different shares of stock or securities, such new, additional or different
shares shall thereupon be subject to all of the conditions which were applicable
to the Shares subject to the Option, as the case may be, prior to such Change in
Capitalization.
8. Effect of Certain Transactions. In the event of (i) the liquidation
or dissolution of the Company or (ii) a merger or consolidation of the Company
(a "Transaction"), the Option issued hereunder shall continue in effect in
accordance with its terms and the Optionee shall be entitled to receive in
respect of each Share subject to any outstanding Option, upon exercise of any
Option, the same number and kind of stock, securities, cash, property, or other
consideration that each holder of a Share was entitled to receive in the
Transaction in respect of a Share. In the event that, after a Transaction, there
occurs any Change in Capitalization with respect to the shares of a surviving or
resulting corporation, then adjustments similar to, and subject to the same
conditions as, those in Section 6 hereof shall be made by the Board.
9. Effect of Certain Transactions.
(a) Notwithstanding anything to the contrary or in the Agreement,
the Optionee shall forfeit 100% of the Options granted pursuant to this
Agreement, whether or not vested, if the Optionee breaches the provisions of
subsections (b) or (d) of this Section 8.
(b) During the period that the Optionee is employed by the Company
or any affiliate of the Company (the "Service Term") and for a period of one
year thereafter, the Optionee shall not, in the continental United States,
directly or indirectly, own, manage, operate, join, control, be employed by, or
participate in the ownership, management, operation or control of or be
connected in any manner, including but not limited to holding the positions of
shareholder, director, officer, consultant, independent contractor, employee,
partner, or investor, with any Competing Enterprise. For purposes of this
Section, the term "Competing Enterprise" shall mean any person, corporation,
partnership or other entity engaged in the operation of an internet service
provider. The prohibition of
<PAGE> 3
this Section 8 shall not be deemed to prevent Optionee from owning 2% or less of
any class of equity securities registered under Section 12 of the Exchange Act.
During the Service Term and for a period of one year thereafter, the Optionee
shall not interfere with the Company's relationship with, or endeavor to entice
away from the Company, any person who at any time during the Service Term was an
employee or customer of the Company or otherwise had a material business
relationship with the Company.
(c) The necessity for protection of the Company and its affiliates
against the Optionee's competition, as well as the nature and scope of such
protection, has been carefully considered by the parties hereto in light of the
uniqueness of the Optionee's talent and his importance to the Company.
Accordingly, the Optionee agrees that, in addition to any other relief to which
the Company may be entitled, the Company shall be entitled to seek and obtain
injunctive relief (without the requirement of any bond) from a court of
competent jurisdiction for the purpose of restraining the Optionee from any
actual or threatened breach of the covenant contained in this Section 8. If for
any reason a final decision of any court determines that the restrictions under
this Section 8 are not reasonable or that consideration therefor is inadequate,
such restrictions shall be interpreted, modified or rewritten by such court to
include as much of the duration, scope and geographic area identified in this
Section 8 as will render such restrictions valid and enforceable.
10. General Rules
(a) The obligation of the Company to sell or deliver Shares with
respect to the Options granted shall be subject to all applicable laws, rules
and regulations, including all applicable federal and state securities laws, and
the obtaining of all such approvals by governmental agencies as may be deemed
necessary or appropriate by the Board.
(b) The Company shall have the right to deduct from any
distribution of cash to Optionee, an amount equal to the federal, state and
local income taxes and other amounts as may be required by law to be withheld
(the "Withholding Taxes") with respect to any Option. If Optionee is entitled to
receive Shares upon exercise of an Option, the Optionee shall pay the
Withholding Taxes to the Company prior to the issuance, or release from escrow,
of such Shares. In satisfaction of the Withholding Taxes to the Company, the
Optionee may make a written election (the "Tax Election"), which may be accepted
or rejected in the discretion of the Board, to have withheld a portion of the
Shares issuable to him or her upon exercise of the Option having an aggregate
Fair Market Value, on the date preceding the date of exercise, equal to the
Withholding Taxes, provided that in respect of an Optionee who may be subject to
liability under Section 16(b) of the Exchange Act either (i)(A) the Optionee
makes the Tax Election at least six (6) months after the date the Option was
granted, (B) the Option is exercised during the ten day period beginning on the
third business day and ending on the twelfth business day following the release
for publication of the Company's quarterly or annual statements of earnings (a
"Window Period") and (C the Tax Election is made during the Window Period in
which the Option is exercised prior to such Window Period and subsequent to the
immediately preceding Window Period or (ii)(A) the Tax Election is made at least
six (6) months prior to the date the Option is exercised prior to the expiration
of six (6) months following an election to revoke the Tax Election.
Notwithstanding the foregoing, the Board may, by the adoption or rules or
otherwise, (i) modify the provisions in the preceding sentence or impose such
other restrictions or limitations on Tax Elections as may be necessary to ensure
that the Tax Elections will be exempt transactions under Section 16(b) of the
Exchange Act, an (ii) permit Tax Elections to be made at such other times and
subject to such other conditions as the Board determines will constitute exempt
transactions under Section 16b of the Exchange Act.
(c) If Optionee makes a disposition, within the meaning of Section
424(c) of the Code and regulations promulgated thereunder, of any Share or
Shares issued to such Optionee pursuant to the exercise of an Option within the
two-year period commencing on the day after the date of the grant or within the
one-year period commencing on the day after the date of transfer of such Share
or Shares to the Optionee pursuant to such exercise, the Optionee shall, within
ten (10) days of such disposition, notify the Company thereof, by delivery of
written notice to the Company at its principal executive office, and immediately
deliver to the Company the amount of Withholding Taxes.
(d) No Option granted hereunder shall be transferable by the
Optionee to whom granted otherwise than by will or the laws of descent and
distribution, and an Option may be exercised during the lifetime of such
<PAGE> 4
Optionee only by the Optionee or his or her guardian or legal representative.
The terms of such an Option shall be final, binding and conclusive upon the
beneficiaries, executors, administrators, heirs and successors of the Optionee.
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed and the Optionee has hereunto set his hand, as of the day and year
first above written.
INTERNET AMERICA, INC.
/s/ ROBERT J. MAYNARD, JR.
--------------------------
Robert J. Maynard, Jr.
Chief Executive Office
OPTIONEE
/s/ JACK T. SMITH
--------------------------
Jack T. Smith
<PAGE> 1
Exhibit 99.9
NON-QUALIFIED STOCK OPTION AGREEMENT
Agreement made this 27th day of June , 1996 by and between Internet
America, Inc. (the "Company") and DOUGLAS G. SHELDON (the "Optionee").
1. Definitions. For purposes of this Agreement:
(a) "Board" means the Board of Directors of the Company.
(b) "Business Services Division" is defined as the scope of
the Business Services Division as configured on the execution
date of this agreement.
(c) "Business Services Revenues" is defined as the sum of all
revenues as reported under generally accepted accounting
principles (GAAP") for any fiscal year ended June 30 ("Fiscal
Year").
(d) "Change in Capitalization" means any increase or reduction
in the number of Shares, or any change (including, but not limited to, a change
in value) in the Shares or exchange of Shares for a different number or kind of
Shares or other securities of the Company, by reason of a reclassification,
recapitalization, merger, consolidation, reorganization, stock dividend, stock
split or reverse stock split, combination or exchange of shares or other similar
events.
(d) "Code" means the Internal Revenue Code of 1986, as amended.
(e) "Company" means Internet America, Inc., a Texas corporation.
(f) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(g) "Fair Market Value" on any date means the closing price of
Shares on such date on the principal national securities exchange on which
Shares are listed or admitted to trading, the arithmetic mean of the per Share
closing bid priced and per Share closing asked price on such date as quoted on
the National Association of Securities Dealers Automated Quotation System or
such then market in which such prices are regularly quoted, or, if there have
been no published bid or asked quotations with respect to Shares on such date,
the Fair Market Value shall be the value established by the Board in good faith
and in accordance with Section 422 of the Code.
(h) "Shares" means the common stock, par value $.01 per share, of
the Company.
(i) "Total Revenues" means the sum of revenues reported under GAAP
for any Fiscal Year ended June 30 ("Fiscal Year")
2. Grant of Option. The Company hereby grants to the Optionee, for
valuable consideration, receipt of which is hereby acknowledged, a Non-Qualified
Stock Option ("Option") to purchase from the Company an aggregate of 10,000
Shares at a purchase price (the "Option Price") of $7.50 per share.
3. Exercise Period. The Option is non-forfeitable and shall hereafter
be exercisable in whole or in part on JUNE 6, 1996. The Option may be exercised
only with respect to full Shares and may not be exercised after the close of
business on the day (the "Termination Date") preceding the tenth anniversary of
the date hereof. The Option shall have no effect after the Termination Date.
4. Exercise of an Option. The exercise of an Option shall be made only
by a written notice delivered in person or by mail to the Secretary of the
Company at the Company's principal executive office, specifying the number of
Shares to be purchased and accompanied by payment therefor. The purchase price
for any Shares purchased pursuant to the exercise of an Option shall be paid in
full upon such exercise by delivery of cash or
<PAGE> 2
personal check in amount of purchase price. The written notice may provide
instructions from the Optionee to the Company that upon receipt of the purchase
price in cash from the Optionee's broker or dealer, designated as such on the
written notice, in payment for any Shares purchased pursuant to the exercise of
an Option, the Company shall issue such Shares directly to the broker or dealer.
If requested by the Board, the Optionee shall deliver this Agreement to the
Secretary of the Company who shall endorse thereon a notation of such exercise
and return such Agreement to the Optionee. No fractional Shares (or cash in lieu
thereof) shall be issued upon exercise of an Option and the number of Shares
that may be purchased upon exercise shall be rounded to the nearest number of
whole Shares.
5. Rights of Optionee. The Optionee shall not be deemed for any purpose
to be the owner of any Shares subject to any Option unless and until (i) the
Option shall have been exercised pursuant to the terms thereof, (ii) the Company
shall have issued and delivered the Shares to the Optionee and (iii) the
Optionee's name shall have been entered as a stockholder of record on the books
of the Company. Thereupon, the Optionee shall have full voting, dividend and
other ownership rights with respect to such Shares.
6. Adjustment Upon Changes in Capitalization.
(a) Subject to Section 7, in the event of a Change in
Capitalization, the number and class of Shares or other stock or securities
which are subject to the Option, and the purchase price therefor, if applicable,
shall be appropriately and equitably adjusted.
(b) If, by reason of a Change in Capitalization, the Optionee shall
be entitled to exercise an Option with respect to new, additional or different
shares of stock or securities, such new, additional or different shares shall
thereupon be subject to all of the conditions which were applicable to the
Shares subject to the Option, as the case may be, prior to such Change in
Capitalization.
7. Effect of Certain Transactions. In the event of (i) the liquidation
or dissolution of the Company or (ii) a merger or consolidation of the Company
(a "Transaction"), the Option issued hereunder shall continue in effect in
accordance with its terms and the Optionee shall be entitled to receive in
respect of each Share subject to any outstanding Option, upon exercise of any
Option, the same number and kind of stock, securities, cash, property, or other
consideration that each holder of a Share was entitled to receive in the
Transaction in respect of a Share. In the event that, after a Transaction, there
occurs any Change in Capitalization with respect to the shares of a surviving or
resulting corporation, then adjustments similar to, and subject to the same
conditions as, those in Section 6 hereof shall be made by the Board.
8. Effect of Certain Transactions.
(a) Notwithstanding anything to the contrary or in the Agreement,
the Optionee shall forfeit 100% of the Options granted pursuant to this
Agreement, whether or not vested, if the Optionee breaches the provisions of
subsections (b) or (d) of this Section 8.
(b) During the period that the Optionee is employed by the Company
or any affiliate of the Company (the "Service Term") and for a period of one
year thereafter, the Optionee shall not, in the continental United States,
directly or indirectly, own, manage, operate, join, control, be employed by, or
participate in the ownership, management, operation or control of or be
connected in any manner, including but not limited to holding the positions of
shareholder, director, officer, consultant, independent contractor, employee,
partner, or investor, with any Competing Enterprise. For purposes of this
Section, the term "Competing Enterprise" shall mean any person, corporation,
partnership or other entity engaged in the operation of an internet service
provider. The prohibition of this Section 8 shall not be deemed to prevent
Optionee from owning 2% or less of any class of equity securities registered
under Section 12 of the Exchange Act. During the Service Term and for a period
of one year thereafter, the Optionee shall not interfere with the Company's
relationship with, or endeavor to entice away from the Company, any person who
at any time during the Service Term was an employee or customer of the Company
or otherwise had a material business relationship with the Company.
<PAGE> 3
(c) The necessity for protection of the Company and its affiliates
against the Optionee's competition, as well as the nature and scope of such
protection, has been carefully considered by the parties hereto in light of the
uniqueness of the Optionee's talent and his importance to the Company.
Accordingly, the Optionee agrees that, in addition to any other relief to which
the Company may be entitled, the Company shall be entitled to seek and obtain
injunctive relief (without the requirement of any bond) from a court of
competent jurisdiction for the purpose of restraining the Optionee from any
actual or threatened breach of the covenant contained in this Section 8. If for
any reason a final decision of any court determines that the restrictions under
this Section 8 are not reasonable or that consideration therefor is inadequate,
such restrictions shall be interpreted, modified or rewritten by such court to
include as much of the duration, scope and geographic area identified in this
Section 8 as will render such restrictions valid and enforceable.
9. General Rules
(a) The obligation of the Company to sell or deliver Shares with
respect to the Options granted shall be subject to all applicable laws, rules
and regulations, including all applicable federal and state securities laws, and
the obtaining of all such approvals by governmental agencies as may be deemed
necessary or appropriate by the Board.
(b) The Company shall have the right to deduct from any distribution
of cash to Optionee, an amount equal to the federal, state and local income
taxes and other amounts as may be required by law to be withheld (the
"Withholding Taxes") with respect to any Option. If Optionee is entitled to
receive Shares upon exercise of an Option, the Optionee shall pay the
Withholding Taxes to the Company prior to the issuance, or release from escrow,
of such Shares. In satisfaction of the Withholding Taxes to the Company, the
Optionee may make a written election (the "Tax Election"), which may be accepted
or rejected in the discretion of the Board, to have withheld a portion of the
Shares issuable to him or her upon exercise of the Option having an aggregate
Fair Market Value, on the date preceding the date of exercise, equal to the
Withholding Taxes, provided that in respect of an Optionee who may be subject to
liability under Section 16(b) of the Exchange Act either (i)(A) the Optionee
makes the Tax Election at least six (6) months after the date the Option was
granted, (B) the Option is exercised during the ten day period beginning on the
third business day and ending on the twelfth business day following the release
for publication of the Company's quarterly or annual statements of earnings (a
"Window Period") and (C the Tax Election is made during the Window Period in
which the Option is exercised prior to such Window Period and subsequent to the
immediately preceding Window Period or (ii)(A) the Tax Election is made at least
six (6) months prior to the date the Option is exercised prior to the expiration
of six (6) months following an election to revoke the Tax Election.
Notwithstanding the foregoing, the Board may, by the adoption or rules or
otherwise, (i) modify the provisions in the preceding sentence or impose such
other restrictions or limitations on Tax Elections as may be necessary to ensure
that the Tax Elections will be exempt transactions under Section 16(b) of the
Exchange Act, an (ii) permit Tax Elections to be made at such other times and
subject to such other conditions as the Board determines will constitute exempt
transactions under Section 16b of the Exchange Act.
If Optionee makes a disposition, within the meaning of Section 424(c)
of the Code and regulations promulgated thereunder, of any Share or Shares
issued to such Optionee pursuant to the exercise of an Option within the
two-year period commencing on the day after the date of the grant or within the
one-year period commencing on the day after the date of transfer of such Share
or Shares to the Optionee pursuant to such exercise, the Optionee shall, within
ten (10) days of such disposition, notify the Company thereof, by delivery of
written notice to the Company at its principal executive office, and immediately
deliver to the Company the amount of Withholding Taxes.
(c) No Option granted hereunder shall be transferable by the
Optionee to whom granted otherwise than by will or the laws of descent and
distribution, and an Option may be exercised during the lifetime of such
Optionee only by the Optionee or his or her guardian or legal representative.
The terms of such an Option shall be final, binding and conclusive upon the
beneficiaries, executors, administrators, heirs and successors of the Optionee.
<PAGE> 4
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed and the Optionee has hereunto set his hand, as of the day and year
first above written.
INTERNET AMERICA, INC.
/s/ ROBERT J. MAYNARD, JR.
--------------------------------------------
Robert J. Maynard, Jr.
Chief Executive Office
OPTIONEE
/s/ DOUGLAS G. SHELDON
--------------------------------------------
Douglas G. Sheldon
<PAGE> 1
Exhibit 99.10
NON-QUALIFIED STOCK OPTION AGREEMENT
Agreement made effective as of the 24th day of March, 1998 by and between
INTERNET AMERICA, INC. (the "Company") and DOUG SHELDON (the "Optionee").
1. Definitions. For purposes of this Agreement:
a. "Board" means the Board of Directors of the Company.
b. "Change in Capitalization" means any increase or reduction in
the number of Shares, or any change (including, but not limited to, a
change in value) in the Shares or exchange of Shares for a different
number or kind of Shares or other securities of the Company, by reason
of a reclassification, recapitalization, merger, consolidation,
reorganization, stock dividend, stock split or reverse stock split,
combination or exchange of shares or other similar events.
c. "Change in Control" shall be deemed to have occurred when the
first of the following events occurs:
(i) when the Company acquires actual knowledge that any person
or group (as such terms are used in Sections 13(d) and
14(d) (2) of the Exchange Act), other than an employee
benefit plan established or maintained by the Company or
any of its subsidiaries or the current largest stockholder,
is or becomes the beneficial owner (as defined under rule
13d-3 of the Exchange Act) directly or indirectly, or
securities of the Company representing 30 percent or more
of the combined voting power of the Company's directors;
(ii) upon the approval by the Company's stockholders of (A) a
merger or consolidation of the Company with or into another
Corporation (other than a merger or consolidation in which
the Company is the surviving corporation and which does not
result in any capital reorganization or reclassification or
other change in the Company's the outstanding shares of
common stock), (B) a sale of disposition of all or
substantially all of the Company's assets of (C) a plan of
liquidation of dissolution of the Company; or
(iii) if, at any time, two-thirds of the members of the Board are
not "Continuing Directors". For this purpose " Continuing
Directors" shall mean the members of the Board of Directors
as of September 30, 1995, and any individual who becomes a
member of the Board thereafter if his or her election or
nomination for election as a director was approved by a
vote of at least two-third of the Continuing Directors then
in office.
d. "Code" means the Internal Revenue Code of 1986, as amended.
<PAGE> 2
e. "Company" means Internet America, Inc., a Texas corporation.
f. "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
g. "Fair Market Value" on any date means the closing price of
Shares on such date on the principal national securities exchange on
which Shares are listed or admitted to trading, the arithmetic mean of
the per Share closing bid priced and per Share closing asked price on
such date as quoted on the National Association of Securities Dealers
Automated Quotation System or such then market in which such prices are
regularly quoted, or, if there have been no published bid or asked
quotations with respect to Shares on such date, the Fair Market Value
shall be the value established by the Board in good faith and in
accordance with Section 422 of the Code.
h. "Shares" means the common stock, par value $.01 per share, of
the Company.
2. Grant of Option. The Company hereby grants to the Optionee, for valuable
consideration, receipt of which is hereby acknowledged, a Non-Qualified Stock
Option ("Option") to purchase from the Company an aggregate of 30,000 Shares at
a purchase price (the "Option Price") of $3.75 per share.
3. Exercise Period. The Option shall become non-forfeitable according to
the following schedule and shall hereafter be exercisable in whole or in part:
(i) First Installment: 7,500 on March 24, 1999
(ii) Second Installment: 7,500 on March 24, 2000
(iii) Third Installment: 7,500 on March 24, 2001
(iv) Fourth Installment: 7,500 on March 24, 2002.
The Option may be exercised only with respect to full Shares and may not be
exercised after the close of business on the day (the "Termination Date")
preceding the tenth anniversary of the date hereof. The Option shall have no
effect after the Termination Date.
4. Exercise of an Option. The exercise of an Option shall be made only by
a written notice delivered in person or by mail to the Secretary of the Company
at the Company's principal executive office, specifying the number of Shares to
be purchased and accompanied by payment therefor. The purchase price for any
Shares purchased pursuant to the exercise of an Option shall be paid in full
upon such exercise by delivery of cash or personal check in amount of purchase
price. The written notice may provide instructions from the Optionee to the
Company that upon receipt of the purchase price in cash from the Optionee's
broker or dealer, designated as such on the written notice, in payment for any
Shares purchased pursuant to the exercise of an Option, the Company shall issue
such Shares directly to the broker or dealer. If requested by the Board, the
Optionee shall deliver this Agreement to the Secretary of the Company who shall
endorse thereon a notation of such exercise and return such Agreement to the
Optionee. No fractional Shares (or cash in lieu thereof) shall be issued upon
exercise of an Option and the number of
Non-Qualified Option Agreement Page 2
<PAGE> 3
Shares that may be purchased upon exercise shall be rounded to the nearest
number of whole Shares.
5. Rights of Optionee. The Optionee shall not be deemed for any purpose to
be the owner of any Shares subject to any Option unless and until (i) the Option
shall have been exercised pursuant to the terms thereof, (ii) the Company shall
have issued and delivered the Shares to the Optionee and (iii) the Optionee's
name shall have been entered as a stockholder of record on the books of the
Company. Thereupon, the Optionee shall have full voting, dividend and other
ownership rights with respect to such Shares.
6. Adjustment Upon Changes in Capitalization.
a. Subject to Section 7, in the event of a Change in
Capitalization, the number and class of Shares or other stock or
securities which are subject to the Option, and the purchase price
therefor, if applicable, shall be appropriately and equitably adjusted.
b. If, by reason of a Change in Capitalization, the Optionee shall
be entitled to exercise an Option with respect to new, additional or
different shares of stock or securities, such new, additional or
different shares shall thereupon be subject to all of the conditions
which were applicable to the Shares subject to the Option, as the case
may be, prior to such Change in Capitalization.
7. Effect of Certain Transactions. In the event of (i) the liquidation or
dissolution of the Company or (ii) a merger or consolidation of the Company (a
"Transaction"), the Option issued hereunder shall continue in effect in
accordance with its terms and the Optionee shall be entitled to receive in
respect of each Share subject to any outstanding Option, upon exercise of any
Option, the same number and kind of stock, securities, cash, property, or other
consideration that each holder of a Share was entitled to receive in the
Transaction in respect of a Share. In the event that, after a Transaction, there
occurs any Change in Capitalization with respect to the shares of a surviving or
resulting corporation, then adjustments similar to, and subject to the same
conditions as, those in Section 6 hereof shall be made by the Board.
8. Effect of Change in Control. Notwithstanding anything contained in the
Plan or an Agreement to the contrary, in the event of a Change in Control, all
Options outstanding on the date of such Change in Control shall become
immediately and fully exercisable.
9. Effect of Certain Transactions.
a. Notwithstanding anything to the contrary or in the Agreement,
the Optionee shall forfeit 100% of the Options granted pursuant to this
Agreement, whether or not vested, if the Optionee breaches the
provisions of subsections (b) or (d) of this Section 9.
b. During the period that the Optionee is employed by the Company
or any affiliate of the Company (the "Service Term") and for a period of
one year thereafter,
Non-Qualified Option Agreement Page 3
<PAGE> 4
the Optionee shall not, in the continental United States, directly or
indirectly, own, manage, operate, join, control, be employed by, or
participate in the ownership, management, operation or control of or be
connected in any manner, including but not limited to holding the
positions of shareholder, director, officer, consultant, independent
contractor, employee, partner, or investor, with any Competing
Enterprise. For purposes of this Section, the term "Competing
Enterprise" shall mean any person, corporation, partnership or other
entity engaged in the operation of an internet service provider. The
prohibition of this Section 9 shall not be deemed to prevent Optionee
from owning 2% or less of any class of equity securities registered
under Section 12 of the Exchange Act. During the Service Term and for a
period of one year thereafter, the Optionee shall not interfere with the
Company's relationship with, or endeavor to entice away from the
Company, any person who at any time during the Service Term was an
employee or customer of the Company or otherwise had a material business
relationship with the Company.
c. The necessity for protection of the Company and its affiliates
against the Optionee's competition, as well as the nature and scope of
such protection, has been carefully considered by the parties hereto in
light of the uniqueness of the Optionee's talent and his importance to
the Company. Accordingly, the Optionee agrees that, in addition to any
other relief to which the Company may be entitled, the Company shall be
entitled to seek and obtain injunctive relief (without the requirement
of any bond) from a court of competent jurisdiction for the purpose of
restraining the Optionee from any actual or threatened breach of the
covenant contained in this Section 9. If for any reason a final decision
of any court determines that the restrictions under this Section 9 are
not reasonable or that consideration therefor is inadequate, such
restrictions shall be interpreted, modified or rewritten by such court
to include as much of the duration, scope and geographic area identified
in this Section 9 as will render such restrictions valid and
enforceable.
d. The Optionee shall not intentionally disclose or reveal to an
unauthorized person, during the Service Term or for a two year period
thereafter, any information relating to the confidential affairs of the
company or any of its affiliates, including but not limited to technical
information, business and marketing plans, strategies, customer
information, other information concerning the Company's products,
promotions, development, financing, expansion plans, business policies
and practices, and other forms of information considered by the Company
to be confidential and in the nature of trade secrets. The Optionee
shall hold as property of the Company and its affiliates all memoranda,
books, papers, letters and other data, and all copies thereof or
therefrom, which are in any way substantially related to the business of
the company or its affiliates, whether made by him or otherwise coming
into his possession and, on a prior written demand of the Company made
within two years after the end of the Service Term, shall deliver the
same to the company.
Non-Qualified Option Agreement Page 4
<PAGE> 5
10. General Rules
a. The obligation of the Company to sell or deliver Shares with
respect to the Options granted shall be subject to all applicable laws,
rules and regulations, including all applicable federal and state
securities laws, and the obtaining of all such approvals by governmental
agencies as may be deemed necessary or appropriate by the Board.
b. The Company shall have the right to deduct from any
distribution of cash to Optionee, an amount equal to the federal, state
and local income taxes and other amounts as may be required by law to be
withheld (the "Withholding Taxes") with respect to any Option. If
Optionee is entitled to receive Shares upon exercise of an Option, the
Optionee shall pay the Withholding Taxes to the Company prior to the
issuance, or release from escrow, of such Shares. In satisfaction of the
Withholding Taxes to the Company, the Optionee may make a written
election (the "Tax Election"), which may be accepted or rejected in the
discretion of the Board, to have withheld a portion of the Shares
issuable to him or her upon exercise of the Option having an aggregate
Fair Market Value, on the date preceding the date of exercise, equal to
the Withholding Taxes, provided that in respect of an Optionee who may
be subject to liability under Section 16(b) of the Exchange Act either
(i)(A) the Optionee makes the Tax Election at least six (6) months after
the date the Option was granted, (B) the Option is exercised during the
ten day period beginning on the third business day and ending on the
twelfth business day following the release for publication of the
Company's quarterly or annual statements of earnings (a "Window Period")
and (C the Tax Election is made during the Window Period in which the
Option is exercised prior to such Window Period and subsequent to the
immediately preceding Window Period or (ii)(A) the Tax Election is made
at least six (6) months prior to the date the Option is exercised prior
to the expiration of six (6) months following an election to revoke the
Tax Election. Notwithstanding the foregoing, the Board may, by the
adoption or rules or otherwise, (i) modify the provisions in the
preceding sentence or impose such other restrictions or limitations on
Tax Elections as may be necessary to ensure that the Tax Elections will
be exempt transactions under Section 16(b) of the Exchange Act, an (ii)
permit Tax Elections to be made at such other times and subject to such
other conditions as the Board determines will constitute exempt
transactions under Section 16b of the Exchange Act.
c. If Optionee makes a disposition, within the meaning of Section
424(c)of the Code and regulations promulgated thereunder, of any Share
or Shares issued to such Optionee pursuant to the exercise of an Option
within the two-year period commencing on the day after the date of the
grant or within the one-year period commencing on the day after the date
of transfer of such Share or Shares to the Optionee pursuant to such
exercise, the Optionee shall, within ten (10) days of such disposition,
notify the Company thereof, by delivery of written notice to the Company
at its principal executive office, and immediately deliver to the
Company the amount of Withholding Taxes.
d. No Option granted hereunder shall be transferable by the
Optionee to whom granted otherwise than by will or the laws of descent
and distribution, and an Option may be exercised during the lifetime of
such Optionee only by the Optionee or his or her
Non-Qualified Option Agreement Page 5
<PAGE> 6
guardian or legal representative. The terms of such an Option shall be
final, binding and conclusive upon the beneficiaries, executors,
administrators, heirs and successors of the Optionee.
e. Termination of Employment or Service. Unless otherwise provided
in the Agreement evidencing the Option, an option shall terminate on or
following an Optionee's termination of employment with the Company and
its Subsidiaries or service as a director of the Company and its
Subsidiaries as follows:
(i) If an Optionee's employment terminates for any reason
other than death, Disability or Cause, the Optionee may at
any time within three (3) months after his or her
termination of employment or service as a director,
exercise an option to the extent, and only to the extent,
that the Option or portion thereof was exercisable at the
date of such termination;
(ii) In the event the Optionee's employment or service as a
director terminates as a result of Disability, the
Optionee may at any time within one (1) year after such
termination exercise such Option to the extent, and only
to the extent, the Option or portion thereof was
exercisable at the date of such termination;
(iii) If an Optionee's employment or service as a director
terminates for Cause, the Option shall terminate
immediately and no rights thereunder may be exercised;
(iv) If an Optionee dies while an employee of the Company or
any Subsidiary or within three(3) months after termination
as described in clause (1) of this Section 10(e), the
Option may be exercised any time within one (1) year after
the Optionee's death by the person or persons to whom such
rights under the Option pass by will or by the laws of
descent and distribution; provided, however, that an
option may be exercised to the extent, and only to the
extent, that the Option or portion thereof was exercisable
on the date of death or earlier termination.
Non-Qualified Option Agreement Page 6
<PAGE> 7
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed
and the Optionee has hereunto set his hand, as of the day and year first above
written.
INTERNET AMERICA, INC.
/s/ MICHAEL MAPLES
--------------------------
Michael Maples
Chief Executive Officer
OPTIONEE
/s/ DOUGLAS G. SHELDON
--------------------------
Douglas G. Sheldon
Non-Qualified Option Agreement Page 7
<PAGE> 1
EXHIBIT 99.11
NON-QUALIFIED STOCK OPTION AGREEMENT
Agreement made effective as of the 24th day of March, 1998 by and between
INTERNET AMERICA, INC. (the "Company") and JAMES T. CHANEY (the "Optionee").
1. Definitions. For purposes of this Agreement:
a. "Board" means the Board of Directors of the Company.
b. "Change in Capitalization" means any increase or reduction in the
number of Shares, or any change (including, but not limited to, a change in
value) in the Shares or exchange of Shares for a different number or kind
of Shares or other securities of the Company, by reason of a
reclassification, recapitalization, merger, consolidation, reorganization,
stock dividend, stock split or reverse stock split, combination or exchange
of shares or other similar events.
c. "Change in Control" shall be deemed to have occurred when the first
of the following events occurs:
(i) when the Company acquires actual knowledge that any person or
group (as such terms are used in Sections 13(d) and 14(d) (2) of
the Exchange Act), other than an employee benefit plan
established or maintained by the Company or any of its
subsidiaries or the current largest stockholder, is or becomes
the beneficial owner (as defined under rule 13d-3 of the Exchange
Act) directly or indirectly, or securities of the Company
representing 30 percent or more of the combined voting power of
the Company's directors;
(ii) upon the approval by the Company's stockholders of (A) a merger
or consolidation of the Company with or into another Corporation
(other than a merger or consolidation in which the Company is the
surviving corporation and which does not result in any capital
reorganization or reclassification or other change in the
Company's the outstanding shares of common stock), (B) a sale of
disposition of all or substantially all of the Company's assets
of (C) a plan of liquidation of dissolution of the Company; or
(iii) if, at any time, two-thirds of the members of the Board are not
"Continuing Directors". For this purpose " Continuing Directors"
shall mean the members of the Board of Directors as of September
30, 1995, and any individual who becomes a member of the Board
thereafter if his or her election or nomination for election as a
director was approved by a vote of at least two-third of the
Continuing Directors then in office.
d. "Code" means the Internal Revenue Code of 1986, as amended.
<PAGE> 2
e. "Company" means Internet America, Inc., a Texas corporation.
f. "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
g. "Fair Market Value" on any date means the closing price of Shares
on such date on the principal national securities exchange on which Shares
are listed or admitted to trading, the arithmetic mean of the per Share
closing bid priced and per Share closing asked price on such date as quoted
on the National Association of Securities Dealers Automated Quotation
System or such then market in which such prices are regularly quoted, or,
if there have been no published bid or asked quotations with respect to
Shares on such date, the Fair Market Value shall be the value established
by the Board in good faith and in accordance with Section 422 of the Code.
h. "Shares" means the common stock, par value $.01 per share, of the
Company.
2. Grant of Option. The Company hereby grants to the Optionee, for valuable
consideration, receipt of which is hereby acknowledged, a Non-Qualified Stock
Option ("Option") to purchase from the Company an aggregate of 35,000 Shares at
a purchase price (the "Option Price") of $3.75 per share.
3. Exercise Period. The Option shall become non-forfeitable according to
the following schedule and shall hereafter be exercisable in whole or in part:
(i) First Installment: 8,750 on March 24, 1999
(ii) Second Installment: 8,750 on March 24, 2000
(iii) Third Installment: 8,750 on March 24, 2001
(iv) Fourth Installment: 8,750 on March 24, 2002.
The Option may be exercised only with respect to full Shares and may not be
exercised after the close of business on the day (the "Termination Date")
preceding the tenth anniversary of the date hereof. The Option shall have no
effect after the Termination Date.
4. Exercise of an Option. The exercise of an Option shall be made only by a
written notice delivered in person or by mail to the Secretary of the Company at
the Company's principal executive office, specifying the number of Shares to be
purchased and accompanied by payment therefor. The purchase price for any Shares
purchased pursuant to the exercise of an Option shall be paid in full upon such
exercise by delivery of cash or personal check in amount of purchase price. The
written notice may provide instructions from the Optionee to the Company that
upon receipt of the purchase price in cash from the Optionee's broker or dealer,
designated as such on the written notice, in payment for any Shares purchased
pursuant to the exercise of an Option, the Company shall issue such Shares
directly to the broker or dealer. If requested by the Board, the Optionee shall
deliver this Agreement to the Secretary of the Company who shall endorse thereon
a notation of such exercise and return such Agreement to the Optionee. No
fractional Shares (or cash in lieu thereof) shall be issued upon exercise of an
Option and the number of Shares that may be purchased upon exercise shall be
rounded to the nearest number of whole Shares.
<PAGE> 3
5. Rights of Optionee. The Optionee shall not be deemed for any purpose to
be the owner of any Shares subject to any Option unless and until (i) the Option
shall have been exercised pursuant to the terms thereof, (ii) the Company shall
have issued and delivered the Shares to the Optionee and (iii) the Optionee's
name shall have been entered as a stockholder of record on the books of the
Company. Thereupon, the Optionee shall have full voting, dividend and other
ownership rights with respect to such Shares.
6. Adjustment Upon Changes in Capitalization.
a. Subject to Section 7, in the event of a Change in Capitalization,
the number and class of Shares or other stock or securities which are
subject to the Option, and the purchase price therefor, if applicable,
shall be appropriately and equitably adjusted.
b. If, by reason of a Change in Capitalization, the Optionee shall be
entitled to exercise an Option with respect to new, additional or different
shares of stock or securities, such new, additional or different shares
shall thereupon be subject to all of the conditions which were applicable
to the Shares subject to the Option, as the case may be, prior to such
Change in Capitalization.
7. Effect of Certain Transactions. In the event of (i) the liquidation or
dissolution of the Company or (ii) a merger or consolidation of the Company (a
"Transaction"), the Option issued hereunder shall continue in effect in
accordance with its terms and the Optionee shall be entitled to receive in
respect of each Share subject to any outstanding Option, upon exercise of any
Option, the same number and kind of stock, securities, cash, property, or other
consideration that each holder of a Share was entitled to receive in the
Transaction in respect of a Share. In the event that, after a Transaction, there
occurs any Change in Capitalization with respect to the shares of a surviving or
resulting corporation, then adjustments similar to, and subject to the same
conditions as, those in Section 6 hereof shall be made by the Board.
8. Effect of Change in Control. Notwithstanding anything contained in the
Plan or an Agreement to the contrary, in the event of a Change in Control, all
Options outstanding on the date of such Change in Control shall become
immediately and fully exercisable.
9. Effect of Certain Transactions.
a. Notwithstanding anything to the contrary or in the Agreement, the
Optionee shall forfeit 100% of the Options granted pursuant to this
Agreement, whether or not vested, if the Optionee breaches the provisions
of subsections (b) or (d) of this Section 9.
b. During the period that the Optionee is employed by the Company or
any affiliate of the Company (the "Service Term") and for a period of one
year thereafter, the Optionee shall not, in the continental United States,
directly or indirectly, own, manage, operate, join, control, be employed
by, or participate in the ownership, management,
<PAGE> 4
operation or control of or be connected in any manner, including but not
limited to holding the positions of shareholder, director, officer,
consultant, independent contractor, employee, partner, or investor, with
any Competing Enterprise. For purposes of this Section, the term "Competing
Enterprise" shall mean any person, corporation, partnership or other entity
engaged in the operation of an internet service provider. The prohibition
of this Section 9 shall not be deemed to prevent Optionee from owning 2% or
less of any class of equity securities registered under Section 12 of the
Exchange Act. During the Service Term and for a period of one year
thereafter, the Optionee shall not interfere with the Company's
relationship with, or endeavor to entice away from the Company, any person
who at any time during the Service Term was an employee or customer of the
Company or otherwise had a material business relationship with the Company.
c. The necessity for protection of the Company and its affiliates
against the Optionee's competition, as well as the nature and scope of such
protection, has been carefully considered by the parties hereto in light of
the uniqueness of the Optionee's talent and his importance to the Company.
Accordingly, the Optionee agrees that, in addition to any other relief to
which the Company may be entitled, the Company shall be entitled to seek
and obtain injunctive relief (without the requirement of any bond) from a
court of competent jurisdiction for the purpose of restraining the Optionee
from any actual or threatened breach of the covenant contained in this
Section 9. If for any reason a final decision of any court determines that
the restrictions under this Section 9 are not reasonable or that
consideration therefor is inadequate, such restrictions shall be
interpreted, modified or rewritten by such court to include as much of the
duration, scope and geographic area identified in this Section 9 as will
render such restrictions valid and enforceable.
d. The Optionee shall not intentionally disclose or reveal to an
unauthorized person, during the Service Term or for a two year period
thereafter, any information relating to the confidential affairs of the
company or any of its affiliates, including but not limited to technical
information, business and marketing plans, strategies, customer
information, other information concerning the Company's products,
promotions, development, financing, expansion plans, business policies and
practices, and other forms of information considered by the Company to be
confidential and in the nature of trade secrets. The Optionee shall hold as
property of the Company and its affiliates all memoranda, books, papers,
letters and other data, and all copies thereof or therefrom, which are in
any way substantially related to the business of the company or its
affiliates, whether made by him or otherwise coming into his possession
and, on a prior written demand of the Company made within two years after
the end of the Service Term, shall deliver the same to the company.
10.General Rules
a. The obligation of the Company to sell or deliver Shares with
respect to the Options granted shall be subject to all applicable laws,
rules and regulations, including all applicable federal and state
securities laws, and the obtaining of all such approvals by governmental
agencies as may be deemed necessary or appropriate by the Board.
<PAGE> 5
b. The Company shall have the right to deduct from any distribution of
cash to Optionee, an amount equal to the federal, state and local income
taxes and other amounts as may be required by law to be withheld (the
"Withholding Taxes") with respect to any Option. If Optionee is entitled to
receive Shares upon exercise of an Option, the Optionee shall pay the
Withholding Taxes to the Company prior to the issuance, or release from
escrow, of such Shares. In satisfaction of the Withholding Taxes to the
Company, the Optionee may make a written election (the "Tax Election"),
which may be accepted or rejected in the discretion of the Board, to have
withheld a portion of the Shares issuable to him or her upon exercise of
the Option having an aggregate Fair Market Value, on the date preceding the
date of exercise, equal to the Withholding Taxes, provided that in respect
of an Optionee who may be subject to liability under Section 16(b) of the
Exchange Act either (i)(A) the Optionee makes the Tax Election at least six
(6) months after the date the Option was granted, (B) the Option is
exercised during the ten day period beginning on the third business day and
ending on the twelfth business day following the release for publication of
the Company's quarterly or annual statements of earnings (a "Window
Period") and (C the Tax Election is made during the Window Period in which
the Option is exercised prior to such Window Period and subsequent to the
immediately preceding Window Period or (ii)(A) the Tax Election is made at
least six (6) months prior to the date the Option is exercised prior to the
expiration of six (6) months following an election to revoke the Tax
Election. Notwithstanding the foregoing, the Board may, by the adoption or
rules or otherwise, (i) modify the provisions in the preceding sentence or
impose such other restrictions or limitations on Tax Elections as may be
necessary to ensure that the Tax Elections will be exempt transactions
under Section 16(b) of the Exchange Act, an (ii) permit Tax Elections to be
made at such other times and subject to such other conditions as the Board
determines will constitute exempt transactions under Section 16b of the
Exchange Act.
c. If Optionee makes a disposition, within the meaning of Section
424(c)of the Code and regulations promulgated thereunder, of any Share or
Shares issued to such Optionee pursuant to the exercise of an Option within
the two-year period commencing on the day after the date of the grant or
within the one-year period commencing on the day after the date of transfer
of such Share or Shares to the Optionee pursuant to such exercise, the
Optionee shall, within ten (10) days of such disposition, notify the
Company thereof, by delivery of written notice to the Company at its
principal executive office, and immediately deliver to the Company the
amount of Withholding Taxes.
d. No Option granted hereunder shall be transferable by the Optionee
to whom granted otherwise than by will or the laws of descent and
distribution, and an Option may be exercised during the lifetime of such
Optionee only by the Optionee or his or her guardian or legal
representative. The terms of such an Option shall be final, binding and
conclusive upon the beneficiaries, executors, administrators, heirs and
successors of the Optionee.
<PAGE> 6
e. Termination of Employment or Service. Unless otherwise provided in
the Agreement evidencing the Option, an option shall terminate on or
following an Optionee's termination of employment with the Company and its
Subsidiaries or service as a director of the Company and its Subsidiaries
as follows:
(i) If an Optionee's employment terminates for any reason other than
death, Disability or Cause, the Optionee may at any time within
three (3) months after his or her termination of employment or
service as a director, exercise an option to the extent, and only
to the extent, that the Option or portion thereof was exercisable
at the date of such termination;
(ii) In the event the Optionee's employment or service as a director
terminates as a result of Disability, the Optionee may at any
time within one (1) year after such termination exercise such
Option to the extent, and only to the extent, the Option or
portion thereof was exercisable at the date of such termination;
(iii) If an Optionee's employment or service as a director terminates
for Cause, the Option shall terminate immediately and no rights
thereunder may be exercised;
(iv) If an Optionee dies while an employee of the Company or any
Subsidiary or within three(3) months after termination as
described in clause (1) of this Section 10(e), the Option may be
exercised any time within one (1) year after the Optionee's death
by the person or persons to whom such rights under the Option
pass by will or by the laws of descent and distribution;
provided, however, that an option may be exercised to the extent,
and only to the extent, that the Option or portion thereof was
exercisable on the date of death or earlier termination.
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed
and the Optionee has hereunto set his hand, as of the day and year first above
written.
INTERNET AMERICA, INC.
/s/ MICHAEL MAPLES
--------------------------
Michael Maples
Chief Executive Officer
OPTIONEE
/s/ JAMES T. CHANEY
--------------------------
<PAGE> 1
EXHIBIT 99.12
NON-QUALIFIED STOCK OPTION AGREEMENT
Agreement made effective as of the 24th day of March, 1998 by and between
INTERNET AMERICA, INC. (the "Company") and JOHN J. STEWART (the "Optionee").
1. Definitions. For purposes of this Agreement:
a. "Board" means the Board of Directors of the Company.
b. "Change in Capitalization" means any increase or reduction in the
number of Shares, or any change (including, but not limited to, a change
in value) in the Shares or exchange of Shares for a different number or
kind of Shares or other securities of the Company, by reason of a
reclassification, recapitalization, merger, consolidation, reorganization,
stock dividend, stock split or reverse stock split, combination or
exchange of shares or other similar events.
c. "Change in Control" shall be deemed to have occurred when the first
of the following events occurs:
(i) when the Company acquires actual knowledge that any person or
group (as such terms are used in Sections 13(d) and 14(d) (2) of
the Exchange Act), other than an employee benefit plan
established or maintained by the Company or any of its
subsidiaries or the current largest stockholder, is or becomes
the beneficial owner (as defined under rule 13d-3 of the
Exchange Act) directly or indirectly, or securities of the
Company representing 30 percent or more of the combined voting
power of the Company's directors;
(ii) upon the approval by the Company's stockholders of (A) a merger
or consolidation of the Company with or into another Corporation
(other than a merger or consolidation in which the Company is
the surviving corporation and which does not result in any
capital reorganization or reclassification or other change in
the Company's the outstanding shares of common stock), (B) a
sale of disposition of all or substantially all of the Company's
assets of (C) a plan of liquidation of dissolution of the
Company; or
(iii) if, at any time, two-thirds of the members of the Board are not
"Continuing Directors". For this purpose " Continuing Directors"
shall mean the members of the Board of Directors as of September
30, 1995, and any individual who becomes a member of the Board
thereafter if his or her election or nomination for election as
a director was approved by a vote of at least two-third of the
Continuing Directors then in office.
d. "Code" means the Internal Revenue Code of 1986, as amended.
<PAGE> 2
e. "Company" means Internet America, Inc., a Texas corporation.
f. "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
g. "Fair Market Value" on any date means the closing price of Shares on
such date on the principal national securities exchange on which Shares
are listed or admitted to trading, the arithmetic mean of the per Share
closing bid priced and per Share closing asked price on such date as
quoted on the National Association of Securities Dealers Automated
Quotation System or such then market in which such prices are regularly
quoted, or, if there have been no published bid or asked quotations with
respect to Shares on such date, the Fair Market Value shall be the value
established by the Board in good faith and in accordance with Section 422
of the Code.
h. "Shares" means the common stock, par value $.01 per share, of the
Company.
2. Grant of Option. The Company hereby grants to the Optionee, for valuable
consideration, receipt of which is hereby acknowledged, a Non-Qualified Stock
Option ("Option") to purchase from the Company an aggregate of 25,000 Shares at
a purchase price (the "Option Price") of $3.75 per share.
3. Exercise Period. The Option shall become non-forfeitable according to the
following schedule and shall hereafter be exercisable in whole or in part:
(i) First Installment: 6,250 on March 24, 1999
(ii) Second Installment: 6,250 on March 24, 2000
(iii) Third Installment: 6,250 on March 24, 2001
(iv) Fourth Installment: 6,250 on March 24, 2002.
The Option may be exercised only with respect to full Shares and may not be
exercised after the close of business on the day (the "Termination Date")
preceding the tenth anniversary of the date hereof. The Option shall have no
effect after the Termination Date.
4. Exercise of an Option. The exercise of an Option shall be made only by a
written notice delivered in person or by mail to the Secretary of the Company at
the Company's principal executive office, specifying the number of Shares to be
purchased and accompanied by payment therefor. The purchase price for any Shares
purchased pursuant to the exercise of an Option shall be paid in full upon such
exercise by delivery of cash or personal check in amount of purchase price. The
written notice may provide instructions from the Optionee to the Company that
upon receipt of the purchase price in cash from the Optionee's broker or dealer,
designated as such on the written notice, in payment for any Shares purchased
pursuant to the exercise of an Option, the Company shall issue such Shares
directly to the broker or dealer. If requested by the Board, the Optionee shall
deliver this Agreement to the Secretary of the Company who shall endorse thereon
a notation of such exercise and return such Agreement to the Optionee. No
fractional Shares (or cash in lieu thereof) shall be issued upon exercise of an
Option and the number of
Non-Qualified Option Agreement Page 2
<PAGE> 3
Shares that may be purchased upon exercise shall be rounded to the nearest
number of whole Shares.
5. Rights of Optionee. The Optionee shall not be deemed for any purpose to be
the owner of any Shares subject to any Option unless and until (i) the Option
shall have been exercised pursuant to the terms thereof, (ii) the Company shall
have issued and delivered the Shares to the Optionee and (iii) the Optionee's
name shall have been entered as a stockholder of record on the books of the
Company. Thereupon, the Optionee shall have full voting, dividend and other
ownership rights with respect to such Shares.
6. Adjustment Upon Changes in Capitalization.
a. Subject to Section 7, in the event of a Change in Capitalization,
the number and class of Shares or other stock or securities which are
subject to the Option, and the purchase price therefor, if applicable,
shall be appropriately and equitably adjusted.
b. If, by reason of a Change in Capitalization, the Optionee shall be
entitled to exercise an Option with respect to new, additional or
different shares of stock or securities, such new, additional or different
shares shall thereupon be subject to all of the conditions which were
applicable to the Shares subject to the Option, as the case may be, prior
to such Change in Capitalization.
7. Effect of Certain Transactions. In the event of (i) the liquidation or
dissolution of the Company or (ii) a merger or consolidation of the Company (a
"Transaction"), the Option issued hereunder shall continue in effect in
accordance with its terms and the Optionee shall be entitled to receive in
respect of each Share subject to any outstanding Option, upon exercise of any
Option, the same number and kind of stock, securities, cash, property, or other
consideration that each holder of a Share was entitled to receive in the
Transaction in respect of a Share. In the event that, after a Transaction, there
occurs any Change in Capitalization with respect to the shares of a surviving or
resulting corporation, then adjustments similar to, and subject to the same
conditions as, those in Section 6 hereof shall be made by the Board.
8. Effect of Change in Control. Notwithstanding anything contained in the
Plan or an Agreement to the contrary, in the event of a Change in Control, all
Options outstanding on the date of such Change in Control shall become
immediately and fully exercisable.
9. Effect of Certain Transactions.
a. Notwithstanding anything to the contrary or in the Agreement, the
Optionee shall forfeit 100% of the Options granted pursuant to this
Agreement, whether or not vested, if the Optionee breaches the provisions
of subsections (b) or (d) of this Section 9.
b. During the period that the Optionee is employed by the Company or
any affiliate of the Company (the "Service Term") and for a period of one
year thereafter,
Non-Qualified Option Agreement Page 3
<PAGE> 4
the Optionee shall not, in the continental United States, directly or
indirectly, own, manage, operate, join, control, be employed by, or
participate in the ownership, management, operation or control of or be
connected in any manner, including but not limited to holding the
positions of shareholder, director, officer, consultant, independent
contractor, employee, partner, or investor, with any Competing Enterprise.
For purposes of this Section, the term "Competing Enterprise" shall mean
any person, corporation, partnership or other entity engaged in the
operation of an internet service provider. The prohibition of this Section
9 shall not be deemed to prevent Optionee from owning 2% or less of any
class of equity securities registered under Section 12 of the Exchange
Act. During the Service Term and for a period of one year thereafter, the
Optionee shall not interfere with the Company's relationship with, or
endeavor to entice away from the Company, any person who at any time
during the Service Term was an employee or customer of the Company or
otherwise had a material business relationship with the Company.
c. The necessity for protection of the Company and its affiliates
against the Optionee's competition, as well as the nature and scope of
such protection, has been carefully considered by the parties hereto in
light of the uniqueness of the Optionee's talent and his importance to the
Company. Accordingly, the Optionee agrees that, in addition to any other
relief to which the Company may be entitled, the Company shall be entitled
to seek and obtain injunctive relief (without the requirement of any bond)
from a court of competent jurisdiction for the purpose of restraining the
Optionee from any actual or threatened breach of the covenant contained in
this Section 9. If for any reason a final decision of any court determines
that the restrictions under this Section 9 are not reasonable or that
consideration therefor is inadequate, such restrictions shall be
interpreted, modified or rewritten by such court to include as much of the
duration, scope and geographic area identified in this Section 9 as will
render such restrictions valid and enforceable.
d. The Optionee shall not intentionally disclose or reveal to an
unauthorized person, during the Service Term or for a two year period
thereafter, any information relating to the confidential affairs of the
company or any of its affiliates, including but not limited to technical
information, business and marketing plans, strategies, customer
information, other information concerning the Company's products,
promotions, development, financing, expansion plans, business policies and
practices, and other forms of information considered by the Company to be
confidential and in the nature of trade secrets. The Optionee shall hold
as property of the Company and its affiliates all memoranda, books,
papers, letters and other data, and all copies thereof or therefrom, which
are in any way substantially related to the business of the company or its
affiliates, whether made by him or otherwise coming into his possession
and, on a prior written demand of the Company made within two years after
the end of the Service Term, shall deliver the same to the company.
Non-Qualified Option Agreement Page 4
<PAGE> 5
10. General Rules
a. The obligation of the Company to sell or deliver Shares with respect
to the Options granted shall be subject to all applicable laws, rules and
regulations, including all applicable federal and state securities laws,
and the obtaining of all such approvals by governmental agencies as may be
deemed necessary or appropriate by the Board.
b. The Company shall have the right to deduct from any distribution of
cash to Optionee, an amount equal to the federal, state and local income
taxes and other amounts as may be required by law to be withheld (the
"Withholding Taxes") with respect to any Option. If Optionee is entitled
to receive Shares upon exercise of an Option, the Optionee shall pay the
Withholding Taxes to the Company prior to the issuance, or release from
escrow, of such Shares. In satisfaction of the Withholding Taxes to the
Company, the Optionee may make a written election (the "Tax Election"),
which may be accepted or rejected in the discretion of the Board, to have
withheld a portion of the Shares issuable to him or her upon exercise of
the Option having an aggregate Fair Market Value, on the date preceding
the date of exercise, equal to the Withholding Taxes, provided that in
respect of an Optionee who may be subject to liability under Section 16(b)
of the Exchange Act either (i)(A) the Optionee makes the Tax Election at
least six (6) months after the date the Option was granted, (B) the Option
is exercised during the ten day period beginning on the third business day
and ending on the twelfth business day following the release for
publication of the Company's quarterly or annual statements of earnings (a
"Window Period") and (C the Tax Election is made during the Window Period
in which the Option is exercised prior to such Window Period and
subsequent to the immediately preceding Window Period or (ii)(A) the Tax
Election is made at least six (6) months prior to the date the Option is
exercised prior to the expiration of six (6) months following an election
to revoke the Tax Election. Notwithstanding the foregoing, the Board may,
by the adoption or rules or otherwise, (i) modify the provisions in the
preceding sentence or impose such other restrictions or limitations on Tax
Elections as may be necessary to ensure that the Tax Elections will be
exempt transactions under Section 16(b) of the Exchange Act, an (ii)
permit Tax Elections to be made at such other times and subject to such
other conditions as the Board determines will constitute exempt
transactions under Section 16b of the Exchange Act.
c. If Optionee makes a disposition, within the meaning of Section
424(c)of the Code and regulations promulgated thereunder, of any Share or
Shares issued to such Optionee pursuant to the exercise of an Option
within the two-year period commencing on the day after the date of the
grant or within the one-year period commencing on the day after the date
of transfer of such Share or Shares to the Optionee pursuant to such
exercise, the Optionee shall, within ten (10) days of such disposition,
notify the Company thereof, by delivery of written notice to the Company
at its principal executive office, and immediately deliver to the Company
the amount of Withholding Taxes.
d. No Option granted hereunder shall be transferable by the Optionee to
whom granted otherwise than by will or the laws of descent and
distribution, and an Option may be exercised during the lifetime of such
Optionee only by the Optionee or his or her
Non-Qualified Option Agreement Page 5
<PAGE> 6
guardian or legal representative. The terms of such an Option shall be
final, binding and conclusive upon the beneficiaries, executors,
administrators, heirs and successors of the Optionee.
e. Termination of Employment or Service. Unless otherwise provided in
the Agreement evidencing the Option, an option shall terminate on or
following an Optionee's termination of employment with the Company and its
Subsidiaries or service as a director of the Company and its Subsidiaries
as follows:
(i) If an Optionee's employment terminates for any reason other than
death, Disability or Cause, the Optionee may at any time within
three (3) months after his or her termination of employment or
service as a director, exercise an option to the extent, and only
to the extent, that the Option or portion thereof was exercisable
at the date of such termination;
(ii) In the event the Optionee's employment or service as a director
terminates as a result of Disability, the Optionee may at any
time within one (1) year after such termination exercise such
Option to the extent, and only to the extent, the Option or
portion thereof was exercisable at the date of such termination;
(iii) If an Optionee's employment or service as a director
terminates for Cause, the Option shall terminate immediately and
no rights thereunder may be exercised;
(iv) If an Optionee dies while an employee of the Company or any
Subsidiary or within three(3) months after termination as
described in clause (1) of this Section 10(e), the Option may be
exercised any time within one (1) year after the Optionee's death
by the person or persons to whom such rights under the Option
pass by will or by the laws of descent and distribution;
provided, however, that an option may be exercised to the extent,
and only to the extent, that the Option or portion thereof was
exercisable on the date of death or earlier termination.
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed
and the Optionee has hereunto set his hand, as of the day and year first above
written.
INTERNET AMERICA, INC.
/s/ MICHAEL MAPLES
--------------------------
Michael Maples
Chief Executive Officer
OPTIONEE
/s/ JOHN J. STEWART
--------------------------
John J. Stewart
Non-Qualified Option Agreement Page 6
<PAGE> 1
EXHIBIT 99.13
NON-QUALIFIED STOCK OPTION AGREEMENT
Agreement made effective as of the 24th day of March, 1998 by and between
INTERNET AMERICA, INC. (the "Company") and FRANK J. DURDA (the "Optionee").
1. Definitions. For purposes of this Agreement:
a. "Board" means the Board of Directors of the Company.
b. "Change in Capitalization" means any increase or reduction in the
number of Shares, or any change (including, but not limited to, a change
in value) in the Shares or exchange of Shares for a different number or
kind of Shares or other securities of the Company, by reason of a
reclassification, recapitalization, merger, consolidation, reorganization,
stock dividend, stock split or reverse stock split, combination or
exchange of shares or other similar events.
c. "Change in Control" shall be deemed to have occurred when the
first of the following events occurs:
(i) when the Company acquires actual knowledge that any person or
group (as such terms are used in Sections 13(d) and 14(d) (2)
of the Exchange Act), other than an employee benefit plan
established or maintained by the Company or any of its
subsidiaries or the current largest stockholder, is or becomes
the beneficial owner (as defined under rule 13d-3 of the
Exchange Act) directly or indirectly, or securities of the
Company representing 30 percent or more of the combined voting
power of the Company's directors;
(ii) upon the approval by the Company's stockholders of (A) a
merger or consolidation of the Company with or into another
Corporation (other than a merger or consolidation in which the
Company is the surviving corporation and which does not result
in any capital reorganization or reclassification or other
change in the Company's the outstanding shares of common
stock), (B) a sale of disposition of all or substantially all
of the Company's assets of (C) a plan of liquidation of
dissolution of the Company; or
(iii) if, at any time, two-thirds of the members of the Board are
not "Continuing Directors". For this purpose " Continuing
Directors" shall mean the members of the Board of Directors as
of September 30, 1995, and any individual who becomes a member
of the Board thereafter if his or her election or nomination
for election as a director was approved by a vote of at least
two-third of the Continuing Directors then in office.
d. "Code" means the Internal Revenue Code of 1986, as amended.
<PAGE> 2
e. "Company" means Internet America, Inc., a Texas corporation.
f. "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
g. "Fair Market Value" on any date means the closing price of Shares
on such date on the principal national securities exchange on which Shares
are listed or admitted to trading, the arithmetic mean of the per Share
closing bid priced and per Share closing asked price on such date as
quoted on the National Association of Securities Dealers Automated
Quotation System or such then market in which such prices are regularly
quoted, or, if there have been no published bid or asked quotations with
respect to Shares on such date, the Fair Market Value shall be the value
established by the Board in good faith and in accordance with Section 422
of the Code.
h. "Shares" means the common stock, par value $.01 per share, of the
Company.
2. Grant of Option. The Company hereby grants to the Optionee, for
valuable consideration, receipt of which is hereby acknowledged, a Non-Qualified
Stock Option ("Option") to purchase from the Company an aggregate of 15,000
Shares at a purchase price (the "Option Price") of $3.75 per share.
3. Exercise Period. The Option shall become non-forfeitable according to
the following schedule and shall hereafter be exercisable in whole or in part:
(i) First Installment: 3,750 on March 24, 1999
(ii) Second Installment: 3,750 on March 24, 2000
(iii) Third Installment: 3,750 on March 24, 2001
(iv) Fourth Installment: 3,750 on March 24, 2002
The Option may be exercised only with respect to full Shares and may not
be exercised after the close of business on the day (the "Termination Date")
preceding the tenth anniversary of the date hereof. The Option shall have no
effect after the Termination Date.
4. Exercise of an Option. The exercise of an Option shall be made only by
a written notice delivered in person or by mail to the Secretary of the Company
at the Company's principal executive office, specifying the number of Shares to
be purchased and accompanied by payment therefor. The purchase price for any
Shares purchased pursuant to the exercise of an Option shall be paid in full
upon such exercise by delivery of cash or personal check in amount of purchase
price. The written notice may provide instructions from the Optionee to the
Company that upon receipt of the purchase price in cash from the Optionee's
broker or dealer, designated as such on the written notice, in payment for any
Shares purchased pursuant to the exercise of an Option, the Company shall issue
such Shares directly to the broker or dealer. If requested by the Board, the
Optionee shall deliver this Agreement to the Secretary of the Company who shall
endorse thereon a notation of such exercise and return such Agreement to the
Optionee. No fractional Shares (or cash in lieu thereof) shall be issued upon
exercise of an Option and the number of Shares that may be purchased upon
exercise shall be rounded to the nearest number of whole Shares.
Non-Qualified Option Agreement Page 2
<PAGE> 3
5. Rights of Optionee. The Optionee shall not be deemed for any purpose to
be the owner of any Shares subject to any Option unless and until (i) the Option
shall have been exercised pursuant to the terms thereof, (ii) the Company shall
have issued and delivered the Shares to the Optionee and (iii) the Optionee's
name shall have been entered as a stockholder of record on the books of the
Company. Thereupon, the Optionee shall have full voting, dividend and other
ownership rights with respect to such Shares.
6. Adjustment Upon Changes in Capitalization.
a. Subject to Section 7, in the event of a Change in Capitalization,
the number and class of Shares or other stock or securities which are
subject to the Option, and the purchase price therefor, if applicable,
shall be appropriately and equitably adjusted.
b. If, by reason of a Change in Capitalization, the Optionee shall
be entitled to exercise an Option with respect to new, additional or
different shares of stock or securities, such new, additional or different
shares shall thereupon be subject to all of the conditions which were
applicable to the Shares subject to the Option, as the case may be, prior
to such Change in Capitalization.
7. Effect of Certain Transactions. In the event of (i) the liquidation or
dissolution of the Company or (ii) a merger or consolidation of the Company (a
"Transaction"), the Option issued hereunder shall continue in effect in
accordance with its terms and the Optionee shall be entitled to receive in
respect of each Share subject to any outstanding Option, upon exercise of any
Option, the same number and kind of stock, securities, cash, property, or other
consideration that each holder of a Share was entitled to receive in the
Transaction in respect of a Share. In the event that, after a Transaction, there
occurs any Change in Capitalization with respect to the shares of a surviving or
resulting corporation, then adjustments similar to, and subject to the same
conditions as, those in Section 6 hereof shall be made by the Board.
8. Effect of Change in Control. Notwithstanding anything contained in the
Plan or an Agreement to the contrary, in the event of a Change in Control, all
Options outstanding on the date of such Change in Control shall become
immediately and fully exercisable.
9. Effect of Certain Transactions.
a. Notwithstanding anything to the contrary or in the Agreement, the
Optionee shall forfeit 100% of the Options granted pursuant to this
Agreement, whether or not vested, if the Optionee breaches the provisions
of subsections (b) or (d) of this Section 9.
b. During the period that the Optionee is employed by the Company or
any affiliate of the Company (the "Service Term") and for a period of one
year thereafter,
Non-Qualified Option Agreement Page 3
<PAGE> 4
the Optionee shall not, in the continental United States, directly or
indirectly, own, manage, operate, join, control, be employed by, or
participate in the ownership, management, operation or control of or be
connected in any manner, including but not limited to holding the
positions of shareholder, director, officer, consultant, independent
contractor, employee, partner, or investor, with any Competing Enterprise.
For purposes of this Section, the term "Competing Enterprise" shall mean
any person, corporation, partnership or other entity engaged in the
operation of an internet service provider. The prohibition of this Section
9 shall not be deemed to prevent Optionee from owning 2% or less of any
class of equity securities registered under Section 12 of the Exchange
Act. During the Service Term and for a period of one year thereafter, the
Optionee shall not interfere with the Company's relationship with, or
endeavor to entice away from the Company, any person who at any time
during the Service Term was an employee or customer of the Company or
otherwise had a material business relationship with the Company.
c. The necessity for protection of the Company and its affiliates
against the Optionee's competition, as well as the nature and scope of
such protection, has been carefully considered by the parties hereto in
light of the uniqueness of the Optionee's talent and his importance to the
Company. Accordingly, the Optionee agrees that, in addition to any other
relief to which the Company may be entitled, the Company shall be entitled
to seek and obtain injunctive relief (without the requirement of any bond)
from a court of competent jurisdiction for the purpose of restraining the
Optionee from any actual or threatened breach of the covenant contained in
this Section 9. If for any reason a final decision of any court determines
that the restrictions under this Section 9 are not reasonable or that
consideration therefor is inadequate, such restrictions shall be
interpreted, modified or rewritten by such court to include as much of the
duration, scope and geographic area identified in this Section 9 as will
render such restrictions valid and enforceable.
d. The Optionee shall not intentionally disclose or reveal to an
unauthorized person, during the Service Term or for a two year period
thereafter, any information relating to the confidential affairs of the
company or any of its affiliates, including but not limited to technical
information, business and marketing plans, strategies, customer
information, other information concerning the Company's products,
promotions, development, financing, expansion plans, business policies and
practices, and other forms of information considered by the Company to be
confidential and in the nature of trade secrets. The Optionee shall hold
as property of the Company and its affiliates all memoranda, books,
papers, letters and other data, and all copies thereof or therefrom, which
are in any way substantially related to the business of the company or its
affiliates, whether made by him or otherwise coming into his possession
and, on a prior written demand of the Company made within two years after
the end of the Service Term, shall deliver the same to the company.
Non-Qualified Option Agreement Page 4
<PAGE> 5
10. General Rules
a. The obligation of the Company to sell or deliver Shares with
respect to the Options granted shall be subject to all applicable laws,
rules and regulations, including all applicable federal and state
securities laws, and the obtaining of all such approvals by governmental
agencies as may be deemed necessary or appropriate by the Board.
b. The Company shall have the right to deduct from any distribution
of cash to Optionee, an amount equal to the federal, state and local
income taxes and other amounts as may be required by law to be withheld
(the "Withholding Taxes") with respect to any Option. If Optionee is
entitled to receive Shares upon exercise of an Option, the Optionee shall
pay the Withholding Taxes to the Company prior to the issuance, or release
from escrow, of such Shares. In satisfaction of the Withholding Taxes to
the Company, the Optionee may make a written election (the "Tax
Election"), which may be accepted or rejected in the discretion of the
Board, to have withheld a portion of the Shares issuable to him or her
upon exercise of the Option having an aggregate Fair Market Value, on the
date preceding the date of exercise, equal to the Withholding Taxes,
provided that in respect of an Optionee who may be subject to liability
under Section 16(b) of the Exchange Act either (i)(A) the Optionee makes
the Tax Election at least six (6) months after the date the Option was
granted, (B) the Option is exercised during the ten day period beginning
on the third business day and ending on the twelfth business day following
the release for publication of the Company's quarterly or annual
statements of earnings (a "Window Period") and (C the Tax Election is made
during the Window Period in which the Option is exercised prior to such
Window Period and subsequent to the immediately preceding Window Period or
(ii)(A) the Tax Election is made at least six (6) months prior to the date
the Option is exercised prior to the expiration of six (6) months
following an election to revoke the Tax Election. Notwithstanding the
foregoing, the Board may, by the adoption or rules or otherwise, (i)
modify the provisions in the preceding sentence or impose such other
restrictions or limitations on Tax Elections as may be necessary to ensure
that the Tax Elections will be exempt transactions under Section 16(b) of
the Exchange Act, an (ii) permit Tax Elections to be made at such other
times and subject to such other conditions as the Board determines will
constitute exempt transactions under Section 16b of the Exchange Act.
c. If Optionee makes a disposition, within the meaning of Section
424(c)of the Code and regulations promulgated thereunder, of any Share or
Shares issued to such Optionee pursuant to the exercise of an Option
within the two-year period commencing on the day after the date of the
grant or within the one-year period commencing on the day after the date
of transfer of such Share or Shares to the Optionee pursuant to such
exercise, the Optionee shall, within ten (10) days of such disposition,
notify the Company thereof, by delivery of written notice to the Company
at its principal executive office, and immediately deliver to the Company
the amount of Withholding Taxes.
d. No Option granted hereunder shall be transferable by the Optionee
to whom granted otherwise than by will or the laws of descent and
distribution, and an Option may be exercised during the lifetime of such
Optionee only by the Optionee or his or her
Non-Qualified Option Agreement Page 5
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guardian or legal representative. The terms of such an Option shall be
final, binding and conclusive upon the beneficiaries, executors,
administrators, heirs and successors of the Optionee.
e. Termination of Employment or Service. Unless otherwise provided
in the Agreement evidencing the Option, an option shall terminate on or
following an Optionee's termination of employment with the Company and its
Subsidiaries or service as a director of the Company and its Subsidiaries
as follows:
(i) If an Optionee's employment terminates for any reason other
than death, Disability or Cause, the Optionee may at any time
within three (3) months after his or her termination of
employment or service as a director, exercise an option to the
extent, and only to the extent, that the Option or portion
thereof was exercisable at the date of such termination;
(ii) In the event the Optionee's employment or service as a
director terminates as a result of Disability, the Optionee
may at any time within one (1) year after such termination
exercise such Option to the extent, and only to the extent,
the Option or portion thereof was exercisable at the date of
such termination;
(iii) If an Optionee's employment or service as a director
terminates for Cause, the Option shall terminate immediately
and no rights thereunder may be exercised;
(iv) If an Optionee dies while an employee of the Company or any
Subsidiary or within three(3) months after termination as
described in clause (1) of this Section 10(e), the Option may
be exercised any time within one (1) year after the Optionee's
death by the person or persons to whom such rights under the
Option pass by will or by the laws of descent and
distribution; provided, however, that an option may be
exercised to the extent, and only to the extent, that the
Option or portion thereof was exercisable on the date of death
or earlier termination.
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed
and the Optionee has hereunto set his hand, as of the day and year first above
written.
INTERNET AMERICA, INC.
/s/ MICHAEL MAPLES
-----------------------------------------------
Michael Maples
Chief Executive Officer
OPTIONEE
/s/ FRANK J. DURDA
-----------------------------------------------
Frank J. Durda
Non-Qualified Option Agreement Page 6
