<PAGE> 1
As filed with the Securities and Exchange Commission on December 8, 1999
Registration No. 333-_______
================================================================================
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)
---------------
INTERNET AMERICA, INC.
EMPLOYEE AND CONSULTANT STOCK OPTION PLAN
(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
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=================================================================================================================
Title of Amount Proposed Proposed
Securities to be Maximum Maximum Amount of
to be Registered Registered Offering Price Aggregate Offering Registration
Per Share (1) Price (1) Fee (1)
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $0.01 par value 260,063 shares $10.19 $2,650,041.90 $699.61
=================================================================================================================
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee.
Pursuant to Rule 457(c) and 457(h), the offering price and registration
fee are computed on the basis of the average of the high and low prices
of the Common Stock on the National Association of Securities Dealers
Automated Quotation National Market System on December 3, 1999.
<PAGE> 2
PROSPECTUS
INTERNET AMERICA, INC.
50,227 SHARES OF COMMON STOCK
This Prospectus relates to the offer and sale of up to 50,227 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
the Internet America, Inc. Employee and Consultant Stock Option Plan (the
"Plan").
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 December 3, 1999, the
last reported sale price of the Common Stock, as reported on the Nasdaq/NMS, was
$10.00.
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
$3,000.
-----------------
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 December 7, 1999.
<PAGE> 3
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. The Company's website is at http://www.airmail.net.
Information contained in the Company's website does not constitute, and shall
not be deemed to constitute, part of this Prospectus.
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) Annual Report on Form 10-KSB filed with the Commission on September
15, 1999 (the "Annual Report");
2
<PAGE> 4
(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 Annual
Report; and
(iii) Description of the Common Stock contained in the Company's
Registration Statement on Form SB-2 (No. 333-78615), as amended and
supplemented, effective as of June 7, 1999.
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 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 Plan. 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 PRIOR OFFERED FOR SELLING OF CLASS AFTER
NAME TO OFFERING(1) SHAREHOLDERS OFFERING(2)
- ---- ------------------ ------------------- ---------------------
<S> <C> <C> <C>
Ernest D. Rapp (3) 52,442 37,205 15,237
Chief Operating Officer *
Marc Ladin (4) 42,267 13,022 29,245
VP - Marketing *
</TABLE>
- ----------------------------
* Less than 1%
(1) Based on ownership as of December 3, 1999. Includes Shares to be acquired
upon exercise of Options granted under the Plan, some of which may not be
exercisable within 60 days of the date of this Prospectus.
3
<PAGE> 5
(2) Based on 9,488,856 shares of Common Stock outstanding on December 3, 1999.
Assumes the exercise of all Options under the Plan, the exercise of which is
covered by this Prospectus, and the sale of the Shares acquired thereby.
(3) Mr. Rapp is also President of PDQ.Net, Inc. ("PDQ Net"), a wholly-owned
subsidiary of the Company. Mr. Rapp was the Chief Financial Officer of PDQ.Net
prior to its acquisition by the Company.
(4) Mr. Ladin was the director of marketing of PDQ.Net prior to its acquisition
by the Company.
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.
4
<PAGE> 6
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.
EXPERTS
The financial statements as of June 30, 1998 and 1999 and for each of
the years then ended, incorporated in this prospectus by reference from the
Company's Annual Report on Form 10-KSB for the year ended June 30, 1999 have
been audited by Deloitte & Touche LLP, independent auditors, as stated in their
reports, which are incorporated herein by reference, and have been so
incorporated in reliance upon the reports 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> 7
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.....................................5
Experts...........................................5
Indemnification...................................5
--------------------------------------------------
</TABLE>
50,227 Shares
Common Stock
INTERNET AMERICA, INC.
December 7, 1999
6
<PAGE> 8
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) Annual Report on Form 10-KSB filed with the Commission on September
15, 1999 (the "Annual Report");
(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 Annual
Report; and
(iii) Description of the Common Stock contained in the Company's
Registration Statement on Form SB-2 (No. 333-78615), as amended and
supplemented, effective as of June 7, 1999.
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.
-1-
<PAGE> 9
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.
-2-
<PAGE> 10
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>
4.1 Specimen Common Stock certificate (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*
99.1 Internet America, Inc. Employee and Consultant Stock Option Plan *
</TABLE>
- -----------
* Filed herewith.
(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
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
-3-
<PAGE> 11
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 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.
-4-
<PAGE> 12
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 7th day of December,
1999.
INTERNET AMERICA, INC.
By: /s/ James T. Chaney
--------------------------------------------------
James T. Chaney, Vice President, Chief
Financial Officer and Treasurer
(Principal Accounting and Financial Officer)
<PAGE> 13
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
- ---------------------------------
Michael T. Maples Chief Executive Officer,
President and Director
(Principal Executive Officer) December 7, 1999
/s/ James T. Chaney
- ---------------------------------
James T. Chaney Chief Financial Officer, Vice
President and Treasurer
(Principal Financial and Accounting
Officer) December 7, 1999
/s/ William O. Hunt
- ---------------------------------
William O. Hunt Chairman of the Board December 7, 1999
/s/ Jack T. Smith
- ---------------------------------
Jack T. Smith Director December 7, 1999
/s/ Gary L. Corona
- ---------------------------------
Gary L. Corona Director December 7, 1999
</TABLE>
-6-
<PAGE> 14
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibit
------- ----------------------
<S> <C>
4.1 Specimen Common Stock certificate (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*
99.1 Internet America, Inc. Employee and Consultant Stock Option Plan *
</TABLE>
- -----------
* Filed herewith.
(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
-7-
<PAGE> 1
EXHIBIT 5.1
December 7, 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 260,063 shares of the Company's Common Stock, par value $0.01 per share (the
"Shares") which Shares are issuable upon the exercise of options granted
pursuant to the Internet America, Inc. Employee and Consultant Stock Option Plan
(the "Plan"), which Plan is filed as an exhibit to a 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 a copy of the Plan. 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. on Form S-8 of our report dated August 13, 1999,
appearing in the Annual Report on Form 10-KSB of Internet America, Inc. for the
year ended June 30, 1999 and 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
December 7, 1999
<PAGE> 1
EXHIBIT 99.1
INTERNET AMERICA, INC.
EMPLOYEE AND CONSULTANT STOCK OPTION PLAN
1. Purposes of the Plan. The purposes of this Stock Option Plan are to
attract and retain the best available personnel for positions of substantial
responsibility, to provide additional incentive to Employees and Consultants of
the Company and its Subsidiaries and to promote the success of the Company's
business. Options granted under this Plan may be incentive stock options (as
defined under Section 422 of the Code) or nonqualified stock options, as
determined by the Administrator at the time of grant of an option and subject to
the applicable provisions of Section 422 of the Code, as amended, and the
regulations promulgated thereunder. No Incentive Stock Options may be granted
under this Plan unless this Plan has been approved by the stockholders of the
Company within twelve months following its adoption by the Board of Directors.
2. Definitions. As used herein, the following definitions shall apply:
(a) "Administrator" means the Board or any of its Committees, as
applicable, that is administering the Plan pursuant to Section 4 of the
Plan.
(b) "Board" means the Board of Directors of the Company.
(c) "Change of Control" shall have the meaning provided in Section 12
hereof.
(d) "Code" means the Internal Revenue Code of 1986, as amended.
(e) "Committee" means the Committee appointed by the Board of
Directors in accordance with paragraph (a) of Section 4 of the Plan.
(f) "Company" means Internet America, Inc., a Texas corporation.
(g) "Consultant" means any consultant or advisor to the Company or any
Parent or Subsidiary.
(h) "Continuous Status as an Employee" means the absence of any
interruption or termination of the employment relationship by the Company
or any Subsidiary. Continuous Status as an Employee shall not be considered
interrupted in the case of: (i) any leave of absence approved by the Board,
including sick leave, military leave, or any other personal leave;
provided, however, that for purposes of Incentive Stock Options, such leave
is for a period of not more than ninety (90) days, unless reemployment upon
the expiration of such leave is guaranteed by contract or statute, or
unless provided otherwise pursuant to Company policy adopted from time to
time; or (ii) in the case of transfers between locations of the Company or
between the Company, its Subsidiaries or its successor.
(i) "Employee" means any person, including officers and directors,
employed by the Company or any Parent or Subsidiary of the Company. The
payment of a director's fee by the Company shall not be sufficient to
constitute "employment" by the Company.
(j) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(k) "Fair Market Value" means, as of any date, the value of Stock
determined as follows:
(i) If the Stock is listed on any established stock exchange or a
national market system, including without limitation The Nasdaq National
Market, its Fair Market Value shall be the closing sales price for such
stock (or the closing bid, if no sales were reported, as quoted on such
system or exchange or the exchange with the greatest volume of trading
in Stock for the last market trading day prior to the time of
determination) as reported in The Wall Street Journal or such other
source as the Administrator deems reliable;
(ii) If the Stock is quoted on The Nasdaq Stock Market (but not on
The Nasdaq National Market) or regularly quoted by a recognized
securities dealer but selling prices are not reported, its Fair Market
Value shall be the mean between the high and low asked prices for the
Stock; or
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(iii) In the absence of an established market for the Stock, the
Fair Market Value thereof shall be determined in good faith by the
Administrator.
(l) "Incentive Stock Option" means an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code.
(m) "Nonqualified Stock Option" means an Option not intended to
qualify as an Incentive Stock Option.
(n) "Option" means a stock option granted pursuant to the Plan.
(o) "Optioned Stock" means the Stock subject to an Option.
(p) "Optionee" means an Employee or Consultant who receives an Option.
(q) "Parent" means a "parent corporation," whether now or hereafter
existing, as defined in Section 424(e) of the Code.
(r) "Plan" means this 1998 Employee and Consultant Stock Option Plan.
(s) "Share" means a share of the Stock, as adjusted in accordance with
Section 12 of the Plan.
(t) "Stock" means the Common Stock, par value $.01 per share, of the
Company.
(u) "Subsidiary" means a "subsidiary corporation," whether now or
hereafter existing, as defined in Section 424(f) of the Code.
3. Stock Subject to the Plan. Subject to the provisions of Section 12 of
the Plan, the maximum number of shares of Stock which may be optioned and sold
under the Plan is 260,063 shares. The shares may be authorized, but unissued, or
reacquired Stock.
If an Option should expire or become unexercisable for any reason without
having been exercised in full, the unpurchased Shares which were subject thereto
shall, unless the Plan shall have been terminated, become available for future
grant under the Plan.
4. Administration of the Plan.
(a) Procedure.
(i) Administration With Respect to Directors and Officers. With
respect to grants of Options to Employees who are also officers or
directors of the Company, the Plan shall be administered by (A) the
Board or (B) a Committee designated by the Board to administer the Plan,
which Committee shall be constituted in such a manner as to permit the
Plan to comply with Rule 16b-3 promulgated under the Exchange Act or any
successor thereto ("Rule 16b-3") with respect to a plan intended to
qualify thereunder as a discretionary plan. Once appointed, such
Committee shall continue to serve in its designated capacity until
otherwise directed by the Board. From time to time the Board may
increase the size of the Committee and appoint additional members
thereof, remove members (with or without cause) and appoint new members
in substitution therefor, fill vacancies, however caused, and remove all
members of the Committee and thereafter directly administer the Plan,
all to the extent permitted by Rule 16b-3 with respect to a plan
intended to qualify thereunder as a discretionary plan. Notwithstanding
the foregoing, the Plan shall not be administered by the Board if (a)
the Company and its officers and directors are then subject to the
requirements of Section 16 of the Exchange Act and (b) the Board's
administration of the Plan would prevent the Plan from complying with
Rule 16b-3.
(ii) Multiple Administrative Bodies. If permitted by Rule 16b-3,
the Plan may be administered by different bodies with respect to
directors, non-director officers and Employees who are neither directors
nor officers.
(iii) Administration With Respect to Consultants and Other
Employees. With respect to grants of Options to Employees or Consultants
who are neither directors nor officers of the
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Company, the Plan shall be administered by (A) the Board or (B) a
Committee designated by the Board, which Committee shall be constituted
in such a manner as to satisfy the legal requirements relating to the
administration of incentive stock option plans, if any, of corporate and
securities laws applicable to the Company and of the Code (the
"Applicable Laws"). Once appointed, such Committee shall continue to
serve in its designated capacity until otherwise directed by the Board.
From time to time the Board may increase the size of the Committee and
appoint additional members thereof, remove members (with or without
cause) and appoint new members in substitution therefor, fill vacancies,
however caused, and remove all members of the Committee and thereafter
directly administer the Plan, all to the extent permitted by the
Applicable Laws.
(b) Powers of the Administrator. Subject to the provisions of the Plan
and in the case of a Committee, the specific duties delegated by the Board
to such Committee, the Administrator shall have the authority, in its
discretion:
(i) to determine the Fair Market Value of the Stock, in accordance
with Section 2(j) of the Plan;
(ii) to select the officers, Consultants and Employees to whom
Options may from time to time be granted hereunder;
(iii) to determine whether and to what extent Options are granted
hereunder;
(iv) to determine the number of shares of Stock to be covered by
each such award granted hereunder;
(v) to approve forms of agreement for use under the Plan;
(vi) to determine the terms and conditions, not inconsistent with
the terms of the Plan, of any award granted hereunder (including, but
not limited to, the per share exercise price for the Shares to be issued
pursuant to the exercise of an Option and any restriction or limitation,
or any vesting acceleration or waiver of forfeiture restrictions
regarding any Option or other award and/or the shares of Stock relating
thereto, based in each case on such factors as the Administrator shall
determine, in its sole discretion);
(vii) to determine whether and under what circumstances an Option
may be bought-out for cash under subsection 9(f);
(viii) to determine whether, to what extent and under what
circumstances Stock and other amounts payable with respect to an award
under this Plan shall be deferred either automatically or at the
election of the participant (including providing for and determining the
amount, if any, of any deemed earnings on any deferred amount during any
deferral period); and
(ix) to reduce the exercise price of any Option to the then current
Fair Market Value if the Fair Market Value of the Stock covered by such
Option shall have declined since the date the Option was granted.
(c) Effect of Committee's Decision. All decisions, determinations and
interpretations of the Administrator shall be final and binding on all
Optionees and any other holders of any Options. Neither the Board, the
Committee nor any member thereof shall be liable for any act, omission,
interpretation, construction or determination made in connection with the
Plan in good faith, and the members of the Board and of the Committee shall
be entitled to indemnification and reimbursement by the Company in respect
of any claim, loss, damage or expense (including counsel fees) arising
therefrom to the full extent permitted by law.
5. Eligibility.
(a) Nonqualified Stock Options may be granted to Employees and
Consultants. Incentive Stock Options may be granted only to Employees. An
Employee or Consultant who has been granted an Option may, if he is
otherwise eligible, be granted an additional Option or Options.
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(b) Each Option shall be designated in the written option agreement as
either an Incentive Stock Option or a Nonqualified Stock Option. However,
notwithstanding such designations, to the extent that the aggregate Fair
Market Value of the Shares with respect to which Options designated as
Incentive Stock Options are exercisable for the first time by any Optionee
during any calendar year (under all plans of the Company or any Parent or
Subsidiary) exceeds $100,000, such excess Options shall be treated as
Nonqualified Stock Options.
(c) For purposes of Section 5(b), Incentive Stock Options shall be
taken into account in the order in which they were granted, and the Fair
Market Value of the Shares shall be determined as of the time the Option
with respect to such Shares is granted.
(d) The Plan shall not confer upon any Optionee any right with respect
to continuation of employment or consulting relationship with the Company,
nor shall it interfere in any way with his right or the Company's right to
terminate his employment or consulting relationship at any time, with or
without cause, unless otherwise agreed in writing by the Company and such
Optionee.
6. Term of Plan. The Plan shall become effective upon its adoption by the
Board of Directors. It shall continue in effect until June 24, 2008 unless
extended by the Board or sooner terminated under Section 14 of the Plan. No
grants of Options will be made pursuant to the Plan after June 24, 2008.
7. Term of Option. The term of each Option shall be the term stated in the
Option Agreement; provided, however, that in the case of an Incentive Stock
Option, the term shall be no more than ten (10) years from the date of grant
thereof or such shorter term as may be provided in the Option Agreement.
However, in the case of an Incentive Stock Option granted to an Optionee who, at
the time the Option is granted, owns Stock representing more than ten percent
(10%) of the voting power of all classes of stock of the Company or any Parent
or Subsidiary, the term of the Option shall be five (5) years from the date of
grant thereof or such shorter term as may be provided in the Option Agreement.
8. Option Exercise Price and Consideration.
(a) The per share exercise price for the Shares to be issued pursuant
to exercise of an Option shall be such price as is determined by the
Administrator, provided that, in the case of an Incentive Stock Option:
(i) granted to an Employee who, at the time of the grant of such
Incentive Stock Option, owns stock representing more than ten percent
(10%) of the voting power of all classes of stock of the Company or any
Parent or Subsidiary, the per Share exercise price shall be no less than
110% of the Fair Market Value per Share on the date of grant.
(ii) granted to any Employee, the per Share exercise price shall be
no less than 100% of the Fair Market Value per Share on the date of
grant.
(b) The consideration to be paid for the Shares to be issued upon
exercise of an Option, including the method of payment, shall be determined
by the Administrator (and, in the case of an Incentive Stock Option, shall
be determined at the time of grant) and may consist entirely of (1) cash,
(2) check, (3) promissory note, (4) other shares of the Company's capital
stock which (x) in the case of shares of the Company's capital stock
acquired upon exercise of an Option either have been owned by the Optionee
for more than six months on the date of surrender or were not acquired,
directly or indirectly, from the Company, and (y) have a Fair Market Value
on the date of surrender equal to the aggregate exercise price of the
Shares as to which said Option shall be exercised, (5) authorization for
the Company to retain from the total number of Shares as to which the
Option is exercised that number of Shares having a Fair Market Value on the
date of exercise equal to the exercise price for the total number of Shares
as to which the Option is exercised, (6) delivery of a properly executed
exercise notice together with irrevocable instructions to a broker to
promptly deliver to the Company the amount of sale or loan proceeds
required to pay the exercise price, (7) any combination of the foregoing
methods of payment, or
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(8) such other consideration and method of payment for the issuance of
Shares to the extent permitted under applicable laws.
9. Exercise of Option.
(a) Procedure for Exercise; Rights as a Stockholder. Any Option
granted hereunder shall be exercisable at such times and under such
conditions as determined by the Administrator, including performance
criteria with respect to the Company and/or the Optionee, and as shall be
permissible under the terms of the Plan. An Option may not be exercised for
a fraction of a Share.
An Option shall be deemed to be exercised, and the Optionee deemed to
be a stockholder of the Shares being purchased upon exercise, when written
notice of such exercise has been given to the Company in accordance with
the terms of the Option by the person entitled to exercise the Option and
full payment for the Shares with respect to which the Option is exercised
has been received by the Company. Full payment may, as authorized by the
Board, consist of any consideration and method of payment allowable under
Section 8(b) of the Plan.
Exercise of an Option in any manner shall result in a decrease in the
number of Shares which thereafter may be available, both for purposes of
the Plan and for sale under the Option, by the number of Shares as to which
the Option is exercised.
(b) Termination of Employment. In the event of termination of an
Optionee's relationship as a Consultant (unless such termination is for
purposes of becoming an Employee of the Company) or Continuous Status as an
Employee with the Company (as the case may be), such Optionee may, but only
within ninety (90) days (or such other period of time as is determined by
the Board, with such determination in the case of an Incentive Stock Option
being made at the time of grant of the Option after the date of such
termination (but in no event later than the expiration date of the term of
such Option as set forth in the Option Agreement)), exercise his Option to
the extent that an Optionee was entitled to exercise it at the date of such
termination. To the extent that an Optionee was not entitled to exercise
the Option at the date of such termination, or if Optionee does not
exercise such Option to the extent so entitled within the time specified
herein, the Option shall terminate.
(c) Disability of Optionee. Notwithstanding the provisions of Section
9(b) above, in the event of termination of an Optionee's relationship as a
Consultant or Continuous Status as an Employee as a result of his total and
permanent disability (as defined in Section 22(e)(3) of the Code), Optionee
may, but only within twelve (12) months from the date of such termination
(but in no event later than the expiration date of the term of such Option
as set forth in the Option Agreement), exercise the Option to the extent
otherwise entitled to exercise it at the date of such termination. To the
extent that Optionee was not entitled to exercise the Option at the date of
termination, or if Optionee does not exercise such Option to the extent so
entitled within the time specified herein, the Option shall terminate.
(d) Death of Optionee. In the event of the death of an Optionee, the
Option may be exercised, at any time within twelve (12) months following
the date of death (but in no event later than the expiration date of the
term of such Option as set forth in the Option Agreement), by the
Optionee's estate or by a person who acquired the right to exercise the
Option by bequest or inheritance, but only to the extent the Optionee was
entitled to exercise the Option at the date of death. To the extent that
Optionee was not entitled to exercise the Option at the date of
termination, or if the Optionee's estate (or such other person who acquired
the right to exercise the Option) does not exercise such Option to the
extent so entitled within the time specified herein, the Option shall
terminate.
(e) Rule 16b-3. Options granted to persons subject to Section 16(b) of
the Exchange Act must comply with Rule 16b-3 and shall contain such
additional conditions or restrictions as may be required thereunder to
qualify for the maximum exemption from Section 16 of the Exchange Act with
respect to Plan transactions.
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(f) Buyout Provisions. The Administrator may at any time offer to buy
out for a payment in cash or Shares, an Option previously granted, based on
such terms and conditions as the Administrator shall establish and
communicate to the Optionee at the time that such offer is made.
10. Non-Transferability of Options. The Option may not be sold, pledged,
assigned, hypothecated, transferred, or disposed of in any manner other than by
will or by the laws of descent or distribution and may be exercised, during the
lifetime of the Optionee, only by the Optionee.
11. Stock Withholding to Satisfy Withholding Tax Obligations. At the
discretion of the Administrator, Optionees may satisfy withholding obligations
as provided in this paragraph. When an Optionee incurs tax liability in
connection with an Option, which tax liability is subject to tax withholding
under applicable tax laws, and the Optionee is obligated to pay the Company an
amount required to be withheld under applicable tax laws, the Optionee may
satisfy the withholding tax obligation by electing to have the Company withhold
from the Shares to be issued upon exercise of the Option, that number of Shares
having a Fair Market Value equal to the amount required to be withheld. The Fair
Market Value of the Shares to be withheld shall be determined on the date that
the amount of tax to be withheld is to be determined (the "Tax Date").
All elections by an Optionee to have Shares withheld for this purpose shall
be made in writing in a form acceptable to the Administrator and shall be
subject to the following restrictions:
(a) the election must be made on or prior to the applicable Tax Date;
(b) once made, the election shall be irrevocable as to the particular
Shares of the Option as to which the election is made;
(c) all elections shall be subject to the consent or disapproval of
the Administrator; and
(d) if the Optionee is subject to Rule 16b-3, the election must comply
with the applicable provisions of Rule 16b-3 and shall be subject to such
additional conditions or restrictions as may be required thereunder to
qualify for the maximum exemption from Section 16 of the Exchange Act with
respect to Plan transactions.
In the event the election to have Shares withheld is made by an Optionee
and the Tax Date is deferred under Section 83 of the Code because no election is
filed under Section 83(b) of the Code, the Optionee shall receive the full
number of Shares with respect to which the Option is exercised but such Optionee
shall be unconditionally obligated to tender back to the Company the proper
number of Shares on the Tax Date.
12. Changes in the Company's Capital Structure. The existence of
outstanding Options shall not affect in any way the right or power of the
Company or its stockholders to make or authorize any or all adjustments,
recapitalizations, reorganizations or other changes in the Company's capital
structure or its business, or any merger or consolidation of the Company, or any
issue of bonds, debentures, preferred or prior preference stock ahead of or
affecting the Stock or the rights thereof, or the dissolution or liquidation of
the Company, or any sale or transfer of all or any part of its assets or
business, or any other corporate act or proceeding, whether of a similar
character or otherwise.
If the Company shall effect a subdivision or consolidation of shares or
other capital readjustment, the payment of a stock dividend, or other increase
or reduction of the number of shares of the Stock outstanding, without receiving
compensation therefor in money, services or property, then (a) the number,
class, and per share price of shares of Stock subject to outstanding Options
hereunder shall be appropriately adjusted in such a manner as to entitle an
Optionee to receive upon exercise of an Option, for the same aggregate cash
consideration, the same total number and class of shares as he would have
received had he exercised his Option in full immediately prior to the event
requiring the adjustment; and (b) the number and class of shares of Stock then
reserved for issuance under the Plan shall be adjusted by substituting for the
total number and class of shares of Stock then reserved that number and class of
shares of stock that would have been received by the owner of an equal number of
outstanding shares of each class of Stock as the result of the event requiring
the adjustment.
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If the Company shall be a party to a merger or a similar reorganization
after which the Company is not the surviving corporation, or if there is a sale
of all or substantially all the Common Stock or a sale of all or substantially
all of the assets of the Company, or if the Company is to be liquidated or
dissolved (any of which events shall constitute a "Significant Transaction"),
then, subject to the provisions hereof, the Administrator, in its discretion,
may accelerate the vesting of all outstanding Options or take such other action
with respect to outstanding Options as it deems appropriate, including, without
limitation, canceling such outstanding Options and paying the Optionees an
amount equal to the value of such Options, as determined by the Board.
Notwithstanding the foregoing, if a Significant Transaction shall occur in
connection with or following a Change in Control (as defined below), in
connection with which Significant Transaction the holder of any Option that is
not fully vested shall not receive, in respect of such Option, a substitute
award of stock options containing substantially similar terms to and having an
equal or greater fair market value than such Option, then the Administrator
shall either (i) accelerate the vesting of such Option within a reasonable time
prior to the completion of such Significant Transaction (such that the holder of
such Option would have the opportunity to participate in the Significant
Transaction on the same basis as holders of Stock, subject to such holder's
exercise of such Option) or (ii) cancel such Option in consideration of the
payment to the holder thereof of an amount (in cash) equal to the fair market
value of such Option. For purposes of the foregoing, the fair market value
attributable to Options shall be determined by the Administrator either, at its
election, (x) in accordance with the Black-Scholes method (for purposes of which
volatility shall be measured over the preceding one year period and the
risk-free interest rate shall be the rate of U.S. treasury bills with a maturity
corresponding to the remaining term of such Option) or (y) to be an amount equal
to the fair market value of the Stock subject to such Option less the exercise
price thereof and (ii) the fair market value of (A) any Options shall be
determined as of the date, either of the Change in Control or of the Significant
Transaction, that results in the greater fair market value of such Options, and
(B) any substitute award shall be determined as of the date of the Significant
Transaction. A "Change in Control" shall be deemed to occur if:
(i) any individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended)
shall become (directly or indirectly) the beneficial owner (within the
meaning of Rule 13d-3 promulgated under such Act) of more than 50% of the
combined voting power of the then outstanding voting securities of the
Company entitled to vote generally in the election of directors ("Voting
Power"); or
(ii) the Company's stockholders shall approve a merger or
consolidation, sale or disposition of all or substantially all of the
Company's assets or a plan of liquidation or dissolution of the Company,
other than (A) a merger or consolidation in which the voting securities of
the Company outstanding immediately prior thereto will become (by operation
of law), or are to be converted into voting securities of the surviving
corporation or its parent corporation that, immediately after such merger
or consolidation, (x) are owned by the same person or entity or persons or
entities that owned the voting securities of the Company immediately prior
thereto and (y) possess at least 75% of the Voting Power held by the voting
securities of the surviving corporation or its parent corporation, or (B) a
merger or consolidation effected to implement a recapitalization of the
Company (or similar transaction) in which no person acquires more than 50%
of the Voting Power.
Except as expressly provided herein, the issue by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
for cash or property, or for labor or services either upon direct sale or upon
the exercise of rights or warrants to subscribe therefor, or upon conversion of
shares or obligations of the Company convertible into such shares or other
securities, shall not affect, and no adjustment by reason thereof shall be made
with respect to, the number, class, or price of shares of Stock then subject to
outstanding Options.
13. Time of Granting Options. The date of grant of an Option shall, for all
purposes, be the date on which the Administrator makes the determination
granting such Option, or such other date as is determined by the Administrator.
Notice of the determination shall be given to each Employee or Consultant to
whom an Option is so granted within a reasonable time after the date of such
grant.
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14. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may at any time amend, alter,
suspend or discontinue the Plan, but no amendment, alteration, suspension
or discontinuation shall be made which would impair the rights of any
Optionee under any grant theretofore made, without his or her consent. In
addition, to the extent necessary and desirable to comply with Rule 16b-3
under the Exchange Act or with Section 422 of the Code (or any other
applicable law or regulation, including the applicable requirements of The
Nasdaq Stock Market or an established stock exchange), the Company shall
obtain stockholder approval of any Plan amendment in such a manner and to
such a degree as required.
(b) Effect of Amendment or Termination. Any such amendment or
termination of the Plan shall not affect Options already granted and such
Options shall remain in full force and effect as if this Plan had not been
amended or terminated, unless mutually agreed otherwise between the
Optionee and the Board, which agreement must be in writing and signed by
the Optionee and the Company.
15. Conditions Upon Issuance of Shares. Shares shall not be issued pursuant
to the exercise of an Option unless the exercise of such Option and the issuance
and delivery of such Shares pursuant thereto shall comply with all relevant
provisions of law, including, without limitation, the Securities Act of 1933, as
amended, the Exchange Act, the rules and regulations promulgated thereunder, and
the requirements of any stock exchange upon which the Shares may then be listed,
and shall be further subject to the approval of counsel for the Company with
respect to such compliance.
As a condition to the exercise of an Option, the Company may require the
person exercising such Option to represent and warrant at the time of any such
exercise that the Shares are being purchased only for investment and without any
present intention to sell or distribute such Shares if, in the opinion of
counsel for the Company, such a representation is required by any of the
aforementioned relevant provisions of law.
16. Reservation of Shares. The Company, during the term of this Plan, will
at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
The inability of the Company to obtain authority from any regulatory body
having jurisdiction, which authority is deemed by the Company's counsel to be
necessary to the lawful issuance and sale of any Shares hereunder, shall relieve
the Company of any liability in respect of the failure to issue or sell such
Shares as to which such requisite authority shall not have been obtained.
17. Agreements. Options shall be evidenced by written agreements ("Option
Agreement") in such form as the applicable Administrator shall approve from time
to time.
18. Information to Optionees. The Company shall provide to each Optionee,
during the period for which such Optionee has one or more Options outstanding,
copies of all annual reports and other information which are generally provided
to all stockholders of the Company. The Company shall not be required to provide
such information to persons whose duties in connection with the Company assure
their access to equivalent information.
19. Governing Law; Construction. All rights and obligations under the Plan
shall be governed by, and the Plan shall be construed in accordance with, the
laws of the State of Texas without regard to the principles of conflicts of
laws. Titles and headings to Sections herein are for purposes of reference only,
and shall in no way limit, define or otherwise affect the meaning or
interpretation of any provisions of the Plan.
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