<PAGE> 1
As filed with the Securities and Exchange Commission on January 12, 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.
1996 INCENTIVE 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>
=================================================================================================================
Proposed Proposed
Title of Amount Maximum Maximum Amount of
Securities to be Offering Price Aggregate Offering Registration
to be Registered Registered Per Share (1) Price (1) Fee (1)
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $0.01 par value 225,000 shares $23.81 $5,357,250 $1,489.32
=================================================================================================================
</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 January 5, 1999.
<PAGE> 2
PROSPECTUS
INTERNET AMERICA, INC.
225,000 SHARES OF COMMON STOCK
This Prospectus relates to the offer and sale of up to 225,000 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
the Internet America, Inc. 1996 Incentive 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 January 8, 1999, the
last reported sale price of the Common Stock, as reported on the Nasdaq/NMS, was
$35.50.
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
$8,000.
-----------------
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 January 11, 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.
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
2
<PAGE> 4
(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 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 COMMON STOCK AMOUNT AND PERCENTAGE
STOCK PRIOR TO OFFERED FOR SELLING OF CLASS AFTER
NAME OFFERING(1) SHAREHOLDERS OFFERING(2)
- ---- ------------------- ------------------- ---------------------
<S> <C> <C> <C>
John James Stewart III 59,944 (3) 3,694 56,250
Vice President - Customer (less than 1%)
Care
</TABLE>
- ----------
(1) Based on ownership as of January 11, 1999. Includes Shares to be acquired
upon exercise of Options granted under the Plan, some of which are not
exercisable within 60 days of the date of this Prospectus.
(2) Based on 6,285,957 shares of Common Stock outstanding on January 11, 1999.
Assumes the exercise of all Options granted under the Plan, the exercise of
which is covered by this Prospectus, and the sale of the Shares acquired
thereby.
(3) Includes 56,250 shares purchasable pursuant to options not granted under the
Plan, some of which are not exercisable within 60 days of the date of this
Prospectus.
3
<PAGE> 5
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
<PAGE> 6
EXPERTS
The financial statements as of June 30, 1997 and 1998 and for each of
the three years in the period then ended, 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, 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> 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 ............................................................ 4
Experts .................................................................. 5
Indemnification .......................................................... 5
</TABLE>
================================================================================
================================================================================
225,000 Shares
Common Stock
INTERNET AMERICA, INC.
January 11, 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) 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.
-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.
Exhibit
Number Description of Exhibit
- ------ ----------------------
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 Internet America, Inc. 1996 Incentive Stock Option Plan*
- ----------
* 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.
-3-
<PAGE> 11
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
-4-
<PAGE> 12
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.
-5-
<PAGE> 13
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 11th day of
January, 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)
-6-
<PAGE> 14
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, January 11, 1999
President and Director
(Principal Executive Officer)
/s/ JAMES T. CHANEY
- ----------------------------------
James T. Chaney Chief Financial Officer, Vice January 11, 1999
President, Secretary and Treasurer
(Principal Financial and Accounting
Officer)
/s/ DOUGLAS G. SHELDON
- ----------------------------------
Douglas G. Sheldon Vice President -- Marketing, Director January 11, 1999
/s/ WILLIAM O. HUNT
- ----------------------------------
William O. Hunt Chairman of the Board January 11, 1999
/s/ JACK T. SMITH
- ----------------------------------
Jack T. Smith Director January 11, 1999
/s/ GARY L. CORONA
- ----------------------------------
Gary L. Corona Director January 11, 1999
</TABLE>
-7-
<PAGE> 15
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 Internet America, Inc. 1996 Incentive 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.
<PAGE> 1
EXHIBIT 5.1
January 11, 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 225,000 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 Internet America, Inc. 1996 Incentive Stock Option Plan
(the "Plan"). A Registration Statement on Form S-8 covering the offering and
sale of the Shares (the "Registration Statement") 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,
when sold by Selling Shareholders 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
January 11, 1999
<PAGE> 1
Exhibit 99
INTERNET AMERICA, INC.
1996 INCENTIVE STOCK OPTION PLAN
1. Purpose. The purpose of this Plan is to strengthen Internet America,
Inc. by providing an incentive to its key employees and directors thereby
encouraging them to devote their abilities and industry to the success of the
Company's business enterprise. It is intended that this purpose be achieved by
extending to key employees of the Company an added long-term incentive for high
levels of performance and unusual efforts through the grant of options to
purchase shares of the Company's common stock under the Internet America, Inc.
1996 Incentive Stock Option Plan.
2. Definitions. For purposes of the Plan:
(a) "Agreement" means the written agreement between the Company and
an Optionee evidencing the grant of an Option and setting forth the terms and
conditions thereof.
(b) "Board" means the Board of Directors of the Company.
(c) "Cause" means (i) intentional failure to perform reasonably
assigned duties, (ii) dishonesty or willful misconduct in the performance of an
Optionee's duties, (iii) any act of (A) fraud or intentional misrepresentation,
or (B) embezzlement, misappropriation or conversion of assets or opportunities
of the Company or (iv) willful violation of any law, rule or regulation in
connection with the performance of an Optionee's duties (other than traffic
violations or similar offenses).
(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.
(e) "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, of 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
then outstanding shares of common stock), (B) a sale or disposition of all or
substantially all of the Company's assets or (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.
(f) "Code" means the Internal Revenue Code of 1986, as amended.
(g) "Committee" means a committee consisting of at least two (2)
Disinterested Directors appointed by the Board to administer the Plan and to
perform the functions set forth herein.
(h) "Company" means Internet America, Inc., a Texas Corporation.
<PAGE> 2
(i) "Disability" means a physical or mental infirmity which impairs the
Optionee's ability to perform substantially his or her duties for a period of
one hundred eighty (180) consecutive days.
(j) "Disinterested Director" means a director of the Company who is
"disinterested" within the meaning of Rule 16b-3 under the Exchange Act.
(k) "Eligible Employee" means any officer or other key employee of the
Company or a Subsidiary designated by the Committee as eligible to receive
Options subject to the conditions set forth herein.
(l) "Employee Options" means an Option granted to an Eligible Employee
pursuant to Section 6.
(m) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(n) "Fair Market Value" on any date means the closing price of Shares on
such date on the principal national securities exchange on which such 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.
(o) "Incentive Stock Option" means an Option satisfying the requirements
of Section 422 of the Code and designated by the committee as an Incentive
Stock Option.
(p) "Nonemployee Director" means a director of the Company who is not an
employee of the Company or any subsidiary.
(q) "Option" means an Employee Option.
(r) "Optionee" means a person to whom an Option has been granted under
the Plan.
(s) "Parent" means any corporation which is a parent corporation (within
the meaning of Section 424(e) of the Code) with respect to the Company.
(t) "Plan" means the Internet America, Inc. 1996 Incentive Stock Option
Plan.
(u) "Shares" means the common stock, par value $.01 per share, of the
Company.
(v) "Subsidiary" means any corporation which is a subsidiary corporation
(within the meaning of Section 424(f) of the Code) with respect to the Company.
(w) "Successor Corporation" means a corporation, or a parent or
subsidiary thereof within the meaning of Section 424(a) of the Code, which
issues or assumes a stock option in a transaction to which Section 424(a) of
the Code applies.
(x) "Ten-Percent Stockholder" means an Eligible Employee, who, at the
time an Incentive Stock Option is to be granted to him or her, owns (within the
meaning of Section 422(b)(6) of the Code) stock possessing more than ten percent
(10%) of the total combined voting power of all classes of stock of the Company,
or of a Parent or a Subsidiary.
<PAGE> 3
3. Administration.
(a) The Plan shall be administered by the Committee which shall
hold meetings at such times as may be necessary for the proper administration
of the Plan. The Committee shall keep minutes of its meetings. A quorum shall
consist of not less than two members of the Committee and a majority of a
quorum may authorize any action. Any decision or determination reduced to
writing and signed by a majority of all of the members shall be as fully
effective as if made by a majority vote at a meeting duly called and held. Each
member of the Committee shall be a Disinterested Director. No member of the
Committee shall be liable for any action, failure to act, determination or
interpretation made in good faith with respect to this Plan of any transaction
hereunder, except for liability arising from his or her own willful
misfeasance, gross negligence of reckless disregard of his or her duties. The
Company hereby agrees to indemnity each member of the Committee for all costs
and expenses and, to the extent permitted by applicable law, any liability
incurred in connection with defending against, responding to, negotiating for
the settlement of or otherwise dealing with any claim, cause of action or
dispute of any kind arising in connection with any actions in administering
this Plan or in authorizing or denying authorization to any transaction
hereunder.
(b) Subject to the express terms and conditions set forth herein,
the Committee shall have the power from time to time to determine those
Eligible Employees to whom Employee Options shall be granted under the Plan
and the number of Incentive Stock Options to be granted to each Eligible
Employee and to prescribe the terms and conditions (which need not be identical)
of each Employee Option, including the purchase price per Share subject to each
Employee Option, and make any amendment or modification to any
Agreement consistent with the terms of the Plan.
(c) Subject to the express terms and conditions set forth herein,
the Committee shall have power from time to time:
(1) To construe and interpret the Plan and the Options granted
thereunder and to establish, amend and revoke rules and regulations for the
administration of the Plan, including, but not limited to, correcting any defect
or supplying any omission, or reconciling any inconsistency in the Plan or any
Agreement, in the manner and to the extent it shall deem necessary or advisable
to make the Plan fully effective, and all decision and determinations by the
Committee in the exercise of this power shall be final, binding and conclusive
upon the Company, its Subsidiaries, the Optionee and all other persons having
any interest therein;
(2) to determine the duration and the purposes for leaves of
absence which may be granted to an Optionee on an individual basis without
constituting a termination of employment or service for purposes of the Plan;
(3) to exercise its discretion with respect to the powers and
rights granted to it as set forth in the Plan; and
(4) generally, to exercise such powers and to perform such
acts as are deemed necessary or advisable to promote the best interest of the
Company with respect to the Plan.
4. Stock Subject to Program.
(a) The maximum number of Shares that may be made the subject of
Options granted under the Plan is 100,000 Shares, (or the number and kind of
shares of stock or other securities to which such Shares are adjusted upon a
Change in Capitalization pursuant to section 7) and the Company shall reserve
for the purposes of the Plan, out of its authorized but unissued Shares or out
of Shares held in the Company's treasury, or partly out of each, such number of
Shares as shall be determined by the Board.
<PAGE> 4
(b) Whenever any outstanding Option or portion thereof expires, is
canceled or is otherwise terminated for any reason (other than upon the
surrender of the Option pursuant to section 5(d) hereof), the Shares allocable
to the canceled or otherwise terminated Option or portion thereof may again be
the subject of Options granted hereunder.
5. Option Grants for Eligible Employees.
(a) Grant. Subject to the provisions of the Plan and to Section 4(a)
above, the Committee shall have full and final authority to select those
Eligible Employees who will receive Employee Options, the terms and conditions
of which shall be set forth in an Agreement; provided, however, that no Eligible
Employee shall receive any Incentive Stock Options unless he is an employee of
the Company, a Parent or Subsidiary at the time the Incentive Stock Option is
granted.
(b) Purchase Price. The purchase price or the manner in which the
purchase price is to be determined for Shares under each Employee Option shall
be determined by the Committee and set forth in the Agreement, provided that the
purchase price per Share under each Employee Option shall not be less than 100%
of the Fair Market Value of a Share on the date the Employee Option is granted
(110% in the case of an Incentive Stock Option granted to a Ten-Percent
Stockholder).
(c) Duration. Employee Options granted hereunder shall be for such
term as the Committee shall determine, provided that no Employee Option shall be
exercisable after the expiration of ten (10) years from the date that it is
granted (five (5) years in the case of an Incentive Stock Option granted to a
ten-Percent Stockholder). The Committee may, subsequent to the granting of any
Employee Option, extend the term thereof but in no event shall the term as so
extended exceed the maximum term provided for in the preceding sentence.
(d) Modification or Substitution. The Committee may, in its
discretion, modify outstanding Employee Options or accept the surrender of
outstanding Employee Options (to the extent not exercised) and grant new Options
in substitution for them. Notwithstanding the foregoing, no modification of an
Employee Option shall adversely alter or impair any rights obligations under the
Employee Option without the Optionee's consent.
6. Terms and Conditions applicable to All Options.
(a) Non-transferability. 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 Option shall be final, binding and conclusive upon
the beneficiaries, executors, administrators, heirs and
successors of the Optionee.
(b) Vesting and Method of Exercise.
(1) Subject to Section 6(e) hereof, each Option shall become
exercisable in the manner, including installments (which need not be equal), and
at such times as may be designated by the Committee and set forth in the
Agreement. To the extent not exercised, installments shall accumulate and be
exercisable, in whole or in part, any time after becoming exercisable, but not
later than the date the Option expires; provided, however, that the Agreement
may provide for the forfeiture of vested and nonvested Options upon the
occurrence of specified events. The Committee may accelerate the exercisability
of any Option or portion thereof at any time.
(2) 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 and otherwise in accordance with
the Agreement pursuant to which the Option was granted. The purchase price for
any Shares purchased pursuant to the exercise of an Option shall be paid in full
upon such exercise, by any one or a combination of the following: (i) cash or
(ii) transferring shares to the Company upon such terms and conditions as
determined by the Committee. The written
<PAGE> 5
notice pursuant to this Section 6(b)(2) may also 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 Shares purchased pursuant to the exercise of an Option, the
Company shall issue Shares directly to the designated broker or dealer. Any
Shares transferred to the Company as payment of the purchase price under an
Option shall be valued at their Fair Market Value on the day preceding the date
of exercise of such an Option. If requested by the Committee, the Optionee shall
deliver the Agreement evidencing the Option 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.
(c) Rights of Optionees. No Optionee shall 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.
(d) Termination of Employment or Service. Unless
otherwise provided in the Agreement evidencing the Option, an Option shall
terminate upon or following an Optionee's termination of employment with the
Company and its Subsidiaries or served as a director of the Company and its
Subsidiaries as follows:
(1) 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;
(2) in the event the Optionee's employment as
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;
(3) 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;
(4) if an Optionee dies while an employee of the
Company or any subsidiary or within three months after termination as described
in clause (1) of this Section 6(d) or within one (1) year after termination as
a result of Disability as described in clause (2) of this Section 6(d), the
Option may be exercised at any time within one (1) year after the Optionee's
death by the person or persons to whom such rights under the Option shall pass
by will or by the laws of descent and distribution; provided, however, that any
Option may be exercised to the extent, and only to the extent, that the Option
or portion thereof was exercisable on the date or death of earlier termination.
Notwithstanding the foregoing, (i) in no event may any Option be
exercised by anyone after the expiration of the term of the Option and (ii) a
termination of service as a director shall not be deemed to occur so long as
the director continues to serve the Company as either a director or director
emeritus.
(a) 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
full exercisable.
<PAGE> 6
7. Adjustment upon Change in Capitalization.
(a) Subject to Section 8, in the event of a Change in
Capitalization, the maximum number and class of Shares or other stock or
securities with respect to which Options may be granted under the Plan, and the
purchase price therefor, if applicable, shall be appropriately and equitable
adjusted.
(b) Any such adjustment in the Shares or other stock or securities
subject to outstanding Incentive Stock Options (including any adjustments in
the purchase price) shall be made in such a manner as not to constitute a
modification as defined by Section 424(h)(3) of the Code and only to the extent
otherwise permitted by Sections 422 and 424 of the Code.
(c) If, by reason of a Change in Capitalization, an 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.
Subject to Section 6(e), in the event of (i) the liquidation or
dissolution of the Company or (ii) a merger or consolidation of the Company (a
"Transaction"), the Plan and the Options issued hereunder shall continue in
effect in accordance with their respective terms and each Optionee shall be
entitled to receive in respect of each Share subject to any outstanding
Options, as the case any be, 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 of a
type described in Section 2(d) hereof with respect to the shares of the
surviving or resulting corporation, then adjustments similar to, and subject to
the same conditions as, those in Section 7 hereof shall be made by the
Committee.
9. Termination and Amendment of the Plan.
(a) The Plan shall terminate on the day preceding the tenth
anniversary of the date of its adoption by the Board and no Option may be
granted thereafter. The Board may sooner terminate or amend the Plan at any
time and from time to time; provided, however, that to the extent necessary
under section 16(b) of the Exchange Act and the rules and regulations
promulgated thereunder or other applicable law, no amendment shall be effective
unless approved by the stockholders of the Company in accordance with
applicable law and regulations at an annual or special meeting held within
twelve (12) months after the date or adoption of such amendment.
(b) Except as provided in Sections 7 and 8 hereof, rights and
obligations under any Option granted before any amendment or termination of the
Plan shall not be adversely altered or impaired by such amendment or
termination, except with the consent of the Optionee, nor shall any amendment
or termination deprive any Optionee of any Shares which he may have acquired
through or as a result of the Plan.
10. Non-Exclusivity of the Plan. The adoption of the Plan by the Board
shall not be construed as amending, modifying or rescinding any previously
approved incentive arrangement or as creating any limitations or the power of
the Board to adopt such other incentive arrangements as it may deem desirable,
including, without limitation, the granting of stock options otherwise than
under the Plan, and such arrangements may be either applicable generally or
only in specific cases.
11. Limitation of Liability. As illustrative of the limitations of
liability of the Company, but not intended to be exhaustive thereof, nothing in
the Plan shall be construed to:
(a) give any person any right to be granted an Option other than at
the sole discretion of the Committee;
(b) give any person any rights whatsoever with respect to Shares
except as specifically provided in the Plan;
<PAGE> 7
(c) limit in any way the right of the Company to terminate the
employment of any person at any time; or
(d) be evidence of any agreement or understanding, expressed or implied,
that the Company will employ any person at any particular rate of compensation
or for any particular period of time.
12. Regulations and Other Approvals' Governing the Law.
(a) This Plan and the rights of all persons claiming hereunder shall be
construed and determined in accordance with the laws of the State of Texas.
(b) The obligation of the Company to sell or deliver Shares with respect
to Options granted under the Plan 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 Committee.
(c) The Plan is intended to comply with Rule 16b-3 promulgated under the
Exchange Act and the Committee shall interpret and administer the provision of
The Plan or any Agreement in a manner consistent therewith. Any provision
inconsistent with such Rule shall be inoperative and shall not affect the
validity of the Plan.
(d) The Board may make such changes as may be necessary or appropriate
to comply with the rules and regulations of any government authority, or to
obtain for Eligible Employees granted Incentive Stock Options the tax benefits
under the Applicable provision of the Code and regulations promulgated
thereunder.
(e) Each Option is subject to the requirement that, if at any time the
Committee determines, in Plan is required by any securities exchange or under
any state or federal law, or the consent or approval of any governmental
regulatory body is necessary or desirable as a condition of, or in connection
with, the grant of an Option or the issuance of Shares, no Options shall be
granted or payment made or Shares issued, in whole or in part, unless listing,
registration, qualification, consent or approval has been effected or obtained
free of any conditions as acceptable to the Committee.
(f) Notwithstanding anything contained in the Plan to the contrary, in
the event that the disposition of Shares acquired pursuant to the Plan is not
covered by a then current registration statement under the Securities Act of
1933, as amended, and rule 144 or other regulations thereunder. The Committee
may require any individual receiving Shares pursuant to the Plan, as a condition
precedent to receipt of such Shares upon exercise of an Option, to represent and
warrant to the Company in writing that the Shares acquired by such individual
are acquired without a view to any distribution thereof and will not be sold or
transferred other than pursuant to an effective registration thereof under said
Act or pursuant to an exemption applicable under the Securities Act of 1933, as
amended, or the rules and regulations promulgated thereunder. The certificates
evidencing any of such Shares shall be appropriately legended to reflect their
status as restricted securities as aforesaid.
14. Miscellaneous.
(a) Multiple Agreements. The terms of each Option may differ from other
Options granted under the Plan at the same time, or at some other time. The
Committee may also grant more than one Option to a given Eligible Employee
during the term of the Plan, either in addition to, or in substitution for, one
or more Options previously granted to the Eligible Employee.
<PAGE> 8
(b) Withholding of Taxes.
(1) The Company shall have the right to deduct from any
distribution of cash to any 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 an 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 any make a written election (the "Tax Election"), which may be accepted
or rejected in the direction of the Committee, to have withheld a portion of the
Shares issuable to him or hereupon the 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 a Optionee who may be
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 or prior to such
Window Period and subsequent to the immediately preceding Window Period or
(II)(A) the Tax Election is made at least (6) months prior to the date the
Option is exercised and (B) the Tax Election is irrevocable with respect to the
exercise of all Options which are exercised prior to the expiration of six (6)
months following an election to revoke the Tax Election. Notwithstanding the
foregoing, the Committee may, by the adoption or rules or otherwise, (i) modify
the provision in the preceding sentence or impose such other restrictions or
limitations on Tax Elections as may be necessary to ensure that the Tax
Elections to be made at such other times and subject to such other conditions as
the Committee determines will constitute exempt transaction under Section 16(b)
of the Exchange Act.
(2) If an 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 Incentive Stock
Option within the two-year period commending 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.
15. Effective Date. The effective date of the Plan shall be the date of
its adoption by the Board.
