<PAGE> 1
As filed with the Securities and Exchange Commission on June 9, 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
incorporation or organization) identification number)
One Dallas Centre
350 N. St. Paul, Suite 3000
Dallas, Texas 75201
(Address of principal executive offices)
---------------
INTERNET AMERICA, INC.
1998 NONQUALIFIED 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>
====================================================================================================================
<S> <C> <C> <C> <C>
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)
- --------------------------------------- ------------------ ----------------- --------------------- -----------------
Common Stock, $0.01 par value 400,000 shares $18.04 $7,216,000 $2,006.05
====================================================================================================================
</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 June 1, 1999.
<PAGE> 2
PROSPECTUS
INTERNET AMERICA, INC.
90,000 SHARES OF COMMON STOCK
This Prospectus relates to the offer and sale of up to 90,000 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 June 1, 1999, the last
reported sale price of the Common Stock, as reported on the Nasdaq/NMS, was
$17.88.
Upon any sale of the Common Stock offered hereby, the Selling
Shareholders and participating agents, brokers, dealers or marketmakers may be
deemed to be underwriters as that term is defined in the Securities Act of 1933,
as amended (the "Securities Act"), and commissions or discounts or any profit
realized on the resale of such securities purchased by them may be deemed to be
underwriting commissions or discounts under the Securities Act. See "Plan of
Distribution." The Company will not receive any of the proceeds from the sales
by the Selling Shareholders.
No underwriter is being utilized in connection with this offering. The
Company will pay all expenses incurred within this offering. The expenses
incurred in connection with the offering are estimated to be approximately
$4,000.
-----------------
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 June 9, 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 June 7, 1999 and filed with the Commission
pursuant to Rule 424(b) on June 8, 1999 (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. 333-78615), 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 PRIOR TO COMMON STOCK OFFERED FOR AMOUNT AND PERCENTAGE OF
NAME OFFERING(1) SELLING SHAREHOLDERS CLASS AFTER OFFERING(2)
- ------------------------ ------------------- ------------------------ ------------------------
<S> <C> <C> <C>
William O. Hunt 1,112,490(3) 22,500 1,109,990
Chairman of the Board (15.7%)
Jack T. Smith 471,811 22,500 449,311
Director (6.4%)
Gary L. Corona 152,624 45,000 107,624
Director (1.6%)
</TABLE>
- ----------------------------
(1) Based on ownership as of May 28, 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 6,893,530 shares of Common Stock outstanding on May 28, 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
<PAGE> 5
(3) Includes 297,301 shares of Common Stock owned by BCG Partnership,
Ltd., a limited partnership in which Mr. Hunt and his wife serve as general
partners, 306,804 shares of Common Stock owned by B&G Partnership, Ltd., a
limited partnership in which Mr. Hunt and his wife serve as general partners,
and 463,385 shares of Common Stock owned by the William O. Hunt, Jr. Rollover
IRA, of which Mr. Hunt is the beneficiary.
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 of Internet America, Inc. as of June 30, 1997
and 1998 and for each of the years then ended, incorporated in this prospectus
by reference from the Company's Registration Statement on Form SB-2 (No.
333-78615) and the financial statements of CompuNet, Inc. and CyberRamp, L.L.C.
as of December 31, 1997 and 1998 and for each of the years then ended,
incorporated by reference from the Company's Current Reports on Form 8-K/A dated
April 16, 1999 and May 5, 1999, respectively, have been audited by Deloitte &
Touche, LLP, independent auditors, as stated in their report, which is
incorporated herein by reference, and have been so incorporated in reliance upon
the report of such firm given upon their authority as experts in accounting and
auditing.
INDEMNIFICATION
The Articles of Incorporation of the Company provide that to the
fullest extent permitted by applicable law, a director of the Company will not
be liable to the Company or its shareholders for monetary damages for an act or
omission in the director's capacity as a director.
The Texas Business Corporation Act ("TBCA") permits the indemnification
of directors, employees, officers and agents to Texas corporations. The
Company's Articles and Bylaws provide that the Company shall indemnify any
person to the fullest extent permitted by law. Under the TBCA, an officer or
director may be indemnified if he acted in good faith and reasonably believed
that his conduct (i) was in the best interests of the Company if he acted in his
official capacity or (ii) was not opposed to the best interests of the Company
in all other cases. In addition, the indemnitee may not have reasonable cause to
believe that his conduct was unlawful in the case of a criminal proceeding. In
any case, the indemnitee may not have been found liable to the Company for
improperly receiving a personal benefit or for willful or intentional misconduct
in the performance of his duty to the Company. The Company (i) must indemnify an
officer or director for reasonable expenses if he is successful, (ii) may
indemnify an officer or director for such reasonable expenses unless he was
found liable for willful or intentional misconduct in the performance of his
duty to the Company and (iii) may advance reasonable defense expenses if the
officer or director undertakes to reimburse the Company if he is later found not
to satisfy the standard for indemnification expenses. Insofar as indemnification
for liabilities arising under the Securities Act may be permitted to directors,
officers and controlling persons of the Company pursuant to the foregoing
provisions, or otherwise, the Company has been advised that in the opinion of
the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable. This
provision in the Articles does not eliminate the duty of care, and in
appropriate circumstances equitable remedies such as an injunction or other
forms of nonmonetary relief would remain available under Texas law. This
provision also does not affect a director's responsibilities under any other
laws, such as the federal securities laws or state or federal environmental
laws.
5
<PAGE> 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>
90,000 Shares
Common Stock
INTERNET AMERICA, INC.
June 9, 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 June 7, 1999 and filed with the Commission
pursuant to Rule 424(b) on June 8, 1999 (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. 333-78615) 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.
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.
II-1
<PAGE> 9
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.
<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>
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. 1998 Nonqualified 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.
II-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 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.
II-4
<PAGE> 12
(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.
II-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 4th day of June, 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)
<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 Chief Executive Officer, June 4, 1999
- ----------------------- President and Director
Michael T. Maples (Principal Executive Officer)
/s/ James T. Chaney Chief Financial Officer, Vice June 4, 1999
- ----------------------- President, Secretary and Treasurer
James T. Chaney (Principal Financial and Accounting
Officer)
/s/ Douglas G. Sheldon Director June 4, 1999
- -----------------------
Douglas G. Sheldon
/s/ Jack T. Smith Director June 4, 1999
- -----------------------
Jack T. Smith
/s/ Gary L. Corona Director
- ----------------------- June 4, 1999
Gary L. Corona
</TABLE>
<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. 1998 Nonqualified 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
June 4, 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 400,000 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. 1998 Nonqualified 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 May
14, 1999, appearing in the Registration Statement on Form SB-2 of
Internet America, Inc. (No. 333-78615), to the incorporation by
reference of our report dated April 14, 1999, appearing in the Current
Report on Form 8-K/A dated April 16, 1999, and to the incorporation by
reference of our report dated April 30, 1999, appearing in the Current
Report on Form 8-K/A dated May 5, 1999.
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
June 7, 1999
<PAGE> 1
EXHIBIT 99
INTERNET AMERICA, INC.
1998 NONQUALIFIED STOCK OPTION PLAN
ARTICLE I
THE PLAN
1.1 Name. This Plan shall be known as the "Internet America, Inc. 1998
Nonqualified Stock Option Plan." Capitalized terms used herein are defined in
Article V hereof.
1.2 Purpose. The purpose of the Plan is to promote the growth and
general prosperity of the Company by permitting the Company to grant to its
Employees, Directors, and Advisors Options to purchase Common Stock of the
Company. The Plan is designed to help the Company and its Subsidiaries attract
and retain superior personnel for positions of substantial responsibility and to
provide Employees, Directors, and Advisors with an additional incentive to
contribute to the success of the Company. Options granted under the Plan are not
intended to qualify as "incentive stock options" within the meaning of Section
422 of the Code.
1.3 Effective Date. The Plan shall become effective upon the Effective
Date.
1.4 Eligibility to Participate. Any Employee, Director, or Advisor
shall be eligible to participate in the Plan. Subject to the following
provisions, the Committee may grant Options in accordance with such
determinations as the Committee from time to time in its sole discretion shall
make. Any Options granted shall be in the form approved at such time by the
Committee.
1.5 Shares Subject to the Plan. The shares of Common Stock to be issued
pursuant to the Plan shall be either authorized and unissued shares of Common
Stock or shares of Common Stock issued and thereafter acquired by the Company.
1.6 Maximum Number of Plan Shares. Subject to adjustment pursuant to
the provisions of Section 3.2, and subject to any additional restrictions
elsewhere in the Plan, the maximum aggregate number of shares of Common Stock
that may be issued and sold hereunder shall not exceed 400,000 shares (which
number has been adjusted to give effect to the Company's 2.25 for 1.00 stock
split in July 1998). The maximum aggregate number of shares of Common Stock with
respect to which Options may be granted to any person during the term of the
Plan shall not exceed 80,000 shares.
1.7 Options and Stock Granted Under Plan. Plan Shares with respect to
which an Option has been exercised shall not again be available for grant
hereunder. If Options terminate for any reason without being wholly exercised,
new Options may be granted hereunder covering the number of Plan Shares to which
such termination relates.
<PAGE> 2
1.8 Conditions Precedent. The Company shall not issue any certificate
for Plan Shares pursuant to the Plan prior to fulfillment of all of the
following conditions:
(a) The admission of the Plan Shares to listing on all stock
exchanges on which the Common Stock is then listed, unless the
Committee determines in its sole discretion that such listing is
neither necessary nor advisable;
(b) The completion of any registration or other qualification
of the offer or sale of the Plan Shares under any federal or state law
or under the rulings or regulations of the Securities and Exchange
Commission or any other governmental regulatory body that the Committee
shall in its sole discretion deem necessary or advisable; and
(c) The obtaining of any approval or other clearance from any
federal or state governmental agency that the Committee shall in its
sole discretion determine to be necessary or advisable.
1.9 Reservation of Shares of Common Stock. During the term of the Plan,
the Company shall at all times reserve and keep available such number of shares
of Common Stock as shall be necessary to satisfy the requirements of the Plan as
to the number of Plan Shares. In addition, the Company shall from time to time,
as is necessary to accomplish the purposes of the Plan, seek or obtain from any
regulatory agency having jurisdiction any requisite authority that is necessary
to issue Plan Shares hereunder. The inability of the Company to obtain from any
regulatory agency having jurisdiction the authority deemed by the Company's
counsel to be necessary to the lawful issuance of any Plan Shares shall relieve
the Company of any liability in respect of the nonissuance of Plan Shares as to
which the requisite authority shall not have been obtained.
1.10 Tax Withholding and Reporting.
(a) Condition Precedent. The issuance of Plan Shares pursuant
to the exercise of any Option is subject to the condition that if at
any time the Committee shall determine, in its discretion, that the
satisfaction of withholding tax or other withholding liabilities under
any federal, state, or local law is necessary or desirable as a
condition of, or in connection with such issuance, then the issuance
shall not be effective unless the withholding shall have been effected
or obtained in a manner acceptable to the Committee.
(b) Manner of Satisfying Withholding Obligation. When the
Committee requires an Optionee to pay to the Company an amount required
to be withheld under applicable income tax laws in connection with
paragraph (a) above, such payment may be made (i) in cash, (ii) by
check, (iii) if permitted by the Committee, by delivery to the Company
of shares of Common Stock already owned by the Optionee having a Fair
Market Value on the Tax Date equal to the amount required to be
withheld, (iv) through the withholding by the Company of a portion of
the Plan Shares acquired upon the exercise of an Option having a Fair
Market Value on the Tax Date equal to the amount required to be
withheld, or (v) in any other form of valid consideration permitted by
the Committee in its discretion.
<PAGE> 3
(c) Tax Reporting. The Company shall file, and shall furnish
the Optionee, a copy of all federal, state, and local tax information
returns that it deems to be required in connection with the grant,
exercise, or vesting of any Option.
1.11 Exercise of Options
(a) Method of Exercise. Each Option shall be exercisable in
accordance with the terms of the Option Agreement pursuant to which the
Option was granted. No Option may be exercised for a fraction of a Plan
Share.
(b) Payment of Purchase Price. The purchase price of any Plan
Shares purchased shall be paid at the time of exercise of the Option
either (i) in cash, (ii) by certified or cashier's check, (iii) if
permitted by the Committee, in shares of Common Stock, (iv) by delivery
of a copy of irrevocable instructions from the Optionee to a broker or
dealer, reasonably acceptable to the Company, to sell certain of the
Plan Shares purchased upon exercise of the Option or to pledge them as
collateral for a loan and promptly to deliver to the Company the amount
of sale or loan proceeds necessary to pay such purchase price or (v) in
any other form of valid consideration permitted by the Committee in its
discretion. If any portion of the purchase price or a note given at the
time of exercise is paid in shares of Common Stock, those shares shall
be valued at their then Fair Market Value.
1.12 Acceleration in Certain Events. The Committee may accelerate the
exercisability or other vesting of any Option in whole or in part at any time.
Notwithstanding the provisions of any Option Agreement, the following provisions
shall apply:
(a) Mergers, Consolidation, Etc. In the event that the
Company, pursuant to action by the Board, at any time enters an
agreement whereby the Company will merge into, consolidate with, or
sell or otherwise transfer all or substantially all of its assets to
another corporation and provision is not made pursuant to the terms of
such transaction for the assumption by the surviving, resulting, or
acquiring corporation of outstanding Options, or for the substitution
of new Options with substantially equivalent benefit therefor, each
outstanding Option shall become fully (100 percent) vested. The
Committee shall advise each Optionee in writing of the manner and terms
under which such fully vested Options shall be exercised, if
applicable.
(b) Change in Control. Anything contained herein to the
contrary notwithstanding, at the sole discretion of the Committee (1)
an Optionee shall become fully (100 percent) vested in each of his
Options upon the occurrence of a change in control (as defined below)
or a threatened change in control (as determined by the Committee in
its sole discretion); and (2) no Option held by an Optionee at the time
a change in control or threatened change in control occurs or at any
time thereafter shall terminate for any reason before the end of the
Option's express term (if applicable). For purposes of this section,
"change in control" means one or more of the following events:
<PAGE> 4
(i) Any person within the meaning of Section 13(d) and 14(d)
of the Exchange Act, other than the Company (including its
Subsidiaries, directors or executive officers) has become the
beneficial owner, within the meaning of Rule 13d-3 under the Exchange
Act, of 50 percent or more of the combined voting power of the
Company's then outstanding Common Stock or equivalent in voting power
of any class or classes of the Company's outstanding securities
ordinarily entitled to vote in elections of directors ("voting
securities"); or
(ii) Shares representing 50 percent or more of the combined
voting power of the Company's voting securities are purchased pursuant
to a tender offer or exchange offer (other than an offer by the Company
or its subsidiaries or affiliates); or
(iii) As a result of, or in connection with, any tender offer
or exchange offer, merger or other business combination, sale of assets
or contested election, or any combination of the foregoing transactions
(a "Transaction"), the persons who were Directors of the Company before
the Transaction shall cease to constitute a majority of the Board of
the Company or of any successor to the Company; or
(iv) Following the effective date of the Plan, the Company is
merged or consolidated with another corporation and as a result of such
merger or consolidation less than 50 percent of the outstanding voting
securities of the surviving or resulting corporation shall then be
owned in the aggregate by the former shareholders of the Company, other
than (A) any party to such merger or consolidation, or (B) any
affiliates of any such party; or
(v) The Company transfers more than 50 percent of its assets,
or the last of a series of transfers results in the transfer of more
than 50 percent of the assets of the Company, to another entity that is
not wholly-owned by the Company. For purposes of this subsection (v),
the determination of what constitutes 50 percent of the assets of the
Company shall be made by the Committee, as constituted immediately
prior to the events that would constitute a change of control if 50
percent of the Company's assets were transferred in connection with
such events, in its sole discretion.
1.13 Written Notice Required. Any Option shall be deemed to be
exercised for purposes of the Plan when written notice of exercise has been
received by the Company at its principal office from the person entitled to
exercise the Option and payment for the Plan Shares with respect to which the
Option is exercised has been received by the Company in accordance with Section
1.11.
1.14 Compliance with Securities Laws. Plan Shares shall not be issued
with respect to any Option unless the issuance and delivery of the Plan Shares
(and the exercise of an Option, if applicable) shall comply with all relevant
provisions of state and federal law (including without limitation (i) the
Securities Act and the rules and regulations promulgated thereunder and (ii) the
requirements of any stock exchange upon which the Plan Shares may then be
listed) and shall be further subject to the approval of counsel for the Company
with respect to such compliance. The Committee may also require an Optionee to
furnish evidence satisfactory to the Company, including without limitation a
written and signed representation letter and consent to be bound by any transfer
<PAGE> 5
restrictions imposed by law, legend, condition, or otherwise, that the Plan
Shares are being acquired only for investment and without any present intention
to sell or distribute the shares in violation of any state or federal law, rule,
or regulation. Further, each Optionee shall consent to the imposition of a
legend on the certificate representing the Plan Shares issued pursuant to an
Option, restricting their transfer as required by law or this section.
1.15 Employment or Service of Optionee. Nothing in the Plan or in any
Option shall confer upon any Employee any right to continued employment by the
Company or any of its Subsidiaries or limit in any way the right of the Company
or any Subsidiary at any time to terminate or alter the terms of that
employment. Nothing in the Plan or in any Option shall confer upon any Director
or Advisor any right to continued service as a Director or Advisor of the
Company or any of its Subsidiaries or limit in any way the right of the Company
or any Subsidiary at any time to terminate or alter the terms of that service.
1.16 Rights of Optionees Upon Termination of Employment or Service. In
the event an Optionee ceases to be an Employee, Director, or Advisor for any
reason other than death, Retirement, Permanent Disability, or Cause or pursuant
to a right of termination under an Employee's employment agreement with the
Company, (i) the Committee shall have the ability to accelerate the vesting of
the Optionee's Options, in its sole discretion, and (ii) any Option held by such
Optionee shall be exercisable (to the extent exercisable on the date of
termination of employment or rendition of services, or, if the vesting of such
Option has been accelerated, to the extent exercisable following such
acceleration) at any time within 30 days after the date of termination of
employment or rendition of services, unless by its terms the Option expires
earlier or unless the Committee agrees, in its sole discretion, to extend its
term further; provided that the term of any such Option shall not be extended
beyond its initial term. In the event an Optionee ceases to serve as an
Employee, Director, or Advisor due to death, Permanent Disability, Retirement,
or Cause or pursuant to a right of termination under an Employee's employment
agreement with the Company, (i) the Committee shall have the ability to
accelerate the vesting of the Optionee's Options, in its sole discretion, and
(ii) the Optionee's Options may be exercised as follows:
(a) Death. Except as otherwise limited by the Committee at the
time of the grant of an Option if an Optionee dies while serving as an
Employee, Director, or Advisor or within three months after ceasing to
be an Employee, Director, or Advisor, his Options shall become fully
(100 percent) vested on the date of his death and shall expire twelve
months thereafter, unless by their terms they expire sooner or unless
the Committee agrees, in its sole discretion, to extend its term
further; provided that the term of any such Option shall not be
extended beyond its initial term. During such period, the Option may be
fully exercised, to the extent that it remains unexercised on the date
of death, by the Optionee's personal representative or by the
distributees to whom the Optionee's rights under the Option pass by
will or by the laws of descent and distribution.
(b) Retirement. If an Optionee ceases to serve as an Employee,
Director, or Advisor as a result of Retirement, (i) the Committee shall
have the ability to accelerate the vesting of the Optionee's Options,
in its sole discretion, and (ii) the Optionee's Options shall be
exercisable (to the extent exercisable on the effective date of such
Retirement or, if the
<PAGE> 6
vesting of such Options has been accelerated, to the extent exercisable
following such acceleration) at any time within three months after the
effective date of such Retirement, unless by their terms the Options
expire earlier or unless the Committee agrees, in its sole discretion,
to extend its term further; provided that the term of any such Option
shall not be extended beyond its initial term.
(c) Disability. If an Optionee ceases to serve as an Employee,
Director, or Advisor as a result of Permanent Disability, the
Optionee's Options shall become fully (100 percent) vested and shall
expire twelve months thereafter, unless by their terms they expire
sooner or unless the Committee agrees, in its sole discretion, to
extend its term; provided that the term of any such Option shall not be
extended beyond its initial term.
(d) Cause. If an Optionee ceases to be employed by the Company
or a Subsidiary or ceases to serve as a Director or Advisor because the
Optionee's employment or service relationship with the Company or a
Subsidiary is terminated for Cause, the Optionee's Options (whether
vested or unvested) shall automatically expire on the date of such
termination. If any facts that would constitute Cause for termination
or removal of an Optionee are discovered after the Optionee's
employment or service relationship with the Company has ended, any
Options then held by the Optionee may be immediately terminated by the
Committee. Notwithstanding the foregoing, if an Optionee is an Employee
employed pursuant to a written employment agreement with the Company or
a Subsidiary, the Optionee's relationship with the Company or a
Subsidiary shall be deemed terminated for Cause for purposes of the
Plan only if the Optionee is considered under the circumstances to have
been terminated "for cause" for purposes of such written agreement or
the Optionee voluntarily ceases to be an Employee in breach of his
employment agreement with the Company or a Subsidiary.
(e) Notice. If an Optionee's employment agreement with the
Company or a Subsidiary is terminated by either the Company, a
Subsidiary, or the Optionee by providing a required or permitted notice
of termination thereunder, the Options that are exercisable as of the
date of termination shall remain exercisable for a period of twelve
months after the date of termination and shall expire at the end of
such twelve-month period.
1.17 Transferability of Options. Except as may be agreed upon by the
Committee in accordance with this section, Options shall not be transferable
other than by will or the laws of descent and distribution. The designation by
an Optionee of a beneficiary shall not constitute a transfer of the Option. The
Committee may, in its discretion, provide in an Option Agreement that Options
may be transferred to members of the Optionee's immediate family, trusts for the
benefit of such immediate family members, and partnerships in which such
immediate family members are the only partners, provided that there is no
consideration for the transfer.
1.18 Return of Value of Option. The Committee, in its sole discretion,
may include in any Option Agreement a provision requiring the Optionee to pay to
the Company an amount of money equal to the excess of the value of Common Stock
received upon the exercise of an Option over the
<PAGE> 7
exercise price paid for such Common Stock, if the Optionee terminates his
employment with the Company without the Company's consent, terminates his
employment with the Company and thereafter engages in competition with the
Company (as defined in the applicable Option Agreement), or is discharged by the
Company for Cause.
1.19 Other Terms and Conditions of Options. Except as otherwise
provided in the Plan, the terms and conditions of Options may differ from one
another as the Committee shall, in its discretion.
1.20 Duration of Options. Each Option and all rights thereunder shall
expire on the date determined by the Committee, but in no event shall any Option
expire later than ten years after the date on which the Option is granted. In
addition, each Option shall be subject to early termination as provided
elsewhere in the Plan.
1.21 Purchase Price. The purchase price for the Plan Shares acquired
pursuant to the exercise, in whole or in part, of an Option shall not be less
than the Fair Market Value of the Plan Shares at the time of the grant of the
Option.
1.22 Individual Option Agreements. Each Optionee shall be required to
enter a written Option Agreement with the Company. In such Option Agreement, the
Optionee shall agree to be bound by the terms and conditions of the Plan, the
Options granted pursuant hereto, and such other matters as the Committee deems
appropriate.
1.23 Option Grants to Nonemployee Directors. After such time as the
Company becomes a reporting company under the Exchange Act (a "Reporting
Company"), each Director who is not an officer or Employee (a "Nonemployee
Director") will receive an Option to purchase 22,500 shares of Common Stock
(which number has been adjusted to give effect to the Company's 2.25 for 1.00
stock split in July 1998), which will be fully exercisable on the date of grant
of such Option. In addition, after such time as the Company becomes a Reporting
Company, each Nonemployee Director will receive an Option to purchase 20,000
shares of Common Stock (which number has been adjusted to give effect to the
Company's 2.25 for 1.00 stock split in July 1998) in the year following his
initial term as a Director, if reelected, and every fourth year thereafter. Each
of such Options will vest 25% annually, with the initial 25% becoming
exercisable on the date of grant of the Option and an additional 25% becoming
exercisable on each of the first three anniversaries of the grant date. The
purchase price of Plan Shares acquired pursuant to the exercise, in whole or in
part, of any Option received by Nonemployee Directors will be the Fair Market
Value of the Plan Shares on the date of grant. Each such Option will expire on
the day prior to the tenth anniversary of the date of grant of such Option. At
the time the Company becomes a Reporting Company, the above provisions in this
Section 1.23 shall become applicable to existing Nonemployee Directors as if
such Nonemployee Director had been initially elected as of the date the Company
became a Reporting Company.
<PAGE> 8
ARTICLE II
ADMINISTRATION
2.1 Committee. The Plan shall be administered by a Committee of not
fewer than two members of the Board. The Committee shall be appointed by the
Board. Each member of the Committee shall be both a "Non-Employee Director"
within the meaning of Rule 16b-3 under the Exchange Act and an "outside
director" within the meaning of Section 162(m) of the Code and the regulations
issued pursuant thereto. Subject to the provisions of the Plan, the Committee
shall have the sole discretion and authority to determine from time to time the
persons to whom Options shall be granted and the number of Plan Shares subject
to each Option, to interpret the Plan, to prescribe, amend, and rescind any
rules and regulations necessary or appropriate for the administration of the
Plan, to determine and interpret the details and provisions of each Option
Agreement, to modify or amend any Option Agreement or waive any conditions or
restrictions applicable to any Option (or the exercise thereof), and to make all
other determinations necessary or advisable for the administration of the Plan.
2.2 Majority Rule; Unanimous Written Consent. A majority of the members
of the Committee shall constitute a quorum, and any action taken by a majority
present at a meeting at which a quorum is present or any action taken without a
meeting evidenced by a writing executed by all members of the Committee shall
constitute the action of the Committee. Meetings of the Committee may take place
by telephone conference call.
2.3 Company Assistance. The Company shall supply full and timely
information to the Committee on all matters relating to Employees, Directors,
and Advisors, their employment, death, Retirement, Permanent Disability, or
other termination of employment or service, and such other pertinent facts as
the Committee may require. The Company shall furnish the Committee with such
clerical and other assistance as is necessary in the performance of its duties.
2.4 Exculpation of Committee. No member of the Committee shall be
personally liable for, and the Company shall indemnify all members of the
Committee and hold them harmless against, any claims resulting directly or
indirectly from any action or inaction by the Committee pursuant to the Plan,
including without limitation any determination by the Committee regarding
whether a "change in control" (within the meaning of Section 1.12) is threatened
and any failure by the Committee to consider such a determination.
ARTICLE III
TERMINATION, AMENDMENT, AND ADJUSTMENT
3.1 Termination and Amendment. The Plan shall terminate on July 7,
2008. No Option shall be granted under the Plan after that date of termination.
Subject to the limitations contained in this section, the Committee may at any
time amend or revise the terms of the Plan, including the form and substance of
the Option Agreements to be used in connection herewith; provided that no
amendment or revision may be made without the approval of the shareholders of
the Company if such approval is required under the Code, Rule 16b-3, or any
other applicable law or rule. No
<PAGE> 9
amendment, suspension, or termination of the Plan shall, without the consent of
the individual who has received an Option hereunder, alter or impair any of that
individual's rights or obligations under any Option granted prior to that
amendment, suspension, or termination.
3.2 Adjustments. If the outstanding Common Stock is increased,
decreased, changed into, or exchanged for a different number or kind of shares
or securities through merger, consolidation, combination, exchange of shares,
other reorganization, recapitalization, reclassification, stock dividend, stock
split, or reverse stock split, an appropriate and proportionate adjustment shall
be made in the maximum number and kind of Plan Shares as to which Options may be
granted under the Plan. A corresponding adjustment changing the number or kind
of shares allocated to unexercised Options or portions thereof granted prior to
any such change also shall be made. Any such adjustment in outstanding Options
shall be made without change in the aggregate purchase price applicable to the
unexercised portion of the Options but with a corresponding adjustment in the
price for each share covered by the Options. The foregoing adjustments and the
manner of application of the foregoing provisions shall be determined solely by
the Committee, and any such adjustment may provide for the elimination of
fractional share interests.
ARTICLE IV
MISCELLANEOUS
4.1 Other Compensation Plans. The adoption of the Plan shall not affect
any other stock option or incentive or other compensation plans in effect for
the Company or any Subsidiary or affiliate of the Company, nor shall the Plan
preclude the Company or any Subsidiary or affiliate thereof from establishing
any other forms of incentive or other compensation plans.
4.2 Plan Binding on Successors. The Plan shall be binding upon the
successors and assigns of the Company and any Subsidiary or affiliate of the
Company that adopts the Plan.
4.3 Number and Gender. Whenever used herein, nouns in the singular
shall include the plural where appropriate, and the masculine pronoun shall
include the feminine gender.
4.4 Headings. Headings of articles and sections hereof are inserted for
convenience of reference and constitute no part of the Plan.
ARTICLE V
DEFINITIONS
As used herein, the following terms have the meanings hereinafter set
forth unless the context clearly indicates to the contrary:
5.1 "Advisor" means any person not employed by the Company and not a
Director, rendering consulting or advisory services to the Company, who is
expected or determined by the Committee to contribute significantly to the
management, growth, or direction of some part or all
<PAGE> 10
of the business of the Company. The power to determine who is and who is not an
Advisor for purposes of the Plan is reserved solely to the Committee.
5.2 The term "affiliate" means, with respect to any Person, any other
Person directly or indirectly controlling or controlled by, or under direct or
indirect common control with such Person.
5.3 "Board" means the Board of Directors of the Company.
5.4 "Cause" means conviction of a crime involving moral turpitude or a
crime providing for a term of imprisonment in a federal or state penitentiary;
failure or refusal to follow reasonable instructions of the Board; failure or
refusal to comply with the reasonable policies, standards and regulations of the
Company, which from time to time may be established; failure or refusal to
faithfully and diligently perform the usual customary duties of his employment
or service; acting in an unprofessional, unethical, immoral or fraudulent
manner; acting in a manner which discredits or is detrimental to the reputation,
character and standing of Company or a Subsidiary; or the commission of any
other act that causes or reasonably may be expected to cause substantial injury
to the Company.
5.5 The term "change of control" has the meaning set forth in Section
1.12(b).
5.6 "Code" means the Internal Revenue Code of 1986, as amended.
5.7 "Committee" means the Committee appointed in accordance with
Section 2.1.
5.8 "Common Stock" means the Common Stock, par value $0.01 per share,
of the Company or, in the event that the outstanding shares of such Common Stock
are hereafter changed into or exchanged for shares of a different stock or
security of the Company or some other corporation, such other stock or security.
5.9 "Company" means Internet America, Inc., a Texas corporation, or one
or more of its Subsidiaries.
5.10 "Director" means a member of the Board.
5.11 "Effective Date" means July 10, 1998.
5.12 "Employee" means an employee (within the meaning of Section
3401(c) of the Code and the regulations thereunder) of the Company or of any
Subsidiary of the Company that adopts the Plan, including Officers.
5.13 "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
5.14 "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
<PAGE> 11
5.15 "Fair Market Value" means such value as determined by the
Committee on the basis of such factors as it deems appropriate; provided that if
the Common Stock is traded on a national securities exchange or transactions in
the Common Stock are quoted on the Nasdaq National Market System, such value as
shall be determined by the Committee on the basis of the reported sales prices
for the Common Stock on the date for which such determination is relevant, as
reported on the national securities exchange or the Nasdaq National Market
System, as the case may be. If the Common Stock is not listed and traded upon a
recognized securities exchange or on the Nasdaq National Market System, the
Committee shall make a determination of Fair Market Value on a reasonable basis
which may include the mean between the closing bid and asked quotations for such
stock on the date for which such determination is relevant (as reported by a
recognized stock quotation service) or, in the event that there shall be no bid
or asked quotations on the date for which such determination is relevant, then
on the basis of the mean between the closing bid and asked quotations on the
date nearest preceding the date for which such determination is relevant for
which such bid and asked quotations were available.
5.16 "Officer" means an officer of the Company or any Subsidiary of the
Company.
5.17 "Option" means a an option to purchase Common Stock pursuant to
this Plan.
5.18 "Optionee" means a person to whom an Option has been granted
hereunder.
5.19 "Option Agreement" means an agreement between the Company and an
Optionee with respect to one or more Options.
5.20 "Permanent Disability" has the meaning provided for that term in
Section 22(e)(3) of the Code.
5.21 "Person" means any individual, corporation, partnership, joint
venture, trust, or unincorporated organization.
5.22 "Plan" means the Internet America, Inc. 1998 Nonqualified Stock
Option Plan, as set forth herein and as amended from time to time.
5.23 "Plan Shares" means shares of Common Stock issuable pursuant to
the Plan.
5.24 "Retirement" occurs when an Optionee terminates his employment or
service relationship with the Company or a Subsidiary on or after the date he
(a) turns 65 years old or (b) turns 55 years old and has completed ten years of
service with the Company or a Subsidiary as otherwise determined by the Board.
5.25 "Rule 16b-3" means Rule 16b-3 promulgated under the Exchange Act
or any successor rule.
5.26 "Securities Act" means the Securities Act of 1933, as amended.
<PAGE> 12
5.27 "Subsidiary" means a subsidiary corporation of the Company, as
defined in Section 424(f) of the Code.
5.28 "Tax Date" means the date on which the amount of tax to be
withheld is determined.
5.29 "Transaction" has the meaning set forth in Section 1.12(b)(iii).
5.30 The term "voting securities" has the meaning set forth in Section
1.12(b)(i).
