<PAGE> 1
[NETAMERICA.COM LETTERHEAD]
November 29, 1999
Dear NetAmerica.com Corporation Shareholder:
You are cordially invited to attend NetAmerica.com Corporation's 1999
annual meeting of shareholders to be held on Thursday, December 16, 1999 at
10:00 a.m., Pacific time, at Two Embarcadero, Suite 200, San Francisco,
California 94111.
An outline of the business to be conducted at the meeting is given in the
accompanying Notice of Annual Meeting of Shareholders and Proxy Statement. In
addition to the matters to be voted on, there will be a report on our progress
and an opportunity for shareholders to ask questions.
I hope you will be able to join us. To ensure your representation at the
meeting, I encourage you to complete, sign, and return the enclosed proxy card
as soon as possible. Your vote is very important. Whether you own a few or
many shares of stock, it is important that your shares be represented.
Sincerely,
/s/ DOUGLAS COLE
--------------------
Douglas Cole
Chairman and
Chief Executive Officer
<PAGE> 2
Schedule 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, For Use of
the Commission Only (as
permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
NETAMERICA.COM CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on the table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials:
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 3
NETAMERICA.COM CORPORATION
---------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
DECEMBER 16, 1999
TO THE SHAREHOLDERS:
The annual meeting of shareholders of NetAmerica.com Corporation will be
held on Thursday, December 16, 1999 at 10:00 a.m., Pacific time, at Two
Embarcadero, Suite 200, San Francisco, California 94111. At the meeting, you
will be asked:
1. To elect five directors to serve until the 2000 annual meeting of
shareholders;
2. To approve the adoption of the 1999 Stock Option Plan;
3. To ratify the appointment of Crouch, Bierwolf & Chisholm as
NetAmerica.com's independent auditors for the fiscal year ending
December 31, 1999; and
4. To transact such other business as may properly be presented at the
annual meeting.
The foregoing items of business are more fully described in the proxy
statement accompanying this notice.
If you were a shareholder of record at the close of business on November
22, 1999, you may vote at the annual meeting and any adjournment(s) thereof.
We invite all shareholders to attend the meeting in person. If you
attend the meeting, you may vote in person even if you previously signed and
returned a proxy.
FOR THE BOARD OF DIRECTORS
Edward Mooney
Executive Vice President and
Secretary/Treasurer
San Francisco, California
November 29, 1999
- --------------------------------------------------------------------------------
YOUR VOTE IS IMPORTANT. TO ASSURE REPRESENTATION OF YOUR SHARES, PLEASE
COMPLETE, SIGN AND DATE THE ENCLOSED PROXY AND MAIL IT PROMPTLY IN THE ENCLOSED
ENVELOPE.
- --------------------------------------------------------------------------------
<PAGE> 4
NETAMERICA.COM CORPORATION
TWO EMBARCADERO, SUITE 200
SAN FRANCISCO, CALIFORNIA 94111
--------------------------
PROXY STATEMENT
FOR THE ANNUAL MEETING OF SHAREHOLDERS
GENERAL
NetAmerica.com Corporation, a Delaware corporation, is soliciting this
proxy on behalf of its Board of Directors to be voted at the 1999 annual meeting
of shareholders to be held on Thursday, December 16, 1999 at 10:00 a.m., Pacific
time, or at any adjournment or postponement thereof. The annual meeting of
shareholders will be held at Two Embarcadero, Suite 200, San Francisco,
California 94111.
METHOD OF PROXY SOLICITATION
These proxy solicitation materials were mailed on or about November 29,
1999 to all shareholders entitled to vote at the meeting. NetAmerica.com will
pay the cost of soliciting these proxies. These costs include the expenses of
preparing and mailing proxy materials for the annual meeting and reimbursement
paid to brokerage firms and others for their expenses incurred in forwarding the
proxy materials. Directors, officers, or employees of NetAmerica.com may also
solicit proxies without additional compensation.
VOTING OF PROXIES
Your shares will be voted as you direct on your signed proxy card. If
you do not specify on your proxy card how you want to vote your shares, we will
vote signed returned proxies:
- FOR the election of the board's nominees for director,
- FOR the adoption of the NetAmerica.com 1999 Stock Option Plan, and
- FOR ratification of the appointment of Crouch, Bierwolf & Chisholm as
NetAmerica.com's independent auditors for the fiscal year ending
December 31, 1999.
We do not know of any other business that may be presented at the annual
meeting. If a proposal other than those listed in the notice is presented at the
annual meeting, your signed proxy card gives authority to the persons named in
the proxy to vote your shares on such matters in their discretion.
REQUIRED VOTE
Record holders of shares of NetAmerica.com's common stock, par value
$.0001 per share, at the close of business on November 22, 1999 may vote at the
meeting. Each shareholder has one vote for each share of common stock the
shareholder owns. At the close of business on November 22, 1999, there were
12,773,266 shares of common stock outstanding.
The affirmative vote of a majority of a quorum of shareholders is
required for approval of all items being submitted to the shareholders for their
consideration. NetAmerica.com's bylaws provide that a majority of the shares
entitled to vote, represented in person or by proxy, constitute a quorum for
transaction of business. An automated system administered by NetAmerica.com's
transfer agent tabulates the votes. Abstentions and broker non-votes are counted
as present for purposes of establishing a quorum. Each is tabulated separately.
Abstentions are counted as voted and broker non-votes are counted as unvoted for
determining the approval of any matter submitted to the shareholders for a vote.
A broker non-vote occurs when a broker votes on some matters on the proxy card
but not on others because he does not have the authority to do so.
REVOCABILITY OF PROXIES
You may revoke your proxy by giving written notice to the Secretary of
NetAmerica.com, by delivering a later proxy, or by attending the meeting and
voting in person.
<PAGE> 5
PROPOSAL ONE
ELECTION OF DIRECTORS
The Board of Directors has nominated five directors for election at the
1999 annual meeting. If you elect them, they will hold office until the next
annual meeting, until their respective successors are duly elected and
qualified, or until they retire. Cumulative voting is not permitted. Unless you
specify otherwise, your returned signed proxy will be voted in favor of each of
the nominees. In the event a nominee is unable to serve, your proxy may vote for
another person nominated by the board to fill that vacancy. The Board of
Directors has no reason to believe that any of the nominees will be unavailable.
All directors have served continuously since first elected as a director.
VOTE REQUIRED
The affirmative vote of a majority of a quorum of shareholders is
required to elect a director.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE
"FOR" EACH OF THE NOMINEES LISTED BELOW.
DIRECTORS
Set forth below is the principal occupation of, and certain other
information regarding, the director nominees.
DOUGLAS D. COLE,
Chairman, Chief Executive Officer, President and Principal Accounting
Officer since April 1999 and Director of NetAmerica.com since August 1998. Mr.
Cole is also a director of two of our subsidiaries, RateXchange, Inc. and
PolarCap, Inc. He has served as the CEO of PolarCap, Inc. since inception. For
the past twenty years Mr. Cole has worked in the information technology
industry, with focus on sales and marketing. He has successfully completed
numerous acquisitions and strategic partnerships with various companies. He is a
current member of the Board of Directors of:
- - Intelliquis International, Inc., a publicly-held company in software
wholesale, and
- - RedFish Telemetrix, a privately-held Irvine, California company engaged in the
business of long distance optimization hardware.
Mr. Cole is a former board member of VR1, a privately-held Boulder,
Colorado company engaged in the business of Internet multi-player games. From
1995 to 1996 Mr. Cole served as President and CEO of Starpress, Inc. after Great
Bear Technology Company, a publicly held California company, acquired it. He
served as President and CEO of Great Bear from 1993 through 1996. From 1985
through 1991 he served as President, CEO and Executive Vice President of Insight
Development Corporation, a company engage in the business of network printing
utilities for Hewlett Packard. From 1977 through 1985 he served as Vice
President of Sales and Marketing of The David Jamison Carlyle Corporation. Mr.
Cole graduated from the University of California, Berkeley, in 1978 with a
Bachelor of Arts degree in Social Science. Age: 44.
JOHN DIXON,
Director of NetAmerica.com since September 1999. For the last five
years, Mr. Dixon has been heavily involved in the technology freight and
operations business. Mr. Dixon has spent his entire career managing multi
dynamic high-tech operations. Since January 1, 1997, Mr. Dixon has been employed
by ATI Freight, a major freight fulfillment company. Prior to 1997, Mr. Dixon
worked with Systems Airfreight. Mr. Dixon graduated from the University of
California, Berkeley in 1977. Age: 45.
DOUGLAS GLEN,
Director of NetAmerica.com since April 1999. Since 1994, Mr. Glen has
been the Senior Vice President and Chief Strategy Officer at Mattel, Inc. At
Mattel, Mr. Glen is responsible for the overall long-term planning process, new
business initiatives in the technology arena and strategic acquisitions. Earlier
in his career at Mattel, Mr. Glen was President of Mattel Media. Prior to
joining Mattel, Mr. Glen was Group Vice President of Strategic Planning and
Business Development at Sega of America. Before that, he was General Manager of
LucasArts Entertainment. Prior to joining Sega, Mr. Glen spent twelve years in
advertising, during which time he founded an agency, sold it to D'Arcy Masius
Benton & Bowles, and directed D'Arcy Masius Benton & Bowles' consumer technology
business for five years. Mr. Glen is a current member of the Board of Directors
of:
- - Fulcrum International, Inc., a privately held Delaware corporation, and
2
<PAGE> 6
- - VR1, a privately-held Boulder, Colorado company engaged in the business of
Internet multi-player games.
Mr. Glen holds business degrees from MIT and Somerset University (UK).
Age: 52.
EDWARD P. MOONEY,
Executive Vice President, Secretary and Treasurer of NetAmerica.com
since April 1999 and Director since December 1998. Mr. Mooney is also a Director
and Secretary of RateXchange, Inc. Since September 1993, Mr. Mooney has served
as Associate Director for Maroon Bells Capital Partners, Inc., where he has
specialized in strategic planning, corporate valuations, corporate governance
and financial analysis. Mr. Mooney served as President and Chief Executive
Officer of WorldPort Communications, Inc., an international telecommunications
company, from October 1996 until April 1997, and as Director of WorldPort from
October 1996 until June 1998. From October 1998 until March 1999, Mr. Mooney
assisted in various corporate and business development functions for WorldPort.
From 1989 until 1992, Mr. Mooney served as Director of Research for American
Business Ventures, Inc., a business development and management consulting firm
that served publicly traded and privately-held companies. From 1984 until 1989,
Mr. Mooney was a research assistant for A.B. Laffer Associates, an economic
research and consulting firm. Mr. Mooney has also served as a consultant, member
of the board of directors, and manager for various publicly held and privately
held companies in the telecommunications, retailing, and transportation
industries. Mr. Mooney holds a Bachelor of Arts degree in Geography from San
Francisco State University and a Master of Arts degree in Education from
California State University, Long Beach. Age: 40.
DONALD H. SLEDGE,
Director of NetAmerica.com since September 1999. Mr. Sledge is also the
Chairman of the Board and Chief Executive Office of RateXchange, Inc.
Previously, he served as Vice Chairman and Chief Executive Officer of TeleHub
Communications Corporation, a next generation ATM-based telecommunications
company. From 1994 to 1995, Mr. Sledge was President and Chief Operating Officer
of WCT, a $160 million long-distance telephone company which was one of Fortune
Magazine's 25 fastest growing public companies before it was acquired by
Frontier Corporation. Mr. Sledge has also served as:
- - the head of operations for New T&T, a Hong Kong based start-up company
competing with Hong Kong Telephone,
- - the Chairman and Chief Executive Officer of New Zealand Telecom International,
- - a member of the executive board of TCNZ, where he led privatization and public
offerings,
- - the managing director of New Zealand's largest operating telephone company,
Telecom Auckland Ltd., and
- - the President and Chief Executive Officer of Pacific Telesis International.
One of the subsidiaries of TeleHub Communications, TeleHub Network
Services, filed for bankruptcy several months after Mr. Sledge resigned from
TeleHub. Mr. Sledge holds a Master of Business Administration degree and a
Bachelors of Arts degree in Industrial Management from Texas Technological
University. Age: 59.
BOARD MEETINGS AND COMMITTEES
In fiscal year 1998 the Board of Directors held one board meeting, with
each member of the board in attendance. The board also executed various
resolutions and written actions in lieu of meeting. The board has recently
established a Compensation Committee and an Audit Committee. The members of the
Compensation Committee are Douglas Cole, John Dixon and Douglas Glen. The
members of the Audit Committee are John Dixon, Edward Mooney and Douglas Cole.
The Compensation Committee reviews compensation and benefits for
NetAmerica.com's executives. If the 1999 Stock Option Plan is adopted, the
Compensation Committee will also administer the grant of stock options. Pursuant
to delegated authority from the Board of Directors, Mr. Cole, as Chief Executive
Officer, determines all salaries except for NetAmerica.com's corporate officers.
The Compensation Committee was established in 1999 and did not hold any meetings
in 1998.
The principal functions of the Audit Committee are to recommend
engagement of our independent auditors, to consult with our auditors concerning
the scope of the audit and to review with them the results of their examination,
to approve the services performed by the independent auditors, to review and
approve any material accounting policy changes affecting our operating results
and to review our financial control procedures and personnel. The Audit
Committee was established in 1999 and did not hold any meetings in 1998.
3
<PAGE> 7
COMPENSATION OF DIRECTORS
Directors employed by NetAmerica.com do not receive any separate
compensation for services performed as a director. NetAmerica.com's non-employee
directors receive $100 for each board meeting attended, plus out-of-pocket
expenses. There is no separate compensation for committee meeting attendance. We
are currently evaluating a compensation plan for existing and future directors,
which could include stock options.
PROPOSAL TWO
NETAMERICA.COM CORPORATION
1999 STOCK OPTION PLAN
The Board of Directors of NetAmerica.com has approved and recommends
that the shareholders approve, the adoption of the NetAmerica.com Corporation
1999 Stock Option Plan for employees, officers and directors of, and consultants
and independent contractors to, the Company and any subsidiary.
The board believes that the issuance of stock options under the 1999
Plan is an essential element of NetAmerica.com's compensation package that it
uses to attract and retain employees in the highly competitive Internet and
e-commerce industries. The 1999 Plan utilizes vesting periods to encourage key
employees to continue in the employ of the Company and thereby acts as a
retention device for those employees as well as encourages them to maintain a
long-term perspective. Furthermore, such options promote the success and enhance
the value of NetAmerica.com by linking the personal interests of its employees,
officers, directors, consultants, and advisors to those of its shareholders and
by providing such individuals with an incentive to work to maximize shareholder
value.
The plan, if approved by shareholders, will have an effective date of
December 30, 1998. In 1998, we issued to Edward Mooney and Douglas Cole 100,000
options each to purchase our common stock at a price of $1.60 per share. These
options were issued under the plan and are subject to shareholder approval. An
aggregate of 3,000,000 shares of our common stock will be available for grant
under the plan. We intend to register all of the shares available under the plan
on Form S-8 under the Securities Act of 1933 as soon as practicable after
receiving shareholder approval.
The plan is described in more detail under the heading "NetAmerica.com
Corporation 1999 Stock Option Plan," beginning on page 13 of this Proxy
Statement and is qualified in its entirety by reference to the 1999 Plan.
VOTE REQUIRED
The affirmative vote of a majority of a quorum of shareholders is
required for the adoption of the NetAmerica.com Corporation 1999 Stock Option
Plan.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE
"FOR" APPROVAL OF THIS PROPOSAL.
PROPOSAL THREE
RATIFICATION OF APPOINTMENT
OF INDEPENDENT AUDITORS
The Board of Directors has selected Crouch, Bierwolf & Chisholm,
independent certified public accountants, as the accounting firm to audit the
accounts and to report on the financial statements of NetAmerica.com for the
fiscal year ending December 31, 1999. The board recommends that the shareholders
vote for ratification of such selection. Shareholder ratification of the
selection of Crouch, Bierwolf & Chisholm as NetAmerica.com's independent
auditors is not required by our bylaws or otherwise. However, the board is
submitting the selection of Crouch, Bierwolf & Chisholm for shareholder
ratification as a matter of good corporate practice. Crouch, Bierwolf & Chisholm
has audited our financial statements since 1997. Notwithstanding the selection,
the board, in its discretion, may direct the appointment of a new independent
accounting firm at any time during the year if the board feels that such a
change would be in the best interests of NetAmerica.com and its shareholders.
Neither Crouch, Bierwolf & Chisholm, nor any of its members has any
financial interest, direct or indirect, in NetAmerica.com, nor has Crouch,
Bierwolf & Chisholm, nor any of its members ever been connected with
NetAmerica.com as promoter, underwriter, voting trustee, director, officer, or
employee. In the event the shareholders do not ratify such appointment, the
Board of Directors will reconsider its selection. Representatives of Crouch,
Bierwolf & Chisholm are not expected to attend the meeting.
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<PAGE> 8
VOTE REQUIRED
The affirmative vote of a majority of a quorum of shareholders is
required for the ratification of the appointment of Crouch, Bierwolf & Chisholm.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE
"FOR" THE RATIFICATION OF THE APPOINTMENT OF CROUCH, BIERWOLF & CHISHOLM
AS OUR INDEPENDENT AUDITORS FOR THE FISCAL YEAR ENDING DECEMBER 31,
1999.
5
<PAGE> 9
OTHER INFORMATION
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding beneficial
ownership of our common stock as of November 22, 1999, (i) by each person who is
known by us to own beneficially more than five percent of our common stock, (ii)
by each of our directors, (iii) by each of our executive officers including
those who served as chief executive officer during the fiscal year ended
December 31, 1998 and (iv) by all directors and executive officers as a group.
<TABLE>
<CAPTION>
Shares Beneficially Owned
Directors, Officers and --------------------------
Principal Shareholders Number Percent (1)
----------------------- --------- -----------
<S> <C> <C>
PRINCIPAL SHAREHOLDERS
Maroon Bells Capital Partners, Inc.(2) 1,853,500 14.51%
450 Sansome Street, Suite 1550, San Francisco, CA 94111
Malcom E. Rogers(3) 743,000 5.77%
1239 Shendoah Drive, Seattle, WA 98112
Theodore Swindells(4) 1,853,500 14.51%
450 Sansome Street, Suite 1550, San Francisco, CA 94111
Hornblower Capital Partners, Inc.(5) 1,012,500 7.93%
14 East 60th Street, Suite 701, New York, NY 10022
John Steinmetz(6) 1,012,500 7.93%
14 East 60th Street, Suite 701, New York, NY 10022
DIRECTORS AND OFFICERS
John Dixon(7) ................................................ 100,000 *
Douglas Cole(8) .............................................. 768,151 5.97%
William Fritts(9) ............................................ -0- *
Douglas Glen(10) ............................................. 178,000 *
Gregory Martin(11) ........................................... 50,000 *
Edward Mooney(12) ............................................ 500,000 3.88%
Donald Sledge(7) ............................................. 100,000 *
All directors and executive officers as a group - 7 persons(13) .... 1,696,151 12.71%
</TABLE>
* Less than one percent.
(1) Applicable percentage ownership is based on 12,773,266 shares of common
stock outstanding as of November 22, 1999. Pursuant to the rules of the
Securities and Exchange Commission, shares shown as "beneficially" owned
include (a) shares subject to options or warrants currently exercisable or
which will be exercisable within 60 days of the record date, (b) shares
attainable through conversion of other securities, (c) shares held by
unincorporated entities and in trusts and estates over which an individual
holds at least shared voting or investment powers and (d) shares held in
trusts and estates of which at least 10 percent of the beneficial interest
of such trust is attributable to specified persons in the immediate family
of the individual(s) involved. This information is not necessarily
indicative of beneficial ownership for any other purpose. Our directors and
executive officers have sole voting and investment power over the shares of
common stock held in their names, except as noted in the following
footnotes.
(2) Includes 1,353,500 shares of common stock beneficially held by Theodore
Swindells (which includes 250,000 shares owned by Mr. Swindells's family
members). Mr. Swindells is a principal of Maroon Bells Capital Partners,
Inc. (MBCP). MBCP disclaims beneficial ownership of these shares.
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<PAGE> 10
(3) Includes currently exercisable options to purchase 50,000 shares of common
stock at $.33 per share and 50,000 shares of common stock at $1.06 per
share. Mr. Rogers also holds options to purchase 50,000 shares at $2.75 per
share, which are not currently exercisable.
(4) Includes 500,000 shares of common stock held by MBCP. Mr. Swindells may be
deemed to be the beneficial owner of the shares held by MBCP. Also includes
250,000 shares of common stock held by Mr. Swindells's family.
(5) Includes 487,500 shares of common stock held by John Steinmetz. Hornblower
Capital Partners, Inc. disclaims beneficial ownership of these shares.
(6) Includes 525,000 shares of common stock held by Hornblower Capital
Partners, Inc. Mr. Steinmetz may be deemed beneficial owner of these
shares.
(7) Includes currently exercisable options to purchase 100,000 shares of common
stock at $2.75 per share.
(8) Includes 35,500 shares held by members of Mr. Cole's family. Includes
currently exercisable options to purchase 100,000 shares of common stock at
$1.60 per share.
(9) Mr. Fritts resigned as officer and director in December 1998.
(10) Includes currently exercisable options to purchase 175,000 shares of common
stock at $1.60 per share.
(11) Mr. Martin resigned as officer and director in December 1998.
(12) Includes currently exercisable options to purchase 100,000 shares of common
stock at $1.60 per share.
(13) The total for directors and officers as a group includes 1,121,151 shares
of common stock and 575,000 shares subject to outstanding stock options
that are currently exercisable or will be exercisable on or before January
22, 2000. All options are issued under the 1999 Stock Option Plan and are
subject to shareholder approval.
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<PAGE> 11
EXECUTIVE COMPENSATION
The following table sets forth information regarding the compensation
paid for services rendered during the last three completed fiscal years to the
Chief Executive Officer and the executive officers of NetAmerica.com whose
annual salary, bonus and other compensation exceeded $100,000 in 1998.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term Compensation
---------------------------------
Annual Compensation Awards Payouts
------------------------------- ---------------------- -------
Other Restricted All Other
Name and Compen- Stock Options/ LTIP Compen-
Principal Position Year Salary Bonus sation Award(s) SARs Payouts sation
- ------------------------------- ---- ------- ----- ------- ---------- -------- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
William Fritts(1) 1998 $15,000 $-- -- -- -- -- --
President and 1997 -- -- -- -- -- -- --
Chief Executive Officer 1996 -- -- -- -- -- -- --
Gregory Martin(2) 1998 $25,000 $-- -- -- -- -- $25,000
President and 1997 -- -- -- -- -- -- --
Chief Executive Officer 1996 -- -- -- -- -- -- --
Douglas Cole(3) 1998 $ -- -- -- -- -- --
Chairman and 1997 -- -- -- -- -- -- --
Chief Executive Officer 1996 -- -- -- -- -- -- --
Edward Mooney(4) 1998 $ -- -- -- -- -- -- --
Executive Vice President 1997 -- -- -- -- -- -- --
Secretary & Treasurer 1996 -- -- -- -- -- -- --
Donald Sledge(5) 1998 $ -- -- -- -- -- -- --
Chief Executive Officer 1997 -- -- -- -- -- -- --
of RateXchange, Inc. 1996 -- -- -- -- -- -- --
</TABLE>
- --------------
(1) Mr. Fritts resigned as officer and director in December 1998.
(2) Mr. Martin resigned as officer and director in December 1998. We agreed to
pay Mr. Martin approximately $25,000 and to issue to Mr. Martin 50,000
shares of our common stock as severance pay.
(3) Mr. Cole was hired as an officer on April 1, 1999. Mr. Cole's annual salary
is $168,000 plus a bonus, pursuant to his employment agreement.
(4) Mr. Mooney was hired as an officer on April 1, 1999. Mr. Mooney's annual
salary is $120,000 plus a bonus, pursuant to his employment agreement.
(5) Mr. Sledge was hired on September 15, 1999 as one of our directors and as
the Chairman and CEO of RateXchange, Inc., one of our subsidiaries. Mr.
Sledge's annual salary at RateXchange is $300,000 plus a bonus, pursuant to
his employment agreement.
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth information regarding options granted
during fiscal year 1998 to the named executive officers. No stock appreciation
rights ("SARs") were granted in 1998.
<TABLE>
<CAPTION>
Individual Grants
------------------------------------------------------
% of Total Exercise
Number of Options or Base
Options Granted to Price Expiration
Name Granted Employees Per Share Date
- -------------- ---------- ---------- --------- ----------
<S> <C> <C> <C> <C>
William Fritts -0- 0% -- --
Gregory Martin -0- 0% -- --
Douglas Cole 100,000(1) 50% $1.60 12/18/03
Edward Mooney 100,000(1) 50% $1.60 12/18/03
Donald Sledge -0- 0% -- --
</TABLE>
(1) These options were granted under the 1999 Stock Option Plan and are subject
to shareholder approval.
8
<PAGE> 12
NETAMERICA.COM CORPORATION
1999 STOCK OPTION PLAN
The Board of Directors has approved and recommends that the shareholders
approve, the adoption of the NetAmerica.com Corporation 1999 Stock Option Plan
for employees, officers and directors of, and consultants and independent
contractors to, NetAmerica.com and any subsidiary. The plan authorizes grants of
Incentive Stock Options ("ISOs") or Nonqualified Stock Options ("NQSOs"). The
plan was established to provide a simplified mechanism for the granting of stock
options to eligible individuals.
The board believes that the issuance of stock options under the plan is
beneficial to NetAmerica.com as a means to promote the success and enhance the
value of NetAmerica.com Corporation by linking the personal interests of its
employees, officers, directors, consultants and independent contractors to those
of its shareholders and by providing such individuals with an incentive for
outstanding performance. These incentives also provide NetAmerica.com
flexibility in its ability to attract and retain the services of individuals
upon whose judgment, interest and special effort the successful conduct of
NetAmerica.com's operation is largely dependent. The following summary is
qualified by reference to the 1999 Stock Option Plan, a copy of which is
attached hereto as Appendix A.
ADMINISTRATION
The plan is administered by either the board or a committee appointed by
the board. If the board does not appoint a committee, any reference herein to
the committee shall be to the board. The committee will have the exclusive
authority to administer the plan, including the price and timing of options.
ELIGIBILITY
Persons eligible to participate in the plan include all employees,
officers and directors of, and consultants and independent contractors to,
NetAmerica.com and its subsidiaries, as determined by the committee.
TERMINATION PROVISION
The plan provides that in the event an individual ceases to be employed
by NetAmerica.com or its subsidiaries for any reason, each option which is
exercisable on the individual's termination date must be exercised within twelve
months after the termination date or such shorter period as provided by the
option grant. To the extent any ISOs are not exercised within three months after
an individual's termination date, they will be treated as NQSOs.
LIMITATION ON OPTIONS AND SHARES AVAILABLE
An aggregate of 3,000,000 shares of NetAmerica.com's common stock are
available for grant under the plan. The maximum number of shares of stock that
may be subject to one or more options to a single participant under the plan
during any fiscal year is 500,000.
DESCRIPTION OF THE AVAILABLE OPTIONS
INCENTIVE STOCK OPTIONS
An ISO is a stock option that satisfies the requirements specified in
Internal Revenue Code Section 422. Under the Code, ISOs may only be granted to
employees. In order for an option to qualify as an ISO, the price payable to
exercise the option must equal or exceed the fair market value of the stock at
the date of the grant, the option must lapse no later than 10 years from the
date of the grant and the stock subject to ISOs that are first exercisable by an
employee in any calendar year must not have a value of more than $100,000 as of
the date of grant. Certain other requirements must also be met.
An optionee will not be treated as receiving taxable income upon either
the grant of an ISO or upon the exercise of an ISO. However, the difference
between the exercise price and the fair market value on the date of exercise
will be an item of tax preference at the time of exercise in determining
liability for the alternative minimum tax, assuming that the stock is either
transferable or is not subject to a substantial risk of forfeiture under Section
83 of the Code.
If stock acquired by the exercise of an ISO is not sold or otherwise
disposed of within two years from the date of its grant and is held for at least
one year after the date such stock is transferred to the optionee, any gain or
loss resulting from its disposition will be treated as capital gain or loss. If
such stock is disposed of before the expiration of the above-mentioned holding
periods, a "disqualifying disposition" will occur. If a disqualifying
disposition occurs, the optionee will realize ordinary income in the year of the
disposition in an amount equal to the difference between the fair market value
of the stock on the date of exercise and the exercise price, or the selling
price of the
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stock and the exercise price, whichever is less. The balance of the optionee's
gain on a disqualifying disposition, if any, will be taxed as capital gain.
In the event an optionee exercises an ISO using stock acquired by a
previous exercise of an ISO, unless the stock exchange occurs after the required
holding periods, such exchange shall be deemed a disqualifying disposition of
the stock exchanged.
NetAmerica.com will not be entitled to any tax deduction as a result of
the grant or exercise of an ISO, or on a later disposition of the stock
received, except that in the event of a disqualifying disposition,
NetAmerica.com will be entitled to a deduction equal to the amount of ordinary
income realized by the optionee.
NONQUALIFIED STOCK OPTIONS
An NQSO is any stock option other than an incentive stock option. Such
options are referred to as "nonqualified" because they do not meet the
requirements of and are not eligible for, the favorable tax treatment provided
by Section 422 of the Code.
No taxable income will be realized by an optionee upon the grant of an
NQSO, nor is NetAmerica.com entitled to a tax deduction by reason of such grant.
Upon the exercise of an NQSO, the optionee will realize ordinary income in an
amount equal to the excess of the fair market value of the stock on the date of
exercise over the exercise price and NetAmerica.com will be entitled to a
corresponding tax deduction.
Upon a subsequent sale or other disposition of stock acquired through
exercise of an NQSO, the optionee will realize capital gain or loss to the
extent of any intervening appreciation or depreciation. Such a resale by the
optionee will have no tax consequence to NetAmerica.com.
RECENT TAX CHANGES
Section 162(m) of the Code, adopted as part of the Revenue
Reconciliation Act of 1993, generally limits to $1 million the deduction that
can be claimed by any publicly-held corporation for compensation paid to any
covered employee in any taxable year. Performance-based compensation is outside
the scope of the $1 million limitation and, hence, generally can be deducted by
a publicly-held corporation without regard to amount, provided that, among other
requirements, such compensation is approved by shareholders. Among the items of
performance-based compensation that can be deducted without regard to amount
(assuming shareholder approval and other applicable requirements are satisfied)
is compensation associated with the exercise price of a stock option so long as
the option has an exercise price equal to or greater than the fair market value
of the underlying stock at the time of the option grant. All options granted
under the plan that are intended to qualify as performance-based compensation
will have an exercise price at least equal to the fair market value of the
underlying stock on the date of grant.
AMENDMENT AND TERMINATION
The committee, subject to approval of the board, may terminate, amend,
or modify the plan at any time; provided, however, that shareholder approval is
required for any amendment that would:
- impair the rights of any optionee under any option previously granted,
- increase the total number of shares reserved under the plan,
- extend the duration of the plan,
- extend the period during and over which options may be exercised under
the plan, or
- change the class of eligible persons under the plan.
Shareholder approval is also required to the extent necessary or desirable to
comply with any applicable law, regulation, or stock exchange rule.
ASSUMPTION OF OPTIONS BY SUCCESSORS
In the event of (a) a merger or consolidation as a result of which the
holders of voting securities of the Company prior to the transaction hold shares
representing less than 51% of the voting securities of the Company after giving
effect to the transaction (other than a merger or consolidation with a
wholly-owned subsidiary or where there is no substantial change in the
shareholders of the corporation and the options granted under this plan are
assumed by the successor corporation), or (b) the sale of all or substantially
all of the assets of the Company, any or all outstanding options shall be
assumed by the successor corporation, which assumption shall be binding on all
optionees, an equivalent option shall be substituted by such successor
corporation or the successor corporation shall provide substantially similar
consideration to optionees as was provided to shareholders (after taking into
account
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the existing provisions of the optionees' options such as the exercise price and
the vesting schedule), and, in the case of outstanding shares subject to a
repurchase option, issue substantially similar shares or other property subject
to repurchase restrictions no less favorable to the optionee.
In the event such successor corporation, if any, refuses to assume or
substitute, as provided above, or in the event of a dissolution or liquidation
of the Company, the options shall, notwithstanding any contrary terms in the
grant, expire on a date specified in a written notice given by the Committee to
the optionees specifying the terms and conditions of such termination (which
date shall be at least twenty (20) days after the date the Committee gives the
written notice).
EMPLOYMENT AGREEMENTS
We entered into separate employment agreements with Edward Mooney and
Douglas Cole dated April 1, 1999. Mr. Mooney's employment agreement provides for
an annual base salary of $120,000. Mr. Cole's employment agreement provides for
an annual base salary of $168,000. Both employment agreements also provide for
options to purchase 100,000 shares of NetAmerica.com's common stock at $1.60 per
share, bonuses in certain circumstances, and reimbursement of expenses. The
employment agreements further provide that we may terminate Mr. Mooney's or Mr.
Cole's employment for cause or at the time of the employee's death without any
further obligations. We may also terminate either Mr. Mooney's or Mr. Cole's
employment without cause upon six months written notice.
Through our subsidiary RateXchange, Inc., we entered into an employment
agreement with Donald Sledge dated September 15, 1999. This agreement terminates
on September 14, 2002. In the agreement, Mr. Sledge agreed to serve on the
NetAmerica.com Board of Directors. Mr. Sledge's agreement provides for an annual
base salary of $300,000, an annual incentive bonus of up to 50% of base salary,
a stock purchase right to purchase up to 10% of RateXchange's common stock and
an expense reimbursement together with other employee benefits. RateXchange may
terminate Mr. Sledge's employment for cause or upon death or disability so long
as RateXchange pays all compensation owed as of the date of such termination.
RateXchange may also terminate Mr. Sledge's employment without cause if
RateXchange pays (1) severance pay equal to one year's annual salary, and (2) a
bonus payment of $150,000.
CHANGE OF CONTROL TRANSACTIONS
The following changes of control have occurred since the beginning of
our last fiscal year:
In August 1998, we issued 1,000,000 shares of our common stock to former
officers and consultants in consideration for services rendered. Each of the
officers and consultants currently holds less than 5% of our outstanding common
stock.
On September 30, 1998, we purchased all of the outstanding stock of
PolarCap, Inc. from the shareholders of PolarCap for 2,400,000 shares of our
common stock. The former shareholders of PolarCap now collectively hold 18.79%
of our outstanding common stock.
From September through December 1998, we issued 1,399,773 shares of our
common stock to bridge note holders for the conversion of $473,762 of debt and
interest. These bridge note holders now collectively beneficially hold 19.44% of
our outstanding common stock.
In October 1998, we contracted to issue 666,574 shares of our common
stock to Theodore Swindells, Douglas Cole and Nathan Drage in exchange for
$66,657 in notes. These shareholders collectively beneficially own 24.36% of our
outstanding common stock.
In December 1998, we issued 1,050,000 shares of our common stock to
Edward Mooney, Douglas Cole and John C. Lukrich in exchange for $300,000 in
notes. These shareholders collectively beneficially own 13.34% of our
outstanding common stock.
From November 1998 to March 1999, we issued 1,817,813 shares of our
common stock to various accredited investors for $1,745,000 and 2,557,500 shares
of our common stock to various accredited investors for notes. The only such
investors who presently own a substantial interest in our outstanding common
stock are:
- Malcom Rogers (5.77%),
- Hornblower Capital Partners, Inc. (7.93%), and
- John Steinmetz (7.93%).
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Due to the closely held nature of the Company, it has engaged in certain
transactions with its officers, directors, principal shareholder and affiliates.
We believe that each of the transactions described below was entered into on
terms no less favorable to us than could have been obtained from unaffiliated
third parties. All future transactions between the Company and its officers,
directors, principal shareholders and affiliates will be reviewed and passed
upon by the Audit Committee of the Board of Directors.
On August 12, 1998, we entered into a Secured Bridge Loan and Stock
Purchase Agreement with Theodore Swindells and others under which we could
borrow up to $1,000,000. Mr. Swindells is one of our significant shareholders.
The notes accrued interest at 12% per annum and were convertible into our common
stock. As of December 1998, the notes, including all principal and interest,
were paid or converted into 1,399,773 shares of our common stock.
On December 15, 1998, we entered into an advisory agreement with Maroon
Bells Capital Partners, Inc. for 18 months with an automatic 12 month renewal.
MBCP is one of our significant shareholders. Pursuant to the advisory agreement,
MBCP provides certain advisory and business development services in exchange for
a monthly advisory fee. In addition, MBCP will be paid a success fee upon the
completion of certain merger and acquisition and business development activities
on behalf of the Company. Edward Mooney may be deemed an affiliate of MBCP.
On September 30, 1998, we acquired PolarCap, Inc., a California
corporation, in exchange for approximately 2,400,000 shares of our common stock.
Prior to the acquisition Douglas Cole was an officer and director of PolarCap
and received 89,077 shares of our common stock as a result of the acquisition.
In October 1998, we contracted with Theodore Swindells and Douglas Cole
to issue 444,574 shares of our common stock in exchange for $44,457 in notes.
On December 20, 1998, Douglas Cole executed a secured promissory note to
us under which Mr. Cole purchased 250,000 shares of our common stock at a price
of $0.50 per share. The note is secured by the common stock with an interest
rate of six and one-half percent (6 1/2 %) A.P.R., with principal and interest
due in two years on December 20, 2000.
On December 20, 1998, Edward Mooney executed a secured promissory note
to us under which Mr. Mooney purchased 400,000 shares of our common stock at an
average price of $0.2188 per share. The note is secured by the common stock with
an interest rate of six and one-half percent (6 1/2 %) A.P.R., with principal
and interest due in two years on December 20, 2000.
SHAREHOLDER PROPOSALS
If you wish to submit proposals to be included in NetAmerica.com's year
2000 proxy statement, we must receive them on or before Friday, December 21,
1999. Please address your proposals to Corporate Secretary, NetAmerica.com
Corporation, Two Embarcadero, Suite 200, San Francisco, California 94111.
If you wish to raise a matter before the shareholders at the year 2000
annual meeting, you must notify the Secretary in writing by not later than April
3, 2000. Please note that this requirement relates only to matters you wish to
bring before your fellow shareholders at the annual meeting. It is separate from
the SEC's requirements to have your proposal included in the proxy statement.
ADDITIONAL INFORMATION
We have included with this proxy statement a copy of our annual report
on Form 10-KSB dated December 31, 1998 and our Form 10-QSB dated September 30,
1999. Unless specifically indicated in this proxy statement, the Form 10-KSB and
Form 10-QSB are not incorporated in the proxy statement and are not considered
part of the soliciting material. We will provide without charge to each person
solicited, upon oral or written request of any such person, an additional copy
of our Form 10-KSB and/or Form 10-QSB, including the consolidated financial
statements and the financial statement schedules required to be filed with the
Securities and Exchange Commission pursuant to Rule 13a-1 under the Securities
Exchange Act of 1934. Direct any such correspondence to the Secretary of
NetAmerica.com.
NETAMERICA.COM CORPORATION
Edward Mooney
Executive Vice President and
Secretary/Treasurer
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APPENDIX A
NETAMERICA.COM CORPORATION
1999 STOCK OPTION PLAN
1. PURPOSE. This 1999 Stock Option Plan ("Plan")(1) is established as a
compensatory plan to attract, retain and provide equity incentives to selected
persons to promote the financial success of NetAmerica.com Corporation, a
Delaware corporation (the "Company"). Capitalized terms not previously defined
herein are defined in Section 18 of this Plan.
2. TYPES OF OPTIONS AND SHARES. Options granted under this Plan (the
"Options") may be either (a) incentive stock options ("ISOs") within the meaning
of Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"), or
(b) nonqualified stock options (also known as "nonstatutory stock options")
("NQSOs"), as designated at the time of grant. The shares of stock that may be
purchased upon exercise of Options granted under this Plan (the "Shares") are
shares of common stock of the Company ("Common Stock").
3. NUMBER OF SHARES. The aggregate number of Shares that may be issued
pursuant to Options granted under this Plan is Three Million (3,000,000),
subject to adjustment as provided in this Plan. If any Option expires or is
terminated without being exercised in whole or in part, the unexercised or
released Shares from such Option shall be available for future grant and
purchase under this Plan. At all times during the term of this Plan, the Company
shall reserve and keep available such number of Shares as shall be required to
satisfy the requirements of outstanding Options under this Plan.
4. ELIGIBILITY.
(a) General Rules of Eligibility. Options may be granted to
employees, officers, directors, consultants, independent contractors and
advisors (provided such consultants, contractors and advisors render bona fide
services not in connection with the offer and sale of securities in a
capital-raising transaction) of the Company or any Parent, Subsidiary or
Affiliate of the Company. ISOs may be granted only to employees (including
officers and directors who are also employees) of the Company or a Parent or
Subsidiary of the Company. The Committee (as defined in Section 14) in its sole
discretion shall select the recipients of Options ("Optionees"). An Optionee may
be granted more than one Option under this Plan.
(b) Company Assumption of Options. The Company may also, from
time to time, assume outstanding options granted by another company, whether in
connection with an acquisition of such other company or otherwise, by either (i)
granting an Option under this Plan in replacement of the Option assumed by the
Company, or (ii) treating the assumed option as if it had been granted under
this Plan if the terms of such assumed option could be applied to an Option
granted under this Plan. Such assumption shall be permissible if the holder of
the assumed option would have been eligible to be granted an Option hereunder if
the other company had applied the rules of this Plan to such grant.
5. TERMS AND CONDITIONS OF OPTIONS. The Committee shall determine
whether each Option is to be an ISO or an NQSO, the number of Shares subject to
the Option, the exercise price of the Option, the period during which the Option
may be exercised, and all other terms and conditions of the Option, subject to
the following:
- --------------
(1) Approved by the Company's Board of Directors on December 30, 1998.
<PAGE> 17
(a) Form of Option Grant. Each Option granted under this Plan
shall be evidenced by a written Stock Option Grant (the "Grant") in
substantially the form attached hereto as Exhibit A or such other form as shall
be approved by the Committee.
(b) Date of Grant. The date of grant of an Option shall be the
date on which the Committee makes the determination to grant such Option unless
otherwise specified by the Committee and subject to applicable provisions of the
Code. The Grant representing the Option will be delivered to the Optionee with a
copy of this Plan within a reasonable time after the date of grant; provided,
however, that if, for any reason, including a unilateral decision by the
Committee not to execute an agreement evidencing such option, a written Grant is
not executed within sixty (60) days after the date of grant, such option shall
be deemed null and void (at the discretion of the Committee). No Option shall be
exercisable until such Grant is executed by the Company and the Optionee.
(c) Exercise Price. The exercise price of an NQSO shall be not
less than eighty-five percent (85%) of the Fair Market Value of the Shares on
the date the Option is granted. The exercise price of an ISO shall be not less
than one hundred percent (100%) of the Fair Market Value of the Shares on the
date the Option is granted. The exercise price of any Option granted to a person
owning more than ten percent (10%) of the total combined voting power of all
classes of stock of the Company or any Parent or Subsidiary of the Company ("Ten
Percent Shareholders") shall not be less than one hundred ten percent (110%) of
the Fair Market Value of the Shares on the date the Option is granted.
(d) Exercise Period. Options shall be exercisable within the
times or upon the events determined by the Committee as set forth in the Grant;
provided, however, that each Option must become exercisable at a rate of at
least twenty percent (20%) per year over five (5) years from the date the Option
is granted; provided further, that no Option shall be exercisable after the
expiration of ten (10) years from the date the Option is granted; and provided
further, that no ISO granted to a Ten Percent Shareholder shall be exercisable
after the expiration of five (5) years from the date the Option is granted.
(e) Limitations on Options. The aggregate Fair Market Value
(determined as of the time an Option is granted) of stock with respect to which
ISOs are exercisable for the first time by an Optionee during any calendar year
(under this Plan or under any other incentive stock option plan of the Company
or any Parent or Subsidiary of the Company) shall not exceed one hundred
thousand dollars ($100,000). To the extent that the Fair Market Value of stock
with respect to which ISOs are exercisable for the first time by an Optionee
during any calendar year exceeds $100,000, the Options for the amount in excess
of $100,000 shall be treated as not being ISOs and shall be treated as NQSOs.
The foregoing shall be applied by taking Options into account in the order in
which they were granted. In the event that the Code or the regulations
promulgated thereunder are amended after the effective date of this Plan to
provide for a different limit on the Fair Market Value of Shares permitted to be
subject to ISOs, such different limit shall be incorporated herein and shall
apply to any Options granted after the effective date of such amendment. The
foregoing provisions of this Plan notwithstanding, no Optionee shall be granted
Options under this Plan in any one fiscal year which in the aggregate shall
permit the Optionee to purchase more than 500,000 shares of Common Stock. To the
extent the Board of Directors of the Company (the "Board of Directors")
determines that limitations such as the provisions of this Section 5(e) are no
longer required to preserve the deductibility for the Company of option-related
compensation under Section 162(m) of the Code, the Board of Directors may modify
or eliminate the limitations contained in this Section 5(e).
(f) Options Non-Transferable. Except as otherwise permitted by
the Committee, options granted under this Plan, and any interest therein, shall
not be transferable or assignable by the Optionee, and may not be made subject
to execution, attachment or similar
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process, otherwise than by will or by the laws of descent and distribution and
shall be exercisable during the lifetime of the Optionee only by the Optionee or
any permitted transferee.
(g) Assumed Options. In the event the Company assumes an option
granted by another company in accordance with Section 4(b) above, the terms and
conditions of such option shall remain unchanged (except the exercise price and
the number and nature of shares issuable upon exercise, which will be adjusted
appropriately pursuant to Section 424 of the Code and the Treasury Regulations
applicable thereto). In the event the Company elects to grant a new Option
rather than assuming an existing option (as specified in Section 4), such new
Option need not be granted at Fair Market Value on the date of grant and may
instead be granted with a similarly adjusted exercise price.
(h) Termination of Options. Except as otherwise provided in an
Optionee's Grant, Options granted under the Plan shall terminate and may not be
exercised if the Optionee ceases to be employed by, or provide services to, the
Company or any Parent or Subsidiary of the Company (or, in the case of a NQSO,
by or to any Affiliate of the Company). An Optionee shall be considered to be
employed by the Company for all purposes under this Section 5(h) if the Optionee
is an officer, director or full-time employee of the Company or any Parent,
Subsidiary or Affiliate of the Company or if the Committee determines that the
Optionee is rendering substantial services as a part-time employee, consultant,
contractor or advisor to the Company or any Parent, Subsidiary or Affiliate of
the Company. The Committee shall have discretion to determine whether an
Optionee has ceased to be employed by the Company or any Parent, Subsidiary or
Affiliate of the Company and the effective date on which such employment
terminated (the "Termination Date").
(i) Termination Generally. If an Optionee ceases to be employed
by the Company and all Parents, Subsidiaries or Affiliates of the Company for
any reason, the Options which are then exercisable (and only to the extent
exercisable) (the "Vested Options") by the Optionee on the Termination Date, may
be exercised by the Optionee, but only within twelve (12) months after the
Termination Date or such shorter period of time as provided in the Grant, but in
no event less than thirty (30) days; provided that Options may not be exercised
in any event after the expiration date of the Option. To the extent any ISOs are
not exercised within three (3) months after an individual's termination date,
they will be treated as NQSOs.
6. EXERCISE OF OPTIONS.
(a) Notices. Options may be exercised only by delivery to the
Company of a written exercise agreement in a form approved by the Committee
(which need not be the same for each Optionee), stating the number of Shares
being purchased, the restrictions imposed on the Shares, if any, and such
representations and agreements regarding the Optionee's investment intent and
access to information, if any, as may be required by the Company to comply with
applicable securities laws, together with payment in full of the exercise price
for the number of Shares being purchased.
(b) Payment. Payment for the Shares may be made in cash (by
check) or, where permitted by law any of the following methods approved by the
Committee, or any combination thereof: (i) by cancellation of indebtedness of
the Company to the Optionee; (ii) by surrender of shares of Common Stock of the
Company already owned by the Optionee, having a Fair Market Value equal to the
exercise price of the Option; (iii) by waiver of compensation due or accrued to
Optionee for services rendered; and/or (iv) by a broker-assisted cashless
exercise.
(c) Withholding Taxes. Prior to issuance of the Shares upon
exercise of an Option, the Optionee shall pay or make adequate provision for any
federal or state withholding obligations of the Company, if applicable. Where
approved by the Committee in its sole
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<PAGE> 19
discretion, the Optionee may provide for payment of withholding taxes upon
exercise of the Option by requesting that the Company retain Shares with a Fair
Market Value equal to the minimum amount of taxes required to be withheld. In
such case, the Company shall issue the net number of Shares to the Optionee by
deducting the Shares retained from the Shares exercised. The Fair Market Value
of the Shares to be withheld shall be determined on the date that the amount of
tax to be withheld is to be determined in accordance with Section 83 of the Code
(the "Tax Date"). All elections by Optionees to have Shares withheld for this
purpose shall be made in writing in a form acceptable to the Committee and shall
be subject to the following restrictions:
(i) the election must be made on or prior to the
applicable Tax Date;
(ii) once made, the election shall be irrevocable as to
the particular Shares as to which the election is made;
(iii) all elections shall be subject to the consent or
disapproval of the Committee; and
(iv) if the Optionee is an officer or director of the
Company or other person (in each case, an "Insider") whose transactions in the
Company's Common Stock are subject to Section 16(b) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and if the Company is subject to
Section 16(b) of the Exchange Act, the election must comply with Rule 16b-3 as
promulgated by the Securities and Exchange Commission ("Rule 16b-3").
(d) Limitations on Exercise. Notwithstanding anything else to
the contrary in the Plan or any Grant, no Option may be exercisable later than
the expiration date of the Option.
7. RESTRICTIONS ON SHARES. At the discretion of the Committee, the
Company may reserve to itself and/or its assignee(s) in the Grant (a) a right of
first refusal to purchase all Shares that an Optionee (or a subsequent
transferee) may propose to transfer to a third party, and/or (b) a right to
repurchase a portion of or all Shares held by an Optionee upon the Optionee's
termination of employment or service with the Company or its Parent, Subsidiary
or Affiliate of the Company for any reason within a specified time as determined
by the Committee at the time of grant at the higher of (i) the Optionee's
original purchase price, or (ii) the Fair Market Value of such Shares.
8. MODIFICATION, EXTENSION AND RENEWAL OF OPTIONS. The Committee shall
have the power to modify, extend or renew outstanding Options and to authorize
the grant of new Options in substitution therefor, provided that any such action
may not, without the written consent of the Optionee, impair any rights under
any Option previously granted. Any outstanding ISO that is modified, extended,
renewed or otherwise altered shall be treated in accordance with Section 424(h)
of the Code. The Committee shall have the power to reduce the exercise price of
outstanding options; provided, however, that the exercise price per share may
not be reduced below the minimum exercise price that would be permitted under
Section 5(c) of this Plan for options granted on the date the action is taken to
reduce the exercise price.
9. PRIVILEGES OF STOCK OWNERSHIP. No Optionee shall have any of the
rights of a stockholder with respect to any Shares subject to an Option until
such Option is properly exercised. No adjustment shall be made for dividends or
distributions or other rights for which the record date is prior to such date,
except as provided in this Plan. The Company shall provide to each Optionee,
regardless of the reports provided to shareholders in general, a copy of the
annual financial statements of the Company within a reasonable time frame
following the end of the fiscal year of the Company.
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10. NO OBLIGATION TO EMPLOY; NO RIGHT TO FUTURE GRANTS. Nothing in this
Plan or any Option granted under this Plan shall confer on any Optionee any
right (a) to continue in the employ of, or other relationship with, the Company
or any Parent or Subsidiary of the Company or limit in any way the right of the
Company or any Parent, Subsidiary or Affiliate of the Company to terminate the
Optionee's employment or other relationship at any time, with or without cause,
or (b) to have any Option(s) granted to such Optionee under this Plan, or any
other plan, or to acquire any other securities of the Company, in the future.
11. ADJUSTMENT OF OPTION SHARES. In the event that the number of
outstanding shares of Common Stock of the Company is changed by a stock
dividend, stock split, reverse stock split, combination, reclassification or
similar change in the capital structure of the Company without consideration, or
if a substantial portion of the assets of the Company are distributed, without
consideration in a spin-off or similar transaction, to the shareholders of the
Company, the number of Shares available under this Plan and the number of Shares
subject to outstanding Options and the exercise price per share of such Options
shall be proportionately adjusted, subject to any required action by the Board
of Directors or shareholders of the Company and compliance with applicable
securities laws; provided, however, that a fractional share shall not be issued
upon exercise of any Option and any fractions of a Share that would have
resulted shall either be cashed out at Fair Market Value or the number of Shares
issuable under the Option shall be rounded down to the nearest whole number, as
determined by the Committee; and provided further that the exercise price may
not be decreased to below the par value, if any, for the Shares.
12. ASSUMPTION OF OPTIONS BY SUCCESSORS.
(a) In the event of (i) a merger or consolidation as a result of
which the holders of voting securities of the Company prior to the transaction
hold shares representing less than 51% of the voting securities of the Company
after giving effect to the transaction (other than a merger or consolidation
with a wholly-owned subsidiary or where there is no substantial change in the
shareholders of the corporation and the Options granted under this Plan are
assumed by the successor corporation), or (ii) the sale of all or substantially
all of the assets of the Company, any or all outstanding Options shall be
assumed by the successor corporation, which assumption shall be binding on all
Optionees, an equivalent option shall be substituted by such successor
corporation or the successor corporation shall provide substantially similar
consideration to Optionees as was provided to shareholders (after taking into
account the existing provisions of the Optionees' options such as the exercise
price and the vesting schedule), and, in the case of outstanding shares subject
to a repurchase option, issue substantially similar shares or other property
subject to repurchase restrictions no less favorable to the Optionee.
(b) In the event such successor corporation, if any, refuses to
assume or substitute, as provided above, pursuant to an event described in
subsection (a) above, or in the event of a dissolution or liquidation of the
Company, the Options shall, notwithstanding any contrary terms in the Grant,
expire on a date specified in a written notice given by the Committee to the
Optionees specifying the terms and conditions of such termination (which date
shall be at least twenty (20) days after the date the Committee gives the
written notice).
13. ADOPTION AND STOCKHOLDER APPROVAL. This Plan shall become effective
on the date that it is adopted by the Board of Directors. This Plan shall be
approved by the stockholders of the Company, in any manner permitted by
applicable corporate law, within twelve (12) months before or after the date
this Plan is adopted by the Board of Directors.
14. ADMINISTRATION. This Plan may be administered by the Board of
Directors or a Committee appointed by the Board of Directors (the "Committee").
At all times during which the Company is registered under the Exchange Act, the
Committee shall be comprised solely of
-5-
<PAGE> 21
two or more Non-Employee Directors. As used in this Plan, references to the
"Committee" shall mean either such Committee or the Board of Directors if no
committee has been established. The interpretation by the Committee of any of
the provisions of this Plan, any related agreements, or any Option granted under
this Plan shall be final and binding upon the Company and all persons having an
interest in any Option or any Shares purchased pursuant to an Option.
15. TERM OF PLAN. Options may be granted pursuant to this Plan from time
to time on or prior to the tenth anniversary of the date of approval of this
Plan by the Board of Directors or the stockholders of the Company pursuant to
Section 13 of this Plan.
16. AMENDMENT OR TERMINATION OF PLAN. The Board of Directors or
Committee may, at any time, amend, alter, suspend or discontinue the Plan, but
no amendment, alteration, suspension or discontinuation shall be made which
would impair the rights of any Optionee under any Option theretofore granted,
without his or her consent, or which, without the approval of the stockholders
of the Company would:
(a) except as provided in Section 11 of the Plan, increase the
total number of Shares reserved for the purposes of the Plan;
(b) extend the duration of the Plan;
(c) extend the period during and over which Options may be
exercised under the Plan; or
(d) change the class of persons eligible to receive Options
granted hereunder (except as may be required to comport with changes in the
Code, Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or
regulations promulgated thereunder).
Without limiting the foregoing, the Board of Directors or Committee may at any
time or from time to time authorize the Company, with the consent of the
respective Optionees, to issue new Options in exchange for the surrender and
cancellation of any or all outstanding Options.
17. CERTAIN DEFINITIONS. As used in this Plan, the following terms shall
have the following meanings:
(a) "Parent" means any corporation (other than the Company) in
an unbroken chain of corporations ending with the Company if, at the time of the
granting of the Option, each of the corporations other than the Company owns
stock possessing fifty percent (50%) or more of the total combined voting power
of all classes of stock in one of the other corporations in such chain.
(b) "Subsidiary" means any corporation (other than the Company)
in an unbroken chain of corporations beginning with the Company if, at the time
of the granting of the Option, each of the corporations other than the last
corporation in the unbroken chain owns stock possessing fifty percent (50%) or
more of the total combined voting power of all classes of stock in one of the
other corporations in such chain.
(c) "Affiliate" means any corporation that directly, or
indirectly through one or more intermediaries, controls or is controlled by, or
is under common control with, another corporation, where "control" (including
the terms "controlled by" and "under common control with") means the possession,
direct or indirect, of the power to cause the direction of the management and
policies of the corporation, whether through the ownership of voting securities,
by contract or otherwise.
-6-
<PAGE> 22
(d) "Non-Employee Directors" shall have the meaning set forth in
Rule 16b-3(b)(3) as promulgated by the Securities and Exchange Commission under
Section 16(b) of the Exchange Act, as such rule is amended from time to time and
as interpreted by the Securities and Exchange Commission.
(e) "Fair Market Value" shall mean the fair market value of the
Shares as determined by the Committee from time to time in good faith. If a
public market exists for the Shares, the Fair Market Value shall be the average
of the last reported bid and asked prices for Common Stock of the Company on the
last trading day prior to the date of determination or, in the event the Common
Stock of the Company is listed on a stock exchange or is a Nasdaq National
Market security, the Fair Market Value shall be the closing price on such
exchange or quotation system on the last trading day prior to the date of
determination.
18. APPLICABLE LAW AND REGULATIONS. The obligations of the Company under
this Plan are subject to the approval of state and federal authorities or
agencies with jurisdiction over the subject matter hereof. The Company shall not
be obligated to issue or deliver shares under this Plan if such issuance or
delivery would violate applicable state or federal securities laws.
-7-
<PAGE> 23
EXHIBIT A
STOCK OPTION GRANT
Optionee:
Address:
Total Shares Subject to Option:
Exercise Price Per Share:
Date of Grant:
Expiration Date of Option
Type of Option: Incentive: _____________
Nonqualified: __________
1. GRANT OF OPTION. NetAmerica.com Corporation, a Delaware corporation
(the "Company"), hereby grants to the optionee named above ("Optionee") an
option (this "Option") to purchase the total number of shares of Common Stock
("Common Stock") of the Company set forth above (the "Shares") at the exercise
price per share set forth above (the "Exercise Price"), subject to all of the
terms and conditions of this Grant and the Company's 1999 Stock Option Plan, as
amended to the date hereof (the "Plan"). If designated as an Incentive Stock
Option above, this Option is intended to qualify as an "incentive stock option"
("ISO") within the meaning of Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code"). Unless otherwise defined herein, capitalized terms used
herein shall have the meanings ascribed to them in the Plan.
2. EXERCISE PERIOD OF OPTION.
(a) (ISOs). The Optionee has option rights hereunder to purchase
a total of ___________ Shares which shall become exercisable during the time
periods as set forth in this Section 2. On and after ______________ [ONE YEAR
FROM DATE OF GRANT], this Option may be exercised by the Optionee for the
purchase of ________ [FRACTION] of the Shares covered by this Option (_______
Shares), or any portion thereof. On or after the last day of each full month
following __________ [ONE YEAR FROM THE DATE OF GRANT] this Option may be
exercised by the Optionee for the purchase of an additional ________ [FRACTION]
of the Shares covered by this Option (_________ Shares), or any portion thereof.
Once a portion of this Option becomes exercisable it shall remain exercisable
until the Expiration Date, or until it terminates pursuant to the terms of
Section 4 hereof, whichever is first to occur.
(b) (NQSOs). The Optionee has option rights hereunder to
purchase a total of ___________ Shares which shall become exercisable by the
Optionee at any time on or after [nine (9) months] after _____________ . Once a
portion of this Option becomes exercisable it shall remain exercisable until the
Expiration Date, or until it terminates pursuant to the terms of Section 4
hereof, whichever is first to occur.
(c) The minimum number of Shares that may be purchased upon any
partial exercise of the Option is ________(___) shares.
(d) This Option shall expire on the Expiration Date set forth
above and must be exercised, if at all, on or before the Expiration Date. The
portion of Shares as to which an Option is exercisable in accordance with the
above schedule as of the applicable dates shall be deemed "Vested Options."
Exhibit A to NetAmerica.com Corporation 1999 Stock Option Agreement
Form of Stock Option Grant
<PAGE> 24
3. RESTRICTION ON EXERCISE. This Option may not be exercised unless such
exercise is in compliance with the Securities Act of 1933, as amended (the
"Securities Act"), and all applicable state securities laws, as they are in
effect on the date of exercise, and the requirements of any stock exchange or
over-the-counter market on which the Company's Common Stock may be listed or
quoted at the time of exercise. Optionee understands that the Company is under
no obligation to register, qualify or list the Shares with the Securities and
Exchange Commission, any state securities commission or any stock exchange to
effect such compliance.
4. TERMINATION OF OPTION. Except as provided below in this Section 4,
this Option shall terminate and may not be exercised if Optionee ceases to be
employed by, or provide services to, the Company or by any Parent or Subsidiary
of the Company (or, in the case of a nonqualified stock option, by or to any
Affiliate of the Company). Optionee shall be considered to be employed by the
Company for all purposes under this Section 4 if Optionee is an officer,
director or full-time employee of the Company or any Parent, Subsidiary or
Affiliate of the Company or if the Committee determines that Optionee is
rendering substantial services as a part-time employee, consultant, contractor
or advisor to the Company or any Parent, Subsidiary or Affiliate of the Company.
The Committee shall have discretion to determine whether Optionee has ceased to
be employed by the Company or any Parent, Subsidiary or Affiliate of the Company
and the effective date on which such employment terminated (the "Termination
Date").
(a) Termination Generally. If Optionee ceases to be employed by
the Company and all Parents, Subsidiaries or Affiliates of the Company for any
reason, the Vested Options, to the extent (and only to the extent) exercisable
by Optionee on the Termination Date, may be exercised by Optionee, but only
within ______ (__) days after the Termination Date; provided that this Option
may not be exercised in any event after the Expiration Date.
(b) No Right to Employment. Nothing in the Plan or this Grant
shall confer on Optionee any right to continue in the employ of, or other
relationship with, the Company or any Parent, Subsidiary or Affiliate of the
Company or limit in any way the right of the Company or any Parent, Subsidiary
or Affiliate of the Company to terminate Optionee's employment or other
relationship at any time, with or without cause.
5. MANNER OF EXERCISE.
(a) Exercise Agreement. This Option shall be exercisable by
delivery to the Company of an executed written Stock Option Exercise Agreement
in the form attached hereto as Exhibit 1, or in such other form as may be
approved by the Company, which shall set forth Optionee's election to exercise
some or all of this Option, the number of Shares being purchased, any
restrictions imposed on the Shares and such other representations and agreements
as may be required by the Company to comply with applicable securities laws.
(b) Exercise Price. The Stock Option Exercise Agreement shall be
accompanied by full payment of the Exercise Price for the Shares being
purchased. Payment for the Shares may be made in cash (by check), or, where
permitted by law, by any of the following methods approved by the Committee, or
any combinations thereof:
(i) by cancellation of indebtedness of the Company to
the Optionee;
(ii) by surrender of shares of Common Stock of the
Company already owned by the Optionee, or which
were obtained by Optionee in the open public
market, having a Fair Market Value equal to the
exercise price of the Option;
Exhibit A to NetAmerica.com Corporation 1999 Stock Option Agreement
Form of Stock Option Grant
<PAGE> 25
(iii) by waiver of compensation due or accrued to
Optionee for services rendered; or
(iv) by a broker-assisted cashless exercise.
(c) Withholding Taxes. Prior to the issuance of the Shares upon
exercise of this Option, Optionee must pay or make adequate provision for any
applicable federal or state withholding obligations of the Company. The Optionee
may provide for payment of Optionee's minimum statutory withholding taxes upon
exercise of the Option by requesting that the Company retain Shares with a Fair
Market Value equal to the minimum amount of taxes required to be withheld, all
as set forth in Section 6(c) of the Plan. In such case, the Company shall issue
the net number of Shares to the Optionee by deducting the Shares retained from
the Shares exercised.
(d) Issuance of Shares. Provided that such Stock Option Exercise
Agreement and payment are in form and substance satisfactory to counsel for the
Company, the Company shall cause the Shares to be issued in the name of Optionee
or Optionee's legal representative.
6. NOTICE OF DISQUALIFYING DISPOSITION OF ISO SHARES. If the Option
granted to Optionee herein is an ISO, and if Optionee sells or otherwise
disposes of any of the Shares acquired pursuant to the ISO on or before the
later of (a) the date two years after the Date of Grant, or (b) the date one
year after exercise of the ISO with respect to the Shares to be sold or disposed
of, the Optionee shall immediately notify the Company in writing of such
disposition. Optionee acknowledges and agrees that Optionee may be subject to
income tax withholding by the Company on the compensation income recognized by
the Optionee from any such early disposition by payment in cash or out of the
current wages or other earnings payable to the Optionee.
7. NONTRANSFERABILITY OF OPTION. This Option may not be transferred in
any manner other than by will or by the laws of descent and distribution and may
be exercised during the lifetime of Optionee only by Optionee or any permitted
transferee. The terms of this Option shall be binding upon the executors,
administrators, successors and assigns of the Optionee.
8. [Restrictions on Shares. The Company reserves to itself for so long
as the Company's stock is not publicly traded (a) the right of first refusal to
purchase all Shares that Optionee (or a subsequent transferee) may propose to
transfer to a third party and/or (b) the right to repurchase within one year of
the Optionee's termination of employment or service with the Company or its
Parent, Subsidiary or Affiliate of the Company, a portion of or all Shares held
by an Optionee at the higher of (i) the Optionee's original purchase price or,
(ii) the Fair Market Value of such Shares.]
9. FEDERAL TAX CONSEQUENCES. Set forth below is a brief summary as of
the date this form of Option Grant was adopted of some of the federal tax
consequences of exercise of this Option and disposition of the Shares. THIS
SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT
TO CHANGE. OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION
OR DISPOSING OF THE SHARES.
(a) Exercise of ISO. If this Option qualifies as an ISO, there
will be no regular federal income tax liability upon the exercise of this
Option, although the excess, if any, of the Fair Market Value of the Shares on
the date of exercise over the Exercise Price will be treated as an adjustment to
alternative minimum taxable income for federal income tax purposes and may
subject the Optionee to an alternative minimum tax liability in the year of
exercise.
Exhibit A to NetAmerica.com Corporation 1999 Stock Option Agreement
Form of Stock Option Grant
<PAGE> 26
(b) Exercise of Nonqualified Stock Option. If this Option does
not qualify as an ISO (a "nonqualified stock option"), there may be a regular
federal income tax liability upon the exercise of the Option. The Optionee will
be treated as having received compensation income (taxable at ordinary income
tax rates) equal to the excess, if any, of the Fair Market Value of the Shares
on the date of exercise over the Exercise Price. The Company will be required to
withhold from Optionee's compensation or collect from Optionee and pay to the
applicable taxing authorities an amount equal to a percentage of this
compensation income at the time of exercise.
(c) Disposition of Shares. In the case of a nonqualified stock
option, if Shares are held for at least one year before disposition, any gain on
disposition of the Shares will be treated as long-term capital gain for federal
income tax purposes. In the case of an ISO, if Shares are held for at least one
year after the date of exercise and at least two years after the Date of Grant,
any gain on disposition of the Shares will be treated as long-term capital gain
for federal income tax purposes. If Shares acquired pursuant to an ISO are
disposed of within such one-year or two-year periods (a "disqualifying
disposition"), gain on such disqualifying disposition will be treated as
compensation income (taxable at ordinary income rates) to the extent of the
excess, if any, of the Fair Market Value of the Shares on the date of exercise
over the Exercise Price (the "Spread"). Any gain in excess of the Spread shall
be treated as capital gain.
10. INTERPRETATION. Any dispute regarding the interpretation of this
Grant shall be submitted by Optionee or the Company to the Board of Directors of
the Company or the Committee, which shall review such dispute at its next
regular meeting. The resolution of such a dispute by the Board of Directors or
Committee shall be final and binding on the Company and on Optionee.
11. ENTIRE AGREEMENT. The Plan and the Stock Option Exercise Agreement
attached hereto as Exhibit 1 are incorporated herein by this reference. This
Grant, the Plan and the Stock Option Exercise Agreement constitute the entire
agreement of the parties hereto and supersede all prior undertakings and
agreements with respect to the subject matter hereof.
NETAMERICA.COM CORPORATION, a
Delaware corporation
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
Exhibit A to NetAmerica.com Corporation 1999 Stock Option Agreement
Form of Stock Option Grant
<PAGE> 27
ACCEPTANCE
Optionee hereby acknowledges receipt of a copy of the Plan, represents
that Optionee has read and understands the terms and provisions thereof, and
accepts this Option subject to all the terms and conditions of the Plan and this
Stock Option Grant. Optionee acknowledges that there may be adverse tax
consequences upon exercise of this Option or disposition of the Shares and that
Optionee should consult a tax adviser prior to such exercise or disposition.
OPTIONEE
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
<PAGE> 28
EXHIBIT 1 TO STOCK OPTION GRANT
STOCK OPTION EXERCISE AGREEMENT
This Agreement is made this _____ day of ________________, 19___ between
NetAmerica.com Corporation, a Delaware corporation (the "Company"), and the
optionee named below ("Optionee").
Optionee:
Address:
Total Shares Subject to Option:
Exercise Price Per Share:
Date of Grant:
Expiration Date of Option
Type of Option: Incentive: __________
Nonqualified: _______
Optionee hereby delivers to the Company the Aggregate Purchase Price, to the
extent permitted in the Option Grant, as follows [CHECK AS APPLICABLE AND
COMPLETE]:
[ ] cash (check) in the amount of $___________, receipt of which is
acknowledged by the Company;
[ ] by cancellation of indebtedness of the Company to the Optionee;
[ ] by delivery of ____________ fully-paid, nonassessable and vested
shares of the Common Stock of the Company owned by Optionee and
owned free and clear of all liens, claims, encumbrances or security
interests, valued at the current fair market value of $_________
per share (determined in accordance with the Plan);
[ ] by the waiver hereby of compensation due or accrued for services
rendered in the amount of $______________; or
[ ] by a broker-assisted cashless exercise.
The Company and Optionee hereby agree as follows:
1. PURCHASE OF SHARES. On this date and subject to the terms and
conditions of this Agreement, Optionee hereby exercises the Stock Option Grant
between the Company and Optionee dated as of the Date of Option Grant set forth
above (the "Grant"), with respect to the Number of Shares Purchased set forth
above of the Company's Common Stock (the "Shares") at an aggregate purchase
price equal to the Aggregate Purchase Price set forth above (the "Purchase
Price") and the Price per Share set forth above (the "Purchase Price Per
Share"). The term "Shares" refers to the Shares purchased under this Agreement
and includes all securities received (a) in replacement of the Shares, and (b)
as a result of stock dividends or stock splits in respect of the Shares.
Capitalized terms used herein that are not defined herein have the definitions
ascribed to them in the Plan or the Grant.
2. REPRESENTATIONS OF PURCHASER. Optionee represents and warrants to the
Company that:
Exhibit 1 to Stock Option Grant
Form of Exercise Agreement
<PAGE> 29
(a) Optionee has received, read and understood the Plan and the
Grant and agrees to abide by and be bound by their terms and conditions.
(b) Optionee is capable of evaluating the merits and risks of
this investment, has the ability to protect Optionee's own interests in this
transaction and is financially capable of bearing a total loss of this
investment.
(c) Optionee is fully aware of (i) the highly speculative nature
of the investment in the Shares, (ii) the financial hazards involved, and (iii)
the lack of liquidity of the Shares and the restrictions on transferability of
the Shares (e.g., that Optionee may not be able to sell or dispose of the Shares
or use them as collateral for loans).
(d) Optionee is purchasing the Shares for Optionee's own account
for investment purposes only and not with a view to, or for sale in connection
with, a distribution of the Shares within the meaning of the Securities Act of
1933, as amended (the "1933 Act").
(e) Optionee has no present intention of selling or otherwise
disposing of all or any portion of the Shares.
3. COMPLIANCE WITH SECURITIES LAWS. Optionee understands and
acknowledges that the Shares have not been registered under the 1933 Act and
that, notwithstanding any other provision of the Grant to the contrary, the
exercise of any rights to purchase any Shares is expressly conditioned upon
compliance with the 1933 Act and all applicable state securities laws. Optionee
agrees to cooperate with the Company to ensure compliance with such laws. The
Shares are being issued under the 1933 Act pursuant to [THE COMPANY WILL CHECK
THE APPLICABLE BOX]:
[ ] the exemption provided by Rule 701;
[ ] the exemption provided by Rule 504;
[ ] Section 4(2) of the 1933 Act;
[ ] other:_____________________________
4. FEDERAL RESTRICTIONS ON TRANSFER. Optionee understands that the
Shares must be held indefinitely unless they are registered under the 1933 Act
or unless an exemption from such registration is available and that the
certificate(s) representing the Shares will bear a legend to that effect.
Optionee understands that the Company is under no obligation to register the
Shares, and that an exemption may not be available or may not permit Optionee to
transfer Shares in the amounts or at the times proposed by Optionee.
(a) Rule 144. Optionee has been advised that Rule 144
promulgated under the 1933 Act, which permits certain resales or unregistered
securities, is not presently available with respect to the Shares and, in any
event, requires that a minimum of one (1) year elapse between the date of
acquisition of Shares from the Company or an affiliate of the Company and any
resale under Rule 144. Prior to an initial public offering of the Company's
stock, "nonaffiliates" (i.e. persons other than officers, directors and major
shareholders of the Company) may resell only under Rule 144(k), which requires
that a minimum of two (2) years elapse between the date of acquisition of Shares
from the Company or an affiliate of the Company and any resale under Rule
144(k). Rule 144(k) is not available to affiliates.
Exhibit 1 to Stock Option Grant
Form of Exercise Agreement
<PAGE> 30
(b) Rule 701. If the exemption relied upon for exercise of the
Shares is Rule 701, the Shares will become freely transferable, subject to
limited conditions regarding the method of sale, by nonaffiliates ninety (90)
days after the first sale of common stock of the Company to the general public
pursuant to a registration statement filed with and declared effective by the
Securities and Exchange Commission (the "SEC"), subject to any lengthier market
standoff agreement contained in this Agreement or entered into by Optionee.
Affiliates must comply with the provisions (other than the holding period
requirements) of Rule 144.
5. STATE LAW RESTRICTIONS ON TRANSFER. Optionee understands that
transfer of the Shares may be restricted by applicable state securities laws,
and that the certificate(s) representing the Shares may bear a legend or legends
to that effect.
6. MARKET STANDOFF AGREEMENT. Optionee agrees in connection with any
registration of the Company's securities that, upon the request of the Company
or the underwriters managing any public offering of the Company's securities,
Optionee will not sell or otherwise dispose of any Shares without the prior
written consent of the Company or such underwriters, as the case may be, for a
period of time (not to exceed one hundred eighty (180) days) from the effective
date of such registration as the Company or the underwriters may specify for
employee stockholders generally.
7. LEGENDS. Optionee understands and agrees that the certificate(s)
representing the Shares will bear a legend in substantially the following forms,
in addition to any other legends required by applicable law:
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE 'SECURITIES ACT'), AND MAY NOT BE OFFERED,
SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL
REGISTERED UNDER THE SECURITIES ACT OR, IN THE OPINION OF COUNSEL,
PREPARED AT ISSUER'S REQUEST AND EXPENSE, IN FORM AND SUBSTANCE
SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR
TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE THEREWITH."
8. STOP-TRANSFER NOTICES. Optionee understands and agrees that, in order
or ensure compliance with the restrictions referred to herein, the Company may
issue appropriate "stop-transfer" instructions to its transfer agent, if any,
and that, if the Company transfers its own securities, it may make appropriate
notations to the same effect in its own records.
9. TAX CONSEQUENCES. OPTIONEE UNDERSTANDS THAT OPTIONEE MAY SUFFER
ADVERSE TAX CONSEQUENCES AS A RESULT OF OPTIONEE'S PURCHASE OR DISPOSITION OF
THE SHARES. OPTIONEE REPRESENTS THAT OPTIONEE HAS CONSULTED WITH ANY TAX
CONSULTANT(S) OPTIONEE DEEMS ADVISABLE IN CONNECTION WITH THE PURCHASE OR
DISPOSITION OF THE SHARES AND THAT OPTIONEE IS NOT RELYING ON THE COMPANY FOR
ANY TAX ADVICE.
10. ENTIRE AGREEMENT. The Plan and Grant are incorporated herein by
reference. This Agreement, the Plan and the Grant constitute the entire
agreement of the parties and supersede in their entirety all prior undertakings
and agreements of the Company and Optionee with respect to the subject matter
hereof, and are governed by California law except for that body of law
pertaining to conflict of laws and matters of corporate law are governed by the
Delaware General Corporation Law.
Exhibit 1 to Stock Option Grant
Form of Exercise Agreement
<PAGE> 31
Submitted By: Accepted By:
"OPTIONEE" "COMPANY"
NETAMERICA.COM CORPORATION, a
Delaware corporation
By:
- ----------------------------------- ---------------------------------
Name: Name:
------------------------------ -------------------------------
Address: Title:
--------------------------- ------------------------------
---------------------------
---------------------------
Dated: ____________ __, ____ Dated: ____________ __, _____
Exhibit 1 to Stock Option Grant
Form of Exercise Agreement
<PAGE> 32
PROXY
NETAMERICA.COM CORPORATION
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD DECEMBER 16, 1999
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Douglas Cole and Edward Mooney and each of
them, as proxies, with full power of substitution, and hereby authorizes them to
represent and vote, as designated on the reverse, all shares of common stock of
NetAmerica.com Corporation, a Delaware corporation, held of record by the
undersigned, on November 22, 1999, at the annual meeting of shareholders to be
held on Thursday, December 16, 1999 at 10:00 a.m., Pacific time, at the
Company's principal executive offices located at Two Embarcadero Center, Suite
200, San Francisco, California 94111, or at any adjournment or postponement
thereof, upon the matters set forth on the reverse, all in accordance with and
as more fully described in the accompanying Notice of Annual Meeting of
Shareholders and Proxy Statement, receipt of which is hereby acknowledged.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED "FOR" THE ELECTION OF THE DIRECTOR NOMINEES NAMED ON THE REVERSE, "FOR"
THE PROPOSAL TO ADOPT THE 1999 STOCK OPTION PLAN, AND "FOR" RATIFICATION OF THE
APPOINTMENT OF CROUCH, BIERWOLF & CHISHOLM AS THE COMPANY'S INDEPENDENT AUDITORS
FOR FISCAL YEAR 1999. PLEASE COMPLETE, SIGN, AND DATE THIS PROXY WHERE INDICATED
AND RETURN PROMPTLY IN THE ACCOMPANYING PREPAID ENVELOPE.
(To be Signed on Reverse Side.)
<PAGE> 33
1. Election of Directors. This proxy will be voted for each of the nominees
identified in the proxy statement at the annual meeting of shareholders
unless authority to vote for one or more of the nominees is expressly
withheld.
[ ] FOR ALL NOMINEES
[ ] WITHHOLD AUTHORITY to Vote for any individual nominee (To
withhold authority for one or more individual nominees, cross out
the name of each such person).
Douglas Cole Douglas Glen Donald Sledge
John Dixon Edward Mooney
[ ] ABSTAIN
2. Proposal to adopt the NetAmerica.com Corporation 1999 Stock Option Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. Proposal to ratify the appointment of Crouch, Bierwolf & Chisholm as
independent auditors of the Company for the fiscal year ending December 31,
1999.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the annual meeting or any adjournment or
postponement thereof.
PLEASE MARK, SIGN, DATE, AND RETURN THIS PROXY CARD IN THE ENCLOSED ENVELOPE.
Signature:
-------------------------------
Date:
-------------------------------
Signature:
-------------------------------
Date:
-------------------------------
NOTE: Please sign above exactly
as the shares are issued. When
shares are held by joint
tenants, both should sign. When
signing as an attorney,
executor, administrator,
trustee, or guardian, please
give full title as such. If a
corporation, please sign in
full corporate name by
president or other authorized
officer. If a partnership,
please sign in partnership name
by authorized person.
