-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SvOSIqpPpKefbharUvPmxh4XWhzsxbbCanhkjU21A7nFHJhiNloMPMhfe1XL2Uh3 68CpgSJWbpSzwkK8/URfzA== 0000950134-99-000831.txt : 19990211 0000950134-99-000831.hdr.sgml : 19990211 ACCESSION NUMBER: 0000950134-99-000831 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 16 FILED AS OF DATE: 19990210 EFFECTIVENESS DATE: 19990210 FILER: COMPANY DATA: COMPANY CONFORMED NAME: INTERNET AMERICA INC CENTRAL INDEX KEY: 0001001279 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 860778979 STATE OF INCORPORATION: TX FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: S-8 SEC ACT: SEC FILE NUMBER: 333-72109 FILM NUMBER: 99528484 BUSINESS ADDRESS: STREET 1: 350 N ST PAUL STE 200 CITY: DALLAS STATE: TX ZIP: 75201 MAIL ADDRESS: STREET 1: ONE DALLAS CENTRE 350 N. ST. PAUL STREET 2: SUITE 3000 CITY: DALLAS STATE: TX ZIP: 75201 S-8 1 FORM S-8 1 ================================================================================ As filed with the Securities and Exchange Commission on February 10, 1999. Registration No. 333- ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 --------------- FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 --------------- INTERNET AMERICA, INC. (Exact name of registrant as specified in its charter) Texas 86-0778979 (State or other jurisdiction of (I.R.S. employer identification number) incorporation or organization) One Dallas Centre 350 N. St. Paul, Suite 3000 Dallas, Texas 75201 (Address of principal executive offices) --------------- INTERNET AMERICA, INC. NON-QUALIFIED STOCK OPTION AGREEMENT--SCOTT W. STEVENS NON-QUALIFIED STOCK OPTION AGREEMENT--ROBERT GREEN NON-QUALIFIED STOCK OPTION AGREEMENT--WILLIAM S. HARRIS NON-QUALIFIED STOCK OPTION AGREEMENT--STEVE TEFERTILLER NON-QUALIFIED STOCK OPTION AGREEMENT--DOUGLAS L. DAVIS NON-QUALIFIED STOCK OPTION AGREEMENT--DOUGLAS L. DAVIS NON-QUALIFIED STOCK OPTION AGREEMENT--WILLIAM O. HUNT NON-QUALIFIED STOCK OPTION AGREEMENT--JACK T. SMITH NON-QUALIFIED STOCK OPTION AGREEMENT--DOUGLAS G. SHELDON NON-QUALIFIED STOCK OPTION AGREEMENT--DOUGLAS G. SHELDON NON-QUALIFIED STOCK OPTION AGREEMENT--JAMES T. CHANEY NON-QUALIFIED STOCK OPTION AGREEMENT--JOHN J. STEWART NON-QUALIFIED STOCK OPTION AGREEMENT--FRANK J. DURDA (Full title of the Plan) --------------- MICHAEL T. MAPLES One Dallas Centre 350 N. St. Paul, Suite 3000 Dallas, Texas 75201 (Name and address of agent for service of agent for service) (214) 861-2500 (Telephone number, including area code, of agent for service) ---------------- COPY TO: RICHARD F. DAHLSON Jackson Walker L.L.P. 901 Main Street Suite 6000 Dallas, Texas 75202 2
CALCULATION OF REGISTRATION FEE ========================================================================================================================= Proposed Proposed Title of Amount Maximum Maximum Amount of Securities to be Offering Price Aggregate Registration to be Registered Registered Per Share (1) Offering Price (1) Fee (1) - ------------------------------------------------------------------------------------------------------------------------- Common Stock, $0.01 par value 45,000 shares $ .09 $ 4,050.00 $ 210.04 11,250 shares $ 1.67 $ 18,787.50 11,250 shares $ 1.67 $ 18,787.50 11,250 shares $ 1.67 $ 18,787.50 11,250 shares $ 1.67 $ 18,787.50 101,250 shares $ 1.67 $ 169,087.50 22,500 shares $ 1.67 $ 37,575.00 22,500 shares $ 1.67 $ 37,575.00 22,500 shares $ 1.67 $ 37,575.00 67,500 shares $ 1.67 $ 112,725.00 78,750 shares $ 1.67 $ 131,512.50 56,250 shares $ 1.67 $ 93,937.50 33,750 shares $ 1.67 $ 56,362.50 =========================================================================================================================
(1) Computed pursuant to Rule 457 solely for the purpose of calculating the registration fee, based upon the prices at which the options may be exercised. 3 PROSPECTUS INTERNET AMERICA, INC. 495,000 SHARES OF COMMON STOCK This Prospectus relates to the offer and sale of up to 495,000 shares (the "Shares") of common stock, par value $0.01 per share (the "Common Stock") of Internet America, Inc. (the "Company"), issued pursuant to the provisions of various Nonqualified Stock Option Agreements between the Company and its officers, directors, employees and former employees (the "Agreements"). The Shares may be sold from time to time by the Selling Shareholders or by permitted transferees. The Common Stock is quoted through the National Association of Securities Dealers Automated Quotation National Market System (the "Nasdaq/NMS") under the symbol "GEEK" and may be sold from time to time by the Selling Shareholders either directly in private transactions, or through one or more brokers or dealers on the Nasdaq/NMS, or any other over-the-counter market or exchange on which the Common Stock is quoted or listed for trading, at such prices and upon such terms as may be obtainable. On February 8, 1999, the last reported sale price of the Common Stock, as reported on the Nasdaq/NMS, was $34.44. Upon any sale of the Common Stock offered hereby, the Selling Shareholders and participating agents, brokers, dealers or marketmakers may be deemed to be underwriters as that term is defined in the Securities Act of 1933, as amended (the "Securities Act"), and commissions or discounts or any profit realized on the resale of such securities purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act. See "Plan of Distribution." The Company will not receive any of the proceeds from the sales by the Selling Shareholders. No underwriter is being utilized in connection with this offering. The Company will pay all expenses incurred within this offering. The expenses incurred in connection with the offering are estimated to be approximately $4,000. ----------------- THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. The date of this Prospectus is February 9, 1999. 4 AVAILABLE INFORMATION The Company is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance therewith, files reports, proxy statements and other information with the Securities and Exchange Commission (the "Commission"). Such reports, proxy statements and other information filed by the Company with the Commission can be inspected and copied at the public reference facilities maintained by the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549; at the Commission's Chicago Regional office located at Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511; and at the Commission's New York Regional office located at 7 World Trade Center, Room 1300, New York, New York 10048. Copies of such material may also be obtained at prescribed rates from the Public Reference Section of the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549. Additionally, the Commission maintains a website (http://www.sec.gov) that contains reports, proxy statements and information statements and other information regarding registrants that file electronically with the Commission. The Common Stock is listed on the Nasdaq/NMS. Reports, proxy statements and other information concerning the Company can be inspected at the offices of the Nasdaq/NMS. The Company has filed with the Commission in Washington, D.C., a Registration Statement on Form S-8 (the "Registration Statement") in connection with the offer and sale of the Common Stock offered hereby under the Securities Act. This Prospectus does not contain all of the information set forth or incorporated by reference in the Registration Statement and the exhibits thereto. For further information with respect to the Company and the Common Stock, reference is made to the Registration Statement and the exhibits thereto. Copies of the Registration Statement are available from the Commission. Statements contained in this Prospectus concerning the provisions of documents filed with the Registration Statement are necessarily summaries of such documents, and each statement is qualified in its entirety by reference to the copy of the applicable document filed with the Commission. The Company's principal executive offices are located at One Dallas Centre, 350 N. St. Paul, Suite 3000, Dallas, Texas 75201 and its telephone number is (214) 861-2500. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The following documents, which have been filed with the Commission by the Company, are incorporated herein by reference and made a part hereof: (i) Prospectus dated December 9, 1998 and filed with the Commission pursuant to Rule 424(b) on December 10, 1998 (the "424(b) Prospectus"); (ii) All other reports filed with the Commission pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), since the end of the fiscal year covered by the 424(b) Prospectus; and (iii) Description of the Common Stock contained in the Company's Registration Statement on Form SB-2 (No. 333-59527) and Registration Statement on Form 8-A (No. 000-25147), effective as of December 9, 1998. All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to the termination of the offering of the 2 5 Common Stock to be made hereunder shall be deemed to be incorporated by reference herein and to be a part hereof from the date of filing of such documents. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus. The Company will provide, without charge, to each person to whom a copy of this Prospectus is delivered, upon the written or oral request of such person, a copy of any or all of the documents incorporated herein by reference (other than exhibits to such documents unless such exhibits are specifically incorporated by reference into the information that this Prospectus incorporates). Written or telephone requests for such documents should be directed to James T. Chaney, One Dallas Centre, 350 N. St. Paul, Suite 3000, Dallas, Texas 75201, telephone number (214) 861-2500. SELLING SHAREHOLDERS This Prospectus covers the offer and resale of Shares issued to certain Shareholders pursuant to the Agreements. The table below sets forth information concerning the Common Stock owned by the following Selling Shareholders, none of whom has, or within the past three years has had, any position, office or other material relationship with the Company or any of its predecessors or affiliates, except as set forth below:
OWNERSHIP OF COMMON STOCK AMOUNT AND PERCENTAGE COMMON STOCK OFFERED FOR SELLING OF CLASS AFTER NAME PRIOR TO OFFERING(1) SHAREHOLDERS OFFERING(2) - ---- -------------------- ------------------- --------------------- Douglas L. Davis 225,000 112,500 112,500 Executive Vice President 1.8% and Chief Operating Officer William O. Hunt 1,134,990 22,500 1,112,490 Chairman of the Board 17.6% Jack T. Smith 471,811 22,500 449,311 Director 7.1% Douglas G. Sheldon 382,502(3) 90,000 292,502 Vice President - Marketing 4.6% and Director James T. Chaney 78,750(4) 78,750 0 Vice President, Chief * Financial Officer, Secretary and Treasurer John James Stewart III 59,945(5) 56,250 3,695 Vice President - Customer * Care
- ---------------------------- * less than 1% (1) Based on ownership as of February 8, 1999. Includes Shares to be acquired upon exercise of Options granted under the Agreements, some of which may not be exercisable within 60 days of the date of this Prospectus. (2) Based on 6,310,328 shares of Common Stock outstanding on February 8, 1999. Assumes the exercise of all Options granted under the Agreements, the exercise of which are covered by this Prospectus, and the sale of the Shares acquired thereby. 3 6 (3) Includes 50,625 shares purchasable pursuant to an Agreement but which are not exercisable within 60 days of the date of this Prospectus. (4) Includes 59,062 shares purchasable pursuant to an Agreement but which are not exercisable within 60 days of the date of this Prospectus. (5) Includes 3,695 shares purchasable pursuant to options not granted under an Agreement, some of which are not exercisable within 60 days of the date of this Prospectus. Includes 42,187 shares purchasable pursuant to an Agreement but which are not exercisable within 60 days of the date of this Prospectus. USE OF PROCEEDS The Company will not receive any proceeds from the sale of the Common Stock hereby. PLAN OF DISTRIBUTION The Shares may be sold from time to time by any of the Selling Shareholders, or permitted transferees. The Shares may be disposed of from time to time in one or more transactions through any one or more of the following: (i) to purchasers directly, (ii) in ordinary brokerage transactions and transactions in which the broker solicits purchasers, (iii) through underwriters or dealers who may receive compensation in the form of underwriting discounts, concessions or commissions from the Selling Shareholders or such permitted transferees or from the purchasers of the Shares for whom they may act as agent, (iv) the writing of options on the Shares, (v) the pledge of the Shares as security for any loan or obligation, including pledges to brokers or dealers who may, from time to time, themselves effect distributions of the Shares or interests therein, (vi) purchases by a broker or dealer as principal and resale by such broker or dealer for its own account pursuant to this Prospectus, (vii) a block trade in which the broker or dealer so engaged will attempt to sell the Shares as agent but may position and resell a portion of the block as principal to facilitate the transaction and (viii) an exchange distribution in accordance with the rules of such exchange, including the Nasdaq/NMS, or in transactions in the over the counter market. Such sales may be made at prices and at terms then prevailing or at prices related to the then current market price or at negotiated prices and terms. In effecting sales, brokers or dealers may arrange for other brokers or dealers to participate. The Selling Shareholders or such successors in interest, and any underwriters, brokers, dealers or agents that participate in the distribution of the Shares, may be deemed to be "underwriters" within the meaning of the Securities Act, and any profit on the sale of the Shares by them and any discounts, commissions or concessions received by any such underwriters, brokers, dealers or agents may be deemed to be underwriting commissions or discounts under the Securities Act. The Company will pay all expenses incident to the offering and sale of the Shares to the public and all underwriting discounts or commissions, brokers' fees and the fees and expenses of any counsel to the Selling Shareholders related thereto. In the event of a material change in the plan of distribution disclosed in this Prospectus, the Selling Shareholders will not be able to effect transactions in the Shares pursuant to this Prospectus until such time as a post-effective amendment to the Registration Statement is filed with, and declared effective by, the Commission. LEGAL MATTERS Certain legal matters in connection with the Common Stock offered hereby have been passed upon for the Company by Jackson Walker L.L.P., 901 Main Street, Suite 6000, Dallas, Texas 75202. 4 7 EXPERTS The financial statements as of June 30, 1997 and 1998 and for each of the three years in the period ended June 30, 1998, incorporated in this prospectus by reference from the Company's Registration Statement on Form SB-2 (No. 333-59527) have been audited by Deloitte & Touche, LLP independent auditors, as stated in their report, which is incorporated herein by reference, and have been so incorporated in reliance upon the report of such firm given upon their authority as experts in accounting and auditing. INDEMNIFICATION The Articles of Incorporation of the Company provide that to the fullest extent permitted by applicable law, a director of the Company will not be liable to the Company or its shareholders for monetary damages for an act or omission in the director's capacity as a director. The Texas Business Corporation Act ("TBCA") permits the indemnification of directors, employees, officers and agents to Texas corporations. The Company's Articles and Bylaws provide that the Company shall indemnify any person to the fullest extent permitted by law. Under the TBCA, an officer or director may be indemnified if he acted in good faith and reasonably believed that his conduct (i) was in the best interests of the Company if he acted in his official capacity or (ii) was not opposed to the best interests of the Company in all other cases. In addition, the indemnitee may not have reasonable cause to believe that his conduct was unlawful in the case of a criminal proceeding. In any case, the indemnitee may not have been found liable to the Company for improperly receiving a personal benefit or for willful or intentional misconduct in the performance of his duty to the Company. The Company (i) must indemnify an officer or director for reasonable expenses if he is successful, (ii) may indemnify an officer or director for such reasonable expenses unless he was found liable for willful or intentional misconduct in the performance of his duty to the Company and (iii) may advance reasonable defense expenses if the officer or director undertakes to reimburse the Company if he is later found not to satisfy the standard for indemnification expenses. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Company pursuant to the foregoing provisions, or otherwise, the Company has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. This provision in the Articles does not eliminate the duty of care, and in appropriate circumstances equitable remedies such as an injunction or other forms of nonmonetary relief would remain available under Texas law. This provision also does not affect a director's responsibilities under any other laws, such as the federal securities laws or state or federal environmental laws. 5 8 No person has been authorized to give any information or to make any representations other than those contained in this Prospectus, and if given or made, such information or representations must not be relied upon. This Prospectus does not constitute an offer to sell or a solicitation to buy any securities other than registered securities to which it relates, or an offer to or a solicitation of any person in any jurisdiction where such offer or solicitation would be unlawful. The delivery of this Prospectus at any time does not imply that the information herein is correct as of any time subsequent to its date. TABLE OF CONTENTS
Page ---- Available Information.............................2 Incorporation of Certain Documents by Reference...................................2 Selling Shareholders..............................3 Use of Proceeds...................................4 Plan of Distribution..............................4 Legal Matters.....................................4 Experts...........................................5 Indemnification...................................5 - -----------------------------------------------------
495,000 Shares Common Stock INTERNET AMERICA, INC. February 9, 1999 6 9 PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE. The following documents, which have been filed with the Commission by Internet America, Inc. (the "Company"), are incorporated herein by reference and made a part hereof: (i) Prospectus dated December 9, 1998 and filed with the Commission pursuant to Rule 424(b) on December 10, 1998 (the "424(b) Prospectus"); (ii) All other reports filed with the Commission pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), since the end of the fiscal year covered by the 424(b) Prospectus; and (iii) Description of the Common Stock contained in the Company's Registration Statement on Form SB-2 (No. 333-59527) and Registration Statement on Form 8-A (No. 000-25147), effective as of December 9, 1998. All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act subsequent to the date of this Registration Statement and prior to the filing of a post-effective amendment that indicates that all of the Common Stock offered hereunder has been sold or which deregisters all of such Common Stock then remaining unsold, shall be deemed to be incorporated by reference herein and to be a part hereof from the date of filing of such documents. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Registration Statement to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Registration Statement. ITEM 4. DESCRIPTION OF SECURITIES. Not applicable. ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL. Not applicable. -1- 10 ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS. The Articles of Incorporation of the Company provide that to the fullest extent permitted by applicable law, a director of the Company will not be liable to the Company or its shareholders for monetary damages for an act or omission in the director's capacity as a director. The Texas Business Corporation Act ("TBCA") permits the indemnification of directors, employees, officers and agents to Texas corporations. The Company's Articles and Bylaws provide that the Company shall indemnify any person to the fullest extent permitted by law. Under the TBCA, an officer or director may be indemnified if he acted in good faith and reasonably believed that his conduct (i) was in the best interests of the Company if he acted in his official capacity or (ii) was not opposed to the best interests of the Company in all other cases. In addition, the indemnitee may not have reasonable cause to believe that his conduct was unlawful in the case of a criminal proceeding. In any case, the indemnitee may not have been found liable to the Company for improperly receiving a personal benefit or for willful or intentional misconduct in the performance of his duty to the Company. The Company (i) must indemnify an officer or director for reasonable expenses if he is successful, (ii) may indemnify an officer or director for such reasonable expenses unless he was found liable for willful or intentional misconduct in the performance of his duty to the Company and (iii) may advance reasonable defense expenses if the officer or director undertakes to reimburse the Company if he is later found not to satisfy the standard for indemnification expenses. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Company pursuant to the foregoing provisions, or otherwise, the Company has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. This provision in the Articles does not eliminate the duty of care, and in appropriate circumstances equitable remedies such as an injunction or other forms of nonmonetary relief would remain available under Texas law. This provision also does not affect a director's responsibilities under any other laws, such as the federal securities laws or state or federal environmental laws. ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED. Not applicable. -2- 11 ITEM 8. EXHIBITS. The following is a list of all exhibits filed as a part of this Registration Statement on Form S-8, including those incorporated herein by reference.
Exhibit Number Description of Exhibit - -------- ---------------------- 3.1 Internet America, Inc.'s Articles of Incorporation (1) 3.2 Internet America, Inc.'s Article of Amendment to Articles of Incorporation (1) 3.3 Internet America, Inc.'s Bylaws (1) 3.4 Internet America Inc.'s Amendment to Bylaws (1) 3.5 Application for Certificate of Withdrawal of Internet America, Inc.(1) 3.6 Articles of Merger merging Internet America, Inc., an Arizona corporation, with and into INTRNTUSA, INC., a Texas corporation (1) 4.1 Specimen Common Stock certificate (1) 4.2 Certificate of Designation of the Series A Preferred Stock of Internet America, Inc.(1) 4.3 Amended Certificate of Designation of the Series A Preferred Stock of Internet America, Inc.(1) 4.4 Certificate of Designation of the Series B Preferred Stock of Internet America, Inc.(1) 5.1 Opinion of Jackson Walker L.L.P.* 23.1 Consent of Jackson Walker L.L.P. (included in its opinion filed as Exhibit 5.1) 23.2 Consent of Deloitte & Touche LLP* 24 Power of Attorney (included in Part II hereof) 99.1 Nonqualified Stock Option Agreement dated July 21, 1995 by and between Internet America, Inc. and Scott W. Stevens.* 99.2 Nonqualified Stock Option Agreement dated December 5, 1995 by and between Internet America, Inc. and Robert Green.* 99.3 Nonqualified Stock Option Agreement dated December 5, 1995 by and between Internet America, Inc. and William S. Harris.*
-3- 12 99.4 Nonqualified Stock Option Agreement dated January 23, 1997 by and between Internet America, Inc. and Steve Tefertiller.* 99.5 Nonqualified Stock Option Agreement dated December 1, 1995 by and between Internet America, Inc. and Douglas L. Davis.* 99.6 Nonqualified Stock Option Agreement dated December 15, 1995 by and between Internet America, Inc. and Douglas L. Davis.* 99.7 Nonqualified Stock Option Agreement dated April 5, 1996 by and between Internet America, Inc. and William O. Hunt.* 99.8 Nonqualified Stock Option Agreement dated April 5, 1996 by and between Internet America, Inc. and Jack T. Smith.* 99.9 Nonqualified Stock Option Agreement dated June 6, 1996 by and between Internet America, Inc. and Douglas G. Sheldon.* 99.10 Nonqualified Stock Option Agreement dated March 24, 1998 by and between Internet America, Inc. and Douglas G. Sheldon.* 99.11 Nonqualified Stock Option Agreement dated March 24, 1998 by and between Internet America, Inc. and James T. Chaney.* 99.12 Nonqualified Stock Option Agreement dated March 24, 1998 by and between Internet America, Inc. and John J. Stewart.* 99.13 Nonqualified Stock Option Agreement dated March 24, 1998 by and between Internet America, Inc. and Frank J. Durda.*
- ----------------------- * Filed herewith. Option granted prior to the 2.25-for-1.00 stock split of the Company's Common Stock effected on July 13, 1998. (1) Previously filed as an exhibit to the Company's Registration Statement on Form SB-2 (file No. 333-59527) originally filed on July 21, 1998, as amended, and incorporated herein by reference. -4- 13 ITEM 9. UNDERTAKINGS. (a) The undersigned registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) To include any prospectus required by section 10(a)(3) of the Securities Act of 1933, as amended; (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the Company pursuant to Section 13 or Section 15(d) of the Exchange Act of 1934, as amended, that are incorporated by reference in the registration statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, as amended, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (b) The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, as amended, each filing of the registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act of 1934, as amended, that is incorporated by reference in the registration statement shall be deemed to be a new registration -5- 14 statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (c) Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended, may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. -6- 15 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Dallas, State of Texas on the 9th day of February, 1999. INTERNET AMERICA, INC. By: /s/ JAMES T. CHANEY ------------------------------------------------- James T. Chaney, Vice President, Chief Financial Officer, Secretary and Treasurer (Principal Accounting and Financial Officer) -7- 16 POWER OF ATTORNEY Each person whose signature appears below authorizes Michael T. Maples and James T. Chaney, and each of them, each of whom may act without joinder of the other, to execute in the name of each such person who is then an officer or director of the Registrant, and to file any amendments to this Registration Statement necessary or advisable to enable the Registrant to comply with the Securities Act of 1933, as amended, and any rules, regulations and requirements of the Commission, in respect thereof, in connection with the registration of the securities which are the subject of this Registration Statement, which amendments may make such changes in such Registration Statement as such attorney may deem appropriate. Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
Signature Title Date - --------- ----- ---- /s/ MICHAEL T. MAPLES - ------------------------ Chief Executive Officer, February 9, 1999 Michael T. Maples President and Director (Principal Executive Officer) /s/ JAMES T. CHANEY - ------------------------ Chief Financial Officer, Vice February 9, 1999 James T. Chaney President, Secretary and Treasurer (Principal Financial and Accounting Officer) /s/ DOUGLAS G. SHELDON - ------------------------ Vice President -- Marketing, February 9, 1999 Douglas G. Sheldon Director /s/ WILLIAM O. HUNT - ------------------------ Chairman of the Board February 9, 1999 William O. Hunt /s/ JACK T. SMITH - ------------------------ Director February 9, 1999 Jack T. Smith /s/ GARY L. CORONA - ------------------------ Director February 9, 1999 Gary L. Corona
-8- 17 INDEX TO EXHIBITS
Exhibit Number Description of Exhibit - -------- ---------------------- 3.1 Internet America, Inc.'s Articles of Incorporation (1) 3.2 Internet America, Inc.'s Article of Amendment to Articles of Incorporation (1) 3.3 Internet America, Inc.'s Bylaws (1) 3.4 Internet America Inc.'s Amendment to Bylaws (1) 3.5 Application for Certificate of Withdrawal of Internet America, Inc.(1) 3.6 Articles of Merger merging Internet America, Inc., an Arizona corporation, with and into INTRNTUSA, INC., a Texas corporation (1) 4.1 Specimen Common Stock certificate (1) 4.2 Certificate of Designation of the Series A Preferred Stock of Internet America, Inc.(1) 4.3 Amended Certificate of Designation of the Series A Preferred Stock of Internet America, Inc.(1) 4.4 Certificate of Designation of the Series B Preferred Stock of Internet America, Inc.(1) 5.1 Opinion of Jackson Walker L.L.P.* 23.1 Consent of Jackson Walker L.L.P. (included in its opinion filed as Exhibit 5.1) 23.2 Consent of Deloitte & Touche LLP* 24 Power of Attorney (included in Part II hereof) 99.1 Nonqualified Stock Option Agreement dated July 21, 1995 by and between Internet America, Inc. and Scott W. Stevens.* 99.2 Nonqualified Stock Option Agreement dated December 5, 1995 by and between Internet America, Inc. and Robert Green.* 99.3 Nonqualified Stock Option Agreement dated December 5, 1995 by and between Internet America, Inc. and William S. Harris.* 99.4 Nonqualified Stock Option Agreement dated January 23, 1997 by and between Internet America, Inc. and Steve Tefertiller.*
-9- 18 99.5 Nonqualified Stock Option Agreement dated December 1, 1995 by and between Internet America, Inc. and Douglas L. Davis.* 99.6 Nonqualified Stock Option Agreement dated December 15, 1995 by and between Internet America, Inc. and Douglas L. Davis.* 99.7 Nonqualified Stock Option Agreement dated April 5, 1996 by and between Internet America, Inc. and William O. Hunt.* 99.8 Nonqualified Stock Option Agreement dated April 5, 1996 by and between Internet America, Inc. and Jack T. Smith.* 99.9 Nonqualified Stock Option Agreement dated June 6, 1996 by and between Internet America, Inc. and Douglas G. Sheldon.* 99.10 Nonqualified Stock Option Agreement dated March 24, 1998 by and between Internet America, Inc. and Douglas G. Sheldon.* 99.11 Nonqualified Stock Option Agreement dated March 24, 1998 by and between Internet America, Inc. and James T. Chaney.* 99.12 Nonqualified Stock Option Agreement dated March 24, 1998 by and between Internet America, Inc. and John J. Stewart.* 99.13 Nonqualified Stock Option Agreement dated March 24, 1998 by and between Internet America, Inc. and Frank J. Durda.*
- ---------------------- * Filed herewith. Option granted prior to the 2.25-for-1.00 stock split of the Company's Common Stock effected on July 13, 1998. (1) Previously filed as an exhibit to the Company's Registration Statement on Form SB-2 (file No. 333-59527) originally filed on July 21, 1998, as amended, and incorporated herein by reference. -10- EX-5.1 2 OPINION AND CONSENT OF JACKSON WALKER LLP 1 EXHIBIT 5.1 February 9, 1999 Internet America, Inc. One Dallas Centre 350 N. St. Paul, Suite 3000 Dallas, Texas 75201 Re: Registration Statement on Form S-8 of Internet America, Inc. Gentlemen: We are acting as counsel for Internet America, Inc., a Texas corporation (the "Company"), in connection with the registration under the Securities Act of 1933, as amended (the "Act"), and the offering and sale of up to 495,000 shares of the Company's Common Stock, par value $0.01 per share (the "Shares") by certain Selling Shareholders. The Selling Shareholders acquired the Shares pursuant to the Nonqualified Stock Option Agreements (the "Agreements") filed as exhibits to the Registration Statement on Form S-8 covering the offering and sale of the Shares (the "Registration Statement") that is expected to be filed with the Securities and Exchange Commission on or about the date hereof. In reaching the conclusions expressed in this opinion, we have examined and relied upon the originals or certified copies of all documents, certificates and instruments as we have deemed necessary to the opinions expressed herein, including the Articles of Incorporation, as amended, and the Bylaws of the Company and copies of the Agreements. In making the foregoing examinations, we have assumed the genuineness of all signatures on original documents, the authenticity of all documents submitted to us as originals and the conformity to original documents of all copies submitted to us. Based solely upon the foregoing, subject to the comments hereinafter stated, and limited in all respects to the laws of the State of Texas and the federal laws of the United States of America, it is our opinion that the Shares have been duly authorized and, when issued and delivered, against receipt by the Company of the agreed consideration therefore, will be validly issued, fully paid and nonassessable. We hereby consent to the use of this opinion as an Exhibit to the Registration Statement. In giving this consent, we do not admit that we come within the category of persons whose consent is required under Section 7 of the Act or the rules and regulations of the Commission promulgated thereunder. Very truly yours, /s/ Jackson Walker L.L.P. EX-23.2 3 CONSENT OF DELOITTE & TOUCHE LLP 1 EXHIBIT 23.2 INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in this Registration Statement of Internet America, Inc. ("the Company") on Form S-8 of our report dated August 12, 1998, appearing in the Company's Registration Statement on Form SB-2 (No. 333- 59527). We also consent to the reference to us under the heading "Experts" in the Prospectus, which is part of this Registration Statement. /s/ Deloitte & Touche LLP Dallas, Texas February 8, 1999 EX-99.1 4 NONQUALIFIED STOCK OPTION AGMNT - SCOTT W. STEVENS 1 EXHIBIT 99.1 NON-QUALIFIED STOCK OPTION AGREEMENT Agreement made effective as of the 21st day of July, 1995 by and between INTERNET AMERICA, INC. (the "Company") and SCOTT W. STEVENS (the "Optionee"). 1. Definitions. For purposes of this Agreement: a. "Board" means the Board of Directors of the Company. b. "Change in Capitalization" means any increase or reduction in the number of Shares, or any change (including, but not limited to, a change in value) in the Shares or exchange of Shares for a different number or kind of Shares or other securities of the Company, by reason of a reclassification, recapitalization, merger, consolidation, reorganization, stock dividend, stock split or reverse stock split, combination or exchange of shares or other similar events. c. "Code" means the Internal Revenue Code of 1986, as amended. d. "Company" means Internet America, Inc., a Texas corporation. e. "Exchange Act" means the Securities Exchange Act of 1934, as amended. f. "Fair Market Value" on any date means the closing price of Shares on such date on the principal national securities exchange on which Shares are listed or admitted to trading, the arithmetic mean of the per Share closing bid priced and per Share closing asked price on such date as quoted on the National Association of Securities Dealers Automated Quotation System or such then market in which such prices are regularly quoted, or, if there have been no published bid or asked quotations with respect to Shares on such date, the Fair Market Value shall be the value established by the Board in good faith and in accordance with Section 422 of the Code. g. "Shares" means the common stock, par value $.01 per share, of the Company. 2. Grant of Option. The Company hereby grants to the Optionee, for valuable consideration, receipt of which is hereby acknowledged, a Non-Qualified Stock Option ("Option") to purchase from the Company an aggregate of 20,000 shares at a purchase price (the "Option Price") of $.20 per share. 3. Exercise Period. The Option is non-forfeitable and shall hereafter be exercisable in whole or in part. The option may be exercised only with respect to full Shares and may not be exercised after the close of business on the day (the "Termination Date") preceding the tenth anniversary of the date hereof. The Option shall have no effect after the Termination Date. 2 4. Exercise of an Option. The exercise of an Option shall be made only by a written notice delivered in person or by mail to the Secretary of the Company at the Company's principal executive office, specifying the number of Shares to be purchased and accompanied by payment therefor. The purchase price for any Shares purchased pursuant to the exercise of an Option shall be paid in full upon such exercise by delivery of cash or personal check in amount of purchase price. The written notice may provide instructions from the Optionee to the Company that upon receipt of the purchase price in cash from the Optionee's broker or dealer, designated as such on the written notice, in payment for any Shares purchased pursuant to the exercise of an Option, the Company shall issue such Shares directly to the broker or dealer. If requested by the Board, the Optionee shall deliver this Agreement to the Secretary of the Company who shall endorse thereon a notation of such exercise and return such Agreement to the Optionee. No fractional Shares (or cash in lieu thereof) shall be issued upon exercise of an Option and the number of Shares that may be purchased upon exercise shall be rounded to the nearest number of whole Shares. 5. Rights of Optionee. The Optionee shall not be deemed for any purpose to be the owner of any Shares subject to any Option unless and until (i) the Option shall have been exercised pursuant to the terms thereof, (ii) the Company shall have issued and delivered the Shares to the Optionee and (iii) the Optionee's name shall have been entered as a stockholder of record on the books of the Company. Thereupon, the Optionee shall have full voting, dividend and other ownership rights with respect to such Shares. 6. Adjustment Upon Changes in Capitalization. a. Subject to Section 7, in the event of a Change in Capitalization, the number and class of Shares or other stock or securities which are subject to the Option, and the purchase price therefor, if applicable, shall be appropriately and equitably adjusted. b. If, by reason of a Change in Capitalization, the Optionee shall be entitled to exercise an Option with respect to new, additional or different shares of stock or securities, such new, additional or different shares shall thereupon be subject to all of the conditions which were applicable to the Shares subject to the Option, as the case may be, prior to such Change in Capitalization. 7. Effect of Change in Control. Notwithstanding anything contained in the Plan or this Agreement to the contrary, in the event of a Change in Control, all Options outstanding on the date of such Change in Control shall become immediately and fully exercisable. Non-Qualified Option Agreement Page 2 3 8. Effect of Certain Transactions. In the event of (i) the liquidation or dissolution of the Company or (ii) a merger or consolidation of the Company (a "Transaction"), the Option issued hereunder shall continue in effect in accordance with its terms and the Optionee shall be entitled to receive in respect of each Share subject to any outstanding Option, upon exercise of any Option, the same number and kind of stock, securities, cash, property, or other consideration that each holder of a Share was entitled to receive in the Transaction in respect of a Share. In the event that, after a Transaction, there occurs any Change in Capitalization with respect to the shares of a surviving or resulting corporation, then adjustments similar to, and subject to the same conditions as, those in Section 6 hereof shall be made by the Board. 9. Effect of Certain Transactions. a. Notwithstanding anything to the contrary or in the Agreement, the Optionee shall forfeit 100% of the Options granted pursuant to this Agreement, whether or not vested, if the Optionee breaches the provisions of subsections (b) or (d) of this Section 9. b. During the period that the Optionee is employed by the Company or any affiliate of the Company (the "Service Term") and for a period of one year thereafter, the Optionee shall not, in the continental United States, directly or indirectly, own, manage, operate, join, control, be employed by, or participate in the ownership, management, operation or control of or be connected in any manner, including but not limited to holding the positions of shareholder, director, officer, consultant, independent contractor, employee, partner, or investor, with any Competing Enterprise. For purposes of this Section, the term "Competing Enterprise" shall mean any person, corporation, partnership or other entity engaged in the operation of an internet service provider. The prohibition of this Section 9 shall not be deemed to prevent Optionee from owning 2% or less of any class of equity securities registered under Section 12 of the Exchange Act. During the Service Term and for a period of one year thereafter, the Optionee shall not interfere with the Company's relationship with, or endeavor to entice away from the Company, any person who at any time during the Service Term was an employee or customer of the Company or otherwise had a material business relationship with the Company. c. The necessity for protection of the Company and its affiliates against the Optionee's competition, as well as the nature and scope of such protection, has been carefully considered by the parties hereto in light of the uniqueness of the Optionee's talent and his importance to the Company. Accordingly, the Optionee agrees that, in addition to any other relief to which the Company may be entitled, the Company shall be entitled to seek and obtain injunctive relief (without the requirement of any bond) from a court of competent jurisdiction for the purpose of restraining the Optionee from any actual or threatened breach of the covenant contained in this Section 9. If for any reason a final decision of any court determines that the restrictions under this Section 9 are not reasonable or that consideration therefor is inadequate, such restrictions shall be interpreted, modified or rewritten by such court to include as much of the duration, Non-Qualified Option Agreement Page 3 4 scope and geographic area identified in this Section 9 as will render such restrictions valid and enforceable. d. The Optionee shall not intentionally disclose or reveal to an unauthorized person, during the Service Term or for a two year period thereafter, any information relating to the confidential affairs of the company or any of its affiliates, including but not limited to technical information, business and marketing plans, strategies, customer information, other information concerning the Company's products, promotions, development, financing, expansion plans, business policies and practices, and other forms of information considered by the Company to be confidential and in the nature of trade secrets. The Optionee shall hold as property of the Company and its affiliates all memoranda, books, papers, letters and other data, and all copies thereof or therefrom, which are in any way substantially related to the business of the company or its affiliates, whether made by him or otherwise coming into his possession and, on a prior written demand of the Company made within two years after the end of the Service Term, shall deliver the same to the company. 10. General Rules a. The obligation of the Company to sell or deliver Shares with respect to the Options granted shall be subject to all applicable laws, rules and regulations, including all applicable federal and state securities laws, and the obtaining of all such approvals by governmental agencies as may be deemed necessary or appropriate by the Board. b. The Company shall have the right to deduct from any distribution of cash to Optionee, an amount equal to the federal, state and local income taxes and other amounts as may be required by law to be withheld (the "Withholding Taxes") with respect to any Option. If Optionee is entitled to receive Shares upon exercise of an Option, the Optionee shall pay the Withholding Taxes to the Company prior to the issuance, or release from escrow, of such Shares. In satisfaction of the Withholding Taxes to the Company, the Optionee may make a written election (the "Tax Election"), which may be accepted or rejected in the discretion of the Board, to have withheld a portion of the Shares issuable to him or her upon exercise of the Option having an aggregate Fair Market Value, on the date preceding the date of exercise, equal to the Withholding Taxes, provided that in respect of an Optionee who may be subject to liability under Section 16(b) of the Exchange Act either (i)(A) the Optionee makes the Tax Election at least six (6) months after the date the Option was granted, (B) the Option is exercised during the ten day period beginning on the third business day and ending on the twelfth business day following the release for publication of the Company's quarterly or annual statements of earnings (a "Window Period") and (C the Tax Election is made during the Window Period in which the Option is exercised prior to such Window Period and subsequent to the immediately preceding Window Period or (ii)(A) the Tax Election is made at least six (6) months prior to the date the Option is exercised prior to the expiration of six (6) months following an election to revoke the Tax Election. Notwithstanding the foregoing, the Board may, by the adoption or rules Non-Qualified Option Agreement Page 4 5 or otherwise, (i) modify the provisions in the preceding sentence or impose such other restrictions or limitations on Tax Elections as may be necessary to ensure that the Tax Elections will be exempt transactions under Section 16(b) of the Exchange Act, an (ii) permit Tax Elections to be made at such other times and subject to such other conditions as the Board determines will constitute exempt transactions under Section 16b of the Exchange Act. If Optionee makes a disposition, within the meaning of Section 424(c)of the Code and regulations promulgated thereunder, of any Share or Shares issued to such Optionee pursuant to the exercise of an Option within the two-year period commencing on the day after the date of the grant or within the one-year period commencing on the day after the date of transfer of such Share or Shares to the Optionee pursuant to such exercise, the Optionee shall, within ten (10) days of such disposition, notify the Company thereof, by delivery of written notice to the Company at its principal executive office, and immediately deliver to the Company the amount of Withholding Taxes. c. No Option granted hereunder shall be transferable by the Optionee to whom granted otherwise than by will or the laws of descent and distribution, and an Option may be exercised during the lifetime of such Optionee only by the Optionee or his or her guardian or legal representative. The terms of such an Option shall be final, binding and conclusive upon the beneficiaries, executors, administrators, heirs and successors of the Optionee. IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed and the Optionee has hereunto set his hand, as of the day and year first above written. INTERNET AMERICA, INC. /s/ ROBERT J. MAYNARD, JR. ---------------------------------------- Robert J. Maynard, Jr. Chief Executive Officer OPTIONEE /s/ SCOTT W. STEVENS ---------------------------------------- Scott W. Stevens Non-Qualified Option Agreement Page 5 EX-99.2 5 NONQUALIFIED STOCK OPTION AGMNT - ROBERT GREEN 1 EXHIBIT 99.2 NON-QUALIFIED STOCK OPTION AGREEMENT Agreement made effective as of the 5th day of December, 1995 by and between INTERNET AMERICA, INC. (the "Company") and ROBERT GREEN (the "Optionee"). 1. Definitions. For purposes of this Agreement: a. "Board" means the Board of Directors of the Company. b. "Change in Capitalization" means any increase or reduction in the number of Shares, or any change (including, but not limited to, a change in value) in the Shares or exchange of Shares for a different number or kind of Shares or other securities of the Company, by reason of a reclassification, recapitalization, merger, consolidation, reorganization, stock dividend, stock split or reverse stock split, combination or exchange of shares or other similar events. c. "Code" means the Internal Revenue Code of 1986, as amended. d. "Company" means Internet America, Inc., a Texas corporation. e. "Exchange Act" means the Securities Exchange Act of 1934, as amended. f. "Fair Market Value" on any date means the closing price of Shares on such date on the principal national securities exchange on which Shares are listed or admitted to trading, the arithmetic mean of the per Share closing bid priced and per Share closing asked price on such date as quoted on the National Association of Securities Dealers Automated Quotation System or such then market in which such prices are regularly quoted, or, if there have been no published bid or asked quotations with respect to Shares on such date, the Fair Market Value shall be the value established by the Board in good faith and in accordance with Section 422 of the Code. g. "Shares" means the common stock, par value $.01 per share, of the Company. 2. Grant of Option. The Company hereby grants to the Optionee, for valuable consideration, receipt of which is hereby acknowledged, a Non-Qualified Stock Option ("Option") to purchase from the Company an aggregate of 5,000 Shares at a purchase price (the "Option Price") of $3.75 per share. 3. Exercise Period. The Option shall become non-forfeitable according to the following schedule and shall hereafter be exercisable in whole or in part: First Installment: With respect to 500 shares, on December 25, 1996 Second Installment: With respect to 1,500 shares, on December 25, 1997 Third Installment: With respect to 1,500 shares, on December 25, 1998 Third Installment: With respect to 1,500 shares, on December 25, 1999
The Option may be exercised only with respect to full Shares and may not be exercised after the close of business on the day (the "Termination Date") preceding the tenth anniversary of the date hereof. The Option shall have no effect after the Termination Date. 2 4. Exercise of an Option. The exercise of an Option shall be made only by a written notice delivered in person or by mail to the Secretary of the Company at the Company's principal executive office, specifying the number of Shares to be purchased and accompanied by payment therefor. The purchase price for any Shares purchased pursuant to the exercise of an Option shall be paid in full upon such exercise by delivery of cash or personal check in amount of purchase price. The written notice may provide instructions from the Optionee to the Company that upon receipt of the purchase price in cash from the Optionee's broker or dealer, designated as such on the written notice, in payment for any Shares purchased pursuant to the exercise of an Option, the Company shall issue such Shares directly to the broker or dealer. If requested by the Board, the Optionee shall deliver this Agreement to the Secretary of the Company who shall endorse thereon a notation of such exercise and return such Agreement to the Optionee. No fractional Shares (or cash in lieu thereof) shall be issued upon exercise of an Option and the number of Shares that may be purchased upon exercise shall be rounded to the nearest number of whole Shares. 5. Rights of Optionee. The Optionee shall not be deemed for any purpose to be the owner of any Shares subject to any Option unless and until (i) the Option shall have been exercised pursuant to the terms thereof, (ii) the Company shall have issued and delivered the Shares to the Optionee and (iii) the Optionee's name shall have been entered as a stockholder of record on the books of the Company. Thereupon, the Optionee shall have full voting, dividend and other ownership rights with respect to such Shares. 6. Adjustment Upon Changes in Capitalization. a. Subject to Section 7, in the event of a Change in Capitalization, the number and class of Shares or other stock or securities which are subject to the Option, and the purchase price therefor, if applicable, shall be appropriately and equitably adjusted. b. If, by reason of a Change in Capitalization, the Optionee shall be entitled to exercise an Option with respect to new, additional or different shares of stock or securities, such new, additional or different shares shall thereupon be subject to all of the conditions which were applicable to the Shares subject to the Option, as the case may be, prior to such Change in Capitalization. 7. Effect of Certain Transactions. In the event of (i) the liquidation or dissolution of the Company or (ii) a merger or consolidation of the Company (a "Transaction"), the Option issued hereunder shall continue in effect in accordance with its terms and the Optionee shall be entitled to receive in respect of each Share subject to any outstanding Option, upon exercise of any Option, the same number and kind of stock, securities, cash, property, or other consideration that each holder of a Share was entitled to receive in the Transaction in respect of a Share. In the event that, after a Transaction, there occurs any Change in Capitalization with respect to the shares of a surviving or resulting corporation, then adjustments similar to, and subject to the same conditions as, those in Section 6 hereof shall be made by the Board. 8. Effect of Certain Transactions. a. Notwithstanding anything to the contrary or in the Agreement, the Optionee shall forfeit 100% of the Options granted pursuant to this Agreement, whether or not vested, if the Optionee breaches the provisions of subsections (b) or (d) of this Section 9. b. During the period that the Optionee is employed by the Company or any affiliate of the Company (the "Service Term") and for a period of one year thereafter, the Optionee shall not, in the continental United States, directly or indirectly, own, manage, operate, join, control, be employed by, or participate in the ownership, management, operation or control of or be connected in any manner, including but not limited to holding the positions of shareholder, director, officer, consultant, independent contractor, employee, partner, or investor, with any Competing Enterprise. For purposes of this Section, Non-Qualified Option Agreement Page 2 3 the term "Competing Enterprise" shall mean any person, corporation, partnership or other entity engaged in the operation of an internet service provider. The prohibition of this Section 9 shall not be deemed to prevent Optionee from owning 2% or less of any class of equity securities registered under Section 12 of the Exchange Act. During the Service Term and for a period of one year thereafter, the Optionee shall not interfere with the Company's relationship with, or endeavor to entice away from the Company, any person who at any time during the Service Term was an employee or customer of the Company or otherwise had a material business relationship with the Company. c. The necessity for protection of the Company and its affiliates against the Optionee's competition, as well as the nature and scope of such protection, has been carefully considered by the parties hereto in light of the uniqueness of the Optionee's talent and his importance to the Company. Accordingly, the Optionee agrees that, in addition to any other relief to which the Company may be entitled, the Company shall be entitled to seek and obtain injunctive relief (without the requirement of any bond) from a court of competent jurisdiction for the purpose of restraining the Optionee from any actual or threatened breach of the covenant contained in this Section 9. If for any reason a final decision of any court determines that the restrictions under this Section 9 are not reasonable or that consideration therefor is inadequate, such restrictions shall be interpreted, modified or rewritten by such court to include as much of the duration, scope and geographic area identified in this Section 9 as will render such restrictions valid and enforceable. d. The Optionee shall not intentionally disclose or reveal to an unauthorized person, during the Service Term or for a two year period thereafter, any information relating to the confidential affairs of the company or any of its affiliates, including but not limited to technical information, business and marketing plans, strategies, customer information, other information concerning the Company's products, promotions, development, financing, expansion plans, business policies and practices, and other forms of information considered by the Company to be confidential and in the nature of trade secrets. The Optionee shall hold as property of the Company and its affiliates all memoranda, books, papers, letters and other data, and all copies thereof or therefrom, which are in any way substantially related to the business of the company or its affiliates, whether made by him or otherwise coming into his possession and, on a prior written demand of the Company made within two years after the end of the Service Term, shall deliver the same to the company. 9. General Rules a. The obligation of the Company to sell or deliver Shares with respect to the Options granted shall be subject to all applicable laws, rules and regulations, including all applicable federal and state securities laws, and the obtaining of all such approvals by governmental agencies as may be deemed necessary or appropriate by the Board. b. The Company shall have the right to deduct from any distribution of cash to Optionee, an amount equal to the federal, state and local income taxes and other amounts as may be required by law to be withheld (the "Withholding Taxes") with respect to any Option. If Optionee is entitled to receive Shares upon exercise of an Option, the Optionee shall pay the Withholding Taxes to the Company prior to the issuance, or release from escrow, of such Shares. In satisfaction of the Withholding Taxes to the Company, the Optionee may make a written election (the "Tax Election"), which may be accepted or rejected in the discretion of the Board, to have withheld a portion of the Shares issuable to him or her upon exercise of the Option having an aggregate Fair Market Value, on the date preceding the date of exercise, equal to the Withholding Taxes, provided that in respect of an Optionee who may be subject to liability under Section 16(b) of the Exchange Act either (i)(A) the Optionee makes the Tax Election at least six (6) months after the date the Option was granted, (B) the Option is exercised during the ten day period beginning on the third business day and ending on the twelfth business day following the release for publication of the Company's quarterly or annual statements of earnings (a "Window Period") and (C the Tax Election is made during the Window Period in which the Option is exercised prior to such Window Period and subsequent to the immediately preceding Window Period or (ii)(A) the Tax Election Non-Qualified Option Agreement Page 3 4 is made at least six (6) months prior to the date the Option is exercised prior to the expiration of six (6) months following an election to revoke the Tax Election. Notwithstanding the foregoing, the Board may, by the adoption or rules or otherwise, (i) modify the provisions in the preceding sentence or impose such other restrictions or limitations on Tax Elections as may be necessary to ensure that the Tax Elections will be exempt transactions under Section 16(b) of the Exchange Act, an (ii) permit Tax Elections to be made at such other times and subject to such other conditions as the Board determines will constitute exempt transactions under Section 16b of the Exchange Act. c. If Optionee makes a disposition, within the meaning of Section 424(c)of the Code and regulations promulgated thereunder, of any Share or Shares issued to such Optionee pursuant to the exercise of an Option within the two-year period commencing on the day after the date of the grant or within the one-year period commencing on the day after the date of transfer of such Share or Shares to the Optionee pursuant to such exercise, the Optionee shall, within ten (10) days of such disposition, notify the Company thereof, by delivery of written notice to the Company at its principal executive office, and immediately deliver to the Company the amount of Withholding Taxes. d. No Option granted hereunder shall be transferable by the Optionee to whom granted otherwise than by will or the laws of descent and distribution, and an Option may be exercised during the lifetime of such Optionee only by the Optionee or his or her guardian or legal representative. The terms of such an Option shall be final, binding and conclusive upon the beneficiaries, executors, administrators, heirs and successors of the Optionee. IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed and the Optionee has hereunto set his hand, as of the day and year first above written. INTERNET AMERICA, INC. /s/ ROBERT J. MAYNARD, JR. --------------------------------------- Robert J. Maynard, Jr. Chief Executive Officer OPTIONEE /s/ ROBERT GREEN --------------------------------------- Robert Green Non-Qualified Option Agreement Page 4 EX-99.3 6 NONQUALIFIED STOCK OPTION AGMNT - WILLIAM S HARRIS 1 EXHIBIT 99.3 NON-QUALIFIED STOCK OPTION AGREEMENT Agreement made effective as of the 5th day of December, 1995 by and between INTERNET AMERICA, INC. (the "Company") and WILLIAM S. HARRIS (the "Optionee"). 1. Definitions. For purposes of this Agreement: a. "Board" means the Board of Directors of the Company. b. "Change in Capitalization" means any increase or reduction in the number of Shares, or any change (including, but not limited to, a change in value) in the Shares or exchange of Shares for a different number or kind of Shares or other securities of the Company, by reason of a reclassification, recapitalization, merger, consolidation, reorganization, stock dividend, stock split or reverse stock split, combination or exchange of shares or other similar events. c. "Code" means the Internal Revenue Code of 1986, as amended. d. "Company" means Internet America, Inc., a Texas corporation. e. "Exchange Act" means the Securities Exchange Act of 1934, as amended. f. "Fair Market Value" on any date means the closing price of Shares on such date on the principal national securities exchange on which Shares are listed or admitted to trading, the arithmetic mean of the per Share closing bid priced and per Share closing asked price on such date as quoted on the National Association of Securities Dealers Automated Quotation System or such then market in which such prices are regularly quoted, or, if there have been no published bid or asked quotations with respect to Shares on such date, the Fair Market Value shall be the value established by the Board in good faith and in accordance with Section 422 of the Code. g. "Shares" means the common stock, par value $.01 per share, of the Company. 2. Grant of Option. The Company hereby grants to the Optionee, for valuable consideration, receipt of which is hereby acknowledged, a Non-Qualified Stock Option ("Option") to purchase from the Company an aggregate of 5,000 Shares at a purchase price (the "Option Price") of $3.75 per share. 3. Exercise Period. The Option shall become non-forfeitable according to the following schedule and shall hereafter be exercisable in whole or in part: First Installment: With respect to 500 shares, on December 25, 1996 Second Installment: With respect to 1,500 shares, on December 25, 1997 Third Installment: With respect to 1,500 shares, on December 25, 1998 Third Installment: With respect to 1,500 shares, on December 25, 1999 The Option may be exercised only with respect to full Shares and may not be exercised after the close of business on the day (the "Termination Date") preceding the tenth anniversary of the date hereof. The Option shall have no effect after the Termination Date. 2 4. Exercise of an Option. The exercise of an Option shall be made only by a written notice delivered in person or by mail to the Secretary of the Company at the Company's principal executive office, specifying the number of Shares to be purchased and accompanied by payment therefor. The purchase price for any Shares purchased pursuant to the exercise of an Option shall be paid in full upon such exercise by delivery of cash or personal check in amount of purchase price. The written notice may provide instructions from the Optionee to the Company that upon receipt of the purchase price in cash from the Optionee's broker or dealer, designated as such on the written notice, in payment for any Shares purchased pursuant to the exercise of an Option, the Company shall issue such Shares directly to the broker or dealer. If requested by the Board, the Optionee shall deliver this Agreement to the Secretary of the Company who shall endorse thereon a notation of such exercise and return such Agreement to the Optionee. No fractional Shares (or cash in lieu thereof) shall be issued upon exercise of an Option and the number of Shares that may be purchased upon exercise shall be rounded to the nearest number of whole Shares. 5. Rights of Optionee. The Optionee shall not be deemed for any purpose to be the owner of any Shares subject to any Option unless and until (i) the Option shall have been exercised pursuant to the terms thereof, (ii) the Company shall have issued and delivered the Shares to the Optionee and (iii) the Optionee's name shall have been entered as a stockholder of record on the books of the Company. Thereupon, the Optionee shall have full voting, dividend and other ownership rights with respect to such Shares. 6. Adjustment Upon Changes in Capitalization. a. Subject to Section 7, in the event of a Change in Capitalization, the number and class of Shares or other stock or securities which are subject to the Option, and the purchase price therefor, if applicable, shall be appropriately and equitably adjusted. b. If, by reason of a Change in Capitalization, the Optionee shall be entitled to exercise an Option with respect to new, additional or different shares of stock or securities, such new, additional or different shares shall thereupon be subject to all of the conditions which were applicable to the Shares subject to the Option, as the case may be, prior to such Change in Capitalization. 7. Effect of Certain Transactions. In the event of (i) the liquidation or dissolution of the Company or (ii) a merger or consolidation of the Company (a "Transaction"), the Option issued hereunder shall continue in effect in accordance with its terms and the Optionee shall be entitled to receive in respect of each Share subject to any outstanding Option, upon exercise of any Option, the same number and kind of stock, securities, cash, property, or other consideration that each holder of a Share was entitled to receive in the Transaction in respect of a Share. In the event that, after a Transaction, there occurs any Change in Capitalization with respect to the shares of a surviving or resulting corporation, then adjustments similar to, and subject to the same conditions as, those in Section 6 hereof shall be made by the Board. 8. Effect of Certain Transactions. a. Notwithstanding anything to the contrary or in the Agreement, the Optionee shall forfeit 100% of the Options granted pursuant to this Agreement, whether or not vested, if the Optionee breaches the provisions of subsections (b) or (d) of this Section 9. b. During the period that the Optionee is employed by the Company or any affiliate of the Company (the "Service Term") and for a period of one year thereafter, the Optionee shall not, in the continental United States, directly or indirectly, own, manage, operate, join, control, be employed by, or participate in the ownership, management, operation or control of or be connected in any manner, Non-Qualified Option Agreement Page 2 3 including but not limited to holding the positions of shareholder, director, officer, consultant, independent contractor, employee, partner, or investor, with any Competing Enterprise. For purposes of this Section, the term "Competing Enterprise" shall mean any person, corporation, partnership or other entity engaged in the operation of an internet service provider. The prohibition of this Section 9 shall not be deemed to prevent Optionee from owning 2% or less of any class of equity securities registered under Section 12 of the Exchange Act. During the Service Term and for a period of one year thereafter, the Optionee shall not interfere with the Company's relationship with, or endeavor to entice away from the Company, any person who at any time during the Service Term was an employee or customer of the Company or otherwise had a material business relationship with the Company. c. The necessity for protection of the Company and its affiliates against the Optionee's competition, as well as the nature and scope of such protection, has been carefully considered by the parties hereto in light of the uniqueness of the Optionee's talent and his importance to the Company. Accordingly, the Optionee agrees that, in addition to any other relief to which the Company may be entitled, the Company shall be entitled to seek and obtain injunctive relief (without the requirement of any bond) from a court of competent jurisdiction for the purpose of restraining the Optionee from any actual or threatened breach of the covenant contained in this Section 9. If for any reason a final decision of any court determines that the restrictions under this Section 9 are not reasonable or that consideration therefor is inadequate, such restrictions shall be interpreted, modified or rewritten by such court to include as much of the duration, scope and geographic area identified in this Section 9 as will render such restrictions valid and enforceable. d. The Optionee shall not intentionally disclose or reveal to an unauthorized person, during the Service Term or for a two year period thereafter, any information relating to the confidential affairs of the company or any of its affiliates, including but not limited to technical information, business and marketing plans, strategies, customer information, other information concerning the Company's products, promotions, development, financing, expansion plans, business policies and practices, and other forms of information considered by the Company to be confidential and in the nature of trade secrets. The Optionee shall hold as property of the Company and its affiliates all memoranda, books, papers, letters and other data, and all copies thereof or therefrom, which are in any way substantially related to the business of the company or its affiliates, whether made by him or otherwise coming into his possession and, on a prior written demand of the Company made within two years after the end of the Service Term, shall deliver the same to the company. 9. General Rules a. The obligation of the Company to sell or deliver Shares with respect to the Options granted shall be subject to all applicable laws, rules and regulations, including all applicable federal and state securities laws, and the obtaining of all such approvals by governmental agencies as may be deemed necessary or appropriate by the Board. b. The Company shall have the right to deduct from any distribution of cash to Optionee, an amount equal to the federal, state and local income taxes and other amounts as may be required by law to be withheld (the "Withholding Taxes") with respect to any Option. If Optionee is entitled to receive Shares upon exercise of an Option, the Optionee shall pay the Withholding Taxes to the Company prior to the issuance, or release from escrow, of such Shares. In satisfaction of the Withholding Taxes to the Company, the Optionee may make a written election (the "Tax Election"), which may be accepted or rejected in the discretion of the Board, to have withheld a portion of the Shares issuable to him or her upon exercise of the Option having an aggregate Fair Market Value, on the date preceding the date of exercise, equal to the Withholding Taxes, provided that in respect of an Optionee who may be subject to liability under Section 16(b) of the Exchange Act either (i)(A) the Optionee makes the Tax Election at least six (6) months after the date the Option was granted, (B) the Option is exercised during the ten day period beginning on the third business day and ending on the twelfth business day following the release Non-Qualified Option Agreement Page 3 4 for publication of the Company's quarterly or annual statements of earnings (a "Window Period") and (C the Tax Election is made during the Window Period in which the Option is exercised prior to such Window Period and subsequent to the immediately preceding Window Period or (ii)(A) the Tax Election is made at least six (6) months prior to the date the Option is exercised prior to the expiration of six (6) months following an election to revoke the Tax Election. Notwithstanding the foregoing, the Board may, by the adoption or rules or otherwise, (i) modify the provisions in the preceding sentence or impose such other restrictions or limitations on Tax Elections as may be necessary to ensure that the Tax Elections will be exempt transactions under Section 16(b) of the Exchange Act, an (ii) permit Tax Elections to be made at such other times and subject to such other conditions as the Board determines will constitute exempt transactions under Section 16b of the Exchange Act. c. If Optionee makes a disposition, within the meaning of Section 424(c)of the Code and regulations promulgated thereunder, of any Share or Shares issued to such Optionee pursuant to the exercise of an Option within the two-year period commencing on the day after the date of the grant or within the one-year period commencing on the day after the date of transfer of such Share or Shares to the Optionee pursuant to such exercise, the Optionee shall, within ten (10) days of such disposition, notify the Company thereof, by delivery of written notice to the Company at its principal executive office, and immediately deliver to the Company the amount of Withholding Taxes. d. No Option granted hereunder shall be transferable by the Optionee to whom granted otherwise than by will or the laws of descent and distribution, and an Option may be exercised during the lifetime of such Optionee only by the Optionee or his or her guardian or legal representative. The terms of such an Option shall be final, binding and conclusive upon the beneficiaries, executors, administrators, heirs and successors of the Optionee. IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed and the Optionee has hereunto set his hand, as of the day and year first above written. INTERNET AMERICA, INC. /s/ ROBERT J. MAYNARD, JR. ----------------------------------------- Robert J. Maynard, Jr. Chief Executive Officer OPTIONEE /s/ WILLIAM W. HARRIS ----------------------------------------- William S. Harris Non-Qualified Option Agreement Page 4 EX-99.4 7 NONQUALIFIED STOCK OPTION AGMT - STEVE TEFERTILLER 1 EXHIBIT 99.4 NON-QUALIFIED STOCK OPTION AGREEMENT Agreement made effective as of the 23rd day of January, 1997 by and between INTERNET AMERICA, INC. (the "Company") and STEVE TEFERTILLER (the "Optionee"). 1. Definitions. For purposes of this Agreement: a. "Board" means the Board of Directors of the Company. b. "Change in Capitalization" means any increase or reduction in the number of Shares, or any change (including, but not limited to, a change in value) in the Shares or exchange of Shares for a different number or kind of Shares or other securities of the Company, by reason of a reclassification, recapitalization, merger, consolidation, reorganization, stock dividend, stock split or reverse stock split, combination or exchange of shares or other similar events. c. "Change in Control" shall be deemed to have occurred when the first of the following events occurs: (i) when the Company acquires actual knowledge that any person or group (as such terms are used in Sections 13(d) and 14(d) (2) of the Exchange Act), other than an employee benefit plan established or maintained by the Company or any of its subsidiaries or the current largest stockholder, is or becomes the beneficial owner (as defined under rule 13d-3 of the Exchange Act) directly or indirectly, or securities of the Company representing 30 percent or more of the combined voting power of the Company's directors; (ii) upon the approval by the Company's stockholders of (A) a merger or consolidation of the Company with or into another Corporation (other than a merger or consolidation in which the Company is the surviving corporation and which does not result in any capital reorganization or reclassification or other change in the Company's the outstanding shares of common stock), (B) a sale of disposition of all or substantially all of the Company's assets of (C) a plan of liquidation of dissolution of the Company; or (iii) if, at any time, two-thirds of the members of the Board are not "Continuing Directors". For this purpose " Continuing Directors" shall mean the members of the Board of Directors as of September 30, 1995, and any individual who becomes a member of the Board thereafter if his or her election or nomination for election as a director was approved by a vote of at least two-third of the Continuing Directors then in office. d. "Code" means the Internal Revenue Code of 1986, as amended. 2 e. "Company" means Internet America, Inc., a Texas corporation. f. "Exchange Act" means the Securities Exchange Act of 1934, as amended. g. "Fair Market Value" on any date means the closing price of Shares on such date on the principal national securities exchange on which Shares are listed or admitted to trading, the arithmetic mean of the per Share closing bid priced and per Share closing asked price on such date as quoted on the National Association of Securities Dealers Automated Quotation System or such then market in which such prices are regularly quoted, or, if there have been no published bid or asked quotations with respect to Shares on such date, the Fair Market Value shall be the value established by the Board in good faith and in accordance with Section 422 of the Code. h. "Shares" means the common stock, par value $.01 per share, of the Company. 2. Grant of Option. The Company hereby grants to the Optionee, for valuable consideration, receipt of which is hereby acknowledged, a Non-Qualified Stock Option ("Option") to purchase from the Company an aggregate of 5,000 Shares at a purchase price (the "Option Price") of $3.75 per share. 3. Exercise Period. The Option shall become non-forfeitable according to the following schedule and shall hereafter be exercisable in whole or in part: (i) First Installment: 500 on June 10, 1997; (ii) Second Installment: 1,500 on June 10, 1998; (iii) Third Installment: 1,500 on June 10, 1999; and (iv) Fourth Installment: 1,500 on June 10, 2000. The Option may be exercised only with respect to full Shares and may not be exercised after the close of business on the day (the "Termination Date") preceding the tenth anniversary of the date hereof. The Option shall have no effect after the Termination Date. 4. Exercise of an Option. The exercise of an Option shall be made only by a written notice delivered in person or by mail to the Secretary of the Company at the Company's principal executive office, specifying the number of Shares to be purchased and accompanied by payment therefor. The purchase price for any Shares purchased pursuant to the exercise of an Option shall be paid in full upon such exercise by delivery of cash or personal check in amount of purchase price. The written notice may provide instructions from the Optionee to the Company that upon receipt of the purchase price in cash from the Optionee's broker or dealer, designated as such on the written notice, in payment for any Shares purchased pursuant to the exercise of an Option, the Company shall issue such Shares directly to the broker or dealer. If requested by the Board, the Non-Qualified Option Agreement Page 2 3 Optionee shall deliver this Agreement to the Secretary of the Company who shall endorse thereon a notation of such exercise and return such Agreement to the Optionee. No fractional Shares (or cash in lieu thereof) shall be issued upon exercise of an Option and the number of Shares that may be purchased upon exercise shall be rounded to the nearest number of whole Shares. 5. Rights of Optionee. The Optionee shall not be deemed for any purpose to be the owner of any Shares subject to any Option unless and until (i) the Option shall have been exercised pursuant to the terms thereof, (ii) the Company shall have issued and delivered the Shares to the Optionee and (iii) the Optionee's name shall have been entered as a stockholder of record on the books of the Company. Thereupon, the Optionee shall have full voting, dividend and other ownership rights with respect to such Shares. 6. Adjustment Upon Changes in Capitalization. a. Subject to Section 7, in the event of a Change in Capitalization, the number and class of Shares or other stock or securities which are subject to the Option, and the purchase price therefor, if applicable, shall be appropriately and equitably adjusted. b. If, by reason of a Change in Capitalization, the Optionee shall be entitled to exercise an Option with respect to new, additional or different shares of stock or securities, such new, additional or different shares shall thereupon be subject to all of the conditions which were applicable to the Shares subject to the Option, as the case may be, prior to such Change in Capitalization. 7. Effect of Certain Transactions. In the event of (i) the liquidation or dissolution of the Company or (ii) a merger or consolidation of the Company (a "Transaction"), the Option issued hereunder shall continue in effect in accordance with its terms and the Optionee shall be entitled to receive in respect of each Share subject to any outstanding Option, upon exercise of any Option, the same number and kind of stock, securities, cash, property, or other consideration that each holder of a Share was entitled to receive in the Transaction in respect of a Share. In the event that, after a Transaction, there occurs any Change in Capitalization with respect to the shares of a surviving or resulting corporation, then adjustments similar to, and subject to the same conditions as, those in Section 6 hereof shall be made by the Board. 8. Effect of Change in Control. a. Notwithstanding anything contained in the Plan or an Agreement to the contrary, in the event of a Change in Control, all Options outstanding on the date of such Change in Control shall become immediately and fully exercisable. 9. Effect of Certain Transactions. a. Notwithstanding anything to the contrary or in the Agreement, the Optionee shall forfeit 100% of the Options granted pursuant to this Agreement, whether or not vested, if the Optionee breaches the provisions of subsections (b) or (d) of this Section 9. Non-Qualified Option Agreement Page 3 4 b. During the period that the Optionee is employed by the Company or any affiliate of the Company (the "Service Term") and for a period of one year thereafter, the Optionee shall not, in the continental United States, directly or indirectly, own, manage, operate, join, control, be employed by, or participate in the ownership, management, operation or control of or be connected in any manner, including but not limited to holding the positions of shareholder, director, officer, consultant, independent contractor, employee, partner, or investor, with any Competing Enterprise. For purposes of this Section, the term "Competing Enterprise" shall mean any person, corporation, partnership or other entity engaged in the operation of an internet service provider. The prohibition of this Section 9 shall not be deemed to prevent Optionee from owning 2% or less of any class of equity securities registered under Section 12 of the Exchange Act. During the Service Term and for a period of one year thereafter, the Optionee shall not interfere with the Company's relationship with, or endeavor to entice away from the Company, any person who at any time during the Service Term was an employee or customer of the Company or otherwise had a material business relationship with the Company. c. The necessity for protection of the Company and its affiliates against the Optionee's competition, as well as the nature and scope of such protection, has been carefully considered by the parties hereto in light of the uniqueness of the Optionee's talent and his importance to the Company. Accordingly, the Optionee agrees that, in addition to any other relief to which the Company may be entitled, the Company shall be entitled to seek and obtain injunctive relief (without the requirement of any bond) from a court of competent jurisdiction for the purpose of restraining the Optionee from any actual or threatened breach of the covenant contained in this Section 9. If for any reason a final decision of any court determines that the restrictions under this Section 9 are not reasonable or that consideration therefor is inadequate, such restrictions shall be interpreted, modified or rewritten by such court to include as much of the duration, scope and geographic area identified in this Section 9 as will render such restrictions valid and enforceable. d. The Optionee shall not intentionally disclose or reveal to an unauthorized person, during the Service Term or for a two year period thereafter, any information relating to the confidential affairs of the company or any of its affiliates, including but not limited to technical information, business and marketing plans, strategies, customer information, other information concerning the Company's products, promotions, development, financing, expansion plans, business policies and practices, and other forms of information considered by the Company to be confidential and in the nature of trade secrets. The Optionee shall hold as property of the Company and its affiliates all memoranda, books, papers, letters and other data, and all copies thereof or therefrom, which are in any way substantially related to the business of the company or its affiliates, whether made by him or otherwise coming into his possession and, on a prior written demand of the Company made within two years after the end of the Service Term, shall deliver the same to the company. Non-Qualified Option Agreement Page 4 5 10. General Rules a. The obligation of the Company to sell or deliver Shares with respect to the Options granted shall be subject to all applicable laws, rules and regulations, including all applicable federal and state securities laws, and the obtaining of all such approvals by governmental agencies as may be deemed necessary or appropriate by the Board. b. The Company shall have the right to deduct from any distribution of cash to Optionee, an amount equal to the federal, state and local income taxes and other amounts as may be required by law to be withheld (the "Withholding Taxes") with respect to any Option. If Optionee is entitled to receive Shares upon exercise of an Option, the Optionee shall pay the Withholding Taxes to the Company prior to the issuance, or release from escrow, of such Shares. In satisfaction of the Withholding Taxes to the Company, the Optionee may make a written election (the "Tax Election"), which may be accepted or rejected in the discretion of the Board, to have withheld a portion of the Shares issuable to him or her upon exercise of the Option having an aggregate Fair Market Value, on the date preceding the date of exercise, equal to the Withholding Taxes, provided that in respect of an Optionee who may be subject to liability under Section 16(b) of the Exchange Act either (i)(A) the Optionee makes the Tax Election at least six (6) months after the date the Option was granted, (B) the Option is exercised during the ten day period beginning on the third business day and ending on the twelfth business day following the release for publication of the Company's quarterly or annual statements of earnings (a "Window Period") and (C the Tax Election is made during the Window Period in which the Option is exercised prior to such Window Period and subsequent to the immediately preceding Window Period or (ii)(A) the Tax Election is made at least six (6) months prior to the date the Option is exercised prior to the expiration of six (6) months following an election to revoke the Tax Election. Notwithstanding the foregoing, the Board may, by the adoption or rules or otherwise, (i) modify the provisions in the preceding sentence or impose such other restrictions or limitations on Tax Elections as may be necessary to ensure that the Tax Elections will be exempt transactions under Section 16(b) of the Exchange Act, an (ii) permit Tax Elections to be made at such other times and subject to such other conditions as the Board determines will constitute exempt transactions under Section 16b of the Exchange Act. c. If Optionee makes a disposition, within the meaning of Section 424(c)of the Code and regulations promulgated thereunder, of any Share or Shares issued to such Optionee pursuant to the exercise of an Option within the two-year period commencing on the day after the date of the grant or within the one-year period commencing on the day after the date of transfer of such Share or Shares to the Optionee pursuant to such exercise, the Optionee shall, within ten (10) days of such disposition, notify the Company thereof, by delivery of written notice to the Company at its principal executive office, and immediately deliver to the Company the amount of Withholding Taxes. Non-Qualified Option Agreement Page 5 6 d. No Option granted hereunder shall be transferable by the Optionee to whom granted otherwise than by will or the laws of descent and distribution, and an Option may be exercised during the lifetime of such Optionee only by the Optionee or his or her guardian or legal representative. The terms of such an Option shall be final, binding and conclusive upon the beneficiaries, executors, administrators, heirs and successors of the Optionee. IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed and the Optionee has hereunto set his hand, as of the day and year first above written. INTERNET AMERICA, INC. /s/ ROBERT J. MAYNARD, JR. -------------------------- Robert J. Maynard, Jr. Chief Executive Officer OPTIONEE /s/ STEVEN R. TEFERTILLER -------------------------- Steven R. Tefertiller Non-Qualified Option Agreement Page 6 EX-99.5 8 NONQUALIFIED STOCK OPTION AGRMNT - DOUGLAS DAVIS 1 EXHIBIT 99.5 NON-QUALIFIED STOCK OPTION AGREEMENT Agreement made effective as of the 1st day of December, 1995 by and between INTERNET AMERICA, INC. (the "Company") and DOUG DAVIS (the "Optionee"). 1. Definitions. For purposes of this Agreement: a. "Board" means the Board of Directors of the Company. b. "Change in Capitalization" means any increase or reduction in the number of Shares, or any change (including, but not limited to, a change in value) in the Shares or exchange of Shares for a different number or kind of Shares or other securities of the Company, by reason of a reclassification, recapitalization, merger, consolidation, reorganization, stock dividend, stock split or reverse stock split, combination or exchange of shares or other similar events. c. "Change in Control" shall be deemed to have occurred when the first of the following events occurs: (i) when the Company acquires actual knowledge that any person or group (as such terms are used in Sections 13(d) and 14(d) (2) of the Exchange Act), other than an employee benefit plan established or maintained by the Company or any of its subsidiaries or the current largest stockholder, is or becomes the beneficial owner (as defined under rule 13d-3 of the Exchange Act) directly or indirectly, or securities of the Company representing 30 percent or more of the combined voting power of the Company's directors; (ii) upon the approval by the Company's stockholders of (A) a merger or consolidation of the Company with or into another Corporation (other than a merger or consolidation in which the Company is the surviving corporation and which does not result in any capital reorganization or reclassification or other change in the Company's the outstanding shares of common stock), (B) a sale of disposition of all or substantially all of the Company's assets of (C) a plan of liquidation of dissolution of the Company; or (iii) if, at any time, two-thirds of the members of the Board are not "Continuing Directors". For this purpose " Continuing Directors" shall mean the members of the Board of Directors as of September 30, 1995, and any individual who becomes a member of the Board thereafter if his or her election or nomination for election as a director was approved by a vote of at least two-third of the Continuing Directors then in office. d. "Code" means the Internal Revenue Code of 1986, as amended. 2 e. "Company" means Internet America, Inc., a Texas corporation. f. "Exchange Act" means the Securities Exchange Act of 1934, as amended. g. "Fair Market Value" on any date means the closing price of Shares on such date on the principal national securities exchange on which Shares are listed or admitted to trading, the arithmetic mean of the per Share closing bid priced and per Share closing asked price on such date as quoted on the National Association of Securities Dealers Automated Quotation System or such then market in which such prices are regularly quoted, or, if there have been no published bid or asked quotations with respect to Shares on such date, the Fair Market Value shall be the value established by the Board in good faith and in accordance with Section 422 of the Code. h. "Shares" means the common stock, par value $.01 per share, of the Company. 2. Grant of Option. The Company hereby grants to the Optionee, for valuable consideration, receipt of which is hereby acknowledged, a Non-Qualified Stock Option ("Option") to purchase from the Company an aggregate of 5,000 Shares at a purchase price (the "Option Price") of $3.75 per share. 3. Exercise Period. The Option shall become non-forfeitable according to the following schedule and shall hereafter be exercisable in whole or in part: First Installment: With respect to 2,500 shares, on December 1, 1995 Second Installment: With respect to 2,500 shares, on April 1, 1996 The Option may be exercised only with respect to full Shares and may not be exercised after the close of business on the day (the "Termination Date") preceding the tenth anniversary of the date hereof. The Option shall have no effect after the Termination Date. 4. Exercise of an Option. The exercise of an Option shall be made only by a written notice delivered in person or by mail to the Secretary of the Company at the Company's principal executive office, specifying the number of Shares to be purchased and accompanied by payment therefor. The purchase price for any Shares purchased pursuant to the exercise of an Option shall be paid in full upon such exercise by delivery of cash or personal check in amount of purchase price. The written notice may provide instructions from the Optionee to the Company that upon receipt of the purchase price in cash from the Optionee's broker or dealer, designated as such on the written notice, in payment for any Shares purchased pursuant to the exercise of an Option, the Company shall issue such Shares directly to the broker or dealer. If requested by the Board, the Optionee shall deliver this Agreement to the Secretary of the Company who shall endorse thereon a notation of such exercise and return such Agreement to the Optionee. No fractional Shares (or cash in lieu thereof) shall be issued upon exercise of an Option and the number of Non-Qualified Option Agreement Page 2 3 Shares that may be purchased upon exercise shall be rounded to the nearest number of whole Shares. 5. Rights of Optionee. The Optionee shall not be deemed for any purpose to be the owner of any Shares subject to any Option unless and until (i) the Option shall have been exercised pursuant to the terms thereof, (ii) the Company shall have issued and delivered the Shares to the Optionee and (iii) the Optionee's name shall have been entered as a stockholder of record on the books of the Company. Thereupon, the Optionee shall have full voting, dividend and other ownership rights with respect to such Shares. 6. Adjustment Upon Changes in Capitalization. a. Subject to Section 7, in the event of a Change in Capitalization, the number and class of Shares or other stock or securities which are subject to the Option, and the purchase price therefor, if applicable, shall be appropriately and equitably adjusted. b. If, by reason of a Change in Capitalization, the Optionee shall be entitled to exercise an Option with respect to new, additional or different shares of stock or securities, such new, additional or different shares shall thereupon be subject to all of the conditions which were applicable to the Shares subject to the Option, as the case may be, prior to such Change in Capitalization. 7. Effect of Certain Transactions. In the event of (i) the liquidation or dissolution of the Company or (ii) a merger or consolidation of the Company (a "Transaction"), the Option issued hereunder shall continue in effect in accordance with its terms and the Optionee shall be entitled to receive in respect of each Share subject to any outstanding Option, upon exercise of any Option, the same number and kind of stock, securities, cash, property, or other consideration that each holder of a Share was entitled to receive in the Transaction in respect of a Share. In the event that, after a Transaction, there occurs any Change in Capitalization with respect to the shares of a surviving or resulting corporation, then adjustments similar to, and subject to the same conditions as, those in Section 6 hereof shall be made by the Board. 8. Effect of Certain Transactions. a. Notwithstanding anything to the contrary or in the Agreement, the Optionee shall forfeit 100% of the Options granted pursuant to this Agreement, whether or not vested, if the Optionee breaches the provisions of subsections (b) or (d) of this Section 9. b. During the period that the Optionee is employed by the Company or any affiliate of the Company (the "Service Term") and for a period of one year thereafter, the Optionee shall not, in the continental United States, directly or indirectly, own, Non-Qualified Option Agreement Page 3 4 manage, operate, join, control, be employed by, or participate in the ownership, management, operation or control of or be connected in any manner, including but not limited to holding the positions of shareholder, director, officer, consultant, independent contractor, employee, partner, or investor, with any Competing Enterprise. For purposes of this Section, the term "Competing Enterprise" shall mean any person, corporation, partnership or other entity engaged in the operation of an internet service provider. The prohibition of this Section 9 shall not be deemed to prevent Optionee from owning 2% or less of any class of equity securities registered under Section 12 of the Exchange Act. During the Service Term and for a period of one year thereafter, the Optionee shall not interfere with the Company's relationship with, or endeavor to entice away from the Company, any person who at any time during the Service Term was an employee or customer of the Company or otherwise had a material business relationship with the Company. c. The necessity for protection of the Company and its affiliates against the Optionee's competition, as well as the nature and scope of such protection, has been carefully considered by the parties hereto in light of the uniqueness of the Optionee's talent and his importance to the Company. Accordingly, the Optionee agrees that, in addition to any other relief to which the Company may be entitled, the Company shall be entitled to seek and obtain injunctive relief (without the requirement of any bond) from a court of competent jurisdiction for the purpose of restraining the Optionee from any actual or threatened breach of the covenant contained in this Section 9. If for any reason a final decision of any court determines that the restrictions under this Section 9 are not reasonable or that consideration therefor is inadequate, such restrictions shall be interpreted, modified or rewritten by such court to include as much of the duration, scope and geographic area identified in this Section 9 as will render such restrictions valid and enforceable. d. The Optionee shall not intentionally disclose or reveal to an unauthorized person, during the Service Term or for a two year period thereafter, any information relating to the confidential affairs of the company or any of its affiliates, including but not limited to technical information, business and marketing plans, strategies, customer information, other information concerning the Company's products, promotions, development, financing, expansion plans, business policies and practices, and other forms of information considered by the Company to be confidential and in the nature of trade secrets. The Optionee shall hold as property of the Company and its affiliates all memoranda, books, papers, letters and other data, and all copies thereof or therefrom, which are in any way substantially related to the business of the company or its affiliates, whether made by him or otherwise coming into his possession and, on a prior written demand of the Company made within two years after the end of the Service Term, shall deliver the same to the company. Non-Qualified Option Agreement Page 4 5 9. General Rules a. The obligation of the Company to sell or deliver Shares with respect to the Options granted shall be subject to all applicable laws, rules and regulations, including all applicable federal and state securities laws, and the obtaining of all such approvals by governmental agencies as may be deemed necessary or appropriate by the Board. b. The Company shall have the right to deduct from any distribution of cash to Optionee, an amount equal to the federal, state and local income taxes and other amounts as may be required by law to be withheld (the "Withholding Taxes") with respect to any Option. If Optionee is entitled to receive Shares upon exercise of an Option, the Optionee shall pay the Withholding Taxes to the Company prior to the issuance, or release from escrow, of such Shares. In satisfaction of the Withholding Taxes to the Company, the Optionee may make a written election (the "Tax Election"), which may be accepted or rejected in the discretion of the Board, to have withheld a portion of the Shares issuable to him or her upon exercise of the Option having an aggregate Fair Market Value, on the date preceding the date of exercise, equal to the Withholding Taxes, provided that in respect of an Optionee who may be subject to liability under Section 16(b) of the Exchange Act either (i)(A) the Optionee makes the Tax Election at least six (6) months after the date the Option was granted, (B) the Option is exercised during the ten day period beginning on the third business day and ending on the twelfth business day following the release for publication of the Company's quarterly or annual statements of earnings (a "Window Period") and (C the Tax Election is made during the Window Period in which the Option is exercised prior to such Window Period and subsequent to the immediately preceding Window Period or (ii)(A) the Tax Election is made at least six (6) months prior to the date the Option is exercised prior to the expiration of six (6) months following an election to revoke the Tax Election. Notwithstanding the foregoing, the Board may, by the adoption or rules or otherwise, (i) modify the provisions in the preceding sentence or impose such other restrictions or limitations on Tax Elections as may be necessary to ensure that the Tax Elections will be exempt transactions under Section 16(b) of the Exchange Act, an (ii) permit Tax Elections to be made at such other times and subject to such other conditions as the Board determines will constitute exempt transactions under Section 16b of the Exchange Act. c. If Optionee makes a disposition, within the meaning of Section 424(c)of the Code and regulations promulgated thereunder, of any Share or Shares issued to such Optionee pursuant to the exercise of an Option within the two-year period commencing on the day after the date of the grant or within the one-year period commencing on the day after the date of transfer of such Share or Shares to the Optionee pursuant to such exercise, the Optionee shall, within ten (10) days of such disposition, notify the Company thereof, by delivery of written notice to the Company at its principal executive office, and immediately deliver to the Company the amount of Withholding Taxes. d. No Option granted hereunder shall be transferable by the Optionee to whom granted otherwise than by will or the laws of descent and distribution, and an Option may be exercised during the lifetime of such Optionee only by the Optionee or his or her Non-Qualified Option Agreement Page 5 6 guardian or legal representative. The terms of such an Option shall be final, binding and conclusive upon the beneficiaries, executors, administrators, heirs and successors of the Optionee. IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed and the Optionee has hereunto set his hand, as of the day and year first above written. INTERNET AMERICA, INC. /s/ ROBERT J. MAYNARD, JR. ----------------------------------------- Robert J. Maynard, Jr. Chief Executive Officer OPTIONEE /s/ DOUG DAVIS ----------------------------------------- Doug Davis Non-Qualified Option Agreement Page 6 EX-99.6 9 NONQUALIFIED STOCK OPTION AGRMNT - DOUGLAS DAVIS 1 EXHIBIT 99.6 NON-QUALIFIED STOCK OPTION AGREEMENT Agreement made effective as of the 15th day of December, 1995 by and between INTERNET AMERICA, INC. (the "Company") and DOUG DAVIS (the "Optionee"). 1. Definitions. For purposes of this Agreement: a. "Board" means the Board of Directors of the Company. b. "Change in Capitalization" means any increase or reduction in the number of Shares, or any change (including, but not limited to, a change in value) in the Shares or exchange of Shares for a different number or kind of Shares or other securities of the Company, by reason of a reclassification, recapitalization, merger, consolidation, reorganization, stock dividend, stock split or reverse stock split, combination or exchange of shares or other similar events. c. "Change in Control" shall be deemed to have occurred when the first of the following events occurs: (i) when the Company acquires actual knowledge that any person or group (as such terms are used in Sections 13(d) and 14(d) (2) of the Exchange Act), other than an employee benefit plan established or maintained by the Company or any of its subsidiaries or the current largest stockholder, is or becomes the beneficial owner (as defined under rule 13d-3 of the Exchange Act) directly or indirectly, or securities of the Company representing 30 percent or more of the combined voting power of the Company's directors; (ii) upon the approval by the Company's stockholders of (A) a merger or consolidation of the Company with or into another Corporation (other than a merger or consolidation in which the Company is the surviving corporation and which does not result in any capital reorganization or reclassification or other change in the Company's the outstanding shares of common stock), (B) a sale of disposition of all or substantially all of the Company's assets of (C) a plan of liquidation of dissolution of the Company; or (iii) if, at any time, two-thirds of the members of the Board are not "Continuing Directors". For this purpose " Continuing Directors" shall mean the members of the Board of Directors as of September 30, 1995, and any individual who becomes a member of the Board thereafter if his or her election or nomination for election as a director was approved by a vote of at least two-third of the Continuing Directors then in office. d. "Code" means the Internal Revenue Code of 1986, as amended. 2 e. "Company" means Internet America, Inc., a Texas corporation. f. "Exchange Act" means the Securities Exchange Act of 1934, as amended. g. "Fair Market Value" on any date means the closing price of Shares on such date on the principal national securities exchange on which Shares are listed or admitted to trading, the arithmetic mean of the per Share closing bid priced and per Share closing asked price on such date as quoted on the National Association of Securities Dealers Automated Quotation System or such then market in which such prices are regularly quoted, or, if there have been no published bid or asked quotations with respect to Shares on such date, the Fair Market Value shall be the value established by the Board in good faith and in accordance with Section 422 of the Code. h. "Shares" means the common stock, par value $.01 per share, of the Company. 2. Grant of Option. The Company hereby grants to the Optionee, for valuable consideration, receipt of which is hereby acknowledged, a Non-Qualified Stock Option ("Option") to purchase from the Company an aggregate of 45,000 Shares at a purchase price (the "Option Price") of $3.75 per share. 3. Exercise Period. The Option shall become non-forfeitable according to the following schedule and shall hereafter be exercisable in whole or in part: First Installment: With respect to 7,500 shares, on December 13, 1995 Second Installment: With respect to 17,500 shares, on March 1, 1996 Third Installment: With respect to 20,000 shares, on August 31, 1996 The Option may be exercised only with respect to full Shares and may not be exercised after the close of business on the day (the "Termination Date") preceding the tenth anniversary of the date hereof. The Option shall have no effect after the Termination Date. 4. Exercise of an Option. The exercise of an Option shall be made only by a written notice delivered in person or by mail to the Secretary of the Company at the Company's principal executive office, specifying the number of Shares to be purchased and accompanied by payment therefor. The purchase price for any Shares purchased pursuant to the exercise of an Option shall be paid in full upon such exercise by delivery of cash or personal check in amount of purchase price. The written notice may provide instructions from the Optionee to the Company that upon receipt of the purchase price in cash from the Optionee's broker or dealer, designated as such on the written notice, in payment for any Shares purchased pursuant to the exercise of an Option, the Company shall issue such Shares directly to the broker or dealer. If requested by the Board, the Optionee shall deliver this Agreement to the Secretary of the Company who shall endorse thereon a notation of such exercise and return such Agreement to the Optionee. No fractional Non-Qualified Option Agreement Page 2 3 Shares (or cash in lieu thereof) shall be issued upon exercise of an Option and the number of Shares that may be purchased upon exercise shall be rounded to the nearest number of whole Shares. 5. Rights of Optionee. The Optionee shall not be deemed for any purpose to be the owner of any Shares subject to any Option unless and until (i) the Option shall have been exercised pursuant to the terms thereof, (ii) the Company shall have issued and delivered the Shares to the Optionee and (iii) the Optionee's name shall have been entered as a stockholder of record on the books of the Company. Thereupon, the Optionee shall have full voting, dividend and other ownership rights with respect to such Shares. 6. Adjustment Upon Changes in Capitalization. a. Subject to Section 7, in the event of a Change in Capitalization, the number and class of Shares or other stock or securities which are subject to the Option, and the purchase price therefor, if applicable, shall be appropriately and equitably adjusted. b. If, by reason of a Change in Capitalization, the Optionee shall be entitled to exercise an Option with respect to new, additional or different shares of stock or securities, such new, additional or different shares shall thereupon be subject to all of the conditions which were applicable to the Shares subject to the Option, as the case may be, prior to such Change in Capitalization. 7. Effect of Certain Transactions. In the event of (i) the liquidation or dissolution of the Company or (ii) a merger or consolidation of the Company (a "Transaction"), the Option issued hereunder shall continue in effect in accordance with its terms and the Optionee shall be entitled to receive in respect of each Share subject to any outstanding Option, upon exercise of any Option, the same number and kind of stock, securities, cash, property, or other consideration that each holder of a Share was entitled to receive in the Transaction in respect of a Share. In the event that, after a Transaction, there occurs any Change in Capitalization with respect to the shares of a surviving or resulting corporation, then adjustments similar to, and subject to the same conditions as, those in Section 6 hereof shall be made by the Board. 8. Effect of Certain Transactions. a. Notwithstanding anything to the contrary or in the Agreement, the Optionee shall forfeit 100% of the Options granted pursuant to this Agreement, whether or not vested, if the Optionee breaches the provisions of subsections (b) or (d) of this Section 9. b. During the period that the Optionee is employed by the Company or any affiliate of the Company (the "Service Term") and for a period of one year thereafter, Non-Qualified Option Agreement Page 3 4 the Optionee shall not, in the continental United States, directly or indirectly, own, manage, operate, join, control, be employed by, or participate in the ownership, management, operation or control of or be connected in any manner, including but not limited to holding the positions of shareholder, director, officer, consultant, independent contractor, employee, partner, or investor, with any Competing Enterprise. For purposes of this Section, the term "Competing Enterprise" shall mean any person, corporation, partnership or other entity engaged in the operation of an internet service provider. The prohibition of this Section 9 shall not be deemed to prevent Optionee from owning 2% or less of any class of equity securities registered under Section 12 of the Exchange Act. During the Service Term and for a period of one year thereafter, the Optionee shall not interfere with the Company's relationship with, or endeavor to entice away from the Company, any person who at any time during the Service Term was an employee or customer of the Company or otherwise had a material business relationship with the Company. c. The necessity for protection of the Company and its affiliates against the Optionee's competition, as well as the nature and scope of such protection, has been carefully considered by the parties hereto in light of the uniqueness of the Optionee's talent and his importance to the Company. Accordingly, the Optionee agrees that, in addition to any other relief to which the Company may be entitled, the Company shall be entitled to seek and obtain injunctive relief (without the requirement of any bond) from a court of competent jurisdiction for the purpose of restraining the Optionee from any actual or threatened breach of the covenant contained in this Section 9. If for any reason a final decision of any court determines that the restrictions under this Section 9 are not reasonable or that consideration therefor is inadequate, such restrictions shall be interpreted, modified or rewritten by such court to include as much of the duration, scope and geographic area identified in this Section 9 as will render such restrictions valid and enforceable. d. The Optionee shall not intentionally disclose or reveal to an unauthorized person, during the Service Term or for a two year period thereafter, any information relating to the confidential affairs of the company or any of its affiliates, including but not limited to technical information, business and marketing plans, strategies, customer information, other information concerning the Company's products, promotions, development, financing, expansion plans, business policies and practices, and other forms of information considered by the Company to be confidential and in the nature of trade secrets. The Optionee shall hold as property of the Company and its affiliates all memoranda, books, papers, letters and other data, and all copies thereof or therefrom, which are in any way substantially related to the business of the company or its affiliates, whether made by him or otherwise coming into his possession and, on a prior written demand of the Company made within two years after the end of the Service Term, shall deliver the same to the company. Non-Qualified Option Agreement Page 4 5 9. General Rules a. The obligation of the Company to sell or deliver Shares with respect to the Options granted shall be subject to all applicable laws, rules and regulations, including all applicable federal and state securities laws, and the obtaining of all such approvals by governmental agencies as may be deemed necessary or appropriate by the Board. b. The Company shall have the right to deduct from any distribution of cash to Optionee, an amount equal to the federal, state and local income taxes and other amounts as may be required by law to be withheld (the "Withholding Taxes") with respect to any Option. If Optionee is entitled to receive Shares upon exercise of an Option, the Optionee shall pay the Withholding Taxes to the Company prior to the issuance, or release from escrow, of such Shares. In satisfaction of the Withholding Taxes to the Company, the Optionee may make a written election (the "Tax Election"), which may be accepted or rejected in the discretion of the Board, to have withheld a portion of the Shares issuable to him or her upon exercise of the Option having an aggregate Fair Market Value, on the date preceding the date of exercise, equal to the Withholding Taxes, provided that in respect of an Optionee who may be subject to liability under Section 16(b) of the Exchange Act either (i)(A) the Optionee makes the Tax Election at least six (6) months after the date the Option was granted, (B) the Option is exercised during the ten day period beginning on the third business day and ending on the twelfth business day following the release for publication of the Company's quarterly or annual statements of earnings (a "Window Period") and (C the Tax Election is made during the Window Period in which the Option is exercised prior to such Window Period and subsequent to the immediately preceding Window Period or (ii)(A) the Tax Election is made at least six (6) months prior to the date the Option is exercised prior to the expiration of six (6) months following an election to revoke the Tax Election. Notwithstanding the foregoing, the Board may, by the adoption or rules or otherwise, (i) modify the provisions in the preceding sentence or impose such other restrictions or limitations on Tax Elections as may be necessary to ensure that the Tax Elections will be exempt transactions under Section 16(b) of the Exchange Act, an (ii) permit Tax Elections to be made at such other times and subject to such other conditions as the Board determines will constitute exempt transactions under Section 16b of the Exchange Act. c. If Optionee makes a disposition, within the meaning of Section 424(c)of the Code and regulations promulgated thereunder, of any Share or Shares issued to such Optionee pursuant to the exercise of an Option within the two-year period commencing on the day after the date of the grant or within the one-year period commencing on the day after the date of transfer of such Share or Shares to the Optionee pursuant to such exercise, the Optionee shall, within ten (10) days of such disposition, notify the Company thereof, by delivery of written notice to the Company at its principal executive office, and immediately deliver to the Company the amount of Withholding Taxes. d. No Option granted hereunder shall be transferable by the Optionee to whom granted otherwise than by will or the laws of descent and distribution, and an Option may be exercised during the lifetime of such Optionee only by the Optionee or his or her Non-Qualified Option Agreement Page 5 6 guardian or legal representative. The terms of such an Option shall be final, binding and conclusive upon the beneficiaries, executors, administrators, heirs and successors of the Optionee. IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed and the Optionee has hereunto set his hand, as of the day and year first above written. INTERNET AMERICA, INC. /s/ ROBERT J. MAYNARD, JR. -------------------------------------------- Robert J. Maynard, Jr. Chief Executive Officer OPTIONEE /s/ DOUG DAVIS -------------------------------------------- Doug Davis Non-Qualified Option Agreement Page 6 EX-99.7 10 NONQUALIFIED STOCK OPTION AGMNT - WILLIAM O. HUNT 1 EXHIBIT 99.7 NON-QUALIFIED STOCK OPTION AGREEMENT Agreement made this 5th day of April , 1996 by and between Internet America, Inc. (the "Company") and WILLIAM O. HUNT (the "Optionee"). 1. Definitions. For purposes of this Agreement: (a) "Board" means the Board of Directors of the Company. (b) "Business Services Division" is defined as the scope of the Business Services Division as configured on the execution date of this agreement. (c) "Business Services Revenues" is defined as the sum of all revenues as reported under generally accepted accounting principles (GAAP") for any fiscal year ended June 30 ("Fiscal Year"). (d) "Change in Capitalization" means any increase or reduction in the number of Shares, or any change (including, but not limited to, a change in value) in the Shares or exchange of Shares for a different number or kind of Shares or other securities of the Company, by reason of a reclassification, recapitalization, merger, consolidation, reorganization, stock dividend, stock split or reverse stock split, combination or exchange of shares or other similar events. (d) "Code" means the Internal Revenue Code of 1986, as amended. (e) "Company" means Internet America, Inc., a Texas corporation. (f) "Exchange Act" means the Securities Exchange Act of 1934, as amended. (g) "Fair Market Value" on any date means the closing price of Shares on such date on the principal national securities exchange on which Shares are listed or admitted to trading, the arithmetic mean of the per Share closing bid priced and per Share closing asked price on such date as quoted on the National Association of Securities Dealers Automated Quotation System or such then market in which such prices are regularly quoted, or, if there have been no published bid or asked quotations with respect to Shares on such date, the Fair Market Value shall be the value established by the Board in good faith and in accordance with Section 422 of the Code. (h) "Shares" means the common stock, par value $.01 per share, of the Company. (i) "Total Revenues" means the sum of revenues reported under GAAP for any Fiscal Year ended June 30 ("Fiscal Year") 2. Grant of Option. The Company hereby grants to the Optionee, for valuable consideration, receipt of which is hereby acknowledged, a Non-Qualified Stock Option ("Option") to purchase from the Company an aggregate of 10,000 Shares at a purchase price (the "Option Price") of $3.75 per share. 3. Exercise Period. The Option is non-forfeitable and shall hereafter be exercisable in whole or in part on APRIL 5, 1996. The Option may be exercised only with respect to full Shares and may not be exercised after the close of business on the day (the "Termination Date") preceding the tenth anniversary of the date hereof. The Option shall have no effect after the Termination Date. 4. Exercise of an Option. The exercise of an Option shall be made only by a written notice delivered in person or by mail to the Secretary of the Company at the Company's principal executive office, specifying the number of Shares to be purchased and accompanied by payment therefor. The purchase price for any Shares 2 purchased pursuant to the exercise of an Option shall be paid in full upon such exercise by delivery of cash or personal check in amount of purchase price. The written notice may provide instructions from the Optionee to the Company that upon receipt of the purchase price in cash from the Optionee's broker or dealer, designated as such on the written notice, in payment for any Shares purchased pursuant to the exercise of an Option, the Company shall issue such Shares directly to the broker or dealer. If requested by the Board, the Optionee shall deliver this Agreement to the Secretary of the Company who shall endorse thereon a notation of such exercise and return such Agreement to the Optionee. No fractional Shares (or cash in lieu thereof) shall be issued upon exercise of an Option and the number of Shares that may be purchased upon exercise shall be rounded to the nearest number of whole Shares. 5. Rights of Optionee. The Optionee shall not be deemed for any purpose to be the owner of any Shares subject to any Option unless and until (i) the Option shall have been exercised pursuant to the terms thereof, (ii) the Company shall have issued and delivered the Shares to the Optionee and (iii) the Optionee's name shall have been entered as a stockholder of record on the books of the Company. Thereupon, the Optionee shall have full voting, dividend and other ownership rights with respect to such Shares. 6. Rights of the Company. In the event Optionee terminates his employment with the Company for any reason, whether voluntary or involuntary, at any time prior to April 5, 1998, Optionee agrees that the Company, upon notice delivered to Optionee within Sixty (60) days of such termination, (I) may either repurchase the Option at a price of $.10 per share which has vested under the Option or (ii) repurchase the Shares, If the Option has been exercised by the Optionee, at a price of $3.85 per share. The repurchase price contemplated by this paragraph will be paid to Optionee within thirty (30) days of such notice and the Option or Shares, as appropriate, will be canceled. 7. Adjustment Upon Changes in Capitalization. (a) Subject to Section 7, in the event of a Change in Capitalization, the number and class of Shares or other stock or securities which are subject to the Option, and the purchase price therefor, if applicable, shall be appropriately and equitably adjusted. (b) If, by reason of a Change in Capitalization, the Optionee shall be entitled to exercise an Option with respect to new, additional or different shares of stock or securities, such new, additional or different shares shall thereupon be subject to all of the conditions which were applicable to the Shares subject to the Option, as the case may be, prior to such Change in Capitalization. 8. Effect of Certain Transactions. In the event of (i) the liquidation or dissolution of the Company or (ii) a merger or consolidation of the Company (a "Transaction"), the Option issued hereunder shall continue in effect in accordance with its terms and the Optionee shall be entitled to receive in respect of each Share subject to any outstanding Option, upon exercise of any Option, the same number and kind of stock, securities, cash, property, or other consideration that each holder of a Share was entitled to receive in the Transaction in respect of a Share. In the event that, after a Transaction, there occurs any Change in Capitalization with respect to the shares of a surviving or resulting corporation, then adjustments similar to, and subject to the same conditions as, those in Section 6 hereof shall be made by the Board. 9. Effect of Certain Transactions. (a) Notwithstanding anything to the contrary or in the Agreement, the Optionee shall forfeit 100% of the Options granted pursuant to this Agreement, whether or not vested, if the Optionee breaches the provisions of subsections (b) or (d) of this Section 8. (b) During the period that the Optionee is employed by the Company or any affiliate of the Company (the "Service Term") and for a period of one year thereafter, the Optionee shall not, in the continental United States, directly or indirectly, own, manage, operate, join, control, be employed by, or participate in the ownership, management, operation or control of or be connected in any manner, including but not limited to holding the positions of shareholder, director, officer, consultant, independent contractor, employee, partner, or investor, with 3 any Competing Enterprise. For purposes of this Section, the term "Competing Enterprise" shall mean any person, corporation, partnership or other entity engaged in the operation of an internet service provider. The prohibition of this Section 8 shall not be deemed to prevent Optionee from owning 2% or less of any class of equity securities registered under Section 12 of the Exchange Act. During the Service Term and for a period of one year thereafter, the Optionee shall not interfere with the Company's relationship with, or endeavor to entice away from the Company, any person who at any time during the Service Term was an employee or customer of the Company or otherwise had a material business relationship with the Company. (c) The necessity for protection of the Company and its affiliates against the Optionee's competition, as well as the nature and scope of such protection, has been carefully considered by the parties hereto in light of the uniqueness of the Optionee's talent and his importance to the Company. Accordingly, the Optionee agrees that, in addition to any other relief to which the Company may be entitled, the Company shall be entitled to seek and obtain injunctive relief (without the requirement of any bond) from a court of competent jurisdiction for the purpose of restraining the Optionee from any actual or threatened breach of the covenant contained in this Section 8. If for any reason a final decision of any court determines that the restrictions under this Section 8 are not reasonable or that consideration therefor is inadequate, such restrictions shall be interpreted, modified or rewritten by such court to include as much of the duration, scope and geographic area identified in this Section 8 as will render such restrictions valid and enforceable. 10. General Rules (a) The obligation of the Company to sell or deliver Shares with respect to the Options granted shall be subject to all applicable laws, rules and regulations, including all applicable federal and state securities laws, and the obtaining of all such approvals by governmental agencies as may be deemed necessary or appropriate by the Board. (b) The Company shall have the right to deduct from any distribution of cash to Optionee, an amount equal to the federal, state and local income taxes and other amounts as may be required by law to be withheld (the "Withholding Taxes") with respect to any Option. If Optionee is entitled to receive Shares upon exercise of an Option, the Optionee shall pay the Withholding Taxes to the Company prior to the issuance, or release from escrow, of such Shares. In satisfaction of the Withholding Taxes to the Company, the Optionee may make a written election (the "Tax Election"), which may be accepted or rejected in the discretion of the Board, to have withheld a portion of the Shares issuable to him or her upon exercise of the Option having an aggregate Fair Market Value, on the date preceding the date of exercise, equal to the Withholding Taxes, provided that in respect of an Optionee who may be subject to liability under Section 16(b) of the Exchange Act either (i)(A) the Optionee makes the Tax Election at least six (6) months after the date the Option was granted, (B) the Option is exercised during the ten day period beginning on the third business day and ending on the twelfth business day following the release for publication of the Company's quarterly or annual statements of earnings (a "Window Period") and (C the Tax Election is made during the Window Period in which the Option is exercised prior to such Window Period and subsequent to the immediately preceding Window Period or (ii)(A) the Tax Election is made at least six (6) months prior to the date the Option is exercised prior to the expiration of six (6) months following an election to revoke the Tax Election. Notwithstanding the foregoing, the Board may, by the adoption or rules or otherwise, (i) modify the provisions in the preceding sentence or impose such other restrictions or limitations on Tax Elections as may be necessary to ensure that the Tax Elections will be exempt transactions under Section 16(b) of the Exchange Act, an (ii) permit Tax Elections to be made at such other times and subject to such other conditions as the Board determines will constitute exempt transactions under Section 16b of the Exchange Act. (c) If Optionee makes a disposition, within the meaning of Section 424(c) of the Code and regulations promulgated thereunder, of any Share or Shares issued to such Optionee pursuant to the exercise of an Option within the two-year period commencing on the day after the date of the grant or within the one-year period commencing on the day after the date of transfer of such Share or Shares to the Optionee pursuant to such exercise, the Optionee shall, within ten (10) days of such disposition, notify the Company thereof, by delivery of written notice to the Company at its principal executive office, and immediately deliver to the Company the amount of Withholding Taxes. 4 (d) No Option granted hereunder shall be transferable by the Optionee to whom granted otherwise than by will or the laws of descent and distribution, and an Option may be exercised during the lifetime of such Optionee only by the Optionee or his or her guardian or legal representative. The terms of such an Option shall be final, binding and conclusive upon the beneficiaries, executors, administrators, heirs and successors of the Optionee. IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed and the Optionee has hereunto set his hand, as of the day and year first above written. INTERNET AMERICA, INC. /s/ ROBERT J. MAYNARD, JR. -------------------------- Robert J. Maynard, Jr. Chief Executive Office OPTIONEE /s/ WILLIAM O. HUNT -------------------------- William O. Hunt EX-99.8 11 NONQUALIFIED STOCK OPTION AGMNT - JACK T. SMITH 1 Exhibit 99.8 NON-QUALIFIED STOCK OPTION AGREEMENT Agreement made this 5th day of April , 1996 by and between Internet America, Inc. (the "Company") and JACK T. SMITH (the "Optionee"). 1. Definitions. For purposes of this Agreement: (a) "Board" means the Board of Directors of the Company. (b) "Business Services Division" is defined as the scope of the Business Services Division as configured on the execution date of this agreement. (c) "Business Services Revenues" is defined as the sum of all revenues as reported under generally accepted accounting principles (GAAP") for any fiscal year ended June 30 ("Fiscal Year"). (d) "Change in Capitalization" means any increase or reduction in the number of Shares, or any change (including, but not limited to, a change in value) in the Shares or exchange of Shares for a different number or kind of Shares or other securities of the Company, by reason of a reclassification, recapitalization, merger, consolidation, reorganization, stock dividend, stock split or reverse stock split, combination or exchange of shares or other similar events. (d) "Code" means the Internal Revenue Code of 1986, as amended. (e) "Company" means Internet America, Inc., a Texas corporation. (f) "Exchange Act" means the Securities Exchange Act of 1934, as amended. (g) "Fair Market Value" on any date means the closing price of Shares on such date on the principal national securities exchange on which Shares are listed or admitted to trading, the arithmetic mean of the per Share closing bid priced and per Share closing asked price on such date as quoted on the National Association of Securities Dealers Automated Quotation System or such then market in which such prices are regularly quoted, or, if there have been no published bid or asked quotations with respect to Shares on such date, the Fair Market Value shall be the value established by the Board in good faith and in accordance with Section 422 of the Code. (h) "Shares" means the common stock, par value $.01 per share, of the Company. (i) "Total Revenues" means the sum of revenues reported under GAAP for any Fiscal Year ended June 30 ("Fiscal Year") 2. Grant of Option. The Company hereby grants to the Optionee, for valuable consideration, receipt of which is hereby acknowledged, a Non-Qualified Stock Option ("Option") to purchase from the Company an aggregate of 10,000 Shares at a purchase price (the "Option Price") of $3.75 per share. 3. Exercise Period. The Option is non-forfeitable and shall hereafter be exercisable in whole or in part on APRIL 5, 1996. The Option may be exercised only with respect to full Shares and may not be exercised after the close of business on the day (the "Termination Date") preceding the tenth anniversary of the date hereof. The Option shall have no effect after the Termination Date. 4. Exercise of an Option. The exercise of an Option shall be made only by a written notice delivered in person or by mail to the Secretary of the Company at the Company's principal executive office, specifying the number of Shares to be purchased and accompanied by payment therefor. The purchase price for any Shares purchased pursuant to the exercise of an Option shall be paid in full upon such exercise by delivery of cash or 2 personal check in amount of purchase price. The written notice may provide instructions from the Optionee to the Company that upon receipt of the purchase price in cash from the Optionee's broker or dealer, designated as such on the written notice, in payment for any Shares purchased pursuant to the exercise of an Option, the Company shall issue such Shares directly to the broker or dealer. If requested by the Board, the Optionee shall deliver this Agreement to the Secretary of the Company who shall endorse thereon a notation of such exercise and return such Agreement to the Optionee. No fractional Shares (or cash in lieu thereof) shall be issued upon exercise of an Option and the number of Shares that may be purchased upon exercise shall be rounded to the nearest number of whole Shares. 5. Rights of Optionee. The Optionee shall not be deemed for any purpose to be the owner of any Shares subject to any Option unless and until (i) the Option shall have been exercised pursuant to the terms thereof, (ii) the Company shall have issued and delivered the Shares to the Optionee and (iii) the Optionee's name shall have been entered as a stockholder of record on the books of the Company. Thereupon, the Optionee shall have full voting, dividend and other ownership rights with respect to such Shares. 6. Rights of the Company. In the event Optionee terminates his employment with the Company for any reason, whether voluntary or involuntary, at any time prior to April 5, 1998, Optionee agrees that the Company, upon notice delivered to Optionee within Sixty (60) days of such termination, (I) may either repurchase the Option at a price of $.10 per share which has vested under the Option or (ii) repurchase the Shares, If the Option has been exercised by the Optionee, at a price of $3.85 per share. The repurchase price contemplated by this paragraph will be paid to Optionee within thirty (30) days of such notice and the Option or Shares, as appropriate, will be canceled. 7. Adjustment Upon Changes in Capitalization. (a) Subject to Section 7, in the event of a Change in Capitalization, the number and class of Shares or other stock or securities which are subject to the Option, and the purchase price therefor, if applicable, shall be appropriately and equitably adjusted. (b) If, by reason of a Change in Capitalization, the Optionee shall be entitled to exercise an Option with respect to new, additional or different shares of stock or securities, such new, additional or different shares shall thereupon be subject to all of the conditions which were applicable to the Shares subject to the Option, as the case may be, prior to such Change in Capitalization. 8. Effect of Certain Transactions. In the event of (i) the liquidation or dissolution of the Company or (ii) a merger or consolidation of the Company (a "Transaction"), the Option issued hereunder shall continue in effect in accordance with its terms and the Optionee shall be entitled to receive in respect of each Share subject to any outstanding Option, upon exercise of any Option, the same number and kind of stock, securities, cash, property, or other consideration that each holder of a Share was entitled to receive in the Transaction in respect of a Share. In the event that, after a Transaction, there occurs any Change in Capitalization with respect to the shares of a surviving or resulting corporation, then adjustments similar to, and subject to the same conditions as, those in Section 6 hereof shall be made by the Board. 9. Effect of Certain Transactions. (a) Notwithstanding anything to the contrary or in the Agreement, the Optionee shall forfeit 100% of the Options granted pursuant to this Agreement, whether or not vested, if the Optionee breaches the provisions of subsections (b) or (d) of this Section 8. (b) During the period that the Optionee is employed by the Company or any affiliate of the Company (the "Service Term") and for a period of one year thereafter, the Optionee shall not, in the continental United States, directly or indirectly, own, manage, operate, join, control, be employed by, or participate in the ownership, management, operation or control of or be connected in any manner, including but not limited to holding the positions of shareholder, director, officer, consultant, independent contractor, employee, partner, or investor, with any Competing Enterprise. For purposes of this Section, the term "Competing Enterprise" shall mean any person, corporation, partnership or other entity engaged in the operation of an internet service provider. The prohibition of 3 this Section 8 shall not be deemed to prevent Optionee from owning 2% or less of any class of equity securities registered under Section 12 of the Exchange Act. During the Service Term and for a period of one year thereafter, the Optionee shall not interfere with the Company's relationship with, or endeavor to entice away from the Company, any person who at any time during the Service Term was an employee or customer of the Company or otherwise had a material business relationship with the Company. (c) The necessity for protection of the Company and its affiliates against the Optionee's competition, as well as the nature and scope of such protection, has been carefully considered by the parties hereto in light of the uniqueness of the Optionee's talent and his importance to the Company. Accordingly, the Optionee agrees that, in addition to any other relief to which the Company may be entitled, the Company shall be entitled to seek and obtain injunctive relief (without the requirement of any bond) from a court of competent jurisdiction for the purpose of restraining the Optionee from any actual or threatened breach of the covenant contained in this Section 8. If for any reason a final decision of any court determines that the restrictions under this Section 8 are not reasonable or that consideration therefor is inadequate, such restrictions shall be interpreted, modified or rewritten by such court to include as much of the duration, scope and geographic area identified in this Section 8 as will render such restrictions valid and enforceable. 10. General Rules (a) The obligation of the Company to sell or deliver Shares with respect to the Options granted shall be subject to all applicable laws, rules and regulations, including all applicable federal and state securities laws, and the obtaining of all such approvals by governmental agencies as may be deemed necessary or appropriate by the Board. (b) The Company shall have the right to deduct from any distribution of cash to Optionee, an amount equal to the federal, state and local income taxes and other amounts as may be required by law to be withheld (the "Withholding Taxes") with respect to any Option. If Optionee is entitled to receive Shares upon exercise of an Option, the Optionee shall pay the Withholding Taxes to the Company prior to the issuance, or release from escrow, of such Shares. In satisfaction of the Withholding Taxes to the Company, the Optionee may make a written election (the "Tax Election"), which may be accepted or rejected in the discretion of the Board, to have withheld a portion of the Shares issuable to him or her upon exercise of the Option having an aggregate Fair Market Value, on the date preceding the date of exercise, equal to the Withholding Taxes, provided that in respect of an Optionee who may be subject to liability under Section 16(b) of the Exchange Act either (i)(A) the Optionee makes the Tax Election at least six (6) months after the date the Option was granted, (B) the Option is exercised during the ten day period beginning on the third business day and ending on the twelfth business day following the release for publication of the Company's quarterly or annual statements of earnings (a "Window Period") and (C the Tax Election is made during the Window Period in which the Option is exercised prior to such Window Period and subsequent to the immediately preceding Window Period or (ii)(A) the Tax Election is made at least six (6) months prior to the date the Option is exercised prior to the expiration of six (6) months following an election to revoke the Tax Election. Notwithstanding the foregoing, the Board may, by the adoption or rules or otherwise, (i) modify the provisions in the preceding sentence or impose such other restrictions or limitations on Tax Elections as may be necessary to ensure that the Tax Elections will be exempt transactions under Section 16(b) of the Exchange Act, an (ii) permit Tax Elections to be made at such other times and subject to such other conditions as the Board determines will constitute exempt transactions under Section 16b of the Exchange Act. (c) If Optionee makes a disposition, within the meaning of Section 424(c) of the Code and regulations promulgated thereunder, of any Share or Shares issued to such Optionee pursuant to the exercise of an Option within the two-year period commencing on the day after the date of the grant or within the one-year period commencing on the day after the date of transfer of such Share or Shares to the Optionee pursuant to such exercise, the Optionee shall, within ten (10) days of such disposition, notify the Company thereof, by delivery of written notice to the Company at its principal executive office, and immediately deliver to the Company the amount of Withholding Taxes. (d) No Option granted hereunder shall be transferable by the Optionee to whom granted otherwise than by will or the laws of descent and distribution, and an Option may be exercised during the lifetime of such 4 Optionee only by the Optionee or his or her guardian or legal representative. The terms of such an Option shall be final, binding and conclusive upon the beneficiaries, executors, administrators, heirs and successors of the Optionee. IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed and the Optionee has hereunto set his hand, as of the day and year first above written. INTERNET AMERICA, INC. /s/ ROBERT J. MAYNARD, JR. -------------------------- Robert J. Maynard, Jr. Chief Executive Office OPTIONEE /s/ JACK T. SMITH -------------------------- Jack T. Smith EX-99.9 12 NONQUALIFED STOCK OPTION AGMT - DOUGLAS G. SHELDON 1 Exhibit 99.9 NON-QUALIFIED STOCK OPTION AGREEMENT Agreement made this 27th day of June , 1996 by and between Internet America, Inc. (the "Company") and DOUGLAS G. SHELDON (the "Optionee"). 1. Definitions. For purposes of this Agreement: (a) "Board" means the Board of Directors of the Company. (b) "Business Services Division" is defined as the scope of the Business Services Division as configured on the execution date of this agreement. (c) "Business Services Revenues" is defined as the sum of all revenues as reported under generally accepted accounting principles (GAAP") for any fiscal year ended June 30 ("Fiscal Year"). (d) "Change in Capitalization" means any increase or reduction in the number of Shares, or any change (including, but not limited to, a change in value) in the Shares or exchange of Shares for a different number or kind of Shares or other securities of the Company, by reason of a reclassification, recapitalization, merger, consolidation, reorganization, stock dividend, stock split or reverse stock split, combination or exchange of shares or other similar events. (d) "Code" means the Internal Revenue Code of 1986, as amended. (e) "Company" means Internet America, Inc., a Texas corporation. (f) "Exchange Act" means the Securities Exchange Act of 1934, as amended. (g) "Fair Market Value" on any date means the closing price of Shares on such date on the principal national securities exchange on which Shares are listed or admitted to trading, the arithmetic mean of the per Share closing bid priced and per Share closing asked price on such date as quoted on the National Association of Securities Dealers Automated Quotation System or such then market in which such prices are regularly quoted, or, if there have been no published bid or asked quotations with respect to Shares on such date, the Fair Market Value shall be the value established by the Board in good faith and in accordance with Section 422 of the Code. (h) "Shares" means the common stock, par value $.01 per share, of the Company. (i) "Total Revenues" means the sum of revenues reported under GAAP for any Fiscal Year ended June 30 ("Fiscal Year") 2. Grant of Option. The Company hereby grants to the Optionee, for valuable consideration, receipt of which is hereby acknowledged, a Non-Qualified Stock Option ("Option") to purchase from the Company an aggregate of 10,000 Shares at a purchase price (the "Option Price") of $7.50 per share. 3. Exercise Period. The Option is non-forfeitable and shall hereafter be exercisable in whole or in part on JUNE 6, 1996. The Option may be exercised only with respect to full Shares and may not be exercised after the close of business on the day (the "Termination Date") preceding the tenth anniversary of the date hereof. The Option shall have no effect after the Termination Date. 4. Exercise of an Option. The exercise of an Option shall be made only by a written notice delivered in person or by mail to the Secretary of the Company at the Company's principal executive office, specifying the number of Shares to be purchased and accompanied by payment therefor. The purchase price for any Shares purchased pursuant to the exercise of an Option shall be paid in full upon such exercise by delivery of cash or 2 personal check in amount of purchase price. The written notice may provide instructions from the Optionee to the Company that upon receipt of the purchase price in cash from the Optionee's broker or dealer, designated as such on the written notice, in payment for any Shares purchased pursuant to the exercise of an Option, the Company shall issue such Shares directly to the broker or dealer. If requested by the Board, the Optionee shall deliver this Agreement to the Secretary of the Company who shall endorse thereon a notation of such exercise and return such Agreement to the Optionee. No fractional Shares (or cash in lieu thereof) shall be issued upon exercise of an Option and the number of Shares that may be purchased upon exercise shall be rounded to the nearest number of whole Shares. 5. Rights of Optionee. The Optionee shall not be deemed for any purpose to be the owner of any Shares subject to any Option unless and until (i) the Option shall have been exercised pursuant to the terms thereof, (ii) the Company shall have issued and delivered the Shares to the Optionee and (iii) the Optionee's name shall have been entered as a stockholder of record on the books of the Company. Thereupon, the Optionee shall have full voting, dividend and other ownership rights with respect to such Shares. 6. Adjustment Upon Changes in Capitalization. (a) Subject to Section 7, in the event of a Change in Capitalization, the number and class of Shares or other stock or securities which are subject to the Option, and the purchase price therefor, if applicable, shall be appropriately and equitably adjusted. (b) If, by reason of a Change in Capitalization, the Optionee shall be entitled to exercise an Option with respect to new, additional or different shares of stock or securities, such new, additional or different shares shall thereupon be subject to all of the conditions which were applicable to the Shares subject to the Option, as the case may be, prior to such Change in Capitalization. 7. Effect of Certain Transactions. In the event of (i) the liquidation or dissolution of the Company or (ii) a merger or consolidation of the Company (a "Transaction"), the Option issued hereunder shall continue in effect in accordance with its terms and the Optionee shall be entitled to receive in respect of each Share subject to any outstanding Option, upon exercise of any Option, the same number and kind of stock, securities, cash, property, or other consideration that each holder of a Share was entitled to receive in the Transaction in respect of a Share. In the event that, after a Transaction, there occurs any Change in Capitalization with respect to the shares of a surviving or resulting corporation, then adjustments similar to, and subject to the same conditions as, those in Section 6 hereof shall be made by the Board. 8. Effect of Certain Transactions. (a) Notwithstanding anything to the contrary or in the Agreement, the Optionee shall forfeit 100% of the Options granted pursuant to this Agreement, whether or not vested, if the Optionee breaches the provisions of subsections (b) or (d) of this Section 8. (b) During the period that the Optionee is employed by the Company or any affiliate of the Company (the "Service Term") and for a period of one year thereafter, the Optionee shall not, in the continental United States, directly or indirectly, own, manage, operate, join, control, be employed by, or participate in the ownership, management, operation or control of or be connected in any manner, including but not limited to holding the positions of shareholder, director, officer, consultant, independent contractor, employee, partner, or investor, with any Competing Enterprise. For purposes of this Section, the term "Competing Enterprise" shall mean any person, corporation, partnership or other entity engaged in the operation of an internet service provider. The prohibition of this Section 8 shall not be deemed to prevent Optionee from owning 2% or less of any class of equity securities registered under Section 12 of the Exchange Act. During the Service Term and for a period of one year thereafter, the Optionee shall not interfere with the Company's relationship with, or endeavor to entice away from the Company, any person who at any time during the Service Term was an employee or customer of the Company or otherwise had a material business relationship with the Company. 3 (c) The necessity for protection of the Company and its affiliates against the Optionee's competition, as well as the nature and scope of such protection, has been carefully considered by the parties hereto in light of the uniqueness of the Optionee's talent and his importance to the Company. Accordingly, the Optionee agrees that, in addition to any other relief to which the Company may be entitled, the Company shall be entitled to seek and obtain injunctive relief (without the requirement of any bond) from a court of competent jurisdiction for the purpose of restraining the Optionee from any actual or threatened breach of the covenant contained in this Section 8. If for any reason a final decision of any court determines that the restrictions under this Section 8 are not reasonable or that consideration therefor is inadequate, such restrictions shall be interpreted, modified or rewritten by such court to include as much of the duration, scope and geographic area identified in this Section 8 as will render such restrictions valid and enforceable. 9. General Rules (a) The obligation of the Company to sell or deliver Shares with respect to the Options granted shall be subject to all applicable laws, rules and regulations, including all applicable federal and state securities laws, and the obtaining of all such approvals by governmental agencies as may be deemed necessary or appropriate by the Board. (b) The Company shall have the right to deduct from any distribution of cash to Optionee, an amount equal to the federal, state and local income taxes and other amounts as may be required by law to be withheld (the "Withholding Taxes") with respect to any Option. If Optionee is entitled to receive Shares upon exercise of an Option, the Optionee shall pay the Withholding Taxes to the Company prior to the issuance, or release from escrow, of such Shares. In satisfaction of the Withholding Taxes to the Company, the Optionee may make a written election (the "Tax Election"), which may be accepted or rejected in the discretion of the Board, to have withheld a portion of the Shares issuable to him or her upon exercise of the Option having an aggregate Fair Market Value, on the date preceding the date of exercise, equal to the Withholding Taxes, provided that in respect of an Optionee who may be subject to liability under Section 16(b) of the Exchange Act either (i)(A) the Optionee makes the Tax Election at least six (6) months after the date the Option was granted, (B) the Option is exercised during the ten day period beginning on the third business day and ending on the twelfth business day following the release for publication of the Company's quarterly or annual statements of earnings (a "Window Period") and (C the Tax Election is made during the Window Period in which the Option is exercised prior to such Window Period and subsequent to the immediately preceding Window Period or (ii)(A) the Tax Election is made at least six (6) months prior to the date the Option is exercised prior to the expiration of six (6) months following an election to revoke the Tax Election. Notwithstanding the foregoing, the Board may, by the adoption or rules or otherwise, (i) modify the provisions in the preceding sentence or impose such other restrictions or limitations on Tax Elections as may be necessary to ensure that the Tax Elections will be exempt transactions under Section 16(b) of the Exchange Act, an (ii) permit Tax Elections to be made at such other times and subject to such other conditions as the Board determines will constitute exempt transactions under Section 16b of the Exchange Act. If Optionee makes a disposition, within the meaning of Section 424(c) of the Code and regulations promulgated thereunder, of any Share or Shares issued to such Optionee pursuant to the exercise of an Option within the two-year period commencing on the day after the date of the grant or within the one-year period commencing on the day after the date of transfer of such Share or Shares to the Optionee pursuant to such exercise, the Optionee shall, within ten (10) days of such disposition, notify the Company thereof, by delivery of written notice to the Company at its principal executive office, and immediately deliver to the Company the amount of Withholding Taxes. (c) No Option granted hereunder shall be transferable by the Optionee to whom granted otherwise than by will or the laws of descent and distribution, and an Option may be exercised during the lifetime of such Optionee only by the Optionee or his or her guardian or legal representative. The terms of such an Option shall be final, binding and conclusive upon the beneficiaries, executors, administrators, heirs and successors of the Optionee. 4 IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed and the Optionee has hereunto set his hand, as of the day and year first above written. INTERNET AMERICA, INC. /s/ ROBERT J. MAYNARD, JR. -------------------------------------------- Robert J. Maynard, Jr. Chief Executive Office OPTIONEE /s/ DOUGLAS G. SHELDON -------------------------------------------- Douglas G. Sheldon EX-99.10 13 NONQUALIFIED STOCK OPTION AGMT - DOUGLAS G SHELDON 1 Exhibit 99.10 NON-QUALIFIED STOCK OPTION AGREEMENT Agreement made effective as of the 24th day of March, 1998 by and between INTERNET AMERICA, INC. (the "Company") and DOUG SHELDON (the "Optionee"). 1. Definitions. For purposes of this Agreement: a. "Board" means the Board of Directors of the Company. b. "Change in Capitalization" means any increase or reduction in the number of Shares, or any change (including, but not limited to, a change in value) in the Shares or exchange of Shares for a different number or kind of Shares or other securities of the Company, by reason of a reclassification, recapitalization, merger, consolidation, reorganization, stock dividend, stock split or reverse stock split, combination or exchange of shares or other similar events. c. "Change in Control" shall be deemed to have occurred when the first of the following events occurs: (i) when the Company acquires actual knowledge that any person or group (as such terms are used in Sections 13(d) and 14(d) (2) of the Exchange Act), other than an employee benefit plan established or maintained by the Company or any of its subsidiaries or the current largest stockholder, is or becomes the beneficial owner (as defined under rule 13d-3 of the Exchange Act) directly or indirectly, or securities of the Company representing 30 percent or more of the combined voting power of the Company's directors; (ii) upon the approval by the Company's stockholders of (A) a merger or consolidation of the Company with or into another Corporation (other than a merger or consolidation in which the Company is the surviving corporation and which does not result in any capital reorganization or reclassification or other change in the Company's the outstanding shares of common stock), (B) a sale of disposition of all or substantially all of the Company's assets of (C) a plan of liquidation of dissolution of the Company; or (iii) if, at any time, two-thirds of the members of the Board are not "Continuing Directors". For this purpose " Continuing Directors" shall mean the members of the Board of Directors as of September 30, 1995, and any individual who becomes a member of the Board thereafter if his or her election or nomination for election as a director was approved by a vote of at least two-third of the Continuing Directors then in office. d. "Code" means the Internal Revenue Code of 1986, as amended. 2 e. "Company" means Internet America, Inc., a Texas corporation. f. "Exchange Act" means the Securities Exchange Act of 1934, as amended. g. "Fair Market Value" on any date means the closing price of Shares on such date on the principal national securities exchange on which Shares are listed or admitted to trading, the arithmetic mean of the per Share closing bid priced and per Share closing asked price on such date as quoted on the National Association of Securities Dealers Automated Quotation System or such then market in which such prices are regularly quoted, or, if there have been no published bid or asked quotations with respect to Shares on such date, the Fair Market Value shall be the value established by the Board in good faith and in accordance with Section 422 of the Code. h. "Shares" means the common stock, par value $.01 per share, of the Company. 2. Grant of Option. The Company hereby grants to the Optionee, for valuable consideration, receipt of which is hereby acknowledged, a Non-Qualified Stock Option ("Option") to purchase from the Company an aggregate of 30,000 Shares at a purchase price (the "Option Price") of $3.75 per share. 3. Exercise Period. The Option shall become non-forfeitable according to the following schedule and shall hereafter be exercisable in whole or in part: (i) First Installment: 7,500 on March 24, 1999 (ii) Second Installment: 7,500 on March 24, 2000 (iii) Third Installment: 7,500 on March 24, 2001 (iv) Fourth Installment: 7,500 on March 24, 2002. The Option may be exercised only with respect to full Shares and may not be exercised after the close of business on the day (the "Termination Date") preceding the tenth anniversary of the date hereof. The Option shall have no effect after the Termination Date. 4. Exercise of an Option. The exercise of an Option shall be made only by a written notice delivered in person or by mail to the Secretary of the Company at the Company's principal executive office, specifying the number of Shares to be purchased and accompanied by payment therefor. The purchase price for any Shares purchased pursuant to the exercise of an Option shall be paid in full upon such exercise by delivery of cash or personal check in amount of purchase price. The written notice may provide instructions from the Optionee to the Company that upon receipt of the purchase price in cash from the Optionee's broker or dealer, designated as such on the written notice, in payment for any Shares purchased pursuant to the exercise of an Option, the Company shall issue such Shares directly to the broker or dealer. If requested by the Board, the Optionee shall deliver this Agreement to the Secretary of the Company who shall endorse thereon a notation of such exercise and return such Agreement to the Optionee. No fractional Shares (or cash in lieu thereof) shall be issued upon exercise of an Option and the number of Non-Qualified Option Agreement Page 2 3 Shares that may be purchased upon exercise shall be rounded to the nearest number of whole Shares. 5. Rights of Optionee. The Optionee shall not be deemed for any purpose to be the owner of any Shares subject to any Option unless and until (i) the Option shall have been exercised pursuant to the terms thereof, (ii) the Company shall have issued and delivered the Shares to the Optionee and (iii) the Optionee's name shall have been entered as a stockholder of record on the books of the Company. Thereupon, the Optionee shall have full voting, dividend and other ownership rights with respect to such Shares. 6. Adjustment Upon Changes in Capitalization. a. Subject to Section 7, in the event of a Change in Capitalization, the number and class of Shares or other stock or securities which are subject to the Option, and the purchase price therefor, if applicable, shall be appropriately and equitably adjusted. b. If, by reason of a Change in Capitalization, the Optionee shall be entitled to exercise an Option with respect to new, additional or different shares of stock or securities, such new, additional or different shares shall thereupon be subject to all of the conditions which were applicable to the Shares subject to the Option, as the case may be, prior to such Change in Capitalization. 7. Effect of Certain Transactions. In the event of (i) the liquidation or dissolution of the Company or (ii) a merger or consolidation of the Company (a "Transaction"), the Option issued hereunder shall continue in effect in accordance with its terms and the Optionee shall be entitled to receive in respect of each Share subject to any outstanding Option, upon exercise of any Option, the same number and kind of stock, securities, cash, property, or other consideration that each holder of a Share was entitled to receive in the Transaction in respect of a Share. In the event that, after a Transaction, there occurs any Change in Capitalization with respect to the shares of a surviving or resulting corporation, then adjustments similar to, and subject to the same conditions as, those in Section 6 hereof shall be made by the Board. 8. Effect of Change in Control. Notwithstanding anything contained in the Plan or an Agreement to the contrary, in the event of a Change in Control, all Options outstanding on the date of such Change in Control shall become immediately and fully exercisable. 9. Effect of Certain Transactions. a. Notwithstanding anything to the contrary or in the Agreement, the Optionee shall forfeit 100% of the Options granted pursuant to this Agreement, whether or not vested, if the Optionee breaches the provisions of subsections (b) or (d) of this Section 9. b. During the period that the Optionee is employed by the Company or any affiliate of the Company (the "Service Term") and for a period of one year thereafter, Non-Qualified Option Agreement Page 3 4 the Optionee shall not, in the continental United States, directly or indirectly, own, manage, operate, join, control, be employed by, or participate in the ownership, management, operation or control of or be connected in any manner, including but not limited to holding the positions of shareholder, director, officer, consultant, independent contractor, employee, partner, or investor, with any Competing Enterprise. For purposes of this Section, the term "Competing Enterprise" shall mean any person, corporation, partnership or other entity engaged in the operation of an internet service provider. The prohibition of this Section 9 shall not be deemed to prevent Optionee from owning 2% or less of any class of equity securities registered under Section 12 of the Exchange Act. During the Service Term and for a period of one year thereafter, the Optionee shall not interfere with the Company's relationship with, or endeavor to entice away from the Company, any person who at any time during the Service Term was an employee or customer of the Company or otherwise had a material business relationship with the Company. c. The necessity for protection of the Company and its affiliates against the Optionee's competition, as well as the nature and scope of such protection, has been carefully considered by the parties hereto in light of the uniqueness of the Optionee's talent and his importance to the Company. Accordingly, the Optionee agrees that, in addition to any other relief to which the Company may be entitled, the Company shall be entitled to seek and obtain injunctive relief (without the requirement of any bond) from a court of competent jurisdiction for the purpose of restraining the Optionee from any actual or threatened breach of the covenant contained in this Section 9. If for any reason a final decision of any court determines that the restrictions under this Section 9 are not reasonable or that consideration therefor is inadequate, such restrictions shall be interpreted, modified or rewritten by such court to include as much of the duration, scope and geographic area identified in this Section 9 as will render such restrictions valid and enforceable. d. The Optionee shall not intentionally disclose or reveal to an unauthorized person, during the Service Term or for a two year period thereafter, any information relating to the confidential affairs of the company or any of its affiliates, including but not limited to technical information, business and marketing plans, strategies, customer information, other information concerning the Company's products, promotions, development, financing, expansion plans, business policies and practices, and other forms of information considered by the Company to be confidential and in the nature of trade secrets. The Optionee shall hold as property of the Company and its affiliates all memoranda, books, papers, letters and other data, and all copies thereof or therefrom, which are in any way substantially related to the business of the company or its affiliates, whether made by him or otherwise coming into his possession and, on a prior written demand of the Company made within two years after the end of the Service Term, shall deliver the same to the company. Non-Qualified Option Agreement Page 4 5 10. General Rules a. The obligation of the Company to sell or deliver Shares with respect to the Options granted shall be subject to all applicable laws, rules and regulations, including all applicable federal and state securities laws, and the obtaining of all such approvals by governmental agencies as may be deemed necessary or appropriate by the Board. b. The Company shall have the right to deduct from any distribution of cash to Optionee, an amount equal to the federal, state and local income taxes and other amounts as may be required by law to be withheld (the "Withholding Taxes") with respect to any Option. If Optionee is entitled to receive Shares upon exercise of an Option, the Optionee shall pay the Withholding Taxes to the Company prior to the issuance, or release from escrow, of such Shares. In satisfaction of the Withholding Taxes to the Company, the Optionee may make a written election (the "Tax Election"), which may be accepted or rejected in the discretion of the Board, to have withheld a portion of the Shares issuable to him or her upon exercise of the Option having an aggregate Fair Market Value, on the date preceding the date of exercise, equal to the Withholding Taxes, provided that in respect of an Optionee who may be subject to liability under Section 16(b) of the Exchange Act either (i)(A) the Optionee makes the Tax Election at least six (6) months after the date the Option was granted, (B) the Option is exercised during the ten day period beginning on the third business day and ending on the twelfth business day following the release for publication of the Company's quarterly or annual statements of earnings (a "Window Period") and (C the Tax Election is made during the Window Period in which the Option is exercised prior to such Window Period and subsequent to the immediately preceding Window Period or (ii)(A) the Tax Election is made at least six (6) months prior to the date the Option is exercised prior to the expiration of six (6) months following an election to revoke the Tax Election. Notwithstanding the foregoing, the Board may, by the adoption or rules or otherwise, (i) modify the provisions in the preceding sentence or impose such other restrictions or limitations on Tax Elections as may be necessary to ensure that the Tax Elections will be exempt transactions under Section 16(b) of the Exchange Act, an (ii) permit Tax Elections to be made at such other times and subject to such other conditions as the Board determines will constitute exempt transactions under Section 16b of the Exchange Act. c. If Optionee makes a disposition, within the meaning of Section 424(c)of the Code and regulations promulgated thereunder, of any Share or Shares issued to such Optionee pursuant to the exercise of an Option within the two-year period commencing on the day after the date of the grant or within the one-year period commencing on the day after the date of transfer of such Share or Shares to the Optionee pursuant to such exercise, the Optionee shall, within ten (10) days of such disposition, notify the Company thereof, by delivery of written notice to the Company at its principal executive office, and immediately deliver to the Company the amount of Withholding Taxes. d. No Option granted hereunder shall be transferable by the Optionee to whom granted otherwise than by will or the laws of descent and distribution, and an Option may be exercised during the lifetime of such Optionee only by the Optionee or his or her Non-Qualified Option Agreement Page 5 6 guardian or legal representative. The terms of such an Option shall be final, binding and conclusive upon the beneficiaries, executors, administrators, heirs and successors of the Optionee. e. Termination of Employment or Service. Unless otherwise provided in the Agreement evidencing the Option, an option shall terminate on or following an Optionee's termination of employment with the Company and its Subsidiaries or service as a director of the Company and its Subsidiaries as follows: (i) If an Optionee's employment terminates for any reason other than death, Disability or Cause, the Optionee may at any time within three (3) months after his or her termination of employment or service as a director, exercise an option to the extent, and only to the extent, that the Option or portion thereof was exercisable at the date of such termination; (ii) In the event the Optionee's employment or service as a director terminates as a result of Disability, the Optionee may at any time within one (1) year after such termination exercise such Option to the extent, and only to the extent, the Option or portion thereof was exercisable at the date of such termination; (iii) If an Optionee's employment or service as a director terminates for Cause, the Option shall terminate immediately and no rights thereunder may be exercised; (iv) If an Optionee dies while an employee of the Company or any Subsidiary or within three(3) months after termination as described in clause (1) of this Section 10(e), the Option may be exercised any time within one (1) year after the Optionee's death by the person or persons to whom such rights under the Option pass by will or by the laws of descent and distribution; provided, however, that an option may be exercised to the extent, and only to the extent, that the Option or portion thereof was exercisable on the date of death or earlier termination. Non-Qualified Option Agreement Page 6 7 IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed and the Optionee has hereunto set his hand, as of the day and year first above written. INTERNET AMERICA, INC. /s/ MICHAEL MAPLES -------------------------- Michael Maples Chief Executive Officer OPTIONEE /s/ DOUGLAS G. SHELDON -------------------------- Douglas G. Sheldon Non-Qualified Option Agreement Page 7 EX-99.11 14 NONQUALIFED STOCK OPTION AGRMNT - JAMES T. CHANEY 1 EXHIBIT 99.11 NON-QUALIFIED STOCK OPTION AGREEMENT Agreement made effective as of the 24th day of March, 1998 by and between INTERNET AMERICA, INC. (the "Company") and JAMES T. CHANEY (the "Optionee"). 1. Definitions. For purposes of this Agreement: a. "Board" means the Board of Directors of the Company. b. "Change in Capitalization" means any increase or reduction in the number of Shares, or any change (including, but not limited to, a change in value) in the Shares or exchange of Shares for a different number or kind of Shares or other securities of the Company, by reason of a reclassification, recapitalization, merger, consolidation, reorganization, stock dividend, stock split or reverse stock split, combination or exchange of shares or other similar events. c. "Change in Control" shall be deemed to have occurred when the first of the following events occurs: (i) when the Company acquires actual knowledge that any person or group (as such terms are used in Sections 13(d) and 14(d) (2) of the Exchange Act), other than an employee benefit plan established or maintained by the Company or any of its subsidiaries or the current largest stockholder, is or becomes the beneficial owner (as defined under rule 13d-3 of the Exchange Act) directly or indirectly, or securities of the Company representing 30 percent or more of the combined voting power of the Company's directors; (ii) upon the approval by the Company's stockholders of (A) a merger or consolidation of the Company with or into another Corporation (other than a merger or consolidation in which the Company is the surviving corporation and which does not result in any capital reorganization or reclassification or other change in the Company's the outstanding shares of common stock), (B) a sale of disposition of all or substantially all of the Company's assets of (C) a plan of liquidation of dissolution of the Company; or (iii) if, at any time, two-thirds of the members of the Board are not "Continuing Directors". For this purpose " Continuing Directors" shall mean the members of the Board of Directors as of September 30, 1995, and any individual who becomes a member of the Board thereafter if his or her election or nomination for election as a director was approved by a vote of at least two-third of the Continuing Directors then in office. d. "Code" means the Internal Revenue Code of 1986, as amended. 2 e. "Company" means Internet America, Inc., a Texas corporation. f. "Exchange Act" means the Securities Exchange Act of 1934, as amended. g. "Fair Market Value" on any date means the closing price of Shares on such date on the principal national securities exchange on which Shares are listed or admitted to trading, the arithmetic mean of the per Share closing bid priced and per Share closing asked price on such date as quoted on the National Association of Securities Dealers Automated Quotation System or such then market in which such prices are regularly quoted, or, if there have been no published bid or asked quotations with respect to Shares on such date, the Fair Market Value shall be the value established by the Board in good faith and in accordance with Section 422 of the Code. h. "Shares" means the common stock, par value $.01 per share, of the Company. 2. Grant of Option. The Company hereby grants to the Optionee, for valuable consideration, receipt of which is hereby acknowledged, a Non-Qualified Stock Option ("Option") to purchase from the Company an aggregate of 35,000 Shares at a purchase price (the "Option Price") of $3.75 per share. 3. Exercise Period. The Option shall become non-forfeitable according to the following schedule and shall hereafter be exercisable in whole or in part: (i) First Installment: 8,750 on March 24, 1999 (ii) Second Installment: 8,750 on March 24, 2000 (iii) Third Installment: 8,750 on March 24, 2001 (iv) Fourth Installment: 8,750 on March 24, 2002. The Option may be exercised only with respect to full Shares and may not be exercised after the close of business on the day (the "Termination Date") preceding the tenth anniversary of the date hereof. The Option shall have no effect after the Termination Date. 4. Exercise of an Option. The exercise of an Option shall be made only by a written notice delivered in person or by mail to the Secretary of the Company at the Company's principal executive office, specifying the number of Shares to be purchased and accompanied by payment therefor. The purchase price for any Shares purchased pursuant to the exercise of an Option shall be paid in full upon such exercise by delivery of cash or personal check in amount of purchase price. The written notice may provide instructions from the Optionee to the Company that upon receipt of the purchase price in cash from the Optionee's broker or dealer, designated as such on the written notice, in payment for any Shares purchased pursuant to the exercise of an Option, the Company shall issue such Shares directly to the broker or dealer. If requested by the Board, the Optionee shall deliver this Agreement to the Secretary of the Company who shall endorse thereon a notation of such exercise and return such Agreement to the Optionee. No fractional Shares (or cash in lieu thereof) shall be issued upon exercise of an Option and the number of Shares that may be purchased upon exercise shall be rounded to the nearest number of whole Shares. 3 5. Rights of Optionee. The Optionee shall not be deemed for any purpose to be the owner of any Shares subject to any Option unless and until (i) the Option shall have been exercised pursuant to the terms thereof, (ii) the Company shall have issued and delivered the Shares to the Optionee and (iii) the Optionee's name shall have been entered as a stockholder of record on the books of the Company. Thereupon, the Optionee shall have full voting, dividend and other ownership rights with respect to such Shares. 6. Adjustment Upon Changes in Capitalization. a. Subject to Section 7, in the event of a Change in Capitalization, the number and class of Shares or other stock or securities which are subject to the Option, and the purchase price therefor, if applicable, shall be appropriately and equitably adjusted. b. If, by reason of a Change in Capitalization, the Optionee shall be entitled to exercise an Option with respect to new, additional or different shares of stock or securities, such new, additional or different shares shall thereupon be subject to all of the conditions which were applicable to the Shares subject to the Option, as the case may be, prior to such Change in Capitalization. 7. Effect of Certain Transactions. In the event of (i) the liquidation or dissolution of the Company or (ii) a merger or consolidation of the Company (a "Transaction"), the Option issued hereunder shall continue in effect in accordance with its terms and the Optionee shall be entitled to receive in respect of each Share subject to any outstanding Option, upon exercise of any Option, the same number and kind of stock, securities, cash, property, or other consideration that each holder of a Share was entitled to receive in the Transaction in respect of a Share. In the event that, after a Transaction, there occurs any Change in Capitalization with respect to the shares of a surviving or resulting corporation, then adjustments similar to, and subject to the same conditions as, those in Section 6 hereof shall be made by the Board. 8. Effect of Change in Control. Notwithstanding anything contained in the Plan or an Agreement to the contrary, in the event of a Change in Control, all Options outstanding on the date of such Change in Control shall become immediately and fully exercisable. 9. Effect of Certain Transactions. a. Notwithstanding anything to the contrary or in the Agreement, the Optionee shall forfeit 100% of the Options granted pursuant to this Agreement, whether or not vested, if the Optionee breaches the provisions of subsections (b) or (d) of this Section 9. b. During the period that the Optionee is employed by the Company or any affiliate of the Company (the "Service Term") and for a period of one year thereafter, the Optionee shall not, in the continental United States, directly or indirectly, own, manage, operate, join, control, be employed by, or participate in the ownership, management, 4 operation or control of or be connected in any manner, including but not limited to holding the positions of shareholder, director, officer, consultant, independent contractor, employee, partner, or investor, with any Competing Enterprise. For purposes of this Section, the term "Competing Enterprise" shall mean any person, corporation, partnership or other entity engaged in the operation of an internet service provider. The prohibition of this Section 9 shall not be deemed to prevent Optionee from owning 2% or less of any class of equity securities registered under Section 12 of the Exchange Act. During the Service Term and for a period of one year thereafter, the Optionee shall not interfere with the Company's relationship with, or endeavor to entice away from the Company, any person who at any time during the Service Term was an employee or customer of the Company or otherwise had a material business relationship with the Company. c. The necessity for protection of the Company and its affiliates against the Optionee's competition, as well as the nature and scope of such protection, has been carefully considered by the parties hereto in light of the uniqueness of the Optionee's talent and his importance to the Company. Accordingly, the Optionee agrees that, in addition to any other relief to which the Company may be entitled, the Company shall be entitled to seek and obtain injunctive relief (without the requirement of any bond) from a court of competent jurisdiction for the purpose of restraining the Optionee from any actual or threatened breach of the covenant contained in this Section 9. If for any reason a final decision of any court determines that the restrictions under this Section 9 are not reasonable or that consideration therefor is inadequate, such restrictions shall be interpreted, modified or rewritten by such court to include as much of the duration, scope and geographic area identified in this Section 9 as will render such restrictions valid and enforceable. d. The Optionee shall not intentionally disclose or reveal to an unauthorized person, during the Service Term or for a two year period thereafter, any information relating to the confidential affairs of the company or any of its affiliates, including but not limited to technical information, business and marketing plans, strategies, customer information, other information concerning the Company's products, promotions, development, financing, expansion plans, business policies and practices, and other forms of information considered by the Company to be confidential and in the nature of trade secrets. The Optionee shall hold as property of the Company and its affiliates all memoranda, books, papers, letters and other data, and all copies thereof or therefrom, which are in any way substantially related to the business of the company or its affiliates, whether made by him or otherwise coming into his possession and, on a prior written demand of the Company made within two years after the end of the Service Term, shall deliver the same to the company. 10.General Rules a. The obligation of the Company to sell or deliver Shares with respect to the Options granted shall be subject to all applicable laws, rules and regulations, including all applicable federal and state securities laws, and the obtaining of all such approvals by governmental agencies as may be deemed necessary or appropriate by the Board. 5 b. The Company shall have the right to deduct from any distribution of cash to Optionee, an amount equal to the federal, state and local income taxes and other amounts as may be required by law to be withheld (the "Withholding Taxes") with respect to any Option. If Optionee is entitled to receive Shares upon exercise of an Option, the Optionee shall pay the Withholding Taxes to the Company prior to the issuance, or release from escrow, of such Shares. In satisfaction of the Withholding Taxes to the Company, the Optionee may make a written election (the "Tax Election"), which may be accepted or rejected in the discretion of the Board, to have withheld a portion of the Shares issuable to him or her upon exercise of the Option having an aggregate Fair Market Value, on the date preceding the date of exercise, equal to the Withholding Taxes, provided that in respect of an Optionee who may be subject to liability under Section 16(b) of the Exchange Act either (i)(A) the Optionee makes the Tax Election at least six (6) months after the date the Option was granted, (B) the Option is exercised during the ten day period beginning on the third business day and ending on the twelfth business day following the release for publication of the Company's quarterly or annual statements of earnings (a "Window Period") and (C the Tax Election is made during the Window Period in which the Option is exercised prior to such Window Period and subsequent to the immediately preceding Window Period or (ii)(A) the Tax Election is made at least six (6) months prior to the date the Option is exercised prior to the expiration of six (6) months following an election to revoke the Tax Election. Notwithstanding the foregoing, the Board may, by the adoption or rules or otherwise, (i) modify the provisions in the preceding sentence or impose such other restrictions or limitations on Tax Elections as may be necessary to ensure that the Tax Elections will be exempt transactions under Section 16(b) of the Exchange Act, an (ii) permit Tax Elections to be made at such other times and subject to such other conditions as the Board determines will constitute exempt transactions under Section 16b of the Exchange Act. c. If Optionee makes a disposition, within the meaning of Section 424(c)of the Code and regulations promulgated thereunder, of any Share or Shares issued to such Optionee pursuant to the exercise of an Option within the two-year period commencing on the day after the date of the grant or within the one-year period commencing on the day after the date of transfer of such Share or Shares to the Optionee pursuant to such exercise, the Optionee shall, within ten (10) days of such disposition, notify the Company thereof, by delivery of written notice to the Company at its principal executive office, and immediately deliver to the Company the amount of Withholding Taxes. d. No Option granted hereunder shall be transferable by the Optionee to whom granted otherwise than by will or the laws of descent and distribution, and an Option may be exercised during the lifetime of such Optionee only by the Optionee or his or her guardian or legal representative. The terms of such an Option shall be final, binding and conclusive upon the beneficiaries, executors, administrators, heirs and successors of the Optionee. 6 e. Termination of Employment or Service. Unless otherwise provided in the Agreement evidencing the Option, an option shall terminate on or following an Optionee's termination of employment with the Company and its Subsidiaries or service as a director of the Company and its Subsidiaries as follows: (i) If an Optionee's employment terminates for any reason other than death, Disability or Cause, the Optionee may at any time within three (3) months after his or her termination of employment or service as a director, exercise an option to the extent, and only to the extent, that the Option or portion thereof was exercisable at the date of such termination; (ii) In the event the Optionee's employment or service as a director terminates as a result of Disability, the Optionee may at any time within one (1) year after such termination exercise such Option to the extent, and only to the extent, the Option or portion thereof was exercisable at the date of such termination; (iii) If an Optionee's employment or service as a director terminates for Cause, the Option shall terminate immediately and no rights thereunder may be exercised; (iv) If an Optionee dies while an employee of the Company or any Subsidiary or within three(3) months after termination as described in clause (1) of this Section 10(e), the Option may be exercised any time within one (1) year after the Optionee's death by the person or persons to whom such rights under the Option pass by will or by the laws of descent and distribution; provided, however, that an option may be exercised to the extent, and only to the extent, that the Option or portion thereof was exercisable on the date of death or earlier termination. IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed and the Optionee has hereunto set his hand, as of the day and year first above written. INTERNET AMERICA, INC. /s/ MICHAEL MAPLES -------------------------- Michael Maples Chief Executive Officer OPTIONEE /s/ JAMES T. CHANEY -------------------------- EX-99.12 15 NONQUALIFED STOCK OPTION AGMNT - JOHN J. STEWART 1 EXHIBIT 99.12 NON-QUALIFIED STOCK OPTION AGREEMENT Agreement made effective as of the 24th day of March, 1998 by and between INTERNET AMERICA, INC. (the "Company") and JOHN J. STEWART (the "Optionee"). 1. Definitions. For purposes of this Agreement: a. "Board" means the Board of Directors of the Company. b. "Change in Capitalization" means any increase or reduction in the number of Shares, or any change (including, but not limited to, a change in value) in the Shares or exchange of Shares for a different number or kind of Shares or other securities of the Company, by reason of a reclassification, recapitalization, merger, consolidation, reorganization, stock dividend, stock split or reverse stock split, combination or exchange of shares or other similar events. c. "Change in Control" shall be deemed to have occurred when the first of the following events occurs: (i) when the Company acquires actual knowledge that any person or group (as such terms are used in Sections 13(d) and 14(d) (2) of the Exchange Act), other than an employee benefit plan established or maintained by the Company or any of its subsidiaries or the current largest stockholder, is or becomes the beneficial owner (as defined under rule 13d-3 of the Exchange Act) directly or indirectly, or securities of the Company representing 30 percent or more of the combined voting power of the Company's directors; (ii) upon the approval by the Company's stockholders of (A) a merger or consolidation of the Company with or into another Corporation (other than a merger or consolidation in which the Company is the surviving corporation and which does not result in any capital reorganization or reclassification or other change in the Company's the outstanding shares of common stock), (B) a sale of disposition of all or substantially all of the Company's assets of (C) a plan of liquidation of dissolution of the Company; or (iii) if, at any time, two-thirds of the members of the Board are not "Continuing Directors". For this purpose " Continuing Directors" shall mean the members of the Board of Directors as of September 30, 1995, and any individual who becomes a member of the Board thereafter if his or her election or nomination for election as a director was approved by a vote of at least two-third of the Continuing Directors then in office. d. "Code" means the Internal Revenue Code of 1986, as amended. 2 e. "Company" means Internet America, Inc., a Texas corporation. f. "Exchange Act" means the Securities Exchange Act of 1934, as amended. g. "Fair Market Value" on any date means the closing price of Shares on such date on the principal national securities exchange on which Shares are listed or admitted to trading, the arithmetic mean of the per Share closing bid priced and per Share closing asked price on such date as quoted on the National Association of Securities Dealers Automated Quotation System or such then market in which such prices are regularly quoted, or, if there have been no published bid or asked quotations with respect to Shares on such date, the Fair Market Value shall be the value established by the Board in good faith and in accordance with Section 422 of the Code. h. "Shares" means the common stock, par value $.01 per share, of the Company. 2. Grant of Option. The Company hereby grants to the Optionee, for valuable consideration, receipt of which is hereby acknowledged, a Non-Qualified Stock Option ("Option") to purchase from the Company an aggregate of 25,000 Shares at a purchase price (the "Option Price") of $3.75 per share. 3. Exercise Period. The Option shall become non-forfeitable according to the following schedule and shall hereafter be exercisable in whole or in part: (i) First Installment: 6,250 on March 24, 1999 (ii) Second Installment: 6,250 on March 24, 2000 (iii) Third Installment: 6,250 on March 24, 2001 (iv) Fourth Installment: 6,250 on March 24, 2002. The Option may be exercised only with respect to full Shares and may not be exercised after the close of business on the day (the "Termination Date") preceding the tenth anniversary of the date hereof. The Option shall have no effect after the Termination Date. 4. Exercise of an Option. The exercise of an Option shall be made only by a written notice delivered in person or by mail to the Secretary of the Company at the Company's principal executive office, specifying the number of Shares to be purchased and accompanied by payment therefor. The purchase price for any Shares purchased pursuant to the exercise of an Option shall be paid in full upon such exercise by delivery of cash or personal check in amount of purchase price. The written notice may provide instructions from the Optionee to the Company that upon receipt of the purchase price in cash from the Optionee's broker or dealer, designated as such on the written notice, in payment for any Shares purchased pursuant to the exercise of an Option, the Company shall issue such Shares directly to the broker or dealer. If requested by the Board, the Optionee shall deliver this Agreement to the Secretary of the Company who shall endorse thereon a notation of such exercise and return such Agreement to the Optionee. No fractional Shares (or cash in lieu thereof) shall be issued upon exercise of an Option and the number of Non-Qualified Option Agreement Page 2 3 Shares that may be purchased upon exercise shall be rounded to the nearest number of whole Shares. 5. Rights of Optionee. The Optionee shall not be deemed for any purpose to be the owner of any Shares subject to any Option unless and until (i) the Option shall have been exercised pursuant to the terms thereof, (ii) the Company shall have issued and delivered the Shares to the Optionee and (iii) the Optionee's name shall have been entered as a stockholder of record on the books of the Company. Thereupon, the Optionee shall have full voting, dividend and other ownership rights with respect to such Shares. 6. Adjustment Upon Changes in Capitalization. a. Subject to Section 7, in the event of a Change in Capitalization, the number and class of Shares or other stock or securities which are subject to the Option, and the purchase price therefor, if applicable, shall be appropriately and equitably adjusted. b. If, by reason of a Change in Capitalization, the Optionee shall be entitled to exercise an Option with respect to new, additional or different shares of stock or securities, such new, additional or different shares shall thereupon be subject to all of the conditions which were applicable to the Shares subject to the Option, as the case may be, prior to such Change in Capitalization. 7. Effect of Certain Transactions. In the event of (i) the liquidation or dissolution of the Company or (ii) a merger or consolidation of the Company (a "Transaction"), the Option issued hereunder shall continue in effect in accordance with its terms and the Optionee shall be entitled to receive in respect of each Share subject to any outstanding Option, upon exercise of any Option, the same number and kind of stock, securities, cash, property, or other consideration that each holder of a Share was entitled to receive in the Transaction in respect of a Share. In the event that, after a Transaction, there occurs any Change in Capitalization with respect to the shares of a surviving or resulting corporation, then adjustments similar to, and subject to the same conditions as, those in Section 6 hereof shall be made by the Board. 8. Effect of Change in Control. Notwithstanding anything contained in the Plan or an Agreement to the contrary, in the event of a Change in Control, all Options outstanding on the date of such Change in Control shall become immediately and fully exercisable. 9. Effect of Certain Transactions. a. Notwithstanding anything to the contrary or in the Agreement, the Optionee shall forfeit 100% of the Options granted pursuant to this Agreement, whether or not vested, if the Optionee breaches the provisions of subsections (b) or (d) of this Section 9. b. During the period that the Optionee is employed by the Company or any affiliate of the Company (the "Service Term") and for a period of one year thereafter, Non-Qualified Option Agreement Page 3 4 the Optionee shall not, in the continental United States, directly or indirectly, own, manage, operate, join, control, be employed by, or participate in the ownership, management, operation or control of or be connected in any manner, including but not limited to holding the positions of shareholder, director, officer, consultant, independent contractor, employee, partner, or investor, with any Competing Enterprise. For purposes of this Section, the term "Competing Enterprise" shall mean any person, corporation, partnership or other entity engaged in the operation of an internet service provider. The prohibition of this Section 9 shall not be deemed to prevent Optionee from owning 2% or less of any class of equity securities registered under Section 12 of the Exchange Act. During the Service Term and for a period of one year thereafter, the Optionee shall not interfere with the Company's relationship with, or endeavor to entice away from the Company, any person who at any time during the Service Term was an employee or customer of the Company or otherwise had a material business relationship with the Company. c. The necessity for protection of the Company and its affiliates against the Optionee's competition, as well as the nature and scope of such protection, has been carefully considered by the parties hereto in light of the uniqueness of the Optionee's talent and his importance to the Company. Accordingly, the Optionee agrees that, in addition to any other relief to which the Company may be entitled, the Company shall be entitled to seek and obtain injunctive relief (without the requirement of any bond) from a court of competent jurisdiction for the purpose of restraining the Optionee from any actual or threatened breach of the covenant contained in this Section 9. If for any reason a final decision of any court determines that the restrictions under this Section 9 are not reasonable or that consideration therefor is inadequate, such restrictions shall be interpreted, modified or rewritten by such court to include as much of the duration, scope and geographic area identified in this Section 9 as will render such restrictions valid and enforceable. d. The Optionee shall not intentionally disclose or reveal to an unauthorized person, during the Service Term or for a two year period thereafter, any information relating to the confidential affairs of the company or any of its affiliates, including but not limited to technical information, business and marketing plans, strategies, customer information, other information concerning the Company's products, promotions, development, financing, expansion plans, business policies and practices, and other forms of information considered by the Company to be confidential and in the nature of trade secrets. The Optionee shall hold as property of the Company and its affiliates all memoranda, books, papers, letters and other data, and all copies thereof or therefrom, which are in any way substantially related to the business of the company or its affiliates, whether made by him or otherwise coming into his possession and, on a prior written demand of the Company made within two years after the end of the Service Term, shall deliver the same to the company. Non-Qualified Option Agreement Page 4 5 10. General Rules a. The obligation of the Company to sell or deliver Shares with respect to the Options granted shall be subject to all applicable laws, rules and regulations, including all applicable federal and state securities laws, and the obtaining of all such approvals by governmental agencies as may be deemed necessary or appropriate by the Board. b. The Company shall have the right to deduct from any distribution of cash to Optionee, an amount equal to the federal, state and local income taxes and other amounts as may be required by law to be withheld (the "Withholding Taxes") with respect to any Option. If Optionee is entitled to receive Shares upon exercise of an Option, the Optionee shall pay the Withholding Taxes to the Company prior to the issuance, or release from escrow, of such Shares. In satisfaction of the Withholding Taxes to the Company, the Optionee may make a written election (the "Tax Election"), which may be accepted or rejected in the discretion of the Board, to have withheld a portion of the Shares issuable to him or her upon exercise of the Option having an aggregate Fair Market Value, on the date preceding the date of exercise, equal to the Withholding Taxes, provided that in respect of an Optionee who may be subject to liability under Section 16(b) of the Exchange Act either (i)(A) the Optionee makes the Tax Election at least six (6) months after the date the Option was granted, (B) the Option is exercised during the ten day period beginning on the third business day and ending on the twelfth business day following the release for publication of the Company's quarterly or annual statements of earnings (a "Window Period") and (C the Tax Election is made during the Window Period in which the Option is exercised prior to such Window Period and subsequent to the immediately preceding Window Period or (ii)(A) the Tax Election is made at least six (6) months prior to the date the Option is exercised prior to the expiration of six (6) months following an election to revoke the Tax Election. Notwithstanding the foregoing, the Board may, by the adoption or rules or otherwise, (i) modify the provisions in the preceding sentence or impose such other restrictions or limitations on Tax Elections as may be necessary to ensure that the Tax Elections will be exempt transactions under Section 16(b) of the Exchange Act, an (ii) permit Tax Elections to be made at such other times and subject to such other conditions as the Board determines will constitute exempt transactions under Section 16b of the Exchange Act. c. If Optionee makes a disposition, within the meaning of Section 424(c)of the Code and regulations promulgated thereunder, of any Share or Shares issued to such Optionee pursuant to the exercise of an Option within the two-year period commencing on the day after the date of the grant or within the one-year period commencing on the day after the date of transfer of such Share or Shares to the Optionee pursuant to such exercise, the Optionee shall, within ten (10) days of such disposition, notify the Company thereof, by delivery of written notice to the Company at its principal executive office, and immediately deliver to the Company the amount of Withholding Taxes. d. No Option granted hereunder shall be transferable by the Optionee to whom granted otherwise than by will or the laws of descent and distribution, and an Option may be exercised during the lifetime of such Optionee only by the Optionee or his or her Non-Qualified Option Agreement Page 5 6 guardian or legal representative. The terms of such an Option shall be final, binding and conclusive upon the beneficiaries, executors, administrators, heirs and successors of the Optionee. e. Termination of Employment or Service. Unless otherwise provided in the Agreement evidencing the Option, an option shall terminate on or following an Optionee's termination of employment with the Company and its Subsidiaries or service as a director of the Company and its Subsidiaries as follows: (i) If an Optionee's employment terminates for any reason other than death, Disability or Cause, the Optionee may at any time within three (3) months after his or her termination of employment or service as a director, exercise an option to the extent, and only to the extent, that the Option or portion thereof was exercisable at the date of such termination; (ii) In the event the Optionee's employment or service as a director terminates as a result of Disability, the Optionee may at any time within one (1) year after such termination exercise such Option to the extent, and only to the extent, the Option or portion thereof was exercisable at the date of such termination; (iii) If an Optionee's employment or service as a director terminates for Cause, the Option shall terminate immediately and no rights thereunder may be exercised; (iv) If an Optionee dies while an employee of the Company or any Subsidiary or within three(3) months after termination as described in clause (1) of this Section 10(e), the Option may be exercised any time within one (1) year after the Optionee's death by the person or persons to whom such rights under the Option pass by will or by the laws of descent and distribution; provided, however, that an option may be exercised to the extent, and only to the extent, that the Option or portion thereof was exercisable on the date of death or earlier termination. IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed and the Optionee has hereunto set his hand, as of the day and year first above written. INTERNET AMERICA, INC. /s/ MICHAEL MAPLES -------------------------- Michael Maples Chief Executive Officer OPTIONEE /s/ JOHN J. STEWART -------------------------- John J. Stewart Non-Qualified Option Agreement Page 6 EX-99.13 16 NONQUALIFED STOCK OPTION AGMNT - FRANK J. DURDA 1 EXHIBIT 99.13 NON-QUALIFIED STOCK OPTION AGREEMENT Agreement made effective as of the 24th day of March, 1998 by and between INTERNET AMERICA, INC. (the "Company") and FRANK J. DURDA (the "Optionee"). 1. Definitions. For purposes of this Agreement: a. "Board" means the Board of Directors of the Company. b. "Change in Capitalization" means any increase or reduction in the number of Shares, or any change (including, but not limited to, a change in value) in the Shares or exchange of Shares for a different number or kind of Shares or other securities of the Company, by reason of a reclassification, recapitalization, merger, consolidation, reorganization, stock dividend, stock split or reverse stock split, combination or exchange of shares or other similar events. c. "Change in Control" shall be deemed to have occurred when the first of the following events occurs: (i) when the Company acquires actual knowledge that any person or group (as such terms are used in Sections 13(d) and 14(d) (2) of the Exchange Act), other than an employee benefit plan established or maintained by the Company or any of its subsidiaries or the current largest stockholder, is or becomes the beneficial owner (as defined under rule 13d-3 of the Exchange Act) directly or indirectly, or securities of the Company representing 30 percent or more of the combined voting power of the Company's directors; (ii) upon the approval by the Company's stockholders of (A) a merger or consolidation of the Company with or into another Corporation (other than a merger or consolidation in which the Company is the surviving corporation and which does not result in any capital reorganization or reclassification or other change in the Company's the outstanding shares of common stock), (B) a sale of disposition of all or substantially all of the Company's assets of (C) a plan of liquidation of dissolution of the Company; or (iii) if, at any time, two-thirds of the members of the Board are not "Continuing Directors". For this purpose " Continuing Directors" shall mean the members of the Board of Directors as of September 30, 1995, and any individual who becomes a member of the Board thereafter if his or her election or nomination for election as a director was approved by a vote of at least two-third of the Continuing Directors then in office. d. "Code" means the Internal Revenue Code of 1986, as amended. 2 e. "Company" means Internet America, Inc., a Texas corporation. f. "Exchange Act" means the Securities Exchange Act of 1934, as amended. g. "Fair Market Value" on any date means the closing price of Shares on such date on the principal national securities exchange on which Shares are listed or admitted to trading, the arithmetic mean of the per Share closing bid priced and per Share closing asked price on such date as quoted on the National Association of Securities Dealers Automated Quotation System or such then market in which such prices are regularly quoted, or, if there have been no published bid or asked quotations with respect to Shares on such date, the Fair Market Value shall be the value established by the Board in good faith and in accordance with Section 422 of the Code. h. "Shares" means the common stock, par value $.01 per share, of the Company. 2. Grant of Option. The Company hereby grants to the Optionee, for valuable consideration, receipt of which is hereby acknowledged, a Non-Qualified Stock Option ("Option") to purchase from the Company an aggregate of 15,000 Shares at a purchase price (the "Option Price") of $3.75 per share. 3. Exercise Period. The Option shall become non-forfeitable according to the following schedule and shall hereafter be exercisable in whole or in part: (i) First Installment: 3,750 on March 24, 1999 (ii) Second Installment: 3,750 on March 24, 2000 (iii) Third Installment: 3,750 on March 24, 2001 (iv) Fourth Installment: 3,750 on March 24, 2002 The Option may be exercised only with respect to full Shares and may not be exercised after the close of business on the day (the "Termination Date") preceding the tenth anniversary of the date hereof. The Option shall have no effect after the Termination Date. 4. Exercise of an Option. The exercise of an Option shall be made only by a written notice delivered in person or by mail to the Secretary of the Company at the Company's principal executive office, specifying the number of Shares to be purchased and accompanied by payment therefor. The purchase price for any Shares purchased pursuant to the exercise of an Option shall be paid in full upon such exercise by delivery of cash or personal check in amount of purchase price. The written notice may provide instructions from the Optionee to the Company that upon receipt of the purchase price in cash from the Optionee's broker or dealer, designated as such on the written notice, in payment for any Shares purchased pursuant to the exercise of an Option, the Company shall issue such Shares directly to the broker or dealer. If requested by the Board, the Optionee shall deliver this Agreement to the Secretary of the Company who shall endorse thereon a notation of such exercise and return such Agreement to the Optionee. No fractional Shares (or cash in lieu thereof) shall be issued upon exercise of an Option and the number of Shares that may be purchased upon exercise shall be rounded to the nearest number of whole Shares. Non-Qualified Option Agreement Page 2 3 5. Rights of Optionee. The Optionee shall not be deemed for any purpose to be the owner of any Shares subject to any Option unless and until (i) the Option shall have been exercised pursuant to the terms thereof, (ii) the Company shall have issued and delivered the Shares to the Optionee and (iii) the Optionee's name shall have been entered as a stockholder of record on the books of the Company. Thereupon, the Optionee shall have full voting, dividend and other ownership rights with respect to such Shares. 6. Adjustment Upon Changes in Capitalization. a. Subject to Section 7, in the event of a Change in Capitalization, the number and class of Shares or other stock or securities which are subject to the Option, and the purchase price therefor, if applicable, shall be appropriately and equitably adjusted. b. If, by reason of a Change in Capitalization, the Optionee shall be entitled to exercise an Option with respect to new, additional or different shares of stock or securities, such new, additional or different shares shall thereupon be subject to all of the conditions which were applicable to the Shares subject to the Option, as the case may be, prior to such Change in Capitalization. 7. Effect of Certain Transactions. In the event of (i) the liquidation or dissolution of the Company or (ii) a merger or consolidation of the Company (a "Transaction"), the Option issued hereunder shall continue in effect in accordance with its terms and the Optionee shall be entitled to receive in respect of each Share subject to any outstanding Option, upon exercise of any Option, the same number and kind of stock, securities, cash, property, or other consideration that each holder of a Share was entitled to receive in the Transaction in respect of a Share. In the event that, after a Transaction, there occurs any Change in Capitalization with respect to the shares of a surviving or resulting corporation, then adjustments similar to, and subject to the same conditions as, those in Section 6 hereof shall be made by the Board. 8. Effect of Change in Control. Notwithstanding anything contained in the Plan or an Agreement to the contrary, in the event of a Change in Control, all Options outstanding on the date of such Change in Control shall become immediately and fully exercisable. 9. Effect of Certain Transactions. a. Notwithstanding anything to the contrary or in the Agreement, the Optionee shall forfeit 100% of the Options granted pursuant to this Agreement, whether or not vested, if the Optionee breaches the provisions of subsections (b) or (d) of this Section 9. b. During the period that the Optionee is employed by the Company or any affiliate of the Company (the "Service Term") and for a period of one year thereafter, Non-Qualified Option Agreement Page 3 4 the Optionee shall not, in the continental United States, directly or indirectly, own, manage, operate, join, control, be employed by, or participate in the ownership, management, operation or control of or be connected in any manner, including but not limited to holding the positions of shareholder, director, officer, consultant, independent contractor, employee, partner, or investor, with any Competing Enterprise. For purposes of this Section, the term "Competing Enterprise" shall mean any person, corporation, partnership or other entity engaged in the operation of an internet service provider. The prohibition of this Section 9 shall not be deemed to prevent Optionee from owning 2% or less of any class of equity securities registered under Section 12 of the Exchange Act. During the Service Term and for a period of one year thereafter, the Optionee shall not interfere with the Company's relationship with, or endeavor to entice away from the Company, any person who at any time during the Service Term was an employee or customer of the Company or otherwise had a material business relationship with the Company. c. The necessity for protection of the Company and its affiliates against the Optionee's competition, as well as the nature and scope of such protection, has been carefully considered by the parties hereto in light of the uniqueness of the Optionee's talent and his importance to the Company. Accordingly, the Optionee agrees that, in addition to any other relief to which the Company may be entitled, the Company shall be entitled to seek and obtain injunctive relief (without the requirement of any bond) from a court of competent jurisdiction for the purpose of restraining the Optionee from any actual or threatened breach of the covenant contained in this Section 9. If for any reason a final decision of any court determines that the restrictions under this Section 9 are not reasonable or that consideration therefor is inadequate, such restrictions shall be interpreted, modified or rewritten by such court to include as much of the duration, scope and geographic area identified in this Section 9 as will render such restrictions valid and enforceable. d. The Optionee shall not intentionally disclose or reveal to an unauthorized person, during the Service Term or for a two year period thereafter, any information relating to the confidential affairs of the company or any of its affiliates, including but not limited to technical information, business and marketing plans, strategies, customer information, other information concerning the Company's products, promotions, development, financing, expansion plans, business policies and practices, and other forms of information considered by the Company to be confidential and in the nature of trade secrets. The Optionee shall hold as property of the Company and its affiliates all memoranda, books, papers, letters and other data, and all copies thereof or therefrom, which are in any way substantially related to the business of the company or its affiliates, whether made by him or otherwise coming into his possession and, on a prior written demand of the Company made within two years after the end of the Service Term, shall deliver the same to the company. Non-Qualified Option Agreement Page 4 5 10. General Rules a. The obligation of the Company to sell or deliver Shares with respect to the Options granted shall be subject to all applicable laws, rules and regulations, including all applicable federal and state securities laws, and the obtaining of all such approvals by governmental agencies as may be deemed necessary or appropriate by the Board. b. The Company shall have the right to deduct from any distribution of cash to Optionee, an amount equal to the federal, state and local income taxes and other amounts as may be required by law to be withheld (the "Withholding Taxes") with respect to any Option. If Optionee is entitled to receive Shares upon exercise of an Option, the Optionee shall pay the Withholding Taxes to the Company prior to the issuance, or release from escrow, of such Shares. In satisfaction of the Withholding Taxes to the Company, the Optionee may make a written election (the "Tax Election"), which may be accepted or rejected in the discretion of the Board, to have withheld a portion of the Shares issuable to him or her upon exercise of the Option having an aggregate Fair Market Value, on the date preceding the date of exercise, equal to the Withholding Taxes, provided that in respect of an Optionee who may be subject to liability under Section 16(b) of the Exchange Act either (i)(A) the Optionee makes the Tax Election at least six (6) months after the date the Option was granted, (B) the Option is exercised during the ten day period beginning on the third business day and ending on the twelfth business day following the release for publication of the Company's quarterly or annual statements of earnings (a "Window Period") and (C the Tax Election is made during the Window Period in which the Option is exercised prior to such Window Period and subsequent to the immediately preceding Window Period or (ii)(A) the Tax Election is made at least six (6) months prior to the date the Option is exercised prior to the expiration of six (6) months following an election to revoke the Tax Election. Notwithstanding the foregoing, the Board may, by the adoption or rules or otherwise, (i) modify the provisions in the preceding sentence or impose such other restrictions or limitations on Tax Elections as may be necessary to ensure that the Tax Elections will be exempt transactions under Section 16(b) of the Exchange Act, an (ii) permit Tax Elections to be made at such other times and subject to such other conditions as the Board determines will constitute exempt transactions under Section 16b of the Exchange Act. c. If Optionee makes a disposition, within the meaning of Section 424(c)of the Code and regulations promulgated thereunder, of any Share or Shares issued to such Optionee pursuant to the exercise of an Option within the two-year period commencing on the day after the date of the grant or within the one-year period commencing on the day after the date of transfer of such Share or Shares to the Optionee pursuant to such exercise, the Optionee shall, within ten (10) days of such disposition, notify the Company thereof, by delivery of written notice to the Company at its principal executive office, and immediately deliver to the Company the amount of Withholding Taxes. d. No Option granted hereunder shall be transferable by the Optionee to whom granted otherwise than by will or the laws of descent and distribution, and an Option may be exercised during the lifetime of such Optionee only by the Optionee or his or her Non-Qualified Option Agreement Page 5 6 guardian or legal representative. The terms of such an Option shall be final, binding and conclusive upon the beneficiaries, executors, administrators, heirs and successors of the Optionee. e. Termination of Employment or Service. Unless otherwise provided in the Agreement evidencing the Option, an option shall terminate on or following an Optionee's termination of employment with the Company and its Subsidiaries or service as a director of the Company and its Subsidiaries as follows: (i) If an Optionee's employment terminates for any reason other than death, Disability or Cause, the Optionee may at any time within three (3) months after his or her termination of employment or service as a director, exercise an option to the extent, and only to the extent, that the Option or portion thereof was exercisable at the date of such termination; (ii) In the event the Optionee's employment or service as a director terminates as a result of Disability, the Optionee may at any time within one (1) year after such termination exercise such Option to the extent, and only to the extent, the Option or portion thereof was exercisable at the date of such termination; (iii) If an Optionee's employment or service as a director terminates for Cause, the Option shall terminate immediately and no rights thereunder may be exercised; (iv) If an Optionee dies while an employee of the Company or any Subsidiary or within three(3) months after termination as described in clause (1) of this Section 10(e), the Option may be exercised any time within one (1) year after the Optionee's death by the person or persons to whom such rights under the Option pass by will or by the laws of descent and distribution; provided, however, that an option may be exercised to the extent, and only to the extent, that the Option or portion thereof was exercisable on the date of death or earlier termination. IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed and the Optionee has hereunto set his hand, as of the day and year first above written. INTERNET AMERICA, INC. /s/ MICHAEL MAPLES ----------------------------------------------- Michael Maples Chief Executive Officer OPTIONEE /s/ FRANK J. DURDA ----------------------------------------------- Frank J. Durda Non-Qualified Option Agreement Page 6 -----END PRIVACY-ENHANCED MESSAGE-----