-----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, Jbun+8p0pOtpmgzoRmEjd+wKPoDkwpxojOYyKpZ2FhWDyWW0+qwjLBxcee8nu1Ov UCLW5bhmwMcMQnR0toHgLg== 0000950134-99-010762.txt : 19991209 0000950134-99-010762.hdr.sgml : 19991209 ACCESSION NUMBER: 0000950134-99-010762 CONFORMED SUBMISSION TYPE: S-8 POS PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19991208 EFFECTIVENESS DATE: 19991208 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 POS SEC ACT: SEC FILE NUMBER: 333-80277 FILM NUMBER: 99770412 BUSINESS ADDRESS: STREET 1: 350 N ST PAUL STE 200 CITY: DALLAS STATE: TX ZIP: 75201 BUSINESS PHONE: 2148612500 MAIL ADDRESS: STREET 1: ONE DALLAS CENTRE 350 N. ST. PAUL STREET 2: SUITE 3000 CITY: DALLAS STATE: TX ZIP: 75201 S-8 POS 1 POST-EFFECTIVE AMENDMENT NO. 1 TO FORM S-8 1 As filed with the Securities and Exchange Commission on December 8, 1999. Registration No. 333-80277 ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 --------------- POST EFFECTIVE AMENDMENT NO. 1 TO 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. 1998 NONQUALIFIED STOCK OPTION PLAN (Full title of the Plan) --------------- MICHAEL T. MAPLES One Dallas Centre 350 N. St. Paul, Suite 3000 Dallas, Texas 75201 (Name and address of agent for service of agent for service) (214) 861-2500 (Telephone number, including area code, of agent for service) ---------------- COPY TO: RICHARD F. DAHLSON Jackson Walker L.L.P. 901 Main Street Suite 6000 Dallas, Texas 75202 CALCULATION OF REGISTRATION FEE
========================================================================================================================= 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 400,000 shares $10.19 $4,076,000 $1,076.06 =========================================================================================================================
(1) Estimated solely for the purpose of calculating the registration fee. Pursuant to Rule 457(c) and 457(h), the offering price and registration fee are computed on the basis of the average of the high and low prices of the Common Stock on the National Association of Securities Dealers Automated Quotation National Market System on December 3, 1999. 2 This Amendment No. 1 to Form S-8 amends the Form S-8 originally filed on June 8, 1999 (file no. 333-80277) to register an additional 400,000 shares of common stock of Internet America reserved for issuance pursuant to the Internet America, Inc. 1998 Nonqualified Stock Option Plan. An amendment to the Internet America, Inc. 1998 Nonqualified Stock Option Plan increasing the amount of shares reserved for issuance by 400,000 was approved by Internet America's shareholders at their annual meeting held on November 4, 1999. 3 PROSPECTUS INTERNET AMERICA, INC. 90,000 SHARES OF COMMON STOCK This Prospectus relates to the offer and sale of up to 90,000 shares (the "Shares") of common stock, par value $0.01 per share (the "Common Stock") of Internet America, Inc. (the "Company"), issued pursuant to the provisions of the Internet America, Inc. 1998 Nonqualified Stock Option Plan, as amended (the "Plan"). The Shares may be sold from time to time by the Selling Shareholders or by permitted transferees. The Common Stock is quoted through the National Association of Securities Dealers Automated Quotation National Market System (the "Nasdaq/NMS") under the symbol "GEEK" and may be sold from time to time by the Selling Shareholders either directly in private transactions, or through one or more brokers or dealers on the Nasdaq/NMS, or any other over-the-counter market or exchange on which the Common Stock is quoted or listed for trading, at such prices and upon such terms as may be obtainable. On December 3, 1999, the last reported sale price of the Common Stock, as reported on the Nasdaq/NMS, was $10.00. Upon any sale of the Common Stock offered hereby, the Selling Shareholders and participating agents, brokers, dealers or marketmakers may be deemed to be underwriters as that term is defined in the Securities Act of 1933, as amended (the "Securities Act"), and commissions or discounts or any profit realized on the resale of such securities purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act. See "Plan of Distribution." The Company will not receive any of the proceeds from the sales by the Selling Shareholders. No underwriter is being utilized in connection with this offering. The Company will pay all expenses incurred within this offering. The expenses incurred in connection with the offering are estimated to be approximately $3,000. ----------------- THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. The date of this Prospectus is December 7, 1999. 1 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. The Company's website is at http://www.airmail.net. Information contained in the Company's website does not constitute, and shall not be deemed to constitute, part of this Prospectus. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The following documents, which have been filed with the Commission by the Company, are incorporated herein by reference and made a part hereof: (i) Annual Report on Form 10-KSB filed with the Commission on September 15, 1999 (the "Annual Report"); 2 5 (ii) All other reports filed with the Commission pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), since the end of the fiscal year covered by the Annual Report; and (iii) Description of the Common Stock contained in the Company's Registration Statement on Form SB-2 (No. 333-78615), as amended and supplemented, effective as of June 7, 1999. All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to the termination of the offering of the Common Stock to be made hereunder shall be deemed to be incorporated by reference herein and to be a part hereof from the date of filing of such documents. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus. The Company will provide, without charge, to each person to whom a copy of this Prospectus is delivered, upon the written or oral request of such person, a copy of any or all of the documents incorporated herein by reference (other than exhibits to such documents unless such exhibits are specifically incorporated by reference into the information that this Prospectus incorporates). Written or telephone requests for such documents should be directed to James T. Chaney, One Dallas Centre, 350 N. St. Paul, Suite 3000, Dallas, Texas 75201, telephone number (214) 861-2500. SELLING SHAREHOLDERS This Prospectus covers the offer and resale of Shares issued to certain Shareholders pursuant to the Plan. The table below sets forth information concerning the Common Stock owned by the following Selling Shareholders, none of whom has, or within the past three years has had, any position, office or other material relationship with the Company or any of its predecessors or affiliates, except as set forth below:
OWNERSHIP OF COMMON COMMON STOCK STOCK PRIOR TO OFFERED FOR SELLING AMOUNT AND PERCENTAGE NAME OFFERING(1) SHAREHOLDERS OF CLASS AFTER OFFERING(2) - ---- ------------------- ------------------- -------------------------- William O. Hunt 932,063(3) 22,500 909,563 Chairman of the Board (9.5%) Jack T. Smith 467,811 22,500 445,311 Director (4.6%) Gary L. Corona 151,124(4) 45,000 106,124 Director (1.1%)
- ---------------------------- 3 6 (1) Based on ownership as of December 3, 1999. Includes Shares to be acquired upon exercise of Options granted under the Plan and other options, some of which may not be exercisable within 60 days of the date of this Prospectus. (2) Based on 9,488,856 shares of Common Stock outstanding on December 3, 1999. Assumes the exercise of all Options under the Plan, the exercise of which is covered by this Prospectus, and the sale of the Shares acquired thereby. (3) Includes 423,678 shares of Common Stock owned by B&G Partnership, Ltd., a limited partnership in which Mr. Hunt and his wife serve as general partners, and 463,385 shares of Common Stock owned by the William O. Hunt Rollover IRA, of which Mr. Hunt is the beneficiary. (4) Includes 14,625 shares of Common Stock owned by Mr. Corona's minor children. Mr. Corona disclaims beneficial ownership of such shares of Common Stock. 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. 4 7 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. EXPERTS The financial statements as of June 30, 1998 and 1999 and for each of the years then ended, incorporated in this prospectus by reference from the Company's Annual Report on Form 10-KSB for the year ended June 30, 1999 have been audited by Deloitte & Touche LLP, independent auditors, as stated in their reports, which are incorporated herein by reference, and have been so incorporated in reliance upon the reports of such firm given upon their authority as experts in accounting and auditing. INDEMNIFICATION The Articles of Incorporation of the Company provide that to the fullest extent permitted by applicable law, a director of the Company will not be liable to the Company or its shareholders for monetary damages for an act or omission in the director's capacity as a director. The Texas Business Corporation Act ("TBCA") permits the indemnification of directors, employees, officers and agents to Texas corporations. The Company's Articles and Bylaws provide that the Company shall indemnify any person to the fullest extent permitted by law. Under the TBCA, an officer or director may be indemnified if he acted in good faith and reasonably believed that his conduct (i) was in the best interests of the Company if he acted in his official capacity or (ii) was not opposed to the best interests of the Company in all other cases. In addition, the indemnitee may not have reasonable cause to believe that his conduct was unlawful in the case of a criminal proceeding. In any case, the indemnitee may not have been found liable to the Company for improperly receiving a personal benefit or for willful or intentional misconduct in the performance of his duty to the Company. The Company (i) must indemnify an officer or director for reasonable expenses if he is successful, (ii) may indemnify an officer or director for such reasonable expenses unless he was found liable for willful or intentional misconduct in the performance of his duty to the Company and (iii) may advance reasonable defense expenses if the officer or director undertakes to reimburse the Company if he is later found not to satisfy the standard for indemnification expenses. 5 8 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. 6 9 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.....................................5 Experts...........................................5 Indemnification...................................5
- ----------------------------------------------------- 90,000 Shares Common Stock INTERNET AMERICA, INC. December 7, 1999 10 PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE. The following documents, which have been filed with the Commission by Internet America, Inc. (the "Company"), are incorporated herein by reference and made a part hereof: (i) Annual Report on Form 10-KSB filed with the Commission on September 15, 1999 (the "Annual Report"); (ii) All other reports filed with the Commission pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), since the end of the fiscal year covered by the Annual Report; and (iii) Description of the Common Stock contained in the Company's Registration Statement on Form SB-2 (No. 333-78615), as amended and supplemented, effective as of June 7, 1999. All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act subsequent to the date of this Registration Statement and prior to the filing of a post-effective amendment that indicates that all of the Common Stock offered hereunder has been sold or which deregisters all of such Common Stock then remaining unsold, shall be deemed to be incorporated by reference herein and to be a part hereof from the date of filing of such documents. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Registration Statement to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Registration Statement. ITEM 4. DESCRIPTION OF SECURITIES. Not applicable. ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL. Not applicable. -1- 11 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- 12 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 - ------ ---------------------- 4.1 Specimen Common Stock certificate (1) 5.1 Opinion of Jackson Walker L.L.P.* 23.1 Consent of Jackson Walker L.L.P. (included in its opinion filed as Exhibit 5.1) 23.2 Consent of Deloitte & Touche LLP* 99.1 Internet America, Inc. 1998 Nonqualified Stock Option Plan (2) 99.2 Internet America, Inc. First Amended 1998 Nonqualified Stock Option Plan * - ------------------- * Filed herewith. (1) Previously filed as an exhibit to the Company's Registration Statement on Form SB-2 (file no. 333-59527) originally filed on July 21, 1998, as amended, and incorporated herein by reference (2) Previously filed as an exhibit to the Company's Registration Statement on Form S-8 (file no. 333-80277) originally filed on June 8, 1999, and incorporated herein by reference. ITEM 9. UNDERTAKINGS. (a) The undersigned registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) To include any prospectus required by section 10(a)(3) of the Securities Act of 1933, as amended; (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental -3- 13 change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the Company pursuant to Section 13 or Section 15(d) of the Exchange Act of 1934, as amended, that are incorporated by reference in the registration statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, as amended, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (b) The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, as amended, each filing of the registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act of 1934, as amended, that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (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 -4- 14 such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. -5- 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 7th day of December, 1999. INTERNET AMERICA, INC. By: /s/ James T. Chaney --------------------------------------------- James T. Chaney, Vice President, Chief Financial Officer and Treasurer (Principal Accounting and Financial Officer)
Signature Title Date - --------- ----- ---- /s/ Michael T. Maples* Chief Executive Officer, December 7, 1999 - --------------------------------- President and Director Michael T. Maples (Principal Executive Officer) /s/ James T. Chaney Chief Financial Officer, Vice December 7, 1999 - --------------------------------- President and Treasurer James T. Chaney (Principal Financial and Accounting Officer) /s/ William O. Hunt * Chairman of the Board December 7, 1999 - --------------------------------- William O. Hunt /s/ Jack T. Smith * Director December 7, 1999 - --------------------------------- Jack T. Smith /s/ Gary L. Corona * Director December 7, 1999 - --------------------------------- Gary L. Corona
- ----------------------------- * Signed on behalf of such person by James T. Chaney pursuant to a power of attorney granted on June 4, 1999 -6- 16 INDEX TO EXHIBITS
Exhibit Number Description of Exhibit ------ ---------------------- 4.1 Specimen Common Stock certificate (1) 5.1 Opinion of Jackson Walker L.L.P.* 23.1 Consent of Jackson Walker L.L.P. (included in its opinion filed as Exhibit 5.1) 23.2 Consent of Deloitte & Touche LLP* 99.1 Internet America, Inc. 1998 Nonqualified Stock Option Plan (2) 99.2 Internet America, Inc. First Amended 1998 Nonqualified Stock Option Plan *
- ------------------ * Filed herewith. (1) Previously filed as an exhibit to the Company's Registration Statement on Form SB-2 (file no. 333-59527) originally filed on July 21, 1998, as amended, and incorporated herein by reference (2) Previously filed as an exhibit to the Company's Registration Statement on Form S-8 (file no. 333-80277) originally filed on June 8, 1999, and incorporated herein by reference. -7- EX-5.1 2 OPINION AND CONSENT OF JACKSON WALKER L.L.P. 1 EXHIBIT 5.1 December 7, 1999 Internet America, Inc. One Dallas Centre 350 N. St. Paul, Suite 3000 Dallas, Texas 75201 Re: Registration Statement on Form S-8 of Internet America, Inc. Gentlemen: We are acting as counsel for Internet America, Inc., a Texas corporation (the "Company"), in connection with the registration under the Securities Act of 1933, as amended (the "Act"), and the offering and sale of up to 400,000 shares of the Company's Common Stock, par value $0.01 per share (the "Shares") which Shares are issuable upon the exercise of options granted pursuant to the Internet America, Inc. 1998 Nonqualified Stock Option Plan, as amended (the "Plan"), which Plan is filed as an exhibit to a Registration Statement on Form S-8 covering the offering and sale of the Shares (the "Registration Statement") that is expected to be filed with the Securities and Exchange Commission on or about the date hereof. In reaching the conclusions expressed in this opinion, we have examined and relied upon the originals or certified copies of all documents, certificates and instruments as we have deemed necessary to the opinions expressed herein, including the Articles of Incorporation, as amended, and the Bylaws of the Company and a copy of the Plan. In making the foregoing examinations, we have assumed the genuineness of all signatures on original documents, the authenticity of all documents submitted to us as originals and the conformity to original documents of all copies submitted to us. Based solely upon the foregoing, subject to the comments hereinafter stated, and limited in all respects to the laws of the State of Texas and the federal laws of the United States of America, it is our opinion that the Shares have been duly authorized, and when issued and delivered, against receipt by the Company of the agreed consideration therefore, will be validly issued, fully paid and nonassessable. We hereby consent to the use of this opinion as an Exhibit to the Registration Statement. In giving this consent, we do not admit that we come within the category of persons whose consent is required under Section 7 of the Act or the rules and regulations of the Commission promulgated thereunder. Very truly yours, /s/ Jackson Walker L.L.P. 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. on Form S-8 of our report dated August 13, 1999, appearing in the Annual Report on Form 10-KSB of Internet America, Inc. for the year ended June 30, 1999 and to the reference to us under the heading "Experts" in the Prospectus, which is part of this Registration Statement. /s/ Deloitte & Touche LLP Dallas, Texas December 7, 1999 EX-99.2 4 1ST AMENDED 1998 NON-QUALIFIED STOCK OPTION PLAN 1 EXHIBIT 99.2 INTERNET AMERICA, INC. FIRST AMENDED 1998 NONQUALIFIED STOCK OPTION PLAN ARTICLE I THE PLAN 1.1 Name. This Plan shall be known as the "Internet America, Inc. 1998 Nonqualified Stock Option Plan." Capitalized terms used herein are defined in Article V hereof. 1.2 Purpose. The purpose of the Plan is to promote the growth and general prosperity of the Company by permitting the Company to grant to its Employees, Directors, and Advisors Options to purchase Common Stock of the Company. The Plan is designed to help the Company and its Subsidiaries attract and retain superior personnel for positions of substantial responsibility and to provide Employees, Directors, and Advisors with an additional incentive to contribute to the success of the Company. Options granted under the Plan are not intended to qualify as "incentive stock options" within the meaning of Section 422 of the Code. 1.3 Effective Date. The Plan shall become effective upon the Effective Date. 1.4 Eligibility to Participate. Any Employee, Director, or Advisor shall be eligible to participate in the Plan. Subject to the following provisions, the Committee may grant Options in accordance with such determinations as the Committee from time-to-time in its sole discretion shall make. Any Options granted shall be in the form approved at such time by the Committee. 1.5 Shares Subject to the Plan. The shares of Common Stock to be issued pursuant to the Plan shall be either authorized and unissued shares of Common Stock or shares of Common Stock issued and thereafter acquired by the Company. 1.6 Maximum Number of Plan Shares. Subject to adjustment pursuant to the provisions of Section 3.2, and subject to any additional restrictions elsewhere in the Plan, the maximum aggregate number of shares of Common Stock that may be issued and sold hereunder shall not exceed 800,000 shares (which number has been adjusted to give effect to the Company's 2.25 for 1.00 stock split in July 1998). The maximum aggregate number of shares of Common Stock with respect to which Options may be granted to any person during the term of the Plan shall not exceed 80,000 shares. 1.7 Options and Stock Granted Under Plan. Plan Shares with respect to which an Option has been exercised shall not again be available for grant hereunder. If Options terminate for any reason without being wholly exercised, new Options may be granted hereunder covering the number of Plan Shares to which such termination relates. 1 2 1.8 Conditions Precedent. The Company shall not issue any certificate for Plan Shares pursuant to the Plan prior to fulfillment of all of the following conditions: (a) The admission of the Plan Shares to listing on all stock exchanges on which the Common Stock is then listed, unless the Committee determines in its sole discretion that such listing is neither necessary nor advisable; (b) The completion of any registration or other qualification of the offer or sale of the Plan Shares under any federal or state law or under the rulings or regulations of the Securities and Exchange Commission or any other governmental regulatory body that the Committee shall in its sole discretion deem necessary or advisable; and (c) The obtaining of any approval or other clearance from any federal or state governmental agency that the Committee shall in its sole discretion determine to be necessary or advisable. 1.9 Reservation of Shares of Common Stock. During the term of the Plan, the Company shall at all times reserve and keep available such number of shares of Common Stock as shall be necessary to satisfy the requirements of the Plan as to the number of Plan Shares. In addition, the Company shall from time-to-time, as is necessary to accomplish the purposes of the Plan, seek or obtain from any regulatory agency having jurisdiction any requisite authority that is necessary to issue Plan Shares hereunder. The inability of the Company to obtain from any regulatory agency having jurisdiction the authority deemed by the Company's counsel to be necessary to the lawful issuance of any Plan Shares shall relieve the Company of any liability in respect of the nonissuance of Plan Shares as to which the requisite authority shall not have been obtained. 1.10 Tax Withholding and Reporting. (a) Condition Precedent. The issuance of Plan Shares pursuant to the exercise of any Option is subject to the condition that if at any time the Committee shall determine, in its discretion, that the satisfaction of withholding tax or other withholding liabilities under any federal, state, or local law is necessary or desirable as a condition of, or in connection with such issuance, then the issuance shall not be effective unless the withholding shall have been effected or obtained in a manner acceptable to the Committee. (b) Manner of Satisfying Withholding Obligation. When the Committee requires an Optionee to pay to the Company an amount required to be withheld under applicable income tax laws in connection with paragraph (a) above, such payment may be made (i) in cash, (ii) by check, (iii) if permitted by the Committee, by delivery to the Company of shares of Common Stock already owned by the Optionee having a Fair Market Value on the Tax Date equal to the amount required to be withheld, (iv) through the withholding by the Company of a portion of the Plan Shares acquired upon the exercise of an Option having a Fair Market Value on the Tax Date equal to the amount required to be withheld, or (v) in any other form of valid consideration permitted by the Committee in its discretion. 2 3 (c) Tax Reporting. The Company shall file, and shall furnish the Optionee, a copy of all federal, state, and local tax information returns that it deems to be required in connection with the grant, exercise, or vesting of any Option. 1.11 Exercise of Options (a) Method of Exercise. Each Option shall be exercisable in accordance with the terms of the Option Agreement pursuant to which the Option was granted. No Option may be exercised for a fraction of a Plan Share. (b) Payment of Purchase Price. The purchase price of any Plan Shares purchased shall be paid at the time of exercise of the Option either (i) in cash, (ii) by certified or cashier's check, (iii) if permitted by the Committee, in shares of Common Stock, (iv) by delivery of a copy of irrevocable instructions from the Optionee to a broker or dealer, reasonably acceptable to the Company, to sell certain of the Plan Shares purchased upon exercise of the Option or to pledge them as collateral for a loan and promptly to deliver to the Company the amount of sale or loan proceeds necessary to pay such purchase price or (v) in any other form of valid consideration permitted by the Committee in its discretion. If any portion of the purchase price or a note given at the time of exercise is paid in shares of Common Stock, those shares shall be valued at their then Fair Market Value. 1.12 Acceleration in Certain Events. The Committee may accelerate the exercisability or other vesting of any Option in whole or in part at any time. Notwithstanding the provisions of any Option Agreement, the following provisions shall apply: (a) Mergers, Consolidation, Etc. In the event that the Company, pursuant to action by the Board, at any time enters an agreement whereby the Company will merge into, consolidate with, or sell or otherwise transfer all or substantially all of its assets to another corporation and provision is not made pursuant to the terms of such transaction for the assumption by the surviving, resulting, or acquiring corporation of outstanding Options, or for the substitution of new Options with substantially equivalent benefit therefor, each outstanding Option shall become fully (100 percent) vested. The Committee shall advise each Optionee in writing of the manner and terms under which such fully vested Options shall be exercised, if applicable. (b) Change in Control. Anything contained herein to the contrary notwithstanding, at the sole discretion of the Committee (1) an Optionee shall become fully (100 percent) vested in each of his Options upon the occurrence of a change in control (as defined below) or a threatened change in control (as determined by the Committee in its sole discretion); and (2) no Option held by an Optionee at the time a change in control or threatened change in control occurs or at any time thereafter shall terminate for any reason before the end of the Option's express term (if applicable). For purposes of this section, "change in control" means one or more of the following events: 3 4 (i) Any person within the meaning of Section 13(d) and 14(d) of the Exchange Act, other than the Company (including its Subsidiaries, directors or executive officers) has become the beneficial owner, within the meaning of Rule 13d-3 under the Exchange Act, of 50 percent or more of the combined voting power of the Company's then outstanding Common Stock or equivalent in voting power of any class or classes of the Company's outstanding securities ordinarily entitled to vote in elections of directors ("voting securities"); or (ii) Shares representing 50 percent or more of the combined voting power of the Company's voting securities are purchased pursuant to a tender offer or exchange offer (other than an offer by the Company or its subsidiaries or affiliates); or (iii) As a result of, or in connection with, any tender offer or exchange offer, merger or other business combination, sale of assets or contested election, or any combination of the foregoing transactions (a "Transaction"), the persons who were Directors of the Company before the Transaction shall cease to constitute a majority of the Board of the Company or of any successor to the Company; or (iv) Following the effective date of the Plan, the Company is merged or consolidated with another corporation and as a result of such merger or consolidation less than 50 percent of the outstanding voting securities of the surviving or resulting corporation shall then be owned in the aggregate by the former shareholders of the Company, other than (A) any party to such merger or consolidation, or (B) any affiliates of any such party; or (v) The Company transfers more than 50 percent of its assets, or the last of a series of transfers results in the transfer of more than 50 percent of the assets of the Company, to another entity that is not wholly-owned by the Company. For purposes of this subsection (v), the determination of what constitutes 50 percent of the assets of the Company shall be made by the Committee, as constituted immediately prior to the events that would constitute a change of control if 50 percent of the Company's assets were transferred in connection with such events, in its sole discretion. 1.13 Written Notice Required. Any Option shall be deemed to be exercised for purposes of the Plan when written notice of exercise has been received by the Company at its principal office from the person entitled to exercise the Option and payment for the Plan Shares with respect to which the Option is exercised has been received by the Company in accordance with Section 1.11. 1.14 Compliance with Securities Laws. Plan Shares shall not be issued with respect to any Option unless the issuance and delivery of the Plan Shares (and the exercise of an Option, if applicable) shall comply with all relevant provisions of state and federal law (including without limitation (i) the Securities Act and the rules and regulations promulgated thereunder and (ii) the requirements of any stock exchange upon which the Plan Shares may then be listed) and shall be further subject to the approval of counsel for the Company with respect to such compliance. The Committee may also require an Optionee to furnish evidence satisfactory to the Company, including without limitation a written and signed representation letter and consent to be bound by any transfer 4 5 restrictions imposed by law, legend, condition, or otherwise, that the Plan Shares are being acquired only for investment and without any present intention to sell or distribute the shares in violation of any state or federal law, rule, or regulation. Further, each Optionee shall consent to the imposition of a legend on the certificate representing the Plan Shares issued pursuant to an Option, restricting their transfer as required by law or this section. 1.15 Employment or Service of Optionee. Nothing in the Plan or in any Option shall confer upon any Employee any right to continued employment by the Company or any of its Subsidiaries or limit in any way the right of the Company or any Subsidiary at any time to terminate or alter the terms of that employment. Nothing in the Plan or in any Option shall confer upon any Director or Advisor any right to continued service as a Director or Advisor of the Company or any of its Subsidiaries or limit in any way the right of the Company or any Subsidiary at any time to terminate or alter the terms of that service. 1.16 Rights of Optionees Upon Termination of Employment or Service. In the event an Optionee ceases to be an Employee, Director, or Advisor for any reason other than death, Retirement, Permanent Disability, or Cause or pursuant to a right of termination under an Employee's employment agreement with the Company, (i) the Committee shall have the ability to accelerate the vesting of the Optionee's Options, in its sole discretion, and (ii) any Option held by such Optionee shall be exercisable (to the extent exercisable on the date of termination of employment or rendition of services, or, if the vesting of such Option has been accelerated, to the extent exercisable following such acceleration) at any time within 30 days after the date of termination of employment or rendition of services, unless by its terms the Option expires earlier or unless the Committee agrees, in its sole discretion, to extend its term further; provided that the term of any such Option shall not be extended beyond its initial term. In the event an Optionee ceases to serve as an Employee, Director, or Advisor due to death, Permanent Disability, Retirement, or Cause or pursuant to a right of termination under an Employee's employment agreement with the Company, (i) the Committee shall have the ability to accelerate the vesting of the Optionee's Options, in its sole discretion, and (ii) the Optionee's Options may be exercised as follows: (a) Death. Except as otherwise limited by the Committee at the time of the grant of an Option if an Optionee dies while serving as an Employee, Director, or Advisor or within three months after ceasing to be an Employee, Director, or Advisor, his Options shall become fully (100 percent) vested on the date of his death and shall expire twelve months thereafter, unless by their terms they expire sooner or unless the Committee agrees, in its sole discretion, to extend its term further; provided that the term of any such Option shall not be extended beyond its initial term. During such period, the Option may be fully exercised, to the extent that it remains unexercised on the date of death, by the Optionee's personal representative or by the distributees to whom the Optionee's rights under the Option pass by will or by the laws of descent and distribution. (b) Retirement. If an Optionee ceases to serve as an Employee, Director, or Advisor as a result of Retirement, (i) the Committee shall have the ability to accelerate the vesting of the Optionee's Options, in its sole discretion, and (ii) the Optionee's Options shall be exercisable (to the extent exercisable on the effective date of such Retirement or, if the 5 6 vesting of such Options has been accelerated, to the extent exercisable following such acceleration) at any time within three months after the effective date of such Retirement, unless by their terms the Options expire earlier or unless the Committee agrees, in its sole discretion, to extend its term further; provided that the term of any such Option shall not be extended beyond its initial term. (c) Disability. If an Optionee ceases to serve as an Employee, Director, or Advisor as a result of Permanent Disability, the Optionee's Options shall become fully (100 percent) vested and shall expire twelve months thereafter, unless by their terms they expire sooner or unless the Committee agrees, in its sole discretion, to extend its term; provided that the term of any such Option shall not be extended beyond its initial term. (d) Cause. If an Optionee ceases to be employed by the Company or a Subsidiary or ceases to serve as a Director or Advisor because the Optionee's employment or service relationship with the Company or a Subsidiary is terminated for Cause, the Optionee's Options (whether vested or unvested) shall automatically expire on the date of such termination. If any facts that would constitute Cause for termination or removal of an Optionee are discovered after the Optionee's employment or service relationship with the Company has ended, any Options then held by the Optionee may be immediately terminated by the Committee. Notwithstanding the foregoing, if an Optionee is an Employee employed pursuant to a written employment agreement with the Company or a Subsidiary, the Optionee's relationship with the Company or a Subsidiary shall be deemed terminated for Cause for purposes of the Plan only if the Optionee is considered under the circumstances to have been terminated "for cause" for purposes of such written agreement or the Optionee voluntarily ceases to be an Employee in breach of his employment agreement with the Company or a Subsidiary. (e) Notice. If an Optionee's employment agreement with the Company or a Subsidiary is terminated by either the Company, a Subsidiary, or the Optionee by providing a required or permitted notice of termination thereunder, the Options that are exercisable as of the date of termination shall remain exercisable for a period of twelve months after the date of termination and shall expire at the end of such twelve-month period. 1.17 Transferability of Options. Except as may be agreed upon by the Committee in accordance with this section, Options shall not be transferable other than by will or the laws of descent and distribution. The designation by an Optionee of a beneficiary shall not constitute a transfer of the Option. The Committee may, in its discretion, provide in an Option Agreement that Options may be transferred to members of the Optionee's immediate family, trusts for the benefit of such immediate family members, and partnerships in which such immediate family members are the only partners, provided that there is no consideration for the transfer. 1.18 Return of Value of Option. The Committee, in its sole discretion, may include in any Option Agreement a provision requiring the Optionee to pay to the Company an amount of money equal to the excess of the value of Common Stock received upon the exercise of an Option over the exercise price paid for such Common Stock, if the Optionee terminates his employment with the 6 7 Company without the Company's consent, terminates his employment with the Company and thereafter engages in competition with the Company (as defined in the applicable Option Agreement), or is discharged by the Company for Cause. 1.19 Other Terms and Conditions of Options. Except as otherwise provided in the Plan, the terms and conditions of Options may differ from one another as the Committee shall, in its discretion. 1.20 Duration of Options. Each Option and all rights thereunder shall expire on the date determined by the Committee, but in no event shall any Option expire later than ten years after the date on which the Option is granted. In addition, each Option shall be subject to early termination as provided elsewhere in the Plan. 1.21 Purchase Price. The purchase price for the Plan Shares acquired pursuant to the exercise, in whole or in part, of an Option shall not be less than the Fair Market Value of the Plan Shares at the time of the grant of the Option. 1.22 Individual Option Agreements. Each Optionee shall be required to enter a written Option Agreement with the Company. In such Option Agreement, the Optionee shall agree to be bound by the terms and conditions of the Plan, the Options granted pursuant hereto, and such other matters as the Committee deems appropriate. 1.23 Option Grants to Nonemployee Directors. After such time as the Company becomes a reporting company under the Exchange Act (a "Reporting Company"), each Director who is not an officer or Employee (a "Nonemployee Director") will receive an Option to purchase 22,500 shares of Common Stock (which number has been adjusted to give effect to the Company's 2.25 for 1.00 stock split in July 1998), which will be fully exercisable on the date of grant of such Option. In addition, after such time as the Company becomes a Reporting Company, each Nonemployee Director will receive an Option to purchase 20,000 shares of Common Stock (which number has been adjusted to give effect to the Company's 2.25 for 1.00 stock split in July 1998) following the first anniversary of his election to the Board of Directors, and only if such Nonemployee Director continues to be a Director. Each of such Options will vest 25% annually, with the initial 25% becoming exercisable on the date of grant of the Option and an additional 25% becoming exercisable on each of the first three anniversaries of the grant date; provided, however, if at any time during the three-year vesting period of such Option such Nonemployee Director ceases to be a Director, the vesting and exercisability of such Option shall occur as provided in Section 1.16 hereof. The purchase price of Plan Shares acquired pursuant to the exercise, in whole or in part, of any Option received by Nonemployee Directors will be the Fair Market Value of the Plan Shares on the date of grant. Each such Option will expire on the day prior to the tenth anniversary of the date of grant of such Option. At the time the Company becomes a Reporting Company, the above provisions in this Section 1.23 shall become applicable to existing Nonemployee Directors as if such Nonemployee Director had been initially elected as of the date the Company became a Reporting Company. 7 8 ARTICLE II ADMINISTRATION 2.1 Committee. The Plan shall be administered by a Committee of not fewer than two members of the Board. The Committee shall be appointed by the Board. Each member of the Committee shall be both a "Non-Employee Director" within the meaning of Rule 16b-3 under the Exchange Act and an "outside director" within the meaning of Section 162(m) of the Code and the regulations issued pursuant thereto. Subject to the provisions of the Plan, the Committee shall have the sole discretion and authority to determine from time-to-time the persons to whom Options shall be granted and the number of Plan Shares subject to each Option, to interpret the Plan, to prescribe, amend, and rescind any rules and regulations necessary or appropriate for the administration of the Plan, to determine and interpret the details and provisions of each Option Agreement, to modify or amend any Option Agreement or waive any conditions or restrictions applicable to any Option (or the exercise thereof), and to make all other determinations necessary or advisable for the administration of the Plan. 2.2 Majority Rule; Unanimous Written Consent. A majority of the members of the Committee shall constitute a quorum, and any action taken by a majority present at a meeting at which a quorum is present or any action taken without a meeting evidenced by a writing executed by all members of the Committee shall constitute the action of the Committee. Meetings of the Committee may take place by telephone conference call. 2.3 Company Assistance. The Company shall supply full and timely information to the Committee on all matters relating to Employees, Directors, and Advisors, their employment, death, Retirement, Permanent Disability, or other termination of employment or service, and such other pertinent facts as the Committee may require. The Company shall furnish the Committee with such clerical and other assistance as is necessary in the performance of its duties. 2.4 Exculpation of Committee. No member of the Committee shall be personally liable for, and the Company shall indemnify all members of the Committee and hold them harmless against, any claims resulting directly or indirectly from any action or inaction by the Committee pursuant to the Plan, including without limitation any determination by the Committee regarding whether a "change in control" (within the meaning of Section 1.12) is threatened and any failure by the Committee to consider such a determination. ARTICLE III TERMINATION, AMENDMENT, AND ADJUSTMENT 3.1 Termination and Amendment. The Plan shall terminate on July 7, 2008. No Option shall be granted under the Plan after that date of termination. Subject to the limitations contained in this section, the Committee may at any time amend or revise the terms of the Plan, including the form and substance of the Option Agreements to be used in connection herewith; provided that no amendment or revision may be made without the approval of the shareholders of the Company if such approval is required under the Code, Rule 16b-3, or any other applicable law or rule. No 8 9 amendment, suspension, or termination of the Plan shall, without the consent of the individual who has received an Option hereunder, alter or impair any of that individual's rights or obligations under any Option granted prior to that amendment, suspension, or termination. 3.2 Adjustments. If the outstanding Common Stock is increased, decreased, changed into, or exchanged for a different number or kind of shares or securities through merger, consolidation, combination, exchange of shares, other reorganization, recapitalization, reclassification, stock dividend, stock split, or reverse stock split, an appropriate and proportionate adjustment shall be made in the maximum number and kind of Plan Shares as to which Options may be granted under the Plan. A corresponding adjustment changing the number or kind of shares allocated to unexercised Options or portions thereof granted prior to any such change also shall be made. Any such adjustment in outstanding Options shall be made without change in the aggregate purchase price applicable to the unexercised portion of the Options but with a corresponding adjustment in the price for each share covered by the Options. The foregoing adjustments and the manner of application of the foregoing provisions shall be determined solely by the Committee, and any such adjustment may provide for the elimination of fractional share interests. ARTICLE IV MISCELLANEOUS 4.1 Other Compensation Plans. The adoption of the Plan shall not affect any other stock option or incentive or other compensation plans in effect for the Company or any Subsidiary or affiliate of the Company, nor shall the Plan preclude the Company or any Subsidiary or affiliate thereof from establishing any other forms of incentive or other compensation plans. 4.2 Plan Binding on Successors. The Plan shall be binding upon the successors and assigns of the Company and any Subsidiary or affiliate of the Company that adopts the Plan. 4.3 Number and Gender. Whenever used herein, nouns in the singular shall include the plural where appropriate, and the masculine pronoun shall include the feminine gender. 4.4 Headings. Headings of articles and sections hereof are inserted for convenience of reference and constitute no part of the Plan. ARTICLE V DEFINITIONS As used herein, the following terms have the meanings hereinafter set forth unless the context clearly indicates to the contrary: 5.1 "Advisor" means any person not employed by the Company and not a Director, rendering consulting or advisory services to the Company, who is expected or determined by the Committee to contribute significantly to the management, growth, or direction of some part or all 9 10 of the business of the Company. The power to determine who is and who is not an Advisor for purposes of the Plan is reserved solely to the Committee. 5.2 The term "affiliate" means, with respect to any Person, any other Person directly or indirectly controlling or controlled by, or under direct or indirect common control with such Person. 5.3 "Board" means the Board of Directors of the Company. 5.4 "Cause" means conviction of a crime involving moral turpitude or a crime providing for a term of imprisonment in a federal or state penitentiary; failure or refusal to follow reasonable instructions of the Board; failure or refusal to comply with the reasonable policies, standards and regulations of the Company, which from time-to-time may be established; failure or refusal to faithfully and diligently perform the usual customary duties of his employment or service; acting in an unprofessional, unethical, immoral or fraudulent manner; acting in a manner which discredits or is detrimental to the reputation, character and standing of Company or a Subsidiary; or the commission of any other act that causes or reasonably may be expected to cause substantial injury to the Company. 5.5 The term "change of control" has the meaning set forth in Section 1.12(b). 5.6 "Code" means the Internal Revenue Code of 1986, as amended. 5.7 "Committee" means the Committee appointed in accordance with Section 2.1. 5.8 "Common Stock" means the Common Stock, par value $0.01 per share, of the Company or, in the event that the outstanding shares of such Common Stock are hereafter changed into or exchanged for shares of a different stock or security of the Company or some other corporation, such other stock or security. 5.9 "Company" means Internet America, Inc., a Texas corporation, or one or more of its Subsidiaries. 5.10 "Director" means a member of the Board. 5.11 "Effective Date" means July 10, 1998. 5.12 "Employee" means an employee (within the meaning of Section 3401(c) of the Code and the regulations thereunder) of the Company or of any Subsidiary of the Company that adopts the Plan, including Officers. 5.13 "ERISA" means the Employee Retirement Income Security Act of 1974, as amended. 5.14 "Exchange Act" means the Securities Exchange Act of 1934, as amended. 10 11 5.15 "Fair Market Value" means such value as determined by the Committee on the basis of such factors as it deems appropriate; provided that if the Common Stock is traded on a national securities exchange or transactions in the Common Stock are quoted on the Nasdaq National Market System, such value as shall be determined by the Committee on the basis of the reported sales prices for the Common Stock on the date for which such determination is relevant, as reported on the national securities exchange or the Nasdaq National Market System, as the case may be. If the Common Stock is not listed and traded upon a recognized securities exchange or on the Nasdaq National Market System, the Committee shall make a determination of Fair Market Value on a reasonable basis which may include the mean between the closing bid and asked quotations for such stock on the date for which such determination is relevant (as reported by a recognized stock quotation service) or, in the event that there shall be no bid or asked quotations on the date for which such determination is relevant, then on the basis of the mean between the closing bid and asked quotations on the date nearest preceding the date for which such determination is relevant for which such bid and asked quotations were available. 5.16 "Officer" means an officer of the Company or any Subsidiary of the Company. 5.17 "Option" means a an option to purchase Common Stock pursuant to this Plan. 5.18 "Optionee" means a person to whom an Option has been granted hereunder. 5.19 "Option Agreement" means an agreement between the Company and an Optionee with respect to one or more Options. 5.20 "Permanent Disability" has the meaning provided for that term in Section 22(e)(3) of the Code. 5.21 "Person" means any individual, corporation, partnership, joint venture, trust, or unincorporated organization. 5.22 "Plan" means the Internet America, Inc. 1998 Nonqualified Stock Option Plan, as set forth herein and as amended from time-to-time. 5.23 "Plan Shares" means shares of Common Stock issuable pursuant to the Plan. 5.24 "Retirement" occurs when an Optionee terminates his employment or service relationship with the Company or a Subsidiary on or after the date he (a) turns 65 years old or (b) turns 55 years old and has completed ten years of service with the Company or a Subsidiary as otherwise determined by the Board. 5.25 "Rule 16b-3" means Rule 16b-3 promulgated under the Exchange Act or any successor rule. 5.26 "Securities Act" means the Securities Act of 1933, as amended. 11 12 5.27 "Subsidiary" means a subsidiary corporation of the Company, as defined in Section 424(f) of the Code. 5.28 "Tax Date" means the date on which the amount of tax to be withheld is determined. 5.29 "Transaction" has the meaning set forth in Section 1.12(b)(iii). 5.30 The term "voting securities" has the meaning set forth in Section 1.12(b)(i). 12 -----END PRIVACY-ENHANCED MESSAGE-----