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 XXXX XXXXX (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/ XXXXXX X. XXXXXXX, XX.
--------------------------------------------
Xxxxxx X. Xxxxxxx, Xx.
Chief Executive Officer
OPTIONEE
/s/ XXXX XXXXX
--------------------------------------------
Xxxx Xxxxx
Non-Qualified Option Agreement Page 6
