[ ] | Preliminary Proxy Statement |
[ ] | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
[X] | Definitive Proxy Statement |
[ ] | Definitive Additional Materials |
[ ] | Soliciting Material Pursuant to §240.14A-12 |
[X] | No fee required. |
[ ] | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
1) | Title of each class of securities to which transaction applies: |
2) | Aggregate number of securities to which transaction applies: |
3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing is calculated and state how it was determined): |
4) | Proposed maximum aggregate value of transaction: |
5) | Total Fee Paid: |
[ ] | Fee paid previously with preliminary materials. |
[ ] | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
1) | Amount Previously Paid: |
2) | Form, Schedule or Registration Statement No.: |
3) | Filing Party: |
4) | Date Filed: |
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Name and Address of Beneficial Owner or Group(1) | Amount and Nature of Beneficial Ownership | Percent of Class | ||
Jack T. Smith President, Chief Executive Officer and Director | 641,811(2) | 6.3% | ||
William O. Hunt Chairman of the Board | 782,063(2)(3) | 7.7% | ||
William E. Ladin, Jr. Vice Chairman of the Board | 785,254(2) | 7.7% | ||
Gary L. Corona Director | 116,124(2) | 1.1% | ||
Peter C. Gibbons Executive Vice President, Chief Operating Officer and Director | 150,627(2) | 1.5% | ||
Elizabeth P. Daane Vice President, General Counsel and Secretary | 21,250(2) | * | ||
Carl H. Westcott (4) | 653,948 | 6.4% | ||
J.N. Palmer Family Partnership (5) | 700,000 | 6.9% | ||
All directors and executive officers as a group (six persons) | 2,497,129(2) | 23.8% |
* | Less than one percent. |
(1) | The address of each officer and director is in care of Internet America at One Dallas Centre, Suite 3000, Dallas, Texas 75201. Mr. Ladin was formerly the President and a Director of our wholly owned subsidiary, PDQ.Net, Inc. |
(2) | Includes options to purchase 45,000, 50,000, 22,500, 87,500, 112,500 and 21,250 shares of Common Stock granted to Smith, Hunt, Ladin, Corona, Gibbons and Daane, respectively, that are exercisable within 60 days of August 29, 2002. |
(3) | Includes 732,063 shares of Common Stock owned by B&G Partnership, Ltd, a limited partnership in which Mr. Hunt and his wife serve as general partners. Does not include any Common Stock which Mr. Hunt may acquire pursuant to the Letter of Credit Security Commitment Agreement described under “Compensation Committee Interlocks and Insider Participation” and “Related Party Transactions,” below. |
(4) | Information reported about Mr. Westcott is derived from a Schedule 13D/A filed by Mr. Westcott on or about March 30, 2001. Mr. Westcott’s address is 100 Crescent Court, Suite 1620, Dallas, Texas 75201. |
(5) | Information reported about the J. N. Palmer Family Partnership is derived from a Schedule 13D filed on or about April 17, 2002. The J. N. Palmer Family Partnership’s address is 6360 I-55N, Suite 330, Jackson, Mississippi 39211. |
Name | Age | Position | Current Term Expiring | |||
Nominee for a three-year term ending in 2005: | ||||||
William O. Hunt(1)(2) | 68 | Chairman of the Board | 2002 (Class III) | |||
Continuing directors: | ||||||
Jack T. Smith | 49 | Director, President and Chief Executive Officer | 2004 (Class II) | |||
Peter C. Gibbons | 38 | Director, Executive Vice President and Chief Operating Officer | 2004 (Class II) | |||
William E. Ladin, Jr. | 61 | Vice Chairman of the Board | 2003 (Class I) | |||
Gary L. Corona(1)(2) | 51 | Director | 2003 (Class I) |
(1) | Member of the Compensation Committee. |
(2) | Member of the Audit Committee. |
Annual Compensation | Long Term Compensation Securities Underlying Option | All Other Compensation | ||||||||||
Name and Principal Position | Year | Salary | Bonus | |||||||||
Jack T. Smith President and Chief Executive Officer (1) | 2002 2001 2000 | $ | 200,000 161,539 — | $ | 120,000 20,000 — | — — 22,500(2) | $16,908(3) 67,408(3) — | |||||
Peter C. Gibbons Executive Vice President and Chief Operating Officer (4) | 2002 2001 2000 | $ | 150,000 121,154 — | $ | 120,000 50,000 — | 150,000(5) 150,000(6) — | (7) — — | |||||
Elizabeth P. Daane Vice President, General Counsel and Secretary (8) | 2002 2001 2000 | $ | 120,000 113,654 94,096 | — — — | — — 30,000(9) | — — — |
(1) | Mr. Smith was elected President and Chief Executive Officer, on September 5, 2000. |
(2) | Mr. Smith was granted an option on December 9, 1998 to purchase 22,500 shares of Common Stock at an exercise price of $13.00 per share in connection with his position as a Director. |
(3) | Consists of credits for interest and payment of taxes pursuant to a Stock Purchase Agreement and Promissory Note between Mr. Smith and the Company. See description of Stock Purchase Agreement and Promissory Note set forth below under the title “Employment Agreements.” |
(4) | Mr. Gibbons became employed by the Company as Executive Vice President and Chief Operating Officer on September 1, 2000. |
(5) | Mr. Gibbons was granted an option on October 2, 2000 to purchase 150,000 shares of Common Stock at an exercise price of $2.25 per share. |
(6) | Mr. Gibbons was granted an option on August 15, 2001 to purchase 150,000 shares of Common Stock at an exercise price of $0.35 per share. |
(7) | Mr. Gibbons has purchased a total of 28,846 shares of the Company’s Common Stock in fiscal 2002 through participation in the Company’s Employee Stock Purchase Plan. See description of the Employee Stock Purchase Plan set forth below under the title “Proposal No. 2 — Approval of the Amendment to the Internet America, Inc. Employee Stock Purchase Plan.” |
(8) | Ms. Daane became employed by the Company as Vice President, General Counsel and Secretary on August 4, 1999. |
(9) | Ms. Daane was granted an option on August 4, 1999 to purchase 25,000 shares of Common Stock at an exercise price of $13.75 per share and an option on December 15, 1999 to purchase 5,000 shares of Common Stock at an exercise price of $9.25 per share. |
Name | Number of Securities Underlying Options Granted (#) | % of Total Options Granted to Employees in Fiscal Year | Exercise or Base Price ($/Sh) | Expiration Date | Potential Realized Value at Assumed Annual Rates of Stock Price Appreciation for Option Term | |||||||
5% | 10% | |||||||||||
Jack T. Smith | — | — | — | — | — | — | ||||||
Peter G. Gibbons | 150,000 | 100% | $0.35 | 08/15/11 | $33,017 | $83,671 | ||||||
Elizabeth P. Daane | — | — | — | — | — | — |
Name | Number of Securities Underlying Unexercised Options at FY End(#) | Value of Unexercised In-the-Money Options at FY End ($)(1) | ||||||
Exercisable | Unexercisable | Exercisable | Unexercisable | |||||
Jack T. Smith | 45,000 | 0 | — | — | ||||
Peter C. Gibbons | 37,500 | 262,500 | — | — | ||||
Elizabeth P. Daane | 15,000 | 15,000 | — | — |
(1) | The value of the options is based on the difference between the option exercise prices and $0.45 (which was the closing sales price per share of the Common Stock on June 28, 2002 as reported on the Nasdaq OTCBB) multiplied by the number of shares of Common Stock underlying the option. None of the Named Executive Officers held in-the-money stock options at June 30, 2002. |
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• | The Company’s external auditors shall report directly to the Audit Committee. |
• | The Audit Committee is directly responsible for the appointment, compensation and oversight of the work of the external auditors. In addition, the Audit Committee may nominate the external auditors to be proposed for shareholder approval in any proxy statement. |
• | The Audit Committee shall review and confirm the independence of the external auditors by requiring that the external auditors submit to the Audit Committee on a periodic basis a formal written statement delineating all relationships between the external auditors and the Company, engaging in a dialogue with the external auditors with respect to any disclosed relationships or services that may impact their objectivity and independence, and taking appropriate action or recommending that the Board take appropriate action to ensure the independence of the external auditors. |
• | Management is responsible for preparing the Company’s financial statements. The Company’s external auditors are responsible for auditing the financial statements. The activities of the Audit Committee are in no way designed to supersede or alter traditional responsibilities. |
• | The Audit Committee is responsible for overseeing the external auditor relationship by discussing with the external auditors the nature and rigor of the audit process, receiving and reviewing audit reports, and providing the auditors full access to the Audit Committee and the Board to report on any and all appropriate matters. |
• | The Audit Committee shall have the authority to engage independent counsel and other advisers as it determines necessary to carry out its duties. |
• | The Audit Committee should provide guidance and oversight to the internal audit activities of the Company, if any, including reviewing the organization, plans and results of such activities. |
• | The Audit Committee is responsible for discussing with management, the internal auditors, if any, and the external auditors the quality and adequacy of the Company’s internal controls and determining improvements if necessary. |
• | The Audit Committee shall meet with management and the external auditors to review and discuss the annual financial statements and the results of the annual audit prior to the release to the public of the results of operations for each fiscal year. These discussions shall include consideration of any significant changes to the Company’s accounting principles, the quality of the Company’s accounting principles as applied in its financial reporting, including review of estimates, reserves and accruals, review of judgmental areas, review of audit adjustments whether or not recorded and such other inquiries as may be appropriate. Based on such review and discussion, the Audit Committee shall recommend to the Board whether the audited annual financial statements be included in the Company’s annual report on Form 10-K. |
• | The Audit Committee shall review with management and the external auditors the quarterly financial information prior to the Company’s filing of Form 10-Q. This review may be performed by the Audit Committee or its Chairperson. |
• | The Audit Committee is responsible for discussing with management the status of pending litigation, taxation matters, compliance and other areas of oversight as may be appropriate. |
• | The Audit Committee shall pre-approve all audit and non-audit services in accordance with the requirements of the Exchange Act. The Audit Committee may delegate authority to one member of the Audit Committee to grant preapprovals of de minimus non-audit services in accordance with the requirements of the Exchange Act. |
• | The Audit Committee shall establish procedures for the receipt, retention, and treatment of complaints received by the Company regarding accounting, internal accounting controls, or auditing matters, and the confidential, anonymous submission by employees of the Company of concerns regarding questionable accounting or auditing matters. |
• | The Audit Committee shall report its activities to the Board and prepare annually a report to shareholders as required by SEC rules to be included in the Company’s proxy statement. |
• | The Audit Committee shall perform other oversight functions as requested by the Board. |
4. | Grant of Option; Participation. |
5. | Payroll Withholding. |
INTERNET AMERICA, INC.
REVOCABLE PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
2002 ANNUAL MEETING OF SHAREHOLDERS - NOVEMBER 11, 2002
The undersigned hereby appoints Jack T. Smith and Elizabeth Palmer Daane, each with power to act without the other and full power of substitution, as proxies of the undersigned and authorizes them to represent and vote, as designated on the reverse side hereof, all of the shares of common stock of Internet America, Inc. that the undersigned is entitled to vote at the 2002 Annual Meeting of Shareholders to be held at the Adam's Mark Hotel, 400 North Olive Street, Dallas, Texas 75201, on November 11, 2002, at 10:00 a.m. central time, and any adjournment thereof.
THIS PROXY, WHEN PROPERLY EXECUTED AND DATED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED "FOR" THE ELECTION OF THE NOMINEE FOR DIRECTOR UNDER PROPOSAL NO. 1, "FOR" THE APPROVAL OF AN AMENDMENT TO THE INTERNET AMERICA INC. EMPLOYEE STOCK PURCHASE PLAN, AND WILL GRANT DISCRETIONARY AUTHORITY PURSUANT TO ITEM 3.
(to be dated and signed on reverse side)
< FOLD AND DETACH HERE >
Please mark your votes as indicated in this example. | |||||||||
FOR | WITHHOLD AUTHORITY | 2. | Approve an amendment to the Internet America, Inc. Employee Stock Purchase Plan, to increase the number of shares of Common Stock reserved for issuance under the plan by 500,000 shares. | FOR | AGAINST | ABSTAIN | |||
the nominee listed | to vote for the nominee | ¨ | ¨ | ¨ | |||||
1. Election of Director 01 William O. Hunt | ¨ | ¨ | 3. | In their discretion, the proxies are authorized to vote upon such other business as may properly come before the meeting or any adjournment thereof. | |||||
Please sign this proxy as your name appears hereon. When shares are held by joint tenants, both should sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such. If a corporation, please sign in full corporate name by the president or other authorized officer. If a partnership, please sign in partnership name by an authorized person. | |||||||||
Dated: _____________________________, 2002 | |||||||||
____________________________________ | |||||||||
Signature | |||||||||
____________________________________ | |||||||||
Signature if held jointly | |||||||||
Please mark, sign, date and return this proxy promptly using the enclosed envelope. | |||||||||