EXHIBIT 99
INTERNET AMERICA, INC.
FIRST AMENDED AND RESTATED
EMPLOYEE STOCK PURCHASE PLAN
1. PURPOSE. The purpose of the Plan is to provide employees of the
Company and its Designated Subsidiaries with an opportunity to purchase Common
Stock of the Company through accumulated payroll withholding amounts. It is the
intention of the Company that the Plan qualify as an "Employee Stock Purchase
Plan" within the meaning of Code Section 423, and the provisions of the Plan
shall be construed in a manner consistent with the requirements of Code Section
423.
2. DEFINITIONS.
(a) "Agent" shall have the meaning set forth in paragraph
11(c).
(b) "Base Pay" shall mean the regular straight-time and
overtime compensation received by an Employee from the Company and its
Designated Subsidiaries for personal services rendered by the Employee,
excluding payments for incentive compensation, bonuses and other
special payments.
(c) "Board" shall mean the Company's Board of Directors.
(d) "Change in Control" shall have the meaning set forth in
paragraph 16.
(e) "Code" shall mean the Internal Revenue Code of 1986, as
amended.
(f) "Commencement Date" shall mean the first day of each
Offering Period on which the Nasdaq National Market System is open for
trading.
(g) "Common Stock" shall mean the Company's common stock, par
value $.01 per share.
(h) "Company" shall mean Internet America, Inc., a Texas
corporation.
(i) "Committee" shall have the meaning set forth in paragraph
11(a).
(j) "Continuous Status as an Employee" shall mean the absence
of any interruption or termination of service as an Employee.
Continuous Status as an Employee shall not be considered interrupted in
the case of absence due to vacation or sick leave in accordance with
the Company's policies or leave agreed to in writing by the Company,
provided that such leave is for a period of not more than 90 days or
reemployment upon the expiration of such leave is guaranteed by
contract or statute.
(k) "Custodian" shall mean the person or entity designated by
the Committee or Plan Administrator pursuant to paragraph 11(b).
(l) "Designated Subsidiary" shall mean each Subsidiary that
has been designated by the Company's Chief Executive Officer as
eligible to become a participating employer in the Plan.
(m) "Effective Date" shall mean April 20, 1999.
(n) "Employee" shall mean any person who is actually recorded
as an employee on the Company's or a Designated Subsidiary's customary
and usual payroll records at the time the services are performed,
provided that no person classified as an independent contractor by the
Company or a Designated Subsidiary shall be considered an "Employee"
for purposes of the Plan.
(o) "Exercise Date" shall mean the last day of each Offering
Period on which the Nasdaq National Market System is open for trading.
(p) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
(q) "Fair Market Value" shall mean, on any date, the closing
price per share of the Common Stock on the Nasdaq National Market
System on such date.
(r) "Offering Period" shall mean each quarterly offering
period beginning on January 1st, April 1st, July 1st and October 1st
and ending on March 31st, June 30th, September 30th and December 31st,
respectively, of each year during the continuation of the Plan;
provided that the Committee shall have the power to change the duration
of Offering Periods from time to time in its sole discretion.
(s) "Option Price" shall have the meaning set forth in
paragraph 4(c).
(t) "Participant" shall mean each Employee who is eligible to
participate in the Plan and who has elected to participate in the Plan
by timely filing a payroll withholding authorization form with the
Committee.
(u) "Plan" shall mean the Internet America, Inc. Employee
Stock Purchase Plan, as amended from time to time.
(v) "Plan Administrator" shall mean the person designated by
the Committee pursuant to paragraph 11(b).
(w) "Reserves" shall have the meaning set forth in paragraph
15(b).
(x) "Subsidiary" shall mean a corporation, domestic or
foreign, of which not less than 50% of the voting shares are held by
the Company or a Subsidiary whether or not such corporation now exists
or is hereafter organized or acquired by the Company or a Subsidiary.
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(y) "Transaction" shall have the meaning set forth in
paragraph 16(iii).
3. ELIGIBILITY.
(a) Subject to the requirements of paragraph 4(b), any
Employee shall be eligible to participate in the Plan during an
Offering Period, provided that as of the Commencement Date of such
Offering Period:
(i) the Employee's customary employment with the
Company or a Designated Subsidiary is more than 20 hours per
week and more than five months in any calendar year; and
(ii) the Employee has maintained Continuous Status as
an Employee for at least three months; and
provided that the Employee maintains Continuous Status as an Employee
throughout the Offering Period. For purposes of paragraph 3(a)(ii),
service with a "predecessor employer" shall be considered service with
the Company or a Designated Subsidiary. The term "predecessor employer"
means an entity (i) the securities or assets of which are acquired by
the Company or a Designated Subsidiary or which is merged into the
Company or a Designated Subsidiary and (ii) which is so designated by
the Company's Chief Executive Officer.
(b) Notwithstanding any provision of the Plan to the contrary,
no Employee shall be granted an option under the Plan:
(i) if, immediately after the grant, the Employee
(together with any other person whose stock would be
attributed to the Employee pursuant to Code Section 424(d))
would own stock and/or hold outstanding options to purchase
stock possessing five percent or more of the total combined
voting power or value of all classes of stock of the Company
or any Subsidiary; or
(ii) which permits the Employee's right to purchase
stock under all employee stock purchase plans (described in
Code Section 423) of the Company and each Subsidiary to accrue
at a rate that exceeds $25,000 of Fair Market Value of such
stock (determined on the date the option is granted) for each
calendar year in which the option is outstanding at any time.
4. GRANT OF OPTION; PARTICIPATION.
(a) On each Commencement Date, the Company shall commence an
offer by granting each eligible Employee an option to purchase the
maximum number of shares of Common Stock that may be purchased by the
eligible Employee pursuant to the Plan, subject to the limitations set
forth in paragraph 10.
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(b) Each eligible Employee may elect to participate in the
Plan with respect to an offer only by filing a payroll withholding
authorization form with the Committee on or before the 15th day of the
month preceding the Commencement Date of the Offering Period (or such
other date as the Committee may designate from time to time in its sole
discretion) authorizing payroll withholding (as set forth in paragraph
5) throughout the Offering Period.
(c) The option price per share of the Common Stock subject to
an offering (the "Option Price") shall be the lesser of:
(i) 85% of the Fair Market Value of a share of Common
Stock on the Commencement Date, or
(ii) 85% of the Fair Market Value of a share of
Common Stock on the Exercise Date.
5. PAYROLL WITHHOLDING.
(a) The payroll withholding authorization form filed by an
eligible Employee with the Committee shall indicate the percentage
amount (in whole numbers) of the Participant's Base Pay (not to exceed
10%) that the Participant elects to use to purchase shares of Common
Stock pursuant to the Plan. A Participant may not increase or decrease
such amount during an Offering Period; provided that a Participant may
change such amount by filing a new payroll withholding authorization
form with the Committee on or before the 15th day of the month
preceding the Commencement Date of the next Offering Period (or such
other date as the Committee may designate from time to time in its sole
discretion). The change in amount shall be effective on the
Commencement Date of the next Offering Period. A Participant's payroll
withholding authorization form shall remain in effect for successive
Offering Periods unless modified as provided in this paragraph or
terminated as provided in paragraph 8.
(b) During an Offering Period, the Company shall withhold from
each Participant's Base Pay the percentage amount elected by the
Participant pursuant to paragraph 5(a). All payroll withholding from a
Participant's Base Pay shall be credited to the Participant's Plan
account. A Participant may not make any payments for the purchase of
Common Stock pursuant to the Plan other than payments pursuant to a
payroll withholding authorization form.
6. EXERCISE OF OPTION. Unless a Participant withdraws the Participant's
accumulated payroll withholding amounts in accordance with paragraph 8, the
Participant's option to purchase Common Stock shall be exercised automatically
on the Exercise Date, and the maximum number of whole shares of Common Stock
subject to the option granted to each Participant shall be purchased at the
Option Price with the Participant's accumulated payroll withholding amounts. No
fractional shares of Common Stock may be purchased. Payroll withholding amounts
that represent cash in lieu of fractional shares shall remain in the
Participant's Plan account and shall become part of the Participant's
accumulated payroll withholding amounts for the next Offering Period. The Common
Stock purchased upon exercise of an option shall be
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deemed to be transferred to the Participant on the Exercise Date. During each
Participant's lifetime, the option to purchase shares of Common Stock shall be
exercisable only by the Participant.
7. DELIVERY. Certificates representing shares of Common Stock purchased
upon exercise of a Participant's option shall be held by the Custodian and
credited to the Participant's Plan account. Upon written request by a
Participant or a Participant's legal representative, the Custodian shall issue
certificates to the Participant or the Participant's legal representative for
the Common Stock credited to the Participant's Plan account. The Custodian may
require a Participant or a Participant's legal representative to provide such
documentation as may be reasonably required in connection with the issuance of
certificates of Common Stock.
8. WITHDRAWAL; TERMINATION OF EMPLOYMENT; INSIDERS.
(a) During an Offering Period, a Participant may withdraw all,
but not less than all, of the Participant's payroll withholding amounts
prior to the Exercise Date of an Offering Period by giving written
notice to the Committee. All of the Participant's payroll withholding
amounts shall be paid to the Participant as soon as administratively
feasible after receipt of written notice of withdrawal, and the
Participant's option for the Offering Period shall be automatically
terminated.
(b) Any Participant who withdraws from the Plan during an
Offering Period pursuant to paragraph 8(a) shall not be eligible to
participate in the Plan for the remainder of the Offering Period. To
participate in the Plan for a subsequent Offering Period, the
Participant must file a new payroll withholding authorization form with
the Committee on or before the date prescribed pursuant to paragraph
4(b).
(c) Upon termination of a Participant's Continuous Status as
an Employee prior to the Exercise Date of an Offering Period on account
of retirement or disability (in accordance with the Company's personnel
policies) or death, the Participant's payroll withholding amounts shall
be used to purchase Common Stock on the next succeeding Exercise Date
unless the Participant (or in the case of the Participant's death, the
legal representative of the Participant's estate) elects to withdraw
the Participant's payroll withholding amounts in cash prior to the
Exercise Date. Upon termination of a Participant's Continuous Status as
an Employee for any other reason, the Participant's payroll withholding
amounts shall be refunded to the Participant in cash as soon as
administratively feasible after such termination.
9. INTEREST. No interest shall accrue on or be payable with respect to
a Participant's payroll withholding amounts.
10. STOCK.
(a) The maximum number of shares of Common Stock that shall be
reserved for issuance pursuant to the Plan shall be 400,000, subject to
adjustment due to changes in capitalization of the Company as provided
in paragraph 15. If the total number of shares of
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Common Stock that would otherwise be subject to options granted
pursuant to paragraph 4(a) on a Commencement Date exceeds the number of
shares of Common Stock then available under the Plan (after deduction
of all shares of Common Stock for which options have been exercised or
are then outstanding), the Committee shall make a pro rata allocation
of the shares of Common Stock remaining available for option grant in a
uniform manner. In such event, the Committee shall give notice to each
Participant of the reduction in the number of shares of Common Stock
available for option grant and, if necessary, shall reduce the rate of
payroll withholding of all affected Participants. The Plan shall
terminate if no Common Stock is available for issuance pursuant to the
Plan. The Common Stock available for issuance pursuant to the Plan may
be authorized but unissued shares, treasury shares or shares purchased
by the Company in the public market for issuance pursuant to the Plan.
The Company shall pay all brokerage commissions and fees incurred in
connection with the purchase of Common Stock for issuance pursuant to
the Plan.
(b) No Participant shall have rights as a stockholder with
respect to Common Stock subject to an option until such shares of
Common Stock have been purchased for the Participant's Plan account in
accordance with the provisions of the Plan.
(c) Common Stock to be delivered to a Participant pursuant to
the Plan shall be registered in the name of the Participant.
11. ADMINISTRATION.
(a) The Plan shall be administered by a committee comprised of
one or more individuals (the "Committee") appointed from time to time
by the Board. The Committee shall have full power and authority to
promulgate rules and regulations for the proper administration of the
Plan, to interpret the provisions and supervise the administration of
the Plan and to take all actions in connection with or in relation to
the Plan as it deems necessary or desirable. Decisions of the Committee
shall be made by a majority of its members and shall be final for all
purposes. The Company shall pay all expenses incurred in the
administration of the Plan.
(b) The Committee may delegate all or part of its power and
authority to administer the Plan to a Plan Administrator appointed by
the Committee. The Plan Administrator (or the Committee if no Plan
Administrator has been appointed) may delegate the responsibility for
the day-to-day operations of the Plan to a Custodian. The Custodian
shall establish and maintain an account for each Participant for the
purpose of holding Common Stock on behalf of each Participant.
(c) An agent (the "Agent") may be appointed by the Committee
to perform the functions and have the responsibilities assigned to the
Agent in this subparagraph with respect to the purchase of Common
Stock. The Committee shall have the right to replace the Agent at any
time. Notwithstanding any Plan provision to the contrary, to the extent
that Common Stock is purchased in the public market, the Agent shall
have all authority to determine the times of purchases, the prices at
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which purchases shall be made, the manner in which purchases shall be
made and the brokers or dealers (which may include the Agent) to make
such purchases.
12. TRANSFERABILITY. Neither payroll withholding amounts nor any rights
with regard to the exercise of an option or to receive Common Stock pursuant to
the Plan may be assigned, transferred, pledged or otherwise disposed of in any
way (other than by will or the laws of descent and distribution) by the
Participant. Any such attempted assignment, transfer, pledge or other
disposition shall be ineffective except that the Committee may treat such act as
an election to withdraw payroll withholding amounts in accordance with paragraph
8.
13. USE OF FUNDS. All payroll withholding amounts pursuant to the Plan
may be used by the Company for any corporate purpose, and the Company shall not
be obligated to segregate payroll withholding amounts from its other assets.
14. REPORTS. Statements of account shall be given to each Participant
as soon as administratively feasible after each Exercise Date. The statements
shall set forth the Participant's payroll withholding amounts throughout the
Offering Period, the Option Price, the number of shares of Common Stock
purchased and the cash balance, if any, in the Participant's Plan account.
15. ADJUSTMENTS. Subject to any required action by the stockholders of
the Company,
(a) the number of shares of Common Stock subject to each
option granted pursuant to the Plan that has not been exercised,
(b) the number of shares of Common Stock that has been
authorized for issuance pursuant to the Plan but has not been placed
under option (collectively, the "Reserves"), and
(c) the Option Price of Common Stock subject to each option
granted pursuant to the Plan that has not been exercised,
shall be proportionately adjusted for any increase or decrease in the number of
issued shares of Common Stock resulting from a stock split, reverse stock split,
stock dividend, combination or reclassification of the Common Stock or similar
capital adjustment, or any other increase or decrease in the number of shares of
Common Stock effected without receipt of consideration by the Company, provided
that conversion of any convertible securities of the Company shall not be deemed
to have been "effected without receipt of consideration." Such adjustment shall
be made by the Board whose determination shall be final, binding and conclusive
for all purposes. Except as expressly provided in the Plan, no issue by the
Company of shares of stock of any class or securities convertible into shares of
stock of any class shall affect, and no adjustment by reason thereof shall be
made with respect to, the number or Option Price of the shares of Common Stock
subject to an option granted pursuant to the Plan.
16. EFFECTS OF CERTAIN CHANGES. In the event of the dissolution or
liquidation of the Company, the Offering Period shall terminate immediately
prior to the consummation of such event unless
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otherwise provided by the Board. In the event that the Company enters into an
agreement to merge into, consolidate with or otherwise transfer all or
substantially all of its assets to another corporation or a Change in Control or
threatened Change in Control (as determined by the Committee in its sole
discretion) occurs, each option under the Plan shall be assumed, or an
equivalent option shall be substituted by, the surviving, resulting or acquiring
corporation or a parent or subsidiary of such corporation unless the Board
determines, in its sole discretion and in lieu of such assumption or
substitution:
(a) to cancel each option and refund to each Participant the
payroll withholding amounts received with respect to the canceled
options, or
(b) to give each Participant the right to exercise the option
as to all of the optioned shares of Common Stock, including shares of
Common Stock as to which the option would not otherwise be exercisable.
For purposes of this paragraph 16, "Change in Control" means one or
more of the following events:
(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% 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% 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% 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% of its
assets, or the last of a series of transfers results in the
transfer of more than 50% of the assets of the Company, to
another entity that is not wholly-owned by the Company. For
purposes of this
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subparagraph (v), the determination of what constitutes 50% 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% of the Company's assets
were transferred in connection with such events, in its sole
discretion.
If the Board makes an option fully exercisable upon the happening of
one of the events described in this paragraph 16, the Board shall notify each
Participant that the option shall be fully exercisable for a period of at least
30 days from the date of such notice, and the option shall terminate upon the
expiration of such period.
The Board, in its sole discretion, also may adjust the Reserves as well
as the Option Price of the Common Stock subject to each outstanding option if
the Company effects one or more reorganizations, recapitalizations, rights
offerings or other increases or reductions of shares of Common Stock or
consolidates with or merges into any other corporation.
17. AMENDMENT OR TERMINATION. The Board may at any time terminate,
suspend or amend the entire Plan or any provision of the Plan. Except as
provided in paragraph 16, no such termination shall affect options previously
granted, nor may an amendment make any change in any option previously granted
that adversely affects the rights of any Participant, nor may an amendment be
made without prior approval of the Company's stockholders if such amendment
would:
(a) materially increase the number of shares of Common Stock
that may be issued pursuant to the Plan; or
(b) change the designation or class of employees eligible for
participation in the Plan;
provided that prior approval of the Company's stockholders with respect to the
foregoing shall be required only to the extent required by any statutory law,
regulation or stock exchange rule.
18. NOTICES. All notices or other communications by a Participant to
the Committee under or in connection with the Plan shall be deemed to have been
given when received in the form specified by the Committee to the location, or
by the person, designated by the Committee for the receipt thereof.
19. STOCKHOLDER APPROVAL. The Plan shall be subject to approval of the
Company's stockholders within 12 months before or after the Effective Date of
the Plan.
20. EMPLOYMENT RIGHTS. Participation in the Plan shall not impose any
obligations upon the Company to continue the employment of a Participant for any
specific period of time and shall not affect the right of the Company to
terminate such person's employment at any time, with or without cause.
21. GOVERNING LAW. The validity, construction and effect of the Plan
and any rules and regulations relating to the Plan shall be determined in
accordance with laws of the State of Texas (without giving effect to conflicts
of laws principles) and applicable Federal law.
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22. CONDITIONS UPON ISSUANCE OF COMMON STOCK. Common Stock shall not be
issued with respect to an option unless the exercise of the option and the
issuance and delivery of the Common Stock complies with all applicable
provisions of law, domestic or foreign, including without limitation the
Securities Act of 1933, as amended, the Exchange Act, the rules and regulations
promulgated under such laws, the requirements of any stock exchange upon which
the Common Stock may then be listed, and shall be subject to the approval of
counsel to the Company with respect to such legal compliance.
As a condition to the exercise of an option, the Company may require
the person exercising the option to represent and warrant at the time of any
such exercise that the Common Stock is being purchased only for investment
without any present intention to sell or distribute the Common Stock if, in the
opinion of counsel to the Company, such a representation is required by
applicable law.
23. EFFECTIVE DATE. The Plan shall be effective on the Effective Date
subject to the approval of the Plan by the Company's stockholders.
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