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EXHIBIT 99.6
NON-QUALIFIED STOCK OPTION AGREEMENT
Agreement made effective as of the 16th day of May, 1996 by and between
INTERNET AMERICA, INC. (the "Company") and ▇▇▇▇▇▇▇ ▇. MAY (the "Optionee").
1. Definitions. For purposes of this Agreement:
a. "Board" means the Board of Directors of the Company.
b. "Change in Capitalization" means any increase or reduction in
the number of Shares, or any change (including, but not limited to, a
change in value) in the Shares or exchange of Shares for a different
number or kind of Shares or other securities of the Company, by reason
of a reclassification, recapitalization, merger, consolidation,
reorganization, stock dividend, stock split or reverse stock split,
combination or exchange of shares or other similar events.
c. "Code" means the Internal Revenue Code of 1986, as amended.
d. "Company" means Internet America, Inc., a Texas corporation.
e. "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
f. "Fair Market Value" on any date means the closing price of
Shares on such date on the principal national securities exchange on
which Shares are listed or admitted to trading, the arithmetic mean of
the per Share closing bid priced and per Share closing asked price on
such date as quoted on the National Association of Securities Dealers
Automated Quotation System or such then market in which such prices are
regularly quoted, or, if there have been no published bid or asked
quotations with respect to Shares on such date, the Fair Market Value
shall be the value established by the Board in good faith and in
accordance with Section 422 of the Code.
g. "Shares" means the common stock, par value $.01 per share, of
the Company.
2. Grant of Option.
The Company hereby grants to the Optionee, for valuable consideration,
receipt of which is hereby acknowledged, a Non-Qualified Stock Option ("Option")
to purchase from the Company an aggregate of 50,000 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:
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(i) First Installment: 25,000 immediately upon grant;
(ii) Second Installment: 12,500 on May 16, 1997; and
(iii) Third Installment: 12,500 on May 16, 1998.
The Option may be exercised only with respect to full Shares and may
not be exercised after the close of business on the day (the "Termination Date")
preceding the tenth anniversary of the date hereof. The Option shall have no
effect after the Termination Date.
4. Exercise of an Option. The exercise of an Option shall be made only by a
written notice delivered in person or by mail to the Secretary of the Company at
the Company's principal executive office, specifying the number of Shares to be
purchased and accompanied by payment therefor. The purchase price for any Shares
purchased pursuant to the exercise of an Option shall be paid in full upon such
exercise by delivery of cash or personal check in amount of purchase price. The
written notice may provide instructions from the Optionee to the Company that
upon receipt of the purchase price in cash from the Optionee's broker or dealer,
designated as such on the written notice, in payment for any Shares purchased
pursuant to the exercise of an Option, the Company shall issue such Shares
directly to the broker or dealer. If requested by the Board, the Optionee shall
deliver this Agreement to the Secretary of the Company who shall endorse thereon
a notation of such exercise and return such Agreement to the Optionee. No
fractional Shares (or cash in lieu thereof) shall be issued upon exercise of an
Option and the number of Shares that may be purchased upon exercise shall be
rounded to the nearest number of whole Shares.
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.
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7. Effect of Certain Transactions.
In the event of (i) the liquidation or dissolution of the Company or
(ii) a merger or consolidation of the Company (a "Transaction"), the Option
issued hereunder shall continue in effect in accordance with its terms and the
Optionee shall be entitled to receive in respect of each Share subject to any
outstanding Option, upon exercise of any Option, the same number and kind of
stock, securities, cash, property, or other consideration that each holder of a
Share was entitled to receive in the Transaction in respect of a Share. In the
event that, after a Transaction, there occurs any Change in Capitalization with
respect to the shares of a surviving or resulting corporation, then adjustments
similar to, and subject to the same conditions as, those in Section 6 hereof
shall be made by the Board.
8. Effect of Change in Control. Notwithstanding anything contained in the
Plan or an Agreement to the contrary, in the event of a Change in Control, all
Options outstanding on the date of such Change in Control shall become
immediately and fully exercisable.
9. Effect of Certain Transactions.
a. Notwithstanding anything to the contrary or in the Agreement,
the Optionee shall forfeit 100% of the Options granted pursuant to this
Agreement, whether or not vested, if the Optionee breaches the
provisions of subsections (b) or (d) of this Section 9.
b. During the period that the Optionee is employed by the Company
or any affiliate of the Company (the "Service Term") and for a period
of one year thereafter, the Optionee shall not, in the continental
United States, directly or indirectly, own, manage, operate, join,
control, be employed by, or participate in the ownership, management,
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)
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from a court of competent jurisdiction for the purpose of restraining
the Optionee from any actual or threatened breach of the covenant
contained in this Section 9. If for any reason a final decision of any
court determines that the restrictions under this Section 9 are not
reasonable or that consideration therefor is inadequate, such
restrictions shall be interpreted, modified or rewritten by such court
to include as much of the duration, scope and geographic area
identified in this Section 9 as will render such restrictions valid and
enforceable.
d. The Optionee shall not intentionally disclose or reveal to an
unauthorized person, during the Service Term or for a two year period
thereafter, any information relating to the confidential affairs of the
company or any of its affiliates, including but not limited to
technical information, business and marketing plans, strategies,
customer information, other information concerning the Company's
products, promotions, development, financing, expansion plans, business
policies and practices, and other forms of information considered by
the Company to be confidential and in the nature of trade secrets. The
Optionee shall hold as property of the Company and its affiliates all
memoranda, books, papers, letters and other data, and all copies
thereof or therefrom, which are in any way substantially related to the
business of the company or its affiliates, whether made by him or
otherwise coming into his possession and, on a prior written demand of
the Company made within two years after the end of the Service Term,
shall deliver the same to the company.
10. General Rules
a. The obligation of the Company to sell or deliver Shares with
respect to the Options granted shall be subject to all applicable laws,
rules and regulations, including all applicable federal and state
securities laws, and the obtaining of all such approvals by
governmental agencies as may be deemed necessary or appropriate by the
Board.
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
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Tax Election is made during the Window Period in which the Option is
exercised prior to such Window Period and subsequent to the
immediately preceding Window Period or (ii)(A) the Tax Election is
made at least six (6) months prior to the date the Option is exercised
prior to the expiration of six (6) months following an election to
revoke the Tax Election. Notwithstanding the foregoing, the Board may,
by the adoption or rules or otherwise, (i) modify the provisions in
the preceding sentence or impose such other restrictions or
limitations on Tax Elections as may be necessary to ensure that the
Tax Elections will be exempt transactions under Section 16(b) of the
Exchange Act, an (ii) permit Tax Elections to be made at such other
times and subject to such other conditions as the Board determines
will constitute exempt transactions under Section 16b of the Exchange
Act.
If Optionee makes a disposition, within the meaning of Section
424(c)of the Code and regulations promulgated thereunder, of any Share
or Shares issued to such Optionee pursuant to the exercise of an Option
within the two-year period commencing on the day after the date of the
grant or within the one-year period commencing on the day after the
date of transfer of such Share or Shares to the Optionee pursuant to
such exercise, the Optionee shall, within ten (10) days of such
disposition, notify the Company thereof, by delivery of written notice
to the Company at its principal executive office, and immediately
deliver to the Company the amount of Withholding Taxes.
c. No Option granted hereunder shall be transferable by the
Optionee to whom granted otherwise than by will or the laws of descent
and distribution, and an Option may be exercised during the lifetime of
such Optionee only by the Optionee or his or her guardian or legal
representative. The terms of such an Option shall be final, binding and
conclusive upon the beneficiaries, executors, administrators, heirs and
successors of the Optionee.
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/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Chief Executive Officer
OPTIONEE
/s/ ▇▇▇▇ ▇. MAY
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▇▇▇▇ ▇. May