As filed with the Securities and Exchange Commission on February 14, 1997
File No. 333
- ------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
ADVANCED RADIO TELECOM CORP.
(Exact name of registrant as specified in its charter)
Delaware 52-1869023
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
Advanced Radio Telecom Corp.
500 108th Avenue, N.E. Suite 2600
Bellevue, Washington 98004
(Address of principal executive offices, including zip code)
RESTATED EQUITY INCENTIVE PLAN
and
1996 NON-EMPLOYEE DIRECTORS AUTOMATIC STOCK OPTION PLAN
(Full title of the plans)
Thomas A. Grina
Executive Vice President and
Chief Financial Officer
Advanced Radio Telecom Corp.
500 108th Avenue, N.E., Suite 2600
Bellevue, Washington 98004
(206) 688-8700
(Name, address and telephone number of agent for service)
Please send copies of all communications to:
James Kardon, Esq.
Hahn & Hessen LLP
350 Fifth Avenue
New York, N.Y. 10118
(212) 736-1000
CALCULATION OF REGISTRATION FEE
Title of Amount Proposed Proposed Amount of
Securities to be maximum maximum registration
to be registered offering aggregate fee
registered price per offering
share(1) price(1)
Common Stock, 1,475,000 $10.2871 $15,173,446.52 $4,598.01
par value shares
$0.001
<PAGE>
(1) Estimated for the purpose of calculating the registration fee (i) pursuant
to Rule 457(h) on the basis of an exercise price per share of outstanding
options for 297,175 shares at $1.6244 per share, 85,455 shares at $4.543
per share, 40,000 shares at $10.835 per share, 408,894 shares at $17.1875
per share, 7,800 shares at $15.00 per share, 2,600 at $12.625 per share and
6,600 shares at $11.25 per share and (ii) pursuant to Rule 457(c) for the
remaining 626,476 shares issuable under the Restated Equity Incentive Plan
and the 1996 Non-Employee Directors Automatic Stock Option Plan which are
registered hereunder, the average ($10.5625) of the high ($10-3/4) and low
($10-3/8) prices for the Company's Common Stock quoted on the Nasdaq Stock
Market on February 12, 1997.
Exhibit Index on page 7
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
This Registration Statement on Form S-8 of Advanced Radio Telecom Corp., a
Delaware corporation (the "Registrant"), covers 1,400,000 shares of common
stock, par value $.001 per share, of the Registrant (the "Common Stock")
reserved for issuance under the Registrant's Restated Equity Incentive Plan (the
"Equity Incentive Plan") and 75,000 shares of Common Stock available for
issuance under the Registrant's 1996 Non-Employee Directors Automatic Stock
Option Plan (the "Directors Plan"). Of those shares, options to purchase 831,524
shares of Common Stock have been issued under the Equity Incentive Plan and
options to purchase 17,000 shares have been issued under the Directors Plan.
Note: The Registrant will provide without charge to each eligible employee and
non-employee director those document(s) containing the Equity Incentive Plan or
the Directors Plan information required by Item 1 of the Form S-8 as specified
by Rule 428. The Registrant will also provide without charge, upon the oral or
written request of any eligible employee, a copy of any and all documents that
have been incorporated by reference in this Registration Statement, other than
exhibits. Such documents may be obtained by writing to Advanced Radio Telecom
Corp., 500 108th Avenue, N.E., Suite 2600, Bellevue, Washington 98004, Attn:
Lori Lawrenson, or by calling (206) 688-8700. In accordance with Rule 428 and
the requirements of Part I of Form S-8, the Equity Incentive Plan, the Directors
Plan and any documents incorporated by reference are not being filed with the
Securities and Exchange Commission ("Commission") either as part of this
Registration Statement or as prospectuses or prospectus supplements pursuant to
Rule 424. Upon request, the Registrant shall furnish to the Commission or its
staff a copy or copies of all of the documents included in such file.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
Advanced Radio Telecom Corp. (the "Registrant") hereby incorporates
the following documents herein by reference:
(a) The Registrant's Registration Statement on Form S-1 (File No. 333-19295) and
the Prospectus dated February 3, 1997 (File No. 333-19295) filed with the
Commission under Rule 424(b) of the Securities Act of 1933 (the "Securities
Act") on February 4, 1997.
(b) All other reports filed by the Registrant with the Commission pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (the
"Exchange Act") since the end of the fiscal year covered by the above-referenced
Prospectus.
(c) The description of the Common Stock of the Registrant contained in the
Registrant's Registration Statement on Form 8-A (File No.0-21091 ) filed with
the Commission under Section 12 of the Exchange Act on November 5, 1996,
including all amendments and reports filed for the purpose of updating such
description.
All documents subsequently filed by the Registrant pursuant to Section 13(a),
Section 13(c), Section 14 and Section 15(d) of the Exchange Act prior to the
filing of a post-effective amendment to this registration statement that
indicates that all securities offered have been sold or which deregisters all
securities then remaining unsold, shall be deemed incorporated herein by
reference from the date of filing of such documents.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
Section 145 of the General Corporation Law of Delaware provides that a
corporation has the power to indemnify a director, officer, employee or agent of
the corporation and certain other persons serving at the request of the
corporation in related capacities against amounts paid and expenses incurred in
connection with an action or proceeding to which that person is or is threatened
to be made a party be reason of such position. If such person shall have acted
in good faith and in a
-2-
<PAGE>
manner that the person reasonably believed to be in or not opposed to the best
interests of the corporation, and, in any criminal proceeding, if such person
had no reasonable cause to believe his or her conduct was unlawful; provided
that, in the case of actions brought by or in the right of the corporation, no
indemnification shall be made with respect to any matter as to which such person
shall have been adjudged to be liable to the corporation unless and only to the
extent that the adjudicating court determines that such indemnification is
proper under the circumstances.
Reference is made to Article Nine of the Certificate of Incorporation
of the Registrant, Section 6.4 of the By-laws and each of the Indemnification
Agreements filed as Exhibits 10-5, 10-6, 10-7 and 10-8, respectively, to the
Registrant's Registration Statement on Form S-1 for information regarding
indemnification of directors and officers under certain circumstances.
The Registrant's Certificate of Incorporation provides that every
director, officer or agent of the Company shall be entitled to be indemnified
out of the assets of the Company against all losses or liabilities which he or
she may sustain or incur in or about the execution of the duties of his or her
office or otherwise in relation thereto, including any liability incurred by him
or her in defending any proceedings, whether civil or criminal, in which
judgment is given in his or her favor or in which he or she is acquitted, and no
director or other officer shall be liable for any loss, damage or misfortune
which may happen to or be incurred by the Company in the execution of the duties
of his or her office or in relation thereto.
Item 7. Exemption From Registration Claimed.
Not applicable.
Item 8. Exhibits.
Exhibit
4.1. Restated Equity Incentive Plan
4.2 1996 Non-Employee Directors Automatic Stock Option Plan
5. Opinion of Hahn & Hessen LLP.
24.1. Consent of Coopers & Lybrand LLP.
24.2. Consent of Hahn & Hessen LLP (included in Exhibit 5).
25. Powers of Attorney (included on page 5 of this registration statement).
-3-
<PAGE>
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; (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 change in the information set forth in the
registration statement; and (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) shall 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 Registrant pursuant to Section 13 or Section 15(d) of
the Exchange Act that are incorporated by reference in the registration
statement;
(2) that, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
herein, 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, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) 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 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
of 1933 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 such
indemnification by it is against public policy as expressed in the Securities
Act of 1933 and will be governed by the final adjudication of such issue.
-4-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, 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 New York, State of New York on February 13, 1997.
ADVANCED RADIO TELECOM CORP.
By: /s/ Thomas A. Grina
-----------------------------------
Thomas A. Grina
Executive Vice President and
Chief Financial Officer
<TABLE>
<CAPTION>
Signatures Title Date
- ---------- ----- ----
/s/ Vernon L. Fotheringham
<S> <C> <C>
- ------------------------------ Chairman, Chief Executive Officer and February 13, 1997
Vernon L. Fotheringham Director (Principal Executive Officer)
/s/ Steven D. Comrie
- ------------------------------ President, Chief Operating Officer and February 13, 1997
Steven D. Comrie Director
/s/ Thomas A. Grina
- ------------------------------ Executive Vice President and Chief February 13, 1997
Thomas A. Grina Financial Officer (Principal Financial
Officer)
/s/ D. David Chandler
- ------------------------------ Vice President and Controller February 13, 1997
D. David Chandler (Principal Accounting Officer)
/s/ James C. Cook
- ------------------------------ Director February 13, 1997
James C. Cook
/s/ Mark C. Demetree
- ------------------------------ Director February 13, 1997
Mark C. Demetree
/s/ Andrew I. Fillat
- ------------------------------ Director February 13, 1997
Andrew I. Fillat
/s/ Alan Z. Senter
- ------------------------------ Director February 13, 1997
Alan Z. Senter
</TABLE>
-5-
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below hereby severally constitutes and appoints Vernon L. Fotheringham and
Thomas A. Grina, and each of them, his true and lawful attorneys-in-fact and
agents, with full power of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this Registration Statement and all
documents relating thereto, including one or more registration statements that
may be filed to register additional securities for an offering pursuant to Rule
462(b) under the Securities Act, and to file the same, with all exhibits hereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, full power and
authority to do and perform each and every act and thing necessary or advisable
to be done in and about the premises, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or his substitute or substitutes, may lawfully do
or cause to be done in virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Signatures Title Date
- ---------- ----- ----
/s/ Vernon L. Fotheringham Chairman, Chief February 13, 1997
- ------------------------------ Executive Officer
Vernon L. Fotheringham and Director
/s/ Steven D. Comrie Director February 13, 1997
- ------------------------------
Steven D. Comrie
/s/ James C. Cook Director February 13, 1997
- ------------------------------
James C. Cook
/s/ Mark C. Demetree Director February 13, 1997
- ------------------------------
Mark C. Demetree
/s/ Andrew I. Fillat Director February 13, 1997
- ------------------------------
Andrew I. Fillat
/s/ Alan Z. Senter Director February 13, 1997
- ------------------------------
Alan Z. Senter
-6-
<PAGE>
EXHIBIT INDEX
Exhibit
Number Title of Exhibit Page
- ------ ---------------- ----
4.1. Restated Equity Incentive Plan.
4.2 1996 Non-Employee Directors Automatic Stock Option Plan.
5. Opinion of Hahn & Hessen LLP.
23.1. Consent of Coopers & Lybrand LLP.
23.2. Consent of Hahn & Hessen LLP (included in Exhibit 5).
24. Powers of Attorney (included on page 6 of this registration
statement).
-7-
ADVANCED RADIO TELECOM CORP.
RESTATED EQUITY INCENTIVE PLAN
(As amended through February 13, 1997)
1. PURPOSE
The purpose of this Restated Equity Incentive Plan (the "Plan") is
to advance the interests of Advanced Radio Telecom Corp. (the "Company") by
enhancing its ability to attract and retain employees and other persons or
entities who are in a position to make significant contributions to the success
of the Company and its subsidiaries through ownership of shares of the Company's
common stock ("Stock").
The Plan was adopted by the Company on July 22, 1995 under the name
"Stock Option Plan", and adopted by stockholders on February 2, 1996. The Plan
was amended on April 24, April 26 and May 20, 1996. In order to incorporate the
amendments including broadening of the Plan to include additional equity
incentives, the Plan was restated and amended by the Company on May 30, 1996 and
renamed the "Restated Equity Incentive Plan". The Plan was further amended on
October 16, 1996 to give effect to a 2.75 to 1 reverse stock split of the
Company's Common Stock and to increase the number of shares issuable under the
Plan.
The Plan is intended to accomplish these goals by enabling the
Company to grant Awards in the form of Options, Stock Appreciation Rights,
Restricted Stock or Unrestricted Stock Awards, Deferred Stock Awards,
Performance Awards, Loans or Supplement Grants, or combinations thereof, all as
more fully described below.
2. ADMINISTRATION
Unless otherwise determined by the Board of Directors of the Company
(the "Board"), the Plan will be administered by a Committee of the Board
designated for such purpose (the "Committee"). The Committee shall consist of at
least two directors. A majority of the members of the Committee shall constitute
a quorum, and all determinations of the Committee shall be made by a majority of
its members. Any determination of the Committee under the Plan may be made
without notice or meeting of the Committee by a writing signed by a majority of
the Committee members. During such times as the Stock is registered under the
Securities Exchange Act of 1934 (the "1934 Act"), all members of the Committee
shall be disinterested persons within the meaning of Rule 16b-3 under the 1934
Act and "outside directors" within the meaning of Section 162(m)(4)(C)(i) of the
Internal Revenue Code of 1986, as amended (the "Code").
The Committee will have authority, not inconsistent with the express
provisions of the Plan and in addition to other authority granted under the
Plan, to (a) grant Awards at such time or times as it may choose; (b) determine
the size of each Award, including the number of shares of Stock subject to the
Award; (c) determine the type or types of each Award; (d) determine the terms
and conditions of each Award; (e) waive compliance by a holder of an Award with
any obligations to be performed by such holder under an
<PAGE>
Award and waive any terms or conditions of an Award; (f) amend or cancel an
existing Award in whole or in part (and if an award is canceled, grant another
Award in its place on such terms and conditions as the Committee shall specify),
except that the Committee may not, without the consent of the holder of an
Award, take any action under this clause with respect to such Award if such
action would adversely affect the rights of such holder; (g) prescribe the form
or forms of instruments that are required or deemed appropriate under the Plan,
including any written notices and elections required of Participants (as defined
below), and change such forms from time to time; (h) adopt, amend and rescind
rules and regulations for the administration of the Plan; and (i) interpret the
Plan and decide any questions and settle all controversies and disputes that may
arise in connection with the Plan. Such determinations and actions of the
Committee, and all other determinations and actions of the Committee made or
taken under authority granted by any provision of the Plan, will be conclusive
and will bind all parties. Nothing in this paragraph shall be construed as
limiting the power of the Committee to make adjustments under Section 7.3 or
Section 8.6.
With respect to persons subject to Section 16 of the 1934 Act,
transactions under the Plan are intended to comply with all applicable
conditions of Rule 16b-3 or its successors under the 1934 Act.
3. EFFECTIVE DATE AND TERM OF PLAN
The Plan will become effective on the date on which it is approved
by the stockholders of the Company. No Award may be granted under the Plan ten
years following the date of stockholder approval, but Awards previously granted
may extend beyond that date.
4. SHARES SUBJECT TO THE PLAN
Subject to the adjustment as provided in Section 8.6 below, the
aggregate number of shares of Stock that may be delivered under the Plan will be
1,400,000. If any Award requiring exercise by the Participant for delivery of
Stock terminates without having been exercised in full, or if any Award payable
in Stock or cash is satisfied in cash rather than Stock, the number of shares of
Stock as to which such Award was not exercised or for which cash was substituted
will be available for future grants.
Subject to Section 8.6(a), the maximum number of shares of Stock as
to which Options and Stock Appreciation Rights may be granted to any Participant
in any one calendar year is 300,000, which limitation shall be construed and
applied consistently with the rules under Section 162(m) of the Internal Revenue
Code.
Stock delivered under the Plan may be either authorized but unissued
Stock or previously issued Stock acquired by the Company and held in treasury.
No fractional shares of Stock will be delivered under the Plan.
5. ELIGIBILITY AND PARTICIPATION
-2-
<PAGE>
Each person in the employ of the Company or any of its subsidiaries
(an "Employee") and each other person or entity (including without limitation
non-Employee directors of the Company or a subsidiary of the Company) who, in
the opinion of the Committee, is in a position to make a significant
contribution to the success of the Company or its subsidiaries will be eligible
to receive Awards under the Plan (each such Employee, person or entity receiving
an Award, a "Participant"). A "subsidiary" for purposes of the Plan will be a
corporation in which the Company owns, directly or indirectly, stock possessing
50 % or more of the total combined voting power of all classes of stock.
6. TYPES OF AWARDS
6.1. Options
(a) Nature of Options. An Option is an Award giving the recipient
the right on exercise thereof to purchase Stock.
Both "incentive stock options," as defined in Section 422 of the
Internal Revenue of 1986, as amended (the "Code") (any Option intended to
qualify as an incentive stock option being hereinafter referred to as an "ISO"),
and Options that are not incentive stock options, may be granted under the Plan.
ISOs shall be awarded only to Employees. Any Option not identified at the time
of grant as being either an ISO or a non-incentive stock option shall be a
non-incentive stock option.
(b) Exercise Price. The exercise price of an Option will be
determined by the Committee subject to the following:
(1) The exercise price of an ISO shall not be less than 100%
(110% in the case of an ISO granted to a ten-percent stockholder) of
the fair market value of the Stock subject to the Option, determined
as of the time the Option is granted. A "ten percent stockholder" is
any person who at the time of grant owns, directly or indirectly, or
is deemed to own by reason of the attribution rules of section
424(d) of the Code, stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company or of
any of its subsidiaries.
(2) In no case may the exercise price paid for Stock which is
part of an original issue of authorized Stock be less than the par
value per share of the Stock.
(3) The Committee may reduce the exercise price of an Option
at any time after the time of grant, but in the case of an Option
originally awarded as an ISO, only with the consent of the
Participant.
(c) Duration of Options. The latest date on which an Option may be
exercised will be the tenth anniversary (fifth anniversary, in the case of an
ISO granted to a ten-percent shareholder) of the day immediately preceding the
date the Option was granted,
-3-
<PAGE>
or such earlier date as may have been specified by the Committee at the time the
Option was granted.
(d) Exercise of Options. An Option will become exercisable at such
time or times, and on such conditions, as the Committee may specify. The
Committee may at any time and from time to time accelerate the time at which all
or any part of the Option may be exercised.
Any exercise of an Option must be in writing, signed by the proper
person and delivered or mailed to the Company, accompanied by (1) any documents
required by the Committee and (2) payment in full in accordance with paragraph
(e) below for the number of shares for which the Option is exercised.
(e) Payment for Stock. Stock purchased on exercise of an Option must
be paid for as follows: (1) in cash or by check (acceptable to the Company in
accordance with guidelines established for this purpose), bank draft or money
order payable to the order of the Company or (2) if so permitted by the
Committee at or after the grant of the Option (with the consent of the optionee
of an ISO if permitted after the grant) or by the instrument evidencing the
Option, (i) through the delivery of shares of Stock which have been outstanding
for at least six months (unless the Committee approves a shorter period) and
which have a fair market value equal to the exercise price, (ii) by delivery of
a promissory note of the person exercising the Option to the Company, payable on
such terms as are specified by the Committee, (iii) by delivery of an
unconditional and irrevocable undertaking by a broker to deliver promptly to the
Company sufficient funds to pay the exercise price, or (iv) by any combination
of the foregoing permissible forms of payment.
(f) Discretionary Payments. If (i) the market price of shares of
Stock subject to an Option (other than an Option which is in tandem with a Stock
Appreciation Right as described in Section 6.2 below) exceeds the exercise price
of the Option at the time of its exercise, and (ii) the person exercising the
Option so requests the Committee in writing, the Committee may in its sole
discretion cancel the Option and cause the Company to pay in cash or in shares
of Common Stock (at a price per share equal to the fair market value per share)
to the person exercising the Option an amount equal to the difference between
the fair market value of the Stock which would have been purchased pursuant to
the exercise (determined on the date the Option is canceled) and the aggregate
exercise price which would have been paid.
6.2. Stock Appreciation Rights.
(a) Nature of Stock Appreciation Rights. A Stock Appreciation Right
is an Award entitling the holder on exercise to receive an amount in cash or
Stock or a combination thereof (such form to be determined by the Committee)
determined in whole or in part by reference to appreciation in the fair market
value of a share of Stock on the date of grant as compared to its fair market
value on the date of exercise or any performance standard selected or
established by the Committee.
-4-
<PAGE>
(b) Grant of Stock Appreciation Rights. Stock Appreciation Rights
may be granted in tandem with, or independently of, Options granted under the
Plan. A Stock Appreciation Right granted in tandem with an Option which is not
an ISO may be granted either at or after the time the Option is granted. A Stock
Appreciation Right granted in tandem with an ISO may be granted only at the time
the Option is granted. The Committee may also grant Stock Appreciation Rights
which provide that following a change in control of the Company, as determined
by the Committee, the holder of such Right will be entitled to receive, with
respect to each share of Stock subject to the Right, an amount equal to the
excess of a specified value (which may include an average of values) for a share
of Stock during a period preceding such change in control over the fair market
value of a share of Stock on the date the Right was granted.
(c) Rules Applicable to Tandem Awards. When Stock Appreciation
Rights are granted in tandem with Options, the following will apply:
(1) The Stock Appreciation Right will be exercisable only at
such time or times, and to the extent, that the related Option is
exercisable and will be exercisable in accordance with the procedure
required for exercise of the related Option.
(2) The Stock Appreciation Right will terminate and no longer
be exercisable upon the termination or exercise of the related
Option, except that a Stock Appreciation Right granted with respect
to less than the full number of shares covered by an Option will not
be reduced until the number of shares as to which the related Option
has been exercised or has terminated exceeds the number of shares
not covered by the Stock Appreciation Right.
(3) The Option will terminate and no longer be exercisable
upon the exercise of the related Stock Appreciation Right.
(4) The Stock Appreciation Right will be transferable only
with the related Option.
(5) A Stock Appreciation Right granted in tandem with an ISO
may be exercised only when the market price of the Stock subject to
the Option exceeds the exercise price of such option.
(d) Exercise of Independent Stock Appreciation Rights. A Stock
Appreciation Right not granted in tandem with an Option will become exercisable
at such time or times, and on such conditions, as the Committee may specify. The
Committee may at any time accelerate the time at which all or any part of the
Right may be exercised.
Any exercise of an independent Stock Appreciation Right must be in
writing, signed by the proper person and delivered or mailed to the Company,
accompanied by any other documents required by the Committee.
-5-
<PAGE>
6.3. Restricted and Unrestricted Stock.
(a) Grant of Restricted Stock. Subject to the terms and provisions
of the Plan, the Committee, at any time and from time to time, may grant shares
of Restricted Stock in such amounts and upon such terms and conditions as the
Committee shall determine subject to the restrictions described below.
(b) Restricted Stock Agreement. The Committee may require, as a
condition to an Award, that a recipient of a Restricted Stock Award enter into a
Restricted Stock Award Agreement, setting forth the terms and conditions of the
Award. In lieu of a Restricted Stock Award Agreement, the Committee may provide
the terms and conditions of an Award in a notice to the Participant of the
Award, on the Stock certificate representing the Restricted Stock, in the
resolution approving the Award, or in such other manner as it deems appropriate.
(c) Transferability and Other Restrictions. Except as otherwise
provided in this Section 6.3, the shares of Restricted Stock granted herein may
not be sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated until the end of the applicable period or periods established by
the Committee and the satisfaction of any other conditions or restrictions
established by the Committee (such period during which a share of Restricted
Stock is subject to such restrictions and conditions is referred to as the
"Restricted Period"). Except as the Committee may otherwise determine, if a
Participant ceases to be an Employee or otherwise suffers a Status Change (as
defined at Section 7.2(a) below) for any reason during the Restricted Period,
the Company may purchase the shares of Restricted Stock subject to such
restrictions and conditions for the amount of cash paid by the Participant for
such shares, or such shares of Restricted Stock shall be forfeited to the
Company if no cash was paid by the Participant.
The Company shall also have the right to retain the certificates
representing shares of Restricted Stock in the Company's possession during the
Restricted Period.
(d) Removal of Restrictions. Except as otherwise provided in this
Section 6.3, a share of Restricted Stock covered by a Restricted Stock grant
shall become freely transferable by the Participant upon completion of the
Restricted Period including the passage of any applicable period of time and
satisfaction of any conditions to vesting. However, unless otherwise provided by
the Committee, the Committee, in its sole discretion, shall have the right to
immediately waive all or part of the restrictions and conditions with regard to
all or part of the shares held by any Participant at any time.
(e) Voting Rights, Dividends and Other Distributions. During the
Restricted Period, Participants holding shares of Restricted Stock granted
hereunder may exercise full voting rights and shall receive all regular cash
dividends paid with respect to such shares. Except as the Committee shall
otherwise determine, any other cash dividends and other distributions paid to
Participants with respect to shares of Restricted Stock including any dividends
and distributions paid in shares shall be subject to the same restrictions and
conditions as the shares of Restricted Stock with respect to which they were
paid.
-6-
<PAGE>
(f) Other Awards Settled with Restricted Stock. The Committee may,
at the time any Award described in this Section 6 is granted, provide that any
or all the Stock delivered pursuant to the Award will be Restricted Stock.
(g) Unrestricted Stock. The Committee may, in its sole discretion,
sell to any Participant shares of Stock free of restrictions under the Plan for
a price which is not less than the par value of the Stock.
(h) Notice of Section 83(b) Election. Any Participant making an
election under Section 83(b) of the Code with respect to Restricted Stock must
provide a copy thereof to the Company within 10 days of filing such election
with the Internal Revenue Service.
6.4. Deferred Stock.
A Deferred Stock Award entitles the recipient to receive shares of
Stock to be delivered in the future. Delivery of the Stock will take place at
such time or times, and on such conditions, as the Committee may specify. The
Committee may at any time accelerate the time at which delivery of all or any
part of the Stock will take place. At the time any Award described in this
Section 6 is granted, the Committee may provide that, at the time Stock would
otherwise be delivered pursuant to the Award, the Participant will instead
receive an instrument evidencing the Participant's right to future delivery of
Deferred Stock.
6.5. Performance Awards; Performance Goals.
(a) Nature of Performance Awards. A Performance Award entitles the
recipient to receive, without payment, an amount in cash or Stock or a
combination thereof (such form to be determined by the Committee) following the
attainment of performance goals. Performance goals may be related to personal
performance, corporate performance, departmental performance or any other
category of performance established by the Committee. The Committee will
determine the performance goals, the period or periods during which performance
is to be measured and all other terms and conditions applicable to the Award.
(b) Other Awards Subject to Performance Condition. The Committee
may, at the time any Award described in this Section 6 is granted, impose the
condition (in addition to any conditions specified or authorized in this Section
6 or any other provision of the Plan) that Performance Goals be met prior to the
Participant's realization of any payment or benefit under the Award.
6.6. Loans and Supplemental Grants.
(a) Loans. The Company may make a loan to a Participant ("Loan"),
either on the date of or after the grant of any Award to the Participant. A Loan
may be made either in connection with the purchase of Stock under the Award or
with the payment of any Federal, state and local income tax with respect to
income recognized as a result of the Award. The Committee will have full
authority to decide whether to make a Loan and to determine the amount, terms
and conditions of the Loan, including the interest rate (which
-7-
<PAGE>
may be zero), whether the Loan is to be secured or unsecured or with or without
recourse against the borrower, the terms on which the Loan is to be repaid and
the conditions, if any, under which it may be forgiven. However, no Loan may
have a term (including extensions) exceeding ten years in duration.
(b) Supplemental Grants. In connection with any Award, the Committee
may at the time such Award is made or at a later date, provide for and grant a
cash award to the Participant ("Supplemental Grant") not to exceed an amount
equal to (1) the amount of any Federal, state and local income tax on ordinary
income for which the Participant may be liable with respect to the Award,
determined by assuming taxation at the highest marginal rate, plus (2) an
additional amount on a grossed-up basis intended to make the Participant whole
on an after-tax basis after discharging all the Participant's income tax
liabilities arising from all payments under this Section 6. Any payments under
this subsection (b) will be made at the time the Participant incurs Federal
income tax liability with respect to the Award.
7. EVENTS AFFECTING OUTSTANDING AWARDS
7.1. Death.
If a Participant dies, the following will apply:
(a) All Options and Stock Appreciation Rights held by the
Participant immediately prior to death, to the extent then exercisable, may be
exercised by the Participant's executor or administrator or the person or
persons to whom the Option or Right is transferred by will or the applicable
laws of descent and distribution, at any time within the one year period ending
with the first anniversary of the Participant's death (or such shorter or longer
period as the Committee may determine), and shall thereupon terminate. In no
event, however, shall an Option or Stock Appreciation Right remain exercisable
beyond the latest date on which it could have been exercised without regard to
this Section 7. Except as otherwise determined by the Committee, all Options and
Stock Appreciation Rights held by a Participant immediately prior to death that
are not then exercisable shall terminate at death.
(b) Except as otherwise determined by the Committee, all Restricted
Stock held by the Participant must be transferred to the Company (and, in the
event the certificates representing such Restricted Stock are held by the
Company, such Restricted Stock will be so transferred without any further action
by the Participant) in accordance with Section 6.3(d) above.
(c) Any payment or benefit under a Deferred Stock Award, Performance
Award, or Supplemental Grant to which the Participant was not irrevocably
entitled prior to death will be forfeited and the Award canceled as of the time
of death, unless otherwise determined the Committee.
7.2. Termination of Service (Other Than By Death).
-8-
<PAGE>
If a Participant who is an Employee ceases to be an Employee for any
reason other than death, or if there is a termination (other than by reason of
death) of the consulting, service or similar relationship in respect of which a
non-Employee Participant was granted an Award hereunder (such termination of the
employment or other relationship being hereinafter referred to as a "Status
Change"), the following will apply:
(a) Except as otherwise determined by the Committee, all Options and
Stock Appreciation Rights held by the Participant that were not exercisable
immediately prior to the Status Change shall terminate at the time of the Status
Change. Any Options or Rights that were exercisable immediately prior to the
Status Change will continue to be exercisable for a period of three months (or
such longer period as the Committee may determine), and shall thereupon
terminate, unless the Award provides by its terms for immediate termination in
the event of a Status Change (unless otherwise determined by the Committee) or
unless the Status Change results from a discharge for cause which in the opinion
of the Committee casts such discredit on the Participant as to justify immediate
termination of the Award (unless otherwise determined by the Committee). In no
event, however, shall an Option or Stock Appreciation Right remain exercisable
beyond the latest date on which it could have been exercised without regard to
this Section 7. For purposes of this paragraph, in the case of a Participant who
is an Employee, a Status Change shall not be deemed to have resulted by reason
of (i) a sick leave or other bona fide leave of absence approved for purposes of
the Plan by the Committee, so long as the Employee's right to reemployment is
guaranteed either by statute or by contract, or (ii) a transfer of employment
between the Company and a subsidiary or between subsidiaries, or to the
employment of a corporation (or a parent or subsidiary corporation of such
corporation) issuing or assuming an option in a transaction to which section
424(a) of the Code applies.
(b) Except as otherwise determined by the Committee, all Restricted
Stock held by the Participant at the time of the Status Change must be
transferred to the Company (and, in the event the certificates representing such
Restricted Stock are held by the Company, such Restricted Stock will be so
transferred without any further action by the Participant) in accordance with
Section 6.3 (c) above.
(c) Any payment or benefit under a Deferred Stock Award, Performance
Award, or Supplemental Grant to which the Participant was not irrevocably
entitled prior to the Status Change will be forfeited and the Award cancelled as
of the date of such Status Change unless otherwise determined by the Committee.
7.3. Certain Corporate Transactions.
Except as otherwise provided by the Committee at the time of grant,
in the event of a consolidation or merger in which the Company is not the
surviving corporation or which results in the acquisition of substantially all
the Company's outstanding Stock by a single person or entity or by a group of
persons and/or entities acting in concert, or in the event of the sale or
transfer of substantially all the Company's assets or a dissolution or
liquidation of the Company (a "covered transaction"), the following rules shall
apply:
-9-
<PAGE>
(a) Subject to paragraph (b) below, all outstanding Awards requiring
exercise will cease to be exercisable, and all other Awards to the extent not
fully vested (including Awards subject to conditions not yet satisfied or
determined) will be forfeited, as of the effective time of the covered
transaction, provided that the Committee may in its sole discretion, on or prior
to the effective date of the covered transaction, (1) make any outstanding
Option and Stock Appreciation Right exercisable in full, (2) remove the
restrictions from any Restricted Stock, (3) cause the Company to make any
payment and provide any benefit under any Deferred Stock Award, Performance
Award, or Supplemental Grant, (4) remove any performance or other conditions or
restrictions on any Award, and (5) forgive all or any portion of the principal
of or interest on a Loan; or
(b) With respect to an outstanding Award held by a participant who,
following the covered transaction, will be employed by or otherwise providing
services to a corporation which is a surviving or acquiring corporation in the
covered transaction or an affiliate of such a corporation, the Committee may at
or prior to the effective time of the covered transaction, in its sole
discretion and in lieu of the action described in paragraph (a) above, arrange
to have such surviving or acquiring corporation or affiliate assume any Award
held by such participant outstanding hereunder or grant a replacement award
which, in the judgment of the Committee, is substantially equivalent to any
Award being replaced.
7.4. Termination Following Change of Control.
Notwithstanding any other provision of this Plan, if the
Participant's employment terminates because of a "Qualified Termination" as
defined in Exhibit A, all unvested Options and Stock Appreciation Rights then
held by such person shall immediately become fully vested, all Options and Stock
Appreciation Rights then held by such person shall remain exercisable until the
earlier of (i) the fourth anniversary of such Qualified Termination and (ii) the
latest date on which such Option or Right could have been exercised without
regard to Section 7.1 and Section 7.2, and all other Awards shall immediately
become fully vested and all restrictions, conditions and performance goals with
respect to such Awards shall be deemed satisfied and shall no longer be
applicable.
8. GENERAL PROVISIONS
8.1. Documentation of Awards.
Awards will be evidenced by such written instruments, if any, as may
be prescribed by the Committee from time to time. Such instruments may be in the
form of agreements to be executed by both the Participant and the Company, or
certificates, letters or similar instruments, which need not be executed by the
Participant but acceptance of which will evidence agreement to the terms
thereof.
8.2. Rights as a Stockholder, Dividend Equivalents.
Except as specifically provided by the Plan, the receipt of an Award
will not give a Participant rights as a stockholder; the Participant will obtain
such rights, subject to any limitations imposed by the Plan or the instrument
evidencing the Award, upon actual
-10-
<PAGE>
receipt of Stock. However, the Committee may, on such conditions as it deems
appropriate, provide that a Participant will receive a benefit in lieu of cash
dividends that would have been payable on any or all Stock subject to the
Participant's Award had such Stock been outstanding. Without limitation, the
Committee may provide for payment to the Participant of amounts representing
such dividends, either currently or in the future, or for the investment of such
amounts on behalf of the Participant.
8.3. Conditions on Delivery of Stock.
The Company will not be obligated to deliver any shares of Stock
pursuant to the Plan or to remove restriction from shares previously delivered
under the Plan (a) until all conditions of the Award have been satisfied or
removed, (b) until, in the opinion of the Company's counsel, all applicable
Federal and state laws and regulation have been complied with, (c) if the
outstanding Stock is at the time listed on any stock exchange or The Nasdaq
National Market, until the shares to be delivered have been listed or authorized
to be listed on such exchange or market upon official notice of notice of
issuance, and (d) until all other legal matters in connection with the issuance
and delivery of such shares have been approved by the Company's counsel. If the
sale of Stock has not been registered under the Securities Act of 1933, as
amended, the Company may require, as a condition to exercise of the Award, such
representations or agreements as counsel for the Company may consider
appropriate to avoid violation of such Act and may require that the certificates
evidencing such Stock bear an appropriate legend restricting transfer.
If an Award is exercised by the Participant's legal representative,
the Company will be under no obligation to deliver Stock pursuant to such
exercise until the Company is satisfied as to the authority of such
representative.
8.4. Tax Withholding.
The Company will withhold from any cash payment made pursuant to an
Award an amount sufficient to satisfy all federal, state and local withholding
tax requirements (the "withholding requirements").
In the case of an Award pursuant to which Stock may be delivered,
the Committee will have the right to require that the Participant or other
appropriate person remit to the Company an amount sufficient to satisfy the
withholding requirements, or make other arrangements satisfactory to the
Committee with regard to such requirements, prior to the delivery of any Stock.
If and to the extent that such withholding is required, the Committee may permit
the Participant or such other person to elect at such time and in such manner as
the Committee provides to have the Company hold back from the shares to be
delivered, or to deliver to the Company, Stock having a value calculated to
satisfy the withholding requirement. The Committee may make such share
withholding mandatory with respect to any Award at the time such Award is made
to a Participant.
If at the time an ISO is exercised the Committee determines that the
Company could be liable for withholding requirements with respect to a
disposition of the Stock received upon exercise, the Committee may require as a
condition of exercise that the person
-11-
<PAGE>
exercising the ISO agree (a) to inform the Company promptly of any disposition
(within the meaning of section 424(c) of the Code) of Stock received upon
exercise, and (b) to give such security as the Committee deems adequate to meet
the potential liability of the Company for the withholding requirements and to
augment such security from time to time in any amount reasonably deemed
necessary by the Committee to preserve the adequacy of such security.
8.5. Nontransferability of Awards.
Unless otherwise permitted by the Committee, no Award (other than an
Award in the form of an outright transfer of cash or Unrestricted Stock) may be
transferred other than by will or by the laws of descent and distribution, and
during a Participant's lifetime an Award requiring exercise may be exercised
only by the Participant (or in the event of the Participant's incapacity, the
person or persons legally appointed to act on the Participant's behalf).
8.6. Adjustments in the Event of Certain Transactions.
(a) In the event of a stock dividend, stock split or combination of
shares, recapitalization or other change in the Company's capitalization, or
other distribution to common stockholders other than normal cash dividends,
after the effective date of the Plan, the Committee will make any appropriate
adjustments to the maximum number of shares that may be delivered under the Plan
under Section 4 above.
(b) In any event referred to in paragraph (a), the Committee will
also make any appropriate adjustments to the number and kind of shares of stock
or securities subject to Awards then outstanding or subsequently granted, any
exercise prices relating to Awards and any other provision of Awards affected by
such change. The Committee may also make such adjustments to take into account
material changes in law or in accounting practices or principles, mergers,
consolidations, acquisitions, dispositions or similar corporate transactions, or
any other event, if it is determined by the Committee that adjustments are
appropriate to avoid distortion in the operation of the Plan.
(c) In the case of ISOs or for purposes of the limits set forth in
the second paragraph of Section 4, the adjustments described in (a) and (b) will
be made only to the extent consistent with continued qualification of the option
under Section 422 of the Code (in the case of an ISO) or Section 162(m) of the
Code (in the case of the limits in Section 4).
8.7. Employment Rights, Etc.
Neither the adoption of the Plan nor the grant of Awards will confer
upon any person any right to continued retention by the Company or any
subsidiary as an Employee or otherwise, or affect in any way the right of the
Company or subsidiary to terminate an employment, service or similar
relationship at any time. Except as specifically provided by the Committee in
any particular case, the loss of existing or potential profit in Awards granted
under the Plan will not constitute an element of damages in the event of
termination of an employment, service or similar relationship even if the
termination is in violation of an obligation of the Company to the Participant.
-12-
<PAGE>
8.8. Deferral of Payments.
The Committee may agree at any time, upon request of the
Participant, to defer the date on which any payment under an Award will be made.
8.9. Past Services as Consideration.
Where a Participant purchases Stock under an Award for a price equal
to the par value of the Stock the Committee may determine that such price has
been satisfied by past services rendered by the Participant.
9. EFFECT, AMENDMENT AND TERMINATION
Neither adoption of the Plan nor the grant of Awards to a
Participant will affect the Company's right to grant to such Participant awards
that are not subject to the Plan, to issue to such Participant Stock as a bonus
or otherwise, or to adopt other plans or arrangements under which Stock may be
issued to Employees.
The Committee may at any time or times amend the Plan or any
outstanding Award for any purpose which may at the time be permitted by law, or
may at any time terminate the Plan as to any further grants of Awards, provided
that (except to the extent expressly required or permitted by the Plan) no such
amendment will, without the approval of the stockholders of the Company,
effectuate a change for which stockholder approval is required in order for the
Plan to continue to qualify for the award of ISOs under section 422 of the Code,
for the award of performance-based compensation under Section 162(m) of the Code
or under Rule 16b-3 promulgated under Section 16 of the 1934 Act.
-13-
<PAGE>
EXHIBIT A
For purposes of Section 7.4 of the Plan, the following terms have the
following meanings:
"Base Salary" means Participant's annual base salary, exclusive of any
bonus or other benefits the Participant may receive.
"Cause" means the following, determined by the Committee in its reasonable
judgment:
(i) willful failure to perform, or gross negligence in the
performance of, Participant's duties and responsibilities to
the Company and its subsidiaries; or
(ii) fraud, embezzlement or other material dishonesty with respect
to the Company or any of its subsidiaries; or
(iii) conviction of, or plea of nolo contendere to, a felony or
other crime involving moral turpitude; or
(iv) other conduct by Participant that is materially harmful to the
business, interests or reputation of the Company or any of its
subsidiaries.
"Change of Control" means such time as:
(i) a "person" or "group" (within the meaning of Sections 13(d)
and 14(d)(2) of the Exchange Act) becomes the ultimate
"beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act) of Voting Stock representing more than 50 % of
the total voting power of the Voting Stock of the Company on a
fully diluted basis,
(ii) individuals who on the May 30, 1996 constitute the Board
(together with any new directors whose election by the Board
or whose nomination for election by the Company's stockholders
was approved by a vote of at least two-thirds of the members
of the Board then in office who either were members of the
Board on May 30, 1996 or whose election or nomination for
election was previously so approved) cease for any reason to
constitute a majority of the members of the Board then in
office and
(iii) the merger or consolidation of the Company with or into
another corporation; or the merger or consolidation of another
corporation with and into the Company, with the effect that,
immediately after such transaction, the Voting Stock of the
entity surviving such
-14-
<PAGE>
merger or consolidation received in such transaction by the
stockholders of the Company immediately prior to such
transaction represents the ultimate beneficial ownership of
less than 50% of Voting Stock of the entity surviving such
merger or consolidation.
"Disability" has the meaning given it in any long-term disability plan of
the Company in which Participant participates. Participant's employment shall be
deemed terminated for Disability when Participant is entitled to receive
long-term disability compensation pursuant to such long-term disability plan. If
the Company does not maintain such a plan, Participant shall be deemed
terminated for Disability if the Company terminates his employment due to
illness, injury, accident or condition of either a physical or psychological
nature as a result of which Participant is unable to perform substantially the
duties and responsibilities of his position for 180 days during a period of 365
consecutive calendar days.
"Good Reason" means the voluntary termination by Participant of his or her
employment after the occurrence, without Participant's express written consent,
of any of the following events:
(i) assignment to Participant of duties materially inconsistent
with his or her positions, duties, responsibilities, or
reporting requirements with the Company (or a subsidiary)
immediately prior to a Change of Control or a material adverse
alteration in Participant's status or the nature of his or her
responsibilities with the Company immediately prior to a
Change in Control; or
(ii) reduction in Participant's rate of Base Salary to less than
100 percent of the rate of Base Salary paid to the Participant
immediately preceding the Change of Control, or reduction in
Participant's total cash compensation opportunities, including
salary, incentives and other benefits, for any fiscal year to
less than 100 percent of the total cash compensation
opportunities made available to the Participant immediately
preceding the Change of Control (for this purpose, such
opportunities shall be deemed reduced if the objective
standards by which Participant's incentive compensation is
measured become materially more stringent or if the amount of
such compensation is materially reduced on a discretionary
basis from the amount that would be payable solely by
reference to the objective standards).
"Qualified Termination" means the termination of Participant's employment
during a Standstill Period (1) by the Company other than for Cause, death or
Disability, and (2) in the case of a Participant who at the time of the Change
of Control holds an office specifically designated by the Committee in its sole
discretion to have such right, by Participant for Good Reason.
-15-
<PAGE>
"Standstill Period" is the period commencing on the date of a Change of
Control and continuing until the close of business on the last business day of
the 24th calendar month following such Change of Control.
"Voting Stock" means the capital stock of any class or kind ordinarily
having the power to vote for the election of directors, managers or other voting
members of the governing body of such Person.
-16-
ADVANCED RADIO TELECOM CORP.
1996 NON-EMPLOYEE DIRECTORS AUTOMATIC STOCK OPTION PLAN
(As amended through February 13, 1997)
ARTICLE I
General
1.1 Purpose of the Plan
(a) Adoption. On April 24, 1996, the Board of Directors (the
"Board") of Advanced Radio Telecom Corp., a Delaware corporation (the
"Corporation") adopted the 1996 Non-Employee Directors Automatic Stock Option
Plan (the "Plan"). The Plan was amended on October 16, 1996 to give effect to a
2.75 to 1 reverse stock split of the Company's Common Stock and to increase the
number of shares issuable under the Plan.
(b) Purpose. The Plan is intended to promote the interests of the
Corporation by providing non-employee members of the Corporation's Board of
Directors (the "Board") the opportunity to acquire a proprietary interest, or
otherwise increase their proprietary interest, in the Corporation and an
increased personal interest in continued success and progress. Such purpose
shall be accomplished by providing for the automatic grant of options to acquire
the Corporation's Stock ("Options").
(c) Effective Date. The Plan shall become effective upon the
completion of an initial public offering of the Corporation's equity securities.
Such date is hereby designated as the Effective Date of the Plan.
(d) Termination of Plan. The Plan shall terminate upon the earlier
of (i) the tenth anniversary of the Effective Date or (ii) the date on which all
shares available for issuance under the Plan shall have been issued pursuant to
the exercise of Options granted under the Plan. If the date of termination is
determined under clause (i) above, then all Option grants outstanding on such
date shall thereafter continue to have force and effect in accordance with the
provisions of the instruments evidencing such grants or issuances.
1.2 Eligible Persons under the Plan. The persons eligible to
participate in the Plan shall be limited to non-employee Board members
("Eligible Persons"). Persons who are eligible under the Plan may also be
eligible to receive option grants or direct stock issuances under other plans of
the Corporation.
1.3 Stock Subject to the Plan.
(a) Available Shares. The Stock subject to the provisions of the
Plan and issuable upon the grant of Options are shares of the Corporation's
common stock (the "Stock") and shall be drawn from either the Corporation's
authorized but unissued shares of Stock or from reacquired shares of Stock,
including shares repurchased by the Corporation on the open market. The maximum
number of shares of Stock which may be issued over the term of the Plan shall
not exceed 75,000 shares, subject to adjustment from time to time in accordance
with the provisions of this Section 1.3.
<PAGE>
(b) Adjustments for Issuances. Should one or more outstanding
Options under this Plan expire or terminate for any reason prior to exercise in
full, then the shares subject to the portion of each Option not so exercised
shall be available for subsequent option grant under the Plan. Shares of Stock
tendered by an Optionholder as payment for shares issued upon exercise of an
Option shall become available for issuance under the Plan. Should shares of
Stock otherwise issuable under the Plan be withheld by the Corporation in
satisfaction of the withholding taxes incurred in connection with the exercise
of an outstanding Option under the Plan, then the number of shares of Stock
available for issuance under the Plan shall be reduced by the gross number of
shares for which the Option is exercised, and not by the net number of shares of
Stock actually issued to the Optionholder.
(c) Adjustments for Organic Changes. Should any change be made to
the Stock issuable under the Plan by reason of any stock split, stock dividend,
recapitalization, combination of shares, exchange of shares or other change
affecting the outstanding Stock as a class without the Corporation's receipt of
consideration, then appropriate adjustments shall be made to (i) the maximum
number and/or class of securities issuable under the Plan, and (ii) the number
and/or class of securities and price per share in effect under each Option
outstanding. Such adjustments to the outstanding Options are to be effected in a
manner which shall preclude the enlargement or dilution of rights and benefits
under such Options. The adjustments determined by the Board shall be final,
binding and conclusive. The amount of Options granted automatically shall not be
adjusted regardless of any organic changes made to the Stock issuable under the
Plan.
ARTICLE II
Automatic Option Grants
2.1 Terms and Conditions of Automatic Option Grants.
(a) Amount and Date of Grant. During the term of this Plan,
Automatic Option Grants shall be made to each Eligible Person ("Optionholder")
as follows:
(i) Annual Grants. Each year on January 1 (the "Annual Grant
Date") an Option to acquire 2,200 shares of Stock shall be granted to each
Eligible Person for so long as there are shares of Stock available under Section
1.3 hereof. Notwithstanding the foregoing, (1) any Eligible Person whose term
ended on the Annual Grant Date shall not be eligible to receive any automatic
option grants on that Annual Grant Date and (2) any Eligible Person who has
received an Automatic Option Grant pursuant to Sections 2.1(a)(ii) or (iii) on
the same date as the Annual Grant Date or within 30 days prior thereto, shall
not be eligible to receive an Automatic Option Grant on that Annual Grant Date.
(ii) Initial New Director Grants. On the Initial Grant Date,
every new member of the Board who is an Eligible Person and has not previously
been a member of the Board shall be granted an Option to acquire 2,600 shares of
Stock ("Optioned Shares") as long as there are shares of Stock available under
Section 1.3 hereof. The "Initial Grant Date" shall be the date that an Eligible
Person is first appointed or elected to the Board.
-2-
<PAGE>
(iii) Initial Existing Director Grants. On the Effective Date of
this Plan, each Eligible Person shall be granted an Option to acquire 2,600
shares of Stock.
(b) Exercise Price. The exercise price per share of Stock subject to
each Automatic Option Grant shall be equal to 100% of the fair market value per
share of the Stock on the date the Option was granted as determined in
accordance with the valuation provisions of Section 2.2 hereof (the "Option
Price").
(c) Vesting. Each Automatic Option Grant made pursuant to Section
2.1(a)(i) or 2.1(a)(ii) shall become exercisable and vest in a series of three
equal and successive yearly installments, with the first such installment to
become exercisable on the Initial Grant Date and each successive installment to
become exercisable every 12 months thereafter. Each Automatic Option Grant made
pursuant to Section 2.1(a)(iii) shall become exercisable and vest in a series of
three equal and successive yearly installments, with the first such installment
to become exercisable on the Effective Date and each successive installment to
become exercisable every 12 months thereafter. Each installment of an Option
shall only vest and become exercisable if the Optionholder has not ceased
serving as a Board member as of such installment date.
(d) Method of Exercise. In order to exercise an Option with respect
to any vested Optioned Shares, an Optionholder (or in the case of an exercise
after an Optionholder's death, such Optionholder's executor, administrator, heir
or legatee, as the case may be) must take the following action:
(i) execute and deliver to the Secretary of the Corporation a
written notice of exercise signed in writing by the person
exercising the Option specifying the number of shares of Stock with
respect to which the Option is being exercised;
(ii) pay the aggregate Option Price in one of the alternate
forms as set forth in Section 2.1(e) below; and
(iii) furnish appropriate documentation that the person or
persons exercising the Option (if other than the Optionholder) has
the right to exercise such Option.
As soon after the Exercise Date, as practical, the Corporation shall mail or
deliver to or on behalf of the Optionholder (or any other person or persons
exercising this Option in accordance herewith) a certificate or certificates
representing the Stock for which the Option has been exercised in accordance
with the provisions of this Plan. In no event may any Option be exercised for
any fractional shares.
(e) Payment Price. The aggregate Option Price shall be payable in
one of the alternative forms specific below:
(i) full payment in cash or check made payable to the
Corporation's order; or
-3-
<PAGE>
(ii) full payment in shares of Stock held for the requisite
period necessary to avoid a charge to the Corporation's reported
earnings and valued at fair market value on the Exercise Date (as
determined in accordance with Section 2.2 hereof); or
(iii) if a cashless exercise program has been implemented by
the Board, full payment through a sale and remittance procedure
pursuant to which the Optionholder (A) shall provide irrevocable
written instructions to a designated brokerage firm to effect the
immediate sale of the Optioned Shares to be purchased and remit to
the Corporation, out of the sale proceeds available on the
settlement date, sufficient funds to cover the aggregate exercise
price payable for the Optioned Shares to be purchased and (B) shall
concurrently provide written directives to the Corporation to
deliver the certificates for the Optioned Shares to be purchased
directly to such brokerage firm in order to complete the sale
transaction.
(f) Term of Option. Each Option shall expire on the fifth
anniversary of the date on which an Automatic Option Grant was made ("Expiration
Date"). Except as provided in Section 2.4 hereof, should an Optionholder's
service as a Board member cease prior to the Expiration date for any reason
while an Option remains outstanding and unexercised, then the Option term shall
immediately terminate and the Option shall cease to be outstanding in accordance
with the following provisions:
(i) The Option shall immediately terminate and cease to be
outstanding for any shares of Stock which were not vested at the
time of Optionholder's cessation of Board service.
(ii) Should an Optionholder cease, for any reason other than
death, to serve as a member of the Board, then the Optionholder
shall have a three-month period measured from the date of such
cessation of Board service in which to exercise the Options which
vested prior to the time of such cessation of Board service. In no
event, however, may any Option be exercised after the Expiration
Date of such Option.
(iii) Should an Optionholder die while serving as a Board
member or within three months after cessation of Board service, then
the personal representative of the Optionholder's estate (or the
person or persons to whom the Option is transferred pursuant to the
Optionholder's will or in accordance with the laws of descent and
distribution) shall have a one year period measured from the date of
the Optionholder's cessation of Board service. In no event, however,
may any Option be exercised after the Expiration Date of such
Option.
(g) Limited Transferability. Each Option shall be exercisable only
by Optionholder during Optionholder's lifetime and shall be neither transferable
nor assignable, other than by will or by the laws of descent and distribution
following Optionholder's death.
-4-
<PAGE>
2.2 Fair Market Value. The fair market value per share of Stock
shall be determined in accordance with the following provisions:
(a) If the Stock is at the time listed or admitted to trading
on any national stock exchange, then the fair market value shall be
the most recent closing selling price per share prior to the date in
question on the exchange determined by the Board to be the primary
market for the Stock, as such price is officially quoted in the
composite tape of transactions on such exchange. If there is no
reported sale of Stock on such exchange on the date in question,
then the fair market value shall be the closing selling price on the
exchange on the last preceding date for which such quotation exists.
(b) If the Stock is not at the time listed or admitted to
trading on any national stock exchange but is traded on the National
Market System ("Nasdaq"), the fair market value shall be the most
recent closing selling price per share prior to the date in
question, as such price is reported by the Nasdaq or any successor
system. If there is no reported closing selling price for the Stock
on the date in question, then the closing selling price on the last
preceding date for which such quotation exists shall be
determinative of fair market value.
(c) If the Stock is not at the time listed or admitted to
trading on either a national stock exchange or Nasdaq, the fair
market value shall be determined by the Board of Directors or a
committee of disinterested directors appointed by the Board.
2.3 Corporate Transaction. In the event of stockholder approval of a
Corporate Transaction, all unvested options shall automatically accelerate and
immediately vest so that each outstanding Option shall, one week prior to the
specified effective date for the Corporate Transaction, become fully exercisable
for all of the Optioned Shares. Upon the consummation of the Corporate
Transaction, all Options shall, to the extent not previously exercised,
terminate and cease to be outstanding.
2.4 Change in Control. In the event of a Change in Control, all
unvested Options shall automatically accelerate and immediately vest so that
each outstanding Option shall, immediately prior to the effective date of such
Change in Control, become fully exercisable for all of the Optioned Shares.
Thereafter, each Option shall remain exercisable until the Expiration Date of
such Option.
ARTICLE III
Miscellaneous
3.1 Amendment of the Plan and Awards.
(a) Board Authority. The Board has complete and exclusive power and
authority to amend or modify the Plan (or any component thereof) in any or all
respects whatsoever. However, no such amendment or modification shall adversely
affect rights and
-5-
<PAGE>
obligations with respect to the Optionholder at the time outstanding under the
Plan, unless the Optionholder consents to such amendment. In addition, the Board
may not, without the approval of the Corporation's stockholders, amend the Plan
to (i) materially increase the maximum number of shares issuable under the Plan,
except for permissible adjustments under Section 3.1 or extend the term of the
Plan, (ii) materially modify the eligibility requirements for Plan participation
or (iii) materially increase the benefits accruing to Plan participants.
(b) Options Issued Prior to Stockholder Approval. Options which
incorporate Plan amendments may be granted prior to any required stockholder
approval of such amendments as long as any shares of stock actually issued under
the Plan are held in escrow until the requisite stockholder approval is
obtained. If such stockholder approval is not obtained within 12 months of the
meeting of the Board approving the amendments, then (i) any Options
incorporating Plan amendments which were not approved shall terminate and cease
to be exercisable and (ii) the Corporation shall promptly refund the purchase
price paid for any Optioned Shares actually issued under the Plan and held in
escrow, together with interest for the period the shares were held in escrow.
(c) Rule 16b-3 Plan. With respect to persons subject to Section 16
of the Securities and Exchange Act of 1934, as amended (the "1934 Act") the Plan
is intended to comply with all applicable conditions of Rule 16b-3 (and all
subsequent revisions thereof) promulgated under the 1934 Act. The Board may
amend the Plan from time to time as it deems necessary in order to meet the
requirements of any amendments to Rule 16b-3 without the consent of the
shareholders of the Corporation.
3.2 Tax Withholding.
(a) General. The Corporation's obligation to deliver Stock upon the
exercise of Options under the Plan shall be subject to the satisfaction of all
applicable federal, state and local income tax withholding requirements.
(b) Shares to Pay for Withholding. The Board may, in its discretion
and in accordance with the provisions of this Section 3.2(b) and such
supplemental rules as it may from time to time adopt (including the applicable
safe-harbor provisions of SEC Rule 16b-3), provide any or all Optionholders with
the right to use shares of Stock in satisfaction of all or part of the federal,
state and local income tax liabilities incurred by such Optionholders in
connection with the exercise of their Options ("Taxes"). Such right may be
provided to any such Optionholder in either or both of the following formats:
(i) Stock Withholding. The Optionholder of an Option may be
provided with the election to have the Corporation withhold, from
the Stock otherwise issuable upon the exercise of such Option, a
portion of those shares of Stock with an aggregate fair market value
equal to the percentage of the applicable Taxes (not to exceed 100
percent) designated by the Optionholder.
(ii) Stock Delivery. The Board may, in its discretion, provide
the Optionholder with the election to deliver to the
-6-
<PAGE>
Corporation, at the time the Option is exercised, one or more shares
of Stock previously acquired by such individual (other than pursuant
to the transaction triggering the Taxes) with an aggregate fair
market value equal to the percentage of the taxes incurred in
connection with such Option exercise (not to exceed 100 percent)
designated by the Optionholder.
3.3 Use of Proceeds. Any cash proceeds received by the Corporation
from the sale of Stock pursuant to Options under the Plan shall be used for
general corporate purposes.
3.4 Regulatory Approvals. The implementation of the Plan, the
granting of any Option and the issuance of Stock upon the exercise or surrender
of the Options made hereunder shall be subject to the Corporation's procurement
of all approvals and permits required by regulatory authorities having
jurisdiction over the Plan, the Options granted under it, and the Stock issued
pursuant to it.
3.5 Securities Registration. No shares of Stock or other assets
shall be issued or delivered under this Plan unless and until there shall have
been compliance with all applicable requirements of federal and state securities
laws, including the filing and effectiveness of the Form S-8 registration
statement for the shares of Stock issuable under the Plan, and all applicable
listing requirements of any securities exchange on which stock of the same class
is then listed.
3.6 Corporation Rights. The grants of Options shall in no way affect
the right of the Corporation to adjust, reclassify, reorganize or otherwise
change its capital or business structure or to merge, consolidate, dissolve,
liquidate or sell or transfer all or any part of its business or assets.
3.7 Privilege of Stock Ownership. An Optionholder shall not have any
of the rights of a stockholder with respect to Optioned Shares until such
individual shall have exercised the Option and paid the Option Price for the
Optioned Shares.
3.8 Assignment. The right to acquire Stock or other assets under the
Plan may not be assigned, encumbered or otherwise transferred by any
Optionholder except as specifically provided herein. The provisions of the Plan
shall inure to the benefit of, and be binding upon, the Corporation and its
successors or assigns, and the Optionholders, the legal representatives of their
respective estates, their respective heirs or legatees and their permitted
assignees.
3.9 Plan Not Exclusive. This Plan is not intended to be the
exclusive means by which the Corporation may issue options or warrants to
acquire its shares of Stock. To the extent permitted by applicable law, any such
other options, warrants, or stock awards may be issued by the Corporation, other
than pursuant to this Plan, without shareholder approval.
-7-
<PAGE>
ARTICLE IV
Definitions
The following capitalized terms used in this Plan shall have the
meaning described below:
"Annual Grant Date" shall mean January 1 of each year.
"Automatic Option Grant" shall mean those automatic option grants
made on the Annual Grant Date, on the Initial Grant Date, and on the Effective
Date.
"Board" shall mean the Board of Directors of the Corporation.
"Change in Control" shall mean (a) a person or related group of
persons, other than the Corporation or a person that directly or indirectly
controls, is controlled by, or under common control with the Corporation,
acquires ownership of 40 percent of the Corporation's outstanding Common Stock
pursuant to a tender or exchange offer which the Board recommends that the
Corporation's stockholders not accept or (b) a change in the composition of the
Board of Directors such that those individuals who were elected to the Board at
the last stockholders' meeting at which there was not a contested election for
Board membership subsequently ceased to comprise a majority of the Board by
reason of a contested election.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Corporation" shall mean Advanced Radio Telecom Corp., a Delaware
corporation.
"Corporate Transaction" shall mean (a) a merger or consolidation in
which the Corporation is not the surviving entity, except for a transaction the
principal purposes of which is to change the state in which the Corporation is
incorporated; (b) the sale, transfer of or other disposition of all or
substantially all of the assets of the Corporation and complete liquidation or
dissolution of the Corporation, or (c) any reverse merger in which the
Corporation is the surviving entity but in which the securities possessing more
than 50 percent of the total combined voting power of the Corporation's
outstanding securities are transferred to a person or persons different from
those who held such securities immediately prior to such merger.
"Effective Date" shall mean the date this Plan is approved by the
Stockholders of the Corporation.
"Eligible Persons" shall mean non-employee Board members as limited
by Section 1.2 hereof.
"Exercise Date" shall be the date on which written notice of the
exercise of an Option is delivered to the Corporation in accordance with Section
2.1(d) hereof.
-8-
<PAGE>
"Expiration Date" shall be the 10-year anniversary of the date on
which an Automatic Option Grant was made.
"Initial Grant Date" shall mean the date that the Optionholder was
first appointed or elected to the Board.
"Optionholder" shall mean an Eligible Person to whom Options have
been granted.
"Optioned Shares" shall be those shares of Stock which can be
acquired by an Eligible Person.
"Option Price" shall mean 100 percent of the fair market value per
share of the Stock on the date any Option was granted, as determined in
accordance with the valuation provisions of Section 2.2 hereof.
"Option" shall mean options granted under the Plan to acquire Stock.
"Plan" shall mean this Stock Option Plan for the Corporation.
"Stock" shall mean shares of the Corporation's Common Stock, par
value $.001 per share, which may be unissued or treasury shares as the Board
from time to time determines.
-9-
[Letterhead of Hahn & Hessen LLP]
February 14, 1997
Advanced Radio Telecom Corp.
500 108th Ave., N.E.
Suite 2600
Bellevue, WA 98004
Re: Advanced Radio Telecom Corp.
1,475,000 shares of Common Stock,
par value $0.001 per share
Ladies/Gentlemen:
In connection with the registration under the Securities Act of 1933,
as amended (the "Act"), of an aggregate of 1,475,000 shares (the "Shares") of
common stock, par value $0.001 per share of Advanced Radio Telecom Corp. (the
"Company") issuable under the Restated Equity Incentive Plan and 1996
Non-Employee Directors Automatic Stock Option Plan (collectively, the "Plans")
by the Company on Form S-8 filed with the Securities and Exchange Commission
(the "Commission") on February 14, 1997 (the "Registration Statement"), you have
requested our opinion with respect to the matters set forth below.
In our capacity as your counsel in connection with such registration,
we are familiar with the proceedings taken and proposed to be taken by the
Company in connection with the authorization, issuance and sale of the Shares.
In addition, we have made such legal and factual examinations and inquiries,
including an examination of originals or copies certified or otherwise
identified to our satisfaction of such documents, corporate records and
instruments, as we have deemed necessary or appropriate for purposes of this
opinion.
In our examination, we have assumed the genuineness of all signatures,
the authenticity of all documents submitted to us as
<PAGE>
Hahn & Hessen LLP
February 13, 1997
Page 2
originals, and the conformity to authentic original documents of all documents
submitted to us as copies.
We are opining herein as to the effect on the subject transaction only
of the General Corporation Law of the State of Delaware, and we express no
opinion with respect to the applicability thereto, or the effect thereon, of any
other laws, or as to any matters of municipal law or the laws of any other local
agencies within the state.
Subject to the foregoing, it is our opinion that the Shares to be
issued under the Plans have been duly authorized, and upon the issuance and
delivery of the Shares, in the manner contemplated by the respective Plans, and
assuming the Company completes all actions and proceedings required on its part
to be taken prior to the issuance and delivery of the Shares pursuant to the
terms of the respective Plans, including without limitation, collection of
required payment for the Shares, the Shares will be validly issued, fully paid
and nonassessable.
We consent to your filing this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ Hahn & Hessen LLP
Hahn & Hessen LLP
Exhibit 23.1
[logo]
[Letterhead of Coopers & Lybrand]
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement of
Advanced Radio Telecom Corp. ("ART") on Form S-8 of our report dated April 26,
1996, except for Note 5B as to which the date is June 26, 1996, except for the
second paragraph of Note 2A, Note 2C and the second paragraph of Note 11A as to
which the date is October 11, 1996 and except for the fourth paragraph of Note
1A and Note 1C as to which the date is November 12, 1996, on our audits of the
financial statements of ART as of December 31, 1995 and 1994, for the years then
ended, and for the period from August 23, 1993 (date of inception) to December
31, 1993, appearing in ART's registration statement on Form S-1 (File No.
333-19295), dated February 3, 1997, filed with the Securities and Exchange
Commission pursuant to the Securities Act of 1933.
/s/Coopers & Lyband L.L.P.
New York, New York
February 12, 1997
