<PAGE>
As filed with the Securities and Exchange Commission on December 17, 1999
Reg. No. __________
===========================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
FIRSTLINK COMMUNICATIONS, INC.
------------------------------------------------------
(Exact name of issuer as specified in its charter)
OREGON 93-1197477
- ---------------------------- ---------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
190 SW Harrison Street, Portland, Oregon 97201
-------------------------------------------------------
(Address of principal executive offices, including Zip Code)
1997 Restated Combined Incentive Stock Option
and Nonqualified Stock Option Plan
1998-1999 Combined Incentive Stock Option
and Nonqualified Stock Option Plan
1999 Combined Incentive Stock Option
and Nonqualified Stock Option Plan
---------------------------------------------------
(Full title of the plans)
A. Roger Pease
President
190 SW Harrison
Portland, Oregon 97201
----------------------------------------------
(Name and address of agent for service)
(503) 306-4444
--------------------------------------------------------------
(Telephone number, including area code, of agent for service)
Copy To:
David H. Drennen, Esq.
Neuman & Drennen, LLC
5445 DTC Parkway, Penthouse 4
Englewood, Colorado 80111
(303) 221-4700
===========================================================================
<PAGE>
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------
Proposed Proposed
Title of Maximum Maximum Amount of
Securities to be Amount to be Offering Price Aggregate Registra-
Registered Registered Per Share(1) Offering Price(1)tion Fee
---------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, no 566,668 $1.57 $892,794 $235.70
par value (1)
Common Stock, no 3,000,000 $7.38 $22,140,000 $5,844.96
par value (2)
----------- ---------- ------------ ---------
Total 3,556,668 $______ $23,032,794 $6,080.66
- ---------------------------------------------------------------------------
(1) Shares issuable upon exercise of options that have been granted under the
Registrant's 1997 Restated Combined Incentive Stock Option and Nonqualified
Stock Option Plan and the Registrant's 1998-1999 Combined Incentive Stock
Option and Nonqualified Stock Option Plan. The maximum offering price per
share is the weighted average exercise price of those options.
(2) Shares issuable upon exercise of options that may be granted under the
1999 Incentive Plan. The maximum offering price is estimated solely for
purposes of calculating the amount of the registration fee, pursuant to
Rule 457(h) under the Securities Act of 1933, as amended (the "Act").
The offering price per share and aggregate offering price are based on
the last sale price of Registrant's Common Stock on December 16, 1999, as
reported on Nasdaq.
Approximate date of commencement of proposed sale to the public: As
soon as practicable after this Registration Statement becomes effective.
<PAGE>
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by FirstLink Communications, Inc., an
Oregon corporation (the "Company" or the "Registrant") with the Securities and
Exchange Commission ("Commission") are incorporated into this Registration
Statement:
(1) The Company's Quarterly Report on Form 10-QSB for the quarter ended
September 30, 1999, dated November 12, 1999;
(2) The Company's Quarterly Report on Form 10-QSB for the quarter ended
June 30, 1999, dated August 13, 1999;
(3) The Company's Definitive Proxy Statement for its Special Meeting of
Shareholders, as filed with the Commission on November 12, 1999;
(4) The Company's Current Report on Form 8-K dated August 9, 1999;
(5) The Company's Quarterly Report on Form 10-QSB for the quarter ended
March 31, 1999, as filed with the Commission on May 13, 1999;
(6) The Company's Annual Report on Form 10-KSB for the year ended
December 31, 1998 as filed with the Commission on April 13, 1999;
(7) A description of the Company's common stock as contained in the
Company's Registration Statement on Form SB-2 (Registration No. 333-
49291) filed with the Commission on April 2, 1999; and
(8) All reports and other documents subsequently filed by the Company
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act
prior to the filing of a post effective amendment which indicates
that all securities offered have been sold or which deregisters all
securities then remaining unsold, shall be deemed to be incorporated
by reference herein and to be a part of this registration statement
from the date of the filing of such reports and documents.
DESCRIPTION OF SECURITIES
Not applicable.
INTERESTS OF NAMED EXPERTS AND COUNSEL
Not applicable.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Our articles of incorporation limit the liability of a directors for
monetary damages for his conduct as a director, except for:
- - Any breach of his duty of loyalty to FirstLink or its shareholders,
- - Acts or omissions not in good faith or that involved intentional
misconduct or a knowing violation of law,
- - Dividends or other distributions of corporate assets from which the
director derives an improper personal benefit.
- - Liability under federal securities law.
The effect of this provisions is to eliminate our right and the right of our
shareholders (through shareholder's derivative suits on our behalf) to recover
monetary damages against a director for breach of his fiduciary duty of care
as a director, except for the acts described above. This provisions does not
limit or eliminate our right or the right of a shareholder to seek non-
monetary relief, such as an injunction or rescission, in the event of a breach
of a director's duty of care. Our by-laws provide that if Oregon law is
amended, in the case of alleged occurrences of actions or omissions preceding
any such amendment, the amended indemnification provisions shall apply only to
the extent that the amendment permits us to provide broader indemnification
rights than the law permitted prior to such amendment.
Our articles of incorporation and by-laws also provide that we shall
indemnify, to the full extent permitted by Oregon law, any of our directors,
officers, employees or agents who are made, or threatened to be made, a party
to a proceeding by reason of the fact that he or she is or was one of our
directors, officers, employees or agents. The indemnification is against
judgments, penalties, fines, settlements and reasonable expenses incurred by
the person in connection with the proceeding if certain standards are met.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to our directors, officers and controlling persons in
accordance with these provisions, or otherwise, we have been advised that, in
the opinion of the SEC, indemnification for liabilities arising under the
Securities Act of 1933 is against public policy as expressed in the Securities
Act and is, therefore, unenforceable.
The only statute, charter provision, by-law, contract, or other
arrangement under which any controlling person, director or officers of the
Registrant is insured or indemnified in any manner against any liability which
he may incur in his capacity as such, is as follows:
Our articles of incorporation permit and its By-laws require us to
indemnify officers and directors to the fullest extent permitted by the Oregon
Business Corporation Law (OBCA). We have also entered into agreements to
indemnify our directors and executive officers to provide the maximum
indemnification permitted by Oregon law. These agreements, among other
provisions, provide indemnification for certain expenses (including attorney
fees), judgments, fines and settlement amounts incurred in any action or
proceeding, including any action by or in our right.
Article VI of the our by-laws permits us to indemnify our directors,
officers, employees and agent to the maximum extent permitted by the OBCA.
Section 317 of the OBCA provides that a corporation has the power to indemnify
and hold harmless a director, officer, employer, or agent of the corporation
who is or is made a party or is threatened to be made a party to any
threatened action, suit or proceeding, whether civil, criminal, administrative
or investigative, against all expense, liability and loss actually and
reasonably incurred by such person in connection with such a proceeding if he
or she acted in good faith and in a manner he or she reasonably believed to be
in the best interest of the corporation, and, with respect to any criminal
proceeding, had no reasonable cause to believe that the conduct was unlawful.
If it is determined that the conduct of such person meets these standards,
such person may be indemnified for expenses incurred and amounts paid in such
proceeding if actually and reasonably in connection therewith.
If such a proceeding is brought by or on behalf of the corporation (i.e.,
a derivative suit), such person may be indemnified against expenses actually
and reasonably incurred if such person acted in good faith and in a manner
reasonably believed to be in the best interest of the corporation and its
shareholders. There can be no indemnification with respect to any matter as
to which such person is adjudged to be liable to the corporation unless and
only to the extent that the court in which such action or suit was brought
shall determine upon application that, despite such adjudication but in view
of all of the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses as the court shall deem proper.
Where any such person is successful in any such proceeding, such person
is entitled to be indemnified against expenses actually and reasonably
incurred by him or her. In all other cases (unless order by a court),
indemnification is made by the corporation upon determination by it that
indemnification of such person is proper in the circumstances because such
person has met the applicable standard or conduct.
A corporation may advance expenses incurred in defending any such
proceeding upon receipt of an undertaking to repay any amount so advanced if
it is ultimately determined that the person is not eligible for
indemnification.
The indemnification rights provided in Section 317 of the OBCA are not
exclusive of additional rights to indemnification for breach of duty to the
corporation and its shareholders to the extent additional rights are
authorized in the corporation's articles of incorporation and are not
exclusive of any other rights to indemnification under any by-law, agreement,
vote of shareholders or disinterested directors or otherwise, with as to
action in his or her office and as to action in another capacity which holding
such office.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS
Exhibit
Number Description
--------- -----------
3.1 Articles of Incorporation (1)
*5.1 Opinion of Neuman & Drennen, LLC relating to the issuance
of shares of Common Stock pursuant to the 1997 Restated
Combined Incentive Stock Option and Nonqualified Stock
Option Plan; and the 1998-1999 Combined Incentive Stock
Option and Nonqualified Stock Option Plan; and the 1999
Incentive Plan.
*23.1 Consent of Neuman & Drennen, LLC
*23.2 Consent of KPMG LLP, Certified Public Accountants.
*24.1 Power of Attorney. Reference is made to Signature page.
*99.1 1997 Restated Combined Incentive Stock Option and
Nonqualified Stock Option Plan.
*99.2 1998-1999 Combined Incentive Stock Option and Nonqualified
Stock Option Plan
99.3 1999 Incentive Plan (2)
- ------------------------------------------------------------
* Filed herewith
(1) Incorporated by reference from Exhibit 3.1 to the Company's
Registration Statement on Form SB-2, Registration No. 33-49291.
(2) Incorporated by reference from Appendix E to the Company's
Definitive Proxy Statement filed with the Commission on November 12,
1999.
UNDERTAKINGS
1. The undersigned Registrant hereby undertakes:
(a) To file, during any period in which offerings 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;
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. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which
was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b)
(Section 230.424(b) of this chapter) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in
the maximum aggregate offering price set forth in the "Calculation
of Registration Fee" table in the effective registration statement.
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)(i) and (a) (ii) do not apply if the
registration statement is on Form S-3 or Form S-8 and the information required
to be included in a post-effective amendment by those paragraphs is contained
in periodic reports filed by the issuer pursuant to Section 13 or Section
15(d) of the Exchange Act that are incorporate by reference in the
registration statement.
(b) That, for the purposes of determining any liability under the Act,
each such post-effective amendment 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; and
(c) 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.
2. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Act, 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.
3. The undersigned Registrant hereby undertakes to deliver, or cause to be
delivered with the Prospectus, to each person to whom the Prospectus is sent
or given, the latest annual report to Securityholders that is incorporated by
reference in the Prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be presented by
Article 3 of Regulation S-X are not set forth in the Prospectus, to deliver,
or cause to be delivered to each person to whom the Prospectus is sent or
given, the latest quarterly report that is specifically incorporated by
reference in the Prospectus to provide such interim financial information.
4. Insofar as indemnification for liabilities arising under the Act 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 Act 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 Act and will be governed by
the final adjudication of such issue.
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
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 Denver, State of Colorado, on
December 17, 1999.
FIRSTLINK COMMUNICATIONS, INC.
By: /s/ A. Roger Pease
----------------------------------
A. Roger Pease
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints A. Roger Pease and Jeffrey S. Sperber,
and each or any one of them, his true and lawful attorney-in-fact and agent,
with full power of substitution and re-substitution, 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 to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
connection therewith, 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 any of them, or their or his substitutes or substitute,
may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed by the following persons
in the capacities and on the dates indicated.
Signature Position Date
/s/ A. Roger Pease President, Chief Executive 12/17/99
- ---------------------------- Officer and Director -------
A. Roger Pease
/s/ Jeffrey S. Sperber Chief Financial 12/17/99
- ----------------------------- Officer --------
Jeffrey S. Sperber (Principal Financial and
Accounting Officer)
/s/ Thomas E. McChesney Director 12/17/99
- ------------------------------- --------
Thomas E. McChesney
/s/ Robert F. Olsen Director 12/17/99
- ------------------------------- --------
Robert F. Olsen
/s/ James F. Twaddell Director 12/17/99
- - ------------------------------ --------
James F. Twaddell
</TABLE>
<PAGE>
EXHIBIT 5.1
NEUMAN & DRENNEN, LLC
5445 DTC Parkway, Penthouse 4
Englewood, Colorado 80111
Telephone: (303) 221-4700
Facsimile: (303) 448-3454
December 17, 1999
FirstLink Communications, Inc.
190 SW Harrison Street
Portland, Oregon 97201
Re: S.E.C. Registration Statement on Form S-8
Ladies and Gentlemen:
We have acted as counsel to FirstLink Communications, Inc. (the
"Company")in connection with a Registration Statement to be filed with the
United Stated Securities and Exchange Commission, Washington, D.C., pursuant
to the Securities Act of 1933, as amended, relating to the registration of an
aggregate of 3,566,668 shares "the "Shares") of the Company's no par value
common stock (the "Common Stock") offered under the Company's 1997 Restated
Combined Incentive Stock Option and Nonqualified Stock Option Plan, its 1998-
1999 Restated Combined Incentive Stock Option and Nonqualified Stock Option
Plan, and its 1999 Incentive Plan (together, the "Plans"). In connection with
such representation of the Company, we have examined such corporate records,
and have made such inquiry of government officials and Company officials and
have made such examination of the law as we deemed appropriate in connection
with delivering this opinion.
Based upon the foregoing, we are of the opinion as follows:
1. The Company has been duly incorporated and organized under the laws
of the State of Oregon and is validly existing as a corporation in good
standing under the laws of that state.
2. All necessary corporate action has been duly taken to authorize the
establishments of the Plans and the issuance of the Shares under the Plans;
3. The shares registered for resale and offered by the Selling
Shareholders have been lawfully and validly issued, fully paid and
nonassessable shares of the Company's common stock; and
4. The Shares, when issued in accordance with the Plan will be
legally issued, fully paid and nonassessable.
Sincerely,
David H. Drennen
<PAGE>
Exhibit 23.1
NEUMAN & DRENNEN, LLC
5445 DTC Parkway, Penthouse 4
Englewood, Colorado 80111
Telephone: (303) 221-4700
Facsimile: (303) 448-3454
December 17, 1999
FirstLink Communications, Inc.
190 SW Harrison Street
Portland, Oregon 97201
Re: S.E.C. Registration Statement on Form S-8
Ladies and Gentlemen:
We hereby consent to the inclusion of our opinion regarding the legality
of the securities being registered by the Registration Statement to be filed
as Exhibit 5.1 of the Registration Statement on Form S-8 with the United
Stated Securities and Exchange Commission, Washington, D.C., pursuant to the
Securities Act of 1933, as amended, by FirstLink Communications, Inc., an
Oregon corporation, (the "Company").
We further consent to the reference in such Registration Statement to our
having given such opinions.
Sincerely,
David H. Drennen
<PAGE>
Exhibit 23.2
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors
FirstLink Communications, Inc.
We consent to the use of our report, dated January 29, 1999, except for note 1
which is at March 11, 1999, relating to the balance sheet of FirstLink
Communications, Inc. as of December 31, 1998, and the related statements of
operations, stockholders' equity and cash flows for each of the years in the
two-year period ended December 31, 1998 which report is incorporated herein by
reference in the Registration Statement on Form S-8, dated December 17, 1999,
of FirstLink Communications, Inc., and to the reference to the reference to
our firm under the heading "Experts" in the Registration Statement.
/s/ KPMG LLP
Portland, Oregon
December 17, 1999
<PAGE>
Exhibit No. 99.1 1997 Stock Option Plan.
FIRSTLINK COMMUNICATIONS, INC.
1997 RESTATED COMBINED INCENTIVE STOCK OPTION ("ISO") AND
NONQUALIFIED STOCK OPTION ("NSO") PLAN
1. PURPOSE
The purpose of the FirstLink Communications, Inc. 1997 Restated Incentive
Stock Option and Nonqualified Stock Option Plan (the "Plan") is to promote the
growth and general prosperity of FirstLink Communications, Inc., an Oregon
corporation (the "Company") and its subsidiary corporations by permitting the
Company to grant options to purchase shares of its common stock (the "Common
Stock") to key employee's and directors. The Plan is designed to help attract
and retain superior personnel for positions of substantial responsibility With
the Company and its subsidiary corporations, and to provide key employees with
an additional incentive to contribute to the success of the company and those
subsidiary corporations. The Company intends that options granted pursuant to
the provisions of the Plan as incentive stock options ("ISO") will qualify as
"incentive stock options" within the meaning of Section 421 through 424 of the
Internal Revenue Code of 1986, as amended (the "Code"). Nonqualified stock
options ("NSO") granted under the Plan will not meet the requirements of
Sections 421 through 424 of the Code.
2. ADMINISTRATION
2.1 PLAN ADMINISTRATORS. This Plan shall be administered by the
Company's Board of Directors. The Board of Directors is hereafter referred to
as the "Plan Administrators." The Board may designate a committee to act as
the Plan Administrators. Actions of the Plan Administrators shall be taken by
majority vote or by unanimous written consent.
2.2 AUTHORITY OF PLAN ADMINISTRATORS. Subject to the provisions of the
Plan, and with a view to effecting its purpose, the Plan Administrators shall
have sole authority, in their absolute discretion:
2.2.1 to construe and interpret the Plan,
2.2.2 to define the terms used herein,
2.2.3 to prescribe, amend and rescind rules and regulations
relating to the Plan,
2.2.4 to determine the individuals to whom options to purchase
shares of Common stock shall be granted under the Plan,
2.2.5 to determine the time or times at which options shall be
granted under the Plan,
2.2.6 to determine the number of shares of Common Stock subject
to each option, the option price, and the duration of each
option granted under the Plan,
2.2.7 to determine all of the other terms and conditions of
options granted under the Plan, and
2.2.8 to make all other determinations necessary or advisable
for the administration of the Plan and do everything
necessary or appropriate to administer the Plan.
All decisions, determinations and interpretations made by the Plan
Administrators shall be final and conclusive on all participants in the Plan
and on their legal representatives, heirs and beneficiaries. The Plan
Administrators shall endeavor to ensure that ISO option agreements entered
into pursuant to the Plan meet all the requirements for incentive stock
options described in of the Code.
2.3 INDEMNIFICATION OF PLAN ADMINISTRATORS. In addition to such other
rights of Indemnification as they may have as directors or as officers of the
Company, the Plan Administrators shall be indemnified by the company against
all reasonable expenses, including attorneys' fees actually and necessarily
incurred in connection with the defense of any action, suit or proceeding, or
in connection With any appeal therein, to which they or any of them may be a
party by reason of any action taken or failure to act under or in connection
with the Plan or any option thereunder, and against all amounts paid by them
in settlement thereof (provided such settlement is approved by independent
legal counsel selected by the Company) or paid by them in satisfaction of a
judgment in any such action, suit or proceeding, except in relation to matters
as to which it shall be adjudged in such action, suit or proceeding that such
Plan Administrator is liable for negligence or misconduct in the performance
of his duties; provided that within sixty (60) days after institution of any
such action, suit or proceeding a Plan Administrator shall in writing offer
the company the opportunity, at its own expense, to handle and defend the
same.
2.4 TERMS, CONDITIONS AND METHOD OF GRANT. The terms and conditions of
options granted under the Plan may differ from one another as the Plan
Administrators, In their absolute discretion, shall determine as long as all
options granted under the Plan satisfy the requirements of the Plan. No
employee who receives an option (the "optionee") shall have any rights with
respect to an option granted under the Plan unless the optionee shall have
executed and delivered to the Plan Administrators an option agreement. The
option agreement shall be in the form and shall contain such provisions
consistent with the Plan as the Plan Administrators, acting with the benefit
of legal counsel, shall deem advisable. The date of the option agreement shall
be the date of granting the option to the optionee for all purposes of the
Plan. No option under the Plan shall be granted the exercise of which shall
be conditioned upon the exercise of any other option under the Plan or any
other plan.
3. NUMBER OF SHARES SUBJECT TO PLAN
Subject to the provisions of Section 13, the maximum aggregate number of
shares that may be optioned and sold under the Plan is 800,000 shares of
authorized and unissued Common Stock. If any of the options granted under the
Plan expire or terminate for any reason before they have been exercised in
full, the unpurchased stock subject to those expired or terminated options
shall again be available for the purposes of the Plan. The Plan
Administrators may designate any option granted under the Plan as ISO or NSO.
4. ELIGIBILITY AND PARTICIPATION
Only key management, full-time employees or directors of the company or
its subsidiaries shall be eligible for selection by the Plan Administrators to
participate in the Plan. As used herein, the term "full-time employee" shall
mean any person employed by the Company or its subsidiaries, in return for
salary, wages or other compensation, whose employment shall be regular as
opposed to a part time or job basis.
5. PLAN DETAILS
5.1 EFFECTIVE DATE. The Plan shall become effective upon its adoption
by the Board of Directors of the company, subject to approval of the Plan by
the shareholders of the Company, as provided in Section 15. The Plan shall
continue in effect for a term of ten (10) years unless sooner terminated under
Section 14.
5.2 DURATION OF OPTIONS. Each option and all rights thereunder
granted pursuant to the terms of the Plan shall expire on the date determined
by the Plan Administrators, but in no event shall any option granted under the
Plan expire later than ten (10) years from the date on which the option is
granted. In addition, each option shall be subject to early termination as
provided in the Plan.
5.3 EXERCISE PRICE. The purchase price for shares of Common Stock
acquired pursuant to the exercise (in whole or in part) of any option shall be
not less than the fair market value of the stock at the time of the grant of
the option. Fair market value shall be determined by the Plan Administrators
on the basis of those factors they deem appropriate; provided that the Plan
Administrators shall make a good faith effort to determine such fair market
value in selecting such factors.
6. EXERCISE
6.1 EXERCISE OF OPTIONS. Each option shall be exercisable in one or more
installments during its term, and the right to exercise may be cumulative as
determined by the Plan Administrators. No option may be exercised for a
fraction of a share of Common Stock or other than on a business day of the
Company. The full purchase price of any shares purchased shall be paid at the
time of exercise of the option by a combination of cash, certified or
cashier's check payable to the order of the Company, or shares of Common
Stock. If any portion of the purchase price is paid in shares of Common
Stock, those shares shall be tendered at their then fair market value, as
determined by the Plan Administrators in accordance with Section 5.3 of the
Plan. No option may be exercised on a date later than ten (10) years from the
date it is granted. For persons who own ten (10) percent of the voting power
or value of all classes of the Company, the maximum exercised period is five
(5) years for ISO options.
6.2 WRITTEN NOTICE REQUIRED. Any option granted pursuant to the terms
of the Plan shall be considered exercised when written notice of that
exercise, together with the investment representations described in Section 7,
if any, have been given to the Company at its principal office by the person
entitled to exercise the option and full payment for the shares with respect
to which the option is exercised has been received by the Company. Upon
receipt thereof, and in connection with the transfer of Common Stock, the
Company shall provide optionee with a written statement containing the
information required by Section 6039(a) of the Code.
7. COMPLIANCE WITH STATE AND FEDERAL LAWS
Shares of Common Stock shall not be issued with respect to any option
granted under the Plan unless the exercise of that option and the issuance and
delivery of the Common Stock pursuant to that exercise shall comply with all
relevant provisions of state and Federal laws, rules and regulations, and the
requirements of any stock exchange upon which the Common Stock may then be
listed, and shall be further subject to the approval of counsel for the
Company with respect to that compliance. If any law or any regulation of the
Federal Home Loan Bank Board, the Securities Exchange Commission, or of any
other Federal or State body having jurisdiction shall require the Company or
the optionee to take any action in connection with the shares specified in the
optionee's notice, then the date for the delivery of the shares shall be
adjourned until the completion of the necessary action. The Plan
Administrators shall also require (to the extent required by applicable laws,
rules and regulations) an optionee to furnish evidence satisfactory to the
Company (including a written and signed representation letter and a consent to
be bound by any transfer restrictions imposed by law, legend condition, or
that the Common Stock is being purchased only for investment and without any
present intention to sell or distribute the Common Stock in violation of any
law, rule or regulation. Further, each optionee shall consent to the
imposition of a legend on the shares of Common Stock subject to this option
restricting their transferability as may be required by applicable laws, rules
and regulations.
8. EMPLOYMENT OF OPTIONEE
Each optionee, if requested by the Plan Administrators, must agree in
writing as a condition of the granting of his option, that he will remain in
the employ of the Company or one of its subsidiaries following the date of the
granting of that option for a period specified by the Plan Administrators,
which period shall in no event exceed three (3) years. Nothing in the Plan
(including the foregoing sentence) or in any option agreement entered into
under the Plan shall confer upon any optionee any right to continued
employment by the Company or any subsidiary, or limit in any way the right of
the Company at any time to terminate or alter the terms of that employment.
9. OPTION RIGHTS UPON TERMINATION OF EMPLOYMENT
If an optionee ceases to be employed by the Company, without regard to
the anticipated duration of that unemployment, for any reason other than death
or permanent and total disability, his option shall immediately terminate,
unless an option agreement allows the option to be exercised (to the extent
exercisable on the date of termination of employment or other relationship) at
any time within three (3) months after the date of termination of employment.
10. OPTION RIGHTS UPON DEATH OR DISABILITY
Except as otherwise limited by the Plan Administrators at the time of the
grant of an option, if an optionee dies or becomes permanently and totally
disabled within the meaning of Section 22(e) (3) of the Code while employed by
the Company or a subsidiary, or dies within three (3) months after ceasing to
an employee thereof, his option shall expire six (6) months after the date of
death or the date of permanent and total disability, unless either the option
agreement or the Plan otherwise provides for earlier termination. During that
six (6) months (or shorter) period, the person or persons to whom the
optionee's rights under the option shall pass by will or by the laws of
descent and distribution, but only to the extent that the optionee is entitled
to exercise the option at the date of death or the date of permanent and total
disability, as the case may be.
11. PRIVILEGES OF STOCK OWNERSHIP
Notwithstanding the exercise of any option granted pursuant to the Plan,
no optionee shall have any of the rights or privileges of a shareholder of the
Company in respect of any shares of Common Stock issuable upon the exercise of
his or her option until the optionee becomes a shareholder of record.
12. OPTIONS NOT TRANSFERABLE
Options granted pursuant to the terms of the Plan may not be sold,
pledged, assigned, or transferred in any manner other than by will or the laws
of descent or distribution and may be exercised during the lifetime of an
optionee only by that optionee.
13. ADJUSTMENTS
13.1 ADJUSTMENTS FOR CHANGES IN CAPITALIZATION OR ORGANIZATION: AND
ACCELERATION OF RIGHT TO EXERCISE OPTION. All options granted pursuant to the
Plan shall be adjusted in a manner prescribed by this section.
13.1.1 If the outstanding shares of the Common Stock of the Company
are increased, decreased, changed into, exchanged for a
different number or kind of shares or securities through
recapitalization, reclassification, stock dividend, stock
split, or reverse stock split, an appropriate and proportionate
adjustment shall be granted under the Plan. A corresponding
adjustment changing the number or kind of shares of Common
Stock allocated to unexercised options or portions thereof,
which shall have been granted prior to any such change, shall
likewise be made. Any such adjustment in outstanding options
shall be made without change in the aggregate purchase price
applicable to the unexercised portion of the option, but with a
corresponding adjustment in the price for each share of Common
Stock or other unit of any security covered by the option.
13.1.2 Upon the effective date of the dissolution orliquidation of the
Company, or of a reorganization, merger, combination, or
consolidation of the Company with one or more other
corporations in which the Company is not the surviving
corporation, or of the transfer of substantially all of the
assets or stock of the Company to another corporation, the Plan
and any option theretofore granted hereunder shall terminate
unless provision is made in writing in connection with that
transaction for the continuance of the Plan and for the
assumption of options theretofore granted hereunder, or the
substitution for those options of new options covering the
stock of the successor Corporation, or a parent or subsidiary
thereof, with appropriate adjustments, as determined or
approved by the Plan Administrators, as to the number and kind
of shares of Common Stock subject to the substituted options
and prices therefor, in which event the Plan and the options
theretofore granted, or the new options substituted therefor,
shall continue in the manner and under the terms so provided.
For the purposes of the preceding sentence, the excess of the
aggregate fair market value of the shares subject to the option
immediately after the substitution or assumption over the
aggregate option price of those shares shall not be more than
the excess of the aggregate fair market value of the shares
subject to the option immediately before the substitution or
assumption over the aggregate option price of those shares, and
the new option or assumption of the old option shall not give
the optionee additional benefits which the optionee did not
have under the old option.
In the event of such dissolution, liquidation,
reorganization, merger, combination, consolidation, or sale or
transfer of assets or stock in which provision is not made in
the transaction for the continuance of the Plan and for the
assumption of options theretofore granted or the substitution
for those options of new options covering the securities of a
successor corporation or a parent or subsidiary thereof, or
(ii) a difference between the excess of the aggregate fair
market value of the shares subject to the option immediately
after the substitution or assumption over the aggregate option
price of those shares and the excess of the aggregate fair
market value of the shares subject to the option immediately
before the substitution or assumption over the aggregate option
price of those shares, each optionee (or that person's estate
or a person who acquired the right to exercise the option from
the optionee by bequest or inheritance) shall be entitled,
prior to the effective date of the consummation of any such
transaction, to purchase, in whole or in part, in full number
of shares of common Stock under the option or options granted
to him which he would otherwise have been entitled to purchase
during the remaining term of the option and without regard to
any otherwise applicable exercise restrictions set forth in the
option agreement. To the extent that any such exercise relates
to stock that is not otherwise available for purchase through
the exercise of the option by the optionee at that time, the
exercise shall be contingent upon the consummation of that
dissolution, liquidation, reorganization, merger, combination,
consolidation, or sale or transfer of assets or stock.
13.1.3 Notwithstanding the foregoing, in the event of a complete
liquidation of a subsidiary corporation, or in the event that
such corporation ceases to be a subsidiary corporation as that
term is defined herein, any unexercised options theretofore
granted to an employee of the subsidiary corporation shall be
deemed canceled three (3) months after the occurrence of any
such event unless the employee shall become employed by the
company or by any other subsidiary corporation on or before the
occurrence of any such event.
14. TERMINATION
14.1 TERMINATION AND AMENDMENT OF PLAN. The Plan shall terminate
ten(10) years after the earlier of its adoption by the Board of Directors or
its approval by the shareholders of the company, and no options shall be
granted under the Plan after that date; provided, however, that termination of
the Plan shall not terminate any option granted prior thereto, and options
granted prior to termination of the Plan and existing at the time of the
termination of the Plan shall continue to be subject to all the terms and
conditions of the Plan as if the Plan had not terminated. Subject to the
limitation contained in Section14.2, the Plan Administrators may at any time
amend or revise the terms of the Plan (including the form and substance of the
option agreements to be used hereunder), provided that no amendment or
revision (unless a majority of the shareholders of the company approve such
amendment) shall (i) increase the maximum aggregate number of shares of Common
Stock provided for in section 3that may be sold pursuant to options granted
under the Plan, except with the approval of the shareholders of the Company,
or except as required under the provisions of Section 13.1.1, (ii) permit the
granting of an option to anyone other than as provided for in Section 4, (iii)
increase the maximum term provided for in Section 5.2 and 5.4 of any option,
or (iv) change the minimum purchase price for shares of Common Stock under
Sections 5.3 and 5.4.
14.2 PRIOR RIGHTS AND OBLIGATIONS. No amendment, suspension, or
termination of the Plan shall, without the consent of the optionee, alter or
impair any of that optionee's rights or obligations under any option granted
under the Plan prior to that amendment, suspension, or termination.
15. APPROVAL OF SHAREHOLDERS
Within twelve (12) months before or after its adoption by the Board of
Directors of the Company, the Plan must be approved by the shareholders of the
Company holding at least a majority of the voting stock of the Company voting
in person or by proxy at the duly held shareholders' meeting. Options may be
granted under the Plan prior to obtaining those approvals, subject to the
limitations of Section 14 concerning the period during which options may be
granted, but those options shall be contingent upon those approvals being
obtained and may not be exercised prior to the receipt of those approvals.
16. RESERVATION OF SHARES OF COMMON STOCK
The Company, during the term of the Plan, will at all times reserve and
keep available a sufficient number of shares of Common Stock to satisfy the
requirements of the Plan. In addition, the Company will from time to time, as
is necessary to accomplish the purposes of the Plan, seek to obtain from any
regulatory agency having jurisdiction any requisite authority in order to
grant options under the Plan and to issue and sell shares of Common Stock
hereunder. The inability of the Company to obtain from any regulatory agency
having jurisdiction the authority deemed by the Company's counsel to be
necessary to the lawful issuance and sale of Common Stock hereunder shall
relieve the Company of any liability in respect of the nonissuance or sale of
the stock as to which the requisite authority shall not have been obtained.
17. HEADINGS
The headings of the sections of the Plan are for convenience only and
shall not be considered or referred to in resolving questions of
interpretation.
18. NO BROKER'S COMMISSIONS
No commissions may be paid to brokers on the sale by the Company to the
optionee of shares of Common Stock that is optioned and sold under the Plan.
19. APPLICATION OF FUNDS
The proceeds received by the Company from the sale of shares of Common
Stock pursuant to options will be used for general corporate purposes.
20. NO OBLIGATION TO EXERCISE OPTION
The granting of an option shall impose no obligation upon the optionee to
exercise such option.
21. NAME
The Plan is known as the "FirstLink Communications, Inc. 1997 Restated
Combined Incentive Stock Option and Nonqualified Stock Option Plan."
22. ADOPTION
The Plan was adopted by a resolution duly adopted by the Board of
Directors of the Company on July 1, 1996 and was approved by the shareholders
of the Company by action of such shareholders effective July 1, 1996.
23. SUPERCEDES PRIOR PLANS
The Plan supercedes and replaces the Company's 1996 Non-Qualified Stock
Option Plan and 1996 Incentive Stock Option Plan in their entirety.
Company:
FIRSTLINK COMMUNICATIONS, INC.
By: /s/ A. Roger Pease
--------------------------------
A. Roger Pease, President
CERTIFICATION
I hereby certify that the foregoing Plan was adopted by the Board of
Directors of the Company on February 25. 1997, and approved by the
shareholders of the Company effective February 24, 1998.
/s/ Jeffrey S. Sperber
---------------------------------
Jeffrey S. Sperber
Chief Financial Officer
<PAGE>
<PAGE>
AMENDMENT TO FIRSTLINK COMMUNICATIONS, INC.
1997 RESTATED COMBINED INCENTIVE STOCK OPTION ("ISO")
AND NONQUALIFIED STOCK OPTION ("NSO") PLAN
RECITALS:
A. FirstLink Communications, Inc., an Oregon corporation (the
"Company"), desires to promote the growth and general prosperity of the
Company and its subsidiary corporations. Accordingly, the Company has granted
options to purchase its shares of common stock (the "Common Stock") to certain
key employees.
B. The Company adopted the FirstLink Communications, Inc. 1997 Combined
Incentive Stock Option ("ISO") and Nonqualified Stock Option ("NSO") Plan (the
"1997 Option Plan") on February 25, 1997. The Company now desires greater
flexibility to vary the terms of certain nonqualified stock options (the
"NSOs") previously granted to certain Company employees and thus enable the
Company to provide certain key employees with additional incentive to
contribute to the success of the Company.
C. Accordingly, the Company desires to adopt this Amendment to
FirstLink Communications, Inc. 1997 Combined Incentive Stock Option ('ISO")
and Nonqualified Stock Option ("NSO") Plan (this "Amendment") and thus amend
the 1997 Option Plan. All capitalized terms not herein defined shall have the
meanings given to them in the 1997 Option Plan.
D. The existing 1998 Option Plan makes the requirements for issuance of
ISOs under Sections 421 through 424 of the Internal Revenue Code, as amended
(the "ISO Code Requirements") applicable to both ISOs and NSOs granted under
the 1998 Option Plan.
NOW, THEREFORE, the Company adopts the following Amendment:
AMENDMENT:
1. ISO REQUIREMENTS INAPPLICABLE TO CERTAIN NSOS. The 1997 Option Plan
is amended to provide that NSOs granted under the 1997 Option Plan are not
required to comply with the requirements for issuance of ISOs under Sections
421 through 424 of the Internal Revenue Code of 1986, as amended (the "Code").
In addition, certain other restrictions of the 1997 Option Plan shall not be
applicable to NSOs granted under the 1997 Option Plan, as provided in this
Amendment. The Plan Administrators may provide in each optionee's option
agreement for NSOs granted under the 1997 Option Plan the extent to which such
requirements and restrictions may be waived or modified.
2. AMENDMENT TO CERTAIN SECTIONS OF THE 1997 OPTION PLAN. Without
limiting the foregoing, the following particular sections of the 1997 Option
Plan shall be amended as provided herein:
a. CASHLESS EXERCISE. Section 6.1 is amended to permit an
optionee to exercise all or any portion of his or her NSOs in any manner
provided for in such optionee's option agreement.
b. OPTION RIGHTS UPON TERMINATION OF EMPLOYMENT. Section 9 is
amended to permit an optionee to exercise all or any portion of his or
her NSOs in any manner and for the length of time provided for in such
optionee's option agreement.
c. OPTION RIGHTS UPON DEATH OR DISABILITY. Section 10 is amended
to permit an optionee to exercise all or any portion of his or her NSOs
in any manner and for the length of time provided for in such optionee's
option agreement.
d. ADJUSTMENTS FOR CHANGES IN CAPITALIZATION OR ORGANIZATION.
Section 13.1 is amended to permit an optionee to exercise all or any
portion of his or her NSOs in any manner and for any length of time
provided for in such optionee's option agreement, regardless of any
change in capitalization or organization of the Company and or its
successors or assigns.
e. SHAREHOLDER APPROVAL NOT ALWAYS NEEDED. Section 15 is amended
in so far as shareholder approval shall not be required to approve NSOs
granted to optionees pursuant to the 1997 Option Plan, nor shall
shareholder approval be necessary to approve the 1997 Option Plan itself
with respect to the Company's authority to grant nonqualified stock
options.
3. TERMINATION. Section 14 shall be amended by removing the two
references to Section "5.4," which does not exist in the 1997 Option Plan.
4. NO OTHER MODIFICATION. Except as amended by this Amendment, the
1997 Option Plan shall remain unmodified and in full force and effect.
5. ADOPTION OF AMENDMENT. Notwithstanding anything in the Amendment to
the contrary, this Amendment shall not amend or change any provision of the
1998 Option Plan that requires shareholder approval as set forth in Section
14.1.
6. APPLICABLE LAW. This Amendment shall be construed, applied, and
enforced in accordance with the laws of the state of Oregon.
IN WITNESS WHEREOF, the Company has adopted this Amendment as of the date
first written above.
COMPANY:
FIRSTLINK COMMUNICATIONS, INC.
By: /s/ A, Roger Pease
----------------------------------------
A. Roger Pease, President
CERTIFICATION
I hereby certify that the foregoing Amendment was adopted by the Board of
Directors of the Company on February 23, 1999.
/s/ Jeffrey S. Sperber
---------------------------------------
Jeffrey S. Sperber, Assistant Secretary
<PAGE>
Exhibit No. 99.2 1998-1999 Stock Option Plan.
FIRSTLINK COMMUNICATIONS, INC.
1998-1999 COMBINED INCENTIVE STOCK OPTION ("ISO") AND
NONQUALIFIED STOCK OPTION ("NSO") PLAN
1. PURPOSE
The purpose of the FirstLink Communications, Inc. 1998-1999 Combined
Incentive Stock Option and Nonqualified Stock Option Plan (the "Plan") is to
promote the growth and general prosperity of FirstLink Communications, Inc.,
an Oregon corporation (the "Company") and its subsidiary corporations by
permitting the Company to grant options to purchase shares of its common stock
(the "Common Stock") to key employee's and directors. The Plan is designed to
help attract and retain superior personnel for positions of substantial
responsibility With the Company and its subsidiary corporations, and to
provide key employees with an additional incentive to contribute to the
success of the company and those subsidiary corporations. The Company intends
that options granted pursuant to the provisions of the Plan as incentive stock
options ("ISO") will qualify as "incentive stock options" within the meaning
of Section 421 through 424 of the Internal Revenue Code of 1986, as amended
(the "Code"). Nonqualified stock options ("NSO") granted under the Plan will
not meet the requirements of Sections 421 through 424 of the Code.
2. ADMINISTRATION
2.1 PLAN ADMINISTRATORS. This Plan shall be administered by the
Company's Board of Directors. The Board of Directors is hereafter referred to
as the "Plan Administrators." The Board may designate a committee to act as
the Plan Administrators. Actions of the Plan Administrators shall be taken by
majority vote or by unanimous written consent.
2.2 AUTHORITY OF PLAN ADMINISTRATORS. Subject to the provisions of the
Plan, and with a view to effecting its purpose, the Plan Administrators shall
have sole authority, in their absolute discretion:
2.2.1 to construe and interpret the Plan,
2.2.2 to define the terms used herein,
2.2.3 to prescribe, amend and rescind rules and regulations
relating to the Plan,
2.2.4 to determine the individuals to whom options to purchase
shares of Common stock shall be granted under the Plan,
2.2.5 to determine the time or times at which options shall be
granted under the Plan,
2.2.6 to determine the number of shares of Common Stock subject
to each option, the option price, and the duration of each
option granted under the Plan,
2.2.7 to determine all of the other terms and conditions of
options granted under the Plan, and
2.2.8 to make all other determinations necessary or advisable
for the administration of the Plan and do everything
necessary or appropriate to administer the Plan.
All decisions, determinations and interpretations made by the Plan
Administrators shall be final and conclusive on all participants in the Plan
and on their legal representatives, heirs and beneficiaries. The Plan
Administrators shall endeavor to ensure that ISO option agreements entered
into pursuant to the Plan meet all the requirements for incentive stock
options described in of the Code.
2.3 INDEMNIFICATION OF PLAN ADMINISTRATORS. In addition to such other
rights of Indemnification as they may have as directors or as officers of the
Company, the Plan Administrators shall be indemnified by the company against
all reasonable expenses, including attorneys' fees actually and necessarily
incurred in connection with the defense of any action, suit or proceeding, or
in connection With any appeal therein, to which they or any of them may be a
party by reason of any action taken or failure to act under or in connection
with the Plan or any option thereunder, and against all amounts paid by them
in settlement thereof (provided such settlement is approved by independent
legal counsel selected by the Company) or paid by them in satisfaction of a
judgment in any such action, suit or proceeding, except in relation to matters
as to which it shall be adjudged in such action, suit or proceeding that such
Plan Administrator is liable for negligence or misconduct in the performance
of his duties; provided that within sixty (60) days after institution of any
such action, suit or proceeding a Plan Administrator shall in writing offer
the company the opportunity, at its own expense, to handle and defend the
same.
2.4 TERMS, CONDITIONS AND METHOD OF GRANT. The terms and conditions of
options granted under the Plan may differ from one another as the Plan
Administrators, In their absolute discretion, shall determine as long as all
options granted under the Plan satisfy the requirements of the Plan. No
employee who receives an option (the "optionee") shall have any rights with
respect to an option granted under the Plan unless the optionee shall have
executed and delivered to the Plan Administrators an option agreement. The
option agreement shall be in the form and shall contain such provisions
consistent with the Plan as the Plan Administrators, acting with the benefit
of legal counsel, shall deem advisable. The date of the option agreement shall
be the date of granting the option to the optionee for all purposes of the
Plan. No option under the Plan shall be granted the exercise of which shall
be conditioned upon the exercise of any other option under the Plan or any
other plan.
3. NUMBER OF SHARES SUBJECT TO PLAN
Subject to the provisions of Section 13, the maximum aggregate number of
shares that may be optioned and sold under the Plan is 500,000 shares of
authorized and unissued Common Stock. If any of the options granted under the
Plan expire or terminate for any reason before they have been exercised in
full, the unpurchased stock subject to those expired or terminated options
shall again be available for the purposes of the Plan. The Plan
Administrators may designate any option granted under the Plan as ISO or NSO.
4. ELIGIBILITY AND PARTICIPATION
Only key management, full-time employees or directors of the company or
its subsidiaries shall be eligible for selection by the Plan Administrators to
participate in the Plan. As used herein, the term "full-time employee" shall
mean any person employed by the Company or its subsidiaries, in return for
salary, wages or other compensation, whose employment shall be regular as
opposed to a part time or job basis.
5. PLAN DETAILS
5.1 EFFECTIVE DATE. The Plan shall become effective upon its adoption
by the Board of Directors of the company, subject to approval of the Plan by
the shareholders of the Company, as provided in Section 15. The Plan shall
continue in effect for a term of ten (10) years unless sooner terminated under
Section 14.
5.2 DURATION OF OPTIONS. Each option and all rights thereunder
granted pursuant to the terms of the Plan shall expire on the date determined
by the Plan Administrators, but in no event shall any option granted under the
Plan expire later than ten (10) years from the date on which the option is
granted. In addition, each option shall be subject to early termination as
provided in the Plan.
5.3 EXERCISE PRICE. The purchase price for shares of Common Stock
acquired pursuant to the exercise (in whole or in part) of any option shall be
not less than the fair market value of the stock at the time of the grant of
the option. Fair market value shall be determined by the Plan Administrators
on the basis of those factors they deem appropriate; provided that the Plan
Administrators shall make a good faith effort to determine such fair market
value in selecting such factors.
6. EXERCISE
6.1 EXERCISE OF OPTIONS. Each option shall be exercisable in one or more
installments during its term, and the right to exercise may be cumulative as
determined by the Plan Administrators. No option may be exercised for a
fraction of a share of Common Stock or other than on a business day of the
Company. The full purchase price of any shares purchased shall be paid at the
time of exercise of the option by a combination of cash, certified or
cashier's check payable to the order of the Company, or shares of Common
Stock. If any portion of the purchase price is paid in shares of Common
Stock, those shares shall be tendered at their then fair market value, as
determined by the Plan Administrators in accordance with Section 5.3 of the
Plan. No option may be exercised on a date later than ten (10) years from the
date it is granted. For persons who own ten (10) percent of the voting power
or value of all classes of the Company, the maximum exercised period is five
(5) years for ISO options.
6.2 WRITTEN NOTICE REQUIRED. Any option granted pursuant to the terms
of the Plan shall be considered exercised when written notice of that
exercise, together with the investment representations described in Section 7,
if any, have been given to the Company at its principal office by the person
entitled to exercise the option and full payment for the shares with respect
to which the option is exercised has been received by the Company. Upon
receipt thereof, and in connection with the transfer of Common Stock, the
Company shall provide optionee with a written statement containing the
information required by Section 6039(a) of the Code.
7. COMPLIANCE WITH STATE AND FEDERAL LAWS
Shares of Common Stock shall not be issued with respect to any option
granted under the Plan unless the exercise of that option and the issuance and
delivery of the Common Stock pursuant to that exercise shall comply with all
relevant provisions of state and Federal laws, rules and regulations, and the
requirements of any stock exchange upon which the Common Stock may then be
listed, and shall be further subject to the approval of counsel for the
Company with respect to that compliance. If any law or any regulation of the
Securities Exchange Commission, or of any other Federal or State body having
jurisdiction shall require the Company or the optionee to take any action in
connection with the shares specified in the optionee's notice, then the date
for the delivery of the shares shall be adjourned until the completion of the
necessary action. The Plan Administrators shall also require (to the extent
required by applicable laws, rules and regulations) an optionee to furnish
evidence satisfactory to the Company (including a written and signed
representation letter and a consent to be bound by any transfer restrictions
imposed by law, legend condition, or that the Common Stock is being purchased
only for investment and without any present intention to sell or distribute
the Common Stock in violation of any law, rule or regulation. Further, each
optionee shall consent to the imposition of a legend on the shares of Common
Stock subject to this option restricting their transferability as may be
required by applicable laws, rules and regulations.
8. EMPLOYMENT OF OPTIONEE
Each optionee, if requested by the Plan Administrators, must agree in
writing as a condition of the granting of his option, that he will remain in
the employ of the Company or one of its subsidiaries following the date of the
granting of that option for a period specified by the Plan Administrators,
which period shall in no event exceed three (3) years. Nothing in the Plan
(including the foregoing sentence) or in any option agreement entered into
under the Plan shall confer upon any optionee any right to continued
employment by the Company or any subsidiary, or limit in any way the right of
the Company at any time to terminate or alter the terms of that employment.
9. OPTION RIGHTS UPON TERMINATION OF EMPLOYMENT
If an optionee ceases to be employed by the Company, without regard to
the anticipated duration of that unemployment, for any reason other than death
or permanent and total disability, his option shall immediately terminate,
unless an option agreement allows the option to be exercised (to the extent
exercisable on the date of termination of employment or other relationship) at
any time within three (3) months after the date of termination of employment.
10. OPTION RIGHTS UPON DEATH OR DISABILITY
Except as otherwise limited by the Plan Administrators at the time of the
grant of an option, if an optionee dies or becomes permanently and totally
disabled within the meaning of Section 22(e) (3) of the Code while employed by
the Company or a subsidiary, or dies within three (3) months after ceasing to
an employee thereof, his option shall expire six (6) months after the date of
death or the date of permanent and total disability, unless either the option
agreement or the Plan otherwise provides for earlier termination. During that
six (6) months (or shorter) period, the person or persons to whom the
optionee's rights under the option shall pass by will or by the laws of
descent and distribution, but only to the extent that the optionee is entitled
to exercise the option at the date of death or the date of permanent and total
disability, as the case may be.
11. PRIVILEGES OF STOCK OWNERSHIP
Notwithstanding the exercise of any option granted pursuant to the Plan,
no optionee shall have any of the rights or privileges of a shareholder of the
Company in respect of any shares of Common Stock issuable upon the exercise of
his or her option until the optionee becomes a shareholder of record.
12. OPTIONS NOT TRANSFERABLE
Options granted pursuant to the terms of the Plan may not be sold,
pledged, assigned, or transferred in any manner other than by will or the laws
of descent or distribution and may be exercised during the lifetime of an
optionee only by that optionee.
13. ADJUSTMENTS
13.1 ADJUSTMENTS FOR CHANGES IN CAPITALIZATION OR ORGANIZATION: AND
ACCELERATION OF RIGHT TO EXERCISE OPTION. All options granted pursuant to the
Plan shall be adjusted in a manner prescribed by this section.
13.1.1 If the outstanding shares of the Common Stock of the Company
are increased, decreased, changed into, exchanged for a
different number or kind of shares or securities through
recapitalization, reclassification, stock dividend, stock
split, or reverse stock split, an appropriate and proportionate
adjustment shall be granted under the Plan. A corresponding
adjustment changing the number or kind of shares of Common
Stock allocated to unexercised options or portions thereof,
which shall have been granted prior to any such change, shall
likewise be made. Any such adjustment in outstanding options
shall be made without change in the aggregate purchase price
applicable to the unexercised portion of the option, but with a
corresponding adjustment in the price for each share of Common
Stock or other unit of any security covered by the option.
13.1.2 Upon the effective date of the dissolution orliquidation of the
Company, or of a reorganization, merger, combination, or
consolidation of the Company with one or more other
corporations in which the Company is not the surviving
corporation, or of the transfer of substantially all of the
assets or stock of the Company to another corporation, the Plan
and any option theretofore granted hereunder shall terminate
unless provision is made in writing in connection with that
transaction for the continuance of the Plan and for the
assumption of options theretofore granted hereunder, or the
substitution for those options of new options covering the
stock of the successor Corporation, or a parent or subsidiary
thereof, with appropriate adjustments, as determined or
approved by the Plan Administrators, as to the number and kind
of shares of Common Stock subject to the substituted options
and prices therefor, in which event the Plan and the options
theretofore granted, or the new options substituted therefor,
shall continue in the manner and under the terms so provided.
For the purposes of the preceding sentence, the excess of the
aggregate fair market value of the shares subject to the option
immediately after the substitution or assumption over the
aggregate option price of those shares shall not be more than
the excess of the aggregate fair market value of the shares
subject to the option immediately before the substitution or
assumption over the aggregate option price of those shares, and
the new option or assumption of the old option shall not give
the optionee additional benefits which the optionee did not
have under the old option.
In the event of such dissolution, liquidation,
reorganization, merger, combination, consolidation, or sale or
transfer of assets or stock in which provision is not made in
the transaction for the continuance of the Plan and for the
assumption of options theretofore granted or the substitution
for those options of new options covering the securities of a
successor corporation or a parent or subsidiary thereof, or
(ii) a difference between the excess of the aggregate fair
market value of the shares subject to the option immediately
after the substitution or assumption over the aggregate option
price of those shares and the excess of the aggregate fair
market value of the shares subject to the option immediately
before the substitution or assumption over the aggregate option
price of those shares, each optionee (or that person's estate
or a person who acquired the right to exercise the option from
the optionee by bequest or inheritance) shall be entitled,
prior to the effective date of the consummation of any such
transaction, to purchase, in whole or in part, in full number
of shares of common Stock under the option or options granted
to him which he would otherwise have been entitled to purchase
during the remaining term of the option and without regard to
any otherwise applicable exercise restrictions set forth in the
option agreement. To the extent that any such exercise relates
to stock that is not otherwise available for purchase through
the exercise of the option by the optionee at that time, the
exercise shall be contingent upon the consummation of that
dissolution, liquidation, reorganization, merger, combination,
consolidation, or sale or transfer of assets or stock.
13.1.3 Notwithstanding the foregoing, in the event of a complete
liquidation of a subsidiary corporation, or in the event that
such corporation ceases to be a subsidiary corporation as that
term is defined herein, any unexercised options theretofore
granted to an employee of the subsidiary corporation shall be
deemed canceled three (3) months after the occurrence of any
such event unless the employee shall become employed by the
company or by any other subsidiary corporation on or before the
occurrence of any such event.
14. TERMINATION
14.1 TERMINATION AND AMENDMENT OF PLAN. The Plan shall terminate
ten(10) years after the earlier of its adoption by the Board of Directors or
its approval by the shareholders of the company, and no options shall be
granted under the Plan after that date; provided, however, that termination of
the Plan shall not terminate any option granted prior thereto, and options
granted prior to termination of the Plan and existing at the time of the
termination of the Plan shall continue to be subject to all the terms and
conditions of the Plan as if the Plan had not terminated. Subject to the
limitation contained in Section14.2, the Plan Administrators may at any time
amend or revise the terms of the Plan (including the form and substance of the
option agreements to be used hereunder), provided that no amendment or
revision (unless a majority of the shareholders of the company approve such
amendment) shall (i) increase the maximum aggregate number of shares of Common
Stock provided for in section 3that may be sold pursuant to options granted
under the Plan, except with the approval of the shareholders of the Company,
or except as required under the provisions of Section 13.1.1, (ii) permit the
granting of an option to anyone other than as provided for in Section 4, (iii)
increase the maximum term provided for in Section 5.2 and 5.4 of any option,
or (iv) change the minimum purchase price for shares of Common Stock under
Sections 5.3 and 5.4.
14.2 PRIOR RIGHTS AND OBLIGATIONS. No amendment, suspension, or
termination of the Plan shall, without the consent of the optionee, alter or
impair any of that optionee's rights or obligations under any option granted
under the Plan prior to that amendment, suspension, or termination.
15. APPROVAL OF SHAREHOLDERS
Within twelve (12) months before or after its adoption by the Board of
Directors of the Company, the Plan must be approved by the shareholders of the
Company holding at least a majority of the voting stock of the Company voting
in person or by proxy at the duly held shareholders' meeting. Options may be
granted under the Plan prior to obtaining those approvals, subject to the
limitations of Section 14 concerning the period during which options may be
granted, but those options shall be contingent upon those approvals being
obtained and may not be exercised prior to the receipt of those approvals.
16. RESERVATION OF SHARES OF COMMON STOCK
The Company, during the term of the Plan, will at all times reserve and
keep available a sufficient number of shares of Common Stock to satisfy the
requirements of the Plan. In addition, the Company will from time to time, as
is necessary to accomplish the purposes of the Plan, seek to obtain from any
regulatory agency having jurisdiction any requisite authority in order to
grant options under the Plan and to issue and sell shares of Common Stock
hereunder. The inability of the Company to obtain from any regulatory agency
having jurisdiction the authority deemed by the Company's counsel to be
necessary to the lawful issuance and sale of Common Stock hereunder shall
relieve the Company of any liability in respect of the nonissuance or sale of
the stock as to which the requisite authority shall not have been obtained.
17. HEADINGS
The headings of the sections of the Plan are for convenience only and
shall not be considered or referred to in resolving questions of
interpretation.
18. NO BROKER'S COMMISSIONS
No commissions may be paid to brokers on the sale by the Company to the
optionee of shares of Common Stock that is optioned and sold under the Plan.
19. APPLICATION OF FUNDS
The proceeds received by the Company from the sale of shares of Common
Stock pursuant to options will be used for general corporate purposes.
20. NO OBLIGATION TO EXERCISE OPTION
The granting of an option shall impose no obligation upon the optionee to
exercise such option.
21. NAME
The Plan is known as the "FirstLink Communications, Inc. 1998-1999
Combined Incentive Stock Option and Nonqualified Stock Option Plan."
22. ADOPTION
The Plan was adopted by a resolution duly adopted by the Board of
Directors of the Company on August 21, 1998.
Company:
FIRSTLINK COMMUNICATIONS, INC.
By: /s/ A. Roger Pease
--------------------------------
A. Roger Pease, President
CERTIFICATION
I hereby certify that the foregoing Plan was adopted by the Board of
Directors of the Company on August 21, 1998.
/s/ Jeffrey S. Sperber
---------------------------------------
Jeffrey S. Sperber, Assistant Secretary
<PAGE>
<PAGE>
AMENDMENT TO FIRSTLINK COMMUNICATIONS, INC.
1998-1999 COMBINED INCENTIVE STOCK OPTION ("ISO")
AND NONQUALIFIED STOCK OPTION ("NSO") PLAN
RECITALS:
A. FirstLink Communications, Inc., an Oregon corporation (the
"Company"), desires to promote the growth and general prosperity of the
Company and its subsidiary corporations. Accordingly, the Company has granted
options to purchase its shares of common stock (the "Common Stock") to certain
key employees.
B. The Company adopted the FirstLink Communications, Inc. 1998-1999
Combined Incentive Stock Option ("ISO") and Nonqualified Stock Option ("NSO")
Plan (the "1998 Option Plan") on August 21, 1998. The Company now desires
greater flexibility to vary the terms of certain nonqualified stock options
(the "NSOs") previously granted to certain Company employees and thus enable
the Company to provide certain key employees with additional incentive to
contribute to the success of the Company.
C. Accordingly, the Company desires to adopt this Amendment to
FirstLink Communications, Inc. 1998-1999 Combined Incentive Stock Option
('ISO") and Nonqualified Stock Option ("NSO") Plan (this "Amendment") and thus
amend the 1998 Option Plan. All capitalized terms not herein defined shall
have the meanings given to them in the 1998 Option Plan.
D. The existing 1998 Option Plan makes the requirements for issuance of
ISOs under Sections 421 through 424 of the Internal Revenue Code, as amended
(the "ISO Code Requirements") applicable to both ISOs and NSOs granted under
the 1998 Option Plan.
NOW, THEREFORE, the Company adopts the following Amendment:
AMENDMENT:
1. ISO REQUIREMENTS INAPPLICABLE TO CERTAIN NSOS. To the extent the
1998 Option Plan makes the ISO Code Requirements applicable to NSOs granted
pursuant to the 1998 Option Plan, the 1998 Option Plan is amended so that such
ISO Code Requirements shall not be applicable to NSOs granted under the 1998
Option Plan, except that the requirements of Section 5.3 shall continue to
apply to NSOs. In addition, certain other restrictions of the 1998 Option
Plan shall not be applicable to NSOs granted under the 1998 Option Plan, as
provided in this Amendment. The Plan Administrators may provide in each
optionee's option agreement for NSOs granted under the 1998 Option Plan the
extent to which such requirements and restrictions may be waived or modified.
2. AMENDMENT TO CERTAIN SECTIONS OF THE 1998 OPTION PLAN. Without
limiting the foregoing, the following particular sections of the 1998 Option
Plan shall be amended as provided herein:
a. CASHLESS EXERCISE. Section 6.1 is amended to permit an
optionee to exercise all or any portion of his or her NSOs in any manner
provided for in such optionee's option agreement.
b. OPTION RIGHTS UPON TERMINATION OF EMPLOYMENT. Section 9 is
amended to permit an optionee to exercise all or any portion of his or
her NSOs in any manner and for the length of time provided for in such
optionee's option agreement.
c. OPTION RIGHTS UPON DEATH OR DISABILITY. Section 10 is amended
to permit an optionee to exercise all or any portion of his or her NSOs
in any manner and for the length of time provided for in such optionee's
option agreement.
d. ADJUSTMENTS FOR CHANGES IN CAPITALIZATION OR ORGANIZATION.
Section 13.1 is amended to permit an optionee to exercise all or any
portion of his or her NSOs in any manner and for any length of time
provided for in such optionee's option agreement, regardless of any
change in capitalization or organization of the Company and or its
successors or assigns.
e. SHAREHOLDER APPROVAL NOT ALWAYS NEEDED. Section 15 is amended
in so far as shareholder approval shall not be required to approve NSOs
granted to optionees pursuant to the 1998 Option Plan, nor shall
shareholder approval be necessary to approve the 1998 Option Plan itself
with respect to the Company's authority to grant nonqualified stock
options.
3. TERMINATION. Section 14 shall be amended by removing the two
references to Section "5.4," which does not exist in the 1998 Option Plan.
4. ADOPTION OF AMENDMENT. Notwithstanding anything in the Amendment to
the contrary, this Amendment shall not amend or change any provision of the
1998 Option Plan that requires shareholder approval as set forth in Section
14.1.
5. NO OTHER MODIFICATION. Except as amended by this Amendment, the
1998 Option Plan shall remain unmodified and in full force and effect.
6. APPLICABLE LAW. This Amendment shall be construed, applied, and
enforced in accordance with the laws of the state of Oregon.
IN WITNESS WHEREOF, the Company has adopted this Amendment as of the date
first written above.
COMPANY:
FIRSTLINK COMMUNICATIONS, INC.
By: /s/ A, Roger Pease
----------------------------------------
A. Roger Pease, President
CERTIFICATION
I hereby certify that the foregoing Amendment was adopted by the Board of
Directors of the Company on February 23, 1999.
/s/ Jeffrey S. Sperber
---------------------------------------
Jeffrey S. Sperber, Assistant Secretary
