<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
MULTI-LINK TELECOMMUNICATIONS, INC.
------------------------------------------------
(Name of Registrant as Specified in Its Charter)
-------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11,
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials
[ ] Check box if any part of the fee is offset as provided by Exchange act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1
<PAGE> 2
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
2
<PAGE> 3
MULTI-LINK TELECOMMUNICATIONS, INC.
February __, 2000
TO THE SHAREHOLDERS OF MULTI-LINK TELECOMMUNICATIONS, INC.
You are cordially invited to attend the Annual Meeting of Shareholders of
MULTI-LINK TELECOMMUNICATIONS, INC., Inc. to be held on March 22, 2000, at 2:00
p.m. at the [place, address, city], Colorado. I encourage you to attend. Whether
or not you plan to attend the meeting, I urge you to complete and sign the
accompanying Proxy and return it in the enclosed envelope. Also attached for
your review are the formal Notice of Meeting and Proxy Statement.
On behalf of your Board of Directors and employees, thank you for your
continued support of MULTI-LINK TELECOMMUNICATIONS, INC.
Very truly yours,
Nigel V. Alexander,
Chief Executive Officer
3
<PAGE> 4
MULTI-LINK TELECOMMUNICATIONS, INC.
4704 Harlan Street, Suite 420
Denver, Colorado 80212
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
March 22, 2000
TO: The Shareholders of Multi-Link Telecommunications, Inc.:
The Annual Meeting of Shareholders of Multi-Link Telecommunications, Inc.
(the "Company") will be held on March 22, 2000 at 2:00 p.m. at [address, city]
Colorado.
The items of business are:
1. To elect two directors to hold office for a three-year term or
until their successors are elected;
2. To approve the Amended and Restated Stock Option Plan;
3. To approve an amendment to the Company's Restated Articles of
Incorporation to provide that directors may be removed by the
Company's shareholders with or without cause;
4. To ratify the appointment of HEIN + ASSOCIATES LLP as independent
auditors of the Company for the fiscal year ending September 30,
2000; and
5. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Only shareholders of record as shown on the books of the Company at the
close of business of February 15, 2000 will be entitled to vote at the meeting
and any adjournment thereof.
THIS NOTICE, THE PROXY STATEMENT AND THE ENCLOSED PROXY ARE SENT TO YOU
BY ORDER OF THE BOARD OF DIRECTORS.
Nigel V. Alexander,
Secretary
February __, 2000
Denver, Colorado
TO ASSURE YOUR REPRESENTATION AT THE MEETING, PLEASE SIGN, DATE AND RETURN YOUR
PROXY IN THE ENCLOSED ENVELOPE WHETHER OR NOT YOU EXPECT TO ATTEND IN PERSON.
SHAREHOLDERS WHO ATTEND THE MEETING MAY REVOKE THEIR PROXIES AND VOTE IN PERSON
IF THEY DESIRE.
4
<PAGE> 5
MULTI-LINK TELECOMMUNICATIONS, INC.
4704 Harlan Street, Suite 420
Denver, Colorado 80212
-------------------------
PROXY STATEMENT
-------------------------
ANNUAL MEETING OF SHAREHOLDERS
MARCH 22, 2000
PROXY SOLICITED BY THE BOARD OF DIRECTORS
This Proxy Statement is furnished to the record holders of shares of
common stock of MULTI-LINK TELECOMMUNICATIONS, INC., a Colorado corporation (the
"Company" or "MultiLink"), as of February 15, 2000, by order of the Board of
Directors. This Proxy Statement is furnished in connection with the Board of
Directors' solicitation of the enclosed Proxy for the Annual Meeting of
Shareholders to be held on March 22, 2000, at 2:00 p.m. at the [address, city],
Colorado. A shareholder giving a Proxy may revoke it at any time prior to the
actual voting at the Annual Meeting of Shareholders by filing written notice of
revocation with the Secretary of the Company, by attending the Annual Meeting of
Shareholders and voting in person, or by filing a new Proxy with the Secretary
of the Company. The revocation of a Proxy will not affect any vote taken prior
to such revocation. This Proxy Statement is expected to be first mailed to
shareholders on or about February __, 2000.
The Annual Meeting of Shareholders has been called for the purpose of (i)
electing two directors for a three-year term, (ii) approving the Amended and
Restated Stock Option Plan, (iii) amending the Company's Restated Articles of
Incorporation to provide that directors may be removed by the Company's
shareholders with or without cause, (iv) ratifying the appointment by the Board
of Directors of HEIN + ASSOCIATES LLP as the Company's independent auditors, and
(v) transacting such other business as may properly come before the meeting or
any adjournment thereof. All properly executed proxies received at or prior to
the meeting will be voted at the meeting. If a shareholder directs how a Proxy
is to be voted with respect to the business coming before the meeting, the Proxy
will be voted in accordance with the shareholder's directions. If a shareholder
does not direct how a Proxy is to be voted, it will be voted FOR electing
management's nominees as members of the Company's Board of Directors, FOR
approving the Amended and Restated Stock Option Plan, FOR amending the Articles
of Incorporation, and FOR ratifying the appointment by the Board of Directors of
HEIN + ASSOCIATES LLP as the Company's independent auditors.
OUTSTANDING SHARES AND VOTING RIGHTS
At the close of business on February 15, 2000, the record date for the
Annual Meeting of Shareholders, there were ________ shares of common stock
outstanding. Each share of common stock is entitled to one vote on each matter
properly coming before the meeting. Cumulative voting for directors is not
permitted. A majority of the shares of common stock issued and outstanding must
be represented at the Annual Meeting, in person or by proxy, in order to
constitute a quorum. An abstention or withholding authority to vote will be
counted as present for determining whether the quorum requirement is satisfied.
With respect to the vote on any particular proposal, abstentions will be treated
as shares present and entitled to vote, and for purposes of determining the
outcome of the vote on any such proposal, shall have the same effect as a vote
against the proposal. A broker "non-vote" occurs when a nominee holding shares
for a beneficial holder does not have discretionary voting power and does not
receive voting instructions from the beneficial owner. Broker "non-votes" on a
particular proposal will not be treated as shares present and entitled to vote
on the proposal.
5
<PAGE> 6
PROPOSAL ONE
ELECTION OF DIRECTORS
The Board of Directors recommends that the two nominees named below be
elected to serve as directors of the Company. Directors are elected to serve a
three-year term. Directors being elected at this Annual Meeting of Shareholders
will serve until the Annual Meeting of Shareholders in 2003, or until their
successors have been duly elected and qualified. All nominees have consented to
serve if elected, but if any nominee becomes unable to serve, the persons named
as proxies may exercise their discretion to vote for a substitute nominee.
Assuming a quorum is present, the two nominees receiving the highest number of
votes cast will be elected as directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ELECTING THE NOMINEES FOR
DIRECTOR SET FORTH BELOW.
DIRECTORS AND EXECUTIVE OFFICERS
The following table lists the names, ages and positions of the directors
and executive officers of the Company as of the date hereof. The members of the
Board of Directors are elected to serve three-year terms. All executive officers
have been appointed to serve until their successors are elected and qualified.
Additional information regarding the business experience, length of time served
in each capacity and other matters relevant to each individual is set forth
below the table.
The following table sets forth certain information concerning our
executive officers and directors:
<TABLE>
<CAPTION>
Name Age Position
- ---- --- --------
<S> <C> <C>
Nigel V. Alexander(1)...... 38 Chief Executive Officer, Treasurer,
Secretary and Director
Shawn B. Stickle(2)........ 34 President and Chief Operating
Officer and Director
David J. Cutler............ 44 Chief Financial Officer
Christina M. Neher......... 34 President, Hellyer Communications
Services, Inc.
Keith R. Holder(3)......... 55 Director
R. Brad Stillahn(3)........ 47 Director
</TABLE>
(1) Class II Director. Term ends in 2001.
(2) Class III Director. Term ends in 2002.
(3) Class I Directors. Nominees for reelection.
Messrs. Holder and Stillahn are members of the Audit and Compensation Committee.
The directors are elected for a three-year term, with approximately
one-third of the board of directors standing for election each year. Each
director holds office until the expiration of the director's term, until the
director's successor has been duly elected and qualified or until the earlier of
their resignation, removal or death. All of our officers devote full-time to our
business and affairs.
6
<PAGE> 7
Nigel V. Alexander -- Chief Executive Officer, Secretary, Treasurer and
Director. Mr. Alexander co-founded Multi-Link in 1996. Mr. Alexander has served
since that time as a Managing Director and now as Chief Executive Officer with
responsibility for financing and strategic planning. Since January of 1996, Mr.
Alexander has been the sole owner of Octagon Strategies, Inc., a consultant to
us. From September 1994 until founding Multi-Link, Mr. Alexander conducted
research into the telecommunications industry to identify the business
opportunity now being pursued by us. From April 1991 to September 1994, Mr.
Alexander was an executive officer of SnowRunner, Inc. a company involved in the
distribution of winter sports products. Mr. Alexander is an Associate of the
British Chartered Institute of Bankers. He has over 15 years experience in
merchant banking, mergers and acquisitions and corporate finance, including ten
years as a merchant banker in London, England and Geneva, Switzerland with Henry
Ansbacher & Co. and the Paribas Group.
Shawn B. Stickle -- President, Chief Operating Officer and Director. Mr.
Stickle co-founded Multi-Link in 1996. Mr. Stickle has served since that time as
a Managing Director and now as our President and Chief Operating Officer with
direct responsibility for all of Multi-Link's operations. From February 1995
until January 1996, Mr. Stickle was employed as Executive Vice President of
MultiLink Communications, Inc., a subsidiary of the Company (formerly known as
Voice Services, Inc.) From 1987 to December 1994, Mr. Stickle was Sales and
Marketing Manager for T.A. Pelsue Company, a manufacturer of telecommunications
products. Mr. Stickle holds a bachelor's degree from the University of Colorado
in marketing and is a certified ISO 9000 Quality Assurance Advisor.
David J. Cutler -- Chief Financial Officer. Mr. Cutler joined us in March
1998 and has served as our Chief Financial Officer since that time. From March
1993 until joining us, Mr. Cutler was a self employed consultant providing
accounting and financial advice to small and medium sized companies in the
United Kingdom and the United States. Mr. Cutler has more than 20 years
experience in international finance, accounting and business administration. He
held senior positions with multi-national companies such as Reuters Group Plc
and Schlumberger Ltd., and has served previously as a director for two British
publicly traded companies -- Charterhall Plc and Reliant Group Plc. Mr. Cutler
has a masters degree from St. Catherine College in Cambridge, England and is
qualified as a British Chartered Accountant and as an Associate of the Institute
of Taxation with Arthur Andersen & Co. in London. He was subsequently admitted
as a Fellow of the UK Institute of Chartered Accountants. In early 1998, he
passed the CPA examination in the United States and is now a member of the
American Institute of Certified Public Accountants.
Christina M. Neher -- President, Hellyer Communications Services, Inc.
Ms. Neher joined Hellyer Communications, Inc. in 1989 and has served as
Hellyer's Vice President of Operations since 1995. Ms. Neher was appointed
President of Hellyer with responsibility for all of Hellyer's operations
following its acquisition by us on November 17, 1999. From 1984 to 1988, Ms.
Neher was employed by St. Mary's College and held the position of
telecommunications coordinator. Ms. Neher holds an associates degree in business
from Indiana Wesleyan University. Ms. Neher has 15 years experience in the
telecommunications industry.
Keith R. Holder -- Director. Mr. Holder became one of our directors in
February 1999. Since January 1998, Mr. Holder has been the Chief Executive
Officer of Recovery Specialists Inc., a regional environmental company. From
March 1990 to January 1998, Mr. Holder was the founder, Chief Executive Officer
and Director of Triumph Fuels Corporation, a gasoline refining, distribution and
retailing company. Mr. Holder received his Bachelor of Science degree in Geology
from the University of London in 1969.
R. Brad Stillahn -- Director. Mr. Stillahn became one of our directors in
February 1999. Since January 1991, Mr. Stillahn has been the owner, Chairman and
Chief Executive Officer of West Tape & Label, Inc., a national custom label
printer. From 1987 to 1991, Mr. Stillahn was the Director of Corporate Marketing
for Menasha Corporation, a diversified holding company. Mr. Stillahn received
his Masters of Business Administration from Washington University in 1976 and in
1974 received a Bachelor of Arts degree in Economics from the University of
Missouri.
7
<PAGE> 8
DIRECTOR COMPENSATION
Our employee directors do not receive any compensation for their services
as directors. Non-employee directors presently receive compensation of $250.00
per meeting and are entitled to reimbursement of travel and other expenses.
COMMITTEES OF THE BOARD OF DIRECTORS
The board of directors maintains a compensation committee and an audit
committee. The compensation committee is composed of Keith R. Holder and R. Brad
Stillahn, both non-employee directors. The audit committee is composed of Keith
R. Holder and R. Brad Stillahn. The primary function of the compensation
committee is to review and make recommendations to the board of directors with
respect to the compensation, including bonuses, of our officers and to
administer the grants under our stock option plan. The functions of the audit
committee are to review the scope of the audit procedures employed by our
independent auditors, to review with the independent auditors our accounting
practices and policies and recommend to whom reports should be submitted within
Multi-Link, to review with the independent auditors their final audit reports,
to review with our internal and independent auditors Multi-Link's overall
accounting and financial controls, to be available to the independent auditors
during the year for consultation, to approve the audit fee charged by the
independent auditors, to report to the board of directors with respect to such
matters and to recommend the selection of the independent auditors.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires our
officers and directors, and persons who own more than 10% of a registered class
of our equity securities, to file reports of ownership and changes in ownership
with the SEC. Officers, directors and greater than 10% shareholders are required
by SEC regulation to furnish us with copies of all Section 16(a) forms they
file. Based solely on our review of copies of such reports received, and
representations from certain reporting persons, we believe that, during the last
fiscal year, all Section 16(a) filing requirements applicable to our officers,
directors and greater than 10% beneficial owners were filed in compliance with
all applicable filing requirements.
EXECUTIVE COMPENSATION
The following table sets forth the compensation paid by us for services
rendered during the fiscal years ended September 30, 1999, 1998 and 1997 to
Nigel V. Alexander and Shawn B. Stickle. No executive officer of Multi-Link
earned or was paid compensation of more than $100,000 for the year ended
September 30, 1999.
Multi-Link pays consulting fees to Octagon Strategies, Inc. for
consulting services rendered by Nigel V. Alexander to Multi-Link. "Octagon" is a
company wholly-owned by Nigel V. Alexander. All amounts reflected in the salary
column in the following table paid to Mr. Alexander are consulting fees paid to
Octagon for Mr. Alexander's benefit.
<TABLE>
<CAPTION>
Fiscal Year Annual Compensation
Ended -------------------------
Name and Principal Position September 30, Salary Bonus
- --------------------------- ------------- ------- -----
<S> <C> <C> <C>
Nigel V. Alexander.................. 1999 $45,551 --
Chief Executive Officer, Secretary and 1998 $40,000 --
Treasurer 1997 $39,960 --
Shawn B. Stickle.................... 1999 $41,000 --
President and Chief Operating Officer 1998 $36,000 --
1997 $36,000 --
</TABLE>
8
<PAGE> 9
The foregoing compensation table does not include certain fringe benefits
made available on a nondiscriminatory basis to all of our employees such as
group health insurance, long-term disability insurance, vacation and sick leave.
EMPLOYMENT AGREEMENTS
Effective January 1, 1999, we entered into three-year agreements with
Octagon and Shawn B. Stickle. The agreements require that Messrs. Alexander and
Stickle devote their full business time to Multi-Link, may only be terminated by
us for "cause" (as defined in the agreements) and may be terminated with or
without cause by Octagon or Mr. Stickle. If the agreements are terminated by us
without cause, Octagon and Mr. Stickle are entitled to receive lump sum payments
equal to the greater of the compensation payable pursuant to the agreements for
the remaining terms thereof or one year's annual payments. The agreements also
contain confidentiality and non-compete provisions. The contracts provide for
annual salary and consulting payments that are subject to periodic increases
from time to time at the sole discretion of the compensation committee of the
Board of Directors. Effective November 1, 1999 the Compensation Committee set
Mr. Stickle's fiscal 2000 compensation at $81,000 and Octagon's fiscal 2000
consulting payments at $90,000. In addition, both are eligible to receive
bonuses based upon our profitability and other factors determined and adjusted
periodically by the Compensation Committee.
STOCK OPTION PLAN
We adopted our stock option plan in 1997 pursuant to which an aggregate
of 300,000 shares of common stock are reserved for issuance.
The stock option plan provides for the granting of incentive stock
options within the meaning of Section 422 of the Internal Revenue Code and
non-qualified stock options, reload options and stock appreciation rights. The
stock option plan is currently administered by the compensation committee of the
board of directors, which determines the terms and conditions of the options
granted under the stock option plan, including the exercise price, the number of
shares subject to a particular option and the exercisability thereof.
The exercise price of all incentive stock options granted under the stock
option plan must be at least equal to the fair market value of our common stock
on the date of grant and must be 110% of fair market value when granted to a 10%
or more stockholder. Under the stock option plan, the exercise price of all
non-qualified stock options granted under the stock option plan may be less than
the fair market value of the common stock on the date of grant. The term of all
options granted under the stock option plan may not exceed ten years, except the
term of incentive stock options granted to a 10% or more stockholder may not
exceed five years. The stock option plan may be amended or terminated by the
board of directors, but no such action may impair the rights of a participant
under a previously granted option.
The stock option plan provides the board of directors or the compensation
committee with the discretion to determine when options granted under the stock
option plan shall become exercisable and the vesting period of such options.
As of December 31, 1999, we had issued options to purchase 297,830 shares
of common stock under our stock option plan. The options have exercise prices
ranging from $0.02 per share to $6.63 per share. The options expire on various
dates between January 14, 2007 and December 13, 2009. Of such issued options,
50,760 had been exercised and 18,440 has been cancelled as of December 31, 1999.
Therefore, as of December 31, 1999, we had 228,630 options issued and
outstanding and options to purchase 20,610 shares of common stock were available
for issuance under our stock option plan.
No options to purchase shares of common stock have been granted by
Multi-Link to Nigel V. Alexander, Shawn B. Stickle or Octagon, and none of such
persons owned any options to purchase common stock on December 31, 1999.
9
<PAGE> 10
No reload options or stock appreciation rights have been granted pursuant
to the stock option plan.
10
<PAGE> 11
PRINCIPAL SHAREHOLDERS
The following table sets forth certain information regarding beneficial
ownership of Multi-Link's common stock, as of December 31, 1999, by:
o each person who is known by Multi-Link to own beneficially more than
5% of Multi-Link's outstanding common stock,
o each of Multi-Link's named executive officers and directors, and
o all executive officers and directors as a group.
Shares of common stock not outstanding but deemed beneficially owned by
virtue of the right of an individual to acquire the shares of common stock
within 60 days are treated as outstanding only when determining the amount and
percentage of common stock owned by such individual. Except as noted below the
table, each person has sole voting and investment power with respect to the
shares of common stock shown. Unless otherwise shown, the address of each person
is 4704 Harlan Street, Suite 420, Denver, Colorado 80212.
<TABLE>
<CAPTION>
Number of Percent of
Name and Address of Beneficial Owner Shares Outstanding
------------------------------------ --------- -----------
<S> <C> <C>
Executive Officers and Directors
Nigel V. Alexander................................ 581,250 16.5%
Shawn B. Stickle.................................. 581,250 16.5%
Keith R. Holder 26,640 0.8%
107 Country Club Park Drive,
Grand Junction, CO 81503.......................
R. Brad Stillahn.................................. 0 0%
3845 Forest, Denver, CO 80207
All executive officers and directors as a group (6
persons).......................................... 1,219,140 34.4%
Other Beneficial Owners
Kennedy Capital Management........................ 278,128 7.9%
10829 Olive Blvd., St. Louis, MO 63141-7739
</TABLE>
In the foregoing table the common stock beneficially owned by:
o Nigel V. Alexander and Shawn B. Stickle includes an aggregate of
200,000 shares of common stock held in escrow. As a condition to the
initial public offering, Nigel V. Alexander and Shawn B. Stickle
were each required to deposit 100,000 shares of common stock in an
escrow account pursuant to an agreement with American Securities
Transfer & Trust, Inc. and Schneider Securities, Inc. The common
stock deposited in the escrow account will be subject to release on
the earlier to occur of (a) Multi-Link achieving basic net income of
at least $0.75 per share and the common stock having a bid price of
at least $15.00 per share for the year ended and as of September 31,
2000, or (b) Multi-Link achieving basic net income of at least $1.25
per share and a bid price of at least $25.00 per share for the year
ended and as of September 30, 2001, or (c) a property exchange, or
sale of all or substantially all of the assets or stock of
Multi-Link if any such transaction is approved by the holders of a
majority of the outstanding shares of common stock (excluding the
shares in escrow), and (d) May 14, 2006. For purposes of determining
the release from escrow, net income will include the effects of any
extraordinary items and will be based on basic net income per share
and the audited financial statements of Multi-Link for the
respective periods. The shares of common stock held in escrow are
not transferable or assignable, although the holders may vote them.
The earnings levels and per share prices set forth above were
11
<PAGE> 12
determined by negotiation between Multi-Link and Schneider
Securities, Inc. and should not be construed to imply or predict any
future earnings by Multi-Link or the market price of the common
stock.
o Keith R. Holder includes 26,640 shares beneficially owned by Harbour
Settlement, a Jersey Channel Islands Trust established for the
benefit of Mr. Holder's children, and does not include 10,000 shares
underlying options that were granted to Mr. Holder personally, and
which are not exercisable for the next 60 days.
o R. Brad Stillahn does not include 10,000 shares underlying options
that are not exercisable for the next 60 days.
12
<PAGE> 13
PROPOSAL TWO
APPROVAL OF THE AMENDED AND RESTATED
STOCK OPTION PLAN
The Company's stock option plan currently provides that 300,000 shares of
authorized but unissued shares of common stock can be issued pursuant to stock
options granted thereunder. The plan provides that, in the event of stock
splits, stock dividends, or certain other capital changes, there shall be an
appropriate adjustment in the price of the shares subject to outstanding options
and in the number of shares previously covered by options or subject to
allotment in the future. At December 31, 1999, options to purchase 297,830
shares of common stock at an average price of $3.61 per share had been granted,
options to purchase 50,760 shares of common stock at an average price of $.49
had been exercised, options to purchase 18,440 shares of common stock at an
average price of $2.48 per share had been canceled, options to purchase 228,630
shares of common stock at an average exercise price of $4.40 per share remained
outstanding, and options to purchase 20610 shares remained available to be
granted. At that date, the outstanding options were held by ___ persons. On
February __, 2000, the market value per share of the common stock was $_____ per
share based on the closing price on the Nasdaq SmallCap Market.
The board of directors has approved certain amendments to the plan as set
forth in the form of Amended and Restated Stock Option Plan attached hereto as
Exhibit A (the "Amended Plan"). The Amended Plan provides for two amendments
that require approval of the shareholders. First, the Amended Plan will clarify
that the benefits of the plan may be extended to consultants or other
independent contractors of the Company or its subsidiaries, thus giving them a
proprietary interest in the Company, and therefore, an additional incentive to
promote its success. Second, the Amended Plan will provide for an increase in
the number of shares of common stock available for issuance pursuant to the plan
by 500,000 shares, subject to future adjustment as provided in the plan.
Management has recommended this increase so that it can continue to reward
officers, employees and consultants of the Company or its subsidiaries having
substantial responsibilities with the opportunity to acquire a proprietary
interest in the Company as an additional incentive to promote its success and
remain in its employ. In order to achieve these objectives, the board of
directors has approved the Amended Plan and recommends that it be submitted to
the shareholders of the Company for approval
Adoption of the Amended Plan requires the affirmative vote of the holders
of a majority of the outstanding shares of common stock represented at the
Annual Meeting of Shareholders.
THE BOARD RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE ADOPTION OF THE
PROPOSED AMENDED AND RESTATED STOCK OPTION PLAN.
PROPOSAL THREE
APPROVAL OF THE AMENDMENT TO THE COMPANY'S
RESTATED ARTICLES OF INCORPORATION
The board of directors has adopted and proposes that the shareholders of
the Company approve an amendment to the Company's Restated Articles of
Incorporation to provide that directors of the Company may be removed with or
without cause by the affirmative vote of not less than two-thirds of the shares
entitled to vote in the election of directors. The proposed amendment is set
forth in Exhibit B hereto.
The Company's Restated Articles of Incorporation currently provide that
directors may only be removed for cause by the affirmative vote of holders of
not less than two-thirds of the shares entitled to vote in the election of
directors.
As a condition to the registration by the California Department of
Corporations of the Company's initial public offering, the Board of Directors
agreed to submit this proposal to the shareholders of Company. Nigel V.
Alexander, the Company's Chief Executive Officer, Treasurer, Secretary and
Director, and Shawn B. Stickle, the
13
<PAGE> 14
Company's President, Chief Operating Officer and Director, have agreed with the
California Department of Corporations to vote all of their shares of common
stock in favor of this proposal.
The amendment, if approved, will have the effect of allowing holders of
two-thirds or more of the outstanding shares of the Company's common stock to
remove a director from the board of directors with or without cause.
Adoption of the proposed amendment requires the affirmative vote of the
holders of a majority of the outstanding shares of common stock represented at
the Annual Meeting of Shareholders.
THE BOARD RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE ADOPTION OF THIS
PROPOSED AMENDMENT TO THE RESTATED ARTICLES OF INCORPORATION.
PROPOSAL FOUR
APPOINTMENT OF INDEPENDENT AUDITORS
The board of directors has appointed HEIN + ASSOCIATES LLP as the
Company's independent auditors for the fiscal year ending September 30, 2000 and
to perform other accounting services. Representatives of HEIN + ASSOCIATES LLP
are expected to be present at the Annual Meeting of Shareholders, with the
opportunity to make a statement if they so desire and to respond to appropriate
shareholder questions. The firm of Scheifley & Associates, PC acted as the
Company's independent auditors for the fiscal year ended September 30, 1997. On
December 16, 1998, the Company's Board of Directors retained HEIN + ASSOCIATES
LLP as the Company's independent public accountants and replaced the Company's
former auditors, Scheifley & Associates, PC. There were no disagreements with
the former auditors on any matter of accounting principles or practices,
financial statement disclosure or auditing scope or procedure with respect to
the Company's financial statements for the fiscal year ended September 30, 1997
or up through the time of replacement which, if not resolved to the former
auditors' satisfaction, would have caused them to make reference to the subject
matter of the disagreement in connection with their report. Prior to retaining
HEIN + ASSOCIATES LLP, the Company had not consulted with HEIN + ASSOCIATES LLP
regarding accounting principles.
Ratification of the appointment requires the affirmative vote of the
holders of a majority of the outstanding shares of common stock represented at
the Annual Meeting of Shareholders.
THE BOARD RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR RATIFICATION OF THE
APPOINTMENT OF HEIN + ASSOCIATE LLP AS INDEPENDENT AUDITORS.
SUBMISSION OF SHAREHOLDER PROPOSALS
Proposals by shareholders of the Company to be presented at the next
Annual Meeting of Shareholders must be received by the Company on or before
__________, 2000 to be included in the Company's Proxy Statement and proxy for
that meeting. The proponent must be a record or beneficial owner entitled to
vote on his or her proposal at the next Annual Meeting and must continue to own
such security entitling him or her to vote through that date on which the
meeting is held. The proponent must own 1% or more of the outstanding shares, or
$1,000 in market value, of the Company's common stock and must have owned such
shares for one year in order to present a shareholder proposal to the Company.
14
<PAGE> 15
ANNUAL REPORT
The Annual Report concerning the operations of the Company during the
fiscal year ended September 30, 1999, including a copy of the Form 10-KSB for
the year then ended, is being mailed to each shareholder of the Company with
this Notice of Annual Meeting. Additional copies of the Annual Report may be
obtained upon written request to the Company, at 4704 Harlan Street, Suite 420,
Denver, Colorado 80212.
OTHER PROPOSALS
The board of directors of the Company does not intend to present any
business at the meeting other than the matters specifically set forth in this
Proxy Statement and knows of no other business to come before the meeting.
COSTS AND METHOD OF SOLICITATION
Solicitation of proxies will be made by preparing and mailing the Notice
of Annual Meeting, Proxy and Proxy Statement to shareholders of record as of the
close of business on February 15, 2000. The cost of making the solicitation
includes the cost of preparing and mailing the Notice of Annual Meeting, Proxy
and Proxy Statement, and the payment of charges incurred by brokerage houses and
other custodians, nominees and fiduciaries for forwarding documents to
shareholders. The Company will bear all expenses incurred in connection with the
solicitation of proxies for the annual meeting.
It is important that your shares are represented and voted at the
meeting, whether or not you plan to attend. Accordingly, we respectfully request
that you sign, date and mail your Proxy in the enclosed envelope as promptly as
possible.
BY ORDER OF THE BOARD OF DIRECTORS
Nigel V. Alexander,
Secretary
February __, 2000
15
<PAGE> 16
EXHIBIT A
MULTI-LINK TELECOMMUNICATIONS, INC.
AMENDED AND RESTATED STOCK OPTION PLAN
(AMENDED AND RESTATED AS OF DECEMBER 13, 1999)
On January 15, 1997, the shareholders of Multi-Link Telecommunications,
Inc. (the "Company") approved the Company's Stock Option Plan (the "Original
Plan"). The effective date of the Original Plan was January 15, 1997. The
maximum number of shares of Common Stock authorized to be issued upon exercise
of Stock Options (as defined below) granted under the Original Plan was 300,000.
As of December 13, 1999, ___________ shares of Common Stock were subject to
outstanding Stock Options or had been issued upon exercise of Stock Options
under the Original Plan. Stock Options granted prior to the effective date of
this Amended and Restated Stock Option Plan shall be governed by the terms and
provisions of the Original Plan.
On __________, 2000, the shareholders of the Company approved this
Amended and Restated Stock Option Plan (the "Plan"), effective as of December
13, 1999, and the reservation of an additional 500,000 shares of Common Stock
for issuance upon exercise of Stock Options granted under the Plan. The total
number of shares of Common Stock that may be issued pursuant to Stock Options
under the Plan is 800,000 (including shares reserved for issuance under the
Original Plan). Stock Options granted on or after December 13, 1999 shall be
governed by the Plan.
1. PURPOSE.
This Plan provides for the grant of Stock Options, Reload Options and
Stock Appreciation Rights to Employees and Consultants of the Company, and such
of its subsidiaries (as defined in Section 424(f) of the Code) as the Board of
Directors of the Company (the "Board") shall from time to time designate
("Participating Subsidiaries"), in order to advance the interests of the Company
and its Participating Subsidiaries, if any, through the motivation, attraction
and retention of their respective Employees and Consultants.
2. INCENTIVE STOCK OPTIONS AND NONSTATUTORY STOCK OPTIONS.
The Stock Options granted under this Plan may be either (a) Incentive
Stock Options ("ISOs") which are intended to be "incentive stock options" as
that term is defined in Section 422 of the Code; or (b) Nonstatutory Stock
Options ("NSOs") which are intended to be options that do not qualify as
incentive stock options under Section 422 of the Code. ISOs may only be granted
to individuals who are Employees. To the extent granted to Employees, all Stock
Options shall be ISOs unless the Option Agreement clearly designates the Stock
Options granted thereunder, or a specified portion thereof, as NSOs. Subject to
the other provisions of this Plan, a Participant may receive ISOs and NSOs at
the same time, provided that the ISOs and NSOs are clearly designated as such.
3. ADMINISTRATION.
3.1. Committee. With respect to grants of Stock Options, Reload Options
and Stock Appreciation Rights to Employees and Consultants other
than officers and directors of the Company, this Plan shall be
administered by a committee comprised of at least two members of
the Board, unless the Board is comprised of only one director, in
which case this Plan will be administered by the Board (the
"Committee"). With respect to grants of Stock Options, Reload
Options and Stock Appreciation Rights to Employees who are officers
or directors of the Company, this Plan shall be administered by the
Board, if each director is a Disinterested Person, or by a special
committee of two or more Disinterested Persons. Such special
committee may be the Committee if all of the members thereof are
Disinterested Persons, or a separate committee appointed by the
Board comprised of at least two Disinterested Persons. The
Committee or the Board, as the case may be,
<PAGE> 17
shall have full authority to administer this Plan, including, but
not limited to, authority to interpret and construe any provision
of this Plan and any Stock Option, Reload Option or Stock
Appreciation Right granted hereunder, to adopt such rules and
regulations for administering this Plan as it may deem necessary in
order to comply with the requirements of this Plan or the Code or
in order that Stock Options that are intended to be ISOs will be
classified as incentive stock options under the Code, or in order
to conform to any regulation or to any change in any law or
regulations applicable thereto and to take the actions permitted
hereunder. The Committee or the Board may delegate any of its
responsibilities under this Plan, other than its responsibility to
make grants of Stock Options, Reload Options and Stock Appreciation
Rights, to determine whether the Stock Appreciation Rights, if any,
payable to a Participant shall be paid in cash, in shares of Common
Stock or a combination thereof, or to interpret and construe this
Plan. If the Board is composed entirely of Disinterested Persons,
the Board may reserve to itself any of the authority granted to the
Committee as set forth herein, and it may perform and discharge all
of the functions and responsibilities of the Committee at any time
that a duly constituted Committee is not appointed and serving. All
references in this Plan to the "Committee" shall be deemed to refer
to the Board whenever the Board is discharging the powers and
responsibilities of the Committee, and to any special committee
appointed by the Board to administer particular aspects of this
Plan.
3.2. Actions of Committee. All actions taken and all interpretations and
determinations made by the Committee in good faith (including
determinations of Fair Market Value) shall be final and binding
upon all Participants, the Company and all other interested
persons. No member of the Committee shall be personally liable for
any action, determination or interpretation made in good faith with
respect to this Plan, and all members of the Committee shall, in
addition to their rights as directors, be fully indemnified by the
Company with respect to any such action, determination or
interpretation.
4. DEFINITIONS.
4.1. "Code." The Code means the Internal Revenue Code of 1986, as
amended.
4.2. "Common Stock." A share of Common Stock means a share of no par
value common stock of the Company.
4.3. "Consultant." A Consultant means any person who is engaged by the
Company or any Participating Subsidiary to render consulting or
advisory services as an independent contractor (and not as an
Employee) and is compensated for such services.
4.4. "Disinterested Person." A Disinterested Person is a director of the
Company who, during the shorter of (a) the one-year period prior to
service as an administrator of this Plan, or (b) the period between
the date on which capital stock of the Company is registered
pursuant to Section 12 of the 1934 Act and the director's service
as an administrator of this Plan, has not been granted or awarded
equity securities pursuant to this Plan or any other plan of the
Company or any of its affiliates except as may be permitted by Rule
16b-3(c)(2) promulgated under the 1934 Act or any successor to such
rule.
4.5. "Fair Market Value." The Fair Market Value of a share of Common
Stock on any date shall be the closing bid price, as quoted by the
National Association of Securities Dealers through NASDAQ (its
automated system for reporting quotes), for the date in question.
4.6. "Employee." Employee means an individual who performs services
while in the employ of the Company or a Participating Subsidiary
subject to the control and direction of the employer entity not
only as to the work to be performed but also as to the manner and
method of performance.
A-2
<PAGE> 18
4.7. "1934 Act." The 1934 Act means the Securities and Exchange Act of
1934, as amended.
4.8. "Option Agreement." An Option Agreement means a written agreement
evidencing a Stock Option.
4.9. "Option Price." An Option Price means the price which the Committee
designates for the exercise of a Stock Option.
4.10. "Participant." A Participant means an Employee or Consultant to
whom a Stock Option, Reload Option and/or Stock Appreciation Right
is granted.
4.11. "Redemption Value." The Redemption Value of shares of Common Stock
purchasable under a Stock Option means the amount, if any, by which
the Fair Market Value of one share of Common Stock on the date on
which the Stock Option is exercised exceeds the Option Price for
such share.
4.12. "Reload Option." A Reload Option means a Stock Option granted
under and subject to the terms of Section 8 of this Plan.
4.13. "Stock Appreciation Right." A Stock Appreciation Right means the
right to receive payment, in shares of Common Stock, cash or a
combination of shares of Common Stock and cash, of the Redemption
Value of a specified number of shares of Common Stock then
purchasable under a Stock Option.
4.14. "Stock Option." A Stock Option means the right granted under this
Plan to a Employee or Consultant to purchase, at such time or times
and at such Option Price as are determined by the Committee and
specified in the Option Agreement, the number of shares of Common
Stock determined by the Committee and specified in the Option
Agreement.
5. ELIGIBILITY AND PARTICIPATION.
Grants of Stock Options, Reload Options and Stock Appreciation Rights may
be made to Employees and Consultants of the Company or any Participating
Subsidiary, if any. Any director of the Company or of a Participating Subsidiary
who is also an Employee or Consultant shall also be eligible to receive Stock
Options, Reload Options and Stock Appreciation Rights; provided, however,
members of the Committee and directors who are not Employees or Consultants
shall not be eligible to receive Stock Options, Reload Options or Stock
Appreciation Rights under this Plan. The Committee shall from time to time
determine the Employees or Consultants to whom Stock Options shall be granted,
the number of shares of Common Stock subject to the Stock Options to be granted
to each such Employee or Consultant, the Option Price of such Stock Options, and
the terms and provisions of such Stock Options, all as provided in this Plan.
The Option Price of any ISO shall be not less than the Fair Market Value of a
share of Common Stock on the date on which the Stock Option is granted, but the
Option Price of an NSO may be less than the Fair Market Value on the date the
NSO is granted if the Committee so determines. If an ISO is granted to an
Employee who then owns stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company or any subsidiary
corporation of the Company, the Option Price of such ISO shall be at least 110%
of the Fair Market Value of the Common Stock subject to the ISO at the time such
ISO is granted, and such ISO shall not be exercisable after five years after the
date on which it was granted. Each Stock Option shall be evidenced by an Option
Agreement containing such terms and provisions as the Committee may determine,
subject to the provisions of this Plan.
A-3
<PAGE> 19
6. SHARES OF COMMON STOCK SUBJECT TO THIS PLAN.
6.1. Maximum Number. The maximum aggregate number of shares of Common
Stock that may be made subject to Stock Options granted under this
Plan shall be 800,000 authorized but unissued shares (including
shares allocated under the Original Plan). The aggregate Fair
Market Value (determined as of the time the ISO is granted) of the
Common Stock subject to ISOs granted to a Participant which may
first become exercisable in a particular calendar year may not
exceed $100,000. If any shares of Common Stock subject to Stock
Options are not purchased or otherwise paid for before such Stock
Options expire, such shares may again be made subject to Stock
Options.
6.2. Capital Changes. Subject to the provisions of Section 13 hereof,
in the event any changes are made to the shares of Common Stock
(whether by reason of merger, consolidation, reorganization,
recapitalization, stock dividend, stock split, combination of
shares, exchange of shares, change in corporate structure or
otherwise), proportionate adjustments shall be made in: (i) the
number of shares of Common Stock theretofore made subject to Stock
Options; (ii) the purchase price of shares of Common Stock
theretofore made subject to Stock Options; and (iii) the aggregate
number of shares of Common Stock which may be made subject to Stock
Options. If any of the foregoing adjustments shall result in a
fractional share, the fraction shall be disregarded, and the
Company shall have no obligation to make any cash or other payment
with respect to such fractional share.
7. EXERCISE OF STOCK OPTIONS.
7.1. Time of Exercise. Subject to the provisions of this Plan, the
Committee, in its discretion, shall determine the time when a Stock
Option, or a portion of a Stock Option, shall become exercisable,
and the time when a Stock Option, or a portion of a Stock Option,
shall expire. Such time or times shall be set forth in the Option
Agreement evidencing such Stock Option. A Stock Option shall
expire, to the extent not exercised, no later than the tenth
anniversary of the date on which it was granted. The Committee may
accelerate the vesting of any Participant's Stock Option by giving
written notice to the Participant. Upon receipt of such notice, the
Participant and the Company shall amend the Option Agreement to
reflect the new vesting schedule, if, however, the Option Agreement
is not amended, the notice given by the Committee shall be deemed
to amend the Option Agreement with respect to the vesting schedule.
The acceleration of the exercise period of a Stock Option shall not
affect the expiration date of that Stock Option. Any shares of
Common Stock not purchased at the time a Stock Option first becomes
exercisable shall remain purchasable at any time until the Stock
Option expires.
7.2. Exercise of Stock Options. A Participant may elect to exercise
Stock Options by delivering a written notice to the Company
specifying the number of shares of Common Stock with respect to
which he exercises such Stock Options and delivering payment of the
Exercise Price of such Stock Options as provided in this Section
7.2. The Exercise Price shall become immediately due upon exercise
of the Stock Options, and shall be payable in one of the
alternatives specified below:
(a) full payment in cash or check made payable to the
Corporation's order;
(b) with the prior consent of the Company, full payment in
shares of Common Stock valued at Fair Market Value on the exercise date;
(c) with the prior consent of the Company, full payment in a
combination of shares of Common Stock valued at Fair Market Value on the
exercise date, and cash or check made payable to the Corporation's order; or
A-4
<PAGE> 20
(d) full payment through a broker-dealer sale and remittance
procedure pursuant to which the Participant shall provide concurrent irrevocable
written instructions (i) to a Company-designated brokerage firm to effect the
immediate sale of the purchased shares and remit to the Company, out of the sale
proceeds available on the settlement date, sufficient funds to cover the
aggregate Exercise Price payable for the purchased shares plus all applicable
Federal, state and local income and employment taxes required to be withheld by
the Company in connection with such purchase, and (ii) to the Company to deliver
the certificates for the purchased shares directly to such brokerage firm in
order to complete the sale transaction.
7.3. Stock Appreciation Rights. The Committee, in its sole discretion,
may permit a Participant to surrender all or part of an unexercised
Stock Option under this Plan in exchange for a distribution from
the Company in an amount equal to the excess of (i) the Fair Market
Value (on the Option surrender date) of the number of shares in
which the Participant is at the time vested under the surrendered
Stock Option (or surrendered portion thereof), over (ii) the
aggregate exercise price payable for such vested shares of Common
Stock.
(a) No such Stock Option surrender shall be effective unless it
is approved by the Committee. If the surrender is so approved, then the
distribution to which the Participant shall accordingly become entitled may be
made in shares of Common Stock valued at Fair Market Value on the Stock Option
surrender date, in cash, or partly in shares and partly in cash, as the
Committee shall in its sole discretion deem appropriate.
(b) If the surrender of a Stock Option is rejected by the
Committee, then the Participant shall retain whatever rights the Participant had
under the surrendered Stock Option (or surrendered portion thereof) on the Stock
Option surrender date and may exercise such rights at any time prior to the
later of (i) five (5) business days after the receipt of the rejection notice,
or (ii) the last day on which the Stock Option is otherwise exercisable in
accordance with the terms of the instrument evidencing such option.
7.4. Termination of Employment Before Exercise. If a Participant's
employment with the Company or a Participating Subsidiary, if any,
shall terminate by reason of the Participant's death or disability
within the meaning of Section 22(e)(3) of the Code, any Stock
Options then held by the Participant, to the extent then
exercisable under the applicable Option Agreement(s), shall remain
exercisable after the termination of his employment for a period of
twelve months (but in no event beyond ten years from the date of
grant of the Stock Option). If a Participant's employment with the
Company or a Participating Subsidiary, if any, shall terminate for
any reason other than the Participant's death or disability, any
Stock Options then held by the Participant, to the extent then
exercisable under the applicable Option Agreement(s), shall remain
exercisable after the termination of his or her employment for a
period of three months. If the Stock Option is not exercised during
the applicable period, it shall be deemed to have been forfeited
and of no further force or effect.
7.5. Disposition of Forfeited Stock Options. Any shares of Common Stock
subject to Stock Options forfeited by a Participant under this Plan
shall not thereafter be eligible for purchase by the Participant,
but may be made subject to Stock Options granted to other
Participants.
8. RELOAD OPTIONS.
8.1. Authorization of Reload Options. Concurrently with the award of
Stock Options to any Participant, the Committee may authorize
Reload Options to purchase, for cash or shares of Common Stock, a
number of shares of Common Stock. The number of Reload Options
shall equal:
(a) the number of shares of Common Stock used to exercise the
underlying Stock Options; and
A-5
<PAGE> 21
(b) to the extent authorized by the Committee, the number of
shares of Common Stock used to satisfy any tax withholding requirement incident
to the exercise of the underlying Stock Options. The grant of a Reload Option
will become effective upon the exercise of underlying Stock Options or Reload
Options through the use of shares of Common Stock held by the Participant for at
least twelve months. Notwithstanding the fact that the underlying Stock Option
may be an Incentive Stock Option, a Reload Option is not intended to qualify as
an "incentive stock option" under Section 422 of the Code.
8.2. Reload Option Amendment. Each Option Agreement shall state whether
the Committee has authorized Reload Options with respect to the
underlying Stock Options. Upon the exercise of an underlying Stock
Option or other Reload Option, the Reload Option will be evidenced
by an amendment to the underlying Option Agreement.
8.3. Reload Option Price. The Option Price per share of Common Stock
deliverable upon the exercise of a Reload Option shall be the Fair
Market Value of a share of Common Stock on the date the grant of
the Reload Option becomes effective.
8.4. Term and Exercise. Each Reload Option shall be fully exercisable
six months from the date the grant of the Reload Option becomes
effective. The term of each Reload Option shall be equal to the
remaining option term of the underlying Stock Option.
8.5. Termination of Employment. No additional Reload Options shall be
granted to Participants when Stock Options and/or Reload Options
are exercised pursuant to the terms of this Plan following
termination of the Participant's employment with the Company or a
Participating Subsidiary.
8.6. Applicability of Stock Option Sections. Section 7 of this Plan
shall apply equally to Reload Options. Section 7 of this Plan is
incorporated by reference in this Section 8 as though fully set
forth herein.
9. STOCK APPRECIATION RIGHTS.
9.1. Grant of Stock Appreciation Rights. The Committee may, from time
to time, grant Stock Appreciation Rights to a Participant with
respect to not more than the number of shares of Common Stock which
are, or may become, purchasable under the Stock Options held by the
Participant. The Committee may, in its sole discretion, specify the
terms and conditions of such rights, including without limitation
the time period or time periods during which such rights may be
exercised and the date or dates upon which such rights shall expire
and become void and unexercisable; provided, however, that in no
event shall such rights expire and become void and unexercisable
later than the time when the related Stock Option is exercised,
expires or terminates. Each Option Agreement shall state whether
the Committee has granted Stock Appreciation Rights and shall
specify the terms and conditions of such rights, which shall be
subject to all the provisions of this Plan.
9.2. Exercise of Stock Appreciation Rights. Subject to Section 6, and
in lieu of purchasing shares of Common Stock upon the exercise of a
Stock Option held by him, a Participant may elect to exercise the
Stock Appreciation Rights, if any, he has been granted and receive
payment of the Redemption Value of all, or any portion, of the
number of shares of Common Stock subject to such Stock Option with
respect to which he has been granted Stock Appreciation Rights;
provided, however, that the Stock Appreciation Rights may be
exercised only when the Fair Market Value of the shares of Common
Stock subject to such Stock Option exceeds the exercise price of
the Stock Option. A Participant shall exercise Stock Appreciation
Rights by delivering a written notice to the Committee specifying
the number of shares of Common Stock with respect to which he
exercises Stock Appreciation Rights and agreeing to surrender the
right to purchase an equivalent number of shares of Common Stock
subject to his Stock Option. If a Participant exercises Stock
A-6
<PAGE> 22
Appreciation Rights, payment of his Stock Appreciation Rights shall
be made in accordance with Section 4 on or before the 90th day
after the date of exercise of the Stock Appreciation Rights.
9.3. Form of Payment. If a Participant elects to exercise Stock
Appreciation Rights as provided in Section 3, the Committee may, in
its absolute discretion, elect to pay any part or all of the
Redemption Value of the shares with respect to which the
Participant has exercised Stock Appreciation Rights in: (i) cash;
(ii) shares of Common Stock; or (iii) any combination of cash and
shares of Common Stock. The Committee's election pursuant to this
Section 3 shall be made by giving written notice to the Participant
within 90 days after the date of exercise of the Stock Appreciation
Rights, which notice shall specify the portion which the Committee
elects to pay in cash, shares of Common Stock or a combination
thereof. In the event any portion is to be paid in shares of Common
Stock, the number of shares of Common Stock to be delivered shall
be determined by dividing the amount which the Committee elects to
pay in shares of Common Stock by the Fair Market Value of one share
of Common Stock on the date of exercise of the Stock Appreciation
Rights. Any fractional share resulting from any such calculation
shall be disregarded. The shares of Common Stock, together with any
cash payable to the Participant, shall be delivered within the
90-day period required above.
10. NO CONTRACT OF EMPLOYMENT.
Nothing in this Plan shall confer upon the Participant the right to
continue in the employ of the Company, or any Participating Subsidiary, if any,
nor shall it interfere in any way with the right of the Company, or any
Participating Subsidiary, if any, to discharge the Participant at any time for
any reason whatsoever, with or without cause. Nothing in this Section 10 shall
affect any rights or obligations of the Company or any Participant under any
written contract of employment.
11. NO RIGHTS AS A SHAREHOLDER.
A Participant shall have no rights as a shareholder with respect to any
shares of Common Stock subject to a Stock Option granted under this Plan. Except
as provided in Section 3, no adjustments shall be made in the number of shares
of Common Stock issued to a Participant, or in any other rights of the
Participant upon exercise of a Stock Option, by reason of any dividend,
distribution or other right granted to shareholders for which the record date is
prior to the date of exercise of the Participant's Stock Option.
12. ASSIGNABILITY.
No Stock Option, Reload Option or Stock Appreciation Right awarded under
this Plan, nor any other rights acquired by a Participant under this Plan, shall
be assignable or transferable by a Participant, other than by will or applicable
laws of intestate succession. During a Participant's lifetime, Stock Options may
be exercised only by such Participant or the guardian or legal representative of
the Participant. Notwithstanding the foregoing, the Committee may, in its sole
discretion, permit the assignment or transfer of an NSO by a Participant, other
than an officer or director, and the exercise thereof by a person other than
such Participant, on such terms and conditions as the Committee in its sole
discretion, may determine. Any such terms shall be determined at the time the
NSO is granted, and shall be set forth in the Option Agreement. In the event of
a Participant's death, the Stock Option or any Reload Option or Stock
Appreciation Right may be exercised by the personal representative of the
Participant's estate or, if no personal representative has been appointed, by
the successor or successors in interest determined under the Participant's will
or under the applicable laws of intestate succession.
13. TERMINATION OF PLAN.
In the event of dissolution or liquidation of the Company, or upon any
reorganization, merger or consolidation of the Company with one or more
corporations where the Company is the surviving corporation and
A-7
<PAGE> 23
the shareholders of the Company immediately prior to such transaction do not own
at least fifty percent (50%) of the issued and outstanding Common Stock
immediately after such transaction, or upon any reorganization, merger or
consolidation of the Company with one or more corporations where the Company is
not the surviving corporation, or upon a sale of substantially all of the assets
of the Company to another corporation or entity or upon the sale of Common Stock
to another person or entity in one or a series of transactions with the result
that such person or entity owns more than fifty percent (50%) of the issued and
outstanding Common Stock immediately after such sale(s), the Plan and all Stock
Options and Reload Options and Stock Appreciation Rights, if any, outstanding
under the Plan shall terminate on the effective date of the transaction (or, in
the event of a tender offer resulting in the sale of fifty percent (50%) or more
of the then outstanding Common Stock (a "Tender Offer"), 30 days after the final
expiration of the Tender Offer) unless prior to the effective date of the
transaction the Board elects, in its sole discretion, to continue the Plan. In
the event the Board does not elect to continue the Plan, however, any Stock
Options, Reload Options and Stock Appreciation Rights theretofore granted and
outstanding under the Plan shall become immediately exercisable in full at such
time as the approval of the transaction by the Board, or the final expiration of
any Tender Offer (notwithstanding any performance, vesting or other criteria
contained therein), and shall remain exercisable until the effective date of
such transaction or 30 days after the final expiration of the Tender Offer,
whichever is applicable (unless the Stock Option, Reload Option or Stock
Appreciation Right would otherwise expire by its own terms on an earlier date).
The Company shall give each optionee written notice at least 30 days prior to
the effective date of any termination of the Plan as a result of a transaction
described above in order to permit the optionee to exercise his Stock Options
and/or Reload Options and Stock Appreciation Rights, if any, prior to the
effective date of termination. Unless the Board has elected to continue the
Plan, any option not exercised by the effective date of a transaction described
above shall terminate on such date.
14. WITHHOLDING TAXES.
The Company or Participating Subsidiary, if any, may take such steps as
it may deem necessary or appropriate for the withholding of any taxes which the
Company or the Participating Subsidiary, if any, is required by any law or
regulation or any governmental authority, whether federal, state or local,
domestic or foreign, to withhold in connection with any Stock Option, Reload
Option or Stock Appreciation Right, including, but not limited to, the
withholding of all or any portion of any payment or the withholding of issuance
of shares of Common Stock to be issued upon the exercise of any Stock Option,
Reload Option or Stock Appreciation Right, until the Participant reimburses the
Company or Participating Subsidiary, if any, for the amount the Company or
Participating Subsidiary, if any, is required to withhold with respect to such
taxes, or cancelling any portion of such award in an amount sufficient to
reimburse itself for the amount it is required to so withhold.
15. AMENDMENT.
The Board may from time to time alter, amend, suspend or discontinue this
Plan, including, where applicable, any modifications or amendments as it shall
deem advisable in order that ISOs will be classified as incentive stock options
under the Code, or in order to conform to any regulation or to any change in any
law or regulations applicable thereto; provided, however, that no such action
shall adversely affect the rights and obligations with respect to Stock Options
at any time outstanding under this Plan; and provided further, however, that no
such action shall, without the approval of the holders of a majority of the
outstanding Common Stock of the Company, (i) increase the maximum number of
shares of the Common Stock that may be made subject to Stock Options (unless
necessary to effect the adjustments required by Section 3), (ii) materially
increase the benefits accruing to Participants under this Plan, or (iii)
materially modify the requirements as to eligibility for participation in this
Plan.
16. APPLICATION OF SECTION 16.
With respect to persons subject to Section 16 of the 1934 Act,
transactions under this Plan are intended to comply with all applicable
conditions of Rule 16b-3 or its successors under the 1934 Act. To the extent any
A-8
<PAGE> 24
provision of this Plan or action by the Committee fails to so comply, it shall
be deemed null and void, to the extent permitted by law and deemed advisable by
the Committee.
17. REGISTRATION OF OPTIONED SHARES.
The Stock Options shall not be exercisable unless the purchase of such
optioned shares is pursuant to an applicable effective registration statement
under the Securities Act of 1933, as amended (the "Act"), or unless, in the
opinion of counsel to the Company, the proposed purchase of such optioned shares
would be exempt from the registration requirements of the Act, and from the
registration or qualification requirements of applicable state securities laws.
The Company shall have no obligation to register any shares of Common Stock.
18. STOCK RESTRICTIONS.
The Committee may provide that shares of Common Stock issuable upon the
exercise of a Stock Option, Reload Option or Stock Appreciation Right, be
subject to various restrictions, including restrictions which provide that the
Company has a right to prohibit sales of such shares of Common Stock, a right of
first refusal with respect to such shares of Common Stock or a right or
obligation to repurchase all or a portion of such shares of Common Stock, which
restrictions may survive a Participant's term of employment with the Company.
The acceleration of time or times at which the Stock Option becomes exercisable
may be conditioned upon the Participant's agreement to such restrictions.
19. NONEXCLUSIVITY OF THIS PLAN.
Neither the adoption of this Plan by the Board nor the submission of this
Plan to shareholders of the Company for approval shall be construed as creating
any limitations on the power or authority of the Board to adopt such other or
additional incentive or other compensation arrangements of whatever nature as
the Board may deem necessary or desirable or preclude or limit the continuation
of any other plan, practice or arrangement for the payment of compensation or
fringe benefits to employees generally, or to any class or group of employees,
which the Company or any Participating Subsidiary, if any, has lawfully put into
effect, including, without limitation, any retirement, pension, savings and
stock purchase plan, insurance, death and disability benefits and executive
short-term incentive plans.
20. EFFECTIVE DATE.
This Plan was adopted by the Board and became effective as of December
13, 1999, and was approved by the shareholders of the Company on _____________,
2000. No ISOs shall be granted under this Plan subsequent to 10 years after its
original effective date, although NSOs may continue to be granted under this
Plan after such ten-year period. ISOs outstanding subsequent to ten years after
the original effective date of this Plan shall continue to be governed by the
provisions of this Plan.
A-9
<PAGE> 25
EXHIBIT B
ARTICLES OF AMENDMENT
TO THE
RESTATED ARTICLES OF INCORPORATION
OF
MULTI-LINK TELECOMMUNICATIONS, INC.
Pursuant to the provisions of the Colorado Business Corporation Act, the
undersigned corporation ("Corporation") adopts the following Articles of
Amendment to its Restated Articles of Incorporation:
FIRST: The name of the Corporation is Multi-Link Telecommunications,
Inc.
SECOND: The third paragraph of Article VII of the Restated Articles of
Incorporation, as previously amended, are amended to read as follows:
ARTICLE VII
BOARD OF DIRECTORS
The unanimous vote of the Board of Directors or the affirmative vote of
the holders of not less than two-thirds of the votes entitled to be case by the
holders of the shares entitled to vote in the election of directors is required
to change the size of the Board of Directors. Directors may be removed for cause
or without cause by the affirmative vote of holders of not less than two-thirds
of the shares entitled to vote in the election of directors. The provision
regarding the votes required to change the size of the Board of Directors and
the provision regarding the votes required to remove a director for cause or
without cause shall not be altered or repealed without the affirmative vote of
the holders of at least two-thirds of the shares entitled to vote in the
election of directors.
THIRD: These Articles of Amendment to the Restated Articles of
Incorporation were proposed and recommended for shareholder approval by the
Board of Directors of the Corporation pursuant resolutions approved by the Board
of Directors of the Corporation on December 13, 1999. The Corporation has only
one shareholder voting group and at an Annual Meeting of Shareholders held on
March 22, 2000, the number of votes cast for the amendment set forth herein by
such voting group was sufficient for approval of the amendments.
Dated: _________________, 2000.
MULTI-LINK TELECOMMUNICATIONS, INC., a
Colorado corporation
By:
-------------------------------------
Nigel V. Alexander, Chief Executive
Officer
B-1
<PAGE> 26
APPENDIX 1
MULTI-LINK TELECOMMUNICATIONS, INC.
PROXY SOLICITED BY MANAGEMENT OF THE COMPANY
The undersigned shareholder of Multi-Link Telecommunications, Inc., a
Colorado corporation (the "Company"), hereby appoints Nigel Alexander or Shawn
Stickle as nominee of the undersigned to attend, vote and act for and in the
name of the undersigned at the Annual Meeting of Shareholders of the Company to
be held at the [address, city], Colorado, on March 22, 2000, at 2:00 p.m. (local
time), and at every adjournment thereof, and the undersigned hereby revokes any
former proxy given to attend and vote at the meeting.
THE NOMINEE IS HEREBY INSTRUCTED TO VOTE AS FOLLOWS WITH RESPECT TO THE
FOLLOWING MATTERS:
<TABLE>
<S> <C> <C>
1. FOR [ ] All Nominees as Directors - Keith R. Holder and R. Brad
Stillahn
WITHHELD [ ] From All Nominees.
FOR [ ] All Nominees Except the Following: _________________.
2. FOR [ ] AGAINST [ ] ABSTAIN [ ] To approve the Amended and Restated Stock Option Plan.
3. FOR [ ] AGAINST [ ] ABSTAIN [ ] To approve the amendment to the restated articles of
incorporation.
4. FOR [ ] AGAINST [ ] ABSTAIN [ ] To ratify the appointment of HEIN + ASSOCIATES LLP as
independent auditors of the Company.
</TABLE>
THIS PROXY WILL BE VOTED FOR OR AGAINST OR WITHHELD OR ABSTAINED IN RESPECT OF
THE MATTERS LISTED IN ACCORDANCE WITH THE CHOICE, IF ANY, INDICATED IN THE SPACE
PROVIDED. IF NO CHOICE IS INDICATED, THE PROXY WILL BE VOTED FOR SUCH MATTER. IF
ANY AMENDMENTS OR VARIATIONS ARE TO BE VOTED ON, OR ANY FURTHER MATTERS COME
BEFORE THE MEETING, THIS PROXY WILL BE VOTED ACCORDING TO THE BEST JUDGMENT OF
THE PERSON VOTING THE PROXY AT THE MEETING. THIS FORM SHOULD BE READ IN
CONJUNCTION WITH THE ACCOMPANYING NOTICE OF MEETING AND PROXY STATEMENT.
<TABLE>
<S> <C>
DATED this ____ day of ______, 2000. 1. Please date and sign (exactly as the shares represented by this
Proxy are registered) and return promptly. Where the instrument
_________________________________ is signed by a corporation, its corporate seal must be affixed
Signature of Shareholder and execution must be made by an officer or attorney thereof duly
authorized. If no date is stated by the Shareholder, the Proxy
is deemed to bear the date upon which it was mailed by management
_________________________________ to the Shareholder.
(Please print name of Shareholder) 2. To be valid, this Proxy form, duly signed and dated, must arrive
at the office of the Company's transfer agent, American
Securities Transfer & Trust, Inc., P.O. Box 1596, Denver,
Colorado 80201-1596 not less than forty-eight (48) hours
(excluding Saturdays, Sundays and holidays) before the day of the
Meeting or any adjournment thereof.
</TABLE>
