<PAGE> 1
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:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
DATALINK.NET, INC.
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the 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:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(5) Total fee paid:
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[ ] 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
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(4) Date Filed:
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<PAGE> 2
DATALINK.NET, INC.
1735 TECHNOLOGY DRIVE, SUITE 790
SAN JOSE, CALIFORNIA 95110
(408) 367-1700
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD AUGUST 14, 2000
------------------------
TO THE SHAREHOLDERS OF DATALINK.NET, INC.:
You are cordially invited to attend the Annual Meeting of Shareholders of
Datalink.net, Inc., a Nevada corporation. We will be holding the Annual Meeting
at the Company's offices at 1735 Technology Drive, Suite 790, San Jose,
California 95110, on Monday, August 14, 2000, at 2:00 p.m., Pacific Time.
At the Annual Meeting, we will ask you to:
1. Elect four (4) Directors of the Company to serve until the next
Annual Meeting of Shareholders and until their successors have been duly
elected and qualified.
2. Approve an amendment to the Company's Employee Stock Option Plan to
increase the number of shares of Common Stock issuable upon the exercise of
options granted under the Plan from 1,000,000 shares to 2,500,000.
3. Ratify the selection of BDO Seidman, L.L.P. as the Company's
independent accountants for the fiscal year ending March 31, 2001.
4. Transact such other business as may properly come before the
meeting or any adjournment thereof.
Enclosed with this letter is a Proxy Statement, a proxy card and a return
envelope. Also enclosed is Datalink.net, Inc.'s Annual Report on Form 10-KSB for
the fiscal year ended March 31, 2000.
Only holders of the $.01 par value Common Stock of the Company of record at
the close of business on July 7, 2000 are entitled to notice of and to vote at
the Annual Meeting. The proxies are being solicited by the Board of Directors of
the Corporation.
Your vote is very important to us. All shareholders, whether or not you
expect to attend the Annual Meeting of Shareholders in person, are urged to sign
and date the enclosed Proxy and return it promptly in the enclosed postage-paid
envelope which requires no additional postage if mailed in the United States. If
you attend the meeting, you may vote in person, even though you have previously
returned your proxy.
BY ORDER OF THE BOARD OF DIRECTORS
Anthony N. Lapine, President
San Jose, California
July 14, 2000
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
General Information......................................... 1
Information About the 2000 Annual Meeting and Voting........ 1
Proposal 1: Election of Directors........................... 3
Proposal 2: Approval of Amendment to the 1996 Stock Option
Plan...................................................... 4
Proposal 3: Ratification of Independent Auditors............ 5
Other Business.............................................. 6
Security Ownership of Certain Beneficial Owners and
Management................................................ 6
Section 16(a) Beneficial Ownership Reporting Requirements... 7
Directors and Executive Officers............................ 7
Executive Compensation...................................... 11
Certain Relationships and Related Transactions.............. 13
Annual Report on Form 10-KSB................................ 14
Shareholder Proposals....................................... 15
</TABLE>
<PAGE> 4
DATALINK.NET, INC.
1735 TECHNOLOGY DRIVE, SUITE 790
SAN JOSE, CALIFORNIA 95110
(408) 367-1700
------------------------
PROXY STATEMENT
------------------------
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD AUGUST 14, 2000
GENERAL INFORMATION
This Proxy Statement provides information that you should read before you
vote on the proposals that will be presented to you at the 2000 Annual Meeting
of Datalink.net, Inc. ("Datalink.net" or the "Company"). The 2000 Annual Meeting
will be held on August 14, 2000 at the Company's offices at 1735 Technology
Drive, Suite 790, San Jose, California 95110.
This Proxy Statement provides detailed information about the Annual
Meeting, the proposals you will be asked to vote on at the Annual Meeting, and
other relevant information. The Board of Directors of Datalink.net is soliciting
these proxies.
At the Annual Meeting, you will be asked to vote on the following
proposals:
1. Elect four directors, each for a one-year term.
2. Approve an amendment to the Company's 1996 Stock Option Plan.
3. Ratify the appointment by the Board of Directors of the firm of BDO
Seidman, LLP as independent public accountants of Datalink.net for the
fiscal year ending March 31, 2000.
4. Such other matters as may properly come before the meeting.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR EACH OF
THESE PROPOSALS.
On July 14, 2000, we began mailing information to people who, according to
our records, owned shares of common stock in Datalink.net as of the close of
business on July 7, 2000. We have mailed with that information a copy of
Datalink.net's Annual Report on Form 10-KSB for the fiscal year ended March 31,
2000.
INFORMATION ABOUT THE 2000 ANNUAL MEETING AND VOTING
THE ANNUAL MEETING
The Annual Meeting will be held at the Company's offices at 1735 Technology
Drive, Suite 790, San Jose, California 95110, on Monday, August 14, 2000, at
2:00 p.m., Pacific Time.
THIS PROXY SOLICITATION
We are sending you this proxy statement because Datalink.net's Board of
Directors is seeking a proxy to vote your shares at the Annual Meeting. This
proxy statement is intended to assist you in deciding how to vote your shares.
It is anticipated that this Proxy Statement and the accompanying Proxy and
Annual Report filed on form 10-KSB will be mailed on or about July 14, 2000 to
the Company's shareholders who, according to our stockholder records, owned
shares at the close of business on July 7, 2000.
Datalink.net is paying the cost of requesting these proxies. Datalink.net's
directors, officers and employees may request proxies in person or by telephone,
mail, telecopy or letter. Datalink.net will reimburse brokers and
<PAGE> 5
other nominees their reasonable out-of-pocket expenses for forwarding proxy
materials to beneficial owners of our shares.
VOTING YOUR SHARES
You may vote your shares at the Annual Meeting either in person or by
proxy. To vote in person, you must attend the Annual Meeting and obtain and
submit a ballot. Ballots for voting in person will be available at the Annual
Meeting. To vote by proxy, you must complete and return the enclosed proxy card
in time to be received by us by the Annual Meeting. By completing and returning
the proxy card, you will be directing the persons designated on the proxy card
to vote your shares at the Annual Meeting in accordance with the instructions
you give on the proxy card.
If you hold your shares with a broker and you do not tell your broker how
to vote, your broker has the authority to vote on all proposals.
IF YOU DECIDE TO VOTE BY PROXY, YOUR PROXY CARD WILL BE VALID ONLY IF YOU
SIGN, DATE AND RETURN IT BEFORE THE ANNUAL MEETING SCHEDULED TO BE HELD ON
AUGUST 14, 2000.
In the election of directors, the four nominees for director who receive
the most votes will be elected. So, if you do not vote for a particular nominee,
or you indicate "WITHHELD" on your proxy card, your vote will not count either
for or against the nominee. For the other proposals, you may vote "FOR,"
"AGAINST" or "ABSTAIN." If you "ABSTAIN" as to any proposal, it has the same
effect as a vote "AGAINST" that proposal.
Failure to return a proxy card or vote in person will not affect the
outcome of the proposals as long as a quorum is achieved. If you sign your proxy
card or broker voting instruction card with no further instructions, your shares
will be voted in accordance with the recommendations of the Board ("FOR" all of
the Company's nominees to the Board, and "FOR" all other items described in this
proxy statement and in the discretion of the proxy holders on any other matters
that properly come before the meeting).
We have described in this proxy statement all the proposals that we expect
will be made at the Annual Meeting. If we or a stockholder properly present any
other proposal to the meeting, we will use your proxy to vote your shares on the
proposal in our best judgment.
REVOKING YOUR PROXY
If you decide to change your vote, you may revoke your proxy at any time
before it is voted. You may revoke your proxy in one of three ways:
- You may notify the Secretary of Datalink.net in writing that you wish to
revoke your proxy at the following address: Datalink.net, Inc., 1735
Technology Drive, Suite 790, San Jose, California 95110, Attention: Tali
Durant, Secretary. We must receive your notice before the time of the
Annual Meeting.
- You may submit a proxy dated later than your original proxy.
- You may attend the Annual Meeting and vote. Merely attending the Annual
Meeting will not by itself revoke a proxy; you must obtain a ballot and
vote your shares to revoke the proxy.
VOTE REQUIRED BY APPROVAL
SHARES ENTITLED TO VOTE. On July 7, 2000, 14,151,479 shares of Datalink.net
Common Stock were issued and outstanding, each of which is entitled to one vote
on each of the proposals.
QUORUM. The quorum requirement for holding the meeting and transacting
business is a majority of the outstanding shares present in person or
represented by proxy and entitled to be voted. A quorum will be present if
7,075,740 votes are represented at the Annual Meeting, either in person (by the
stockholders) or by proxy. If a quorum is not present, a vote cannot occur. Both
abstentions and broker non-votes are counted as present for the purposes of
determining the presence of a quorum.
2
<PAGE> 6
VOTES REQUIRED. In the election of directors, the four persons receiving
the highest number of "FOR" votes will be elected. All other proposals require
the affirmative "FOR" vote of a majority of those shares present and entitled to
vote. If you are a beneficial owner and do not provide the shareowner of record
with voting instructions, your shares may constitute broker non-votes. In
tabulating the voting result for any particular proposal, shares that constitute
broker non-votes are not considered entitled to vote on that proposal and will
not be considered votes cast for the foregoing purposes. Thus, broker non-votes
will not affect the outcome of any of the matters being voted upon at the
meeting. Generally, broker non-votes occur when shares held by a broker for a
beneficial owner are not voted with respect to a particular proposal because (1)
the broker has not received voting instructions from the beneficial owner, and
(2) the broker lacks discretionary voting power to vote such shares.
ADDITIONAL INFORMATION
We are mailing our Annual Report on Form 10-KSB for the fiscal year ended
March 31, 2000, including consolidated financial statements, to all shareholders
entitled to vote at the Annual Meeting together with this proxy statement. The
Annual Report on Form 10-KSB does not constitute a part of the proxy
solicitation material. The Annual Report on Form 10-KSB tells you how to get
additional information about Datalink.net.
PROPOSAL 1:
ELECTION OF DIRECTORS
The following table sets forth the name and age of each nominee for
Director, indicating all positions and offices with the Company presently held,
and the period during which each person has served as a Director:
<TABLE>
<CAPTION>
POSITIONS AND OFFICES HELD
NAME AGE AND TERM AS A DIRECTOR
---- --- --------------------------
<S> <C> <C>
Anthony N. LaPine....................... 57 Chairman of the Board, President, Chief Executive
Officer and Director
Charles K. Dargan....................... 45 Director, Executive Vice President of Operations
and Administration
Frederick M. Hoar....................... 51 Director
Jason Pavona............................ 28 Director
</TABLE>
Each director will be elected to serve for a one-year term, unless he or
she resigns or is removed before his or her term expires, or until his or her
replacement is elected and qualified. Each of the four nominees is currently a
member of the Board of Directors and has consented to serve as a director if
re-elected. More detailed information about each of the nominees is available in
the section of this proxy statement titled "Directors and Executive Officers,"
which begins on page 7.
There are no known arrangements or understandings between any director or
executive officer and any other person pursuant to which any of the above-named
directors was selected as a director of the Company.
If any of the nominees cannot serve for any reason (which is not
anticipated), the Board of Directors may designate a substitute nominee or
nominees. If a substitute is nominated, we will vote all valid proxies for the
election of the substitute nominee or nominees. Alternatively, the Board of
Directors may also decide to leave the board seat or seats open until a suitable
candidate or candidates are located, or it may decide to reduce the size of the
Board.
The Board of Directors of the Company has established the size of the board
at four members. Proxies for the Annual Meeting may not be voted for more than
the four nominees named.
BOARD RECOMMENDATION
The Board of Directors unanimously recommends a vote "FOR" each of the
nominees to the Board of Directors.
3
<PAGE> 7
PROPROSAL 2:
APPROVAL OF AMENDMENT TO THE 1996 STOCK OPTION PLAN
DESCRIPTION OF THE PLAN
In June 1996, the Company adopted the 1996 Stock Option Incentive Plan (the
"Plan"). The "Plan" provides for the granting of stock options to acquire common
stock and/or the granting of stock appreciation rights to obtain, in cash or
shares of common stock, the benefit of the appreciation of the value of shares
of common stock after the grant date. The Company is currently authorized to
issue up to 1,000,000 shares of common stock under the Plan, and intends to seek
Shareholder approval to issue additional shares. The Plan expires ten years
after its adoption.
Under the Plan, the Board of Directors may grant incentive stock options to
purchase shares of the Company's common stock only to employees, directors,
officers, consultants and advisers of the Company. The Board of Directors may
grant options to purchase shares of the Company's common stock at prices not
less than fair market value, as defined under the Plan, at the date of grant for
incentive stock options. The Board of Directors also has the authority to set
exercise dates (no longer than ten years from the date of grant), payment terms
and other provisions for each grant. In addition, incentive options may be
granted to persons owning more than 10% of the voting power of all classes of
stock, at a price no lower than 110% of the fair market value at the date of
grant, as determined by the Board of Directors. Options granted under the Plan
generally vest over four years at a rate of 25% after year one and then equally
on a monthly basis over the next three years from the date of grant. As of March
31, 2000, no stock appreciation rights have been granted under the Plan.
Effective May 24, 1999 the Board of Directors of the Company approved the
repricing of all of the options held by employees of the Company except for
those options held by the Company's CEO and the Company's Vice President of
Marketing. Employees with an exercise price ranging between $0.375 per share and
$3.50 per share were offered the opportunity to amend their option grants to
reprice the exercise price to $1.29 per share.
Effective November 17, 1999, the Company's Board of Directors approved the
repricing of all of the options held by Directors of the Company. All of the
Directors were offered the opportunity to amend their option grants to reprice
the exercise price to $1.56 per share, and $1.72 per share for 10% or greater
shareholders.
During the year ended March 31, 2000, the Board of Directors approved the
grants of 1,556,456 options, which exceeded the grants authorized by the
shareholders by 858,592. The Company requests shareholder approval for
additional grants at its next meeting of shareholders to be held August 14,
2000.
AMENDMENT
On March 31, 2000 the Board of Directors voted, subject to shareholder
approval, to increase the number of shares of Common Stock subject to options
under the 1996 Plan from 1,000,000 to 2,500,000. The Board of Directors believes
that the proposed increase is necessary in order for the Company to have
sufficient flexibility to provide the amounts and types of incentives to its
officers, employees, directors and consultants which are deemed necessary to
encourage the Company's success.
During the year ended March 31, 2000, stock options to purchase up to
1,556,456 shares of Common Stock were granted to a total of 57 employees,
directors and consultants under the 1996 Plan, of which, 858,592 are contingent
upon Shareholder approval, and options to purchase 280,152 shares of Common
Stock have been exercised. As of July 7, 2000, a total of 1,324,000 stock
options to purchase shares of Common Stock were granted and contingent upon
Shareholder approval under the 1996 Plan.
4
<PAGE> 8
NEW PLAN BENEFITS TABLE
1996 STOCK OPTION PLAN
<TABLE>
<CAPTION>
NAME AND POSITION DOLLAR VALUE($) NUMBER OF UNITS
----------------- --------------- ---------------
<S> <C> <C>
Anthony LaPine.............................................. $3,824,690(1) 370,000(2)
CEO, Chairman of the Board, President
Charles Dargan.............................................. $ 329,980(1) 140,000(3)
Executive Group............................................. $6,282,850(1) 950,000(4)
Non-Executive Director Group................................ $ 56,870(1) 10,000(5)
Non-Executive Officer Employee Group........................ $ 364,364(1) 364,000(6)
</TABLE>
---------------
(1) The Dollar Value of these options to purchase Datalink.net common stock
represents the difference between the exercise price of the options and
$14.187 which was the last reported sale price of Datalink.net common stock
on July 6, 2000.
(2) Represents Anthony LaPine's options to purchase 370,000 shares of the
Company's common stock at $3.85 per share and vesting over a three year
period, contingent upon Shareholder approval.
(3) Represents Mr. Dargan's 140,000 options to purchase the Company's common
stock at $11.83, which vest over a four year period.
(4) Includes the options to purchase Datalink.net common stock listed above as
granted, upon Shareholder approval, to Messrs. LaPine and Dargan, and
options to purchase Datalink.net common stock granted, upon Shareholder
approval, to other executive officers; including, Pamela LaPine, who was
granted 50,000 options at $3.85 per share; Cornel Fota, who was granted
50,000 options at $3.34 per share; Stas Wolk, who was granted 160,000
options at $8.56 per share; and Eric Fernwood, who was granted 180,000
options at $13.25 per share, all of which vest over a four year period.
(5) Represents 10,000 options to purchase common stock of Datalink.net, upon
Shareholder approval, to Mr. Hoar, exercisable at $8.50 per share and
vesting over a three year period.
(6) Includes options to purchase common stock of Datalink.net granted, upon
Shareholder approval, to all non-executive officer employees, with a
weighted average exercise price of $13.186 per share, and vesting over a
four year period.
BOARD RECOMMENDATION
The Board of Directors unanimously recommends a vote "FOR" approval of the
amendment to the 1996 Plan. All the Directors have been granted options that are
contingent upon Shareholder approval.
PROPOSAL 3:
RATIFICATION OF INDEPENDENT AUDITORS
The independent accounting firm of BDO Seidman L.L.P. audited the financial
statements of the Company for the year ended March 31, 2000, and has been
selected in such capacity for the current fiscal year. At the direction of the
Board of Directors, this appointment is being presented to the shareholders for
ratification or rejection at the Annual Meeting of Shareholders. If the
shareholders do not ratify the appointment of BDO Seidman L.L.P., the
appointment of auditors will be reconsidered by the Board of Directors.
It is expected that representatives of BDO Seidman L.L.P. will be present
at the meeting and will be given an opportunity to make a statement if they
desire to do so. It is also expected that the representatives will be available
to respond to appropriate questions from shareholders.
BOARD RECOMMENDATION
The Board of Directors recommends a vote "FOR" the ratification of the
selection of BDO Seidman, L.L.P., as auditors.
5
<PAGE> 9
OTHER BUSINESS
As of the date of this Proxy Statement, management of the Company was not
aware of any other matter to be presented at the Meeting other than as set forth
herein. However, if any other matters are properly brought before the Meeting,
the shares represented by valid proxies will be voted with respect to such
matters in accordance with the judgment of the persons voting them. A majority
vote of the shares represented at the meeting is necessary to approve any such
matters.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the number and percentage of shares entitled
to vote owned beneficially, as of July 7, 2000, by any person, who is known to
the Company to be the beneficial owners of five percent or more of the Company's
Common Stock, by each individual Director of the Company, and by all Directors
and Officers as a group. Information as to beneficial ownership is based upon
statements furnished to the Company by such persons. Each individual has sole
voting and investment power over the shares, except as otherwise noted.
<TABLE>
<CAPTION>
PERCENT
NAME AND ADDRESS AMOUNT AND NATURE OF OF
OF BENEFICIAL OWNERS BENEFICIAL OWNERSHIP CLASS
-------------------- ----------------------- --------
<S> <C> <C>
Anthony LaPine.............................................. 1,756,666(1) 12.5%
1735 Technology Drive
San Jose, California 95110-1333
Charles K. Dargan II........................................ 40,000(2) *
515 S. Figueroa Street, 11th Fl
Los Angeles, CA 90071
Fredrick M. Hoar............................................ 20,000(3) *
555 Twin Dolphin Drive
Suite 650
Redwood City, CA 94065
Jason Pavona................................................ 26,666(4) *
400-2 Totten Pond Rd
Waltham, MA 02451
All Officers and Directors as a Group (10 Persons).......... 1,897,035(5) 13.5%
</TABLE>
---------------
* Less than 1%
(1) Includes 1,000,000 shares of Common Stock owned directly by Mr. LaPine;
266,666 shares underlying currently exercisable warrants to purchase shares
of the Company's common stock at $1.875 per share; 300,000 warrants to
purchase shares of the Company's common stock at $2.375 per share that are
immediately exercisable; 140,000 shares underlying currently exercisable
options to purchase the Company's common stock at $1.72 per share; 50,000
shares underlying currently exercisable options held by Mr. LaPine's wife
and the Company's Vice President of Marketing, Pamela LaPine. Does not
include options to purchase 370,000 shares of the Company's common stock at
$3.85 per share, 50,000 options held by Mr. LaPine's wife and the Company's
Vice President of Marketing, Pamela LaPine, which are contingent upon
Shareholder approval, and 133,334 warrants issued in conjunction with the
closing of the November 5, 1997 private placement, which are not currently
exercisable.
(2) Represents 20,000 options at $6.50 per share that are currently exercisable,
and 20,000 options at $1.25 per share that are currently exercisable. Does
not include 180,000 options to purchase the Company's common stock at $11.83
per share, of which 140,000 vest over a four year period and 40,000 vest
based upon a performance plan, which are contingent upon Shareholder
approval.
(3) Represents 20,000 shares of Common Stock owned directly by Mr. Hoar.
(4) Represents 26,666 shares underlying currently exercisable options to
purchase the Company's Common Stock at $3.50 per share. Does not include
13,334 options to purchase the Company's Common Stock, which are not
currently exercisable.
6
<PAGE> 10
(5) Includes the shares listed above as beneficially owned by Messrs. LaPine,
Dargan, and Hoar; 7,203 shares of Common Stock underlying currently
exercisable options held by other executive officers, and 46,500 shares
owned directly by other certain executive officers.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") requires the Company's officers (as defined in regulations
issued by the SEC) and directors, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the SEC. Officers, directors and greater
than ten percent shareholders are required by SEC regulation to furnish the
Company with copies of all Section 16(a) forms they file.
Based solely on a review of copies of such reports of ownership furnished
to the Company during its most recent fiscal year, and certain written
representations, no person who was either a director, Officer or beneficial
owner of more than 10% of the Company's Common Stock failed to file on a timely
basis reports required by Section 16(a) of the Exchange Act during the most
recent fiscal year, except that Anthony LaPine, an Officer and Director, filed a
Form 4 reporting two transactions late and a Form 5 reporting seven transactions
late; Pamela B. LaPine, an Officer, filed a Form 5 reporting nine transactions
late; Taliesin Durant, an Officer, filed a Form 5 reporting three transactions
late; Cornell Fota, an Officer, Filed a Form 5 reporting eleven transactions
late; Charles Dargan, an Officer and Director, filed a Form 5 reporting two
transactions late; and Jason Pavona, a Director, filed a Form 3 late.
DIRECTORS AND EXECUTIVE OFFICERS
Set forth below are the names of all Directors, Nominees for Director and
Executive Officers of the Company, all positions and offices with the Company
held by each such person, the period during which he has served as such, and the
principal occupations and employment of such persons during at least the last
five years:
<TABLE>
<CAPTION>
POSITIONS AND OFFICES HELD
NAME AGE AND TERM AS A DIRECTOR
---- --- --------------------------
<S> <C> <C>
Anthony N. LaPine....................... 57 Chairman of the Board, President, Chief Executive
Officer and Director
Charles K. Dargan....................... 45 Director, Executive Vice President of Operations
and Administration
Frederick M. Hoar....................... 51 Director
Jason Pavona............................ 28 Director
William A. Mahan........................ 59 Chief Financial Officer and Treasurer
Taliesin Durant......................... 29 Secretary and In-house Counsel
Stas Wolk............................... 39 Chief Operating Officer
Cornel R. Fota.......................... 33 Vice President -- Engineering
Pamela B. LaPine........................ 42 Vice President -- Marketing
Eric Fernwood........................... 35 Vice President -- Sales
</TABLE>
There is no family relationship between any Director or Executive Officer
of the Company except that Anthony N. LaPine and Pamela B. LaPine are husband
and wife. There are no known arrangements or understandings between any director
or executive officer and any other person pursuant to which any of the
above-named executive officers or directors was selected as an officer or
director of the Company.
ANTHONY N. LAPINE, CHAIRMAN AND CEO
Mr. LaPine became the Company's Chairman on September 10, 1997. He has
served as Chief Executive Officer and a Director of the Company since June 27,
1996. Mr. LaPine's career began at IBM where he served as a member of the
engineering team that gave birth to the modern disk drive. His Data
7
<PAGE> 11
Synchronization Patent (#3,701,039) remains today's state of the art. In 1969 he
was recruited as one of the founders of Memorex's Equipment Group where he was
instrumental in giving birth to the floppy disk drive, a cornerstone of today's
personal computer revolution. He subsequently played a major role in Memorex's
historic turnaround, relisting Memorex on the New York Stock Exchange -- the
only company ever relisted.
After the sale of Memorex to Unisys, Mr. LaPine was recruited to
re-engineer the Irwin/Olivetti Company, where he orchestrated the invention of
the first removable cartridge tape backup in personal computers. This
development opened a new billion-dollar market catapulting the company to
profitability and a public offering (IPO). He subsequently formed LaPine
Technology, raising $30 million and launched the new 3 1/2 inch Winchester disk
drive technology that is now the industry standard. Mr. LaPine led his company's
growth to a profitable $60 million in sales before selling the company to his
alliance partners, Prudential and Kyocera, in a transaction valued at $240
million. After the sale of LaPine Technology, he formed The LaPine Group, a
private investment and management-consulting firm, which achieved wide
recognition for its successes.
Mr. LaPine has served as a technology expert for major law firms and
governmental agencies on intellectual property matters. In addition to having
taught as an adjunct professor in the Graduate School of Business at the
University of San Francisco, Mr. LaPine is a member of the National Association
of Securities Dealers Board of Arbitrators and a Public Arbitrator for the
Pacific Stock Exchange. Mr. LaPine is a 40-year resident of Silicon Valley. He
has served as a member of 20 corporate Boards for companies whose products or
services span a broad spectrum of industries. During his career, Mr. LaPine has
spearheaded the raising of hundreds of millions in investment capital. He has
served as chairman of the Hoover Institution's Council on Economic Development
and as a strategic advisor to the Russian government on the transition to
capitalism. In 1993 he received the San Jose State University "Alumni Award of
Distinction" and is the recipient of the Santa Clara University 1994
"Distinguished Engineering Alumni" award.
Mr. LaPine received a BSEE Cum Laude, from California State University, an
MSEE from Santa Clara University and an MBA from the University of San
Francisco. He later became an alumnus of Stanford's Graduate School of Business
through their Executive Program. He has been the subject of articles in Forbes,
Business Week, and Wall Street Journal. He has appeared on a number of
television programs, including CNBC, CNN, ABC, and Bloomberg TV. He is listed in
"The International Directory of Distinguished Leadership" "Men of Achievement"
and "Who's Who" in: ". . . the Computer Industry", ". . . California", ". . .
Finance and Industry", ". . . Science and Engineering" ". . . American Business
Leaders", ". . . Worldwide." Mr. LaPine's accomplishments have been chronicled
in numerous business books including The Third Century, High Technology
Start-Ups, and Overseas Business.
CHARLES K. DARGAN II, DIRECTOR AND EXECUTIVE VICE PRESIDENT OF OPERATIONS
Mr. Dargan has been a member of the Company's Board of Directors since
March 1999 and became the Executive Vice President of Operations and
Administration for Datlalink.net in February 2000. Mr. Dargan now leads
Datalink.net's business development strategy as well as merger and acquisition
efforts. Prior to joining Datalink.net, Mr. Dargan served as the Managing
Director of Corporate Finance for the Seidler Companies Incorporated, a private
brokerage, investment banking and public finance firm. In addition, he also
served as the Managing Director of Corporate Finance at L.H. Friend, Weinress,
Frankson & Presson, Inc., and was a principal in investment banking at Ambient
Capital and a First Vice President at Drexel Burnham Lambert, Inc. His financial
industry experience has made him an expert in private debt and equity finance,
leveraged buyouts and exchange offers in addition to merger and acquisition
advisory services.
FREDERICK M. HOAR, DIRECTOR
Mr. Hoar has served as a Director of the Company since March 1998. He has
over 35 years of experience in public affairs, financial relations and
marketing. He has shaped and implemented communications strategies for some of
America's seminal technology-based companies, including Apple, Fairchild,
Genentech and RCA. Mr. Hoar joined Boston-based Miller Communications, a leading
international high-tech public relations agency, in 1989. He subsequently became
president of Miller/Shandwick Technologies West, with
8
<PAGE> 12
responsibility for offices in Silicon Valley, Los Angeles and Dallas. In 1997 he
was named to the additional position of chairman of Shandwick Technologies. In
the early 1980's, Mr. Hoar was vice president of communications for Apple
Computer. He also served as vice president, communication and marketing services
for Fairchild Camera & Instrument; vice president, corporate communications for
Genentech; director, worldwide communications for Raychem; and division vice
president, public affairs and advertising for RCA. Mr. Hoar holds a B.A. degree
cum laude in American history and literature from Harvard College and an M.A. in
editorial journalism from the University of Iowa. He began his career with the
Associated Press and as an instructor in English and journalism at the
University of Northern Iowa.
JASON PAVONA, DIRECTOR
Mr. Pavona has served on Datalink.net's Board of Directors since February
of 2000. He currently holds a position as the Director of Wireless Strategy and
Personalization for Lycos Network. At Lycos, he has been instrumental in
building the infrastructure necessary to take the Lycos Network into the next
generation of device agnostic content and service delivery. Moreover, he has
created the distribution channels necessary to extend the Lycos brand to the
wireless world. He also manages Network Personalization, including MyLycos, the
award winning personalization platform for the Lycos Network. Before tackling
the wireless space, Mr. Pavona managed Lycos' two most challenging accounts:
Microsoft and Netscape. He was instrumental in the Company's ability to gain
crucial access and distribution in the PC OEM space, which included building
relationships with IBM, Compaq, Micron and Packard Bell. Prior to joining Lycos,
Mr. Pavona was instrumental in the creation of INPHO, Inc., a venture capital
funded Internet real estate venture. Mr. Pavona holds a Bachelor of Science
degree in Finance and Entrepreneurial Studies, Cum laude from Babson College. He
currently serves on the Advisory Board of New Gold, Inc. (NASDAQ:NGLD and on the
Board of Directors of several other privately held Internet start-up companies.
WILLIAM A. MAHAN, TREASURER AND CHIEF FINANCIAL OFFICER
William A. Mahan joined Datalink.net as Chief Financial Officer in October
1998. Mr. Mahan has extensive experience in corporate finance, operations,
shareholder reporting and investor services and has served as Chief Financial
Officer or Chief Accounting Officer for various public and privately held
companies over the last 30 years. Mr. Mahan's past service to public companies
includes the Nichols Institute (American Stock Exchange, medical diagnostic
products), Wrather Corporation (American Stock Exchange, leisure industry), and
American Investment Company (New York Stock Exchange, financial services). In
addition, Mr. Mahan was President and Chief Executive Officer of a privately
held technology company from 1989 to 1993, prior to its acquisition by a NYSE
listed company. Mr. Mahan received his degree in Finance and Accounting from
Arizona State University, subsequently earning his CPA certificate at the Los
Angeles office of Haskins & Sells, CPA's (now Deloitte & Touche, LLP). He
currently serves as a Director of the Santa Clara Valley Chapter of Financial
Executives Institute and is a member of the American Institute of Certified
Public Accountants.
TALIESIN DURANT, CORPORATE SECRETARY AND IN-HOUSE COUNSEL
Ms. Durant joined the Company in August 1999 and became the Company's
Secretary in January 2000. She plays a crucial role in Datalink.net's business
development and merger and acquisition strategy. Ms. Durant provides legal
counsel for the Company in the discussions and negotiations with major Internet
and other web-based companies that have potential synergies with Datalink.net.
Her legal expertise is also required when drafting and negotiating various
agreements relating to the development, distribution sale and licensing of
Datalink.net's services and technology. Ms. Durant brings four years of business
experience in a wide-range of areas, including consumer protection, telecom,
small business development and contracts, and intellectual property safeguards.
A current member of the California State Bar and an alumna of Northwestern
School of Law at Lewis and Clark College, Ms. Durant is well-versed in the legal
as well as business aspects of contractual, licensing, and trademark agreements.
Ms. Durant intensified her studies in high technology law at Santa Clara
University School of Law in 1998-99. She received her Bachelor of Arts degree
with academic distinction in Economics from Connecticut College in 1993.
9
<PAGE> 13
STAS WOLK, CHIEF OPERATING OFFICER
Mr. Wolk became the Chief Operating Officer of Datalink.net in May, 2000.
In this role, Mr. Wolk is responsible for driving the Company's revenue growth
through its enterprise business strategy, implementing the company's acquisition
program, and further building and developing the management team. Prior to
joining Datalink.net, Mr. Wolk served as Group President of the Credit Card &
Financial Services group for OSI, the nation's largest receivables management
company. Mr. Wolk's group had more than one thousand employees managing $3
billion in annual placements generating $90 million in annual revenue. He gained
extensive experience in the wireless industry during his six years with Paging
Network, Inc. While there, he held the role of Vice President and General
Manager for PageNet's largest GM-led operation and was directly responsible for
$75 million in annual revenue. Mr. Wolk has a Bachelor of Science degree in
Mechanical Engineering from Stanford University and a MBA in Finance and
Marketing from San Francisco State University.
CORNEL FOTA, VICE PRESIDENT OF ENGINEERING
Cornel Fota became Datalink.net's Vice President of Engineering in October
1998. Mr. Fota is a software engineer with experience in the analysis, design,
implementation and management of software-based projects. His areas of expertise
include real-time systems, Internet technologies, serial communications, paging
protocols and object-oriented analysis and design. At Datalink.net, Mr. Fota is
responsible for managing the Company's development, production and information
systems groups. Mr. Fota joined Datalink.net in 1996 as a senior software
engineer and was involved in developing most of Datalink.net's products and
technologies. Before joining the Company, he was involved with the development
of various Microsoft-based systems. Mr. Fota has a Master of Science in Software
Engineering from the Technical University of Bucharest, Romania. He also holds a
post-graduate management degree from Ecole Nationale des Ponts et Chaussees,
Paris, France.
PAMELA LAPINE, VICE PRESIDENT OF MARKETING
Mrs. LaPine has been the Company's Vice President of Marketing since
October 1998. Pamela LaPine is a seasoned business professional with over 20
years of management experience in Silicon Valley high tech companies. She has
extensive experience in corporate operations, finance, marketing and business
development. Mrs. LaPine started her management career as Marketing Director at
Digital Recording Corporation, and then transitioned to LaPine Technologies,
where she was responsible for strategic planning. She has also held executive
positions with Partners Petroleum and Olympiad Corporation.
Mrs. LaPine's experience includes: P&L responsibility, leading disparate
marketing programs in multiple channels, supervising corporate operations and
building external strategic relationships. At Datalink.net, she manages an
international marketing group comprised of experienced product managers, web
managers, and marketing specialists. Collectively, this impressive marketing
group holds four MBA's. Mrs. LaPine did her undergraduate studies at the
University of Utah and is completing her MBA at Harriot Watt University. She has
served on the Board of Directors of the San Jose Cleveland Ballet, Junior
Achievement, Olympiad Corporation and Partners Petroleum Corporation.
ERIC FERNWOOD, VICE PRESIDENT OF STRATEGIC SALES
Mr. Fernwood joined as the Vice President of Strategic Sales of the Company
on May 2000. In this capacity, he further strengthens and manages a sales team
that will develop additional corporate relationships and secure agreements with
targeted Fortune 1000 companies. Prior to joining Datalink.net, Mr. Fernwood
served as the alliance manager for IBM Global Services (IGS) where he was
responsible for identifying IGS solutions needs in the business-to-business
space. Previously, Fernwood held multiple positions at Hewlett Packard. In this
position, he was the Asia director of e-commerce for Verifone, a division of
Hewlett Packard, where he was responsible for the sale of Secure Electronic
Transactions (SET) to major banks and telecommunications companies in Asia. Mr.
Fernwood also held positions as the sales manager for Hewlett
10
<PAGE> 14
Packard's Integrated Systems Division as well as the manager of the Channel
Business Development Department in Singapore.
MEETINGS OF THE BOARD OF DIRECTORS
The Company's Board of Directors held a total of two meetings during the
year ended March 31, 2000. Each Director attended 100% of the aggregate number
of meetings held by the Board of Directors during the time each such Director
was a member of the Board. The Board also took thirty three actions by unanimous
written consent in lieu of meetings during the fiscal year ended March 31, 2000.
The Board of Directors currently consists of four members. The Company does
not have a nominating committee, but does have an audit committee and a
compensation committee, which consists of all of the non-employee Directors of
the Company, and therefore presently consists of Frederick M. Hoar and Jason
Pavona. Both Committees were first established on January 15, 1998.
EXECUTIVE COMPENSATION
Summary Compensation. The following table presents the compensation for the
Company's President and each Executive Officer who received compensation that
exceeded $100,000 for the fiscal years ended March 31 1998, 1999, and 2000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
--------------------------------------------
AWARDS PAYOUTS
ANNUAL COMPENSATION ----------------------- -----------------
------------------------------------ SECURITIES
OTHER UNDERLYING ALL
ANNUAL RESTRICTED OPTIONS/ OTHER
COMPEN- STOCK SARS LTIP COMPEN-
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS SATION AWARD(S) (NUMBER) PAYOUTS SATION
--------------------------- ---- -------- ------- ------- ---------- ---------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Anthony LaPine.......... 2000 $240,000 -0- 11,000(1) -0- 1,210,000(2) -0- -0-
CEO and 1999 $140,000 -0- 11,000(1) -0- 1,210,000(2) -0- -0-
Chairman of the Board 1998 $140,000 -0- 11,000(1) -0- 400,000(2) -0- -0-
Nicholas Miller......... 2000 -0- -0- -0- -0- 100,000(3) -0- -0-
1999 -0- -0- -0- -0- 100,000(3) -0- -0-
1998 $135,000 -0- 9,000(1) -0- 400,000(3) -0- -0-
William Mahan........... 2000 $135,000 -0- 6,000(1) -0- 77,500(4) -0- -0-
Chief Financial Officer
Charles Dargan.......... 2000 $155,000 $25,000(5) -0- -0- 220,000(6) -0- -0-
Executive Vice President
of Operations and
Director
</TABLE>
---------------
(1) Represents car allowances.
(2) For fiscal year 1999 and 2000: Represents warrants to purchase 400,000
shares of the Company's common stock at $1.875 per share which vest over a
three-year period and warrants to purchase 300,00 shares of the Company's
common stock at $2.375 per share that are immediately exercisable and
140,000 options to purchase the Company's common stock at $1.72 which are
immediately exercisable, and options to purchase 370,000 shares of the
Company's common stock at $3.85 per share which vest over a three year
period, which are contingent upon Shareholder approval.
For fiscal year 1998: Represents 400,000 warrants to purchase shares of the
Company's common stock at 1.875 per share which vest over a three-year
period.
(3) For fiscal year 1998: Represents warrants to purchase 100,000 shares of the
Company's common stock at $1.875 per share which vest over a three year
period and options to purchase 300,000 shares of the Company's common stock
as $2.20 which are immediately exercisable.
11
<PAGE> 15
For fiscal year 1999 and 2000: Represents warrants to purchase 100,000
shares of the Company's common stock at $1.875 per share which vest over a
three year period.
(4) Represents stock options to purchase 77,500 shares of the Company's Common
Stock at $.50 which vest over a four year period.
(5) Represents a moving expenses allowance.
(6) Represents 20,000 options at $6.50 per share that vest immediately, 20,000
options to purchase Common Stock at $1.25 per share that immediately vest,
and 180,000 options to purchase the Company's common stock at $11.83, of
which 140,000 vest over a four year period and 40,000 vest based upon a
performance plan, which are contingent upon Shareholder approval.
Option Grants. The following table sets forth certain information
concerning individual grants of stock options made to each of the Executive
Officers named above during the fiscal year ended March 31, 2000. No stock
appreciation rights were granted to these individuals during the year.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
----------------------------------------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO
OPTIONS EMPLOYEES IN EXERCISE EXPIRATION
NAME GRANTED(#)(*) FISCAL YEAR PRICE($/SH) DATE
---- ------------- ------------ ----------- ----------
<S> <C> <C> <C> <C>
Anthony LaPine.......................... 370,000(1) 24% $ 3.85 01/12/10
Charles K. Dargan....................... 20,000(2) 1% $ 6.50 01/24/05
140,000(3) 9% $11.83 02/24/10
</TABLE>
---------------
* Options expire 90 days after the termination of employment of the option
holder.
(1) One-third of the options become exercisable beginning January 12, 2001.
Thereafter, the remaining two-thirds of the options become exercisable
monthly in equal increments over a two-year period thereafter. These options
are contingent upon Shareholder approval.
(2) The options are immediately exercisable in there entirety.
(3) One-fourth of the options become exercisable beginning February 24, 2001.
Thereafter, the remaining three-fourths of the options become exercisable
monthly in equal increments over a three-year period. These options are
contingent upon Shareholder approval.
Aggregate Option Exercises. The following table sets forth certain
information concerning individual exercises of stock options of the Executive
Officers named above during the fiscal year ended March 31, 2000.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
SECURITIES UNDERLYING
SHARES UNEXERCISED OPTIONS VALUE OF UNEXERCISED IN-THE-
ACQUIRED ON VALUE AT FY-END MONEY OPTIONS AT FY-END
NAME EXERCISE(#) REALIZED EXERCISABLE/UNEXERCISABLE EXERCISABLE/ UNEXERCISABLE
---- ----------- ---------- ------------------------- ----------------------------
<S> <C> <C> <C> <C>
Anthony N. LaPine.... -0- -0- 706,666/503,334 $21,046,947/$14,351,653
Nicholas Miller...... 66,666 $1,997,647 -0-/ 33,334 -0-/$ 998,853
Charles K. Dargan.... -0- -0- 40,000/140,000 $ 1,118,600/$ 2,801,400
William A. Mahan..... 42,500 $298,875 -0-/ 77,500 -0-/$ 2,428,850
</TABLE>
---------------
(1) Options were "in the money" because the closing price of Datalink.net's
common stock on March 31, 2000 exceeded the exercise price of the options.
The value of unexercised options represents the difference between the
exercise price of net options and $31.84 which was the last reported sale
price of Datalink.net common stock on March 31, 2000.
12
<PAGE> 16
DIRECTOR COMPENSATION
Except for reimbursement for reasonable travel expenses relating to
attendance at board meetings and discretionary grants of stock options,
directors are not compensated for their services as directors. Directors who are
employees are eligible to participate in our equity incentive plan.
The following table identifies options that we have granted to current
non-employee directors since January 1, 1997.
<TABLE>
<CAPTION>
NUMBER OF
SHARES UNDERLYING EXERCISE
NON-EMPLOYEE DIRECTOR OPTIONS(#) PRICE($)
--------------------- ----------------- --------
<S> <C> <C>
Frederick H. Hoar........................................... 20,000 $1.56
Jason Pavona................................................ 40,000 $3.50
</TABLE>
EMPLOYMENT AGREEMENTS
The Company entered into a three-year employment agreement with Anthony
LaPine, which became effective on May 1, 1996, and was extended to May 1, 2004.
As the Company's CEO, Anthony LaPine receives a base salary of $240,000 per
year, plus discretionary increases in conformity with the Company's standard
review procedure. In addition, to his base salary, Mr. LaPine shall be paid an
annual bonus during the term of the agreement in an amount equal to 86% of the
base salary, provided there is satisfactory achievement of agreed upon
performance goals. Mr. LaPine will also be given a car allowance that is not to
exceed $1,000 a month. Mr. LaPine receives full health, dental, vision, and
disability insurance. If the Company terminates Mr. LaPine's employment
agreement prior to May 1, 2004 for reasons other than disability, or if Mr.
LaPine terminates the agreement for "good reason" as defined in the agreement,
the Company is mandated to continue paying the salary and other benefits for the
duration of the term.
The Board of Directors has agreed that no bonuses will be paid to Mr.
LaPine until the Company has four consecutive profitable quarters. The
performance goals for Mr. LaPine will be established by the compensation
committee.
EMPLOYEE WARRANTS
In addition to the stock options granted under the Company's Employee Stock
Option Plan, in August 1997, the Board of Directors approved the issuance of
warrants to Anthony N. LaPine and Nicholas R. Miller as of the initial closing
date of the Company's recent private offering. Mr. LaPine received warrants to
purchase 400,000 shares of Common Stock at $1.875 per share. These vest over a
three-year period in equal installments of one-third of the total shares on each
anniversary of the date of grant, and expire five years from the closing date of
the Company's recent private offering. Mr. Miller received warrants to purchase
400,000 shares of Common Stock at $1.875 per share. Of these warrants, 300,000
have been terminated and the remaining 100,000 will vest over a three-year
period in equal installments of one-third of such number on each anniversary of
the date of grant. These warrants also expire five years from the closing date
of the private offering. The above warrants were approved pursuant to the
requirements of the Company's letter of intent with the Placement Agent.
On December 1, 1999, the Company issued warrants to purchase 300,000 shares
of common stock at $2.375 per share to the Chief Executive Officer.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Effective May 1, 1996, The Company entered into a three year employment
agreement with the Company's Chief Executive Officer. This agreement was
extended to May 1, 2004. The agreement automatically renews for one year terms
unless notice is provided by either party.
Concurrently with the execution of the original employment agreement, the
Company's Chief Executive Officer entered into a Stock Purchase Agreement
pursuant to which he purchased 400,000 shares of the
13
<PAGE> 17
Common Stock of DCC (which were later exchanged for 400,000 shares of the
Company's Common Stock), and as payment terms he executed a non-recourse
promissory note in the amount of $1,500,000. The note bore interest at 10.5% per
annum and the principal plus interest were due on or before April 1, 2001. As
security for the note, the Chief Executive Officer granted the Company a
security interest in the 400,000 shares of Common Stock.
On June 26, 1996, the Company entered into a Loan Forgiveness Agreement
with the Chief Executive Officer which provided that the $1,500,000 promissory
note would be forgiven if he continues to serve as the Company's Chief Executive
Officer through May 1, 1999, and there are no uncured defaults by him under this
Employment Agreement on May 1, 1999. The note plus interest was amortized over
the period of the contract of employment as compensation. Consequently, in the
years ended March 31, 2000 and 1999, expense of $48,754 and $585,044
respectively has been recorded as compensation expense. On May 1, 1999, the note
and accrued interest was forgiven in full.
On January 2, 1997, the Company entered into a three year non-cancelable
lease agreement with the Chief Executive Officer of the Company where the
Company leased office space owned by the Chief Executive Officer at an annual
rate of $100,000 or $8,333.37 per month. This lease was cancelled on November 1,
1999.
In conjunction with the private placement dated November 5, 1997 the Chief
Executive Officer of the Company entered into a stock purchase agreement. Under
the terms of the agreement, the Chief Executive Officer received 280,000 shares
of preferred stock with detachable warrants to purchase 280,000 shares of the
Company's common stock at $2.50 per share, in exchange for a note receivable in
the amount of $1,050,000. The note is collateralized by certain assets of the
officer and bears interest at a rate of 10.25%.
On December 1, 1999, the Company issued warrants to purchase 300,000 shares
of common stock at $2.375 per share to the Chief Executive Officer.
On January 15, 2000, the Company entered into a Loan Forgiveness Agreement
with the Chief Executive Officer which provided that the $1,050,000 promissory
note would be forgiven if he continues to serve as the Company's Chief Executive
Officer through May 1, 2004, and there are no uncured defaults by him under his
Employment Agreement on May 1, 2004. The note, together with interest accrued
thereon has been presented as contra-equity in the balance sheet. The note plus
interest is being amortized over the period of the contract of employment.
Consequently, in the year ended March 31, 2000 expense of $93,888 has been
recorded as employment compensation.
On February 29, 2000, the Company entered into a secured promissory note
with the Chief Executive Officer, in the amount of $100,000 to cover the cost of
the Chief Executive Officer's exercise of 40,000 warrants, that would otherwise
be redeemed by the corporation on April 3, 2000, pursuant to the Company's
automatic redemption rights against all holders of the Company's $2.50 warrants.
ANNUAL REPORT ON FORM 10-KSB
THE COMPANY'S 2000 ANNUAL REPORT ON FORM 10-KSB, INCLUDING FINANCIAL
STATEMENTS FOR THE YEAR ENDED MARCH 31, 2000, IS BEING DISTRIBUTED TO ALL
STOCKHOLDERS OF THE COMPANY TOGETHER WITH THIS PROXY STATEMENT, IN SATISFACTION
OF THE REQUIREMENTS OF THE SECURITIES AND EXCHANGE COMMISSION. ADDITIONAL COPIES
OF THE REPORT, EXCEPT FOR EXHIBITS, ARE AVAILABLE AT NO CHARGE UPON REQUEST. TO
OBTAIN ADDITIONAL COPIES OF THE ANNUAL REPORT ON FORM 10-KSB, PLEASE CONTACT
WILLIAM MAHAN, INVESTOR RELATIONS, AT 1735 TECHNOLOGY DRIVE, SUITE 790, SAN
JOSE, CA 95110, OR AT TELEPHONE NUMBER (408) 367-1708.
14
<PAGE> 18
SHAREHOLDER PROPOSALS
If you intend to propose any matter for action at our 2001 Annual Meeting
of Stockholders and wish to have the proposal included in our proxy statement,
you must submit your proposal to the Secretary of Datalink.net at 1735
Technology Drive, Suite 790, San Jose, California 95110, on or before March 15,
2001, not later than 5:00 p.m. Pacific Standard Time. Please note that proposals
must comply with all of the requirements of Rule 14a-8 under the Securities
Exchange Act of 1934. Only then can we consider your proposal for inclusion in
our proxy statement and proxy relating to the 2001 Annual Meeting. We will be
able to use proxies you give us for the next year's meeting to vote for or
against any shareholder proposal that is not included in the proxy statement at
our discretion unless the proposal is submitted to us on or before March 15,
2001.
Anthony N. Lapine, President
San Jose, California
July 14, 2000
15
<PAGE> 19
Attachment A
DATALINK SYSTEMS CORPORATION
1996 STOCK OPTION PLAN
1. PURPOSE.
The purpose of the DATALINK SYSTEMS CORPORATION STOCK OPTION PLAN (the
"Plan") is to grant to selected employees, directors, and consultants of
DATALINK SYSTEMS CORPORATION, a Nevada corporation (the "Company") and its
subsidiaries and affiliates, a favorable opportunity to acquire Common Stock of
the Company, thereby encouraging such persons to accept or continue a productive
relationship with the Company, and furnishing such persons with an incentive to
improve operations and increase profits of the Company. Capitalized terms not
previously defined herein are defined in Section 17 of this Plan.
2. OPTIONS AND SHARES.
Options granted under this Plan (the "Options") are for the purchase of
Common Stock.
The aggregate number of Shares that may be issued pursuant to Options
granted under this Plan is Three Million (3,000,000) Shares, subject to
adjustment as provided in this Plan. If any Option expires or is terminated
without being exercised in whole or in part, the unexercised or released Shares
from such Option shall be available for future grant and purchase under this
Plan. At all times during the term of this Plan, the Company shall reserve and
keep available such number of Shares as shall be required to satisfy the
requirements of outstanding Options under this Plan.
3. ADMINISTRATION.
The Plan shall be administered by the Board of Directors of the Company
(the "Board"), or by a committee appointed by the Board that is comprised solely
of two or more Non-Employee Directors. As used in this Plan, references to the
"Administrator" shall mean either the committee appointed by the Board to
administer this Plan or the Board if no committee has been established. The
interpretation by the Administrator of any of the provisions of this Plan or any
Option granted under this Plan shall be final and binding upon the Company and
all persons having an interest in any Option or any Shares purchased pursuant to
an Option. The Administrator may delegate to officers of the Company the
authority to grant Options under this Plan to Optionees who are not Insiders, as
defined in the Exchange Act.
<PAGE> 20
The Administrator may delegate nondiscretionary administrative duties
to such employees of the Company as it deems proper. Subject to the provisions
of the Plan, the Administrator shall have the sole authority, in its discretion:
(a) to determine to which of the eligible individuals, and the time or
times at which, options to purchase Common Stock of the Company shall
be granted;
(b) to determine the number of shares of Common Stock to be subject to
options granted to each eligible individual;
(c) to determine the price to be paid for the shares of Common Stock upon
the exercise of each option;
(d) to determine the term and the exercise schedule of each option;
(e) to determine the terms and conditions of each stock option grant
(which need not be identical) entered into between the Company and any
eligible individual to whom the Administrator has granted an option,
subject to Section 14 hereof;
(f) to interpret the Plan;
(g) to accelerate the exercise date or schedule with respect to any option
granted under the Plan or, with the consent of the holder thereof, to
modify or amend any such option;
(h) to make all determinations deemed necessary or advisable for the
administration of the Plan;
(i) to determine whether Optionee has ceased to be employed by the Company
or any Parent, Subsidiary or Affiliate of the Company and the
effective date on which such employment terminated; and
(j) to determine whether an Optionee, who is a director, consultant or
advisor of the Company, is "employed by the Company or any Parent,
Subsidiary or Affiliate of the Company" pursuant to the foregoing
Sections.
4. ELIGIBILITY.
2
<PAGE> 21
Options may be granted to employees, officers, directors, consultants
and advisers (provided such consultants and advisers render bona fide services
not in connection with the offer and sale of securities in a capital-raising
transaction) of the Company or any Parent, Subsidiary or Affiliate of the
Company. Incentive Stock Options may be granted only to employees of the Company
or a Parent or Subsidiary of the Company. The Administrator in its sole
discretion shall select the recipients of Options ("Optionees"). An Optionee may
be granted more than one Option under this Plan. The Company may also, from time
to time, assume outstanding options granted by another company, whether in
connection with an acquisition of such other company or otherwise, by either (a)
granting an Option under this Plan in replacement of the option assumed by the
Company, or (b) treating the assumed option as if it had been granted under this
Plan if the terms of such assumed option could be applied to an Option granted
under this Plan. Such assumption shall be permissible if the holder of the
assumed option would have been eligible to be granted an Option hereunder if the
other company had applied the rules of this Plan to such grant.
5. TERMS AND CONDITIONS OF OPTIONS.
5.1 Option Grant. Each option granted under the Plan shall be evidenced
by a written stock option grant (the "Option"). Each such agreement shall
designate the option thereby granted as a Common Stock option. Each such Option
shall be subject to the terms and conditions set forth in this Section 5, and to
such other terms and conditions not inconsistent herewith as the Administrator
may deem appropriate in each case.
5.2 Date of Grant. The date of grant of an Option shall be the date on
which the Administrator makes the determination to grant such Option unless
otherwise specified by the Administrator. The Option representing the Option
will be delivered to Optionee with a copy of this Plan within a reasonable time
after the granting of the Option.
5.3 Exercise Price. The exercise price of an Option shall be not less
than 100% of the Fair Market Value of the Shares on the date the Option is
granted. The exercise price of any Option granted to a person owning more than
10% of the total combined voting power of all classes of stock of the Company or
any Parent or Subsidiary of the Company ("Ten Percent Shareholder") shall not be
less than 110% of the Fair Market Value of the Shares on the date the Option is
granted. For purposes of this Section 5.3, in determining stock ownership, an
Optionee shall be considered as owning the voting capital stock owned, directly
or indirectly, by or for his brothers and sisters, spouse, ancestors and lineal
descendants. Voting capital stock owned, directly or
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<PAGE> 22
indirectly, by or for a corporation, partnership, estate or trust shall be
considered as being owned proportionately by or for its shareholders, partners
or beneficiaries, as applicable. Common Stock with respect to which any such
Optionee holds an Option shall not be counted. Additionally, for purposes of
this Section 5.3, outstanding capital stock shall include all capital stock
actually issued and outstanding immediately after the grant of the Option to the
Optionee. Outstanding capital stock shall not include capital stock authorized
for issue under outstanding Options held by the Optionee or by any other person.
5.4 Exercise Period. Subject to the limitations set forth herein,
Options shall be exercisable within the times or upon the events determined by
the Administrator as set forth in the Option. In no event shall the right to
exercise be at a rate less than twenty percent (20%) per year over five (5)
years from the date the Option is granted. No Option shall be exercisable after
the expiration of ten (10) years from the date the Option is granted.
5.5 Options Non-Transferable. Options granted under this Plan, and any
interest therein, shall not be transferable or assignable by Optionee, and may
not be made subject to execution, attachment or similar process, otherwise than
by will or by the laws of descent and distribution or pursuant to a qualified
domestic relations order as defined by the Code or Title 1 of the Employee
Retirement Income Security Act, or the rules thereunder, and shall be
exercisable during the lifetime of the Optionee only by Optionee.
5.6 Assumed Options. In the event the Company assumes an option granted
by another company, the exercise price and the number and nature of shares
issuable upon exercise, of such assumed option will be adjusted appropriately
pursuant to the Code. In the event the Company elects to grant a new option
rather than assuming an existing option, such new option need not be granted at
Fair Market Value on the date of grant and may instead be granted with a
similarly adjusted exercise price.
6. EXERCISE OF OPTIONS.
6.1 Notice. Options may be exercised only by delivery to the Company of
a written stock option exercise agreement (the "Exercise Agreement") in a form
approved by the Administrator (which need not be the same for each Optionee),
stating the number of Shares being purchased, the restrictions imposed on the
Shares, if any, and such representations and agreements regarding Optionee's
investment intent and access to information, if any, as may be required by the
Company to comply with applicable
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<PAGE> 23
securities laws, together with payment in full of the exercise price for the
number of Shares being purchased.
6.2 Payment. Payment for the Shares may be made in cash (by check) or,
where approved by the Administrator in its sole discretion and where permitted
by law: (a) by cancellation of indebtedness of the Company to the Optionee; (b)
by surrender of shares of common stock of the Company having a Fair Market Value
equal to the applicable exercise price of the Option that have been owned by
Optionee for more than six (6) months (and which have been paid for within the
meaning of the Securities and Exchange Commission ("SEC") Rule 144 and, if such
Shares were purchased from the Company by use of a promissory note, such note
has been fully paid with respect to such shares), or were obtained by Optionee
in the open public market; (c) by waiver of compensation due or accrued to
Optionee for services rendered; (d) provided that a public market for the
Company's stock exists, through a "same day sale" commitment from Optionee and a
broker-dealer that is a member of the National Association of Securities Dealers
(an "NASD Dealer") whereby Optionee irrevocable elects to exercise the Option
and to sell a portion of the Shares so purchased to pay for the exercise price
and whereby the NASD Dealer irrevocably commits upon receipt of such Shares to
forward the exercise price directly to the Company; (e) provided that a public
market for the Company's stock exists, through a "margin" commitment from
Optionee and an NASD Dealer whereby Optionee irrevocable elects to exercise the
Option and to pledge the Shares so purchased to the NASD Dealer in a margin
account as security for a loan from the NASD Dealer in the amount of the
exercise price, and whereby the NASD Dealer irrevocably commits upon receipt of
such Shares to forward the exercise price directly to the Company; or (f) by any
combination of the foregoing.
6.3 Withholding Taxes. Prior to issuance of the Shares upon exercise of
an Option, Optionee shall pay or make adequate provision for any federal or
state withholding obligations of the Company, if applicable. Where approved by
the Administrator in its sole discretion, and so long as the Company is not a
reporting company under the Exchange Act, Optionee may provide for payment of
withholding taxes upon exercise of the Option by requesting that the Company
retain Shares with a Fair Market Value equal to the minimum amount of taxes
required to be withheld. In such case, the Company shall issue the net number of
Shares to Optionee by deducting the Shares retained from the Shares exercised.
The Fair Market Value of the Shares to be withheld shall be determined on the
date that the amount of tax to be withheld is to be determined in accordance
with Section 83 of the Code (the "Tax Date"). All elections by Optionees to have
Shares withheld for this purpose shall be made in writing in a
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<PAGE> 24
form acceptable to the Administrator and shall be subject to the following
restrictions:
(a) the election must be made on or prior to the applicable Tax Date;
(b) once made, the election shall be irrevocable as to the particular
Shares as to which the election is made; and
(c) all elections shall be subject to the consent or disapproval of the
Administrator.
6.4 Limitations on Exercise. Notwithstanding the exercise periods set
forth in the Option, exercise of an Option shall always be subject to the
following:
6.4.1 If Optionee ceases to be employed by the Company or any
Parent or Subsidiary of the Company for any reason except death or disability,
Optionee may exercise such Optionee's ISOs to the extent (and only to the
extent) that they would have been exercisable upon the date of termination,
within ninety (90) days after the date of termination (or such shorter time
period as may be specified in the Option);
6.4.2 If Optionee's employment with the Company or any Parent
or Subsidiary of the Company is terminated because of the death of Optionee or
disability (as defined in Section 22(e)(3) of the Code) of Optionee, Optionee's
Options may be exercised to the extent (and only to the extent) that they would
have been exercisable by Optionee on the date of termination, by Optionee (or
Optionee's legal representative) within one year after the date of termination
(or such shorter time period as may be specified in the Option), but in any
event no later than the expiration date of the Options.
7. SECURITIES LAW REQUIREMENTS.
7.1 The Administrator may require an individual as a condition of the
grant and of the exercise of an option, to represent and establish to the
satisfaction of the Administrator that all shares of Common Stock to be acquired
upon the exercise of such option will be acquired for the investment and not for
resale. The Administrator shall cause such legends to be placed on certificates
evidencing shares of Common Stock issued upon exercise of an option as, in the
opinion of the Company's counsel, may be required by federal and applicable
state securities laws.
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7.2 No shares of Common Stock shall be issued upon the exercise of any
option unless and until counsel for the Company determines that:
(a) the Company and the Optionee have satisfied all applicable
requirements under the Securities Act of 1933 and the Securities
Exchange Act of 1934;
(b) any applicable listing requirement of any stock exchange on which the
Company's Common Stock is listed has been satisfied; and
(c) all other applicable provisions of state and federal law have been
satisfied.
8. MODIFICATION, EXTENSION AND RENEWAL OF OPTIONS.
The Administrator shall have the power to accelerate the exercise date
or schedule of any outstanding Option, or to otherwise modify, extend or renew
outstanding Options and to authorize the grant of new Options in substitution
therefor, provided that any such action may not, without the written consent of
Optionee, impair any rights under any Option previously granted. The
Administrator shall have the power to reduce the exercise price of outstanding
Options without the consent of Optionee's by a written notice to the Optionee's
affected; provided, however, that the exercise price per Share may not be
reduced below the minimum exercise price that would be permitted under Section
5.3 of this Plan for Options granted on the date the action is taken to reduce
the exercise price.
9. STOCK OWNERSHIP; FINANCIAL STATEMENTS.
Notwithstanding any other provisions of the Plan and except as provided
in this Section 9, no Optionee shall have any of the rights of a shareholder
(including the right to vote and receive dividends) of the Company, by reason of
the provisions of this Plan or any action taken hereunder, until the date such
Optionee shall both have paid the exercise price for the Common Stock and shall
have been issued (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company) the stock
certificate evidencing such shares. No adjustment shall be made for dividends or
distributions or other rights for which the record date is prior to such date,
except as provided in this Plan. However, the Company shall provide to each
Optionee, during the period for which such Optionee has one or more Options
outstanding, copies of the financial statements of the Company, consisting of,
at a minimum, a balance sheet and an income statement, at such time after the
close of each fiscal year of the Company as such statements are released by the
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<PAGE> 26
Company to its shareholders. The Company shall not be required to provide such
information to key employees whose duties in connection with the Company assume
their access to equivalent information.
10. NO OBLIGATION TO EMPLOY.
Nothing in this Plan or any Option granted under this Plan shall confer
on any Optionee any right to continue in the employ of, or other relationship
with, the Company or any Parent, Subsidiary or Affiliate of the Company, nor
limit or otherwise impair the right of the Company, or any Parent, Subsidiary,
or Affiliate of the Company to terminate Optionee's employment or other
relationship at any time, with or without cause.
11. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION OR MERGER.
11.1 Changes in Capitalization. Subject to any required action by the
Company's shareholders, the number of Shares of Common Stock covered by this
Plan as provided in Section 2, the number of Shares covered by each outstanding
Option granted hereunder and the exercise price thereof shall be proportionately
adjusted for any increase or decrease in the number of shares of Common Stock
resulting from a stock split, reverse stock split, recapitalization, combination
or reclassification of the shares or the payment of a stock dividend (but only
on the Common Stock) or any other increase or decrease in the number of such
outstanding shares of Common Stock effected without the receipt of consideration
by the Company; provided, however, that the conversion of any convertible
securities of the Company shall not be deemed to have been "effected without
receipt of consideration".
11.2 Assumption or Substitution. In the event of (a) a merger or
consolidation in which the Company is not the surviving corporation (other than
a merger or consolidation with a wholly owned subsidiary, a reincorporation, or
other transaction in which there is no substantial change in the shareholders of
the corporation and the Options granted under this Plan are assumed by the
successor corporation, which assumption shall be binding on all Optionee's), (b)
a dissolution or liquidation of the Company, (c) the sale of substantially all
of the assets of the Company, or (d) any other transaction which qualifies as a
"corporate transaction" under Section 424(a) of the Code wherein the
shareholders of the Company give up all of their equity interest in the Company
(except for the acquisition of all or substantially all of the outstanding
shares of the Company), any or all outstanding Options may be assumed by the
successor corporation, which assumption shall be binding on all Optionee's. In
the alternative, the successor corporation may substitute an
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<PAGE> 27
equivalent option or provide substantially similar consideration to Optionees as
was provided to shareholders (after taking into account the existing provisions
of Optionee's options, such as the exercise price and the vesting schedule). The
successor corporation may also issue, in place of outstanding shares of the
Company held by Optionee as a result of the exercise of an Option that is
subject to repurchase, substantially similar shares or other property subject to
similar repurchase restrictions no less favorable to Optionee.
11.3 Expiration. In the event such successor corporation, if any,
refuses to assume or substitute Options, as provided above, pursuant to a
transaction described in Subsection 11.2 above, or there is no successor
corporation, and if the Company is ceasing to exist as a separate corporate
entity, the Options shall, notwithstanding any contrary terms in the Option,
expire on (and, in the case of a transaction described in Subsection 11.2 above,
if the Company has reserved to itself a right to repurchase Shares issued on
exercise of Option at the original purchase price of such Shares, such right
shall terminate on) a date at least 20 days after the Board gives written notice
to Optionees, specifying the terms and conditions of such termination.
11.4 Additional Provisions. Subject to the foregoing provisions of this
Section 11, in the event of the occurrence of any transaction described in
Section 11.2, any outstanding Option shall be treated as provided in the
applicable agreement or plan of merger, consolidation, dissolution, liquidation,
sale of assets or other corporate transaction.
12. ADOPTION AND SHAREHOLDER APPROVAL.
This Plan shall become effective on the date that it is adopted by the
Board of the Company. This Plan shall be approved by the shareholders of the
Company, in any manner permitted by applicable corporate law, within twelve
months before or after the date this Plan is adopted by the Board. Upon the
effective date of the Plan, the Board may grant Options pursuant to this Plan;
provided that, in the event that shareholder approval is not obtained within the
time period provided herein, all Options granted hereunder shall terminate. No
Option that is issued as a result of any increase in the number of shares
authorized to be issued under this Plan shall be exercised prior to the time
such increase has been approved by the shareholders of the Company and all such
Options granted pursuant to such increase shall similarly terminate if such
Shareholder approval is not obtained.
13. TERM OF PLAN AND GOVERNING LAW.
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<PAGE> 28
Options may be granted pursuant to this Plan from time to time within a
period of ten (10) years after the date on which this Plan is adopted by the
Board. This Plan and the Options granted pursuant hereto shall be governed by
California law, except for that body of law pertaining to conflict of laws.
14. AMENDMENT OR TERMINATION OF PLAN.
The Board may terminate the Plan or amend the Plan from time to time in
such respects as the Board may deem advisable, except that, without the approval
of the Company's shareholders in compliance with the requirements of applicable
law, no such revision or amendment shall:
(a) increase the number of shares of Common Stock except as provided in
Section 11 hereof;
(b) change the class of persons eligible to participate in the Plan under
Section 4 hereof;
(c) extend the term of the Plan under Section 13 hereof;
(d) amend this Section 14 to defeat its purpose; or
(e) amend this Plan in any manner that requires shareholder approval
pursuant to the Code or the regulations promulgated thereunder as such
provisions apply to ISO plans, without obtaining such shareholder
approval.
15. RESERVATION OF SHARES. The Company, during the term of this Plan, will at
all times reserve and keep available such number of shares of its Common Stock
as shall be sufficient to satisfy the requirements of the Plan.
16. EFFECTIVE DATE. This Plan was adopted by the Board of Directors of the
Company on June 14, 1996, and shall be effective on said date, provided the Plan
is approved within twelve (12) months of said date by the shareholders of the
Company in accordance with the requirements of the Code and other applicable
law. Options may be granted, but may not be exercised, prior to the date of such
shareholder approval.
17. CERTAIN DEFINITIONS. As used in this Plan, the following terms shall have
the following meanings:
17.1 "Parent" means any corporation (other than the Company) in an
unbroken chain of corporations ending with the Company, if, at the time of the
granting of the Option, each of such corporations other than the Company owns
stock possession 50% or
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more of the total combined voting power of all classes of stock in one of the
other corporations in such chain.
17.2 "Subsidiary" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if, at the time of
granting of the Option, each of the corporations other than the last corporation
in the unbroken chain owns stock possessing 50% or more of the total combined
voting power of all classes of stock in one of the other corporations in such
chain.
17.3 "Affiliate" means any corporation that directly, or indirectly
through one or more intermediaries, controls or is controlled by, or is under
common control with, another corporation, where "control" (including the terms
"controlled by" and "under common control with") means the possession, direct or
indirect, of the power to cause the direction of the management and policies of
the corporation, whether through the ownership of voting securities, by contract
or otherwise.
17.4 "Fair Market Value" shall mean the fair market value of the Shares
as determined by the Administrator from time to time in good faith. If a public
market exists for the Shares, the Fair Market Value shall be the average of the
last reported bid and asked prices for common stock of the Company on the last
trading day prior to the date of determination (or the average closing price
over the number of consecutive working days preceding the date of determination
as the Administrator shall deem appropriate) or, in the event the common stock
of the Company is listed on a stock exchange or on the NASDAQ National Market
System, the Fair Market Value shall be the closing price on such exchange or
quotation system on the last trading day prior to the date of determination (or
the average closing price over the number of consecutive working days preceding
the date of determination as the Administrator shall deem appropriate).
17.5 "Exchange Act" shall mean Securities and Exchange Act of 1934, as
amended.
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PROXY
DATALINK.NET, INC.
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Anthony N. LaPine with the power to appoint
his substitute, and hereby authorizes him to represent and to vote as designated
below, all the shares of common stock of Datalink.net, Inc. held of record by
the undersigned on July 7, 2000, at the Annual Meeting of Shareholders to be
held on August 14, 2000, or any adjournment thereof.
1. Election of four (4) Directors of the Company to serve until the next
Annual Meeting of Shareholders and until their successors have been duly
elected and qualified:
[ ] FOR all nominees listed below [ ] WITHHOLD authority to vote
(except as marked to the contrary). for all nominees listed below:
Anthony N. LaPine, Frederick M. Hoar, Charles K. Dargan, II, Jason Pavona
(INSTRUCTION: To withhold authority to vote for any individual nominee,
cross out that nominee's name above.)
2. The approval of an amendment to the Company's Employee Stock Option Plan
to increase the number of shares of Common Stock issuable upon the
exercise of options granted under the Plan from 1,000,000 shares to
2,500,000 shares.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. The ratification of the appointment of BDO Seidman, LP, as the Company's
independent accountants for the fiscal year ending March 31, 2001:
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. The transaction of such other business as may properly come before the
meeting or any adjournment thereof:
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF DATALINK.NET,
INC. PLEASE SIGN AND RETURN THIS PROXY IN THE ENCLOSED PRE-ADDRESSED ENVELOPE.
THE GIVING OF A PROXY WILL NOT AFFECT YOUR RIGHT TO VOTE IN PERSON IF YOU ATTEND
THE MEETING.
(To be signed on the other side)
<PAGE> 31
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSALS 1, 2 AND 3.
SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AT THE MEETING IN ACCORDANCE WITH
THE SHAREHOLDER'S SPECIFICATIONS ABOVE . THIS PROXY CONFERS DISCRETIONARY
AUTHORITY IN RESPECT TO MATTERS NOT KNOWN OR DETERMINED AT THE TIME OF THE
MAILING OF THE NOTICE OF THE ANNUAL MEETING OF SHAREHOLDERS TO THE UNDERSIGNED.
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting of
Shareholders, Proxy Statement and Annual Report.
Dated: , 2000
---------------
---------------------------
Signature(s) of
Shareholder(s)
---------------------------
Signature(s) of
Shareholder(s)
Signature(s) should agree
with the name(s) stenciled
hereon. Executors,
administrators, trustees,
guardians and attorneys
should indicate when
signing. Attorneys should
submit powers of attorney.
