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 ss.240.14a-11(c) or ss.240.14a-12
MARKETLINK, 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)(1)
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) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
MarketLink, Inc.
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
to be held
December 23, 1996
A Special Meeting of Shareholders of MarketLink, Inc. will be held at
the Company's headquarters located at 10340 Viking Drive, Suite 150,
Minneapolis, Minnesota, on December 23, 1996, at 10:00 a.m. (Central Standard
Time), for the following purposes:
1. To amend the Articles of Incorporation to change the corporate
name to "OneLink Communications, Inc."
2. To amend the Articles of Incorporation to increase the
authorized number of shares to 50,000,000.
3. To approve the reservation of One Million Five Hundred
Thousand (1,500,000) additional shares for issuance to
employees, officers, directors, consultants and others under
the Company's 1994 Stock Option Plan.
4. To approve certain grants of options to the Chairman of the
Board and the President and Chief Executive Officer of the
Company under the Company's 1994 Stock Option Plan.
5. To approve certain current and future grants of options to
directors of the Company under the Company's 1994 Stock Option
Plan.
6. To take action upon any other business that may properly come
before the meeting or any adjournment of it.
Only shareholders of record shown on the books of the Company at the
close of business on November 27, 1996, will be entitled to vote at the meeting
or any adjournment of the meeting. Each shareholder is entitled to one vote per
share on all matters to be voted on at the Special Meeting.
You are cordially invited to attend the meeting. Whether or not you
plan to attend the meeting, please sign, date and return your Proxy in the
return envelope provided as soon as possible. Your cooperation in promptly
signing and returning the Proxy will help avoid further solicitation expense to
the Company.
Gregory H. Mohn
Secretary
Dated: December 9, 1996
Minneapolis, Minnesota
<PAGE>
MarketLink, Inc.
PROXY STATEMENT
for
Special Meeting of Shareholders
to be held December 23, 1996
INTRODUCTION
This Proxy Statement is being furnished to the shareholders of
MarketLink, Inc. ("MarketLink" or the "Company") in connection with the
solicitation by the Company's Board of Directors of proxies to be voted at the
Special Meeting of Shareholders (the "Special Meeting") to be held on December
23, 1996, and at any adjournment of the Special Meeting, for the purposes set
forth in the attached Notice of Special Meeting.
The cost of soliciting Proxies, including preparing, assembling and
mailing the Proxies and soliciting material, will be borne by the Company.
Directors, officers and regular employees of the Company may, without
compensation other than their regular compensation, solicit Proxies personally
or by telephone.
Any shareholder giving a Proxy may revoke it at any time prior to its
use at the Special Meeting by giving written notice of such revocation to the
Secretary or other officer of the Company or by filing a new written Proxy with
an officer of the Company. Personal attendance at the Special Meeting is not, by
itself, sufficient to revoke a Proxy unless written notice of the revocation or
a subsequent Proxy is delivered to an officer before the revoked or superseded
Proxy is used at the Special Meeting.
The presence at the Special Meeting in person or by proxy of the
holders of a majority of the outstanding shares of MarketLink's Common Stock
entitled to vote shall constitute a quorum for the transaction of business.
Proxies not revoked will be voted in accordance with the instructions specified
by shareholders by means of the ballot provided on the Proxy for that purpose.
Proxies which are signed but which lack any such specific instructions with
respect to any proposal will, subject to the following, be voted in favor of the
proposals set forth in the Notice of Meeting and listed herein. If a shareholder
abstains from voting as to any proposal, then the shares held by such
shareholder shall be deemed present at the Special Meeting for purposes of
determining a quorum and for purposes of calculating the vote with respect to
such proposal, but shall not be deemed to have been voted in favor of such
proposal. Abstentions as to any proposal, therefore, will have the same effect
as votes against such proposal. If a broker returns a "non-vote" proxy,
indicating a lack of voting instruction by the beneficial holder of the shares
and a lack of discretionary authority on the part of the broker to vote on a
particular proposal, then the shares covered by such non-vote proxy shall be
deemed present at the Special Meeting for purposes of determining a quorum, but
shall not be deemed to be represented at the Special Meeting for purposes of
calculating the vote required for approval of such proposal.
<PAGE>
The mailing address of the Company's principal executive office is
10340 Viking Drive, Suite 150, Minneapolis, Minnesota 55344. This Proxy
Statement and the related Proxy and Notice of Special Meeting are first being
mailed to MarketLink shareholders on or about December 9, 1996.
OUTSTANDING SHARES AND VOTING RIGHTS
The Board of Directors of the Company has fixed November 27, 1996, as
the record date (the "Record Date") for determining shareholders entitled to
vote at the Special Meeting. Persons who were not shareholders on the Record
Date will not be allowed to vote at the Special Meeting. At the close of
business on the Record Date, 2,931,415 shares of MarketLink's Common Stock were
issued and outstanding. The Common Stock is the only outstanding class of
capital stock of the Company. Each share of Common Stock is entitled to one vote
on each matter to be voted upon at the Special Meeting.
PRINCIPAL SHAREHOLDERS AND
MANAGEMENT SHAREHOLDINGS
The following table sets forth the number of shares of the Company's
Common Stock beneficially owned as of November 27, 1996, by each person known to
the Company to be the beneficial owner of 5% or more of the Company's Common
Stock, by each executive officer of the Company named in the Summary
Compensation Table, by each director and nominee for director and by all
directors and executive officers (including the named individuals) as a group.
Unless otherwise indicated by footnote, the address of each beneficial owner is
10340 Viking Drive, Suite 150, Minneapolis, Minnesota 55344.
Name of Shareholder or Number of Shares Percent
Identity of Group Beneficially Owned(1) of Class(2)
- ------------------------- --------------------- ----------------
Gregory H. Mohn 261,136(3) 8.9%
Nicholas C. Bluhm 110,000(4) 3.6%
Ian D. Packer 106,735(5) 3.6%
Ronald E. Eibensteiner 50,000(4) 1.7%
Vin Weber 30,869(6) 1.0%
Michael P. Corcoran 0 --
George E. Smith 0 --
All current executive officers and 452,005 14.4%
directors as a group (7 persons)(7)
Perkins Capital Management, Inc. 843,850(8) 28.2%
First Bank System, Inc. 649,800(9) 22.2%
Donald L. & Page Anne Johnson 186,099(10) 6.3%
- ---------------------
-2-
<PAGE>
(1) Unless otherwise indicated, the person listed as the beneficial owner
of the shares has sole voting and sole investment power over the
shares.
(2) Shares not outstanding but deemed beneficially owned by virtue of the
right of a person to acquire them as of November 27, 1996, or within 60
days of such date are treated as outstanding only when determining the
percent owned by such individual and when determining the percent owned
by the group.
(3) Includes 14,430 shares which may be purchased upon exercise of
currently exercisable options.
(4) Such shares are not outstanding but may be purchased upon exercise of
currently exercisable warrants and options, subject to approval of the
grant of such options by shareholders (see Proposal #4 below).
(5) Includes 35,596 shares which may be purchased upon exercise of
warrants. The address of the holder is 3844 Upton Avenue S.,
Minneapolis, Minnesota 55410.
(6) Includes 575 shares which may be purchase upon exercise of warrants and
28,000 shares which may be purchased upon exercise of currently
exercisable options.
(7) Includes 10,575 shares which may be purchased upon exercise of warrants
and 192,430 shares which may be purchased upon exercise of currently
exercisable options.
(8) Perkins Capital Management, Inc. has sole power to vote or direct the
vote of 151,500 shares and sole power to dispose or direct the
disposition of all shares listed in the table as beneficially owned by
it. Includes 60,000 shares of Common Stock issuable on exercise of
warrants. The address of the holder is 730 East Lake Street, Wayzata,
Minnesota 55391.
(9) First Bank System, Inc. has sole power to vote or direct the vote for
all shares and sole power to dispose or direct the disposition of
643,800 shares. The address of the holder is 601 2nd Avenue S.,
Minneapolis, Minnesota 55402.
(10) The address of the holder is 7547 128th Street, Apple Valley, Minnesota
55124.
Immediately prior to the Company's Annual Meeting of Shareholders on
May 13, 1996, Ian D. Packer, former President, Chief Executive Officer and Chief
Financial Officer and Allan K. Pray, former Vice President of Finance and
Administration of the Company voluntarily resigned and all incumbent directors,
except Mr. Weber, declined to stand for election. At the Annual Meeting, three
(3) new directors, Ronald E. Eibensteiner, Nicholas C. Bluhm and Michael P
Corcoran, and the sole incumbent director standing for election, Vin Weber, were
elected to the Board by the shareholders. Immediately following the Annual
Meeting, at a meeting of the directors, the size of the Board of Directors was
expanded to five (5) persons and Gregory H. Mohn, a founder of the Company, was
elected as director. The directors elected Richard E. Eibensteiner, Chairman of
the Company and Nicholas C. Bluhm, President of the Company.
-3-
<PAGE>
On July 30, 1996, at a meeting of the directors, the size of the Board
was again expanded, this time to six (6) persons, and George E. Smith was
elected as director.
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth the total compensation paid by the
Company during the Company's last three fiscal years to the person who served as
President and Chief Executive Officer of the Company during the fiscal year
which ended December 31, 1995. No other executive officer of the Company earned
a total annual salary and bonus in excess of $100,000 during fiscal 1995.
<TABLE>
<CAPTION>
Annual Compensation Long-Term
Compensation
Awards
Securities
Other Annual Underlying
Name and Principal Position Year Salary ($) Bonus ($) Compensation Options (#)
- --------------------------- ---- ---------- --------- ------------ -----------
<S> <C> <C> <C> <C> <C>
Ian D. Packer, Former 1995 81,250 9,750 None 29,138(2)
President, Chief Executive Officer 1994 37,188 None None 125,000(2)
and Chief Financial Officer 1993(1) 0 None None 32,500(3)
</TABLE>
- -----------------
(1) Employment commenced in 1993.
(2) Such options terminated in connection with Mr. Packer's resignation.
(3) Represents warrants to purchase shares at an exercise price of $2.18 per
share expiring December 31, 1998.
Option/SAR Grants During 1995 Fiscal Year
The following table sets forth the options that were granted to the
executive officer named in the Summary Compensation Table during the Company's
last fiscal year which ended December 31, 1995.
<TABLE>
<CAPTION>
Number of Percent of
Securities Total Options/
Underlying SARs Granted to Exercise or
Options/SARs Employees in Base Price Expiration
Name Granted (#) Fiscal Year ($/Share) Date
<S> <C> <C> <C> <C>
Ian D. Packer 29,138 14.2% $3.50 02/20/00(1)
</TABLE>
(1) See footnote (2) to preceding table.
-4-
<PAGE>
Option/SAR Exercises During Fiscal 1995
and Fiscal Year-End Option/SAR Values
The following table provides certain information regarding the exercise
of stock options to purchase shares of the Company's Common Stock during the
year ended December 31, 1995, by the executive officer named in the Summary
Compensation Table and the fiscal year-end value of unexercised stock options
held by such officer.
<TABLE>
<CAPTION>
Number of Number of Unexercised Value of Unexercised In-
Shares Acquired Value Options at Fiscal Year the-Money Options at
on Realized End Fiscal Year End ($)
Name Exercise ($) (exercisable/unexercisable) (exercisable/unexercisable)(1)
---- ---------- ----- --------------------------- ------------------------------
<S> <C> <C> <C> <C>
Ian D. Packer None 0 154,138 / 0 (2) $207,177 / 0 (2)
</TABLE>
(1) The value of the options equals the difference between $3.75, the
closing bid price of the Company's Common Stock on December 31, 1995 as
reported by the Nasdaq SmallCap Market, and the option exercise price
per share, multiplied times the number of shares subject to such
options.
(2) Such options terminated in connection with Mr. Packer's resignation.
Compensation of Current Officers
At a meeting held on July 30, 1996, the Board of Directors of the
Company created a Compensation Committee composed solely of the Board's outside
members, Michael Corcoran, George E. Smith and Vin Weber. The Board delegated to
the Committee authority to develop a compensation plan for Messrs. Eibensteiner
and Bluhm. Although Messrs. Eibensteiner and Bluhm had been elected Chairman of
the Board and President, respectively, on May 13, 1996, no agreement had been
reached by the Company and either Messrs. Eibensteiner and Bluhm concerning the
terms of their service to the Company. Although Mr. Bluhm was a full-time
employee of the Company from May 13, 1996 through July 30, 1996, he received no
cash compensation for his services during that period.
In discussions after May 13, 1996, Messrs. Eibensteiner and Bluhm
presented to the Compensation Committee a proposal setting forth the
compensation sought by them. Their proposals emphasized compensation from grants
of options to purchase the Company's Common Stock more than cash compensation.
Messrs. Eibensteiner and Bluhm told the Committee they bring to the Company
substantial knowledge and experience both directly in the industries in which
the Company sells its products and services as well as corporate finance, which
would benefit the Company.
After substantial discussions, the Compensation Committee concluded the
Company's shareholders should vote upon Messrs. Eibensteiner's and Bluhm's
compensation. Since options to purchase the Company's Common Stock are a
significant proportion of the compensation sought by Messrs. Eibensteiner and
Bluhm, the Compensation Committee decided its role should be to negotiate the
minimum compensation agreeable to them and take appropriate action to bring the
stock option portion of the resulting compensation plan to the Company's
shareholders for their consideration and, if appropriate, approval.
-5-
<PAGE>
For the purpose of presenting the stock option compensation sought by
Messrs. Eibensteiner and Bluhm to the shareholders, on September 4, 1996, the
Compensation Committee approved, expressly subject to shareholder approval, the
following compensation plan:
Ronald Eibensteiner. For his services as Chairman of the Board or a
director of the Company:
1. Stock Options. Subject to the limitations set out below, Mr.
Eibensteiner would receive options under the Company's 1994 Stock Option Plan to
purchase 400,000 shares of the Company's Common Stock at an exercise price equal
to $1.75, which was the fair market value of the Company's Common Stock on
September 4, 1996. Mr. Eibensteiner may exercise such options (i.e. the options
will vest) in the following manner:
50,000 shares Effective September 4, 1996.
50,000 shares May 13, 1997, (the first anniversary of Mr. Eibensteiner's
election as Chairman of the Board of the Company),
50,000 shares May 13, 1998,
50,000 shares May 13, 1999, and
200,000 shares Effective at such time as: (1) the closing price of the
Company's Common Stock exceeds $3.50 per share for 20
consecutive trading days, if such Common Stock is then
reported in the Nasdaq National Market or is listed upon
an established exchange or exchanges, or (2) the average
between the bid and asked prices quoted by a recognized
market maker in the Company's Common Stock exceeds
$3.50 per share for 20 consecutive trading days, if the
stock is not reported in the Nasdaq National Market or
listed upon an exchange.
If Mr. Eibensteiner ceases to be both Chairman of the Board and a
director of the Company for any reason, then options which are not vested will
automatically expire. Options which have vested but have not been exercised will
also automatically expire (1) ninety (90) days after the termination of his
positions, if Mr. Eibensteiner voluntarily terminates his positions both as
Chairman and director or (2) one (1) year after the termination of his
positions, if the Company terminates Mr. Eibensteiner's positions both as
Chairman and director.
2. No Separate Cash Compensation. It is not contemplated that Mr.
Eibensteiner will be an employee of the Company and he will not be entitled to
receive any cash compensation for his services unless the Compensation Committee
otherwise determines that cash compensation is appropriate.
-6-
<PAGE>
As a non-employee, Mr. Eibensteiner will not be entitled to employee
benefits as are generally available to other officers of the Company.
3. No Separate Director Compensation. Mr. Eibensteiner will not be
entitled to receive any options under the 1994 Stock Option Plan for his
attendance at Board and committee meetings.
Nicholas Bluhm. For his services as President of the Company:
1. Stock Options. Subject to the limitations set out below, Mr. Bluhm
would receive options under the Company's 1994 Stock Option Plan to purchase
600,000 shares of the Company's Common Stock at an exercise price of $1.75,
which was the fair market value of the Company's Common Stock on September 4,
1996. Mr. Bluhm may exercise such options (i.e. the options will vest) in the
following manner:
100,000 shares Effective September 4, 1996,
100,000 shares May 13, 1997, (the first anniversary of Mr. Bluhm's
employment by the Company),
100,000 shares May 13, 1998,
100,000 shares May 13, 1999, and
200,000 shares Effective at such time as: (1) the closing price of the
Company's Common Stock exceeds $3.50 per share for 20
consecutive trading days, if stock is then reported in
the Nasdaq National Market or is listed upon an
established exchange or exchanges, or (2) the average
between the bid and asked prices quoted by a recognized
market maker in the Company's Common Stock exceeds
$3.50 per share for 20 consecutive trading days, if the
stock is not reported in the Nasdaq National Market or
listed upon an exchange.
If Mr. Bluhm ceases to be an employee of the Company for any reason,
then options which are not vested will automatically expire. Options which have
vested but have not been exercised will also automatically expire, unless Mr.
Bluhm exercises such options within (1) ninety (90) days after his employment
terminates, if Mr. Bluhm voluntarily terminates his employment or (2) one (1)
year after his employment terminates, if the Company terminates Mr.
Bluhm's employment.
2. Cash Compensation. Mr. Bluhm will receive such cash compensation as
the Compensation Committee may decide from time to time in agreement with Mr.
Bluhm. Mr. Bluhm will receive cash compensation at the rate of $90,000 per year
for the period commencing May 13, 1996, and ending on June 30, 1997. Mr. Bluhm's
cash compensation for periods beginning after June 30, 1997, will be as
established by agreement of the Compensation Committee and Mr. Bluhm.
-7-
<PAGE>
Mr. Bluhm will also be entitled to such other employee benefits as are
generally available to other employee-officers of the Company.
3. No Separate Director Compensation. If the Company's Board of
Directors decides to compensate directors for their attendance at Board and
committee meetings, as an employee of the Company, unless the Board otherwise
decides, Mr. Bluhm will not be entitled to receive such director's compensation.
Terms Applicable To Both Eibensteiner and Bluhm.
Under the 1994 Stock Option Plan, if there is an increase or decrease
in the number of shares of Company's Common Stock resulting from a subdivision
or consolidation of shares or the payment of a stock dividend or any other
increase or decrease in the number of shares effected without receipt of
consideration by the Company, the number of shares covered by each outstanding
option granted to Messrs. Eibensteiner and Bluhm and the option price per share
for them will be equitably adjusted by the Board of Directors to reflect such
change. Additional shares which may be credited pursuant to such adjustment will
be subject to the same restrictions as are applicable to the shares with respect
to which the adjustment relates.
Under the 1994 Stock Option Plan, if there is a sale by the Company of
all or substantially all of its assets and the consequent discontinuance of its
business, or in the event of a merger, exchange, consolidation or liquidation of
the Company, the Board of Directors may, in connection with the Board's adoption
of the plan for sale, merger, exchange, consolidation or liquidation, provide
for one or more of the following: (i) accelerate the exercisability of any or
all of Messrs. Eibensteiner's and Bluhm's outstanding options; or (ii) continue
Messrs. Eibensteiner's and Bluhm's rights to exercise options which were
outstanding (both vested and unvested) as of the date of adoption by the Board
of such plan for sale, merger, exchange, consolidation or liquidation and
provide to Messrs. Eibensteiner and Bluhm the right to exercise their options as
to an equivalent number of shares of stock of the corporation which succeeds the
Company by reason of such sale, merger, exchange, consolidation or liquidation.
As provided in the 1994 Stock Option Plan, Messrs. Eibensteiner's and
Bluhm's option rights will not limit in any way the right or power of the
Company to make adjustments, reclassifications, reorganizations or changes of
its capital or business structure or to merge, exchange or consolidate or to
dissolve, liquidate, sell or transfer all or any part of its business or assets.
Shareholder Approval. The compensation plan set out by the Compensation
Committee as a result of the discussions with Messrs. Eibensteiner and Bluhm
expressly provides the options granted under the Plan will not be effective
until their grant is approved by the holders of a majority of the disinterested
shares of the Company's Common Stock at the Special Meeting which has been
called for the purpose of approving such option compensation. The grant of the
options will be of no force or effect if such approval is not obtained.
Messrs. Eibensteiner's and Bluhm's compensation otherwise will remain
subject to change by the Compensation Committee and/or the Board by agreement
with Messrs. Eibensteiner and Bluhm. The Company may, at a subsequent time,
increase or decrease Mr. Bluhm's cash compensation or, in Mr. Eibensteiner's
case, begin paying cash compensation.
-8-
<PAGE>
Mr. Bluhm's cash compensation is not being presented for approval by
the shareholders, nor are the details of the compensation plan generally. The
general terms of the stock options granted to Messrs. Eibensteiner and Bluhm are
subject to the 1994 Stock Option Plan and approval by Proposal #4 of such terms
is not being sought. The Board of Directors is seeking shareholder approval only
of the number of shares covered by the option grants to Messrs. Eibensteiner and
Bluhm and the terms governing the vesting and exercise of such options as
summarized in the paragraphs entitled "1. Stock Options." under Messrs.
Eibensteiner's and Bluhm's names, above.
Compensation of Directors
General Policy. Directors presently do not receive any compensation
from the Company for attending Board or Committee meetings, although the Company
does reimburse directors for expenses incurred in attending such meetings.
Stock Options. Prior to the public offering of the Company's stock,
outside directors of the Company received options under the Company's 1994 Stock
Option Plan to purchase Common Stock at exercise prices equal to the fair market
value of the Company's Common Stock on the date of grant. Mr. Weber is the only
remaining outside director to have received options which are exercisable. The
options granted to other outside directors have expired. Mr. Weber was granted
options in 1994 and 1995 to purchase Twenty-Five Thousand (25,000) and Three
Thousand (3,000) shares, respectively, at an exercise price of $2.18 and $3.50
per share, respectively. Subject to approval by the shareholders, each
nonemployee director of the Company will receive a nonqualified option for Five
Thousand (5,000) shares upon election to the Board and will automatically be
granted a nonqualified option for Fifteen Thousand (15,000) shares of Common
Stock for each year of service on the Board up to a maximum of Fifty Thousand
(50,000) shares. See Proposal #5 below for a more complete description of the
proposed automatic director grant amendment of the 1994 Stock Option Plan.
AMENDMENT OF ARTICLES TO CHANGE CORPORATE NAME
(Proposal #1)
At the Special Meeting, shareholders will be asked to approve an
amendment to the Company's Articles of Incorporation to change the name of the
Company to "OneLink Communications, Inc." On November 27, 1996, the Board of
Directors of the Company unanimously approved the amendment of the Company's
Articles of Incorporation (attached hereto as Exhibit A) which amends Article I
of the Company's Articles of Incorporation to change the Company's name from
"MarketLink, Inc." to "OneLink Communications, Inc." to better identify the
Company and its business.
Vote Required
Adoption of the amendment to the Company's Articles of Incorporation to
change the Company's name requires the affirmative vote of the holders of the
greater of (1) a majority of the voting power of the shares represented in
person or by proxy at the Special Meeting with authority to vote on such matter
or (2) a majority of the voting power of the minimum number of shares that would
constitute a quorum for the transaction of business at the Special Meeting.
-9-
<PAGE>
AMENDMENT OF ARTICLES TO INCREASE AUTHORIZED SHARES
(Proposal #2)
The Board of Directors has also adopted, and recommends shareholder
approval of, an amendment to the Company's Articles of Incorporation to
authorize additional shares of stock. The full text of the amendment is set
forth in Exhibit B to this Proxy Statement. The amendment would increase the
number of shares authorized for issuance from 5,000,000 to 50,000,000, of which
Forty Million (40,000,000) will be designated as Common Stock and Ten Million
(10,000,000) will be classified as "undesignated."
The Company's existing Articles of Incorporation authorize Five Million
(5,000,000) shares and empower the Board to establish different classes or
series and fix the rights and preferences of the shares in any such class or
series. If the proposed amendment is approved, the Board of Directors will
similarly have the power to establish from the "undesignated" shares, without
further action by the shareholders, one or more additional classes of stock
(which may, in the Board's sole discretion, include designation as additional
Common or as Preferred Stock), to establish the relative preferences, rights and
limitations of any such additional class or series (including rights and
preferences which may be superior to those of Common Stock), and to issue any
such additional shares as it deems advisable. Current holders of the Company's
Common Stock will have no preemptive rights to purchase any shares of additional
stock when and if designated and issued.
The proposed authorization of Forty-Five Million (45,000,000)
additional shares of stock will insure that shares will be readily available, if
more shares are needed, for issuance in connection with corporate purposes such
as stock splits, stock dividends, financings, acquisitions and other future
developments where issuance would be desirable. The Board of Directors believes
having the additional shares available for such purposes without delay or the
necessity for a special shareholders' meeting would be beneficial to the
Company. The Company has no immediate plans for the designation or issuance of
any of such additional shares.
In the event of a proposed merger, tender offer or other attempt to
gain control of the Company of which the Board does not approve, the proposed
amendment will continue to allow the Board to authorize the issuance of a class
of stock with rights and preferences which could impede the completion of such a
transaction. The Board will also have the authority to issue shares to
purchasers who would support the Board in opposing a hostile takeover attempt.
The Board does not intend to issue any shares except on terms which the Board
deems to be in the best interests of the Company and its then existing
shareholders. Neither the Board of Directors nor management of the Company is
aware of any specific effort to accumulate the Company's securities or to obtain
control of the Company by means of a merger, tender offer or solicitation of
proxies in opposition to management.
Vote Required
Adoption of the amendment to the Company's Articles of Incorporation to
increase the authorized shares requires the affirmative vote of the holders of
the greater of (1) a majority of the voting power of the shares represented in
person or by proxy at the Special Meeting with authority to vote on such matter
or (2) a majority of the voting power of the minimum number of shares that would
constitute a quorum for the transaction of business at the Special Meeting.
-10-
<PAGE>
APPROVAL OF INCREASE IN RESERVED SHARES UNDER
1994 STOCK OPTION PLAN
(Proposal #3)
General. The Board of Directors has adopted, subject to shareholder
approval, an increase to Two Million Two Hundred Fifty Thousand (2,250,000) in
the number of shares reserved for issuance under the Company's 1994 Stock Option
Plan (the "Plan"). There were initially Seven Hundred Fifty Thousand (750,000)
(adjusted to reflect a 2:1 reverse stock split) shares reserved for issuance
under the Plan, of which no shares have been issued and One Million Seven
Hundred Sixty-six Thousand Two Hundred Fifty Three (1,766,253) shares are
subject to currently outstanding options (including the options granted to
Messrs. Bluhm and Eibensteiner discussed in Proposal #4 below). Options
currently outstanding in excess of Seven Hundred Fifty Thousand (750,000) shares
have been granted expressly subject to shareholder approval of the increase in
the number of shares reserved under the Plan and the grants of the options
themselves in the cases of Messrs. Eibensteiner and Bluhm and the outside
directors. In order to provide sufficient shares to cover the proposed options
as well as for future grants to employees, consultants, directors and others,
the shareholders are being asked to approve the reservation of One Million Five
Hundred Thousand (1,500,000) additional shares under the Plan.
If the shareholders do not approve Proposal #3 to increase the number
of shares reserved under the Plan, there will not be enough shares available
under the Plan to provide the stock option compensation sought by Messrs.
Eibensteiner and Bluhm. Accordingly, if the shareholders do not approve such
increase, even though the shareholders may separately vote in favor of the stock
option compensation for Messrs. Eibensteiner and Bluhm, the failure to approve
such reservation of additional shares under the Plan will result in inability
and failure of the Company to provide to Messrs. Eibensteiner and Bluhm the
stock option compensation.
A general description of the basic features of the Plan is set forth
below, but such description is qualified in its entirety by reference to the
full text of the Plan, a copy of which may be obtained without charge upon
written request to the Company's Controller.
Description of Plan
Purpose. The purpose of the Plan is to promote the success of the
Company by facilitating the employment and retention of competent personnel and
by providing incentives to directors, officers, other employees and consultants
and advisors, upon whose efforts the success of the Company depends to a large
degree.
Term. The term of the Plan expires May 8, 2004, which is ten (10) years
from the date the Plan was adopted by the Board of Directors, unless it is
terminated earlier by the Board.
Administration. The Plan is administered by the Compensation Committee
of the Board of Directors (the "Committee") for the purpose of complying with
Rule 16b-3 of the Securities Exchange Act of 1934, as amended. The Plan gives
broad powers to the Committee to administer and interpret the Plan, including
the authority to select the individuals to be granted options and to prescribe
the particular form of agreement to govern each option grant and the conditions
to which each option is subject. The form of agreement may be different for each
optionee, depending upon the terms of the grant.
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<PAGE>
Eligibility. The Plan provides that all employees of the Company or of
any subsidiary are eligible to receive incentive stock options pursuant to the
Plan, including officers and directors who are employees of the Company. The
Plan provides also that nonqualified stock options may be granted to consultants
and advisors to the Company or of any subsidiary. Persons, such as Mr.
Eibensteiner, who qualifies as a "consultant", who are officers but not
employees may be granted nonqualified options under the Plan. Members of the
Board of Directors of the Company who are not employees and who do not qualify
as "consultants" may not be granted either incentive stock options or
nonqualified options under the Plan. As of November 27, 1996, the Company had
approximately 28 employees (including employee officers) and consultants
(including Mr. Eibensteiner). As of November 27, 1996, three (3) members of the
Board of Directors of the Company were not eligible to receive options under the
Plan because they are not employees or consultants of the Company.
Options. When an option is granted under the Plan, the Committee, at
its discretion, specifies the option price, the type of option (either
"incentive" or nonqualified) to be granted, and the number of shares of Common
Stock which may be purchased upon exercise of the option. The exercise price of
an incentive stock option may not be less than 100% of the fair market value of
the Company's Common Stock, as that term is defined in the Plan, and, unless
otherwise determined by the Committee, the exercise price of a nonqualified
stock option may not be less than 100% of the fair market value on the date of
grant. The market price of the Company's Common Stock was $1.875 on November 27,
1996. The period during which an option may be exercised and whether the option
will be exercisable immediately, in stages or otherwise is set by the Committee
or the Board, but in no event may an option be exercisable more than ten (10)
years from the date of grant. Optionees may pay for shares upon exercise of
options with cash, check, promissory note or Common Stock of the Company valued
at the stock's then "fair market value" as defined in the Plan. Each option
granted under the Plan is nontransferable during the lifetime of the optionee
and will terminate earlier than its stated expiration date in the event of the
optionee's termination of employment or directorship. The Committee or the Board
may impose additional or alternative conditions and restrictions on the options
granted under the Plan. See Proposal #5 below for discussion of the automatic
director option grant provisions of the Plan which shareholders are asked to
approve at the Meeting.
Amendment. The Board of Directors may from time to time suspend or
discontinue the Plan or revise or amend it in any respect; provided, however,
that no such revision or amendment may impair the terms and conditions of any
outstanding option to the material detriment of the optionee without the consent
of the optionee, except as authorized in the event of a sale, merger,
consolidation or liquidation of the Company.
Federal Income Tax Consequences of the Plan. Incentive stock options
granted pursuant to the Plan are intended to qualify for favorable tax treatment
to the optionee under Section 422 of the Internal Revenue Code. Under Section
422, an optionee realizes no taxable income when the option is granted. Further,
the optionee generally will not recognize any taxable income when the option is
exercised if he or she has at all times from the date of the option's grant
until three months before the date of exercise been an employee of the Company.
The Company ordinarily is not entitled to any income tax deduction upon the
grant or exercise of an incentive stock option. Certain other favorable tax
consequences may be available to the optionee if he or she does not dispose of
the shares acquired upon exercise of an incentive stock option for a period of
two years from the granting of the option and one year after receipt of the
shares.
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Under present law, an optionee will not realize any taxable income on
the date a nonqualified stock option is granted to the optionee pursuant to the
Plan. Upon exercise of the option, however, the optionee must recognize, in the
year of exercise, ordinary income equal to the difference between the option
price and the fair market value of the Company's Common Stock on the date of
exercise. Upon the sale of the shares, any resulting gain or loss will be
treated as capital gain or loss. The Company will receive an income tax
deduction in its fiscal year in which nonqualified options are exercised, equal
to the amount of ordinary income recognized by those optionees exercising
options, provided that the Company withholds income and other employment-related
taxes on such ordinary income.
Plan Benefits
The table below shows the total number of stock options that have been
received by the following individuals and groups under the Plan:
Total Number of
Name and Position/Group Options Received (1)
Ian D. Packer, Former President and
Chief Executive Officer 264,138(2)
Current Executive Officer Group (3 persons) 1,023,747(3)
Current Non-executive Officer Director Group
(3 persons) 68,000(4)
Current Non-executive Officer Employee Group
(25 persons) 585,446
(1) This table reflects the total stock options granted without
taking into account exercises or cancellations. Because future
grants of stock options are subject to the discretion of the
Compensation Committee, the future benefits that may be
received by these individuals or groups under the Plan cannot
be determined at this time, except for the automatic option
grants to nonemployee directors as described above.
(2) All of Mr. Packer's options have expired in connection with
his resignation.
(3) Includes options for 600,000 shares and 400,000 shares granted
to Messrs. Bluhm and Eibensteiner, respectively, subject to
approval by the shareholders. (See Proposal #4 below.)
(4) Includes options to purchase 10,000 shares in aggregate which
will be granted to Messrs. Corcoran and Smith and 30,000
shares which will be granted to Mr. Weber as of the date of
the Special Meeting if the director automatic option grant
amendment to the Plan is approved by the shareholders. (See
Proposal #5 below.)
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Vote Required
The Board of Directors recommends the shareholders approve the increase
in the number of shares reserved under the 1994 Stock Option Plan. Approval of
such increase requires the affirmative vote of the greater of (i) a majority of
the shares represented at the meeting with authority to vote on such matter or
(ii) a majority of the voting power of the minimum number of shares that would
constitute a quorum for the transaction of business at the meeting.
APPROVAL OF GRANT OF OPTIONS TO OFFICERS
(Proposal #4)
Rationale for Compensation Approach. The success of the Company is
largely dependent upon the efforts of its management team, lead by Messrs.
Eibensteiner and Bluhm. The selection, organization and direction of the
management team depends for the most part on the skills and efforts of Messrs.
Eibensteiner and Bluhm. The compensation plan for Messrs. Eibensteiner and Bluhm
provides financial benefit to a large extent from an increase in the price of
the Company's common stock. This linkage ties and fully aligns the rewards to
Messrs. Eibensteiner's and Bluhm's for their performance with and to the
achievement of value for the Company's shareholders. If they are successful in
completing the development of the Company's business, it is hoped the value of
the Company's common stock will reflect that success. If so, Messrs.
Eibensteiner and Bluhm will, with the Company's shareholders, benefit directly
from that success. Conversely, if Messrs. Eibensteiner and Bluhm are unable to
succeed, the lack of success, too, will be reflected in the value of the
Company's common stock. Their financial benefit from the stock options may be
little or nothing if there is little or no appreciation in the value of the
Company's common stock after August 27, 1996.
The Company's capital resources are limited. The Company has not yet
developed a volume of profitable sales sufficient to fund the Company's
continued operations. The Company must develop successful sales efforts and
properly position its products and services rapidly while it has sufficient
resources to do so. Messrs. Eibensteiner and Bluhm believe this will be
accomplished best by an entrepreneurial management team whose compensation is
tied closely to the long-term success of the Company and which is best measured
by the market's valuation of the Company stock. Accordingly, the compensation
sought by Messrs. Eibensteiner and Bluhm provides for cash compensation totaling
$90,000. The remainder of the compensation consists entirely of stock options
which will have substantial value to Messrs. Eibensteiner and Bluhm only if the
Company succeeds in materially improving its sales efforts while controlling
costs.
Potential Compensation Expense. For financial accounting purposes, the
Company could incur an expense equal to the number of shares underlying the
options multiplied by the difference between the per share exercise price of the
options and the market price per share of Marketlink's Common Stock on the date
of shareholder approval. As a result, if the Company's Common Stock increases in
value significantly from $1.75, the exercise price of the options, the Company
could incur a compensation expense which may have a material adverse effect on
the Company.
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<PAGE>
Vote Required
Approval of the grants to Messrs. Eibensteiner and Bluhm requires the
affirmative vote of the greater of (i) a majority of the shares represented at
the meeting with authority to vote on such matter or (ii) a majority of the
voting power of the minimum number of shares that would constitute a quorum for
the transaction of business at the meeting.
APPROVAL OF AUTOMATIC OPTION GRANTS TO DIRECTORS
(Proposal #5)
The Board of Directors as adopted, subject to shareholder approval, an
amendment to the 1994 Stock Option Plan which provides for certain automatic
grants of stock options upon the initial election and continued service of
outside directors of the Company. Under the amendment, each nonemployee director
would receive an option to purchase 5,000 shares upon such director's initial
election to the Board and an option to purchase 15,000 shares for each year of
such director's service on the Board up to a maximum of 50,000 shares. Each
option will be exercisable for a period of 10 years, unless earlier terminated
in accordance with the Plan, at an exercise price per share equal to 100% of the
fair market value of the Company's Common Stock on the date of grant. Each
option would become exercisable only after the fair market value of the
Company's Common Stock (determined as described in the Plan) is, for 20
consecutive trading days, at least 25% above the fair market value of the
Company's Common Stock on the date of grant.
At the time the 1994 Stock Option Plan was adopted, Rule 16b-3 required
the Plan to be administered by a committee of disinterested directors. The law
further provided that to be "disinterested", a committee member could not be
entitled to receive options under the Plan. Rule 16b-3 did permit grants of
options to such directors under provisions where the directors would have no
discretion as to the number of shares and terms of the stock options granted to
them. The proposed amendment to the 1994 Stock Option Plan is a permissible
means under Rule 16b-3 for automatically granting options to outside directors
without causing them to lose their "disinterested" status.
Rule 16b-3 has changed and, after November 1, 1996, outside directors
administering stock option plans like the Plan will not lose their
"disinterested" status even if they have the power to award themselves options
under the Plan. The Company has determined that it is in the interests of the
shareholders only to permit outside, disinterested directors to participate
under the Plan using automatic grant provisions which were permissible under
prior law. Thus, even though under the revised Rule 16b-3, which will be in
force at the time of the Special Meeting, the members of the Committee
administering the Plan could be permitted to determine the terms of options
granted to themselves, the Company has eliminated all discretion of the
Committee to set such terms by providing for the automatic grant of options
described above.
In the event of the election of a new director by the Board between
shareholder meetings, the 15,000 shares per year of service would be pro-rated
for the number of months between the new director's election and the next
shareholders' meeting. This provision will apply to Mr. Smith. Directors do not
currently receive compensation for attending Board or committee meetings and,
with the exception of Mr. Weber who received director options in 1994 and 1995
to purchase 25,000 and 3,000 shares, respectively, outside directors have not
received options
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<PAGE>
to purchase Company stock. In Mr. Weber's case, his options to purchase 28,000
shares of the Company's Common Stock will reduce the number of shares as to
which he may be granted options under the Plan. Mr. Weber's 28,000 option shares
are not subject to the requirement of the proposed amendment that the fair
market value of the Company's Common Stock increase at least 25% prior to the
time the options become exercisable.
The Board of Directors asks the shareholders of the Company to approve
the automatic grant amendment to the Plan as a long-term approach for attracting
and retaining qualified outside directors who have an incentive to improve
shareholder value.
Vote Required
The Board of Directors recommends that the shareholders approve the
amendment to the 1994 Stock Option Plan providing for automatic grant of
options. Approval of such amendment requires the affirmative vote of the greater
of (i) a majority of the shares represented at the meeting with authority to
vote on such matter or (ii) a majority of the voting power of the minimum number
of shares that would constitute a quorum for the transaction of business at the
meeting.
SHAREHOLDER PROPOSALS
Any appropriate proposal submitted by a shareholder of the Company and
intended to be presented at the 1997 Annual Meeting must be received by the
Company at its offices by December 9, 1996, to be considered for inclusion in
the Company's proxy statement and related proxy for the 1997 Annual Meeting.
OTHER BUSINESS
The Board of Directors knows of no other matters to be presented at the
meeting. If any other matter does properly come before the meeting, the
appointees named in the Proxies will vote the Proxies in accordance with their
best judgment.
Dated: December 9, 1996
Minneapolis, Minnesota
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EXHIBIT A
ARTICLE I.
Name. The name of this Corporation shall be OneLink Communications,
Inc.
<PAGE>
EXHIBIT B.
ARTICLE III.
3.1) Authorized Shares. The aggregate number of shares the corporation
has authority to issue shall be 50,000,000 shares, which shall have a par value
of $.01 per share, and which shall consist of 40,000,000 shares of Common Stock
and 10,000,000 undesignated shares.
The Board of Directors of the corporation is authorized to
establish from the undesignated shares, by resolution adopted and filed
in the manner provided by law, one or more classes or series of shares,
to designate each such class or series (which may include but is not
limited to designation as additional shares of Common Stock), and to
fix the relative rights and preferences of each such class or series.
The Board of Directors shall have the authority to issue
shares of a class or series, shares of which may then be outstanding,
to holders of shares of another class or series to effectuate share
dividends, splits or conversion of its outstanding shares.
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MarketLink, Inc.
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints NICHOLAS C. BLUHM and RONALD E. EIBENSTEINER, or
either of them acting alone, with full power of substitution, as proxies to
represent and vote, as designated below, all shares of Common Stock of
MarketLink, Inc. registered in the name of the undersigned, at the Special
Meeting of the Shareholders to be held on December 23, 1996, at 10:00 a.m.,
Central Standard Time, at the Company's headquarters located at 10340 Viking
Drive, Suite 150, Minneapolis, Minnesota, and at all adjournments of such
meeting. The undersigned hereby revokes all proxies previously granted with
respect to such meeting.
The Board of Directors recommends the shareholders vote to approve each
of the following proposals.
(1) AMEND ARTICLES OF INCORPORATION TO CHANGE CORPORATE NAME:
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(2) AMEND ARTICLES TO INCREASE AUTHORIZED SHARES TO 50,000,000:
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(3) APPROVE 1,500,000 SHARE INCREASE IN SHARES RESERVED FOR 1994 STOCK
OPTION PLAN:
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(4) APPROVE GRANTS OF OPTIONS TO CHAIRMAN OF THE BOARD AND
PRESIDENT:
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(5) APPROVE AUTOMATIC DIRECTOR OPTION GRANTS UNDER 1994 STOCK OPTION
PLAN:
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(6) OTHER MATTERS. In their discretion, the appointed proxies are
authorized to vote upon such others business as may properly come
before the Meeting or any adjournment.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO
DIRECTION IS GIVEN FOR A PARTICULAR PROPOSAL, WILL BE VOTED FOR SUCH
PROPOSAL.
Date: December , 1996.
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PLEASE DATE AND SIGN ABOVE exactly as name
appears at the left, indicating, where
appropriate, official position or
representative capacity. If stock is held in
joint tenancy, each joint owner should sign.
