SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act
of 1934 (Amendment No. ____)
Filed by the Registrant [ ]
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
OneLink Communications, 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>
OneLink Communications, Inc.
-------------------------------
Notice of Annual Meeting of Shareholders
to be held May 22, 1997
--------------------------------
The Annual Meeting of Shareholders of OneLink Communications, Inc. will be
held at the Company's headquarters located at 10340 Viking Drive, Suite 150,
Eden Prairie, MN 55344, on Monday, May 22, 1997 at 2:00 PM, local time for the
following purposes:
1. To elect six directors to the Board of Directors.
2. To ratify the selection of Ernst & Young, LLP as independent
public accountants of the Company for the fiscal year ending
December 31, 1997.
3. To adopt OneLink Communications, Inc.'s Amended and Restated
1994 Stock Option Plan to amend and restate the provisions
pertaining to the automatic grants and vesting schedules of
options granted to nonemployee directors.
4. To transact such other business that may properly come
before the meeting or any adjournment thereof.
Accompanying this Notice of Annual Meeting is a Proxy Statement, form of
Proxy and the 1996 Annual Report to Shareholders, which are being sent to you by
order of the Board of Directors.
Only shareholders of record shown on the books of the Company at the close
of business on April 11, 1997 will be entitled to vote at the meeting or any
adjournment thereof. Each shareholder is entitled to one vote per share on all
matters to be voted on at the 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.
Sincerely,
/s/ Gregory H. Mohn
Gregory H. Mohn
Secretary
Dated: April 17, 1997
Eden Prairie, MN 55344
<PAGE>
OneLink Communications, Inc.
10340 Viking Drive, Suite 150
Eden Prairie, MN 55344
------------------------------
PROXY STATEMENT
for
Annual Meeting of Shareholders
to be held May 22, 1997
---------------------------------------
INTRODUCTION
This Proxy Statement is being furnished to the shareholders of OneLink
Communications, Inc. in connection with the solicitation by the Board of
Directors of OneLink Communications, Inc. ("OneLink" or the "Company") of
proxies to be voted at the Annual Meeting of Shareholders (the "Annual Meeting")
to be held on Monday, May 22, 1997 at 2:00 PM local time at the Company's
headquarters, located at 10340 Viking Drive, Suite 150, Eden Prairie, MN, and at
any adjournment thereof, for the purposes set forth in the attached Notice of
Annual Meeting. The Company expects that this Proxy Statement, the related Proxy
and the Notice of Annual Meeting will be first mailed to OneLink shareholders on
or about April 17, 1997.
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 anytime prior to its use at
the Annual 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 Annual Meeting is not, by itself,
sufficient to revoke a Proxy unless written notice of the revocation of a
subsequent Proxy is delivered to an officer before the Proxy intended to be
revoked or superseded is used at the Annual Meeting.
The presence at the Annual Meeting in person or by proxy of the holders of
a majority of the outstanding shares of OneLink'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 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 Annual Meeting and in favor of the slate of directors proposed by
the Board of Directors as listed herein. If a shareholder abstains from voting
as to any proposal, then the shares held by such shareholder shall be deemed
<PAGE>
present at the Annual 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 Annual Meeting for purposes
of determining a quorum, but shall not be deemed to be present at the Annual
Meeting for purposes of calculating the vote required for approval of such
proposal.
OUTSTANDING SHARES AND VOTING RIGHTS
The Board of Directors of the Company has fixed April 11, 1997 as the
record date (the "Record Date") for determining shareholders entitled to vote at
the Annual Meeting. Persons who were not shareholders on the Record Date will
not be allowed to vote at the Annual Meeting. At the close of business on the
Record Date, 2,966,696 shares of OneLink's Common Stock (the "Common Stock")
were issued and outstanding. Each share of Common Stock is entitled to one vote
on each matter to be voted upon at the Annual Meeting. Holders of Common Stock
are not entitled to cumulative voting rights.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth certain information with respect to
beneficial ownership of Common Stock as of April 11, 1997 by: (i) each director
of the Company, (ii) each executive officer of the Company named in the Summary
Compensation Table, (iii) all directors and executive officers of the Company as
a group and (iv) each person or entity known by the company to own beneficially
more than five percent of the Company's Common Stock. The address of each
beneficial owner, except Perkins Capital Management, Inc., First Bank System,
Inc., Woodland Partners LLC and Donald L. and Anne Johnson, is 10340 Viking
Drive, Suite 150, Minneapolis, MN 55344.
Number of Shares Percent of
Beneficially Outstanding
Name of Shareholder Owned (1) Shares (1)
- ------------------- --------- ----------
Nicholas C. Bluhm (2) 210,000 7.1%
Gregory H. Mohn (3) 264,242 8.9%
Ronald E. Eibensteiner (4) 105,000 3.5%
Vin Weber (5) 30,869 1.0%
Michael P. Corcoran (6) 5,000 .2%
George E. Smith (6) 5,000 .2%
All executive officers and
directors as a group
(eight persons) (7) 643,167 21.7%
Perkins Capital Management, Inc. (8) 833,650 28.1%
First Bank System, Inc. (9) 536,100 18.1%
Woodland Partners LLC (10) 187,600 6.3%
Donald L. & Anne Johnson (11) 169,299 5.7%
<PAGE>
(1) Beneficial ownership is determined in accordance with the rules
of the Securities and Exchange Commission, and generally includes
voting power and/or investment power with respect to securities.
Shares of Common Stock subject to options or warrants currently
exercisable or exercisable with 60 days of April 11, 1997 are
deemed outstanding for computing the beneficial ownership
percentage of the person holding such options or warrants but are
not deemed outstanding for computing the beneficial ownership
percentage of any other person. Except as indicated by footnote,
the persons names in the table above have the sole voting and
investment power with respect to all shares of Common Stock shown
as beneficially owned by them.
(2) Includes 10,000 shares of common stock issuable upon exercise of
warrants and 200,000 shares of common stock issuable pursuant to
options exercisable within 60 days.
(3) Includes 17,536 shares of common stock issuable pursuant to
options exercisable within 60 days.
(4) Includes 100,000 shares of common stock issuable pursuant to
options exercisable within 60 days
(5) Includes 575 shares of common stock issuable upon exercise of
warrants and 28,000 shares of common stock issuable pursuant to
options exercisable within 60 days. Excludes 15,000 shares of
common stock issuable pursuant to options exercisable upon
reelection to the Board of Directors.
(6) Includes five thousand (5,000) nonqualified options granted on
January 3, 1997. Excludes 15,000 shares of common stock issuable
pursuant to options exercisable upon reelection to the Board of
Directors.
(7) Includes 10,575 shares of common stock issuable upon exercise of
warrants and 378,592 shares of common stock issuable to options
exercisable within 60 days.
(8) Perkins Capital Management, Inc. has sole power to vote or direct
the vote for 166,500 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, MN 55391-1769.
(9) First Bank System, Inc. has sole power to vote or direct the vote
for 513,500 shares, the shared power to vote or direct the vote
for 22,600 shares and sole power to dispose or direct the
disposition of 437,900 shares. The address of the holder is 601
2nd Ave. South, Minneapolis, MN 55402-4302.
(10) Woodland Partners LLC has the sole power to vote or direct the
vote and the sole power to dispose or direct the disposition of
all shares listed in the table as beneficially owned by it. The
address of the holder is 60 South Sixth Street, Suite 3750,
Minneapolis, MN 55402.
(11) The address of the holder is 7547 128th Street, Apple Valley, MN
55124.
<PAGE>
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 Ronald E. Eibensteiner, Chairman of
the Company and Nicholas C. Bluhm, President of the Company. 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.
ELECTION OF SIX DIRECTORS TO THE BOARD OF DIRECTORS
(Proposal #1)
The Board of Directors has set the number of directors to be elected for
the ensuing year at six. Ronald Eibensteiner, Nicholas Bluhm, Gregory Mohn,
Michael Corcoran, George Smith and Vin Weber are all current directors of the
Company. The Board of Directors has nominated all six of them to stand for
reelection at the Annual Meeting, and all of them have consented to stand for
reelection.
Vote Required: THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE
"FOR" EACH OF THE NOMINEES LISTED ABOVE. The election of each of the nominees
requires the affirmative vote of a majority of the shares represented in person
or by proxy at the Annual Meeting.
In the absence of other instructions, the Proxies will be voted for each of
the Nominees. If elected, each Nominee shall serve until the next annual meeting
of shareholders and until his successor has been elected and qualified. If any
of the Nominees should be unable to serve as a director by reason of death,
incapacity or other unexpected occurrence, the Proxies solicited by the Board of
Directors shall be voted by the proxy representatives for such substitute
nominee(s) as is recommended by the Board of Directors, or, in the absence of
such recommendation, for such fewer number of directors as remain willing and
able to serve.
The following table provides certain information with respect to the
Company's directors:
Name Age Position
- ---- --- --------
Ronald E. Eibensteiner 46 Chairman and Director
Nicholas C. Bluhm 45 President, CEO and Director
Gregory H. Mohn 33 Vice President, Secretary &
Director
Vin Weber 44 Director
Michael P. Corcoran 44 Director
George E. Smith 44 Director
<PAGE>
Ronald E. Eibensteiner joined the Company as Chairman of the Board of
Directors in May 1996. He is President of Wyncrest Capital, Inc. and has been an
investor in several early stage technology companies. Mr. Eibensteiner is
co-founder and director of Diametrics Medical, Inc., a manufacturer of blood gas
systems and IVI Publishing, Inc., an interactive multimedia publisher of health
and medical titles.
Nicholas C. Bluhm joined the Company as President and CEO in May 1996. He
has extensive experience in both the domestic and international
telecommunications industry. Mr. Bluhm co-founded Minneopa Communications, Inc.
and National Independent Billing, Inc. to provide billing and collection
services to the telecommunications industry. He is co-founder of Minneopa, Inc.,
a privately owned company which has been active in international
telecommunications projects, including the operation of international telephone
ground stations in Saudi Arabia during Operation Desert Storm, and subsequently
the reconstruction and development of the domestic and international
telecommunications systems in Kuwait, Lebanon and Somalia. Mr. Bluhm is a
director of MCI International Gateways, a joint venture between MCI
International and Minneopa, Inc.
Gregory H. Mohn is Vice President of Business Development and Secretary of
the Company. Prior to founding the Company in April 1990, he founded a start-up
venture using the predecessor to the technology used in the Company's first
systems. Mr. Mohn is responsible for many of the Company's new products and
features including the development and introduction of OneLink's Geographic
Information Systems (GIS) products.
Vin Weber has been a Director of the Company since 1994 and is the Vice
Chairman of Empower America, a non-profit organization formed to advocate
policies that emphasize individual responsibility and accountability in matters
relating to the economy, social welfare and education. Mr. Weber, along with
three colleagues, formed Empower America in January 1993. Prior to that, he
served 12 years in the United States Congress representing Minnesota's Second
Congressional District. He is also a partner in Clark & Weinstock, Inc. He is a
director of Department 56, Inc., Mark Centers Trust Ltd., ITT Education
Services, Inc. and BHC Communications, Inc.
Michael P. Corcoran joined the Company as a Director in May 1996. He is the
founder of Virtual Phone, a local computer telephone company. Mr. Corcoran and
Mr. Bluhm co-founded Minneopa Communications, Inc. and Minneopa, Inc.
George E. Smith joined the Company as a Director in August 1996. He is the
Chief Executive Officer of TelCon, Inc., which provides systems management and
contract programming services to both Local and InterExchange Carriers within
the telecommunications industry. Mr. Smith has over twenty years of data
processing and systems management experience in the telecommunications and
financial services industries.
<PAGE>
Board and Committee Meetings
The Company has a Compensation Committee that provides recommendations
concerning salaries and bonuses for officers of the Company and stock options
for officers and employees of the Company. The members of the committee are Vin
Weber, Michael Corcoran, and George Smith.
During fiscal 1996, the Board of Directors held six meetings. Directors and
Committee members may take formal actions by unanimous written consent, in
accordance with Minnesota law, rather than hold formal meetings. During fiscal
1996, the Compensation Committees each met twice. Each director attended 75% or
more of the total number of meetings of the Board of Directors or Committee of
which they were a member.
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 (the "Old 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 exercisable price
of $2.18 and $3.50 per share, respectively. On January 3, 1997, shareholders
approved an amendment to the Old Plan for each nonemployee director of the
Company to receive a nonqualified option for five thousand (5,000) shares upon
election to the Board and to 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. Mr. Smith and Mr.
Corcoran received five thousand (5,000) nonqualified options on January 3, 1997.
<PAGE>
The Board of Directors has amended and restated the Plan (the "Amended and
Restated Plan"), subject to shareholder approval, to amend and restate the
provisions of the Plan pertaining to the automatic grants of nonqualified stock
options to nonemployee directors. Under the Company's Amended and Restated Plan,
which shareholders are being asked to approve at the Annual Meeting, nonemployee
directors receive an option to purchase 50,000 shares of Company Common Stock
upon such director's initial election or appointment to the Board. No further
options will be granted to nonemployee directors upon a directors subsequent
reelection to the Board by the shareholders. The options vest in the following
manner: 5,000 shares upon initial election or appointment to the Board; 15,000
shares upon first reelection to the Board by the Shareholders; 15,000 shares
upon second reelection to the Board by the Shareholders; 15,000 shares upon
third reelection to the Board by the Shareholders. The exercise price of the
options are equal to the fair market value of the Company's Common Stock on the
date the nonemployee director is initially elected or appointed to the Company's
Board. If approved by the shareholders, Messrs. Corcoran, Smith and Weber will
receive nonqualified options to purchase 45,000 shares of common stock
respectively at a price equal to $2.25, the fair market value of the Company's
Common Stock on the date the Board of Directors adopted the Plan. See Proposal
#3 for a more complete description of the Amended and Restated 1994 Stock Option
Plan.
EXECUTIVE COMPENSATION
The following table sets forth the total compensation paid by the Company
during the Company's last three fiscal years to the persons who served as
President and Chief Executive Officer of the Company during the fiscal year
which ended December 31, 1996. No other executive officer of the Company earned
a total annual salary and bonus in excess of $100,000 during fiscal 1996.
<PAGE>
<TABLE>
<CAPTION>
Annual Compensation
------------------------------ Long-Term
Compensation
Awards
Securities
Other Annual Underlying
Name and Principal Position Year Salary ($) Bonus ($) Compensation Options (#)
<S> <C> <C> <C> <C> <C>
Nicholas C. Bluhm, 1996 $56,250 $0 $0 600,000
President, CEO and
Director (1)
Ian D. Packer, Former 1996 $76,238 $0 $0 32,000(2)
President, CEO, CFO and
Director
1995 $81,250 $9,750 $0 29,138(2)
1994 $37,188 $0 $0 125,000(2)
</TABLE>
(1) Mr. Bluhm was appointed to these positions on May 13, 1996. While
Mr. Bluhm did not receive any cash compensation in 1996, he
received deferred compensation of $56,250.
(2) Such options terminated in connection with Mr. Packer's
resignation.
<PAGE>
Option/SAR Grants During 1996 Fiscal Year
The following tables sets forth the options that were granted to the
executive officers named in the Summary Compensation Table during the Company's
last fiscal year which ended December 31, 1996.
<TABLE>
<CAPTION>
Number of Percent of
Securities Total Options/
Underlying SARs Granted to Exercise or
Options/SARs Employees in Base Price Expiration
Name Granted Fiscal Year ($/Share) Date
(#)
<S> <C> <C> <C> <C>
Nicholas C. Bluhm 600,000 34.2% $ 1.75 09/03/06
Ian D. Packer 32,000 1.8% $ 2.375 04/01/01 (1)
</TABLE>
(1) See footnote (2) to proceeding table.
Option/SAR Exercises During Fiscal 1996 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, 1996, by the executive officers named in the Summary
Compensation Table and the fiscal year-end value of unexercised stock options
held by such officers.
<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>
Nicholas C. None 0 100,000 / 500,000 $21,875 / 109,375
Bluhm
Ian D. Packer None 0 0 / 154,138 (2) $0 / 0 (2)
</TABLE>
(1) The value of the options equals the difference between $1.96875, the
closing bid price of the Company's Common Stock on December 31, 1996
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.
<PAGE>
RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
(Proposal #2)
The Board of Directors unanimously recommends that the shareholders ratify
the appointment of Ernst & Young LLP, independent public accountants, as the
Company's independent public accountants for the fiscal year ending December 31,
1997. Unless otherwise instructed, the Proxies will be so voted. Ernst & Young
LLP has served as the Company's independent public accountants since September
27, 1995.
Representatives of Ernst & Young LLP are expected to be present at the
Annual Meeting, will be given an opportunity to make a statement regarding
financial and accounting matters of the Company if they so desire, and will be
available to respond to questions form the Company's shareholders.
ADOPTION OF ONELINK COMMUNICATIONS, INC.'S
AMENDED AND RESTATED 1994 STOCK OPTION PLAN
(Proposal #3)
At the Company's Special Meeting of Shareholders held December 27, 1996,
Company Shareholders approved an amendment to the Company's 1994 Stock Option
Plan ( the "Old Plan") to provide automatic grants of stock options to
nonemployee directors. Pursuant to the Old Plan, nonemployee directors were
granted nonqualified stock options to purchase 5,000 shares of Company Common
Stock at the time of his or her election to the Board and additional options to
purchase 15,000 shares of Common Stock at each annual meeting thereafter, up to
a maximum of 50,000 options. The exercise price of each option granted was equal
to the fair market value of the Company's Common Stock on the date a nonemployee
director was first elected to the Board of Directors and on the date of such
nonemployee director's reelection to the Board.
The Board of Directors has amended and restated the Old Plan (the "Plan"),
subject to shareholder approval, to amend and restate the provisions of the Old
Plan pertaining to the automatic grants of nonqualified stock options to
nonemployee directors and amend the entire Old Plan by "restating" it so as to
combine into one document these and all prior amendments to the Old Plan and to
provide plan terms consistent with those currently contained in similar types of
plans. Under the Company's Amended and Restated 1994 Stock Option Plan, which
shareholders are being asked to approve at the Annual Meeting, a nonemployee
director receives an option to purchase 50,000 shares of Company Common Stock
upon such director's initial election or appointment to the Board. No further
options will be granted to nonemployee directors upon a director's subsequent
reelection to the Board by the shareholders. The options vest in the following
manner: 5,000 shares upon initial election or appointment to the Board; 15,000
shares upon first reelection to the Board by the Shareholders; 15,000 shares
upon second reelection to the Board by the Shareholders; 15,000 shares upon
third reelection to the Board by the Shareholders. The exercise price of the
options are equal to the fair market value of the Company's Common Stock on the
date the nonemployee director is initially elected or appointed to the Company's
Board. No material changes from the Old Plan would, in the opinion of
management, be effected by the proposed amended and restated Plan except for the
automatic grants to nonemployee directors.
<PAGE>
Plan Description. The Plan currently provides for the granting of stock
options to officers, directors who are employees of the Company, employees,
consultants and independent contractors of the Company and its subsidiaries. The
Plan is administered by the Compensation Committee of the Board of Directors.
The Compensation Committee has discretion to select recipients of options
and to establish the terms and conditions of each option, subject to the
provisions of the Plan and the applicable provisions of the Internal Revenue
Code of 1986, as amended. Options and awards granted under the Plan are
nontransferable except by will or by the laws of descent and distribution, and
are subject to various other conditions and restrictions.
The Plan provides for the granting of both incentive stock options intended
to qualify for preferential treatment under Section 422 of the Internal Revenue
Code of 1986, as amended ("incentive options"), and nonqualified options that do
not qualify for such treatment ("nonqualified options"). The option price of an
incentive option granted under the Plan must not be less than the fair market
value of the Company's Common Stock on the date of the grant, and the term of an
incentive option must not exceed ten years. For an incentive option granted
under the Plan to an optionee who owns capital stock representing more than 10%
of the voting rights of the capital stock of the Company and its subsidiaries,
however, the option price must be at least 110% of the fair market value of the
Company's Common Stock on the date of the grant, and the term of such option
must not exceed five years. Incentive options may only be granted to full or
part-time employees of the Company and its subsidiaries, including officers and
directors.
2,250,000 shares of Common Stock are authorized to be issued in connection
with options issued under the Plan. As of April 11, 1997, the Company had
outstanding options to purchase an aggregate of 1,927,171 shares of Common Stock
at a weighted average exercise price of $1.76 per share. As of April 11, 1997,
1,111,747 options issued under the Plan were held by directors of the Company.
The Plan will expire on May 8, 2004, unless terminated earlier by the Board
of Directors. No option or award may be granted after such termination, but
termination of the 1994 Plan shall not, without the consent of the optionee or
grantee, alter or impair any rights or obligations under any option or award
previously granted.
The grant of an option will result in no tax consequences for the recipient
or the Company or any subsidiary employing such individual (the "employer"). The
holder of an incentive stock option generally will have no taxable income upon
exercising the incentive stock option (except that the alternative minimum tax
may apply), and the employer generally will receive no tax deduction when an
incentive stock option is exercised. Upon exercise of a stock option other than
an incentive option, the optionee must recognize ordinary income equal to the
excess of the fair market value of the shares acquired on the date of exercise
over the option price, and the employer will then be entitled to a tax deduction
for the same amount. The tax consequences to an optionee of a disposition of
shares acquired through the exercise of an option will depend on how long the
shares have been held and upon whether such shares were acquired by exercising
an incentive option or nonqualified stock option. Generally, there will be no
tax consequence to the employer in connection with a disposition of shares
acquired under an option except that the employer may be entitled to a tax
deduction in the case of a disposition of shares acquired under an incentive
option before the applicable incentive option holding period has been satisfied.
<PAGE>
Special rules apply in the case of individuals subject to Section 16(b) of
the Securities Exchange Act of 1934, as amended. In particular, under current
law, shares received pursuant to the exercise of a stock option may be treated
as restricted as to transferability and subject to a substantial risk of
forfeiture for a period of up to six months after the date of exercise.
Accordingly, unless a special tax election is made, the amount of ordinary
income recognized and the amount of the employer's deduction may be determined
as of such date.
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
Nicholas C. Bluhm, President/CEO 600,000
Ian D. Packer, Former President/CEO 186,138(1)
Current Executive Officer Group (3 persons) 709,167
Current Non-executive Officers Director (5 persons) 511,747
Current Non-executive Officer Employee Group (28 persons) 681,043
(1) Mr. Packer's options terminated pursuant to Mr.
Packer's resignation.
The Board of Directors recommends that the shareholders approve the Amended
and Restated 1994 Stock Option Plan. Approval of the Plan 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.
Section16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Act of 1934 requires the Company's
executive officers and directors, and persons who own more than ten percent of
the Company's Common Stock, to file with the Securities and Exchange Commission
initial reports of ownership and reports of changes in ownership of Common Stock
and other equity securities of the Company. Officers, directors and greater than
ten percent shareholders ("Insiders") are required by SEC regulation to furnish
the Company with copies of all Section 16(a) forms they file.
To the Company's knowledge, based on a review of the copies of such reports
furnished to the Company, during the fiscal year ended December 31, 1996, all
Section 16(a) filing requirements applicable to Insiders were compiled with
except that Forms 3 were filed late by Messrs. Bluhm, Corcoran and Eibensteiner.
<PAGE>
SHAREHOLDER PROPOSALS
Any appropriate proposal submitted by a shareholder of the Company and
intended to be presented at the annual meeting for the fiscal year ending
December 31, 1997 must be received by the Company at its offices by December 17,
1997, to be considered for inclusion in the Company's proxy statement and
related proxy for such 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 Proxy will vote the Proxies in accordance with their
best judgment.
OTHER INFORMATION
Enclosed with this Proxy Statement is a copy of the Company's 1996 Annual
Report to Shareholders.
THE COMPANY WILL FURNISH, WITHOUT CHARGE, A COPY OF ITS ANNUAL REPORT ON
FORM 10-KSB FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996, TO ANY SHAREHOLDER OF
THE COMPANY UPON WRITTEN REQUEST. SUCH REQUESTS SHOULD BE SENT TO ONELINK
COMMUNICATION, INC., MICHAEL J. RYAN, CHIEF FINANCIAL OFFICER, 10340 VIKING
DRIVE, SUITE 150, EDEN PRAIRIE, MN 55344.
Dated: April 17, 1997
Eden Prairie, MN
<PAGE>
- -------------------------------------------------------------------------------
ONELINK COMMUNICATIONS, INC.
- -------------------------------------------------------------------------------
Proxy for Annual 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 the power of substitution, as proxies to
represent and vote, as designated on the reverse, all shares of Common Stock of
OneLink Communications Inc. registered in the name of the undersigned, at the
Annual Meeting of Shareholders of OneLink Communications, Inc. to be held on May
22, 1997, at 2:00 p.m., Central Standard Time at the Company's headquarters
located at 10340 Viking Drive, Suite 150, Eden Prairie, Minnesota, and at all
adjournments of such meeting. The undersigned hereby revokes all proxies
previously granted with respect to such meeting.
1. ELECTION OF DIRECTORS
[ ] FOR all nominees listed below (expect as marked to the contrary
below) [ ] WITHHOLD AUTHORITY to vote for all nominees listed below
To withhold authority to vote for any nominee, strike a line through the
nominee's name in the list below:
Nicholas Bluhm Vin Weber Ronald Eibensteiner
George Smith Greg Mohn Michael Corcoran
2. APPROVAL OF ERNST & YOUNG LLP AS THE COMPANY'S INDEPENDENT PUBLIC
ACCOUNTANT FOR THE FISCAL YEAR ENDING DECEMBER 31, 1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. TO ADOPT ONELINK COMMUNICATIONS, INC.'S AMENDED AND RESTATED 1994 STOCK
OPTION PLAN TO AMEND AND RESTATE THE PROVISIONS PERTAINING TO THE AUTOMATIC
GRANTS AND VESTING SCHEDULES OF OPTIONS GRANTED TO NONEMPLOYEE DIRECTORS.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. OTHER MATTERS; IN THEIR DISCRETION THE APPOINTED PROXIES ARE AUTHORIZED TO
VOTE ON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE ANNUAL MEETING
OR ANY ADJOURNMENT.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
This Proxy, when properly executed, will be voted in the manner directed herein
by the undersigned shareholder. If no direction is made, the Proxy will be voted
for the election of the nominees set forth in Item 1 and for Item 2 and 3. When
shares are held by joint tenants, both should sign. When signing as attorney,
executor, administrator, trustee or guardian, please give full title as such.
When signing as a corporation, please sign in full corporate name by President
or other authorized officer. When signing as a partnership, please sign in
partnership name by authorized person.
Signature Signature if held jointly
- --------------------------- ---------------------------
Please print name Please print name
Dated: ___________, 1996
---------------------------------------------------
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY
Return envelope is enclosed for your convenience
---------------------------------------------------
<PAGE>
ONELINK COMMUNICATIONS, INC.
AMENDED AND RESTATED 1994 STOCK OPTION PLAN
1. Purposes of the Plan. The purposes of this Amended and Restated 1994
Stock Option Plan are to attract and retain the best available personnel for
positions of substantial responsibility, to provide additional incentive to
Employees and Consultants of the Company and its Subsidiaries and to promote the
success of the Company's business. Options granted under the Plan may be
incentive stock options (as defined under Section 422 of the Code) or
nonqualified stock options, as determined by the Administrator at the time of
grant of option and subject to the applicable provisions of Section 422 of the
Code, as amended, and the regulations promulgated thereunder.
2. Definitions. As used herein, the following definitions shall apply:
(a) "Administrator" means the Board or any of its Committees appointed
pursuant to Section 4 of the Plan.
(b) "Board" means the Board of Directors of the Company.
(c) "Code" means the Internal Revenue Code of 1986, as amended.
(d) "Committee" means the Committee appointed by the Board of Directors in
accordance with paragraph (a) of Section 4 of the Plan.
(e) "Common Stock" means the Common Stock of the Company.
(f) "Company" means OneLink Communications, Inc., a Minnesota corporation.
(g) "Consultant" means any person, including an advisor, who is engaged by
the Company or any Parent or Subsidiary to render services and is compensated
for such services, and any director of the Company whether compensated for such
services or not, provided that if and in the event the Company registers any
class of any equity security pursuant to the Exchange Act, the term Consultant
shall thereafter not include directors who are not compensated for their
services or are paid only a director's fee by the Company.
(h) "Continuous Status as an Employee" means the absence of any
interruption or termination of the employment relationship by the Company or any
Subsidiary. Continuous Status as an Employee shall not be considered interrupted
in the case of: (i) sick leave; (ii) military leave; (iii) any other leave of
absence approved by the Company, provided that such leave is for a period of not
more than ninety (90) days, unless reemployment upon the expiration of such
leave is guaranteed by contract or statute, or unless provided otherwise
pursuant to Company policy adopted from time to time; or (iv) in
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<PAGE>
the case of transfers between locations of the Company or between the Company,
its Subsidiaries or its successor.
(i) "Employee" means any person, including officers and directors, employed
by the Company or any Parent or Subsidiary of the Company. The payment of a
director's fee by the Company shall not be sufficient to constitute "employment"
by the Company.
(j) "Exchange Act" means the Securities Exchange Act of 1934, as
- ------------ amended.
(k) "Fair Market Value" means, as of any date, the value of Common Stock
determined as follows:
(i) If the Common Stock is listed on any established stock exchange
or a national market system including without limitation the National Market
System of the National Association of Securities Dealers, Inc. Automated
Quotation ("NASDAQ") System, its Fair Market Value shall be the closing sales
price for such stock (or the closing bid, if no sales were reported, as quoted
on such system or exchange, or the exchange with the greatest volume of trading
in Common Stock, for the last market trading day prior to the time of
determination) as reported in The Wall Street Journal or such other source as
the Administrator deems reliable;
(ii) If the Common Stock is quoted on the NASDAQ System (but
not on the National Market System thereof) or regularly quoted by a recognized
securities dealer but selling prices are not reported, its Fair Market Value
shall be the mean between the high bid and low asked prices for the Common Stock
or;
(iii) In the absence of an established market for the Common Stock,
the Fair Market Value thereof shall be determined in good faith by the
Administrator.
(l) "Incentive Stock Option" means an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code.
(m) "Nonqualified Stock Option" means an Option not intended to qualify as
an Incentive Stock Option.
(n) "Option" means a stock option granted pursuant to the Plan.
(o) "Optioned Stock" means the Common Stock subject to an Option.
(p) "Optionee" means an Employee or Consultant who receives an Option.
(q) "Parent" means a "parent corporation", whether now or hereafter
existing, as defined in Section 424(e) of the Code.
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<PAGE>
(r) "Plan" means this 1994 Stock Option Plan.
(s) "Share" means a share of the Common Stock, as adjusted in accordance
with Section 12 of the Plan.
(t) "Subsidiary" means a "subsidiary corporation", whether now or hereafter
existing, as defined in Section 424(f) of the Code.
3. Stock Subject to the Plan. Subject to the provisions of Section 12 of
the Plan, the maximum aggregate number of shares which may be optioned and sold
under the Plan is 2,250,000 shares of Common Stock. The shares may be
authorized, but unissued, or reacquired Common Stock.
If an Option should expire or become unexercisable for any reason without
having been exercised in full, the unpurchased Shares which were subject thereto
shall, unless the Plan shall have been terminated, become available for future
grant under the Plan.
4. Administration of the Plan.
(a) Procedure.
(i) Administration With Respect to Directors and Officers. With
respect to grants of Options to Employees who are also officers or directors of
the Company, the Plan shall be administered by (A) the Board if the Board may
administer the Plan in compliance with Rule 16b-3 promulgated under the Exchange
Act or any successor thereto ("Rule 16b-3") with respect to a plan intended to
qualify thereunder as a discretionary plan, or (B) a committee designated by the
Board to administer the Plan, which committee shall be constituted in such a
manner as to permit the Plan to comply with Rule 16b-3 with respect to a plan
intended to qualify thereunder as a discretionary plan. Once appointed, such
Committee shall continue to serve in its designated capacity until otherwise
directed by the Board. From time to time the Board may increase the size of the
Committee and appoint additional members thereof, remove members (with or
without cause) and appoint new members in substitution therefor, fill vacancies,
however caused, and remove all members of the Committee and thereafter directly
administer the Plan, all to the extent permitted by Rule 16b-3 with respect to a
plan intended to qualify thereunder as a discretionary plan.
(ii) Multiple Administrative Bodies. If permitted by Rule 16b-3, the
Plan may be administered by different bodies with respect to directors,
non-director officers and Employees who are neither directors nor officers.
(iii) Administration With Respect to Consultants and Other
Employees. With respect to grants of Options to Employees or Consultants who are
neither directors nor officers of the Company, the Plan shall be administered by
(A) the Board or (B) a committee designated by the Board, which committee shall
be constituted in such a manner as to satisfy the legal requirements relating to
the administration of incentive stock
- 3 -
<PAGE>
option plans, if any, of state corporate and securities laws and of the Code
(the "Applicable Laws"). Once appointed, such Committee shall continue to serve
in its designated capacity until otherwise directed by the Board. From time to
time the Board may increase the size of the Committee and appoint additional
members thereof, remove members (with or without cause) and appoint new members
in substitution therefor, fill vacancies, however caused, and remove all members
of the Committee and thereafter directly administer the Plan, all to the extent
permitted by the Applicable Laws.
(b) Powers of the Administrator. Subject to the provisions of the Plan and
in the case of a Committee, the specific duties delegated by the Board to such
Committee, the Administrator shall have the authority, in its discretion:
(i) to determine the Fair Market Value of the Common Stock, in
accordance with Section 2(k) of the Plan;
(ii) to select the Consultants and Employees to whom Options may
from time to time be granted hereunder;
(iii) to determine whether and to what extent Options are granted
hereunder;
(iv) to determine the number of shares of Common Stock to be
covered by each such award granted hereunder;
(v) to approve forms of agreement for use under the Plan;
(vi) to determine the terms and conditions, not inconsistent with
the terms of the Plan, of any award granted hereunder (including, but not
limited to, the share price and any restriction or limitation, or any
vesting acceleration or waiver of forfeiture restriction regarding any Option
or other award and/or the shares of Common Stock relating thereto, based in
each case on such factors as the Administrator shall determine, in its
sole discretion);
(vii) to determine the terms and conditions, not inconsistent with
the terms of the Plan, of any award granted hereunder;
(viii) to determine whether and under what circumstances an Option
may be settled in cash under subsection 9(f) instead of Common Stock; and
(ix) to reduce the exercise price of any Option to the then
current Fair Market Value if the Fair Market Value of the Common Stock covered
by such Option shall have declined since the date the Option was granted.
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<PAGE>
(x) to restate the Plan, from time to time, to include any
amendment to the Plan which has been approved in accordance with the terms of
the Plan or other applicable law.
(c) Effect of Administrator's Decision. All decisions, determinations and
interpretations of the Administrator shall be final and binding on all Optionees
and any other holders of any Options.
5. Eligibility.
(a) Nonqualified Stock Options may be granted to Employees and Consultants.
Incentive Stock Options may be granted only to Employees. An Employee or
Consultant who has been granted an Option may, if he is otherwise eligible, be
granted an additional Option or Options.
(b) Each Option shall be designated in the written option agreement as
either an Incentive Stock Option or a Nonqualified Stock Option. However,
notwithstanding such designations, to the extent that the aggregate Fair Market
Value of the Shares with respect to which Options designated as Incentive Stock
Options are exercisable for the first time by any Optionee during any calendar
year (under all plans of the Company or my Parent or Subsidiary) exceeds
$100,000, such excess Options shall be treated as Nonqualified Stock Options.
(c) For purposes of Section 5(b), Incentive Stock Options shall be taken
into account in the order in which they were granted, and the Fair Market Value
of the Shares shall be determined as of the time the Option with respect to such
Shares is granted.
(d) The Plan shall not confer upon any Optionee any right with respect to
continuation of employment or consulting relationship with the Company, nor
shall it interfere in any way with his right or the Company's right to terminate
his employment or consulting relationship at my time, with or without cause.
6. Term of Plan. The Plan shall become effective upon the earlier to occur
of its adoption by the Board of Directors or its approval by the shareholders of
the Company as described in Section 19 of the Plan. It shall continue in effect
for a term of ten (10) years unless sooner terminated under Section 15 of the
Plan.
7. Term of Option. The term of each Option shall be the term stated in the
Option Agreement; provided, however, that the term shall be no more than ten
(10) years from the date of grant thereof or such shorter term as may be
provided in the Option Agreement. However, in the case of an Incentive Stock
Option granted to an Optionee who, at the time the Option is granted, owns stock
representing more than ten percent (10%) of the voting power of all classes of
stock of the Company or any Parent or Subsidiary, the term of the Option shall
be five (5) years from the date of grant thereof or such shorter term as may be
provided in the Option Agreement.
- 5 -
<PAGE>
8. Option Exercise Price and Consideration.
(a) The per share exercise price for the Shares to be issued pursuant to
exercise of an Option shall be such price as is determined by the Board, but
shall be subject to the following:
(i) In the case of an Incentive Stock Option
(A) granted to an Employee who, at the time of the grant of
Such Incentive Stock Option, owns stock representing more than ten percent (10%)
of the voting power of all classes of stock of the Company or any Parent or
Subsidiary, the per Share exercise price shall be no less than 110% of the Fair
Market Value per Share on the date of grant.
(B) granted to any Employee, the per Share exercise price
shall be no less than 100% of the Fair Market Value per Share on the date of
grant.
(ii) In the case of a Nonqualified Stock Option, the per Share
exercise price shall be determined by the Administrator.
(b) The consideration to be paid for the Shares to be issued upon exercise
of an Option, including the method of payment, shall be determined by the
Administrator (and, in the case of an Incentive Stock Option, shall be
determined at the time of grant) and may consist entirely of (1) cash, (2)
check, (3) promissory note, (4) other Shares which (x) in the case of Shares
acquired upon exercise of an Option have been owned by the Optionee for more
than six months on the date of surrender, and (y) have a Fair Market Value on
the date of surrender equal to the aggregate exercise price of the Shares as to
which said Option shall be exercised, (5) authorization from the Company to
retain from the total number of Shares as to which the Option is exercised that
number of Shares having a Fair Market Value on the date of exercise equal to the
exercise price for the total number of Shares as to which the Option is
exercised, (6) delivery of a properly executed exercise notice together with
such other documentation as the Administrator and the broker, if applicable,
shall require to effect an exercise of the Option and delivery to the Company of
the sale or loan proceeds required to pay the exercise price, (7) any
combination of the foregoing methods of payment, or (8) such other consideration
and method of payment for the issuance of Shares to the extent permitted under
Applicable Laws. In making its determination as to the type of consideration to
accept, the Board shall consider if acceptance of such consideration may be
reasonably expected to benefit the Company.
9. Exercise of Option.
(a) Procedure for Exercise: Rights as a Shareholder. Any Option granted
hereunder shall be exercisable at such times and under such conditions as
determined by the Board, including performance criteria with respect to the
Company and/or the Optionee, and as shall be permissible under the terms of the
Plan.
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<PAGE>
An Option may not be exercised for a fraction of a Share.
An Option shall be deemed to be exercised when written notice of such
exercise has been given to the Company in accordance with the terms of the
Option by the person entitled to exercise the Option and full payment for the
Shares with respect to which the Option is exercised has been received by the
Company. Full payment may, as authorized by the Board, consist of any
consideration and method of payment allowable under Section 8(b) of the Plan.
Until the stock certificate evidencing such Shares is issued (as
evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company), no right to vote or receive dividends
or any other rights as a shareholder shall exist with respect to the optioned
Stock, notwithstanding the exercise of the Option. The Company shall issue (or
cause to be issued) such stock certificate promptly after the Option is
exercised. No adjustment will be made for a dividend or other right for which
the record date is prior to the date the stock certificate is issued, except as
provided in Section 12 of the Plan.
Exercise of a Option in any manner shall result in a decease in the
number of Shares which thereafter may be available, both for purposes of the
Plan and for sale under the Option, by the number of Shares as to which the
Option is exercised.
(b) Termination of Employment. In the event of termination of an Optionee's
consulting relationship or Continuous Status as an Employee with the Company,
such Optionee may, but only with in a period of thirty (30) days (or such other
period of time as is determined by the Board, which, in the case of an Incentive
Stock Option shall not exceed three (3) months) after the date of such
termination (but in no event later than the expiration date of the term of such
Option as set forth in the Option Agreement), exercise his Option to the extent
that Optionee was entitled to exercise it at the date of such termination. To
the extent that Optionee was not entitled to exercise the Option at the date of
such termination, or if Optionee does not exercise such Option to the extent so
entitled within the time specified herein, the Option shall terminate.
(c) Disability of Optionee. Notwithstanding the provisions of Section 9(b)
above, in the event of termination of an Optionee's consulting relationship or
Continuous Status as an Employee as a result of his total and permanent
disability (as defined in Section 22(e)(3) of the Code), Optionee may, but only
within twelve (12) months from the date of such termination (but in no event
later than the expiration date of the term of such Option as set forth in the
Option Agreement), exercise the Option to the extent otherwise entitled to
exercise it at the date of such termination. To the extent that Optionee was not
entitled to exercise the Option at the date of termination, or if Optionee does
not exercise such Option to the extent so entitled within the time specified
herein, the Option shall terminate.
(d) Death of Optionee. In the event of the death of an Optionee, the Option
may be exercised, at any time within twelve (12) months following the date of
death (but in
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<PAGE>
no event later than the expiration date of the term of such Option as set forth
in the Option Agreement), by the Optionee's estate or by a person who acquired
the right to exercise the Option by bequest or inheritance, but only to the
extent the Optionee was entitled to exercise the Option at the date of death. To
the extent that Optionee was not entitled to exercise the Option at the date of
termination, or if Optionee does not exercise such Option to the extent so
entitled within the time specified herein, the Option shall terminate.
(e) Rule 16b-3. Options granted to persons subject to Section 16(b) of the
Exchange Act must comply with Rule 16b-3 and shall contain such additional
conditions or restrictions as may be required thereunder to qualify for the
maximum exemption from Section 16 of the Exchange Act with respect to Plan
transactions.
(f) Buyout Provisions. The Administrator may at any time offer to buy out
for a payment in cash or Shares, an Option previously granted, based on such
terms and conditions as the Administrator shall establish and communicate to the
Optionee at the time that such offer is made.
10. Non-Transferability of Options. The Option may not be sold, pledged,
assigned, hypothecated, transferred, or disposed of in any manner other than by
will or by the laws of descent or distribution and may be exercised, during the
lifetime of the Optionee, only by the Optionee.
11. Stock Withholding to Satisfy Withholding Tax Obligations. At the
discretion of the Administrator, Optionees may satisfy withholding obligations
as provided in this paragraph. When an Optionee incurs tax liability in
connection with an Option, which tax liability is subject to tax withholding
under applicable tax laws, and the Optionee is obligated to pay the Company an
amount required to be withheld under applicable tax laws, the Optionee may
satisfy the withholding tax obligation by one or some combination of the
following methods: (i) by cash payment, or (ii) out of Optionee's current
compensation, or (iii) if permitted by the Administrator, in its discretion, by
surrendering to the Company Shares which (a) in the case of Shares previously
acquired from the Company, have been owned by the Optionee for more than six
months on the date of surrender, and (b) have a fair market value on the date of
surrender equal to or less than Optionee's marginal tax rate times the ordinary
income recognized, (iv) by electing to have the Company withhold from the Shares
to be issued upon exercise of the Option that number of Shares having a fair
market value equal to the amount required to be withheld. For this purpose, 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 (the "Tax Date").
If the Optionee is subject to Section 16 of the Exchange Act (an
"Insider"), any surrender of previously owned Shares to satisfy tax withholding
obligations arising upon exercise of this Option must comply with the applicable
provisions of Rule 16b-3 promulgated under the Exchange Act ("Rule 16b-3") and
shall be subject to such additional conditions or restrictions as may be
required thereunder to qualify for the maximum exemption from Section 16 of the
Exchange Act with respect to Plan transactions.
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<PAGE>
All elections by an Optionee to have Shares withheld to satisfy tax
withholding obligations shall be made in writing in a 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 of the Option as to which the election is made;
(c) all elections shall be subject to the consent or disapproval of the
Administrator;
(d) if the Optionee is an Insider, the election must comply with the
applicable provisions of Rule 16b-3 and shall be subject to such additional
conditions or restrictions as may be required thereunder to qualify for the
maximum exemption from Section 16 of the Exchange Act with respect to Plan
transactions.
In the event the election to have Shares withheld is made by an Optionee
and the Tax Date is deferred under Section 83 of the Code because no election is
filed under Section 83(b) of the Code, the Optionee shall receive the full
number of Shares with respect to which the Option is exercised but such Optionee
shall be unconditionally obligated to tender back to the Company the proper
number of Shares on the Tax Date.
12. Adjustments Upon Changes in Capitalization or Merger.
(a) Changes in Capitalization. Subject to any required action by the
shareholders of the Company, the number of shares of Common Stock covered by
each outstanding Option, and the number of shares of Common Stock which have
been authorized for issuance under the Plan but as to which no Options have yet
been granted or which have been returned to the Plan upon cancellation or
expiration of an Option, as well as the price per share of Common Stock covered
by each such outstanding Option, shall be proportionately adjusted for any
increase or decrease in the number of issued shares of Common Stock resulting
from a stock split, reverse stock split, stock dividend, combination or
reclassification of the Common Stock, or any other increase or decrease in the
number of issued shares of Common Stock effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of shares of Common Stock subject to an Option.
(b) Dissolution or Liquidation. In the event of the proposed dissolution or
liquidation of the Company, the Board shall notify the Optionee at least fifteen
(15) days
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<PAGE>
prior to such proposed action. To the extent it has not been previously
exercised, the Option will terminate immediately prior to the consummation of
such proposed action.
(c) Merger or Asset Sale. In the event of a proposed sale of all or a
majority of all of the assets of the Company, or the merger of the Company with
or into another corporation if the shareholders of the Company immediately prior
to such merger own less than fifty percent (50%) of the equity of the combined
entity immediately after such merger becomes effective the Optionee shall have
the right to exercise the Option as to all of the Optioned Stock, including
Shares as to which the Option would not otherwise be exercisable and the Board
shall notify the Optionee at least twenty-five (25) days prior to such
transaction that the Option shall be fully exercisable for a period of fifteen
(15) days from the date of such notice, and the Option will terminate upon the
expiration of such period. In the event of any other form of merger with or into
another corporation, each outstanding Option shall be assumed or a equivalent
option or right shall be substituted by the successor corporation or a Parent or
Subsidiary of the successor corporation. In the event that the successor
corporation does not agree to assume the Option or to Substitute a equivalent
option or right, the Administrator may, in lieu of such assumption or
substitution, provide for the Optionee to have the right to exercise the Option
as to all of the Optioned Stock, including Shares as to which it would not
otherwise be exercisable. If the Administrator makes an Option fully exercisable
in lieu of assumption or substitution in the event of a merger, the
Administrator shall notify the Optionee that the Option shall be fully
exercisable for a period of fifteen (15) days from the date of such notice, and
the Option will terminate upon the expiration of such period. For the purposes
of this paragraph, the Option shall be considered assumed if, following the
merger or sale of assets, the option or right confers the right to purchase, for
each Share of Optioned Stock subject to the Option immediately prior to the
merger or sale of assets, the consideration (whether stock, cash, or other
securities or property) received in the merger or sale of assets by holders of
Common Stock for each Share held on the effective date of the transaction (and
if holders were offered a choice of consideration, the type of consideration
chosen by the holders of a majority of the outstanding Shares); provided,
however, that if such consideration received in the merger or sale of assets was
not solely common stock of the successor corporation or its Parent, the
Administrator may, with consent of the successor corporation and the
participant, provide for the consideration to be received upon the exercise of
the Option, for each Share of Optioned Stock subject to the Option, to be solely
common stock of the successor corporation or its Parent equal in Fair Market
Value to the per share consideration received by holders of Common Stock in the
merger or sale of assets.
(d) Public Offering. Immediately upon the closing of the Company's sale of
Common Stock pursuant to a registration statement on Form 5-1, 5.18 (or the
equivalent) under the Securities Act of 1933, as amended, pursuant to a public
offering the Optionee shall have the right to exercise the Option as to all of
the Optioned Stock, including Shares as to which the Option would not otherwise
be exercisable so long as such Optionee agrees not to sell any shares acquired
upon exercise during a period beginning on the effective date of such
registration statement and ending 180 days afterwards or such shorter period as
may
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be requested by the underwriter and the Board shall notify the Optionee at least
twenty-five (25) days prior to such transaction.
13. Time of Granting Options. The date of grant of an Option shall, for all
purposes, be the date on which the Administrator makes the determination
granting such Option, or such other date as is determined by the Board. Notice
of the determination shall be given to each Employee or Consultant to whom an
Option is so granted within a reasonable time after the date of such grant.
14. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may at any time amend, alter,
suspend or discontinue the Plan, but no amendment, alteration, suspension or
discontinuation shall be made which would impair the rights of any Optionee
under any grant theretofore made, without his or her consent. In addition, to
the extent necessary and desirable to comply with Rule 16B-3 under the Exchange
Act or with Section 422 of the Code (or any other applicable law or regulation,
including the requirements of the NASD or a established stock exchange), the
Company shall obtain shareholder approval of any Plan amendment in such a manner
and to such a degree as required.
(b) Effect of Amendment or Termination. Any such amendment or termination
of the Plan shall not affect Options already granted and such Options shall
remain in full force and effect as if this Plan had not been amended or
terminated, unless mutually agreed otherwise between the Optionee and the Board,
which agreement must be in writing and signed by the Optionee and the Company.
15. Conditions Upon Issuance of Shares. Shares shall not be issued pursuant
to the exercise of a Option unless the exercise of such Option and the issuance
and delivery of such Shares pursuant thereto shall comply with all relevant
provisions of law, including, without limitation, the Securities Act of 1933, as
amended, the Exchange Act, the rules and regulations promulgated thereunder, and
the requirements of any stock exchange upon which the Shares may then be listed,
and shall be further subject to the approval of counsel for the Company with
respect to such compliance.
As a condition to the exercise of an Option, the Company may require the
person exercising such Option to represent and warrant at the time of any such
exercise that the Shares are being purchased only for investment and without any
present intention to sell or distribute such Shares if, in the opinion of
counsel for the Company, such a representation is required by any of the
aforementioned relevant provisions of law.
16. Reservation of Shares. The Company, during the term of this Plan, will
at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
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<PAGE>
The inability of the Company to obtain authority from any regulatory body
having jurisdiction, which authority is deemed by the Company's counsel to be
necessary to the lawful issuance and sale of any Shares hereunder, shall relieve
the Company of any liability in respect of the failure to issue or sell such
Shares as to which such requisite authority shall not have been obtained.
17. Agreements. Options shall be evidenced by written agreements in such
form as the Board shall approve from time to time.
18. Shareholder Approval. Continuance of the Plan shall be subject to
approval by the shareholders of the Company within twelve (12) months before or
after the date the Plan is adopted. Such shareholder approval shall be obtained
in the degree and manner required under applicable state and federal law.
19. Grant of Options to Non-Employee Directors.
(a) Timing of the Grant. Each Non-Employee Director whose initial election
or appointment to the Board of Directors occurs after January 15, 1997, shall,
as of the date of such approval, election or appointment to the Board,
automatically receive an option to purchase Fifty Thousand (50,000) shares of
the Common Stock at an exercise price per share equal to one hundred percent
(100%) of the fair market value of the Common Stock on the date of such election
or appointment.
With the exception of Mr. Weber, each Non-Employee Director serving on the
Board as of January 15, 1997, is automatically granted an option, effective
January 15, 1997, to purchase Fifty Thousand (50,000) shares of the Common Stock
at an exercise price per share equal to one hundred percent (100%) of the fair
market value of the Common Stock on January 15, 1997.
The foregoing notwithstanding, Mr. Weber is automatically granted an
option, effective January 15, 1997, to purchase Forty-five Thousand (45,000)
shares of the Common Stock at an exercise price per share equal to one hundred
percent (100%) of the fair market value of the Common Stock on January 15, 1997.
The vesting schedule described below shall not apply to Mr. Weber with respect
to the vesting of Five Thousand (5,000) shares of the Common Stock as of January
15, 1997, but shall otherwise apply in the manner applicable to Non-Employee
Directors.
(b) Vesting Schedule. The shares granted to Non-Employee Directors pursuant
to this Plan shall become exercisable (shall vest) upon the occurrence of the
following:
Upon initial election
or appointment to the Board
(1/15/97 for current Non-Employee Directors) 5,000 shares
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<PAGE>
Upon first re-election (following the initial grant)
to the Board by the shareholders 15,000 shares
Upon second re-election (following the initial grant)
to the Board by the shareholders 15,000 shares
Upon third re-election (following the initial grant)
to the Board by the shareholders 15,000 shares
(c) General. Non-Employee Directors shall not receive options to purchase
more than 50,000 shares for all years served on the Board of Directors. All
options granted pursuant to this Section 19 shall be designated as nonqualified
options and shall be subject to the same terms and provisions as are then in
effect with respect to granting of nonqualified options to officers and
employees of the Company, except that the option shall expire on the earlier of
(i) three months after the optionee ceases to be a director (except by death)
and (ii) ten (10) years after the date of grant. Notwithstanding the foregoing,
in the event of the death of a Non-Employee Director, any option granted to such
Non-Employee Director may be exercised at any time within twelve (12) months of
the death of such Non-Employee Director or on the date on which the option, by
its terms expires, whichever is earlier."
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