<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] 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 Rule 14a-11(c) or Rule 14a-12
</TABLE>
WebLink Wireless, 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.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
[WEBLINK LOGO]
3333 LEE PARKWAY, SUITE 100
DALLAS, TEXAS 75219
March 1, 2000
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders to
be held at 9:00AM, local time, on April 5, 2000, in the Linquist Center on the
4th floor of the Company's offices at 3333 Lee Parkway, Dallas, Texas 75219. The
formal Notice of Annual Meeting of Stockholders and Proxy Statement are
attached. I hope you will be able to attend and participate in the meeting, at
which time I will have the opportunity to review the business and operations of
WebLink Wireless, Inc.
The matters to be acted upon by our stockholders are set forth in the
Notice of Annual Meeting of Stockholders. It is important that your shares be
represented and voted at the meeting. Accordingly, after reading the attached
Proxy Statement, please sign, date and return the enclosed proxy card. Your vote
is important regardless of the number of shares you own.
Sincerely yours,
/s/ JOHN D. BELETIC
John D. Beletic
Chairman and Chief Executive Officer
<PAGE> 3
[WEBLINK LOGO]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
APRIL 5, 2000
March 1, 2000
To the Stockholders:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of WebLink
Wireless, Inc., a Delaware corporation (the "Company"), will be held in the
Linquist Center on the 4th floor of the Company's offices at 3333 Lee Parkway,
Dallas, Texas 75219 on April 5, 2000 at 9:00 AM, local time, for the following
purposes:
1. To elect a Board of Directors consisting of seven members.
2. To consider and vote upon a proposal to approve the Company's 2000
Flexible Incentive Plan.
3. To consider and vote upon a proposal to amend the Company's
Nonqualified Formula Stock Option Plan for Non-Employee Directors.
4. To ratify the appointment of Arthur Andersen LLP to continue as the
independent auditors of the Company to serve as such at the pleasure
of the Board of Directors.
5. To consider and vote upon any other matter that may be properly
brought before the meeting.
Only stockholders of record, as shown by the transfer books of the Company,
at the close of business on February 10, 2000 are entitled to notice of, and to
vote at, the Annual Meeting.
A list of stockholders entitled to vote at the Annual Meeting will be
available for examination by any stockholder for any proper purpose during
normal business hours at the offices of the Company for a period of at least ten
(10) days preceding the Annual Meeting.
The Board of Directors recommends that you vote FOR: (i) the Board's
nominees for director, (ii) the approval of the 2000 Flexible Incentive Plan,
(iii) the approval of the amendments to the Nonqualified Formula Stock Option
Plan for Non-Employee Directors, and (iv) the appointment of the independent
auditors.
By Order of the Board of Directors,
/s/ FREDERICK G. ANDERSON
Frederick G. Anderson
Vice President, General Counsel and
Secretary
PLEASE FILL IN, DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT IN THE ENVELOPE
PROVIDED AS PROMPTLY AS POSSIBLE, WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL
MEETING. IF YOU LATER DESIRE TO REVOKE YOUR PROXY FOR ANY REASON, YOU MAY DO SO
IN THE MANNER DESCRIBED IN THE ATTACHED PROXY STATEMENT.
<PAGE> 4
[WEBLINK LOGO]
PROXY STATEMENT
DATED MARCH 1, 2000
ANNUAL MEETING OF STOCKHOLDERS
APRIL 5, 2000
The accompanying proxy is solicited by the Board of Directors (the "Board")
of WebLink Wireless, Inc. (the "Company") to be voted at the Annual Meeting of
Stockholders to be held April 5, 2000 (the "Annual Meeting"), and any
adjournments thereof. When the proxy is properly executed and returned, the
shares it represents will be voted at the meeting as directed. If no
specification is indicated, the shares will be voted in accordance with the
recommendation of the Board with respect to each matter submitted to the
Company's stockholders for approval. Abstentions will not be voted, but will be
counted for determining the presence of a quorum. Broker non-votes will not be
counted for any purpose. Any stockholder giving a proxy has the power to revoke
it prior to its exercise by notice of revocation to the Company in writing, by
voting in person at the Annual Meeting or by execution of a subsequent proxy;
provided, however, that such action must be taken in sufficient time to permit
the necessary examination and tabulation of the subsequent proxy or revocation
before the vote is taken.
The shares entitled to vote at the meeting consist of shares of Class A
Convertible Common Stock of the Company (the "Common Stock"), with each share
entitling the holder of record to one vote. At the close of business on February
10, 2000, the record date for the Annual Meeting, there were outstanding
37,926,525 shares of Common Stock. This Proxy Statement and the accompanying
form of proxy are first being sent to stockholders on or about March 1, 2000.
In addition to the use of the mails, solicitation may be made by employees
of the Company by telephone, e-mail, mailgram, facsimile, telegraph, cable and
personal interview. The Company will bear all expense for the solicitation of
proxies and has not retained a solicitation firm.
PROPOSAL ONE: ELECTION OF DIRECTORS
NOMINEES AND DIRECTORS
Seven members of the Board will be elected at the Annual Meeting. Directors
elected at the Annual Meeting will serve until the next annual meeting of
stockholders or until their successors are elected and qualified. The seven
nominees receiving the greatest number of votes cast by the holders of the
Common Stock entitled to vote at the meeting will be elected directors of the
Company (assuming a quorum is present). The Company has no reason to believe
that any nominee of the Board will be unable to serve if elected. A vote FOR the
nominees includes discretionary authority to vote for a substitute nominee named
by the Board if any of the nominees becomes unable or unwilling to serve.
<PAGE> 5
The following persons have been nominated by the Board for election to the
Board of Directors:
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
John D. Beletic.................................... 48 Chairman and Chief Executive Officer
Leigh J. Abramson(1)(2)............................ 31 Director
Albert C. Black, Jr. .............................. 40 Director
Guy L. de Chazal(1)................................ 52 Director
Steven B. Dodge.................................... 54 Director
Michael C. Hoffman................................. 37 Director
Pamela D.A. Reeve(1)(2)............................ 50 Director
</TABLE>
- ---------------
(1) Member of Compensation Committee during 1999
(2) Member of Audit Committee during 1999
John D. Beletic, Chairman and Chief Executive Officer. Mr. Beletic joined
the Company as President and a director in March 1992. Mr. Beletic also became
Chief Executive Officer of the Company in February 1994 and Chairman of the
Company's Board in August 1994. In November 1997, Mr. Beletic continued as the
Chairman and Chief Executive Officer with N. Ross Buckenham assuming the
position of President. Prior to joining the Company, Mr. Beletic spent a year in
venture capital, and he served for five years as President and Chief Executive
Officer of The Tigon Company ("Tigon"), a leading voice mail service provider.
Tigon was acquired by Ameritech Development Corporation, a wholly-owned
subsidiary of American Information Technologies Corporation in 1988. Mr. Beletic
earned his bachelor's degree in finance from Cincinnati's Xavier University and
his MBA from the Harvard Business School. Mr. Beletic currently serves as a
director of TESSCO Technologies, Inc., iPass, Inc. and Triton PCS Holdings, Inc.
Within the messaging industry, Mr. Beletic currently serves as a director of the
Personal Communications Industry Association.
Leigh J. Abramson, Director. Mr. Abramson has been a Director of the
Company since August 1994. He is currently a Principal of Morgan Stanley & Co.
Incorporated ("Morgan Stanley") and of Morgan Stanley Dean Witter Capital
Partners. Mr. Abramson has been with Morgan Stanley since 1990, first in the
Corporate Finance Division and, since 1992, in the Private Equity Division. Mr.
Abramson is also a Director of Silgan Holdings. Mr. Abramson was designated by
Morgan Stanley Capital Partners III, L.P. ("MSCP III") pursuant to the Amended
and Restated Stockholders Agreement among the Company and certain stockholders
of the Company dated as of May 10, 1996, as amended (the "Stockholders
Agreement"). See "Certain Relationships and Related Transactions -- Election of
Directors."
Albert C. Black, Jr., Director. Mr. Black has been a director of the
Company since February 2000. He is currently Chairman of the Board, President
and Chief Executive Officer of On-Target Supplies & Logistics, Ltd., a
privately-held distributor of office supplies and equipment and administrator of
warehousing and delivery. Mr. Black is also Chairman of the Board of the Greater
Dallas Chamber of Commerce, a director of the Dallas Black Chamber of Commerce
and Chase Bank of Texas, and the Finance Chairman of the Board of Regents of
Texas Southern University.
Guy L. de Chazal, Director. Mr. de Chazal has been a Director of the
Company since June 1989. Mr. de Chazal is a Managing Director of Morgan Stanley
and is President and a general partner of Morgan Stanley Dean Witter Venture
Partners. Mr. de Chazal joined Morgan Stanley in 1984. Mr. de Chazal is also a
director of several private companies. Mr. de Chazal was designated by Morgan
Stanley Venture Capital Fund, L.P.("MSVCF") pursuant to the Stockholders
Agreement. See "Certain Relationships and Related Transactions -- Election of
Directors."
Steven B. Dodge, Director. Mr. Dodge has been a Director of the Company
since November 1998. Mr. Dodge is Chairman and Chief Executive Officer of
American Tower Corporation ("ATC"), a leading independent owner and operator of
wireless communications towers in the United States. Prior to joining ATC, Mr.
Dodge founded and was the Chairman of the Board, President and CEO of American
Radio Systems Corporation ("ARS"), an independent owner and operator of radio
stations, a position he occupied from ARS' founding in November, 1993 until its
merger with CBS Corporation. In addition, Mr. Dodge
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<PAGE> 6
founded Atlantic Radio, L.P. in 1988, which was one of the predecessor entities
of ARS. Prior to forming Atlantic Radio, L.P., Mr. Dodge founded and served as
Chairman and CEO of American Cablesystems Corporation, a cable television
company. Currently, Mr. Dodge is also a director of TD Waterhouse Group and
Sensitech, Inc.
Michael C. Hoffman, Director. Mr. Hoffman has been a Director of the
Company since March 1999. Mr. Hoffman is a Managing Director of Morgan Stanley
and of Morgan Stanley Dean Witter Capital Partners. Mr. Hoffman joined Morgan
Stanley in 1986. Mr. Hoffman was designated by The Morgan Stanley Leveraged
Equity Fund II, L.P. ("MSLEF II") pursuant to the Stockholders Agreement. Mr.
Hoffman is also a director of OrbLynx, Inc. and eAccess Limited. See "Certain
Relationships and Related Transactions -- Election of Directors."
Pamela D.A. Reeve, Director. Ms. Reeve has been a Director of the Company
since April 1996. Ms. Reeve is President, Chief Executive Officer and Director
of Lightbridge, Inc. ("Lightbridge") and has been with Lightbridge since 1989.
Lightbridge develops and manages software used by wireless telecommunications
companies across the United States to support sales and marketing applications.
Prior to joining Lightbridge, Ms. Reeve spent eleven years at The Boston
Consulting Group, with senior operating responsibility for the firm's Boston
office. Prior to joining The Boston Consulting Group, Ms. Reeve worked with the
National Endowment for the Humanities managing educational projects and with
real estate development and manufacturing firms, primarily in operations and
marketing. Ms. Reeve is also a director of Natural Microsystems, Inc.
INFORMATION CONCERNING THE BOARD OF DIRECTORS
The Company's Board of Directors held four meetings in 1999. All of the
directors attended 75% or more of the total number of meetings of the Board and
committees of the Board on which they served.
The Audit Committee of the Board recommends the firm to be employed as the
Company's independent public accountants and reviews the scope of the audit and
audit fees. In addition, the Audit Committee consults with the independent
auditors with regard to the plan of audit, the audit report and the management
letter, and confers with the independent auditors with regard to the adequacy of
internal accounting controls, as appropriate, out of the presence of management.
During 1999, the members of the Audit Committee were Mr. Abramson, Ms. Reeve and
Alejandro Perez. Mr. Perez does not plan to stand for re-election to the Board
at the Annual Meeting. The Audit Committee held one meeting in 1999.
The Compensation Committee of the Board is charged with reviewing executive
compensation and administering the Company's Stock Option Plan and Flexible
Incentive Plan (as defined herein). During 1999, its members were Mr. Abramson,
Mr. de Chazal, Ms. Reeve and Arthur Patterson. Mr. Patterson does not plan to
stand for re-election to the Board at the Annual Meeting. The Compensation
Committee held four meetings in 1999.
The Board does not have a nominating committee.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding beneficial
ownership of Class A Common Stock as of January 31, 2000, (i) by each person
known by the Company to own beneficially more than 5% of the outstanding Class A
Common Stock, (ii) by each director of the Company, (iii) by the chief executive
officer and each of the four most highly compensated officers other than the
chief executive officer (the "Named Executive Officers"), and (iv) by all
executive officers and directors of the Company as a group.
3
<PAGE> 7
Except as otherwise indicated, each named person has voting and investment power
over the listed shares, exercised solely by the named person or shared with a
spouse.
<TABLE>
<CAPTION>
SHARES OF PERCENT OF
CLASS A CLASS A
NAME AND ADDRESS OF BENEFICIAL OWNER COMMON STOCK COMMON STOCK
- ------------------------------------ ------------ ------------
<S> <C> <C>
The Morgan Stanley Leveraged Equity Fund II, L.P. .......... 8,476,518 23.0%
1221 Avenue of the Americas,
New York, NY 10020
Morgan Stanley Capital Partners III, L.P. .................. 5,072,672 13.7%
1221 Avenue of the Americas,
New York, NY 10020
Morgan Stanley Venture Capital Fund, L.P. .................. 2,154,071 5.8%
1221 Avenue of the Americas,
New York, NY 10020
Other Morgan Stanley-sponsored limited partnerships......... 1,103,802 3.0%
Mellon Bank, N.A., as Trustee for First Plaza Group
Trust(1).................................................. 3,214,286 8.7%
One Mellon Plaza,
Pittsburgh, PA 15258
Pulsar...................................................... 2,142,857 5.8%
Av. Roble, No. 300 Mezzanine, Edificio Torre Alta
Garza Garcia, N.L., Mexico C.P. 66265
Directors and Named Executive Officers:
John D. Beletic(2).......................................... 878,703 2.4%
N. Ross Buckenham(3)........................................ 164,041 *
Frederick G. Anderson(4).................................... 61,165 *
E. Russell Villemez(5)...................................... 28,333 *
Paul L. Turner(6)........................................... 108,232 *
Leigh J. Abramson........................................... -- *
Albert C. Black, Jr. ....................................... -- *
Guy L. de Chazal............................................ -- *
Steven B. Dodge(7).......................................... 12,499 *
Michael C. Hoffman.......................................... -- *
Pamela D.A. Reeve(8)........................................ 33,333 *
All directors and executive officers as a group(9).......... 1,796,300 4.7%
</TABLE>
- ---------------
* Denotes less than 1%
(1) Mellon Bank, N.A. ("Mellon") acts as the trustee for First Plaza Group Trust
("First Plaza"), a trust under and for the benefit of certain employee
benefit plans of General Motors Company ("GM") and its subsidiaries. These
shares may be deemed to be owned beneficially by General Motors Investment
Management Company ("GMIMCo"), a wholly-owned subsidiary of GM. GMIMCo's
principal business is providing investment advice and investment management
services with respect to the assets of certain employee benefit plans of GM
and its subsidiaries and with respect to the assets of certain direct and
indirect subsidiaries of GM and associated entities. GMIMCo's business
address is 767 Fifth Avenue, New York, New York. GMIMCo is serving as First
Plaza's investment manager with respect to these shares and in that capacity
it has the sole power to direct the trustee as to the voting and disposition
of these shares. Because of Mellon's limited role, beneficial ownership of
the shares by Mellon is disclaimed.
(2) Includes 344,700 shares of Common Stock issued pursuant to the Stock Option
Plan and the Company's Stock Issuance Plan (both as defined herein).
Includes 523,334 stock options which are exercisable within the 60-day
period commencing January 31, 2000, pursuant to the Stock Option Plan.
4
<PAGE> 8
(3) Includes 162,333 stock options which are exercisable within the 60-day
period commencing January 31, 2000, pursuant to the Stock Option Plan.
(4) Includes 61,165 stock options which are exercisable within the 60-day period
commencing January 31, 2000, pursuant to the Stock Option Plan.
(5) Includes 28,333 stock options which are exercisable within the 60-day period
commencing January 31, 2000, pursuant to the Stock Option Plan.
(6) Includes 105,998 stock options which are exercisable within the 60-day
period commencing January 31, 2000, pursuant to the Stock Option Plan.
(7) Includes 12,499 stock options which are exercisable within the 60-day period
commencing January 31, 2000, pursuant to the 1996 Nonqualified Formula Stock
Option Plan for Non-Employee Directors.
(8) Includes 33,333 stock options which are exercisable within the 60-day period
commencing January 31, 2000, pursuant to the 1996 Nonqualified Formula Stock
Option Plan for Non-Employee Directors.
(9) Includes 1,335,190 stock options which are exercisable within the 60-day
period commencing January 31, 2000.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Related Party Transactions
As of January 31, 2000, John D. Beletic, Chairman and Chief Executive
Officer of the Company, was indebted to the Company in the amount of $163,000
under three promissory notes. The first promissory note (the "First Note") was
originally issued in January 1994 and renewed in January 1999 for $97,800 in
connection with a stock option exercise by Mr. Beletic and bears interest at the
rate of 4.57% per annum. Interest on the outstanding balance was due annually
beginning on January 28, 1995. The outstanding principal balance on the First
Note was due on January 28, 2002. The second promissory note (the "Second Note")
was issued in September 1997 for $16,300 in connection with a stock option
exercise by Mr. Beletic and bears interest at the rate of 5.81% per annum.
Interest on the outstanding balance was due annually beginning on September 22,
1998. The outstanding principal balance on the Second Note is due September 22,
2000. The third promissory note (the "Third Note") was issued in January 1998
for $48,900 in connection with a stock option exercise by Mr. Beletic and bears
interest at the rate of 5.7% per annum. Interest on the outstanding balance was
due annually beginning on January 14, 1999. The outstanding principal balance on
the Third Note is due on January 14, 2001. The First Note, the Second Note and
the Third Note are all secured by the Common Stock owned by Mr. Beletic. The
principal and accrued interest on such notes will be forgiven in the
circumstances described below.
Effective January 3, 2000, the Company entered into a Retention Agreement
with John D. Beletic providing that Mr. Beletic will remain with the Company for
the term of the agreement. The term of the agreement is one year, with automatic
one-year renewals unless either party gives the other written notice of
nonrenewal. Mr. Beletic will receive the annual base salary and will have the
opportunity to earn annual and special bonuses as determined by the Board each
year. Once determined by the Board, the salary and bonuses may not be amended
adversely to Mr. Beletic without his consent. The Company may terminate the
agreement for cause (as defined in the agreement) or if Mr. Beletic becomes
disabled. Mr. Beletic may terminate the agreement for good reason (as defined in
the agreement). Either party may terminate the agreement upon 30 days notice to
the other party. If the Company terminates the agreement for any reason other
than cause or the death or disability of Mr. Beletic, or if Mr. Beletic
terminates the agreement for good reason, then the Company will pay Mr. Beletic
the base salary and annual bonus due for the remainder of the then current term
of the agreement, and if such termination occurs before a change in control of
the Company (as defined in the agreement), the Company will also pay Mr. Beletic
any special bonus due for the remainder of the then current term of the
agreement. If the agreement is terminated by the Company due to the disability
of Mr. Beletic, the Company will pay Mr. Beletic any special bonus whether
earned or unearned at the time of disability. If the agreement is terminated due
to the death of Mr. Beletic, Mr. Beletic will forfeit
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<PAGE> 9
any unpaid annual bonus. If the agreement is terminated by the Company for cause
or by Mr. Beletic for any reason other than good reason, Mr. Beletic will
forfeit any unpaid annual or special bonuses. If any payment or distribution to
Mr. Beletic by the Company will cause Mr. Beletic to be subject to the excise
tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended,
then the Company will pay Mr. Beletic an additional amount such that, after
payment of all taxes on the additional amount, Mr. Beletic retains an amount
equal to such excise tax. The Company also agreed that all obligations of Mr.
Beletic on his indebtedness to the Company described above will be suspended
until and forgiven on January 3, 2001 if the agreement has not been previously
terminated by the Company for cause or by Mr. Beletic for any reason other than
good reason.
Three directors of the Company are employees of Morgan Stanley. Morgan
Stanley Senior Funding, Inc. ("MSSF"), an affiliate of Morgan Stanley, acted as
Syndication Agent with respect to the Credit Agreement, dated as of March 23,
1999, among the Company, Bankers Trust Company, MSSF and various lenders. The
Company paid MSSF an agency fee of $1.1 million for its services as Syndication
Agent.
On September 12, 1997, in connection with his promotion to the position of
President of the Company, the Company entered into an agreement with N. Ross
Buckenham providing for (i) payment to Mr. Buckenham of one half of his annual
base salary upon termination of his employment for any reason other than death,
disability, voluntary termination by Mr. Buckenham or termination for cause by
the Company, and (ii) payment to Mr. Buckenham of $100,000 to compensate him for
the expenses of moving his principal residence if his employment terminates for
any reason other than voluntary termination or termination for cause.
Election of Directors
Pursuant to the Amended and Restated Stockholders Agreement among the
Company and certain stockholders dated as of May 10, 1996, as amended (the
"Stockholders Agreement"), MSLEF II, MSCP III, MSVCF, the Morgan Stanley Venture
Capital Fund II, L.P. ("MSVCF II"), the Morgan Stanley Capital Investors, L.P.
("MSCI"), the MSCP 892 Investors, L.P. ("MSCP 892") and other Morgan Stanley
sponsored limited partnerships (collectively, the "Morgan Stanley Shareholders")
have the right to designate and have elected one-half of the members of the
Board for so long as the total number of shares of voting and nonvoting common
stock (the "Capital Stock") of the Company owned by the Morgan Stanley
Shareholders constitutes at least 50% of the outstanding Capital Stock of the
Company. If such ownership falls below 50%, the number of directors that the
Morgan Stanley Shareholders will have the right to designate and have elected
will be reduced to the number of directors which constitutes a percentage
representation on the Board equal to the Morgan Stanley Shareholders' aggregate
percentage ownership of the outstanding Capital Stock of the Company. The rights
of each of MSLEF II, MSCP III, MSVCF and the MSVCF II to designate and have
elected one member of the Board of Directors terminates once the total number of
shares of Capital Stock of the Company owned by such stockholder falls below
7.5%. However, each such stockholder will continue to have such rights if its
ownership of Capital Stock exceeds 2% and such stockholder has determined that
the continued possession of such rights is necessary or desirable in order for
such stockholder to qualify as a "venture capital operating company" within the
meaning of Department of Labor Regulation Section 2510.3-101. MSVCF has made
such a determination and continues, therefore, to have the right to designate
and have elected one director.
Accel Telecom L.P., Accel III, L.P. and Accel Investors 89, L.P.
(collectively, "Accel") together have the right to designate one director for
election to the Board of Directors so long as Accel owns at least 7.5% of the
outstanding Capital Stock of the Company. As of the record date for the Annual
Meeting, Accel did not have the right to designate a director for election at
the Annual Meeting.
The Morgan Stanley Shareholders, Accel, Pulsar, BT Investment Partners,
Inc., Toronto Dominion Capital Group, Ltd. and John D. Beletic have agreed to
vote all of their shares for all such designees.
So long as the Morgan Stanley Shareholders hold securities representing at
least 10% of the outstanding Capital Stock, the Company is required to maintain
compensation and audit committees of its Board, each consisting of up to four
directors, of which the Morgan Stanley Shareholders are entitled to designate up
to
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<PAGE> 10
two directors on each such committee. Those members of the Board who are not
designated by the Morgan Stanley Shareholders are entitled to designate one
director, and Accel is entitled to designate one director, on each such
committee.
Registration Rights
The Stockholders Agreement provides that the parties thereto (collectively,
the "Holders"), collectively have the right to "demand" an unlimited number of
registrations. Pursuant to these demand rights, Holders of Capital Stock (the
"Registrable Securities") may request in writing that the Company file a
registration statement under the Securities Act of 1933, as amended (the
"Securities Act"), covering the registration of a number of shares equal to at
least three million shares of Capital Stock or a lesser number if such number
represents a majority of the Registrable Securities then outstanding. The
Company is obligated within ten days of the receipt thereof to give written
notice of such request to all Holders and to use its best efforts to effect as
soon as practicable the registration under the Securities Act of all Registrable
Securities that the Holders request to be registered within 20 days of such
notice by the Company. Unless the Holders of a majority of the Registrable
Securities to be registered shall consent in writing, no other party (including
the Company) will be permitted to offer securities under such demand
registration. Pulsar may also request that the Company file a registration under
the Securities Act covering the registration of all of the Registrable
Securities Pulsar owns. Pulsar may make no more than two such requests. The
Company is not obligated to effect more than one demand registration in any
six-month period.
In the event the managing underwriter advises the Holders that the size of
the offering is such that the success of the offering would be materially and
adversely affected by inclusion of all Registrable Securities requested to be
included, then the number of shares of Registrable Securities to be included in
the underwriting will be reduced on a pro rata basis, provided that the Company
will first reduce entirely all securities other than Registrable Securities to
be included in such underwriting.
The Stockholders Agreement also provides that if the Company proposes to
register any of its stock or other securities under the Securities Act in
connection with the public offering of such securities solely for cash, the
Company shall promptly (but in no event less than 30 days before the filing
date) give each Holder written notice of such registration, and such notice
shall offer the Holders the opportunity to register such number of shares of
Registrable Securities as such Holder may request. Subject to certain
restrictions, upon the written request of each Holder given within 20 days after
delivery of such notice by the Company, the Company shall cause to be registered
under the Securities Act all of the Registrable Securities that each such Holder
has requested to be registered.
If the underwriters determine that the total amount of securities requested
to be included in any such offering would materially and adversely affect the
success of such offering, the Company will be required to include in the
offering, in addition to any shares to be registered by the Company, only that
number of such Registrable Securities that the underwriters determine in their
sole discretion would not affect the success of such offering.
The registration rights provisions of the Stockholders Agreement terminate
four years after the Company's initial public offering, which occurred on June
13, 1996.
Restrictions on Transfer
Under the Stockholders Agreement, if MSCP III, MSLEF II, MSCI and MSCP 892
(collectively, the "MS Merchant Banking Funds") propose to transfer (other than
in a sale to the public) shares which, taken together with any prior transfers
by the MS Merchant Banking Funds, represent more than 10% of the shares owned by
them on the date of the Stockholders Agreement, the Holders have a right to
require the transferee to purchase their shares on a pro rata basis.
The Stockholders Agreement also provides for certain restrictions on the
transfer of shares of Capital Stock by holders thereof subject to Regulation Y
of the Board of Governors of the Federal Reserve System.
7
<PAGE> 11
Restrictions on Amendment of Certificate of Incorporation
The Company will not amend the Company's Amended and Restated Certificate
of Incorporation or By-laws to eliminate the right of stockholders of the
Company to take action upon written consent of the holders of a majority of the
outstanding shares of Common Stock without a meeting, without prior notice and
without a vote as provided in the Company's Bylaws, so long as the MS Merchant
Banking Funds hold at least 7.5% of the Company's Capital Stock.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's executive officers and directors and
persons who own more than ten percent of a registered class of the Company's
equity securities (collectively, the "reporting persons") to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
and to furnish the Company with copies of these reports. Based on the Company's
review of the copies of these reports received by it, and written
representations received from reporting persons, the Company believes that all
filings required to be made by the reporting persons during the year ended
December 31, 1999, were made on a timely basis.
EXECUTIVE COMPENSATION
The following table sets forth compensation information for the Named
Executive Officers for services rendered in the fiscal years ending December 31,
1999, 1998, and 1997.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL ------------
COMPENSATION(1) SECURITIES
------------------- UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS(2) COMPENSATION(3)
- --------------------------- ---- -------- -------- ------------ ---------------
<S> <C> <C> <C> <C> <C>
John D. Beletic....................... 1999 $376,013 $691,937 200,000 $18,045
Chairman and Chief Executive Officer 1998 323,616 454,480 400,000 16,110
1997 279,171 358,599 300,000 15,743
N. Ross Buckenham..................... 1999 240,385 259,470 150,000 11,634
President 1998 210,000 139,536 100,000 82,079(4)
1997 167,692 63,261 160,000 25,800
Frederick G. Anderson................. 1999 195,192 163,929 55,000 12,144
Vice President, General Counsel and 1998 173,231 64,851 80,000 10,610
Secretary 1997 55,577 22,388 70,000 2,796
E. Russell Villemez................... 1999 179,308 147,929 65,000 11,327
Vice President, Information Technology 1998 36,923 16,238 100,000 2,512
and Chief Information Officer 1997 -- -- -- --
Paul L. Turner........................ 1999 164,171 87,238 25,000 9,999
Vice President, Customer Service 1998 155,000 56,009 5,000 5,933
1997 155,000 59,130 75,000 5,784
</TABLE>
- ---------------
(1) The amount of cash compensation does not include the value of personal
benefits or securities, property or other non-cash compensation paid or
distributed other than pursuant to a plan, which, with respect to any Named
Executive Officer, was less than the lesser of $50,000 and 10% of the cash
compensation received by such Officer.
(2) Denominated in shares of Common Stock.
8
<PAGE> 12
(3) All other compensation for 1999 is made up of the following:
<TABLE>
<CAPTION>
1999 MR. BELETIC MR. BUCKENHAM MR. ANDERSON MR. VILLEMEZ MR. TURNER
- ---- ----------- ------------- ------------ ------------ ----------
<S> <C> <C> <C> <C> <C>
Below prime rate loan........... $ 4,883 $ -- $ -- $ -- $ --
Life and accident insurance..... 480 300 240 180 197
Long-term disability insurance.. 1,699 1,074 922 668 731
Health insurance................ 10,982 10,260 10,982 10,479 9,071
Total other compensation.... 18,045 11,634 12,144 11,327 9,999
</TABLE>
(4) Includes $71,604 for payment or reimbursement of expenses related to moving
Mr. Buckenham's residence to Dallas, Texas.
STOCK OPTIONS
The following table sets forth grants of stock options, during fiscal year
1999, to each Named Executive Officer.
OPTION GRANTS IN THE LAST FISCAL YEAR
<TABLE>
<CAPTION>
PERCENTAGE POTENTIAL REALIZATION VALUE
NUMBER OF OF TOTAL AT ASSUMED ANNUAL RATES
SECURITIES OPTIONS OF STOCK PRICE APPRECIATION
UNDERLYING GRANTED TO EXERCISE FOR OPTION TERM(2)
OPTIONS EMPLOYEES IN PRICE PER EXPIRATION ---------------------------
GRANTED(1) FISCAL 1999 SHARE DATE 5% 10%
---------- ------------ --------- ---------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
John D. Beletic.......... 100,000(3) 5.28% $6.38 01/28/2009 $401,232 $1,016,806
100,000 5.28% 5.19 10/14/2009 325,987 826,501
N. Ross Buckenham........ 100,000(3) 5.28% 6.38 01/28/2009 401,232 1,016,806
50,000 2.64% 5.19 10/14/2009 162,993 413,250
Frederick G. Anderson.... 55,000(4) 2.90% 5.19 10/14/2009 179,292 454,575
E. Russell Villemez...... 65,000(4) 3.43% 5.19 10/14/2009 211,891 537,225
Paul L. Turner........... 25,000 1.32% 5.19 10/14/2009 81,496 206,625
</TABLE>
- ---------------
(1) Denominated in shares of Common Stock. Unless otherwise noted, each option
vests with respect to (i) 20% of the option shares one year after the date
of grant, and (ii) the balance of the option shares in equal successive
monthly installments over each of the next 48 months of service.
(2) The assigned rates of growth were selected by the Securities and Exchange
Commission for illustrative purposes only and are not intended to predict or
forecast future stock prices.
(3) Option does not vest until the third anniversary of the date of grant, at
which time it becomes 100% vested.
(4) 15,000 shares of the option do not vest until the third anniversary of the
date of grant, at which time it becomes 100% vested.
9
<PAGE> 13
The following table sets forth stock options exercised during fiscal year
1999 and the fiscal year-end value of unexercised options for each Named
Executive Officer.
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS IN-THE-MONEY OPTIONS AT
SHARES AT DECEMBER 31, 1999(1) DECEMBER 31, 1999(2)
ACQUIRED ON VALUE --------------------------- ---------------------------
EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
John D. Beletic.......... -- $ -- 498,334 751,666 $4,590,541 $5,752,952
N. Ross Buckenham........ -- -- 146,832 313,168 1,192,716 2,773,528
Frederick G. Anderson.... -- -- 53,665 151,335 346,869 1,226,625
E. Russell Villemez...... -- -- 23,333 141,667 203,870 1,344,776
Paul L. Turner........... -- -- 102,248 47,752 869,666 449,704
</TABLE>
- ---------------
(1) Denominated in shares of Common Stock.
(2) The fair market value at December 31, 1999 was $15.50 per share.
DIRECTORS' COMPENSATION
Pamela Reeve, Albert Black and Steven Dodge each receive $10,000 annually
for their services as directors, plus $1,000 for each Board meeting attended in
person and $500 for each Board meeting attended by telephone conference call. No
other directors of the Company currently receive compensation for their services
in such capacity. All directors who are not employees of the Company or any of
its affiliates and who own 1% or less of the Company's Common Stock participate
in the Company's Nonqualified Formula Stock Option Plan for Non-Employee
Directors, pursuant to which each such director is granted an option covering
25,000 shares of Common Stock upon being elected to the Board, with an exercise
price equal to the fair market value of such stock on the date of grant. On the
third anniversary of the grant, each eligible director still serving on the
Board will be granted another option covering 25,000 shares at the fair market
value on the date of such grant. Each option vests in equal quarterly
installments over a three year period and has a maximum term of 10 years.
Currently only Ms. Reeve, Mr. Black and Mr. Dodge are eligible to participate in
the Plan.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
None of the members of the Compensation Committee during 1999 have ever
been an officer or employee of the Company or any of its subsidiaries. No
executive officer of the Company serves on the compensation committee of another
Company, an executive officer of which serves as a Director of the Company or on
the Company's Compensation Committee. No executive officer of the Company serves
as a director of another Company, an executive officer of which serves as a
member of the Company's Compensation Committee.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee
The Compensation Committee of the Board, which consisted of four
non-employee directors during 1999, is responsible for overseeing all stock
option plans, setting the compensation for the Chief Executive Officer ("CEO")
and other executive officers, reviewing and approving the Company's compensation
policies and providing guidelines for determining the annual compensation of
other management personnel.
10
<PAGE> 14
Compensation Philosophy
The goals of the Compensation Committee with respect to executive
compensation are to: (1) establish a competitive compensation program to
attract, retain and motivate employees in those positions that most directly
affect the Company's overall performance and (2) encourage coordinated and
sustained effort toward enhancing the Company's performance and maximizing the
Company's value to its shareholders. The Compensation Committee has observed
increasing competition for the services of experienced senior executives in the
telecommunications industry, which is being addressed through a program of
competitive base salaries, bonus programs based on successfully achieving
predetermined financial, strategic or operational performance goals and programs
providing a heavy emphasis on executive equity ownership.
Base Salaries
The Compensation Committee reviews and approves salaries for the CEO and
the other executive officers on an annual basis. The Compensation Committee also
provides guidelines to set the base salary of other management personnel. The
Compensation Committee considers the recommendation of, and relies on
information provided by, the CEO in determining the salaries of the non-CEO
officers. The Compensation Committee may also consider information derived from
reports of public companies in the paging, telecommunications and technology
industries and/or national surveys of compensation data. Ultimately, however,
the salaries are based on a subjective analysis of each officer's performance
during the prior year, as well as an evaluation of the individual executive's
expected future performance and the competitive environment for retaining
talented officers. In ratifying salary decisions, the Compensation Committee
exercises its discretion and judgment with no specific formula being applied to
determine salary levels.
Annual Incentive Bonus
Each executive officer has an opportunity to earn an annual bonus based
upon Company performance. Annual incentive bonus opportunities for executive
officers are based on the Compensation Committee's belief that a significant
portion of the annual compensation of each executive officer should be
contingent upon Company performance. To carry out this philosophy, the Company
implemented the 1999 Management Annual Variable Compensation Plan (the
"Incentive Plan"). The Incentive Plan is a pay-for-performance plan intended to
motivate and reward executive officers (as well as other officers and managers)
by directly linking cash bonuses to specific aggressive Company performance
targets. Prior to a calendar year, the Compensation Committee sets the incentive
bonus target at a stated percentage of an executive officer's base salary. The
bonus amounts earned are determined as of the end of each calendar year. The
percentage bonus is calculated by determining the level of the Company's
accomplishment of certain performance criteria established in order to align
participants' perspectives with that of shareholders and enhance shareholder
value.
The Compensation Committee has the discretion to modify the bonus amounts
paid to all participants in the Incentive Plan regardless of the performance
level achieved if certain extraordinary unforeseen events occur during the year.
The Compensation Committee has exercised its discretion to modify the bonus
amounts only once in prior years and did not exercise its discretion to modify
the bonus amounts under the Incentive Plan in 1999.
Certain of the executive officers of the Company (other than the CEO and
President), as well as certain managers, also have the opportunity to
participate in the Company's Management by Objective ("MBO") bonus program. The
MBO bonus program is intended to provide officers with an incentive to focus on
short-term performance goals that enhance the operating efficiency of the
Company and enhance shareholder value. Participants in the MBO program are
provided a cash bonus based upon the percentage of definitive performance
objectives completed during each calendar quarter. The participant's potential
MBO bonus is a percentage of such participant's annual base salary, paid
quarterly based upon the participant's completion of his/her objectives. For
1999, potential MBO bonuses were 5% of executive officers' annual base salaries.
11
<PAGE> 15
Stock Options/Equity Ownership
The Compensation Committee believes that the periodic grant of time-vested
stock options provides an incentive that focuses the executives' attention on
managing the business as owners of an equity stake in the Company. It further
motivates executives to maximize long-term growth and profitability because
value is created in the options only as the Company's stock price increases
after the option is granted. Pursuant to the Company's Fifth Amended and
Restated 1991 Stock Option Plan (the "Stock Option Plan"), options are granted
at the discretion of the Compensation Committee. Pursuant to the 2000 Flexible
Incentive Plan (the "Flexible Incentive Plan"), which the stockholders are being
asked to approve at the Annual Meeting, options, stock appreciation rights,
restricted stock, phantom stock, dividend equivalent awards and performance
awards can also be granted at the discretion of the Compensation Committee.
Although the Flexible Incentive Plan will provide a range of incentive
alternatives, the Compensation Committee expects to rely primarily on options as
an incentive mechanism. The number of shares covered by such grants are
determined based upon assessment of the individual executive's performance, the
impact of the individual on the Company's performance, the competitive
environment for retaining talented individuals in critical positions and the
number of vested and unvested options already held by the individuals. The
Compensation Committee considers the recommendation of and relies on information
provided by the CEO in determining the number of option shares to be granted to
the non-CEO executive officers.
CEO Compensation
The Compensation Committee believes that, as with the other executive
officers, the CEO's compensation should, in large part, be tied directly to the
performance of the Company and that the CEO should share in the same risks and
rewards as do the Company's shareholders. Accordingly, the compensation of the
CEO in 1999 was comprised of base salary, annual incentive bonus pursuant to the
Incentive Plan and long-term incentives through stock options.
In setting Mr. Beletic's future compensation, the Compensation Committee
analyzes subjective measures of performance during the prior fiscal year as well
as expected future performance and the competitive environment for retaining a
talented individual in the CEO position. The Compensation Committee has
established bonus and stock based compensation that will permit the CEO to earn
significant amounts for increasing stockholder value.
Deductibility of Executive Compensation
The Omnibus Budget Reconciliation Act of 1993 provides that
non-performance-based compensation paid to any Named Executive Officer in excess
of one million dollars will not be deductible for federal income tax purposes.
The Compensation Committee intends to grant deductible awards, subject to the
needs of the Company in specific circumstances.
Respectfully submitted,
Compensation Committee:
Leigh J. Abramson
Guy L. de Chazal
Arthur Patterson
Pamela D.A. Reeve
12
<PAGE> 16
PERFORMANCE GRAPH
The rules of the Securities and Exchange Commission ("SEC") require each
public company to include a performance graph comparing the cumulative total
shareholder return on such company's common stock for the five preceding fiscal
years, or such shorter period as the registrant's class of securities has been
registered with the SEC, with the cumulative total returns of a broad equity
market index (such as The Nasdaq Stock Market(R) -- U.S. Companies Index) and a
peer group or similar index. The Company's Common Stock began trading on The
Nasdaq Stock Market(R) under the symbol PMWI on June 14, 1996. With the change
of the Company's name to WebLink Wireless, Inc. on December 1, 1999, the symbol
under which the Company traded on The Nasdaq Stock Market(R) changed to WLNK.
The following chart graphs the performance of the cumulative total return
to shareholders (stock price appreciation plus dividends) between June 14, 1996
and December 31, 1999 in comparison to returns of The Nasdaq Stock
Market(R) -- U.S. Companies Index and a peer group index. The peer group index
was constructed specifically for the Company and includes the following wireless
messaging companies: Arch Communications Group, Inc., Metrocall, Inc. and Paging
Network, Inc. In calculating the peer group index, the returns of each company
in the group have been weighted according to such company's market
capitalization at the beginning of the period. ProNet, Inc. and American Paging,
Inc. were included in the 1997 peer group index and have been excluded from the
peer group presented herein due to their mergers with Metrocall, Inc. and
Telephone and Data Systems, Inc., respectively. SkyTel Communications, Inc. was
included in the 1998 peer group index and has been excluded from the peer group
presented herein due to its merger with MCI WorldCom.
CUMULATIVE TOTAL RETURNS*
[PERF. GRAPH]
<TABLE>
<CAPTION>
NASDAQ NATIONAL MARKET(R) -
WEBLINK WIRELESS, INC. PEER GROUP U.S. COMPANIES INDEX
---------------------- ---------- ---------------------------
<S> <C> <C> <C>
6/14/96 100.00 100.00 100.00
12/31/96 56.99 50.49 106.24
6/30/97 73.12 26.40 118.88
12/31/97 67.74 28.76 130.18
6/30/98 77.96 33.70 156.53
12/31/98 47.85 12.24 183.43
6/30/99 65.05 12.72 221.23
12/31/99 133.33 3.64 210.11
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
6/14/96 12/31/96 6/30/97 12/31/97 6/30/98 12/31/98 6/30/99 12/31/99
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
WebLink Wireless, Inc. $100.00 $ 56.99 $ 73.12 $ 67.74 $ 77.96 $ 47.85 $ 65.05 $133.33
Peer Group 100.00 50.49 26.40 28.76 33.70 12.24 12.72 3.64
The Nasdaq Stock Market(R) --
U.S. Companies Index 100.00 106.24 118.88 130.18 156.53 183.43 221.23 210.11
</TABLE>
* Cumulative total return assumes reinvestment of dividends. Assumes $100
invested on June 14, 1996 in the Company's Common Stock, Peer Group and The
Nasdaq Stock Market(R) -- U.S. Companies Index.
13
<PAGE> 17
PROPOSAL TWO:
PROPOSAL TO APPROVE THE 2000
FLEXIBLE INCENTIVE PLAN
GENERAL
Effective January 3, 2000, the Board adopted, subject to stockholder
approval, the WebLink Wireless, Inc. 2000 Flexible Incentive Plan (the "Flexible
Incentive Plan"). The Flexible Incentive Plan provides for the grant of
nonqualified and incentive stock options, stock appreciation rights, restricted
stock, performance awards, dividend equivalent rights, phantom stock, and other
awards of incentive compensation (collectively referred to as "Awards") to
individuals, partnerships, corporations, joint ventures and any other form of
business organization (collectively referred to herein as "Persons") who are
responsible for the management, growth and financial success of the Company
including, without limitation, officers, directors, employees and consultants.
The purpose of the Flexible Incentive Plan is to strengthen the Company by
providing eligible Persons with the opportunity to acquire a proprietary
interest or increase their proprietary interest in the Company, thereby
providing a means of attracting desirable employees, directors, vendors and
consultants and encouraging them to remain in the service of the Company.
A general description of the terms of the Flexible Incentive Plan is set
forth below, but is qualified in its entirety by reference to the text of such
plan. Copies of the full text of the Flexible Incentive Plan are available for
review at the principal offices of the Company and will be furnished to
stockholders without charge upon request directed to Frederick G. Anderson, Vice
President and General Counsel, WebLink Wireless, Inc., 3333 Lee Parkway, Suite
100, Dallas, Texas 75219.
Three million shares of Common Stock are currently reserved for issuance
under the Flexible Incentive Plan, subject to adjustment in the event of a
recapitalization, stock split, reverse stock split, dividend or other
distribution, reorganization, merger, consolidation, or other similar corporate
transaction. Based upon the closing price of the Common Stock on The Nasdaq
Stock Market(R) on January 3, 2000, the 3,000,000 shares of Common Stock which
may be made the subject of Awards granted pursuant to the Flexible Incentive
Plan had market value of $45,000,000. None of the currently outstanding Awards
are exercisable. The Flexible Incentive Plan is administered by the Compensation
Committee appointed by the Board of Directors, the membership of which is
limited to "non-employee directors" (as such term is defined in Rule 16b-3
promulgated under the Exchange Act) who are also "outside directors", pursuant
to Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code"),
and consisting of no fewer than two (2) directors. The Committee is authorized
to determine who may participate in the Flexible Incentive Plan, the types and
combinations of Awards to be granted, and the terms, conditions and limitations
of each Award. The Committee determines all questions of interpretation and
application of the Flexible Incentive Plan, as well as any Award under the
Flexible Incentive Plan. The Board of Directors has the authority to amend or
modify the Flexible Incentive Plan and to suspend or terminate the Flexible
Incentive Plan at any time, provided that no Award which is outstanding at that
time may be modified, impaired or canceled adversely to the holder of the Award
without the consent of such holder. The Committee has the authority to amend,
modify or terminate any outstanding Award with the Participant's consent at any
time prior to payment or exercise in any manner not inconsistent with the terms
of the Flexible Incentive Plan.
Stock Options. The Committee is authorized to grant options to purchase
shares of Common Stock, including options qualifying as "incentive stock
options" under Section 422 of the Code to employees and options that do not so
qualify ("nonqualified stock options") to eligible Persons as additional
compensation for their services to the Company. A $100,000 limit applies to the
aggregate fair market value (determined at grant) of stock with respect to which
incentive stock options are first exercisable by an optionee under all incentive
stock option plans of the Company during any calendar year.
Options are exercisable over such period as may be determined by the
Committee, but no incentive stock option may be exercised after ten years from
the date of grant. No option may be transferred other than by will or by the
laws of descent and distribution without the written consent of the Committee
(which may be granted or withheld in the sole discretion of the Committee). The
purchase price of Common Stock issued
14
<PAGE> 18
pursuant to the exercise of any option must be paid in full at the time of
exercise in cash or by other consideration deemed acceptable by the Committee in
its sole discretion. The terms and conditions of options to be granted pursuant
to the Flexible Incentive Plan will be determined by the Board of Directors;
provided, however, the exercise price of such options must be at least equal to
the fair market value of the shares of Common Stock underlying such options
measured as of the date of grant.
Stock Appreciation Rights. Stock appreciation rights may be granted in
tandem with a stock option, in addition to a stock option or freestanding and
unrelated to a stock option. Stock appreciation rights granted in tandem with or
in addition to a stock option may be granted either at the same time as the
stock option or at a later time. Stock appreciation rights will have an exercise
price as determined by the Committee on the date of grant.
Restricted Stock. The Committee may grant, to any eligible Person, shares
of restricted Common Stock which may be subject to forfeiture under such
conditions and for such period of time as the Committee may determine. Such
restrictions will be determined by the Committee and may include, without
limitation, restrictions related to transferability, continued service,
individual performance goals or the Company's financial performance. The
Committee may cancel all or any portion of any outstanding restrictions prior to
the expiration of such restrictions with respect to any or all of the shares of
restricted Common Stock so awarded.
Performance Awards. The Committee may grant performance awards to any
eligible Person which may consist of either or both, as the Committee may
determine, of (a) the right to receive shares of Common Stock or restricted
Common Stock, or any combination thereof as the Committee may determine, or (b)
the right to receive a fixed dollar amount payable in shares of Common Stock,
restricted Common Stock, cash or any combination thereof as the Committee may
determine. The terms and conditions of performance awards shall be specified at
the time of the grant and may include, without limitation, provisions
establishing the performance period, the performance criteria to be achieved,
the criteria used to determine vesting, and the maximum or minimum settlement
values.
Dividend Equivalent Rights. The Committee may grant a dividend equivalent
right to any eligible Person, either as a component of another Award or as a
separate Award, and in general, each Participant awarded a dividend equivalent
right that is outstanding on a dividend record date for the Common Stock shall
be credited with an amount equal to the cash or stock dividends or other
distributions that would have been received had the shares subject to the Award
been issued and outstanding on the dividend record date. Dividend equivalent
rights may be settled in cash or shares of Common Stock, or a combination
thereof, in a single payment or in installments.
Phantom Stock. The Committee may grant to any eligible Person shares of
phantom stock. The Committee will determine the date of grant of the shares of
phantom stock, the number of shares of phantom stock awarded, the period during
which the shares of phantom stock shall vest, and the period during which the
shares of phantom stock shall be convertible, in whole or in part, and redeemed
for payment. Vested shares of phantom stock that are convertible in accordance
with the terms of the Flexible Incentive Plan may be converted into cash, Common
Stock or both in accordance with the terms of the Flexible Incentive Plan and
the terms and conditions of the applicable phantom stock agreement.
Other Awards. The Committee may grant to any eligible Person other forms of
Awards based upon, payable in or otherwise related to, in whole or in part,
shares of Common Stock if the Committee, in its sole discretion, determines that
such other form of Award is consistent with the purposes of the Flexible
Incentive Plan.
Award Agreements. Awards shall be evidenced by a written agreement which
sets forth the terms and conditions of the Award, including but not limited to,
the price, if any, and the vesting schedule, if any, of such Award.
15
<PAGE> 19
FEDERAL INCOME TAX CONSEQUENCES
The following is a general description of the federal income tax
consequences resulting from the receipt and/or exercise of Awards under the
Flexible Incentive Plan. It is based on present federal tax laws and
regulations; therefore, the description contained herein may change, possibly
retroactively, if the Code or regulations promulgated thereunder are changed.
This summary does not purport to be a complete description of such federal
income tax consequences. Further, it does not describe tax consequences that may
vary based on particular circumstances. The Flexible Incentive Plan is not a
qualified plan under Section 401(a) of the Code.
PARTICIPANTS SUBJECT TO SECTION 16(B) OF THE EXCHANGE ACT. The Flexible
Incentive Plan is intended to comply with the requirements of Rule 16b-3
promulgated under the Exchange Act. Therefore, because the acquisition of Common
Stock pursuant to the Flexible Incentive Plan will not be deemed to be a
"purchase" for purposes of Section 16(b) of the Exchange Act, a sale of Common
Stock by a Person to whom an Award has been granted (a "Participant") within six
months after such acquisition should not necessarily subject the Participant to
liability under Section 16(b) of the Exchange Act. However, because the sale of
Common Stock acquired pursuant to the Flexible Incentive Plan can still be
"matched" with other purchases of Common Stock which are not exempted from
Section 16(b), if a Participant has purchased Common Stock or obtained a right
to acquire Common Stock which is considered a "purchase" for purposes of Section
16(b) within six months before the acquisition of shares of Common Stock
pursuant to the Flexible Incentive Plan (an "interim purchase"), the Participant
may have short-swing liability under Section 16(b) if the Participant were to
sell the Common Stock acquired pursuant to the Flexible Incentive Plan within
six months after the date of the interim purchase. The Internal Revenue Service
(the "IRS") has not provided guidance on the tax consequences of this fact
situation. However, IRS regulations suggest that because an interim purchase
would trigger liability upon the sale of Common Stock acquired pursuant to the
Flexible Incentive Plan within six months after the interim purchase, the Common
Stock may be treated as subject to a "substantial risk of forfeiture" under
Section 83(c) of the Code and not transferable and, therefore, substantially
nonvested. Tax consequences regarding this issue are discussed below.
PARTICIPANTS SUBJECT TO SECTION 16(b) OF THE EXCHANGE ACT ARE URGED TO CONSULT
THEIR ADVISORS CONCERNING THE APPLICATION OF SECTION 16(b) OF THE EXCHANGE ACT
TO TRANSACTIONS UNDER THE FLEXIBLE INCENTIVE PLAN.
NONQUALIFIED STOCK OPTIONS. A Participant will not recognize taxable income
upon the grant of a nonqualified stock option. The federal income tax
consequences to a Participant of exercising a nonqualified stock option will
vary depending on whether the Common Stock received upon the exercise of such
option is either "substantially vested" or "substantially non-vested" within the
meaning of Section 83 of the Code. Generally, shares of Common Stock will be
"substantially non-vested" if they are both non-transferable and subject to a
substantial risk of forfeiture, and will be "substantially vested" if they are
either transferable or not subject to a substantial risk of forfeiture.
Shares of Common Stock Which Are Substantially Non-vested. A Participant
generally should not recognize compensation income upon exercising a
nonqualified stock option for shares that are substantially non-vested until
such shares become substantially vested. A Participant who wishes to recognize
compensation income at the time of the exercise of such an option (rather than
when the shares become substantially vested) must file an election under section
83(b) of the Code ("Section 83(b) Election"). A Section 83(b) Election is made
by filing a written notice with the IRS office with which the Participant files
the Participant's federal income tax return. The notice must be filed within 30
days of the Participant's receipt of the Common Stock related to the applicable
Award and must meet certain technical requirements.
Shares of Common Stock Which Are Substantially Vested. Upon the exercise of
a nonqualified stock option, a Participant who receives Common Stock that is
substantially vested will generally recognize ordinary income in an amount equal
to the excess of the fair market value of the Common Stock received on the date
of exercise over the exercise price. (But see discussion below under the caption
"Participants Subject to Section 16(b) -- If Interim Purchases Cause Common
Stock to be Substantially Non-vested".)
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<PAGE> 20
Participants Subject to Section 16(b) -- If Interim Purchases Cause Common
Stock to be Substantially Non-vested. If a Participant who is subject to Section
16(b) has made an interim purchase of Common Stock (or has obtained a right to
acquire Common Stock which is considered a "purchase" for purposes of Section
16(b)) within six months prior to the exercise of the nonqualified stock option,
such interim purchase may cause the Common Stock to be considered substantially
non-vested and, as a result, the Participant will not recognize ordinary income
until the Applicable Date (as hereinafter defined), at which time the
Participant will recognize ordinary income in an amount equal to the difference
between the exercise price and the fair market value of the Common Stock on the
Applicable Date, unless the Participant has made a Section 83(b) Election.
Alternatively, if the Participant makes a Section 83(b) Election, then the
Participant will recognize ordinary income on the date of exercise in an amount
equal to the excess of the fair market value of the Common Stock on the date of
exercise over the exercise price.
As used herein, "Applicable Date" shall mean the earlier of (i) the date
the Participant disposes of the Common Stock acquired pursuant to the Flexible
Incentive Plan or (ii) the first date on which the sale of such stock will not
subject the Participant to liability under Section 16(b) of the Exchange Act.
Participants Subject to Section 16(b) -- If Interim Purchases Do Not Cause
Common Stock to be Substantially Non-vested. If no interim purchases were made
or if it is determined that interim purchases do not cause the Common Stock to
be substantially non-vested, the tax consequences will be the same as if the
Participant were not subject to Section 16(b). Therefore, upon the exercise of a
nonqualified stock option, a Participant who receives Common Stock which is
otherwise substantially vested will recognize ordinary income in an amount equal
to the excess of the fair market value of the Common Stock received on the date
of exercise over the exercise price.
Basis. The Participant's basis in Common Stock acquired upon the exercise
of a nonqualified stock option will be the exercise price plus the amount of
ordinary income recognized by the Participant with respect to such Common Stock,
assuming the exercise price is paid solely in cash. The tax basis in the Common
Stock for which the exercise price is paid in shares of Common Stock (if
permitted by the Committee pursuant to the Flexible Incentive Plan) is discussed
below under the caption "Exercise of Options with Common Stock."
Subsequent Sale or Disposition of Common Stock. Upon the sale or other
disposition of Common Stock acquired upon the exercise of a nonqualified stock
option, a Participant will recognize taxable income (or a deductible loss) equal
to the difference between the amount realized on the sale or disposition and the
Participant's basis in the Common Stock. The Participant's gain or loss will be
taxable as a capital gain or deductible as a capital loss (either short- or
long-term, depending on the holding period of the Common Stock), provided the
shares constitute a capital asset in the hands of the Participant. If the shares
are not held by the Participant as a capital asset, any such gain or loss would
be taxable as ordinary income or deductible as an ordinary expense.
Reload Options. The receipt of a "Reload Option" should not affect the tax
treatment of the holder of an underlying option upon exercise of such underlying
option. A Reload Option will constitute a nonqualified stock option for federal
income tax purposes and will be taxed as such in the manner set forth above.
Company Deduction. The Company will be entitled to a deduction equal to the
amount recognized as income by a Participant at the time such amount is
recognized by the Participant, provided that the Participant's compensation is
within statutory limitations.
INCENTIVE STOCK OPTIONS. A Participant will not recognize any taxable
income upon the grant of an incentive stock option. A Participant also will not
recognize any taxable income upon the exercise of an incentive stock option
provided that the Participant was an employee of the Company (or a subsidiary of
the Company) at all times beginning on the date the option was granted and
ending on the date three months before the option was exercised (one year in the
case of a disabled employee).
Alternative Minimum Tax. The exercise of an incentive stock option will
result, however, in an item of income for purposes of determining the
alternative minimum tax ("AMT"). Liability for tax under the AMT rules will
arise only if the Participant's tax liability determined under the AMT rules
exceeds the Participant's tax liability determined under the ordinary income tax
rules. The exercise of an incentive stock option will give
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<PAGE> 21
rise to an item of AMT income to a Participant in an amount equal to the excess
of the fair market value of the Common Stock received on the date the option is
exercised over the exercise price. Participants who exercise incentive stock
options and receive Common Stock that is subject to a substantial risk of
forfeiture within the meaning of section 83(c) of the Code are urged to consult
their tax advisor concerning the application of the AMT rules.
Basis. A Participant's tax basis in Common Stock acquired upon the exercise
of an incentive stock option for which the exercise price is paid solely in cash
will be equal to the amount of the cash paid. The tax basis in Common Stock for
which the exercise price is paid in shares of Common Stock (if permitted by the
Committee pursuant to the Flexible Incentive Plan) is discussed below under the
caption "Exercise of Options with Common Stock."
Subsequent Sale or Disposition after Holding Period. If a Participant holds
the shares of Common Stock acquired upon the exercise of an incentive stock
option for at least two years after the date on which the incentive stock option
was granted and for at least one year after the date on which the option was
exercised (collectively, these periods are referred to as the "Holding Period"),
upon the sale of such Common Stock, the Participant will recognize a long-term
capital gain (or loss) in an amount equal to the excess (or deficiency) of the
sales price over the Participant's basis, provided the shares are held as a
capital asset by the Participant. Under certain circumstances, Common Stock
acquired upon exercise of an incentive stock option following the Participant's
death will receive the tax treatment described above without regard to the
Holding Period requirement.
Company Deduction. Neither the Company (nor any subsidiary of the Company)
will be entitled to a deduction for federal income tax purposes with respect to
the grant of an incentive stock option to a Participant under the Flexible
Incentive Plan, the exercise of such option by the Participant, or the sale of
the Common Stock acquired through the exercise of such option by the Participant
subsequent to the expiration of the Holding Period.
Disqualifying Dispositions
Disqualifying Disposition by Participants Not Subject to Section 16(b). If
shares of Common Stock acquired upon the exercise of an incentive stock option
are sold before the expiration of the Holding Period (hereinafter referred to as
a "Disqualifying Disposition"), the Participant will recognize ordinary income
in an amount equal to the lesser of (i) the excess of the fair market value of
the Common Stock on the date of exercise over the exercise price or (ii) the
amount realized on the sale of such shares over the exercise price, except that
the amount recognized will be determined exclusively under (i) above if the
Disqualifying Disposition is made to a related party (as defined in Code Section
267) or is otherwise a disposition pursuant to which no loss would be recognized
by the Participant.
Disqualifying Disposition by Participants Subject to Section 16(b) -- If
Interim Purchases Cause Common Stock to be Substantially Non-vested. If a
Participant who is subject to Section 16(b) makes an interim purchase of Common
Stock (or obtains a right to acquire Common Stock which is considered a purchase
for purposes of Section 16(b)) within six months prior to the exercise of an
incentive stock option (and if such interim purchase causes the Common Stock to
be considered substantially non-vested as discussed above) and then sells the
Common Stock acquired upon exercise of the incentive stock option in a
Disqualifying Disposition, the Participant will recognize ordinary income in an
amount equal to the lesser of (i) the excess of the fair market value of the
Common Stock on the Applicable Date over the exercise price or (ii) the amount
realized on the sale of such stock over the exercise price, unless the
Participant makes a Section 83(b) Election, in which case the tax consequences
will be the same as if the Participant were not subject to Section 16(b) as
described in the immediately preceding paragraph. Participants who are subject
to Section 16(b) should consult their tax advisors regarding the tax
consequences of a Disqualifying Disposition in which the Common Stock is
considered substantially non-vested.
Disqualifying Disposition by Participants Subject to Section 16(b) -- If
There Are No Interim Purchases or Interim Purchases Do Not Cause Common Stock to
be Substantially Non-vested. If no interim purchases were made or if it is
determined that interim purchases do not cause the Common Stock to be
substantially
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<PAGE> 22
non-vested, the tax consequences will be the same as if the Participant was not
subject to Section 16(b) as described in the second preceding paragraph.
Capital Gain. If the amount realized by a Participant on the sale of Common
Stock in a Disqualifying Disposition exceeds the fair market value of such
Common Stock on the date of exercise, the excess will be taxed to the
Participant as a short- or long-term capital gain, provided the Participant held
the Common Stock as a capital asset. If the shares are not held by the
Participant as a capital asset, any such gain or loss would be taxable as
ordinary income or deductible as an ordinary expense.
Alternative Minimum Tax. If a Participant exercises an incentive stock
option and sells the Common Stock related thereto in a Disqualifying Disposition
in the same taxable year, the tax treatment for purposes of ordinary income tax
and AMT will be the same (resulting in no additional AMT liability). Conversely,
if the Participant sells Common Stock in a Disqualifying Disposition in a tax
year subsequent to the tax year in which the incentive stock option was
exercised, the Participant will recognize AMT income (as determined above) in
the first taxable year, and ordinary taxable income (but not AMT income) in the
year in which the disposition was made.
Company Deduction. Upon the occurrence of a Disqualifying Disposition, the
Company will be entitled to a deduction for federal income tax purposes equal to
the amount of ordinary income recognized by the Participant, provided that the
Participant's compensation is within statutory limitations.
EXERCISE OF OPTIONS WITH COMMON STOCK. The Flexible Incentive Plan permits,
subject to the discretion of the Committee, the exercise price of Options to be
paid with Common Stock owned by the Participant. Only Common Stock that is
"substantially vested" may be used to pay the exercise price of an Option.
Nonqualified Stock Options. If a Participant pays the exercise price of a
nonqualified stock option with shares of Common Stock (including stock obtained
through the exercise of an incentive stock option and not held for the Holding
Period), the Participant will not recognize any gain on the shares surrendered.
With respect to the Common Stock received, that portion of the Common Stock
equal in number to the shares of Common Stock surrendered will have a basis
equal to the basis of the shares surrendered. The excess shares received will be
taxable to the Participant as ordinary compensation income in an amount equal to
the fair market value (i) as of the exercise date, if the excess shares are
"substantially vested", or (ii) as of the Applicable Date, if the excess shares
are substantially non-vested. The Participant's basis in such excess shares of
Common Stock will equal the amount of ordinary compensation income recognized by
the Participant.
Incentive Stock Options. The tax consequences to a Participant of using
Common Stock to pay the exercise price of incentive stock options will depend on
the status of the Common Stock acquired. Except as described below, if a
Participant pays the exercise price of an incentive stock option for shares of
Common Stock that is substantially vested with shares of Common Stock that are
substantially vested, the Participant will not recognize any compensation income
or gain with respect to the shares surrendered. With respect to the Common Stock
received, that portion of the Common Stock equal in number to the shares of
Common Stock surrendered will have a basis equal to the basis of the shares
surrendered. The Holding Period of the surrendered shares will be carried over
to the equivalent number of shares of Common Stock received. The Participant
will recognize no gain with respect to the excess shares received, the basis of
such shares will be zero, and the Holding Period of such shares will begin on
the date of receipt thereof by the Participant. If the Participant pays the
exercise price for substantially non-vested Common Stock with shares of Common
Stock that are substantially vested, the tax consequences will be the same.
If a Participant exercises an incentive stock option using shares of Common
Stock that were obtained through the exercise of an incentive stock option
(whether granted under the Flexible Incentive Plan or under another plan of the
Company) and that have been held by the Participant for the Holding Period, the
tax consequences of such payment to the Participant will be identical to those
discussed in the preceding paragraph. However, if a Participant exercises an
incentive stock option using shares of Common Stock received upon the prior
exercise of an incentive stock option (whether granted under the Flexible
Incentive Plan or under another plan of the Company) and the Participant has not
held such Common Stock for the
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<PAGE> 23
Holding Period, the Participant will have made a Disqualifying Disposition of
the number of shares of Common Stock used as payment for the exercise price of
the incentive stock option. If the Participant receives Common Stock that is
substantially vested, the Participant generally will recognize ordinary
compensation income with respect to the surrender of those shares equal to the
excess of the fair market value of the Common Stock surrendered (determined as
of the date the option relating to such Common Stock was exercised) over the
exercise price of the shares surrendered. It is unclear whether, if the
Participant receives Common Stock that is "substantially non-vested", the
recognition of income will be deferred until the Common Stock becomes
substantially vested. The basis of the shares received will equal the amount of
ordinary compensation income recognized by the Participant plus the
Participant's basis in the shares surrendered, allocated equally among the
shares received.
UNRESTRICTED STOCK.
Participants Not Subject to Section 16(b). A Participant who is not subject
to Section 16(b) who receives an unrestricted Award of Common Stock will
recognize ordinary income equal to the excess of the fair market value of the
Common Stock received at the time of distribution over any purchase price paid
by such Participant for the Common Stock.
Participants Subject to Section 16(b). A Participant subject to Section
16(b) who receives an unrestricted Award of Common Stock will recognize ordinary
income equal to the excess of the fair market value of the stock received over
the purchase price paid by such Person for the Common Stock at the Applicable
Date, unless the Participant makes a Section 83(b) Election to report the
difference between the fair market value of the Common Stock received and any
purchase price paid for such Common Stock as ordinary income at the time of
receipt.
Basis. The basis of the unrestricted Common Stock in the hands of the
Participant will equal the fair market value of such Common Stock on the date
the Participant recognizes ordinary income as described above.
Subsequent Sale or Disposition of Unrestricted Common Stock. Upon the sale
or other disposition of unrestricted Common Stock, a Participant will recognize
taxable income (or a deductible loss) equal to the difference between the amount
realized on the sale or disposition and the Participant's basis in the
unrestricted Common Stock. The Participant's gain or loss will be taxable as a
capital gain or deductible as a capital loss (either short- or long-term,
depending on the holding period of the unrestricted Common Stock), provided the
Common Stock constitutes a capital asset in the hands of the Participant.
Company Deduction. The Company will be entitled to a deduction equal to the
amount recognized as income by a Participant at the time such amount is
recognized by the Participant, provided that the Participant's compensation is
within statutory limitations.
RESTRICTED STOCK.
Participants Not Subject to Section 16(b). A Participant who is not subject
to Section 16(b) who receives a restricted Award of Common Stock will recognize
ordinary income equal to the excess of the fair market value of the Common Stock
received at the time the restrictions lapse over any purchase price paid for the
Common Stock, unless the Participant makes a Section 83(b) Election to report
the difference between the fair market value of such Common Stock received and
the purchase price paid for the Common Stock as ordinary income at the time of
receipt.
Participants Subject to Section 16(b). A Participant subject to Section
16(b) who receives a restricted Award of Common Stock will recognize ordinary
income equal to the fair market value of the Common Stock received at the later
of (i) the Applicable Date or (ii) the date on which the restrictions lapse;
unless the Participant makes a Section 83(b) Election to report the difference
between the fair market value of such Common Stock received and any purchase
price paid for such Common Stock as ordinary income at the time of receipt.
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<PAGE> 24
Basis. In general, the basis of the restricted Common Stock in the hands of
the Participant will be equal to the fair market value of such Common Stock on
the date the Participant recognizes ordinary income as described above.
Subsequent Sale or Disposition. The restrictions placed on restricted
Common Stock do not permit sale or disposition until the restrictions lapse.
Upon the sale or disposition of restricted Common Stock after the restrictions
lapse, a Participant will recognize taxable income or loss equal to the
difference between the amount realized by the Participant on the disposition of
the Common Stock and the Participant's basis in such Common Stock. The gain or
loss will be taxable to the Participant as a capital gain or deductible by the
Participant as a capital loss (either short- or long-term, depending on the
holding period of the restricted Common Stock), provided the Participant held
the restricted Common Stock as a capital asset.
Dividends. During the period in which a Participant holds restricted Common
Stock, if the Company pays cash dividends to the Participant prior to the lapse
of the restrictions and the Participant makes a Section 83(b) Election, the
dividends will be taxed as dividend income at the time of payment and will not
be deductible by the Company. Conversely, if the Participant does not make a
Section 83(b) Election, cash dividends will be taxable to the Participant as
compensation at the time of payment and the Company will be entitled to a
deduction. Dividends or distributions paid in the form of Common Stock prior to
the lapse of the restrictions will be restricted Common Stock and will be
taxable under the above rules.
Company Deduction. The Company may deduct an amount equal to the income
recognized by the Participant at the time the Participant recognizes the income,
provided the Participant's compensation is within statutory limitations.
PERFORMANCE AWARDS. The tax consequences to a Participant upon receipt of
Common Stock pursuant to a Performance Award are the same as those for the
recipient of an unrestricted Award of Common Stock. The tax consequences to a
Participant upon receipt of restricted Common Stock pursuant to a Performance
Award are the same as those for the recipient of a restricted Common Stock
Award. Cash received pursuant to a Performance Award is taxable as compensation
income when received.
STOCK APPRECIATION RIGHTS. A Participant will not recognize taxable income
upon the grant of a stock appreciation right.
Participants Not Subject to Section 16(b). Upon the exercise of a stock
appreciation right, a Participant who is not subject to Section 16(b) of the
Exchange Act will recognize ordinary income in an amount equal to the cash and
fair market value of the Common Stock received.
Participants Subject to Section 16(b) -- If Interim Purchases Cause Common
Stock to be Substantially Non-vested. If a Participant who is subject to Section
16(b) has made an interim purchase of Common Stock (or obtained a right to
acquire Common Stock which is considered a "purchase" for purposes of Section
16(b)) within six months prior to the exercise of a stock appreciation right
that provides for settlement wholly or partially with shares of Common Stock and
it is determined that such interim purchase causes the Common Stock received in
settlement of the stock appreciation right to be substantially non-vested, the
Participant will recognize ordinary income in an amount equal to the cash
received and the fair market value of any Common Stock received determined as of
(i) the exercise date if the Participant makes a Section 83(b) Election or (ii)
the Applicable Date if the Participant does not make a Section 83(b) Election.
Participants Subject to Section 16(b) -- If There Are No Interim Purchases
or Interim Purchases Do Not Cause Common Stock to be Substantially
Non-vested. If no interim purchases were made or it is determined that interim
purchases do not cause the Common Stock paid in settlement of a stock
appreciation right to be substantially non-vested, the tax consequences will be
the same as if the Participant was not subject to Section 16(b). Therefore, upon
the exercise of a stock appreciation right, the Participant will recognize
ordinary income in an amount equal to the cash and fair market value of the
Common Stock received.
Basis. In the event that a stock appreciation right is paid in whole or in
part in Common Stock, the amount recognized by the Participant as ordinary
income with respect to those shares will be the Participant's basis in those
shares for purposes of determining any gain or loss on the subsequent sale of
such shares.
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Company Deduction. The Company will be entitled to a deduction in the
amount of, and at the time that, ordinary income is recognized by the
Participant in connection with the exercise of a stock appreciation right,
provided that the Participant's compensation is within statutory limits.
DIVIDEND EQUIVALENT RIGHTS. The IRS has not provided formal guidance on the
income tax consequences of the receipt of dividend equivalent rights. However,
under the principles of Section 83 of the Code, a Participant should not
recognize ordinary income until the dividend is received by the Participant.
When the dividend is received, the Participant should recognize ordinary income
equal to the amount of cash received plus the fair market value of any Common
Stock or other property received.
PHANTOM STOCK. A Participant will not recognize taxable income upon the
grant of a phantom stock Award. Cash received pursuant to settlement of a
phantom stock Award is taxable as compensation income when received. The tax
consequences to a Participant upon receipt of unrestricted Common Stock pursuant
to a phantom stock Award are the same as those for the recipient of an
unrestricted Award of Common Stock. The tax consequences to a Participant upon
receipt of restricted Common Stock pursuant to a phantom stock Award are the
same as those for the recipient of a restricted stock Award. The Company will be
entitled to a deduction in the amount of, and at the time that, ordinary income
is recognized by the Participant in connection with the settlement of a phantom
stock Award, provided that the Participant's compensation is within statutory
limits.
WITHHOLDING. The Company shall have the right to deduct any sums that the
Committee reasonably determines that federal, state or local tax law requires to
be withheld with respect to the Award or as otherwise may be required by those
laws. The Company may require as a condition to issuing Common Stock that the
Participant pay any sums that federal, state or local tax law requires to be
withheld. The Company shall not be obligated to advise any Participant of the
existence of the tax or the amount which will be so required to be withheld. A
Participant may, with the consent of the Committee, have Common Stock withheld
("Stock Withholding") by the Company from the Common Stock otherwise to be
received; provided, that if the Participant is subject to the provisions of
Section 16(b), no Stock Withholding shall be permitted unless such transaction
complies with the requirements of Rule 16b-3(e) promulgated under the Exchange
Act. The number of shares of Common Stock so withheld should have an aggregate
fair market value on the date of exercise sufficient to satisfy the applicable
withholding taxes.
THE FOREGOING DESCRIPTION OF FEDERAL INCOME TAX CONSEQUENCES OF THE
FLEXIBLE INCENTIVE PLAN IS INTENDED ONLY AS AN AID FOR PARTICIPANTS, AND THE
COMPANY ASSUMES NO RESPONSIBILITY IN CONNECTION WITH THE INCOME TAX LIABILITY OF
ANY PARTICIPANT. BECAUSE OF THE COMPLEXITIES OF THE CODE, IT IS RECOMMENDED THAT
A HOLDER OF AN AWARD GRANTED UNDER THE FLEXIBLE INCENTIVE PLAN OBTAIN TAX ADVICE
FROM SUCH PERSON'S TAX ADVISOR IN CONNECTION WITH HIS OR HER RECEIPT OR EXERCISE
OF THE AWARD OR THE SALE OF THE COMMON STOCK ACQUIRED THEREBY.
AWARDS GRANTED
The following table sets forth Awards which have been granted pursuant to
the Flexible Incentive Plan to the Company's chief executive officer, the Named
Executive Officers, and all current executive officers as a group. No other
Awards have been granted pursuant to the Flexible Incentive Plan.
NEW PLAN BENEFITS
WEBLINK WIRELESS, INC. 2000 FLEXIBLE INCENTIVE PLAN
<TABLE>
<CAPTION>
NAME AND POSITION DOLLAR VALUE NUMBER OF UNITS(1)
- ----------------- ------------ ------------------
<S> <C> <C>
John D. Beletic, Chairman and Chief Executive Officer....... (2) 1,000,000
N. Ross Buckenham, President................................ (2) 75,000
All current executive officers, as a group.................. (2) 1,075,000
</TABLE>
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- ---------------
(1) Awards are for phantom stock which vests over a three year period and, when
vested, converts into shares of Common Stock upon the achievement of certain
market capitalization or other targets. If not fully converted prior
thereto, Awards convert on the 10th anniversary of the date of grant.
(2) The dollar value of the Awards is not currently determinable. Based on the
closing price of the Common Stock on February 25, 2000, the value for Mr.
Beletic, Mr. Buckenham and all current executive officers as a group would
be $18,437,500, $1,382,813 and $19,820,313, respectively if such Awards were
then vested and converted. These values are shown for illustrative purposes
only and are not intended to predict or forecast the ultimate value of the
Awards to the officers to whom granted.
VOTE REQUIRED; RECOMMENDATION OF THE BOARD
Approval of the Flexible Incentive Plan requires the affirmative vote of
the holders of a majority of shares of Common Stock present or represented by
proxy at the Annual Meeting. The holders of 16,807,063 shares of Common Stock
(44.3% of the issued and outstanding shares of Common Stock entitled to vote
with respect to the proposal to approve the Flexible Incentive Plan) have
indicated their intent to vote such shares of Common Stock in favor of the
approval of the Flexible Incentive Plan. If the stockholders do not approve the
Flexible Incentive Plan, Awards that have been granted pursuant to the plan will
be void.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE FLEXIBLE
INCENTIVE PLAN.
PROPOSAL THREE:
PROPOSAL TO AMEND THE COMPANY'S NONQUALIFIED
FORMULA STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS
GENERAL
The Board and stockholders of the Company previously approved the
Nonqualified Formula Stock Option Plan for Non-Employee Directors (the "Director
Stock Option Plan"). The Board has unanimously adopted, subject to stockholder
approval, an amendment to the Director Stock Option Plan to increase the maximum
number of authorized shares of the Company's Common Stock which may be issued
under the Director Stock Option Plan.
The Board is recommending that the number of shares available for issuance
under the Director Stock Option Plan be increased by 200,000 shares of Common
Stock to a total of 300,000 shares of Common Stock to permit the Company to
continue to use the stock options as a means to attract and retain qualified
individuals as directors and provide them with the ability to acquire an equity
interest in the Company. As of February 28, 1999, options to acquire 100,000
shares were outstanding to non-employee directors under the Director Stock
Option Plan, and no shares were available for the grant of options.
No determination has been made as to who will be granted options to acquire
the additional shares of Common Stock to be made available under the Director
Stock Option Plan, and such shares will be reserved for future grants.
A general description of the terms of the Director Stock Option Plan is set
forth below, but is qualified in its entirety by reference to the text of such
plan. Copies of the full text of the Director Stock Option Plan are available
for review at the principal offices of the Company and will be furnished to
stockholders without charge upon request directed to Frederick G. Anderson, Vice
President and General Counsel, WebLink Wireless, Inc., 3333 Lee Parkway, Suite
100, Dallas, Texas 75219.
The Director Stock Option Plan provides for the grant of nonqualified stock
options to non-employee directors of the Company. A non-employee director is a
member of the Board who is not employed by the Company or any of its affiliates
and who owns 1% or less of the Company's Common Stock. The Director Stock Option
Plan requires that on the day a non-employee director is first elected or
appointed to the Board, he or she shall be granted an option to purchase 25,000
shares of Common Stock. On each subsequent third
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<PAGE> 27
anniversary of the date of grant, each non-employee director who continues to
serve in such capacity shall be granted an option to purchase an additional
25,000 shares of Common Stock. The purchase price of the Common Stock covered by
each option will be equal to the fair market value of such stock on the date of
grant. Since the Common Stock is listed on the Nasdaq Stock Market, the fair
market value will be the closing price of the Common Stock on the Nasdaq Stock
Market on such date.
The Director Stock Option Plan is administered by the Compensation
Committee of the Board, which, subject to the terms of the Director Stock Option
Plan, has powers and authorities which are exclusively ministerial in nature,
including the authority to construe and interpret such Plan, to define the terms
used in such Plan, to prescribe, amend and rescind rules and regulations
relating to the administration of such Plan, and to make all other
determinations necessary or advisable for administration of such Plan.
Options granted under the Director Stock Option Plan are exercisable only
to the extent of shares that have vested. Shares vest as to 1/12 of each grant
as of the last day of the first calendar quarter following the date of grant,
with an additional 1/12 of such grant to vest as of the last day of each
calendar quarter subsequent thereto.
The exercise price of options may be paid in cash, by check, in shares of
Common Stock, or other consideration as may be provided for by the Compensation
Committee in an Option Agreement with a non-employee director.
Options expire on the tenth anniversary of the date of grant, subject to
earlier termination in certain circumstances. If a non-employee director's
directorship is terminated for death or disability of the director, an option
shall be exercisable (to the extent vested) at any time prior to the earlier of
the expiration date of the option or twelve months after the date of death or
disability. The options of a non-employee director automatically terminate on
the date his or her directorship is terminated on account of any act of fraud or
intentional misrepresentation, embezzlement, misappropriation or conversation of
assets or opportunities of the Company or other cause, as determined by the
Board. If the directorship of a non-employee director is terminated for any
other reason, options shall be exercisable (to the extent vested) for 60 days
after the date of termination of the directorship.
In the event of a change in control (as defined in the Director Stock
Option Plan), if provision is made in connection with the change in control for
the assumption and continuance of options granted under such Plan, or for the
substitution for such options of new options covering the shares of a successor
corporation, then the options granted under such Plan or the new options
substituted therefore, shall continue in the manner and under the terms
provided. If provision is not made in connection with the change in control for
the continuance and assumption of options granted under such Plan or for
substitution of options, then the non-employee director shall be entitled to
purchase the full number of shares covered by options, whether or not vested, as
of the effective date of the change in control.
Options granted under the Director Stock Option Plan are not transferable
other than by will or by the laws of descent and distribution.
The Board may suspend or terminate the Director Stock Option Plan and may,
with the consent of a non-employee director, make such modifications of the
terms and conditions of such director's options as it shall deem advisable. Any
amendment to such Plan must be approved by the stockholders of the Company if
the amendment would: increase the aggregate number of shares of Common Stock
which may be issued pursuant to options granted under such Plan; change the
minimum option price; increase the maximum term of options provided for in such
Plan; materially modify the requirements as to eligibility for participation in
such Plan; remove the administration of such Plan from the Compensation
Committee; or materially increase the benefits accruing to the holders of
options under such Plan.
FEDERAL INCOME TAX CONSEQUENCES
The federal income tax consequences resulting from the receipt and/or
exercise of options granted under the Director Stock Option Plan are the same as
for nonqualified stock options granted under the Flexible
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<PAGE> 28
Incentive Plan. See "Proposal II: Proposal to Approve the 2000 Flexible
Incentive Plan -- Federal Income Tax Consequences -- Nonqualified Stock
Options."
VOTE REQUIRED; RECOMMENDATION OF THE BOARD
Approval of the amendment of the Director Stock Option Plan requires the
affirmative vote of the holders of a majority of the shares of Common Stock
present or represented by proxy at the Annual Meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE AMENDMENT OF
THE DIRECTOR STOCK OPTION PLAN.
PROPOSAL FOUR:
PROPOSAL TO RATIFY THE APPOINTMENT OF ARTHUR ANDERSEN LLP
AS INDEPENDENT AUDITORS OF THE COMPANY
The Board has appointed Arthur Andersen LLP, independent public
accountants, as the Auditors of the Company, to serve at the pleasure of the
Board for 2000. A member of that firm will be present at the Annual Meeting with
the opportunity to make a statement and respond to appropriate questions by
stockholders.
The stockholders of the Company are asked to consider and act upon the
matter of ratifying the appointment of Arthur Andersen LLP.
Approval of the independent auditors requires the affirmative vote of the
holders of a majority of the shares of Common Stock present or represented by
proxy at the Annual Meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF ARTHUR
ANDERSEN LLP AS INDEPENDENT AUDITORS OF THE COMPANY.
STOCKHOLDER PROPOSALS FOR 2001 ANNUAL MEETING
Any proposals of stockholders which are intended to be presented at the
next Annual Meeting of Stockholders, but which are not received by the Secretary
of the Company at the principal executive offices of the Company on or before
November 1, 2000, may be omitted by the Company from the Proxy Statement and
form of proxy relating to that meeting.
OTHER MATTERS
The Board of Directors knows of no other matters to be brought before the
Annual Meeting. However, if other matters should come before the meeting, it is
the intention of each of the persons named in the proxy to vote in accordance
with his judgment on such matters.
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<PAGE> 29
ANNUAL REPORTS
The Company's 1999 Annual Report to Stockholders, which contains the
Company's Annual Report on Form 10-K (without exhibits) and its consolidated
financial statements for the year ended December 31, 1999, accompanies this
proxy statement. The Company's Annual Report on Form 10-K for the year ended
December 31, 1999 will also be made available (without exhibits), free of
charge, to interested stockholders upon written request to the Vice President,
Finance of the Company, at 3333 Lee Parkway, Suite 100, Dallas, TX 75219.
By Order of the Board of Directors,
/s/ JOHN D. BELETIC
John D. Beletic
Chairman and Chief Executive Officer
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<PAGE> 30
APPENDIX 1
WEBLINK WIRELESS, INC.
NONQUALIFIED FORMULA STOCK OPTION PLAN
FOR NON-EMPLOYEE DIRECTORS
<PAGE> 31
WEBLINK WIRELESS, INC.
NONQUALIFIED FORMULA STOCK OPTION PLAN
FOR NON-EMPLOYEE DIRECTORS
Table of Contents
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE I - Purpose and Administration................................... 1
1.1 Purpose................................................ 1
1.2 Administration......................................... 1
1.3 Participation.......................................... 2
1.4 Stock Subject to the Plan.............................. 2
1.5 Restrictions on Exercise............................... 2
ARTICLE II - Stock Options............................................... 3
2.1 Grant and Option Price................................. 3
2.2 Stock Option Agreement................................. 4
2.3 Option Period.......................................... 4
2.4 Vesting and Exercise of Options........................ 4
2.5 Nontransferability of Options.......................... 5
2.6 Termination of Directorship............................ 5
2.7 Issuance of Stock Certificates........................ 7
ARTICLE III - Other Provisions.......................................... 7
3.1 Adjustments Upon Changes in Capitalization............ 7
3.2 Acceleration.......................................... 9
3.3 Continuation of Directorship.......................... 11
3.4 Amendment and Termination............................. 11
3.5 Time of Exercise...................................... 12
3.6 Privileges of Stock Ownership and
Non-Distributive Intent............................. 12
3.7 Effective Date of the Plan............................ 12
3.8 Expiration............................................ 12
3.9 Governing Law......................................... 12
3.10 Application of Funds.................................. 12
3.11 No Liability for Good Faith Determinations............ 13
3.12 Execution of Receipts and Releases.................... 13
3.13 No Guarantee of Interests............................. 13
3.14 Payment of Expenses................................... 13
3.15 Corporate Records..................................... 13
3.16 Information........................................... 13
3.17 No Liability of Corporation........................... 14
3.18 Corporate Action...................................... 14
</TABLE>
<PAGE> 32
<TABLE>
<S> <C> <C>
3.19 Severability.......................................... 14
3.20 Notice................................................ 14
3.21 Waiver of Notices..................................... 15
3.22 Successors............................................ 15
3.23 Headings.............................................. 15
3.24 Word Usage............................................ 15
</TABLE>
<PAGE> 33
WEBLINK WIRELESS, INC.
NONQUALIFIED FORMULA STOCK OPTION PLAN
FOR NON-EMPLOYEE DIRECTORS
ARTICLE I
Purpose and Administration
Section 1.1 Purpose. The purpose of the WebLink Wireless, Inc. Nonqualified
Formula Stock Option Plan for Non-Employee Directors (the "Plan") is to
strengthen WebLink Wireless, Inc. (the "Corporation") by providing a means of
retaining and attracting competent non-employee personnel to serve on its board
of directors by extending to certain such individuals added long-term incentives
for high levels of performance and for unusual efforts designed to improve the
financial performance of the Corporation. In order to effectuate this intent,
the Corporation will, pursuant to this Plan, grant to each eligible non-employee
director the option to acquire shares of common stock of the Corporation
("Common Stock"), which options shall vest over a specified period of time.
Section 1.2 Administration. The Plan shall be administered by the compensation
committee (the "Committee") of the Board of Directors of the Corporation (the
"Board").
Subject to the express provisions of the Plan, the Committee shall have
powers and authorities which are exclusively ministerial in nature, including
the authority to construe and interpret the Plan, to define the terms used in
the Plan, to prescribe, amend and rescind rules and regulations relating to the
administration of the Plan, and to make all other determinations necessary or
advisable for the administration of the Plan. The determinations of the
Committee on all matters referred to in this Plan shall be
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<PAGE> 34
conclusive. The Committee shall not be liable for any action, failure to act,
determination or interpretation made in good faith with respect to the Plan or
any transaction under the Plan.
Section 1.3 Participation. Each member of the Board who (i) is not employed by
the Corporation or any Affiliate and (ii) owns one percent (1%) or less of the
Corporation's Common Stock at the time of any grant hereunder (collectively, the
"Non-Employee Directors") shall be eligible and shall participate in the Plan.
For purposes of the Plan, the term "Affiliate" shall mean a "parent
corporation", as such term is defined in Section 424(e) of the Internal Revenue
Code, as amended (the "Code"), or a "subsidiary corporation", as such term is
defined in Section 424(f) of the Code.
Section 1.4 Stock Subject to the Plan. Subject to adjustment as provided in
Section 3.1 hereof, the stock to be offered under the Plan shall be treasury
shares or shares of the Corporation's authorized but unissued Common Stock
(hereinafter collectively called "Stock"). The aggregate number of shares of
Stock to be issued upon exercise of all options granted under the Plan shall not
exceed 300,000 shares, subject to adjustments as set forth in Sections 3.1 and
3.2 hereof. If any option granted hereunder shall lapse or terminate for any
reason without having been fully exercised, the shares subject thereto shall
again be available for purposes of the Plan.
Section 1.5 Restrictions on Exercise . No option granted hereunder may be
exercised unless and until the Committee determines that such exercise will be
made in compliance with all applicable laws, rules and regulations, including,
without limitation, applicable securities laws, rules and regulations. The
Corporation does not have any obligation to take any action to register or
qualify shares of Common Stock pursuant to applicable
2
<PAGE> 35
securities laws or to perfect an exemption from such registration/qualification
requirements.
ARTICLE II
Stock Options
Section 2.1 Grant and Option Price.
(a) On the effective date of this Plan, each existing Non-Employee
Director shall be granted an option to purchase 25,000 shares of Stock.
Thereafter, on the day a Non-Employee Director is first elected or
appointed to the Board, such Non-Employee Director shall be granted an
option to purchase 25,000 shares of Stock.
(b) On each subsequent third anniversary of the date of grant,
each Non-Employee Director who was previously elected to the Board and
who continues to serve in such capacity, shall be granted an option to
purchase an additional 25,000 shares of Stock.
(c) The purchase price of the Stock covered by each option granted
under the Plan shall be equal to the Fair Market Value of such Stock on
the date of grant. For purposes of the Plan, the term "Fair Market
Value" on any date shall mean: (i) if the Stock is listed or admitted
to trade on a national securities exchange, the closing price of the
Stock on the Composite Tape, as published in the Wall Street Journal,
of the principal national securities exchange on which the Stock is so
listed or admitted to trade, on such date or, if there is no trading of
the Stock on such date, then the closing price of the Stock as quoted
on such Composite Tape on the next preceding date on which there was
trading in such
3
<PAGE> 36
shares; (ii) if the Stock is not listed or admitted to trade on a
national securities exchange, then the closing price of the Stock as
quoted on the National Market System of the National Association of
Securities Dealers, Inc. ("NASD") on such date; (iii) if the Stock is
not listed to trade on the National Market System of the NASD, the mean
between the bid and asked price for the Stock on such date, as
furnished by the NASD through NASDAQ or a similar organization if
NASDAQ is no longer reporting such information; or (iv) if the Stock is
not listed or admitted to trade on a national securities exchange and
if bid and asked prices for the Stock are not so furnished by the NASD
or a similar organization, the values established by the Committee for
purposes of granting options under the Plan. In addition to the above
rules, Fair Market Value shall be determined without regard to any
restriction other than a restriction which, by its terms, will never
lapse.
Section 2.2 Stock Option Agreement. Each option granted pursuant to the Plan
shall be evidenced by a Stock Option Agreement ("Option Agreement"), in such
form as the Committee shall require, between the Corporation and the
Non-Employee Director to whom the option has been granted (the "Optionee").
Section 2.3 Option Period. Except as otherwise provided herein, each option
and all rights or obligations thereunder shall expire on the tenth anniversary
of the date of grant (the "Expiration Date"), and shall be subject to earlier
termination as hereinafter provided.
Section 2.4 Vesting and Exercise of Options.
(a) Subject to Section 3.2 hereof, an option granted hereunder
shall be exercisable only to the extent of shares that have vested.
Shares shall vest hereunder as to 1/12 of each grant as of the last day
of the first calendar quarter
4
<PAGE> 37
following the date of the grant, with an additional 1/12 of such grant
to vest as of the last day of each calendar quarter subsequent thereto.
(b) The purchase price of the Stock purchased upon exercise of an
option shall be paid in full in cash or by check at the time of each
exercise of an option or by such other consideration as may be provided
for by the Committee in the Option Agreement; provided, however, that
if the Option Agreement so provides and upon receipt of all regulatory
approvals, the person exercising the option may deliver in payment of a
portion or all of the purchase price certificates for Common Stock,
including a multiple series of exchanges of such Common Stock, which
shall be valued at the Fair Market Value of such Common Stock on the
date of exercise of the option. No options shall be exercisable except
in respect of whole shares of Stock.
Section 2.5 Nontransferability of Options. An option granted under the Plan
shall, by its terms, be nontransferable by the Optionee other than by will or by
the laws of descent and distribution. During the Optionee's lifetime, the option
shall be exercisable only by the Optionee or by the Optionee's duly appointed
guardian or personal representative.
Section 2.6 Termination of Directorship.
(a) If the directorship of the Optionee is terminated for any
reason other than (i) Disability (as hereinafter defined) of the
Optionee, (ii) death of the Optionee, or (iii) on account of any act of
fraud or intentional misrepresentation or embezzlement,
misappropriation or conversion of assets or opportunities of the
Corporation or any Affiliate, or other cause, as determined by the
Board, an option (to the extent otherwise exercisable on the date of
such termination) shall
5
<PAGE> 38
be exercisable by the Optionee at any time prior to the Expiration Date
of the option or within 90 days after the date of such termination of
the directorship, whichever is the shorter period.
(b) If the Optionee's directorship is terminated by reason of
Disability, an option (to the extent otherwise exercisable on the date
of the Optionee's termination of directorship by reason of Disability)
shall be exercisable by the Optionee at any time prior to the
Expiration Date of the option or within twelve (12) months after the
date of such termination, whichever is the shorter period. As used
herein, the term "Disability" shall mean the inability to engage in any
substantial gainful activity by reason of any medically determinable
physical or mental impairment which can be expected to result in death
or which has lasted or can be expected to last for a continuous period
of not less than twelve (12) months. The determination of whether or
not an Optionee's directorship is terminated by reason of Disability
shall be in the sole and absolute discretion of the Committee. An
individual shall not be considered Disabled unless he furnishes proof
of the existence thereof in such form and manner, and at such times, as
the Committee may require.
(c) If an Optionee dies while serving as a member of the Board,
the option shall be exercisable (to the extent otherwise exercisable on
the date of the death of such Optionee) by the person or persons
entitled to do so under the Optionee's will, or, if the Optionee shall
fail to make testamentary disposition of said option or shall die
intestate, by the Optionee's legal representative or representatives,
at any time prior to the Expiration Date of the option or within twelve
(12) months after the date of death, whichever is the shorter period.
6
<PAGE> 39
(d) The option of a Non-Employee Director shall automatically
terminate as of the date his or her directorship is terminated, if the
directorship is terminated on account of any act of (i) fraud or
intentional misrepresentation; (ii) embezzlement, misappropriation or
conversion of assets or opportunities of the Corporation or any
Affiliate; or (iii) cause as otherwise determined by the Board.
Section 2.7 Issuance of Stock Certificates. Upon exercise of an option, but
subject to the provisions of Section 3.6 of the Plan, the person exercising the
option shall be entitled to one (1) stock certificate evidencing the shares
acquired upon such exercise; provided, however, that any person who tenders
Common Stock in payment of a portion or all of the purchase price of Stock
purchased upon exercise of the option shall be entitled to receive a separate
certificate representing the number of shares purchased in consideration of the
tender of such Common Stock.
ARTICLE III
Other Provisions
Section 3.1 Adjustments Upon Changes in Capitalization.
(a) In the event that a dividend payable in shares of Common Stock
or a stock split shall be hereinafter declared upon the Common Stock,
the number of shares of Common Stock then subject to any option granted
hereunder and the number of shares reserved for issuance pursuant to
the Plan but not yet covered by an option shall be adjusted by adding
to each such share the number of shares which would be distributable
thereon if such share had been outstanding on the date
7
<PAGE> 40
fixed for determining the shareholders entitled to receive such stock
dividend or stock split.
(b) In the event that the outstanding shares of the Common Stock
shall be changed into or exchanged for a different number or kind of
shares of stock or other securities of the Corporation or of another
corporation, whether through reorganization, recapitalization, stock
split, combination of shares, merger or consolidation, then there shall
be substituted for each share of Common Stock subject to any such
option and for each share of Common Stock reserved for issuance
pursuant to the Plan but not yet covered by an option, the number and
kind of shares of stock or other securities into which each outstanding
share of Common Stock shall be so changed or for which each such share
shall be exchanged.
(c) In the event that there shall be any change, other than as
specified above in this Section 3.1, in the number or kind of
outstanding shares of Common Stock or of any stock or other securities
into which Common Stock shall have been changed or for which it shall
have been exchanged, then if the Committee shall in its sole discretion
determine that such change equitably requires an adjustment in the
number or kind of shares theretofore reserved for issuance pursuant to
the Plan but not yet covered by an option and of the shares then
subject to an option or options, such adjustment shall be made by the
Committee and shall be effective and binding for all purposes of the
Plan and of each Option Agreement.
(d) In the case of any such substitution or adjustment as provided
for in this Section, the option price in each Option Agreement for each
share covered
8
<PAGE> 41
thereby prior to such substitution or adjustment will be the option
price for all shares of stock or other securities which shall have been
substituted for such share or to which such adjustment provided for in
this Section 3.1 shall be made. No adjustment or substitution provided
for in this Section 3.1 shall require the Corporation pursuant to any
Option Agreement to sell a fractional share, and the total substitution
or adjustment with respect to each Option Agreement shall be limited
accordingly.
Section 3.2 Acceleration. In the event of a Change in Control, the provisions
of subsections (a) and (b) of this Section 3.2 shall apply to determine the
exercisability of options granted hereunder. A "Change in Control" for purposes
of this Plan shall mean the acquisition of fifty percent (50%) or more of the
Common Stock, issued and outstanding immediately prior thereto, pursuant to a
tender or exchange offer made by a person or group of related persons (other
than the Corporation or a person that directly or indirectly controls, is
controlled by or is under common control with the Corporation) which the Board
does not recommend to the shareholders, or one or more of the following
shareholder-approved transactions: (i) a merger or consolidation in which the
Corporation is not the surviving entity, provided securities possessing fifty
percent (50%) or more of the total combined voting power of the Corporation's
outstanding voting securities are transferred to a person or persons different
from those who held such securities immediately prior to such transaction; (ii)
the sale, transfer or other disposition of all or substantially all of the
assets of the Corporation other than in the ordinary course of business; or
(iii) any reverse merger in which the Corporation is the surviving entity but in
which securities possessing fifty percent (50%) or more of the total combined
9
<PAGE> 42
voting power of the Corporation's outstanding voting securities are transferred
to a person or persons different from those who held such securities immediately
prior to such merger. In no event shall any merger, consolidation or other
reorganization involving the Corporation be deemed to constitute a "Change in
Control" if the primary purpose of such transaction is either to change the
state in which the Corporation is incorporated or to create a holding company
structure whereby the Corporation's shareholders of record become the
shareholders of the holding company.
(a) Change in Control with Provision Being Made Therefor. If
provision be made in writing in connection with a Change in Control for
the assumption and continuance of any option granted under the Plan, or
the substitution for such option of a new option covering the shares of
the successor corporation, with appropriate adjustment as to number and
kind of shares and prices, the option granted under the Plan, or the
new option substituted therefor, as the case may be, shall continue in
the manner and under the terms provided.
(b) Change in Control Without Provision Being Made Therefor. If
provision is not made in connection with a Change in Control for the
continuance and assumption of the option granted under the Plan or for
the substitution of any option covering the shares of the successor
corporation, then the holder of any such option shall be entitled,
prior to the effective date of any such Change in Control, to purchase
the full number of shares not previously exercised under such option,
without regard to the period of exercisability set forth in Section 2.4
if (and only if) such option has not at that time expired or been
cancelled, failing which purchase, any unexercised portion shall be
deemed cancelled as of the effective date of such Change in Control.
10
<PAGE> 43
All adjustments under this Section 3.2 shall be made by the Committee,
whose determination as to what adjustments shall be made and the extent thereof,
shall be final, binding and conclusive for all purposes of the Plan and of each
Option Agreement.
Section 3.3 Continuation of Directorship. Nothing contained in this Plan (nor
in any option granted pursuant to this Plan) shall confer upon any Non-Employee
Director any right to continue as a member of the Board or constitute any
contract or agreement or interfere in any way with the right of the Corporation
to remove such Non-Employee Director from the Board. Nothing contained herein or
in any Option Agreement shall affect any other contractual rights of a
Non-Employee Director.
Section 3.4 Amendment and Termination. The Board may at any time suspend or
terminate the Plan and may, with the consent of the Optionee, make such
modifications of the terms and conditions of such Optionee's option as it shall
deem advisable. No option may be granted during any suspension of the Plan or
after such termination. The amendment, suspension or termination of the Plan
shall not, without the consent of the Optionee, alter or impair any rights or
obligations under any option theretofore granted under the Plan.
The Board may at any time amend the Plan as it shall deem advisable
without further action on the part of the shareholders of the Corporation;
provided, that any amendment to the Plan must be approved by the shareholders of
the Corporation, if the amendment would (i) increase the aggregate number of
shares of Stock which may be issued pursuant to options granted under the Plan;
(ii) change the minimum option price; (iii) increase the maximum terms of
options provided for herein; (iv) materially modify the requirements as to
eligibility for participation in the Plan; (v) remove the administration
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<PAGE> 44
of the Plan from the Committee; or (vi) materially increase the benefits
accruing to holders of options under the Plan.
Section 3.5 Time of Exercise. An option shall be deemed to be exercised when
the Secretary of the Corporation receives written notice of such exercise from
the person entitled to exercise the option together with payment of the purchase
price made in accordance with Section 2.4 of this Plan.
Section 3.6 Privileges of Stock Ownership and Non-Distributive Intent. The
holder of an option shall not be entitled to the privileges of stock ownership
as to any shares of Stock not actually issued and delivered to the holder.
Section 3.7 Effective Date of the Plan. The Plan shall be effective upon
approval by the affirmative vote of the holders of a majority of the outstanding
shares of Common Stock present and entitled to vote at a meeting duly held or by
the written consent of the holders of a majority of the outstanding shares of
Common Stock entitled to vote.
Section 3.8 Expiration. Unless previously terminated by the Board, the Plan
shall expire at the close of business on the date which is the last day of the
ten (10) year period beginning on the earlier of the date on which the Plan is
adopted by the Board or the date on which the shareholders approve the Plan, and
no option shall be granted under it thereafter, but such expiration shall not
affect any option theretofore granted.
Section 3.9 Governing Law. The Plan and the options issued hereunder shall be
governed by, and construed and enforced in accordance with, the laws of the
State of Texas applicable to contracts made and performed within that State.
Section 3.10 Application of Funds. The proceeds received by the Corporation
from the sale of shares pursuant to options shall be used for general corporate
purposes.
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Section 3.11 No Liability for Good Faith Determinations. Neither the members of
the Board nor the Committee shall be liable for any act, omission or
determination taken or made in good faith with respect to the Plan or any option
granted under it.
Section 3.12 Execution of Receipts and Releases. Any payment or any issuance
or transfer of shares of Stock to the Optionee, or to his legal representative,
heir, legatee or distributee, in accordance with the provisions hereof, shall,
to the extent thereof, be in full satisfaction of all claims of such persons
hereunder. The Board may require any Optionee, legal representative, heir,
legatee or distributee, as a condition precedent to such payment, to execute a
release and receipt therefor in such form as it shall determine.
Section 3.13 No Guarantee of Interests. Neither the Board nor the Corporation
guarantees the Stock from loss or depreciation.
Section 3.14 Payment of Expenses. All expenses incident to the administration,
termination or protection of the Plan, including, but not limited to, legal and
accounting fees, shall be paid by the Corporation.
Section 3.15 Corporate Records. Records of the Corporation and any Affiliate
regarding the Optionee's period of service, termination of service and the
reason therefor, leaves of absence, and other matters shall be conclusive for
all purposes hereunder, unless determined by the Committee to be incorrect.
Section 3.16 Information. The Corporation and any Affiliate shall, upon request
or as may be specifically required hereunder, furnish or cause to be furnished
all of the information or documentation which is necessary or required by the
Committee to perform its duties and functions under the Plan.
13
<PAGE> 46
Section 3.17 No Liability of Corporation. The Corporation assumes no obligation
or responsibility to the Optionee or his or her personal representatives, heirs,
legatees or distributees for any act of, or failure to act on the part of, the
Board or the Committee.
Section 3.18 Corporate Action. Any action required of the Corporation shall be
by resolution of the Board or by a person authorized to act by Board resolution.
Section 3.19 Severability. If any provision of this Plan shall be held to be
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining provisions hereof, but shall be fully severable and the Plan shall
be construed and enforced as if the illegal or invalid provision had never been
included herein.
Section 3.20 Notice. Whenever any notice is required or permitted hereunder,
such notice must be in writing and personally delivered or sent by mail. Except
as otherwise provided in Section 3.5 of this Plan, any notice required or
permitted to be delivered hereunder shall be deemed to be delivered on the date
on which it is personally delivered or, whether actually received or not, on the
third (3rd) business day after it is deposited in the United States mail,
certified or registered, postage pre-paid, addressed to the person who is to
receive it at the address which such person has theretofore specified by written
notice delivered in accordance herewith. The Corporation or an Optionee may
change, at any time and from time to time, by written notice to the other, the
address which it or he had theretofore specified for receiving notices. Until it
is changed in accordance herewith, the Corporation and each Optionee shall
specify as its and his address for receiving notices the address set forth in
the Option Agreement pertaining to the shares to which such notice relates.
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<PAGE> 47
Section 3.21 Waiver of Notices. Any person entitled to notice hereunder may
waive such notice.
Section 3.22 Successors. The Plan shall be binding upon the Optionee, his or
her heirs, legatees and legal representatives, and upon the Corporation and its
successors and assigns.
Section 3.23 Headings. The titles and headings of sections and paragraphs are
included for convenience of reference only and are not to be considered in
construction of the provisions hereof.
Section 3.24 Word Usage. Words used in the masculine shall apply to the
feminine where applicable and, wherever the context of this Plan dictates, the
plural shall be read as the singular and the singular as the plural.
15
<PAGE> 48
APPENDIX 2
WEBLINK WIRELESS, INC.
2000 FLEXIBLE INCENTIVE PLAN
SECTION 1. PURPOSE OF THIS PLAN
The purpose of the WebLink Wireless, Inc. 2000 Flexible Incentive Plan
is to strengthen WebLink Wireless, Inc., a Delaware corporation (the
"Corporation"), by providing eligible individuals who are responsible for the
management, growth and financial success of the Corporation or who otherwise
render valuable services to the Corporation with the opportunity to acquire a
proprietary interest, or increase their proprietary interest, in the Corporation
and thereby providing a means of attracting competent personnel and encouraging
them to remain in the service of the Corporation. To achieve this purpose,
eligible Persons may receive Stock Options, Stock Appreciation Rights,
Restricted Stock, Performance Awards, Dividend Equivalent Rights, Phantom Stock
and any other Awards (as such terms are hereinafter defined), or any combination
thereof.
SECTION 2. DEFINITIONS
As used in this Plan, the following terms shall have the meanings set
forth below unless the context otherwise requires:
2.1 "Award" shall mean the grant of a Stock Option, a Stock
Appreciation Right, Restricted Stock, a Performance Award, a Dividend
Equivalent Right, Phantom Stock or any other grant of incentive
compensation pursuant to this Plan.
2.2 "Board" shall mean the Board of Directors of the
Corporation, as the same may be constituted from time to time.
2.3 "Cause" shall mean either
(a) termination of a Participant's Service with the
Corporation or a Subsidiary upon the occurrence of one or more
of the following events as determined in the sole discretion
of the Committee:
(i) The Participant's failure to substantially perform
such Participant's duties with the Corporation or any
Parent or Subsidiary Corporation as determined by the
Committee in its sole discretion following receipt by the
Participant of written notice of such failure and the
Participant's failure to remedy such failure within thirty
(30) days after receipt of such notice (other than a
failure resulting from the Participant's incapacity due to
physical or mental illness or injury);
(ii) The Participant's willful failure or refusal to
perform specific directives of the Board, which directives
are consistent with the scope and nature of the
Participant's duties and responsibilities, and which are
not
<PAGE> 49
remedied by the Participant within thirty (30) days after
being notified in writing of such Participant's failure by
the Board;
(iii) The Participant's conviction of a felony; or
(iv) A breach of the Participant's fiduciary duty to
the Corporation or any Parent or Subsidiary Corporation or
willful violation in the course of performing the
Participant's duties for the Corporation or any Parent or
Subsidiary Corporation of any law, rule or regulation
(other than traffic violations or other minor offenses).
No act or failure to act on the Participant's part shall
be considered willful unless done or omitted to be done in
bad faith and without reasonable belief that the action or
omission was in the best interest of the Corporation or
any Parent or Subsidiary Corporation; or
(b) such other definition of Cause as may be approved by
the Committee in connection with a specific Award (such
alternative definition to be included in the agreement
evidencing such Award).
2.4 "Change in Control" means either
(a) the acquisition of fifty percent (50%) or more of
the Corporation's outstanding voting stock pursuant to a
tender or exchange offer made by a person or group of related
persons (other than the Corporation or a person that directly
or indirectly controls, is controlled by or is under common
control with the Corporation) which the Board does not
recommend to the stockholders; or
(b) such other definition of Change in Control as may
be approved by the Committee in connection with a specific
Award (such alternative definition to be included in the
agreement evidencing such Award).
2.5 "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time (or any successor to such legislation).
2.6 "Committee" shall mean the committee established by the
Board to administer the Plan, as such Committee may be constituted from
time to time; provided, however, membership on the Committee shall be
limited to "non-employee directors" (as such term is defined in Rule
16b-3 (or any successor to such rule) promulgated under the Exchange
Act) who are also "outside directors", as required pursuant to Section
162(m) of the Code and such Treasury regulations as may be promulgated
thereunder; and provided further, the Committee will consist of not
less than two (2) directors. All members of the Committee will serve at
the pleasure of the Board. If no committee is established by the Board,
the Board will be deemed to be the "Committee" for purposes of this
Plan.
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2.7 "Common Stock" shall mean the shares of the Corporation's
authorized but unissued or reacquired Class A convertible common stock,
par value $.0001 per share.
2.8 "Corporation" shall have the meaning set forth in Section
1 of this Plan.
2.9 "Corporate Transaction" shall mean one or more of the
following stockholder-approved transactions:
(a) a merger or consolidation in which the
Corporation is not the surviving entity, provided securities
possessing fifty percent (50%) or more of the total combined
voting power of the Corporation's outstanding voting
securities are transferred to a person or persons different
from those who held such securities immediately prior to such
transaction;
(b) the sale, transfer or other disposition of all or
substantially all of the assets of the Corporation other than
in the ordinary course of business; or
(c) any reverse merger in which the Corporation is
the surviving entity but in which securities possessing fifty
percent (50%) or more of the total combined voting power of
the Corporation's outstanding voting securities are
transferred to a person or persons different from those who
held such securities immediately prior to such merger.
In no event shall any merger, consolidation or other
reorganization involving the Corporation be deemed to constitute a
Corporate Transaction if the primary purpose of such transaction is
either to change the State in which the Corporation is incorporated or
to create a holding-company structure whereby the Corporation's
stockholders of record become the stockholders of the holding company.
2.10 "Designated Beneficiary" shall mean the beneficiary
designated by a Participant, in a manner authorized by the Committee,
to exercise the rights of such Participant in the event of such
Participant's death. In the absence of an effective designation by a
Participant, the Designated Beneficiary shall be such Participant's
estate.
2.11 "Director" shall mean any member of the Board.
2.12 "Disability" shall mean, with respect to any Incentive
Stock Option, permanent and total inability to engage in any
substantial gainful activity, even with reasonable accommodation, by
reason of any medically determinable physical or mental impairment
which has lasted or can reasonably be expected to last without material
interruption for a period of not less than twelve (12) months, as
determined in the sole discretion of the Committee, and except as
otherwise agreed upon by a Participant and the Committee. With respect
to any Award other than an Incentive Stock Option, "Disability" shall
mean, except as otherwise agreed upon by a Participant and the
Committee, the
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inability of a Participant, as determined in the sole and absolute
discretion of the Committee, by reason of any medically determinable
physical or mental impairment, to engage in the performance of the
material duties of the position in which such Participant was last
engaged by the Corporation or a Parent or Subsidiary Corporation, for a
period which has lasted or can reasonably be expected to last without
material interruption for not less than twelve (12) months.
2.13 "Dividend Equivalent Right" shall mean the right of the
holder thereof to receive payments based on the dividends that would
have been paid on the number of Shares specified in an Award granting
Dividend Equivalent Rights if the number of Shares subject to such
Award were held by such holder on the record date for determining
stockholders to whom dividends are payable.
2.14 "Effective Date" shall mean January 3, 2000.
2.15 "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended from time to time (or any successor to such
legislation).
2.16 "Fair Market Value" shall mean with respect to the
Shares, as of any date:
(a) If the Common Stock is not at the time listed or
admitted to trading on any national securities exchange but is
traded in the over-the-counter market, the Fair Market Value
shall be the mean between the highest bid and the lowest asked
prices (or, if such information is available, the closing
sales price) per share of Common Stock on the date in question
in the over-the-counter market, as such prices are reported by
the National Association of Securities Dealers through its
Nasdaq National Market System or any successor system. If
there are no reported bid and asked prices (or closing sales
price) for the Common Stock on the date in question, then the
mean between the highest bid and lowest asked prices (or
closing sales price) on the last preceding date for which such
quotations exist shall be determinative of Fair Market Value.
(b) If the Common Stock is at the time listed or
admitted to trading on any national securities exchange, then
the Fair Market Value shall be the closing sales price per
share of Common Stock on the date in question on the national
securities exchange determined by the Committee to be the
primary market for the Common Stock, as such price is
officially quoted in the composite tape of transactions on
such exchange. If there is no reported sale of Common Stock on
such exchange on the date in question, then the fair market
value shall be the closing sales price on the exchange on the
last preceding date for which such quotation exists.
(c) If the Common Stock is at the time neither listed
nor admitted to trading on any national securities exchange
nor traded in the over-the-counter market, or if the Committee
determines that the valuation provisions of subparagraphs (i)
and
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(ii) above will not result in a true and accurate valuation of
the Common Stock, then the Fair Market Value shall be
determined by the Committee after taking into account such
factors as the Committee shall deem appropriate under the
circumstances.
2.17 "Incentive Stock Option" shall mean any option to
purchase Shares awarded pursuant to this Plan which qualifies as an
"Incentive Stock Option" pursuant to Section 422 of the Code.
2.18 "Limited Stock Appreciation Rights" shall have the
meaning set forth in Subsection 7.4 of this Plan.
2.19 "Nonqualified Stock Option" shall mean any option to
purchase Shares awarded pursuant to this Plan that does not qualify as
an Incentive Stock Option (including, without limitation, any option to
purchase Shares originally designated as or intended to qualify as an
Incentive Stock Option to the extent such option does not (for whatever
reason) qualify as an Incentive Stock Option).
2.20 "Non-Share Method" shall have the meaning set forth in
Subsection 17.13 of this Plan.
2.21 "Non-Tandem Stock Appreciation Right" shall mean any
Stock Appreciation Right granted alone and not in connection with an
Award which is a Stock Option.
2.22 "Optionee" shall mean any Participant who has been
granted and holds a Stock Option awarded pursuant to this Plan.
2.23 "Parent Corporation" shall mean any corporation which,
directly or indirectly, owns, at the time of the determination, stock
possessing fifty percent (50%) or more of the total combined voting
power of all classes of stock of the Corporation with respect to the
election of directors generally.
2.24 "Participant" shall mean any Person who has been granted
and holds an Award granted pursuant to this Plan.
2.25 "Performance Award" shall mean any Award granted pursuant
to this Plan of Shares, rights based upon, payable in or otherwise
related to Shares (including Restricted Stock) or cash, as the
Committee or Board of Directors may determine, at the end of a
specified performance period established by the Committee or Board of
Directors and may include, without limitation, Performance Shares or
Performance Units.
2.26 "Performance Shares" shall have the meaning set forth in
Subsection 9.1 of this Plan.
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2.27 "Performance Units" shall have the meaning set forth in
Subsection 9.1 of this Plan.
2.28 "Person" shall mean an individual, partnership, limited
liability corporation, corporation, joint stock corporation, trust,
estate, joint venture association or unincorporated organization or any
other form of business organization.
2.29 "Phantom Stock" shall mean one unit granted to a
Participant pursuant to Section 11 of this Plan which entitles the
Participant to receive a payment in cash, Common Stock, or both, as
specified in the Phantom Stock Agreement (as such term is defined in
Section 11 of this Plan) on the date of conversion.
2.30 "Plan" shall mean this WebLink Wireless, Inc. 2000
Flexible Incentive Plan as it may be amended from time to time.
2.31 "Reload Option" shall mean a Stock Option as defined in
Subsection 6.6(b) of this Plan.
2.32 "Restricted Stock" shall mean any Shares granted pursuant
to this Plan that are subject to restrictions or substantial risk of
forfeiture, as described in Section 8 of this Plan.
2.33 "Securities Act" shall mean the Securities Act of 1933,
as amended from time to time (or any successor to such legislation).
2.34 "Service" shall mean the performance of services for the
Corporation or one or more Parent or Subsidiary Corporations by an
individual in the capacity of an employee, a member of the Board or the
board of directors of such Parent or Subsidiary Corporation, or a
consultant, unless a different meaning is specified in the agreement
evidencing the grant of an Award hereunder. A Participant shall be
deemed to remain in Service for so long as such individual renders
services to the Corporation or any Parent or Subsidiary Corporation on
a periodic basis in the capacity of an employee, a member of the Board
or the board of directors of such Parent or Subsidiary Corporation, or
a consultant.
2.35 "Share Retention Method" shall have the meaning set forth
in Subsection 17.13 of this Plan.
2.36 "Shares" shall mean shares of the Common Stock and any
shares of capital stock or other securities hereafter issued or
issuable upon, in respect of or in substitution or exchange for shares
of Common Stock.
2.37 "Stock Appreciation Right" shall mean the right of the
holder thereof to receive property or Shares with a Fair Market Value
equal to or cash in an amount equal to the excess of the Fair Market
Value of the aggregate number of Shares subject to such Stock
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Appreciation Right on the date of exercise over the Fair Market Value
of the aggregate number of Shares subject to such Stock Appreciation
Right on the date of the grant of such Stock Appreciation Right (or
such other value as may be specified in the agreement granting such
Stock Appreciation Right). A Stock Appreciation Right may be a Tandem
Stock Appreciation Right, Non-Tandem Stock Appreciation Right or
Limited Stock Appreciation Right.
2.38 "Stock Option" shall mean any Incentive Stock Option or
Nonqualified Stock Option.
2.39 "Subsidiary or Subsidiary Corporation" shall mean a
subsidiary corporation of the Corporation, as defined in Section 424(f)
of the Code.
2.40 "Tandem Stock Appreciation Right" shall mean a Stock
Appreciation Right granted in connection with an Award which is a Stock
Option.
SECTION 3. ADMINISTRATION OF THIS PLAN
3.1 Administration. This Plan shall be administered and
interpreted by the Committee.
3.2 Awards.
(a) Subject to the provisions of this Plan, and directions
from the Board, the Committee is authorized and has the full
power and discretion to:
(i) determine the Persons to whom Awards are
to be granted;
(ii) determine the types and combinations of
Awards to be granted; the number of Shares to be
covered by an Award; the exercise price of an Award;
the time or times when an Award shall be granted and
may be exercised; the terms, performance criteria or
other conditions, vesting periods or any restrictions
for an Award; any restrictions on Shares acquired
pursuant to the exercise of an Award; and any other
terms and conditions of an Award;
(iii) interpret the provisions of this Plan;
(iv) prescribe, amend and rescind rules and
regulations relating to this Plan;
(v) determine whether, to what extent and
under what circumstances to provide loans from the
Corporation to Participants to exercise Awards
granted pursuant to this Plan, and the terms and
conditions of such loans;
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(vi) rely upon employees of the Corporation
for such clerical and recordkeeping duties as may be
necessary in connection with the administration of
this Plan;
(vii) accelerate or defer (with the consent
of the Participant) the vesting of any rights
pursuant to an Award; and
(viii) make all other determinations and
take all other actions necessary or advisable for the
administration of this Plan.
(b) Without limiting the Board's right to amend this
Plan pursuant to Section 15 or the Committee's authority under
Subsection 3.2(a) of this Plan, the Board may take all actions
authorized by Subsection 3.2(a) of this Plan, including,
without limitation, granting such Awards pursuant to this Plan
as the Board may deem necessary or appropriate. In such a
case, the Board shall have the authority to perform all acts
performable by the Committee pursuant to the terms of this
Plan.
3.3 Procedures.
(a) Proceedings by the Board or Committee with
respect to this Plan will be conducted in accordance with the
certificate of incorporation and bylaws of the Corporation.
(b) All questions of interpretation and application
of this Plan or pertaining to any question of fact or Award
granted hereunder will be decided by the Committee in its
discretion, whose decision will be final, conclusive and
binding upon the Corporation and each other affected party.
SECTION 4. SHARES SUBJECT TO PLAN
4.1 Limitations. The maximum number of Shares that may be
issued with respect to all Awards, including Incentive Stock Options,
granted pursuant to this Plan shall not exceed 3,000,000 Shares.
(a) Shares subject to (i) the portion of one or more
outstanding Stock Options which are not exercised prior to
expiration or termination and (ii) outstanding Stock Options
cancelled in accordance with the cancellation-regrant
provisions of Section 6.6 will be available for subsequent
Awards granted under this Plan. The Shares which shall not be
available for subsequent Stock Option grants under this Plan
include (1) Shares subject to an Award surrendered under this
Plan in connection with a Change in Control and (2) Shares
issued pursuant to this Plan (whether as vested or unvested
Shares) which are repurchased by the Corporation.
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(b) In the event that the Committee shall determine that
any dividend or other distribution (whether in the form of
shares of Common Stock or other securities), recapitalization,
stock split, reverse stock split, reorganization, merger,
consolidation, split-up, spin-off, combination, repurchase or
exchange of securities of the Corporation, or other similar
corporate transaction or event affects the benefits or
potential benefits intended to be made available under this
Plan such that an adjustment is determined by the Committee to
be appropriate in order to prevent dilution or enlargement of
the benefits or potential benefits intended to be made
available under this Plan, then the Committee may, in such
manner as it may deem equitable, adjust any or all of (i) the
number of Shares subject to this Plan and which thereafter may
be made the subject of Awards under this Plan, (ii) the number
of Shares subject to outstanding Awards, (iii) the nature of
the consideration (including, without limitation, other
securities of the Corporation, securities of another entity
and/or other property) to be received upon exercise of an
Award and/or (iv) the grant, purchase or exercise price with
respect to any Award, or, if deemed appropriate, make
provisions for a cash payment to the holder of an outstanding
Award; provided, however, in each case, that with respect to
Incentive Stock Options no such adjustment shall be authorized
to the extent that such adjustment would cause this Plan to
violate Section 422(b)(1) or 424(a) of the Code or any
successor provisions thereto; and provided further, however,
that the number of Shares subject to any Stock Option payable
or denominated in Shares shall always be a whole number.
Notwithstanding the foregoing, Nonqualified Stock Options
shall be subject to only such adjustment as shall be necessary
to maintain the proportionate interest of the Optionee and
preserve, without exceeding, the value of such Stock Option,
unless increased or decreased by reason of changes in the
capitalization of the Corporation as hereinafter provided or
by amendment of this Plan. The Shares issued pursuant to this
Plan may be authorized but unissued Shares, or (except as
noted in Subsection 4.1(a)) they may be issued Shares which
have been reacquired by the Corporation.
SECTION 5. ELIGIBILITY
Eligibility for participation in this Plan shall be confined to those
individuals who are key employees (including officers and Directors) of the
Corporation (or its Parent or Subsidiary Corporations), Directors or consultants
who render services which contribute to the success and growth of the
Corporation or its Parent or Subsidiary Corporations or which may reasonably be
anticipated to contribute to the future success and growth of the Corporation
(or its Parent or Subsidiary Corporations). In making any determination as to
Persons to whom Awards shall be granted, the type of Award and/or the number of
Shares to be covered by the Award, the Committee shall consider the position and
responsibilities of the Person; the importance of the Person to the Corporation;
the duties of the Person; the past, present and potential contributions of the
Person to the growth and success of the Corporation; and such other factors as
the Committee may deem relevant in connection with accomplishing the purposes of
this Plan.
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SECTION 6. STOCK OPTIONS
6.1 Grants. The Committee may grant Stock Options alone or in
addition to other Awards granted pursuant to this Plan to any eligible
Person. Each Person so selected shall be offered a Stock Option to
purchase the number of Shares determined by the Committee. The
Committee shall specify whether such Stock Option is an Incentive Stock
Option or Nonqualified Stock Option and any other terms or conditions
relating to such Award. To the extent that any Stock Option designated
as an Incentive Stock Option does not qualify as an Incentive Stock
Option (whether because of its provisions, the failure of the
stockholders of the Corporation to authorize the issuance of Incentive
Stock Options, the time or manner of its exercise or otherwise), such
Stock Option or the portion thereof which does not qualify shall be
deemed to constitute a Nonqualified Stock Option. Each Person to be
granted a Stock Option shall enter into a written agreement with the
Corporation, in such form as the Committee may prescribe, setting forth
the terms and conditions (including, without limitation, the exercise
price and vesting schedule) of the Stock Option. At any time and from
time to time, the Optionee and the Committee may agree to modify a
Stock Option agreement in such respects as they may deem appropriate,
including, without limitation, the conversion of an Incentive Stock
Option into a Nonqualified Stock Option. The Committee may require that
an Optionee meet certain conditions before the Stock Option or a
portion thereof may vest or be exercised, as, for example, that the
Optionee remain in the Service of the Corporation or a Subsidiary for a
stated period or periods of time.
6.2 Incentive Stock Options Limitations.
(a) Incentive Stock Options shall only be granted to
individuals who are employees of the Corporation or a Parent
or Subsidiary Corporation. In no event shall any individual be
granted Incentive Stock Options to the extent that the Shares
covered by any Incentive Stock Options (and any incentive
stock options granted pursuant to any other plans of the
Corporation or its Subsidiaries) that may be exercised for the
first time by such individual in any calendar year have an
aggregate Fair Market Value in excess of $100,000. For this
purpose, the Fair Market Value of the Shares shall be
determined as of the date(s) on which the Incentive Stock
Options are granted. To the extent a Participant holds two or
more such Stock Options which become exercisable for the first
time in the same calendar year, the foregoing limitation on
the exercisability thereof as Incentive Stock Options shall be
applied on the basis of the order in which such Stock Options
are granted. It is intended that the limitation on Incentive
Stock Options provided in this Subsection 6.2(a) be the
maximum limitation on Stock Options which may be considered
Incentive Stock Options pursuant to the Code.
(b) The Stock Option exercise price of an Incentive
Stock Option shall not be less than one hundred percent (100%)
of the Fair Market Value of the Shares subject to such
Incentive Stock Option on the date of the grant of such
Incentive Stock Option.
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(c) Notwithstanding anything herein to the contrary,
in no event shall any employee owning more than ten percent
(10%) of the total combined voting power of the Corporation or
any Parent or Subsidiary Corporation be granted an Incentive
Stock Option unless the option exercise price of such
Incentive Stock Option shall be at least one hundred ten
percent (110%) of the Fair Market Value of the Shares subject
to such Incentive Stock Option on the date of the grant of
such Incentive Stock Option.
(d) In no event shall any individual be granted an
Incentive Stock Option after the expiration of ten (10) years
from the date this Plan is adopted or is approved by the
stockholders of the Corporation (if stockholder approval is
required by Section 422 of the Code).
(e) To the extent stockholder approval of this Plan
is required by Section 422 of the Code, no individual shall be
granted an Incentive Stock Option unless this Plan is approved
by the stockholders of the Corporation within twelve (12)
months before or after the date this Plan is initially
adopted. In the event this Plan is amended to increase the
number of Shares subject to issuance upon the exercise of
Incentive Stock Options or to change the class of employees
eligible to receive Incentive Stock Options, no individual
shall be granted an Incentive Stock Option unless such
amendment is approved by the stockholders of the Corporation
within twelve (12) months before or after such amendment (if
such stockholder approval is required by Section 422 of the
Code).
(f) No Incentive Stock Option shall be granted to any
employee owning more than ten percent (10%) of the total
combined voting power of the Corporation or any Parent of
Subsidiary Corporation unless the term of such Incentive Stock
Option is equal to or less than five (5) years measured from
the date on which such Incentive Stock Option is granted.
6.3 Option Term and Price. The term of a Stock Option shall be
for such period of time from the date of its grant as may be determined
by the Committee; provided, however, that no Incentive Stock Option
shall be exercisable later than ten (10) years from the date of its
grant. The Stock Option price shall be fixed by the Committee;
provided, however, that in no event shall the Stock Option price per
Share be less than one hundred percent (100%) of the Fair Market Value
of a Share.
6.4 Time of Exercise. No Stock Option may be exercised unless
it is exercised prior to the expiration of its stated term.
Furthermore, at the time of exercise, the Optionee must be, and
continually have been since the date of grant of such Stock Option, in
the Service of the Corporation or a Parent or Subsidiary Corporation,
except that:
(a) A Stock Option may, to the extent vested as of
the date the Optionee's Service with the Corporation or a
Parent or Subsidiary Corporation ceases, be
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exercised during the three-month period immediately following
the date the Optionee's Service ceases (for any reason other
than death, Disability or termination for Cause) with the
Corporation or a Parent or Subsidiary Corporation (or within
such other period as may be specified in the applicable Stock
Option agreement); provided that, if the Stock Option has been
designated as an Incentive Stock Option and the Stock Option
agreement provides for a longer exercise period, the exercise
of such Stock Option after such three-month period shall be
treated as the exercise of a Nonqualified Stock Option;
(b) If the Optionee dies while in the Service of the
Corporation or a Subsidiary, or within three months after the
Optionee's Service ceases (for any reason other than
termination for Cause) (or within such other period as may be
specified in the applicable Stock Option agreement), a Stock
Option may, to the extent vested as of the date of the
Optionee's death, be exercised by the Optionee's Designated
Beneficiary during the twelve-month period immediately
following the date of the Optionee's death (or within such
other period as may be specified in the applicable Stock
Option agreement);
(c) If the Optionee's Service with the Corporation or
a Subsidiary ceases by reason of the Optionee's Disability, a
Stock Option, to the extent vested as of the date the
Optionee's Service with the Corporation or a Subsidiary
ceases, may be exercised during the twelve-month period
immediately following the date on which the Optionee's Service
with the Corporation or a Subsidiary ceases (or within such
other period as may be specified in the applicable Stock
Option agreement); provided that, if the Stock Option has been
designated as an Incentive Stock Option and the Stock Option
agreement provides for a longer exercise period, the exercise
of such Stock Option after such twelve-month period shall be
treated as the exercise of a Nonqualified Stock Option; and
(d) If the Optionee's Service is terminated for
Cause, all Stock Options held by such Optionee shall
simultaneously terminate and will no longer be exercisable.
Nothing contained in this Subsection 6.4 will be deemed to extend the
term of a Stock Option or to revive any Stock Option which has
previously lapsed or been canceled, terminated or surrendered.
Notwithstanding the foregoing, however, the Committee shall have full
power and authority to extend (either at the time the Stock Option is
granted or at any time while the Stock Option remains outstanding) the
period of time for which the Stock Option is to remain exercisable
following an Optionee's cessation of Service, from the period set forth
in the agreement evidencing the grant of the Stock Option to such
greater period of time as the Committee may deem appropriate under the
circumstances. In no event, however, shall a Stock Option be
exercisable after the specified expiration date of the Stock Option.
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6.5 Vesting of Stock Options.
(a) Each Stock Option granted pursuant to this Plan
may only be exercised to the extent that the Optionee vested
in such Stock Option. Each Stock Option shall vest separately
in accordance with the Stock Option vesting schedule
determined by the Committee, which will be incorporated in the
Stock Option agreement entered into between the Corporation
and such Optionee. The Stock Option vesting schedule may be
accelerated if, in the sole discretion of the Committee, the
acceleration of the Stock Option vesting schedule would be in
the best interests of the Corporation. Notwithstanding the
foregoing, except as provided or permitted pursuant to
Subsection 6.5(c) or Section 14 of this Plan, no Stock Option
may vest prior to the first anniversary of the date on which
it is granted.
(b) In the event of the dissolution or liquidation of
the Corporation, each Stock Option granted pursuant to this
Plan shall terminate as of a date to be fixed by the
Committee; provided, however, that not less than thirty (30)
days written notice of the date so fixed shall be given to
each Optionee. Upon the date fixed by the Committee, any
unexercised Stock Options shall terminate and be of no further
effect.
(c) The Committee may provide in the Stock Option
agreement that some or all of a Stock Option shall vest upon
the occurrence of a Change in Control.
6.6 Manner of Exercise of Stock Options.
(a) Except as otherwise provided in this Plan, Stock
Options may be exercised as to Shares only in amounts and at
intervals of time specified in the written Stock Option
agreement between the Corporation and the Optionee. Each
exercise of a Stock Option, or any part thereof, shall be
evidenced by a written notice delivered by the Optionee to the
Corporation. The purchase price of the Shares as to which a
Stock Option shall be exercised shall be paid in full at the
time of exercise, and may be paid to the Corporation either:
(i) in cash (including check acceptable to
the Corporation, bank draft or money order); or
(ii) by other consideration deemed
acceptable by the Committee in its sole discretion.
(b) If an Optionee delivers Shares (including Shares
of Restricted Stock) already owned by the Optionee full or
partial payment of the exercise price for any Stock Option, or
if the Optionee elects to have the Corporation retain that
number of Shares out of the Shares being acquired through the
exercise of the Stock Option having a Fair Market Value equal
to the exercise price of the Stock Option being
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exercised, the Committee may, in its sole discretion,
authorize the grant of a new Stock Option (a "Reload Option")
for that number of Shares equal to the number of already owned
Shares surrendered (including Shares of Restricted Stock) or
newly acquired Shares being retained by the Corporation in
payment of the Stock Option exercise price of the underlying
Stock Option being exercised. The grant of a Reload Option
will become effective upon the exercise of the underlying
Stock Option. The Stock Option exercise price of the Reload
Option shall be the Fair Market Value of a Share on the
effective date of the grant of the Reload Option. Each Reload
Option shall be exercisable no later than the time when the
underlying stock option being exercised could be last
exercised. The Committee may also specify additional terms,
conditions and restrictions for the Reload Option and the
Shares to be acquired upon the exercise thereof.
(c) An Optionee shall not have any of the rights of a
stockholder of the Corporation with respect to the Shares
subject to a Stock Option except to the extent that such Stock
Option is exercised and one or more certificates representing
such Shares shall have been delivered to the Optionee.
6.7 Limited Surrender Rights.
(a) Should a Change in Control occur at a time when the
Corporation's outstanding capital stock is registered under
Section 12 of the Exchange Act, then each Participant who is
at the time an officer or director of the Corporation subject
to the short-swing profit restrictions of the Federal
securities laws shall have the right to surrender any or all
Stock Options held by such individual under this Plan, to the
extent such Stock Options are at the time exercisable for
vested shares. In return for each surrendered Stock Option,
the officer or director shall receive an appreciation
distribution from the Corporation in an amount equal to the
excess of (i) the aggregate Acquisition Price (as such term is
hereinafter defined) of the number of shares in which such
individual is at the time vested under the surrendered Stock
Option over (ii) the aggregate Stock Option price payable for
such vested shares. Such limited surrender right shall be
exercisable for a period not to exceed thirty (30) days
following the completion of the Change in Control. The
distribution to which such Optionee shall become entitled upon
the Stock Option surrender shall be made entirely in cash. The
surrender of Stock Options to the Corporation pursuant to this
Subsection 6.7 is specifically approved by the Board and, if
necessary to exempt such surrender from Section 16(b) of the
Exchange Act, the Board shall take any additional action
necessary for such approval to comply with the requirements of
Rule 16b-3(e) promulgated under the Exchange Act.
(b) The "Acquisition Price" per share of the vested Common
Stock subject to the surrendered Stock Option shall be deemed
to be equal to the greater of (i) the Fair Market Value per
share on the date of surrender or (ii) the highest reported
price per share paid in effecting the Change in Control of the
Corporation's
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outstanding voting stock. However, if the surrendered Stock
Option is an Incentive Option, then the Acquisition Price of
the vested shares subject to the surrendered Stock Option
shall not exceed the Fair Market Value per share on the date
of surrender.
SECTION 7. STOCK APPRECIATION RIGHTS
7.1 Grants. The Committee may grant to any eligible Person
either Non-Tandem Stock Appreciation Rights or Tandem Stock
Appreciation Rights. Stock Appreciation Rights shall be subject to such
terms and conditions as the Committee shall impose. The grant of the
Stock Appreciation Right may provide that the holder will be paid for
the value of the Stock Appreciation Right either in cash or in Shares,
or a combination thereof, at the sole discretion of the Committee. In
the event of the exercise of a Stock Appreciation Right payable in
Shares, the holder of the Stock Appreciation Right shall receive that
number of whole Shares having an aggregate Fair Market Value on the
date of exercise equal to the value obtained by multiplying (a) either
(i) in the case of a Tandem Stock Appreciation Right, the difference
between the Fair Market Value of a Share on the date of exercise over
the per share exercise price of the related Stock Option, or (ii) in
the case of a Non-Tandem Stock Appreciation Right, the difference
between the Fair Market Value of a Share on the date of exercise over
the Fair Market Value on the date of the grant by (b) the number of
Shares as to which the Stock Appreciation Right is exercised. However,
notwithstanding the foregoing, the Committee, in its sole discretion,
may place a ceiling on the amount payable upon exercise of a Stock
Appreciation Right, but any such limitation shall be specified at the
time that the Stock Appreciation Right is granted.
7.2 Exercisability. A Tandem Stock Appreciation Right granted
in connection with an Incentive Stock Option (a) may be exercised at,
and only at, the times and to the extent the related Incentive Stock
Option is exercisable, (b) will expire upon the termination of the
related Incentive Stock Option, (c) may not exceed 100% of the
difference between the exercise price of the related Incentive Stock
Option and the Fair Market Value of the Shares subject to the related
Incentive Stock Option at the time the Tandem Stock Appreciation Right
is exercised and (d) may be exercised at, and only at, such times as
the Fair Market Value of the Shares subject to the related Incentive
Stock Option exceeds the exercise price of the related Incentive Stock
Option. A Tandem Stock Appreciation Right may be transferred at, and
only at, the times and to the extent the related Stock Option is
transferable. If a Tandem Stock Appreciation Right is granted, there
shall be surrendered and canceled from the related Stock Option at the
time of exercise of the Tandem Stock Appreciation Right, in lieu of
exercise pursuant to the related Stock Option, that number of Shares as
shall equal the number of Shares as to which the Tandem Stock
Appreciation Right shall have been exercised.
7.3 Certain Limitations on Non-Tandem Stock Appreciation
Rights. A Non-Tandem Stock Appreciation Right will be exercisable as
provided by the Committee and will have such other terms and conditions
as the Committee may determine. A
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Non-Tandem Stock Appreciation Right is subject to acceleration of
vesting or immediate termination in certain circumstances and to
conditions on exercisability and the timing thereof in the same manner
as Stock Options pursuant to Subsections 6.4 and 6.5 of this Plan and,
to the extent payable in Shares, shall be entitled to the same limited
surrender rights as Stock Options pursuant to Subsection 6.7 of this
Plan.
7.4 Limited Stock Appreciation Rights. The Committee may grant
"Limited Stock Appreciation Rights," either as Tandem Stock
Appreciation Rights or Non-Tandem Stock Appreciation Rights. Limited
Stock Appreciation Rights will become exercisable only upon the
occurrence of such event as the Committee may designate at the time of
grant or thereafter.
SECTION 8. RESTRICTED STOCK
8.1 Grants. The Committee may grant Awards of Restricted Stock
to any eligible Person for such minimum consideration, if any, as may
be required by applicable law or such greater consideration as may be
determined by the Committee, in its sole discretion. The terms and
conditions of the Restricted Stock shall be specified by the grant
agreement. The Committee, in its sole discretion, may specify any
particular rights which the Participant to whom a grant of Restricted
Stock is made shall have in the Restricted Stock during the restriction
period and the restrictions applicable to the particular Award, the
vesting schedule (which may be based on service, performance or other
factors) and rights to acceleration of vesting (including, without
limitation, whether non-vested Shares are forfeited or vested upon
termination of Service). Further, the Committee may grant
performance-based Awards consisting of Restricted Stock by conditioning
the grant, or vesting or such other factors, such as the release,
expiration or lapse of restrictions upon any such Award (including the
acceleration of any such conditions or terms) of such Restricted Stock
upon the attainment of specified performance goals or such other
factors as the Committee may determine. The Committee shall also
determine when the restrictions shall lapse or expire and the
conditions, if any, pursuant to which the Restricted Stock will be
forfeited or sold back to the Corporation. Each Award of Restricted
Stock may have different restrictions and conditions. Unless otherwise
set forth in the grant agreement, Restricted Stock may not be sold,
pledged, encumbered or otherwise disposed of by the recipient until the
restrictions specified in the Award expire. Awards of Restricted Stock
are subject to acceleration of vesting, termination of restrictions and
termination in the same manner as Stock Options pursuant to Subsections
6.4 and 6.5 of this Plan, and shall be entitled to the same limited
surrender rights as Stock Options pursuant to Subsection 6.7 of this
Plan.
8.2 Awards and Certificates. Any Restricted Stock issued
hereunder may be evidenced in such manner as the Committee, in its sole
discretion, shall deem appropriate including, without limitation,
book-entry registration or issuance of a stock certificate or
certificates. In the event any stock certificate is issued in respect
of Shares of Restricted Stock, such certificate shall bear an
appropriate legend with respect to the restrictions
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applicable to such Award. The Corporation may retain, at its option,
the physical custody of any stock certificate representing any awards
of Restricted Stock during the restriction period or require that the
certificates evidencing Restricted Stock be placed in escrow or trust,
along with a stock power endorsed in blank, until all restrictions are
removed or expire.
SECTION 9. PERFORMANCE AWARDS
9.1 Grants. A Performance Award may consist of either or both,
as the Committee may determine, of (a) the right to receive Shares or
Restricted Stock, or any combination thereof as the Committee may
determine ("Performance Shares"), or (b) the right to receive a fixed
dollar amount payable in Shares, Restricted Stock, cash or any
combination thereof, as the Committee may determine ("Performance
Units"). The Committee may grant Performance Awards to any eligible
Person, for such minimum consideration, if any, as may be required by
applicable law or such greater consideration as may be determined by
the Committee, in its sole discretion. The terms and conditions of
Performance Awards shall be specified at the time of the grant and may
include provisions establishing the performance period, the performance
criteria to be achieved during a performance period, the criteria used
to determine vesting (including the acceleration thereof), whether
Performance Awards are forfeited or vest upon termination of Service
during a performance period and the maximum or minimum settlement
values. Each Performance Award shall have its own terms and conditions,
which shall be determined in the sole discretion of the Committee. If
the Committee determines, in its sole discretion, that the established
performance measures or objectives are no longer suitable because of a
change in the Corporation's business, operations, corporate structure
or for other reasons that the Committee deems satisfactory, the
Committee may modify the performance measures or objectives and/or the
performance period. Awards of Performance Shares and/or Performance
Units are subject to acceleration of vesting, termination of
restrictions and termination in the same manner as Stock Options
pursuant to Subsections 6.4 and 6.5 of this Plan and, to the extent
payable in Shares, shall be entitled to the same limited surrender
rights as Stock Options pursuant to Subsection 6.7 of this Plan.
9.2 Terms and Conditions. Performance Awards may be valued by
reference to the Fair Market Value of a Share or according to any other
formula or method deemed appropriate by the Committee, in its sole
discretion, including, but not limited to, achievement of specific
financial, production, sales, cost or earnings performance objectives
that the Committee believes to be relevant or the Corporation's
performance or the performance of the Common Stock measured against the
performance of the market, the Corporation's industry segment or its
direct competitors. Performance Awards may also be conditioned upon the
applicable Participant remaining in the Service of the Corporation or
one of its Subsidiaries for a specified period. Performance Awards may
be paid in cash, Shares (including Restricted Stock) or other
consideration, or any combination thereof. Performance Awards may be
payable in a single payment or in installments and may be payable at a
specified date or dates or upon attaining the performance objective or
objectives, all at the sole discretion of the Committee. The extent to
which any applicable performance
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objective has been achieved shall be conclusively determined by the Committee in
its sole discretion.
SECTION 10. DIVIDEND EQUIVALENT RIGHTS
The Committee may grant a Dividend Equivalent Right to any eligible
Person, either as a component of another Award or as a separate Award, and, in
general, each such Participant awarded a Dividend Equivalent Right that is
outstanding on a dividend record date for the Common Stock shall be credited
with an amount equal to the cash or stock dividends or other distributions that
would have been received had the Shares subject to the Award been issued and
outstanding on the dividend record date. The terms and conditions of the
Dividend Equivalent Right shall be specified in a dividend equivalent right
agreement which evidences such Award. Dividend Equivalent Rights may be settled
in cash or Shares, or a combination thereof, in a single payment or in
installments. A Dividend Equivalent Right granted as a component of another
Award may provide that such Dividend Equivalent Right shall be settled upon
exercise, settlement or payment for or lapse of restrictions on such other
Award, and that such Dividend Equivalent Right shall expire or be forfeited or
annulled pursuant to the same conditions as such other Award. A Dividend
Equivalent Right granted as a component of another Award may also contain terms
and conditions different from such other Award.
SECTION 11. PHANTOM STOCK
The Committee may grant to any eligible Person shares of Phantom Stock.
Such grant shall be evidenced by an agreement (the "Phantom Stock Agreement"),
in such form as is approved by the Committee, between the Corporation and the
Participant. Each Phantom Stock Agreement shall set forth the date of grant of
the shares of Phantom Stock, the number of shares of Phantom Stock awarded, the
period during which the shares of Phantom Stock shall vest, and the period
during which the shares of Phantom Stock shall be convertible, in whole or in
part, and redeemed for payment (the "Conversion Period").
Vested shares of Phantom Stock that are convertible in accordance with
the applicable Phantom Stock Agreement, or in accordance with the terms of this
Plan, may be converted by a Participant into cash, Common Stock, or both, only
in accordance with this Section 11 and the terms and conditions of the
applicable Phantom Stock Agreement. To convert vested, convertible shares of
Phantom Stock, a Participant must deliver or mail to the Committee a written
notice of conversion stating the number of shares of Phantom Stock to be
converted. Such conversion shall be effective on the date of receipt by the
Committee (the "Conversion Date"). Upon receipt by the Committee of a proper
written notice of conversion of a Participant, the Participant shall be entitled
to receive, at the time and in the manner set forth in the applicable Phantom
Stock Agreement (a) an amount in cash equal to the aggregate Fair Market Value
on the Conversion Date of the shares converted or (b) shares of Common Stock
equal in number to the number of shares of Phantom Stock converted. The
Corporation shall satisfy its obligation upon conversion of shares of Phantom
Stock by either making a distribution in cash or by distributing the requisite
number of shares of Common Stock. The method of settlement and the time of
payment shall be set forth in the applicable
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Phantom Stock Agreement. Awards of shares of Phantom Stock are subject to
acceleration of vesting or immediate termination in certain circumstances and to
conditions on exercisability and the timing thereof in the same manner as Stock
Options pursuant to Subsections 6.4 and 6.5 of this Plan and, to the extent
payable in Shares, shall be entitled to the same limited surrender rights as
Stock Options pursuant to Subsection 6.7 of this Plan.
SECTION 12. OTHER AWARDS
The Committee may grant to any eligible Person other forms of Awards
based upon, payable in or otherwise related to, in whole or in part, Shares, if
the Committee, in its sole discretion, determines that such other form of Award
is consistent with the purposes of this Plan. The terms and conditions of such
other form of Award shall be specified in a written agreement which sets forth
the terms and conditions of such Award, including, but not limited to, the
price, if any, and the vesting schedule, if any, of such Award. Such Awards may
be granted for such minimum consideration, if any, as may be required by
applicable law or for such other greater consideration as may be determined by
the Committee, in its sole discretion.
SECTION 13. COMPLIANCE WITH SECURITIES AND OTHER LAWS
As a condition to the issuance or transfer of any Award or any security
issuable in connection with such Award, the Corporation may require an opinion
of counsel, satisfactory to the Corporation, to the effect that (a) such
issuance and/or transfer will not be in violation of the Securities Act or any
other applicable securities laws and (b) such issuance and/or transfer will not
be in violation of the rules and regulations of any securities exchange or
automated quotation system on which the Common Stock is listed or admitted to
trading. Further, the Corporation may refrain from issuing, delivering or
transferring any Award or any security issuable in connection with such Award
until the Committee has determined that such issuance, delivery or transfer will
not violate such securities laws or rules and regulations and that the recipient
has tendered to the Corporation any federal, state or local tax owed as a result
of such issuance, delivery or transfer, when the Corporation has a legal
liability to satisfy such tax. The Corporation shall not be liable for damages
due to delay in the issuance, delivery or transfer of any Award or any security
issuable in connection with such Award or any agreement, instrument or
certificate evidencing such Award or security for any reason whatsoever,
including, but not limited to, a delay caused by the listing requirements of any
securities exchange or automated quotation system or any registration
requirements under the Securities Act, the Exchange Act, or under any other
state or federal law, rule or regulation. Except as may be set forth in an
agreement evidencing the grant of an Award, the Corporation is under no
obligation to take any action or incur any expense to register or qualify the
issuance, delivery or transfer of any Award or any security issuable in
connection with such Award under applicable securities laws or to perfect any
exemption from such registration or qualification or to list any security on any
securities exchange or automated quotation system. Furthermore, the Corporation
will have no liability to any person for refusing to issue, deliver or transfer
any Award or any security issuable in connection with such Award if such refusal
is based upon the foregoing provisions of this Section 13. As a condition to any
issuance, delivery or transfer of any Award or any security issuable in
connection with such Award, the Corporation may place legends on any agreement,
instrument or
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certificate evidencing such Award or security; issue stop transfer orders with
respect thereto; require such market stand-off, lockup, or similar agreements or
undertakings as the Corporation deems necessary or desirable; and require such
agreements or undertakings as the Corporation may deem necessary or advisable to
assure compliance with applicable laws or regulations, including, if the
Corporation or its counsel deems it appropriate, representations from the
recipient of such Award or security to the effect that such recipient is
acquiring such Award or security solely for investment and not with a view to
distribution and that no distribution of the Award or the security will be made
unless registered pursuant to applicable federal and state securities laws, or
in the opinion of counsel to the Corporation, such registration is unnecessary.
SECTION 14. ADJUSTMENTS UPON THE OCCURRENCE OF A CORPORATE
TRANSACTION
(a) In the event of any Corporate Transaction, except as
otherwise provided in the agreement evidencing the grant of an Award
hereunder, each Award outstanding under this Plan shall automatically
accelerate so that each such Award shall, immediately prior to the
specified effective date for such Corporate Transaction, become fully
exercisable, convertible or payable and may be exercised or converted,
as the case may be, to the extent of all or any portion of such Award.
(b) Upon the consummation of the Corporate Transaction, except
as otherwise provided in the agreement evidencing the grant of an Award
hereunder, each Award outstanding under this Plan shall terminate and
cease to be exercisable.
(c) The exercisability as incentive stock options under the
Federal tax laws of any Incentive Stock Options accelerated in
connection with the Corporate Transaction shall remain subject to the
applicable dollar limitation of Subsection 6.2(a) of this Plan.
(d) The grant of Awards under this Plan shall in no way affect
the legal right of the Corporation to adjust, reclassify, reorganize or
otherwise change its capital or business structure or to merge,
consolidate, dissolve, liquidate or sell or transfer all or any part of
its business or assets.
SECTION 15. AMENDMENT OR TERMINATION OF THIS PLAN
15.1 Amendment of This Plan. Notwithstanding anything contained
in this Plan to the contrary, all provisions of this Plan (including,
without limitation, the maximum number of Shares that may be issued
with respect to Awards to be granted pursuant to this Plan) may at any
time or from time to time be modified or amended by the Board;
provided, however, that no Award at any time outstanding pursuant to
this Plan may be modified, impaired or canceled adversely to the holder
of the Award without the consent of such holder. Without limiting the
generality of the foregoing, the Board is authorized to amend this Plan
to the extent it deems necessary to comply with Rule 16b-3 (or any
successor to such rule) promulgated under the Exchange Act, and to make
any other amendments deemed
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necessary or appropriate to better accomplish the purposes of this Plan
in light of any amendments made to Rule 16b-3 (or any successor to such
rule).
15.2 Termination of This Plan. The Board may suspend or
terminate this Plan at any time, and such suspension or termination may
be retroactive or prospective. Termination of this Plan shall not
impair or affect any Award previously granted hereunder and the rights
of the holder of the Award shall remain in effect until the Award has
been exercised in its entirety or has expired or otherwise has been
terminated by the terms of such Award.
SECTION 16. AMENDMENTS AND ADJUSTMENTS TO AWARDS
The Committee may amend, modify or terminate any outstanding Award with
the Participant's consent at any time prior to payment or exercise in any manner
not inconsistent with the terms of this Plan, including, without limitation, to
change the date or dates as of which and/or the terms and conditions pursuant to
which (i) a Stock Option becomes exercisable or (ii) a Performance Award is
deemed earned. The Committee may also make adjustments in the terms and
conditions of, and the criteria included in agreements evidencing Awards in
recognition of unusual or nonrecurring events (including, without limitation,
the events described in Section 14 hereof) affecting the Corporation, or the
financial statements of the Corporation or any Parent Corporation or Subsidiary
Corporation, or of changes in applicable laws, regulations or accounting
principles, whenever the Committee determines that such adjustments are
appropriate to prevent reduction or enlargement of the benefits or potential
benefits intended to be made available pursuant to this Plan. Without limiting
the generality of the foregoing, the Committee is authorized to modify any Award
to the extent it deems necessary to comply with Rule 16b-3 (or any successor to
such rule) promulgated under the Exchange Act, and to make any other
modifications deemed necessary or appropriate to better accomplish the purposes
of this Plan in light of any amendments made to Rule 16b-3 (or any successor to
such rule).
SECTION 17. GENERAL PROVISIONS
17.1 No Limit on Other Compensation Arrangements. Nothing
contained in this Plan shall prevent the Corporation from adopting or
continuing in effect other compensation arrangements, and such
arrangements may be either generally applicable or applicable only in
specific cases.
17.2 No Right to Employment or Continuation of Relationship.
Nothing in this Plan or in any Award, nor the grant of any Award, shall
confer upon or be construed as giving any Participant any right to
remain in the employ of the Corporation or a Parent or Subsidiary
Corporation or to continue as a consultant or Director. Further, the
Corporation or a Parent or Subsidiary Corporation may at any time
dismiss a Participant from employment or terminate the relationship of
any consultant or Director with the Corporation or any Parent or
Subsidiary Corporation, free from any liability or any claim pursuant
to this
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Plan, unless otherwise expressly provided in this Plan or in any
agreement evidencing an Award made under this Plan. No consultant,
Director or employee of the Corporation or any Parent or Subsidiary
Corporation shall have any claim to be granted any Award, and there is
no obligation for uniformity of treatment of any consultant, Director
or employee of the Corporation or any Parent or Subsidiary Corporation
or of any Participants.
17.3 GOVERNING LAW. EXCEPT AS TO MATTERS RELATING TO THE
INTERNAL AFFAIRS OF THE CORPORATION WHICH SHALL BE GOVERNED BY THE
DELAWARE GENERAL CORPORATION LAW, THE VALIDITY, CONSTRUCTION AND EFFECT
OF THIS PLAN AND ANY RULES AND REGULATIONS RELATING TO THIS PLAN SHALL
BE DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS,
WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF AND
WILL, TO THE MAXIMUM EXTENT PRACTICABLE, BE DEEMED TO CALL FOR
PERFORMANCE IN DALLAS COUNTY, TEXAS.
17.4 Severability. If any provision of this Plan or any Award
is or becomes or is deemed to be invalid, illegal or unenforceable in
any jurisdiction or as to any individual or Award, or would disqualify
this Plan or any Award under any law deemed applicable by the
Committee, such provision shall be construed or deemed amended to
conform to applicable law, or if it cannot be construed or deemed
amended without, in the sole determination of the Committee, materially
altering the intent of this Plan or the Award, such provision shall be
stricken as to such jurisdiction, individual or Award and the remainder
of this Plan and any such Award shall remain in full force and effect.
17.5 No Fractional Shares. No fractional Shares shall be
issued or delivered pursuant to this Plan or any Award, and the
Committee shall determine, in its discretion, whether cash, other
securities or other property shall be paid or transferred in lieu of
any fractional Shares or whether such fractional Shares or any rights
thereto shall be canceled, terminated or otherwise eliminated.
17.6 Headings. Headings are given to the Sections and
Subsections of this Plan solely as a convenience to facilitate
reference. Such headings shall not be deemed in any way material or
relevant to the construction or interpretation of this Plan or any
provision thereof.
17.7 Effective Date. The provisions of this Plan that relate
to the grant of Incentive Stock Options shall be effective as of the
date of the approval of this Plan by the stockholders of the
Corporation.
17.8 Transferability of Awards. Awards shall not be
transferable otherwise than by will or the laws of descent and
distribution without the written consent of the Committee (which may be
granted or withheld at the sole discretion of the Committee). Awards
may be exercised, during the lifetime of the holder, only by the
holder. Any attempted
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assignment, transfer, pledge, hypothecation or other disposition of an
Award contrary to the provisions hereof, or the levy of any execution,
attachment or similar process upon an Award shall be null and void and
without effect.
17.9 Rights of Participants. Except as hereinbefore expressly
provided in this Plan, any Person to whom an Award is granted shall
have no rights by reason of any subdivision or consolidation of stock
of any class or the payment of any stock dividend or any other increase
or decrease in the number of shares of stock of any class or by reason
of any dissolution, liquidation, reorganization, merger or
consolidation or spinoff of assets or stock of another corporation, and
any issue by the Corporation of shares of stock of any class or
securities convertible into shares of stock of any class shall not
affect, and no adjustment by reason thereof shall be made with respect
to, the number or exercise price of Shares subject to an Award.
17.10 No Limitation Upon the Rights of the Corporation. The
grant of an Award pursuant to this Plan shall not affect in any way the
right or power of the Corporation to make adjustments,
reclassifications, or changes of its capital or business structure; to
merge, convert or consolidate; to dissolve or liquidate; or sell or
transfer all or any part of its business or assets.
17.11 No Liability for Good Faith Determinations. Neither the
members of the Board nor any member of the Committee shall be liable
for any action, failure to act, omission or determination taken or made
in good faith with respect to this Plan or any Award granted hereunder.
17.12 Execution of Receipts and Releases. Any payment or any
issuance or transfer of shares of Common Stock to a Participant, or to
the legal representative, heir, legatee or distributee of a
Participant, in accordance with the provisions hereof, shall, to the
extent thereof, be in full satisfaction of all claims of such persons
hereunder. The Committee may require any Participant, or legal
representative, heir, legatee or distributee of a Participant, as a
condition precedent to such payment, to execute a release and receipt
therefor in such form as it shall determine.
17.13 Withholding Obligation. The amount, as determined by the
Committee, of any federal, state or local tax required to be withheld
by the Corporation upon the grant, exercise, settlement, conversion,
redemption, or otherwise with respect to any Award granted hereunder,
shall, subject to the authorization of the Committee, be satisfied, at
the election of the Participant, either (i) by payment by the
Participant to the Corporation of the amount of such withholding
obligation in cash or other consideration acceptable to the Committee
in its sole discretion (the "Non-Share Method") or (ii) through either
the retention by the Corporation of a number of Shares out of the
Shares being acquired through the grant, exercise, settlement,
conversion, redemption, or otherwise with respect to any Award or the
delivery of already owned Shares having a Fair Market Value equal to
the amount of the withholding obligation (the "Share Retention
Method"). If a Participant elects to use the
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Share Retention Method in full or partial satisfaction of any tax
liability resulting from the exercise of a Stock Option, the Committee
may authorize the grant of a Reload Option for that number of Shares as
shall equal the number of Shares used to satisfy the tax liabilities of
the Participant arising out of the exercise of such Stock Option. Such
Reload Option will be granted at the price and on the terms set forth
in Subsection 6.6 (b). The cash payment or an amount equal to the Fair
Market Value of the Shares so withheld, as the case may be, shall be
remitted by the Corporation to the appropriate taxing authorities.
17.14 Date of Grant of an Award. No Participant shall have any
enforceable rights under this Plan prior to such execution and delivery
of a written agreement hereunder. Solely for purposes of determining
the Fair Market Value of the Shares subject to an Award, such Award
will be deemed to have been granted as of the date specified by the
Committee notwithstanding any delay which may elapse in executing and
delivering the applicable agreement.
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FORM OF
PHANTOM STOCK AGREEMENT
WEBLINK WIRELESS, INC.
2000 FLEXIBLE INCENTIVE PLAN
THIS PHANTOM STOCK AGREEMENT (the "AGREEMENT") is dated as of this____
day of ____________, 20___, between WEBLINK WIRELESS, INC., a Delaware
corporation (the "COMPANY") and _________________, an Executive of the Company
or one or more of its Subsidiaries (the "EXECUTIVE"). All capitalized terms not
otherwise defined herein or in exhibits to this Agreement shall have the meaning
set forth in the WebLink Wireless, Inc. 2000 Flexible Incentive Plan, as amended
(the "PLAN").
W I T N E S S E T H:
WHEREAS, the Company desires to carry out the purposes of the Plan by
granting the Executive the opportunity to receive shares of Common Stock;
NOW THEREFORE, in consideration of the mutual covenants hereinafter set
forth and for other good and valuable consideration, the parties hereto agree as
follows:
1. Grant of Shares of Phantom Stock. The Company hereby grants to
Executive_____________ shares of phantom stock (the "PHANTOM STOCK"). Each share
of Phantom Stock represents one share of Common Stock. The shares of Phantom
Stock will be granted to Executive on the following date (the "Date of Grant")
[SELECT APPLICABLE ONE]:
[ ] the date of this Agreement
[ ] _____________, 20___, unless, prior to the Date of Grant, the
Executive has voluntarily resigned his employment [without Good
Reason (as defined in Exhibit C to this Agreement)] with the
Company] or the Company has terminated the employment of the
Executive with the Company [for Cause (as defined in Exhibit A to
this Agreement)].
2. Vesting of Shares of Phantom Stock. Except as otherwise provided
herein, unless terminated hereunder, shares of Phantom Stock will vest in
accordance with the vesting schedule set forth below. The vesting of the shares
of Phantom Stock accrues only in accordance with the following vesting schedule
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and, except as otherwise provided herein, only to the extent that the Executive
remains in the continuous employ or service of the Company or a subsidiary of
the Company.
[INSERT VESTING SCHEDULE.]
The events resulting in the vesting of the Phantom Stock are
hereinafter referred to as "Vesting Events".
3. Payment Events. [INCLUDE TO EXTENT APPLICABLE]
(a) To the extent not previously converted, all shares of
Phantom Stock will be automatically converted into Common Stock,
payable on ____________, 20___.
(b) A share of Phantom Stock shall be converted into a share
of Common Stock in accordance with the terms of Sections 3 and 4 of
this Agreement. Shares of Phantom Stock will not be converted until at
least one Payment Event occurs. A Payment Event occurs upon [SELECT ALL
THAT APPLY]:
[ ] consummation of a Change in Control;
[ ] consummation of a Change in Control in which stockholders of the
Company receive stock of a company that has such stock listed on
the New York Stock Exchange, NASDAQ, the American Stock Exchange or
such other stock exchange as may be approved by the Board of
Directors of the Company (the "BOARD") and has an equity market
capitalization not less than $__ billion;
[ ] the Company achieving an equity market capitalization of $___
billion, in the absence of a Change in Control;
[ ] [Events (which must be specifically defined) providing liquidity to
current stockholders];
[ ] Other: ____________________________________
(c) Once shares of Phantom Stock have vested, such shares may
be forfeited by the Executive and recovered by the Company only if the
Executive has engaged in Materially Adverse Conduct. As used herein,
the term "Materially Adverse Conduct" will be deemed to mean that the
Executive has committed an egregious act of intentional fraud which has
a material adverse effect upon the Company or its successor, in each
case, taken as a whole. In no event will the Company have the right
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to recover/forfeit either shares of Common Stock issued upon conversion
of shares of Phantom Stock or proceeds from the sale of shares of
Common Stock issued upon conversion of shares of Phantom Stock.
4. Manner of Conversion.
(a) A share of Phantom Stock will be converted into a share of
Common Stock when [SELECT APPLICABLE ONE]:
[ ] a Vesting Event has occurred
[ ] both a Payment Event and a Vesting Event have occurred
with respect to such share of Phantom Stock.
(b) The conversion of shares of Phantom Stock into shares of
Common Stock shall be automatic and without notice by the Executive to
the Company. Any provision of the Plan which would otherwise require a
written notice of conversion from the Executive to the Company shall be
without force or effect, and the Company hereby waives its right to
receive any such notice of conversion prior to conversion.
5. Withholding Taxes. Unless it is unable to satisfy its withholding
obligations as provided below because of "Economic Constraint", the Company will
satisfy any federal, state or local tax required to be withheld due to the
payment of shares of Phantom Stock in accordance with the following procedures:
(a) the Company will compute the taxable value of the
compensation which would be deemed to have been paid to the Executive
if all of the shares of Phantom Stock which would otherwise be
convertible into shares of Common Stock (but for the provisions of this
Section 5) were converted into shares of Common Stock and were issued
to the Executive;
(b) the Company will divide the aggregate taxable value
computed pursuant to the immediately preceding clause (a) by the number
of shares of Phantom Stock which would otherwise be convertible into
shares of Common Stock (but for the provisions of this Section 5);
(c) based upon the calculation made in the immediately
preceding clause (a), the Company will remit payment to the Internal
Revenue Service (as a withholding tax payment) an amount equal to the
lesser of (i) the result of applying the minimum statutory withholding
rate to the value calculated pursuant to the immediately preceding
clause (a) or
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(ii) the maximum amount that can be paid without causing Economic
Constraint;
(d) the Company will divide the payment made in the
immediately preceding clause (c) by the result of the calculation made
in clause (b);
(e) the Company will subtract the result of the calculation
made in the immediately preceding clause (d) from the number of shares
of Common Stock which (but for the provisions of this Section 5) would
be issuable to the Executive upon the conversion of shares of Phantom
Stock into shares of Common Stock; and
(f) the Company will issue to the Executive the number of
shares of Common Stock calculated pursuant to the immediately preceding
clause (e).
In the event the Company is not able to satisfy its minimum statutory
withholding obligations with respect to the conversion of shares of Phantom
Stock into shares of Common Stock due to Economic Constraint, it will remit to
the Internal Revenue Service (as a withholding tax payment) the maximum amount
which it is able to withhold and pay without Economic Constraint and the
Executive will remit to the Company, within 14 days following the later of (i)
notification by the Company to the Executive that a Payment Event has occurred
and (ii) delivery to the Executive of the shares of Common Stock into which
shares of Phantom Stock have been converted as a result of such Payment Event,
sufficient cash or other consideration acceptable to the Board to satisfy (when
aggregated with any payments made by the Company) the Company's minimum
statutory withholding obligation with respect to such conversion (such payment
being hereinafter referred to as the "EXECUTIVE WITHHOLDING TAX PAYMENT"). In
the event that the Executive is obligated to make the Executive Withholding Tax
Payment, the Company may, in its discretion, retain as security from the shares
otherwise issuable to the Executive upon conversion of shares of Phantom Stock
into Common Stock shares of Common Stock with a Fair Market Value (as
hereinafter defined) equal to the Executive Withholding Tax Payment. Any such
shares of Common Stock retained by the Company will be promptly delivered to the
Executive upon payment of the Executive Withholding Tax Payment. As used herein
the term "Fair Market Value" will be deemed to mean the closing price as of the
Trading Day immediately preceding the day on which the Payment Event occurs (or
if there is no closing price on such Trading Day, the average between the
closing bid and asked prices for the Common Stock on such Trading Day) on the
principal stock exchange or automated transaction reporting system on which the
Common Stock is then listed for trading. If the Common Stock is not then listed
for trading, the term "Fair Market Value" will be deemed to be such value as
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may be reasonably determined by the Board. For purposes of this Agreement,
"Economic Constraint" is defined as an economic or fiscal condition of the
Company such that any such retention of such shares and/or payment of such
required withholding amount could reasonably result in the violation of any of
the Company's covenants under any credit or loan agreement to which the Company
is then a party or, in the good faith determination of the Board, could
reasonably have a material adverse effect on the Company and, in each case, the
Company is not reasonably able to promptly resell such withheld shares in the
open market.
6. Acceleration of Vesting Dates. Notwithstanding the provisions of
Section 2 hereof but subject to delayed vesting pursuant to Section 3:
(a) If Executive [SELECT ALL THAT APPLY]
[ ] dies,
[ ] is terminated without Cause,
[ ] is terminated for disability,
[ ] terminates this Agreement for Good Reason,
the shares of Phantom Stock that would have vested will be vested upon
such death or termination (such amount, the "ACCELERATED AMOUNT");
provided, however that if Executive is terminated without Cause
following one or more Payment Events, Executive shall be vested in the
greater of (x) the Accelerated Amount or (y) the number of shares of
unvested Phantom Stock that would have been convertible had they been
vested immediately prior to such termination.
(b) In the event of a Change in Control which does not result
in the occurrence of a Payment Event and which would result in the
Common Stock not being publicly traded and the stockholders of the
Company receiving consideration other than solely cash, the Company may
cancel unvested and unconverted shares of Phantom Stock in exchange (i)
in the circumstance in which securities are issued to the stockholders
of the Company in connection with the Change in Control, for the
securities received by the stockholders of the Company or (ii) in all
other circumstances, for such other consideration as the Board may
equitably determine to have a value equal to the value of the canceled
shares of Phantom Stock; provided, however, any such securities
received shall not be transferable except in such circumstances as
shares of Common Stock would otherwise be transferable to Executive
under this Agreement or under the Stockholders Agreement.
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7. No Contract. This Agreement does not constitute a contract for
employment or service and shall not affect the right of the Company to terminate
Executive's employment or service for any reason or no reason whatsoever.
8. Rights as Stockholder. This grant of shares of Phantom Stock shall
not entitle Executive to any rights of a stockholder of the Company or to any
notice of proceedings of the Company with respect to any shares of Common Stock
payable upon these shares of Phantom Stock unless and until the shares of
Phantom Stock have been converted into such shares of Common Stock and such
shares have been registered in the Executive's name upon the stock records of
the Company.
9. Restriction on Issuance of Shares. The Company shall not be required
to issue or deliver any certificates for shares payable upon the conversion of a
share of Phantom Stock prior to: (a) the obtaining of any approval from any
governmental agency which the Company shall, in its reasonable discretion,
determine to be necessary or advisable; and (b) the completion of any
registration or other qualification of such shares under any state or federal
law or ruling or regulation of any governmental body which the Company shall, in
its sole discretion, determine to be necessary or advisable. In addition, if the
Common Stock reserved for issuance upon the conversion of shares of Phantom
Stock shall not then be registered under the Securities Act of 1933, the Company
may upon payment of shares, require Executive or his permitted transferee to
represent in writing that the shares being acquired are for investment and not
with a view to distribution, and may mark the certificate for the shares with a
legend restricting transfer and may issue stop transfer orders relating to such
certificate to the Company's transfer agent (if applicable).
10. Restriction on Sale of Shares. Executive agrees not to sell any of
the shares of Common Stock when applicable laws or Company policies prohibit a
sale. Such restriction will apply so long as Executive is an employee,
consultant or director of the Company or a subsidiary of the Company.
11. Certain Forfeiture Events. If the employment of the Executive with
the Company is terminated for Cause, all unvested shares of Phantom Stock which
have not yet been converted into shares of Common Stock and paid to Executive
shall be forfeited and cancelled.
12. Lapse of Shares of Phantom Stock. This Agreement shall be null and
void in the event Executive shall fail to sign and return a counterpart hereof
to the Company within thirty (30) days of its delivery to Executive.
13. Binding Effect. This Agreement shall be binding upon the heirs,
executors, administrators, and successors of the parties hereto.
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14. Governing Instrument and Entire Agreement. This grant of shares of
Phantom Stock and any shares issued hereunder shall in all respects be governed
by the terms and provisions of the Plan. In the event of a conflict between the
terms of this Agreement and the terms of the Plan (a copy of which is attached),
the terms of the Plan shall control. There are no oral agreements between the
parties relating to the subject matter hereof, and this Agreement and the terms
of the Plan constitute the entire agreement of the parties with respect to the
subject matter hereof. This Agreement may not be amended except by written
agreement executed by the Company and Executive.
COMPANY
WEBLINK WIRELESS, INC.
By:
---------------------------------
Name:
-------------------------
------------------------------
Title:
------------------------
------------------------------
Accepted and Agreed:
EXECUTIVE:
Name:
------------------------------
Date:
------------------------------
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[To be used if definitions in Plan is to be replaced.]
Exhibit A
"Cause" shall mean: [SELECT ALL THAT APPLY]
[ ] the Executive shall have committed an intentional act of fraud,
embezzlement or a material theft in connection with the Executive's duties or in
the course of the Executive's employment with the Company.
[ ] the Executive shall have been convicted of felony and the
continuation of the employment of the Executive with the Company following such
conviction will have a materially adverse affect upon the reputation and/or
prospects of the Company.
[ ] the Executive shall have breached any material duty of loyalty to the
Company; provided the actions of the Executive were not approved by the Board
following full disclosure of the Executive's interest.
[ ] the Executive shall have materially breached his obligation to devote
substantially all of his time during normal business hours (subject to
vacations, sick leaves and other absences in accordance with the policies of the
Company as of in effect of the date hereof) to the business and affairs of the
Company and to attempt to maximize shareholder value.
[ ] the Executive shall have committed intentional wrongful damage to
property of the Company (which is materially harmful to the Company).
[ ] the Executive shall have committed intentional wrongful disclosure of
secret processes or confidential information of the Company (which is materially
harmful to the Company).
[ ] the Executive shall have failed to comply with specific directions of
the Board of Directors or the Chief Executive Officer of the Company.
[ ] Other ______________________________
[ ] For purpose of this definition of Cause, no act, or failure to
act, on the part of the Executive shall be deemed "intentional" if it was due
primarily to an error in judgment or negligence, but shall be deemed
"intentional" only if done, or omitted to be done, by the Executive not in good
faith and without reasonable
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belief that the Executive's action or omission was in the best interest of the
Company.
To the extent that any action of the Executive relied upon by the
Company to terminate Executive's employment for Cause is susceptible of being
cured, the Company must provide the Executive with written notice of its intent
to terminate (such to identify with specificity the action upon which the
Company intends to rely to terminate) and the right of the Company to terminate
any such employment based upon such action shall be suspended for a period of
thirty (30) days to allow the Executive to cure such action.
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[To be used if definitions in Plan is to be replaced.]
Exhibit B
"Change in Control" shall mean [SELECT ALL THAT APPLY]:
[ ] The Company is merged, consolidated, converted or reorganized into
or with another corporation or other legal entity, and as a result
of such merger, consolidation, conversion or reorganization less
than a majority of the combined voting power of the then
outstanding securities of the Company or such corporation or other
legal entity are held, immediately after such transaction, in the
aggregate, by the holders of Voting Stock (as hereinafter defined)
of the Company immediately prior to such transaction and/or such
voting power is not held by substantially all of such holders in
substantially the same proportions relative to each other;
[ ] The Company sells (directly or indirectly) all or substantially all
of its assets (including, without limitation), by means of the sale
of the capital stock or assets of one or more direct or indirect
subsidiaries of the Company) to any other corporation or other
legal entity (other than a directly or indirectly majority-owned
subsidiary of the Company), of which less than a majority of the
combined voting power of the then outstanding voting securities
(entitled to vote generally in the election of directors or persons
performing similar functions on behalf of such other corporation or
legal entity) of such other corporation or legal entity is held in
the aggregate by the holders of Voting Stock of the Company
immediately prior to such sale and/or such voting power is not held
by substantially all of such holders in substantially the same
proportions relative to each other;
[ ] Any person (as the term "person" is used in Section 13(d)(3) or
Section 14(d)(2) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act")) becomes (subsequent to the date hereof) the
beneficial owner (as the term "beneficial owner" is defined under
Rule 13d-3 or any successor rule or regulation promulgated under
the Exchange Act) of securities representing fifty percent (50%) or
more of the combined voting power of the outstanding securities
entitled to vote generally in the election of directors of the
Company ("Voting Stock"); provided, however, for purposes of this
section, the term "person" will not be deemed to
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include any "person" who, as of the date hereof, owns forty-five
percent (45%) or more of the Voting Stock of the Company; or
[ ] The stockholders of the Company approve a plan contemplating the
liquidation or dissolution of the Company.
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Exhibit C
"Good Reason" shall mean [SELECT ALL THAT APPLY]:
[ ] Failure to elect or reelect the Executive to the office(s) of the
Company which the Executive holds as of the date hereof.
[ ] A significant adverse change imposed by the Board in the nature or
scope of the authorities, powers, functions, responsibilities or
duties attached to the position(s) with the Company which the
Executive held immediately prior to the date hereof.
[ ] The Company shall require that the principal place of work of the
Executive be changed to any location which is in excess of 25 miles
from the location thereof immediately prior to the date hereof
[ ] The Company shall require the Executive to travel away from the
Executive's office in the course of discharging the Executive's
responsibilities or duties hereunder significantly more (in terms
of either consecutive days or aggregate days in any calendar year)
than was required of the Executive prior to the date hereof
without, in either case, the Executive's prior consent.
[ ] Any material breach of this Agreement by the Company or any
successor thereto; including, without limitation, any failure to
pay to the Executive the compensation payable to the Executive by
the Company pursuant to this Agreement.
[ ] Other _____________________________
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WEBLINK WIRELESS, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
THE COMPANY FOR ANNUAL MEETING APRIL 5, 2000
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<S> <C>
The undersigned hereby appoints John D. Beletic and Frederick G. Anderson, or any one of them, proxies of the
P undersigned, each with the power of substitution, to vote all shares of common stock which the undersigned would be
entitled to vote at the Annual Meeting of Stockholders of WebLink Wireless, Inc. to be held in Dallas, Texas on
R Wednesday, April 5, 2000, and any adjournment of such meeting on the matters specified and in their discretion with
respect to such other business as may properly come before the meeting or any adjournment thereof, hereby revoking
O any proxy heretofore given. The undersigned hereby acknowledges receipt of the Notice of, and a Proxy Statement for
such Annual Meeting.
X (change of address)
Y THIS PROXY, WHEN PROPERLY EXECUTED WILL BE VOTED IN THE
MANNER DIRECTED HEREIN. IN THE ABSENCE OF SPECIFIC
DIRECTIONS TO THE CONTRARY (INDICATED BY MARKING THE ----------------------------------------------------
APPROPRIATE BOXES ON THE REVERSE HEREOF), THIS PROXY WILL
BE VOTED FOR THE ELECTION OF EACH OF THE DIRECTOR ----------------------------------------------------
NOMINEES, FOR APPROVAL OF THE 2000 FLEXIBLE INCENTIVE
PLAN AND FOR THE RATIFICATION OF THE APPOINTMENT OF ----------------------------------------------------
ARTHUR ANDERSEN LLP AS INDEPENDENT AUDITORS.
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SEE REVERSE
SIDE
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<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
WEBLINK WIRELESS, INC.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. [X]
The Board of Directors recommends a vote FOR
proposals 1, 2 and 3.
FOR WITHHOLD FOR except vote
ALL ALL withheld from the
following nominees:
1. Election of NOMINEES: 01 JOHN D. BELETIC, 3. Approval of Amendment to the FOR AGAINST ABSTAIN
Directors [ ] [ ] [ ] 02 LEIGH J. Nonqualified Formula Stock
ABRAMSON, 03 ALBERT Option Plan for Non-Employee [ ] [ ] [ ]
C. BLACK, JR., Directors.
- -------------------------------- 04 GUY L. DE CHAZAL,
Nominee Exceptions 05 STEVEN B. 4. The ratification of the FOR AGAINST ABSTAIN
DODGE, 06 MICHAEL appointment of Arthur
(terms to expire at 2001 Annual Meeting of Stockholders) C. HOFFMAN AND Andersen LLP as independent [ ] [ ] [ ]
07 PAMELA D.A. REEVE auditors.
2. Approval of FOR AGAINST ABSTAIN
2000 Flexible 5. With discretionary authority
Incentive Plan. [ ] [ ] [ ] as to such other matters as
may properly come before the
meeting.
----------------------------------------------------------
Signature(s) Date
----------------------------------------------------------
Signature(s) Date
NOTE: Please sign exactly as name appears hereon. Joint
owners should each sign. When signing as attorney,
executor, administrator, trustee or guardian,
please give your full title as such.
Please sign, date and return the Proxy Card promptly, using the enclosed envelope.
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