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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. 1)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
High Speed Access Corp.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction
applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how it
was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
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[HIGH SPEED ACCESS CORP. LETTERHEAD]
May 8, 2000
Dear Stockholder:
You are cordially invited to attend the 2000 Annual Meeting of
Stockholders of High Speed Access Corp. It will be held in the Aspen Room of the
Inverness Hotel & Convention Center, 200 Inverness Drive West, Englewood,
Colorado 80112, at 2:00 p.m., Mountain Standard Time, on June 6, 2000.
At the Annual Meeting, the stockholders will be asked:
1. To elect two members of the Board of Directors to serve for a
term ending in 2003 and until their successors are duly
elected and qualified.
2. To approve an increase in the number of shares of Common Stock
authorized for issuance under the Company's 1999 Stock Option
Plan.
3. To transact such other business as may properly come before
the meeting and any adjournment thereof.
The accompanying Notice of 2000 Annual Meeting of Stockholders and
Proxy Statement describe the matters to be presented at the Annual Meeting.
The Board of Directors recommends that stockholders vote in favor of
the election of the nominated directors and the amendment to the Company's 1999
Stock Option Plan.
Your vote is important. Whether or not you plan to attend the Annual
Meeting, please mark, sign, date and promptly return your proxy card in the
enclosed envelope as soon as possible. Your stock will be voted in accordance
with the instructions that you have given. You may attend the Annual Meeting and
vote in person even if you have previously submitted your vote.
Sincerely,
/s/ David A. Jones, Jr.
David A. Jones, Jr.
Chairman of the Board of Directors
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HIGH SPEED ACCESS CORP.
NOTICE OF 2000 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 6, 2000
The 2000 Annual Meeting of Stockholders of High Speed Access Corp. (the
"Company") will be held at 2:00 p.m., Mountain Standard Time, on Tuesday, June
6, 2000, in the Aspen Room, Inverness Hotel & Convention Center, 200 Inverness
Drive West, Englewood, Colorado, for the following purposes:
1. To elect two members of the Board of Directors to
serve for a term ending in 2003 and until their successors are duly
elected and qualified.
2. To approve an increase in the number of shares of
Common Stock authorized for issuance under the Company's 1999 Stock
Option Plan.
3. To transact such other business as may properly come
before the meeting and any adjournment thereof.
The Board of Directors has fixed April 21, 2000 as the record date for
determining shareholders entitled to receive notice of and to vote at the
meeting and any adjournment thereof. Only stockholders of record at the close of
business at that date will be entitled to notice of and to vote at the Annual
Meeting.
All stockholders are invited to attend the Annual Meeting in person,
but even if you expect to be present at the Annual Meeting, you are requested to
mark, sign, date and return the enclosed proxy card as promptly as possible in
the postage-paid envelope provided to ensure your representation. Stockholders
attending the Annual Meeting may vote in person even if they have previously
voted.
By Order of the Board of Directors
/s/ John G. Hundley
John G. Hundley
Vice President, Secretary and General Counsel
Denver, Colorado
May 8, 2000
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HIGH SPEED ACCESS CORP.
4100 East Mississippi Avenue
Denver, Colorado 80246
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 6, 2000
This proxy statement is furnished in connection with the solicitation
of proxies by the Board of Directors of High Speed Access Corp., a Delaware
corporation (the "Company"), for use at the Annual Meeting of Stockholders of
the Company to be held at 2:00 p.m., Mountain Standard Time, on Tuesday, June 6,
2000, in the Aspen Room, Inverness Hotel & Convention Center, Englewood,
Colorado 80112, and at any adjournment or adjournments thereof.
Your vote is important. Please complete, date and sign the accompanying
proxy card and return it in the postage-paid return envelope which has been
provided so you can be sure your shares are represented at the Annual Meeting.
This proxy statement and the accompanying proxy card are first being
sent to stockholders of the Company on or about May 8, 2000.
VOTING
VOTING RIGHTS. You are entitled to notice of the Annual Meeting and to
vote your shares of Common Stock if our records showed that you owned your
shares as of the close of business on April 21, 2000. As of the close of
business on that date, there were a total of 54,418,025 shares of Common Stock
outstanding and entitled to vote. Each share of Common Stock has one vote.
USING A PROXY TO VOTE. If you hold your shares in your own name as a
holder of record, you may indicate on the enclosed proxy card how you want your
shares voted and sign, date and mail the proxy card in the postage-paid envelope
that we have provided to you. The proxies will vote your shares in accordance
with those instructions. If you give us a proxy without giving specific voting
instructions, your shares will be voted by the proxies FOR the Class I director
nominees and FOR the amendment to the 1999 Stock Option Plan recommended by our
Board of Directors. We are not aware of any other matters to be presented at the
Annual Meeting except for those described in this proxy statement. If any other
matters not described in the proxy statement are properly presented at the
meeting, the proxies will have discretionary authority to vote your shares, and
will vote your shares in accordance with the recommendations of the Board of
Directors. If the meeting is adjourned, the proxies may vote your shares on the
new meeting date as well unless you revoke your proxy.
If your Common Stock is held in "street name," the broker, bank or
other nominee holding your shares will send you directions you must follow in
order to provide it with instructions on how to vote your shares.
HOW TO REVOKE YOUR PROXY. If you complete and mail in the proxy card
before the Annual Meeting, you may revoke the proxy at any time before it is
voted. You may revoke the
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proxy by either (1) delivering written notice of revocation to the Secretary of
the Company or (2) delivering a later dated proxy or (3) voting in person at the
Annual Meeting.
VOTES REQUIRED. To transact business at the Annual Meeting, a majority
of the outstanding Common Stock entitled to vote must be represented at the
meeting in person or by proxy. If you have returned a properly executed proxy
card or attend the meeting in person, your Common Stock will be counted for the
purpose of determining whether there is a quorum, even if you wish to abstain
from voting on some or all matters introduced at the meeting. A "broker
non-vote" can occur if shares are held by a broker, bank or other nominee who
does not have authority to vote on a particular matter. Like abstentions, broker
non-votes will be counted for quorum purposes. We do not count abstentions or
broker non-votes as votes for or against a proposal. As a result, they will not
effect the outcome of the vote on the election of the Class I directors
(Proposal 1) or the proposal to amend the 1999 Stock Option Plan (Proposal 2).
With respect to Proposal 1, assuming the presence of a quorum, the
nominees for election to the Board of Directors who receive the greatest number
of votes cast for the election of directors by the shares present, in person or
by proxy, will be elected directors. Holders of Common Stock are not allowed to
cumulate their votes in the election of directors.
With respect to Proposal 2, assuming the presence of a quorum, the
amendment to the 1999 Stock Option Plan will be approved if a majority of the
shares of Common Stock present, in person or represented by proxy, and entitled
to vote at the meeting vote in favor of the amendment.
SHARE OWNERSHIP
The following table shows the number of shares of Common Stock
beneficially owned as of April 21, 2000, by each person who is known by us to
own beneficially more than 5% of the Common Stock, each of the directors and
nominees, each of the officers named in the Summary Compensation Table below,
and all directors and executive officers as a group. Except as otherwise
indicated, the Company believes that the beneficial owners of the Common Stock
listed below, based on information furnished by such owners, have sole voting
and investment power with respect to such shares.
Shares of Common Stock
Beneficially Owned
------------------
Name and Address of
Beneficial Owner Number Percent
---------------- ------ -------
Vulcan Ventures, Incorporated 20,222,139 37.2%
110 110th Avenue, N.E
Bellevue, Washington 98004
Irving W. Bailey, II(1) 1,350,312 2.5%
Michael E. Gellert(2) 569,541 1.0%
David A. Jones, Jr.(3) 2,092,290 3.8%
Jerald L. Kent(4) 38,700 *
Robert S. Saunders(5) 463,314 *
William D. Savoy(6) 20,251,589 37.2%
Stephen E. Silva(7) 58,000 *
Daniel J. O'Brien 0 0
Ron Pitcock, Sr.(8) 1,368,500 2.5%
Atul Doshi(8)(9) 142,545 *
Ferris Peery(8) 27,050 *
Jeffrey M. Tokar(8) 44,563 *
John G. Hundley(8)(10) 53,920 *
George E. Willett(8) 88,838 *
Directors and executive officers 24,993,554 45.6%
as a group (11 persons)(8)(11)
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- ----------
*Less than 1%
(1) Includes 4,800 shares held by Mr. Bailey's wife and 38,750 shares
issuable upon exercise of options exercisable within 60 days of April
21, 2000.
(2) Includes 173,515 shares held by Mr. Gellert's wife and 31,000 shares
issuable upon exercise of options exercisable within 60 days of April
21, 2000.
(3) Includes 1,527,106 shares held by a partnership with respect to which
Mr. Jones shares voting and dispositive power, 1,540 shares held by Mr.
Jones' wife as custodian under the Uniform Gift to Minors' Act and
29,450 shares issuable upon exercise of options exercisable within 60
days of April 21, 2000.
(4) Includes 31,000 shares issuable upon exercise of options exercisable
within 60 days of April 21, 2000.
(5) Includes 400 shares held by Mr. Saunders' wife, 1,500 shares held by
Mr. Saunders' children and 29,450 shares issuable upon exercise of
options exercisable within 60 days of April 21, 2000.
(6) Includes 20,222,139 shares held by Vulcan Ventures, Inc. and 29,450
shares issuable upon exercise of options exercisable within 60 days of
April 21, 2000. Mr. Savoy is the Vice President of Vulcan Ventures,
Inc.
(7) Includes 38,750 shares issuable upon exercise of options exercisable
within 60 days of April 21, 2000.
(8) Includes, as applicable, shares issuable upon exercise of options
exercisable within 60 days of April 21, 2000 as follows: Mr. Pitcock -
6,250; Mr. Doshi - 11,625; Mr. Peery - 23,250; Mr. Tokar - 44,563; Mr.
Willett - 87,188; Mr. Hundley - 7,500; and all directors and executive
officers as a group -307,813.
(9) Mr. Doshi resigned his employment with the Company effective December
31, 1999.
(10) Includes 1,230 shares held by Mr. Hundley's wife and 765 shares held by
Mr. Hundley as custodian under the Uniform Gift to Minors Act.
(11) Does not include shares owned by Mr. Pitcock or Mr. Doshi who are no
longer serving as executive officers of the Company.
PROPOSAL 1: ELECTION OF CLASS I DIRECTORS
CLASS I DIRECTORS TO BE ELECTED
Our Certificate of Incorporation provides for a classified board of
directors. The Board of Directors is divided into three classes. Each class
serves a three-year term and only one class is elected at each annual meeting of
stockholders. Class I directors are to be elected this year.
At the Annual Meeting, two directors are to be elected in Class I, with
a term to expire at the annual meeting of stockholders to be held in 2003. The
Board of Directors has nominated Irving W. Bailey, II and Stephen E. Silva for
election as directors in Class I. Each of these individuals is currently serving
as a director in Class I. Following the election of Class I directors at the
Annual Meeting, the Board of Directors will consist of seven members, with two
directors serving in each of Class I and Class II and three directors serving in
Class III.
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The Board of Directors has no reason to believe that any nominee for
Class I director will not be available for election. However, if either of the
nominees becomes unavailable for election, and unless authority is withheld, the
holders of the proxies solicited hereby will vote for such other individual(s)
as the Board of Directors may recommend.
INFORMATION ABOUT OUR DIRECTORS AND NOMINEES
The following biographies show the age and principal occupation during
the past five years of each of our directors, the date the director was first
elected to the Board and any directorships held by the director with any other
public company or registered investment company. Ages are shown as of April 21,
2000.
CLASS I DIRECTORS AND NOMINEES:
Irving W. Bailey, II, age 58, has been a director of the Company since
April 1998. Mr. Bailey currently serves as President of Bailey Capital
Corporation, a private investment company, and has held this position since
1997. He also served in various executive capacities with Providian Corporation
from 1981 to 1997, including as Chairman and Chief Executive Officer from 1988
to 1997. Mr. Bailey is a director of Computer Sciences Corporation.
Stephen E. Silva, age 40, has been a director of the Company since
January 1999. Since September 1999, Mr. Silva has served as Senior Vice
President, Corporate Development and Technology of Charter Communications, Inc.,
an owner and operator of cable television systems. Mr. Silva joined Charter
Communications in April 1995 and during that time has served as Director of
Billing Services, Vice President - Information Services, and Vice President -
Corporate Development and Technology.
CLASS II DIRECTORS:
Michael E. Gellert, age 68, has been a director of the Company since
April 1998. Since 1967, Mr. Gellert has served as a General Partner of Windcrest
Partners, a private investment company. Mr. Gellert is a director of Devon
Energy Corp., Premier Parks, Inc., Humana Inc., Seacor Smit Inc., Smith Barney
World Funds, Smith Barney Worldwide Securities Ltd. and Smith Barney Worldwide
Special Fund NV.
Jerald L. Kent, age 43, has been a director of the Company since
January 1999. Mr. Kent is the President, Chief Executive Officer and a director
of Charter Communications, Inc., and has served in various executive capacities
at Charter since 1992. Mr. Kent is also a director of Cable Television
Laboratories, Inc. and Com21, Inc.
CLASS III DIRECTORS:
David A. Jones, Jr., age 42, has served as Chairman of the Board and a
director of the Company since April 1998. Since 1994, Mr. Jones has been
Chairman of Chrysalis Ventures, a private equity management firm. Mr. Jones also
serves as Vice Chairman and a director of Humana, Inc., and as a director of
MidAmerica Bancorp, Inc. and Tritel, Inc.
Robert S. Saunders, age 48, has served as Vice Chairman of the Board
and a director of the Company since April 1998. Mr. Saunders has been Senior
Managing Director of Chrysalis Ventures, a private equity management firm, since
1998. From 1993 to 1997, Mr. Saunders served as Chief Planning Officer and
Managing Director for Strategic Planning and Business Development at Providian
Capital Management.
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William D. Savoy, age 35, has served as a director of the Company since
January 1999. Mr. Savoy currently serves as Vice President of Vulcan Ventures
Incorporated, and has served as President of Vulcan Northwest, Inc. since
January 1990. Mr. Savoy is a director of CNET, Inc., Go2Net, Inc., Harbinger
Corporation, Metricom, Inc., Telescan, Inc., Ticketmaster Online-CitySearch,
Inc., USA Networks, Inc., and Value America, Inc.
COMMITTEES OF THE BOARD AND MEETINGS
The Board of Directors has established an Audit Committee and a
Compensation Committee. The Board of Directors has not established a nominating
committee. Each of the Audit and Compensation Committees is responsible to the
full Board of Directors. The functions performed by these committees are
summarized below:
Audit Committee. The Audit Committee makes recommendations to the Board
of Directors regarding the selection and retention of the independent auditors,
reviews the scope and results of the audit and reports the results to the Board
of Directors. In addition, the Audit Committee reviews the adequacy of internal
accounting, financial and operating controls and reviews the Company's financial
reporting compliance procedures. The members of the Audit Committee are Mr.
Bailey, Chairman, and Messrs. Gellert, Jones, Saunders and Kent. The Audit
Committee met two times in 1999.
Compensation Committee. The Compensation Committee review and approves
the compensation of the Company's officers, reviews and administers the
Company's stock option plans for employees and makes recommendations to the
Board of Directors regarding such matters. The members of the Compensation
Committee are Mr. Saunders, Chairman, and Messrs. Bailey, Gellert, Jones and
Silva. The Compensation Committee met ten times in 1999.
Meetings. The Board of Directors held six meetings during 1999. Each of
the directors attended at least 75% of the total number of meetings of the Board
and the Committees on which such director served, with the exception of Jerald
L. Kent.
DIRECTOR COMPENSATION
Directors do not currently receive cash compensation for service on the
Board or any committee of the Board, but directors may be reimbursed for their
reasonable expenses incurred in connection with attendance at Board and
committee meetings.
Directors who are not employees of the Company or its subsidiaries
receive automatic grants of stock options under our 1999 Non-Employee Director
Stock Option Plan. Under the plan, each non-employee director received an option
to purchase 27,125 shares of Common Stock in January 1999. Such options were
granted at fair market value on the date of grant and vested immediately. The
plan also provides for grants on the first business day of each subsequent year
to non-employee directors (who have served for at least six months as a
director) of an option to purchase 11,625 shares of Common Stock. All of such
options granted to non-employee directors have an exercise price equal to the
fair market value of the common stock on the grant date, and have a term of ten
years.
EXECUTIVE OFFICERS
The names of, and certain information regarding, executive officers of
the Company who are not directors of the Company are set forth below. The
executive officers serve at the pleasure of the Board of Directors and the Chief
Executive Officer.
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Name Age Positions with the Company
- ---- --- --------------------------
Daniel J. O'Brien 41 President and Chief Executive Officer
Ferris Peery 58 Executive Vice President, Industry Sales
George E. Willett 38 Chief Financial Officer and Treasurer
John G. Hundley 40 Vice President and General Counsel
Mr. O'Brien joined the Company as Chief Operating Officer in October
1999 and was named President in November 1999 and Chief Executive Officer in
February 2000. From 1995 to October 1999, Mr. O'Brien was President and Chief
Operating Officer of Primestar, Inc. and previously served as President of Time
Warner Satellite Services.
Mr. Peery has held the position of Executive Vice President, Industry
Sales, since March 1999. From 1991 to 1999, Mr. Peery served as an Executive
Vice President of ANTEC, a cable technology equipment supplier.
Mr. Willett was appointed as Chief Financial Officer and Treasurer of
the Company in June 1998. From 1997 to 1998, Mr. Willett served as Chief
Financial Officer of American Pathology Resources, Inc. and, from 1994 to 1998,
as Chief Financial Officer of Regent Communications, Inc., a radio station
holding company.
Mr. Hundley has served as Vice President, Secretary and General Counsel
of the Company since May 1998. From January 1998 to May 1998, Mr. Hundley served
as General Counsel and Vice President of Development of OPM Services, Inc. and
Icelease Partners, Ltd/Vogt Ice. From 1995 to 1997, he served as development
officer and general counsel for Normal Life, Inc., a multi-state assisted living
provider.
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EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth for the year ended December 31, 1999 the
compensation received by our Chief Executive Officer, the four most highly
compensated executive officers of the Company based on salary and bonus for the
year ended December 31, 1999, and two other individuals no longer serving as
executive officers of the Company at December 31, 1999 who would have been among
the four most highly compensated executive officers of the Company for the year
ended December 31, 1999 (the "Named Officers").
Long-Term
Compensation
Annual Compensation Awards
-------------------------------- ------------
Securities
Underlying All Other
Name and Principal Position Year Salary ($) Bonus($)(1) Options (#) Compensation($)
- --------------------------- ---- ---------- ----------- ----------- ---------------
Daniel J. O'Brien 1999 $ 75,000(2) $ -- 750,000 $ 1,719(3)
President and Chief
Executive Officer
Ron Pitcock, Sr 1999 144,789 100,000 125,000 --
Former President (4) 1998 91,250 50,000
Ferris Peery 1999 122,211 61,233 93,000 --
ExecutiveVice President of
Industry Sales
Atul Doshi 1999 155,586 25,000 116,250 16,082(6)
Former Chief Technology
Officer (5)
Jeffrey M. Tokar 1999 139,478 37,563 62,000 --
Former Vice President of
Systems Operations(7)
John G. Hundley 1999 103,529 51,562 45,500 --
Vice President, Secretary
And General Counsel
George E. Willett 1999 103,529 51,562 77,500 --
Chief Financial Officer
- ---------------
(1) Amount shown for 1999 includes bonus' earned in fiscal year 1999 and
paid in fiscal year 2000.
(2) Amount shown for 1999 for Mr. O'Brien represents base salary paid after
he commenced employment with the Company on October 1, 1999.
(3) Represents insurance premiums paid by the Company during 1999 with
respect to term life insurance for the benefit of Mr. O'Brien.
(4) Mr. Pitcock served as President of the Company from January 1999 to
October 1999.
(5) Mr. Doshi resigned from the Company effective December 31, 1999.
(6) Represents reimbursement of relocation expenses.
(7) Mr. Tokar resigned from the Company effective April 25, 2000.
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OPTION GRANTS IN 1999
The following table provides information with respect to the Named
Officers concerning options granted during 1999:
Number of Percent of Potential Realizable Value at
Securities Total Options Assumed Annual Rates of Stock
Underlying Granted to Price Appreciation for Option Term(3)
Options Employees in Exercise Price Expiration -------------------------------------
Name Granted(#)(1) 1999 ($/share)(2) Date 5%($) 10%($)
- ---- ------------- ------------ -------------- ---------- ----- ------
Daniel J. O'Brien 750,000 26.8% $ 17.63 09/30/09 $ 8,054,761 $20,281,651
Ron Pitcock, Sr. 25,000 .9% 13.00 06/02/09 372,881 757,522
100,000 3.6% 25.63 08/11/09 255,241 1,847,290
Atul Doshi 58,125 2.1% 3.23 01/28/09 1,407,848 2,246,627
58,125 2.1% 3.23 03/03/09 1,415,250 2,269,128
Ferris Peery 46,500 1.7% 3.23 03/03/09 1,132,200 1,815,302
46,500 1.7% 3.23 03/03/09 1,132,200 1,815,302
Jeffrey M. Tokar 38,750 1.4% 3.23 01/28/09 938,566 1,497,751
23,250 .8% 13.00 03/03/09 338,854 680,406
John G. Hundley 15,500 .6% 1.61 01/28/09 400,428 624,102
10,000 .4% 13.00 04/11/09 147,205 297,088
20,000 .7% 13.00 06/02/09 298,304 606,018
George E. Willett 38,750 1.4% 1.61 01/28/09 1,001,069 1,560,254
38,750 1.4% 13.00 03/03/09 564,757 1,134,009
- -------------------
(1) Represents options granted under the 1998 Stock Option Plan and the
1999 Stock Option Plan. Each option granted has a term of 10 years. All
options granted under the 1998 Stock Option Plan were immediately
vested and exercisable on June 3, 1999. Options granted under the 1999
Stock Option Plan vest and become exercisable at the rate of 25% per
year of employment completed from the date of grant.
(2) Mr. O'Brien's option was granted at the fair market value of the Common
Stock on January 1, 2000. All other options were granted at not less
than the fair market value of the Common Stock on the date of grant.
Fair market value is based on the closing sales price for the Common
Stock as reported on the Nasdaq National Market on the business day
preceding the date of grant.
(3) The dollar amounts under these columns are the results of calculations
at the 5% and 10% rates required by applicable regulations of the
Securities and Exchange Commission and, therefore, are not intended to
forecast possible future appreciation, if any, of the Common Stock
price. Assumes all options are exercised at the end of their respective
terms. Actual gains, if any, on stock options exercised depends on the
future performance of the Common Stock and overall market conditions,
as well as the optionee's continued employment through the vesting
period. The amounts reflected in this table may not be achieved.
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AGGREGATED OPTION EXERCISES IN 1999 AND FISCAL YEAR-END OPTION VALUES
The following table provides information with respect to the Named
Officers concerning option exercises and unexercised options in 1999.
Number of Securities Underlying
Unexercised Options at Fiscal Value of Unexercised Options at
Year-End(#) Fiscal Year-End($)(2)
Shares Acquired Value Realized -------------------------------- -------------------------------
Name on Exercise(#) ($)(1) Exercisable Unexercisable Exercisable Unexercisable
- ---- --------------- -------------- ----------- ------------- ----------- -------------
Daniel J. O'Brien -- $ -- -- 750,000 $ -- $ --
Ron Pitcock, Sr -- -- -- 125,000 -- 115,625
Atul Doshi 58,125 567,881 -- 11,625 146,766 --
Ferris Peery -- -- -- 93,000 -- 1,339,107
Jeffrey M. Tokar -- -- 38,750 23,250 557,969 107,531
John G. Hundley 31,000 367,970 -- 30,000 -- 138,750
George E. Willett -- -- 77,500 38,750 1,278,432 179,219
- --------------------
(1) Value Realized represents the market value of the underlying securities
on the exercise date minus the exercise price of such options.
(2) Based on the market value of the underlying securities of $17.625 at
December 31, 1999 minus the exercise price of the options.
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE OF CONTROL
ARRANGEMENTS
The Company entered into an employment agreement with Daniel J.
O'Brien, the Company's President and Chief Executive Officer, as of October 1,
1999. Under this agreement, Mr. O'Brien is entitled to an initial annual salary
of $300,000, which will increase to $350,000 on October 1, 2000 and to $400,000
on October 1, 2001. Mr. O'Brien also received 750,000 options which vest over
four years, and will receive 100,000 additional options on October 1, 2000 which
will vest over four years from the date of grant. Mr. O'Brien will also be
entitled to receive 100,000 performance options on each of October 1, 2000, 2001
and 2002. Under the employment agreement, the Company agreed to purchase and
maintain a $2,000,000 term life insurance policy payable to Mr. O'Brien's
beneficiary on his death and to reimburse Mr. O'Brien up to $5,000 annually for
financial and tax planning expenses. In addition, Mr. O'Brien may participate in
any retirement, medical, dental and welfare plans, life and disability insurance
coverages and other benefit plans afforded to employees by the Company. Under
the employment agreement, Mr. O'Brien's employment with the Company is "at-will"
and may be terminated by either party at any time, with or without cause.
In conjunction with the employment agreement, Mr. O'Brien and the
Company entered into a Supplemental Executive Compensation Agreement. Under this
agreement, if, as of September 30, 2002, the difference between the exercise
price of Mr. O'Brien's initial option grant of 750,000 shares and the then fair
market value of a share of Common Stock is less than $2.00 per share, Mr.
O'Brien may elect, with respect to all or a portion of the 750,000 option shares
then outstanding, to surrender the option to the Company for cancellation and
receive a cash payment equal to $2.00 for each share subject to the option as to
which the election is made. Such payment will be in lieu of Mr. O'Brien's
exercise of the option. Subject to Mr. O'Brien's right to elect to defer such
payment, the Company will pay Mr. O'Brien the cash payment in one lump sum
payment within 30 days after Mr. O'Brien makes the election to surrender the
option and receive the cash payment. Mr. O'Brien's election to surrender the
option must be made by October 10, 2002 and his right to the election will be
forfeited upon the voluntary or involuntary termination of Mr. O'Brien's
employment with the Company.
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If Mr. O'Brien's employment with the Company is terminated without
cause by the Company or by Mr. O'Brien for good reason within the six month
period following the Company's hiring of a chief executive officer, 250,000
options of Mr. O'Brien's initial option grant will automatically vest and become
exercisable. If, as of the date of such termination of employment, the
difference between the exercise price of Mr. O'Brien's initial option grant and
the then fair market value of the shares subject to the option is less than
$2.00 per share, Mr. O'Brien may elect, with respect to all or a portion of the
250,000 option shares, to surrender the option to the Company for cancellation
and receive a cash payment equal to $2.00 for each of the 250,000 shares for
which the election is made, provided that such amount will be prorated based on
the number of months Mr. O'Brien has been employed by the Company . Such payment
will be in lieu of Mr. O'Brien's exercise of such options.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee is composed of five directors who are not
employees of the Company or any of its subsidiaries. The current members of the
Committee are Mr. Bailey, Mr. Gellert, Mr. Jones, Mr. Saunders and Mr. Silva. No
interlocking relationship exists between the Board of Directors or Compensation
Committee and the board of directors or compensation committee of any other
company, nor has such interlocking relationship existed in the past. In April
1998, the Company agreed to pay Chrysalis Ventures, LLC a consulting fee of
$20,000 per quarter, upon the earlier of a determination by the Board of
Directors that the Company had sufficient cash flow to pay such fees or the
Company's having after-tax quarterly profits in excess of $100,000 for two
consecutive quarters. Mr. Jones is the Chairman of Chrysalis Ventures and Mr.
Saunders is a Senior Managing Director of Chrysalis Ventures. In 1999, the
Company accrued $63,000 payable to Chrysalis Ventures under the consulting
arrangement. In April 2000, the Company and Chrysalis Ventures agreed to
terminate the consulting arrangement effective December 31, 1999 upon the
Company's payment of the accrued fees through December 31, 1999.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee (the "Committee") of the Board of Directors
administers the Company's executive compensation program. The Committee reviews,
recommends and approves changes to the Company's compensation policies and
programs, makes recommendations to the Board of Directors as to the amount and
form of executive officer compensation, and administers the Company's stock
option plans.
General Compensation Philosophy. The compensation programs of the
Company are designed to directly align compensation with Company performance and
increases in stockholder value as measured by the Company's stock price and to
enable the Company to attract, retain and reward executives and employees needed
to accomplish the Company's goals. The Committee believes that executive pay
should be linked to overall Company performance. Therefore, the Company provides
an executive compensation program which includes base pay, long-term incentive
opportunities through the use of stock options and, in some cases, cash bonuses.
Base Salary. Base salary is designed primarily to be competitive with
base salary levels in effect at high technology companies that are of comparable
size to the Company and with which the Company competes for executive personnel.
Base salary is set annually based on job-related experience, individual
performance and pay levels of similar positions at comparable companies.
Salaries for executive officers for 1999 were generally determined on an
individual basis by evaluating each executive's scope of responsibility,
performance, prior experience and salary history, as well as salaries for
similar positions at comparable companies.
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Cash Performance Awards. Cash performance awards, such as bonuses, are
tied to the achievement of performance goals, financial or otherwise,
established by the Committee. The Company had no formal management incentive
plan in 1999. To the extent that bonuses were paid to executive officers in
1999, the Committee considered several factors including the position held by
the executive to whom the bonus was paid, total compensation paid by comparable
companies to similarly situated executives, the performance of the executive,
and the growth and success of the Company. In 1999, the Company also provided
cash awards targeted to provide competitive levels of total cash compensation
based on the degree of achievement of Company financial and operational
performance measures.
Stock Options. In order to link the interests of the Company's
stockholders and senior management, the Company maintains stock option plans.
The Company believes that the practice of granting stock options is critical to
retaining and recruiting the key talent necessary at all employee levels to
ensure the Company's success. Stock options generally have value for executive
officers only if the price of the Company's common stock increases above the
fair market value of a share of common stock on the grant date and the officer
remains in the Company's employ for the period required for the options granted
to such person to vest.
The number of shares subject to stock options granted is within the
discretion of the Committee. In determining the size of stock option grants, the
Committee considers the officer's responsibilities, the expected future
contribution of the officer to the Company's performance and the number of
shares which continue to be subject to vesting under outstanding options. For
1999, options were granted to the executive officers based on their positions
and a subjective assessment of individual performances. In addition, options
were granted to certain executive officers as incentives for them to become
employees or to aid in their retention. Stock options typically have been
granted to executive officers when the executive first joins the Company. At the
discretion of the Committee, executive officers may also be granted stock
options to provide greater incentives to continue their employment with the
Company and to strive to increase the value of the Company's common stock. In
the aggregate, the Company's Named Officers received options to purchase a total
of 1,323,500 shares, or 44.3% of the total options granted to employees for
1999. The stock options generally become exercisable over a four year period and
are granted at a price that is equal to the fair market value of the Company's
common stock on the date of grant.
Compensation for the Chief Executive Officer. Mr. O'Brien's base salary
and long term incentive awards for 1999 were determined by the Committee in
connection with Mr. O'Brien's hiring in October 1999 and the employment
agreement entered into between the Company and Mr. O'Brien the committee
believes that the employment agreement terms are in a manner consistent with the
factors described above for all executive officers. As part of Mr. O'Brien's
employment agreement, Mr. O'Brien's base salary will be to increased to an
annual rate of $350,000 in October 2000.
Internal Revenue Code Section 162(m) Limitation. Section 162(m) of the
Internal Revenue Code imposes a limit, with certain exceptions, on the amount
that a publicly held corporation may deduct in any year for the compensation
paid or accrued with respect to its five most highly compensated executive
officers. In general, it is the Committee's policy to qualify, to the maximum
extent possible, executives' compensation for deductibility under applicable tax
laws.
Compensation Committee
Irving W. Bailey, II
Michael E. Gellert
David A. Jones, Jr.
Robert S. Saunders
Stephen E. Silva
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In November 1998, the Company entered into a systems access and
investment agreement with Vulcan Ventures and Charter Communications, a
programming content agreement with Vulcan and related network services agreement
with Charter. Under the agreements, the Company agreed to pay Charter 50% of the
Company's gross revenues for cable modem access services provided in Charter
cable systems, 15% of gross revenues for dial up access services and 50% of
gross revenues for all other optional services. In addition, if the Company
sells equipment to a subscriber, the Company pays Charter 50% of the gross
profit the Company receives from the sale. In 1999, under the agreements the
Company paid Charter $847,118. In addition, the Company recognized revenue of
$237,709 representing head end installation fees and accrued $412,725 of
reimbursable operating expenses. In addition, Charter purchased certain network
services equipment from the Company for a purchase price of $817,685,
representing the Company's acquisition cost for such equipment, of which
$695,261 was paid by Charter in 1999. Vulcan Ventures owns approximately 37.2%
of the Company's Common Stock. Mr. Savoy, a director of the Company, is the Vice
President of Vulcan Ventures. Mr. Kent, a director of the Company, is the
President, Chief Executive Officer and a director of Charter. Mr. Silva, a
director of the Company, is the Senior Vice President - Corporate Development
and Technology, of Charter.
In April 1999, Vulcan purchased 7,750,000 shares of the Company's
Series C Convertible Preferred Stock at a purchase price of $3.23 per share or
$25 million in the aggregate. Upon the closing of the Company's initial public
offering in June 1999, the Series C Convertible Preferred Stock automatically
converted into 7,750,000 shares of common stock of the Company.
In April 2000, the Company entered into a letter of intent with Charter
Communications to enter into a five year agreement under which the Company will
provide customer service, network operating, monitoring and certain other
services to Charter cable systems containing not less than 5,000,000 homes
passed. The definitive agreement, when executed, will set forth the terms upon
which the Company will provide such services.
During 1999, the Company advanced $235,000 to Darwin Networks, Inc.
pursuant to a $500,000 six month unsecured revolving credit note bearing
interest at the prime rate and paid operating expenses on behalf of Darwin
totaling $278,000. The note balance outstanding plus accrued interest totaling
$15,000 was paid in September 1999. In connection with the note, the Company
received a warrant to purchase 5 million shares of common stock of Darwin at an
exercise price of $1.00 per share. Three of the Company's directors, David A.
Jones, Jr., Michael E. Gellert and Robert S. Saunders, are also directors of
Darwin Networks, Inc.
STOCK PRICE PERFORMANCE GRAPH
The following graph compares the Company' cumulative total stockholder
return on its Common Stock during a period beginning June 4, 1999, when shares
of Common Stock of the Company were first registered under Section 12(g) of the
Securities and Exchange Act of 1934, and ending on December 31, 1999 (as
measured by dividing (a) the difference between the Company's share price at the
end and the beginning of the measurement period; by (b) the share price at the
beginning of the measurement period) with the cumulative total return of the
Nasdaq (US) Index and the Morgan Stanley High Technology Index during such
period, assuming a $100 investment on June 4, 1999. It should be noted that the
Company has not paid any dividends on
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the Common Stock, and no dividends are included in the representation of the
Company's performance. The stock price performance shown on the graph is not
necessarily indicative of future price performance.
Total Returns Index for: 6/4/99 6/30/99 9/30/99 12/31/99
- ------------------------ ------ ------- ------- --------
High Speed Access Corp. 100.0 197.0 176.0 136.0
Nasdaq (US) Index 100.0 108.0 111.0 164.0
Morgan Stanley High Technology Index 100.0 110.0 117.0 175.0
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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers and directors, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission.
Officers and directors are required by SEC regulation to furnish the Company
with copies of all Section 16(a) forms filed. Based solely upon review of copies
of such forms, or written representations that there were no unreported holdings
or transactions, the Company believes that for the fiscal year ending December
31, 1999 all Section 16(a) filing requirements applicable to its officers and
directors were complied with on a timely basis.
PROPOSAL 2: APPROVAL OF AMENDMENT TO 1999 STOCK OPTION PLAN
The Board of Directors has adopted, subject to shareholder approval, an
amendment to the Company's 1999 Stock Option Plan (the "Plan") to increase the
number of shares available for issuance by 4,679,500 shares of Common Stock to
an aggregate of 7,779,500 shares. Currently under the Plan, the number of shares
of Common Stock available for issuance is 3,100,000 shares. As of April 21,
2000, 173,549 shares remained available for grant under the Plan. As of that
date, approximately 2,926,451 shares were subject to outstanding grants under
the Plan and 369,116 shares were subject to outstanding grants under the
Company's 1998 Stock Option Plan.
The Board believes that adoption of this amendment to the Plan would,
among other things, enhance the long-term stockholder value of the Company by
offering opportunities to the Company's employees and officers to participate in
the Company's growth and success, and to encourage them to remain in the service
of the Company and to acquire and maintain stock ownership in the Company. As of
April 21, 2000, approximately 554 persons were eligible to participate in the
Plan.
The following is a summary of the principal features of the Plan.
DESCRIPTION OF THE PLAN
The purpose of the Plan is to provide us with an additional means to
retain and attract competent personnel whose present and potential contributions
are important to the success of the Company. Another purpose of the Plan is to
give our participating officers and employees additional incentive in the form
of the opportunity for stock ownership for high levels of performance and
unusual efforts to increase our earnings.
The Plan is administered by the Compensation Committee of the Board of
Directors. Subject to the eligibility and other provisions of the Plan, the
Committee is authorized to determine the recipients to whom options will be
granted; the number of shares to be subject to each option grant; the terms upon
which, the times at which, and the period within which such options may be
acquired and exercised; and to authorize the grant of incentive stock options or
nonstatutory stock options or a combination of both. In addition, the Committee
is authorized to interpret the Plan, to determine all other questions relating
to the administration of the Plan, and to take all other action it deems proper
and in the Company's best interests for carrying out the Plan.
The Board of Directors may amend, suspend or terminate the Plan, which
otherwise will terminate on January 29, 2009. However, the Plan may not be
amended without stockholder approval if such approval is required by applicable
law. The Committee may amend outstanding option agreements as long as the
amendment is not materially adverse to the participant.
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Under the Plan, nonstatutory stock options and options intended to
qualify as incentive stock options under Section 422 of the Internal Revenue
Code of 1986 (the "Code") may be granted to employees of the Company and its
subsidiaries. The Committee will select the employees to whom options may be
granted under the Plan. Such employees will be those who in the Committee's sole
discretion have in the past materially contributed to, or may be expected in the
future to materially contribute to, the successful performance of the Company
and its subsidiaries.
The Plan prohibits the transfer of options granted under the Plan
except by will or by the laws of descent and distribution. Options granted by
the Committee typically become exercisable on a cumulative basis as to a
specified percentage of the shares during the term of the option.
The maximum term for incentive stock options granted under the Plan is
ten years from the date of grant, and the exercise prices of incentive stock
options granted cannot be less than the fair market value of the optioned shares
at the date of grant. The maximum term for incentive stock options granted under
the Plan to persons who at the time the option is granted beneficially own stock
possessing more than 10% of the combined voting power of all classes of stock of
the Company or its subsidiaries (a "10% shareholder") is five years from the
date of grant, and the exercise price of incentive stock options granted to such
persons cannot be less than 110% of the fair market value of the optioned shares
at the date of grant. The fair market value (determined as of the date the
option is granted) of the stock for which incentive stock options may become
exercisable by a particular employee during any calendar year may not exceed
$100,000.
Incentive stock options granted under the Plan will expire upon the
earliest of ten years after the date of grant (or five years from the date of
grant in the case of a 10% shareholder), termination for cause, three months
after termination of employment (other than for cause) for any reason except
death or disability, and one year after death or after termination due to
disability.
There is no maximum term for nonstatutory stock options granted under
the Plan. The exercise prices of nonstatutory stock options granted under the
Plan are not required to be at fair market value of the optioned shares.
The Committee is authorized to provide in its discretion for the
payment of the exercise price otherwise than in cash, including by delivery of
shares of the Company' common stock valued at fair market value on the date
preceding the date written notice of exercise is delivered to the Company, or by
a combination of both cash and stock.
In the event of a Corporate Transaction (as defined in the Plan), the
Committee will determine whether provisions will be made in connection with the
Corporate Transaction for the assumption of options under the Plan or
substitution of appropriate new options covering the stock of the successor
corporation. If the successor corporation does not assume all outstanding
options or replace them with comparable options, the Committee may accelerate
the vesting of all outstanding options as of the participant's next vesting date
so that they become exercisable prior to the consummation of the Corporate
Transaction at such times and on such conditions as the Committee determines.
The granting of stock options under the Plan by the Committee is
subjective and is dependent upon, among other things, an employee's individual
performance. Therefore, future option grants to executive officers or employees
under the Plan are not determinable.
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FEDERAL INCOME TAX CONSEQUENCES
If an option granted under the Plan is an incentive stock option, the
optionee will not recognize income on the date of grant. In addition, no income
will be recognized on the exercise of an incentive stock option unless the
optionee is subject to the alternative minimum tax. The exercise of an incentive
stock option may result in a tax to the optionee under the alternative minimum
tax because the excess of the market value of the stock received on the exercise
of the option over the exercise price is a "tax adjustment item." Gain or loss
from the subsequent sale or exchange of shares acquired upon exercise of the
option generally will be treated as capital gain or loss, provided that the
disposition occurs more than two years after the date of grant of the option and
at least one year after the date of exercise (the "required holding period").
In general, if shares acquired by the exercise of an incentive stock
option are disposed of prior to the expiration of the required holding period,
the optionee will recognize ordinary income equal to the excess over the
exercise price of the lesser of the amount realized or the market value of the
shares at the time of exercise. Any gain in excess of ordinary income recognized
on the disposition will be capital gain, and any loss will be capital loss.
All options that do not qualify as incentive stock options are taxed as
nonstatutory stock options. An optionee will not recognize income at the time a
nonstatutory stock option is granted. However, the optionee will generally
recognize ordinary income when the option is exercised. In general, the amount
of income will be the excess, if any, of the market value of the shares at the
time of exercise over the exercise price. Upon a later sale of those shares, the
optionee will have capital gain or loss equal to the difference between the
amount realized on such sale and the tax basis of the shares sold. Furthermore,
the capital gain or loss will be long term capital gain or loss if the shares
are held for more than one year before they are sold. If payment of the option
price is made entirely in cash, the tax basis of the shares will be equal to
their fair market value on the exercise date (but not less than the exercise
price), and the shares' holding period will begin on the date after the exercise
date.
If the optionee uses already owned shares to pay the exercise price of
a nonqualified option, in whole or in part, the transaction will not be
considered to be a taxable disposition of the already owned shares. The
optionee's tax basis and holding period of the already owned shares will be
carried over to the equivalent number of shares received upon exercise. The tax
basis of the additional shares received upon exercise will be the fair market
value of the shares on the exercise date (but not less than the amount of cash,
if any, used in payment), and the holding period for such additional shares will
begin on the date after the exercise date.
In all the foregoing cases, the Company will be entitled to a deduction
at the same time and in the same amount as the participant recognizes ordinary
income, subject to certain limitations.
The statutes governing the tax treatment of stock options and stock
acquired by the exercise of options are quite technical. The above description
of tax consequences is necessarily general in nature and does not purport to be
complete. Moreover, statutory provisions are, of
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course, subject to change, as are their interpretations. The tax consequences
under state laws may not be the same as under federal laws.
RECOMMENDATION OF THE BOARD
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF THE
AMENDMENT TO THE COMPANY'S 1999 STOCK OPTION PLAN.
AUDITORS
The Company has selected PricewaterhouseCoopers LLP as its independent
public accountants for the fiscal year ending December 31, 2000. Representatives
of PricewaterhouseCoopers LLP are expected to attend the Annual Meeting and will
have an opportunity to make a statement or to respond to appropriate questions
from stockholders.
SOLICITATION OF PROXIES
In addition to solicitation by mail, some of the Company' directors and
officers who will receive no additional compensation for their services may
solicit proxies in person, and by telephone, telegraph, telecopier, facsimile.
All costs of solicitation of proxies will be borne by the Company. We have
requested brokers and nominees who hold stock in their name to furnish this
proxy material to their customers and the Company will reimburse such brokers
and nominees for their reasonable related out-of-pocket expenses.
STOCKHOLDER PROPOSALS
Any stockholder proposals intended to be presented at the Company's
2001 Annual Meeting of Stockholders must be received in writing by the Company
at its principal office no later than January 5, 2001. Any proposal submitted
after that date will be considered untimely. It will not be included in our
proxy statement and form of proxy relating to the 2001 Annual Meeting, and, if
raised at the annual meeting, management proxies would be allowed to use their
discretionary voting authority to vote on the proposal even though there is no
discussion of the proposal in the proxy statement.
ANNUAL REPORT
A copy of the Company' combined Annual Report to Stockholders and
Annual Report on Form 10-K for the year ended December 31, 1999 is enclosed with
this proxy statement. Neither the Annual Report to Shareholders nor the Form
10-K is to be considered proxy-soliciting material except to the extent
expressly incorporated by reference in this proxy statement.
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ANY STOCKHOLDER WHO WISHES TO OBTAIN AN ADDITIONAL COPY, WITHOUT
CHARGE, OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR ITS FISCAL YEAR ENDED
DECEMBER 31, 1999, WHICH INCLUDES FINANCIAL STATEMENTS AND FINANCIAL STATEMENT
SCHEDULES, WHICH IS REQUIRED TO BE FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, MAY CONTACT STEPHEN CALK, VICE PRESIDENT-INVESTOR RELATIONS, AT 4100
EAST MISSISSIPPI AVENUE, DENVER, COLORADO 80246, OR AT TELEPHONE NUMBER
303/256-2000.
By Order of the Board of Directors
/s/ John G. Hundley
John G. Hundley
Vice President, Secretary and General Counsel
Denver, Colorado
May 8, 2000
PLEASE MARK, DATE, SIGN, AND RETURN THE ENCLOSED PROXY AS PROMPTLY AS
POSSIBLE, WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON.
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APPENDIX TO PROXY STATEMENT
FORM OF PROXY CARD
(Front)
PROXY
HIGH SPEED ACCESS CORP.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR STOCKHOLDERS MEETING ON JUNE 6, 2000
The undersigned hereby appoints Daniel J. O'Brien and John G. Hundley,
and each or either of them, as true and lawful agents and proxies, with full
power of substitution in each, to represent the undersigned in all matters
coming before the 2000 Annual Meeting of Stockholders of High Speed Access Corp.
to be held at the Aspen Room, Inverness Hotel & Convention Center, 200 Inverness
Drive West, Englewood, Colorado on June 6, 2000 at 2:00 p.m., Mountain Standard
Time, and any adjournments thereof, and to vote all shares owned of record by
the undersigned as follows:
1. ELECTION OF DIRECTORS
Nominees: Irving W. Bailey, II and Stephen E. Silva
[ ] VOTE FOR all nominees listed above, except vote withheld
from the following nominees (if any):
------------------------------------------------------
OR
[ ] VOTE WITHHELD from all nominees listed above.
2. Approval of amendment to Company's 1999 Stock Option Plan to
increase the number of shares of Common Stock reserved for
issuance thereunder by 4,679,000 shares of Common Stock to an
aggregate of 7,779,500 shares.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
All of the proposals set forth above are proposals of the Company. None
of the proposals is related to or conditioned upon approval of any other
proposal.
In their discretion, the proxies are authorized to vote with respect to
any other matters that may come before the meeting or any adjournments thereof.
WHEN PROPERLY EXECUTED, THIS PROXY WILL BE VOTED IN THE MANNER
SPECIFIED ABOVE BY THE SHAREHOLDER. TO THE EXTENT CONTRARY SPECIFICATIONS ARE
NOT GIVEN, THIS PROXY WILL BE VOTED FOR THE NOMINEES LISTED IN ITEM 1 AND FOR
THE PROPOSAL IN ITEM 2 WITH THE DISCRETIONARY AUTHORITY SET FORTH IN THE
ACCOMPANYING PROXY STATEMENT.
PLEASE DATE AND SIGN ON THE REVERSE SIDE
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(Back)
Dated: , 2000
PLEASE SIGN EXACTLY AS ---------------
NAME APPEARS BELOW Signature
----------------------
Signature
- ----------------------
(JOINT OWNERS SHOULD EACH SIGN.
ATTORNEYS-IN-FACT, EXECUTORS,
ADMINISTRATORS, CUSTODIANS,
PARTNERS, OR CORPORATION OFFICERS
SHOULD GIVE FULL TITLE).
PLEASE DATE, SIGN, AND RETURN THIS PROXY
IN THE ENCLOSED ENVELOPE PROMPTLY.
NO POSTAGE IS NECESSARY IF MAILED
IN THE UNITED STATES.
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Appendix to Proxy Statement
HIGH SPEED ACCESS CORP.
1999 STOCK OPTION PLAN
1. PURPOSE. The purpose of this Plan is to strengthen the Company by
providing an additional means of retaining and attracting competent management
personnel and by providing to participating officers and other key employees of
the Company added incentive for high levels of performance and for unusual
efforts to increase the earnings of the Company through the opportunity for
stock ownership offered by the Plan.
2. DEFINITIONS. For purposes of this Plan, capitalized words and
phrases shall have the following meanings:
A. BOARD. The word "Board" means the Company's Board of
Directors.
B. CODE. The word "Code" means the Internal Revenue Code of
1986, as amended.
C. COMMON STOCK. The term "Common Stock" means the Company's
common stock, $.01 par value per share.
D. COMPANY. The word "Company" means High Speed Access Corp.,
a Delaware corporation, with its principal place of business at 4100 East
Mississippi Avenue, Denver, Colorado 80246.
E. COMPENSATION COMMITTEE. The term "Compensation Committee"
means the committee appointed by the Board to administer the Plan, pursuant to
Section 4 hereof, consisting of not less than two directors of the Company
appointed by the Board. If the Company is subject to the Exchange Act, no person
may be a member of the Committee if he or she would fail to be (i) an "outside
director", as defined in the regulations promulgated under Code Section 162(m),
or (ii) a "Non-Employee Director" within the meaning of Rule 16b-3 under the
Exchange Act.
F. DATE OF GRANT. The term "Date of Grant" means the effective
date on which an Option is awarded to an Optionee, as set forth in the Option
Agreement executed pursuant to Section 7 by the Optionee and by a member of the
Compensation Committee on behalf of the Company; provided, however, that in the
case of an ISO, the grant date shall be the later of the date on which the
Compensation Committee makes the determination granting such ISO or the date of
commencement of the Optionee's employment with the Company.
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G. DISABILITY. The word "Disability" means, as defined by and
to be construed in accordance with Code Section 22(e)(3), 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, and which renders Optionee unable to engage in
any substantial gainful activity. An Optionee shall not be considered to have a
Disability unless Optionee furnishes proof of the existence thereof in such form
and manner, and at such time, as the Compensation Committee may require.
H. EXCHANGE ACT. The term "Exchange Act" means the Securities
Exchange Act of 1934, as amended from time to time.
I. ISO. The acronym "ISO" means an option to purchase Common
Stock which at the time the option is granted qualifies as an incentive stock
option within the meaning of Code Section 422.
J. NSO. The acronym "NSO" means a nonstatutory stock option to
purchase Common Stock which at the time the option is granted does not qualify
as an ISO.
K. OPTION. The word "Option" means an ISO or NSO.
L. OPTION AGREEMENT. The term "Option Agreement" means an
agreement between the Company and an Optionee with respect to one or more
Options.
M. OPTION PRICE. The term "Option Price" means the price to be
paid for Common Stock upon the exercise of an Option granted under the Plan, in
accordance with Section 7.A hereof.
N. OPTIONEE. The word "Optionee" means an employee to whom
Options have been granted under the Plan.
O. OPTIONEE REPRESENTATIVE. The term "Optionee Representative"
means the personal representative of the Optionee's estate, and after final
settlement of the Optionee's estate, the successor or successors entitled
thereto by law.
P. PLAN. The word "Plan" means the High Speed Access Corp.
1999 Stock Option Plan, as set forth herein, and as amended from time to time.
Q. SECURITIES ACT. The term "Securities Act" means the
Securities Act of 1933, as amended from time to time.
R. SUBSIDIARY. The word "Subsidiary" means, as defined in Code
Section 424(f), any corporation (other than the Company) in an unbroken chain of
corporations beginning with the Company if, at the time of the granting of an
Option under the Plan, each of the corporations other than the
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last corporation in the unbroken chain owns stock possessing fifty percent (50%)
or more of the total combined voting power of all classes of stock of one of the
other corporations in such chain.
S. TEN PERCENT SHAREHOLDER. The term "Ten Percent Shareholder"
means an employee who, at the time an Option is granted, owns, or is deemed
within the meaning of Section 422(b)(6) of the Code to own, stock possessing
more than ten percent (10%) of the total combined voting power of all classes of
stock of the Company (or of its Subsidiary or parent (within the meaning of
Section 424(e) of the Code)).
3. STOCK SUBJECT TO PLAN. Subject to adjustment as provided in Section
8 hereof, the aggregate number of shares of Common Stock which may be issued
under the Plan shall not exceed seven million seen hundred seventy nine thousand
five hundred (7,779,500) shares. Authorized and unissued shares shall be
delivered under the Plan. If any Option expires or terminates for any reason,
the shares of Common Stock subject thereto shall again become available under
the Plan to the extent permitted by law. For purposes of meeting the
requirements of Code Section 162(m), the maximum number of shares on which
Options may be granted in any calendar year to any one individual who is a
"covered employee" under Code Section 162(m) is three hundred thousand (300,000)
shares of Common Stock, subject to adjustment as provided in Section 8 hereof.
4. ADMINISTRATION. The Compensation Committee shall have full power and
authority to construe, interpret and administer the Plan and may from time to
time adopt such rules and regulations for carrying out the Plan as it may deem
proper and in the Company's best interests. The decision of a majority of the
members of the Compensation Committee shall constitute the decision of the
Compensation Committee and the Compensation Committee may act either at a
meeting at which a majority of the members of the Compensation Committee are
present, or by a writing signed by all of the members of the Compensation
Committee. The interpretation of any provisions of the Plan by the Compensation
Committee shall be final, conclusive, and binding upon all persons and the
officers of the Company shall place into effect and shall cause the Company to
perform its obligations under the Plan in accordance with the determinations of
the Compensation Committee in administering the Plan.
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5. GRANT OF OPTIONS.
A. COMPENSATION COMMITTEE'S AUTHORITY. Subject to the terms,
provisions and conditions of the Plan, the Compensation Committee shall have
exclusive jurisdiction: [i] to select the employees to whom Options shall be
granted; [ii] to authorize the granting of ISOs, NSOs or a combination of ISOs
and NSOs to employees; [iii] to determine the number of shares of Common Stock
subject to each Option; [iv] to determine the time or times when Options will be
granted, the manner in which each Option shall be exercisable, and the duration
of the exercise period; [v] to fix such other provisions of the Option Agreement
as it may deem necessary or desirable consistent with the terms of the Plan; and
[vi] to determine all other questions relating to the administration of the
Plan.
B. $100,000 ISO EXERCISABILITY LIMITATION. Notwithstanding
Section 5.A hereof, the maximum aggregate fair market value of Common Stock
(determined as of the date the Option is granted) with respect to which ISOs
will first become exercisable by an Optionee in any calendar year under all ISO
plans of the Company and its Subsidiaries shall not exceed $100,000. Any portion
of an Option granted under the Plan in excess of the foregoing limit shall
constitute a NSO.
6. ELIGIBILITY. Key employees of the Company and its Subsidiaries,
including officers and directors of the Company or a Subsidiary, are eligible to
receive ISOs and NSOs under the Plan. Key employees to whom Options may be
granted under the Plan will be those selected by the Compensation Committee from
time to time who, in the sole discretion of the Compensation Committee, have
contributed in the past or who may be expected to contribute materially in the
future to the successful performance of the Company and its Subsidiaries.
7. TERMS OF OPTIONS. Each Option granted under the Plan shall be
evidenced by an Option Agreement signed by the Optionee and by a member of the
Compensation Committee on behalf of the Company. An Option Agreement shall
constitute a binding contract between the Company and the Optionee, and every
Optionee, upon acceptance of such Option Agreement, shall be bound by the terms
and restrictions of the Plan and of the Option Agreement. Such agreement shall
be subject to the following express terms and conditions and to such other terms
and conditions that are not inconsistent with the Plan as the Compensation
Committee may deem appropriate.
A. OPTION PRICE. The Option Price per share of Common Stock
shall be determined by the Compensation Committee at the time an Option is
granted. The Option Price for ISOs shall be not less than: [i] the fair market
value per share of Common Stock on the Date of Grant, or [ii] in the case of an
ISO granted to a Ten Percent Shareholder, one hundred ten percent (110%) of the
fair market value per share of Common Stock on the Date of Grant. The fair
market value per share of Common Stock shall be determined by:
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[i] if the Common Stock is listed on any established stock
exchange or a national market system including without limitation the
National Market of the National Association of Securities Dealers, Inc.
Automated Quotation ("Nasdaq") system, its Fair Market Value shall be
the closing sales price for such stock (or the closing bid, if no sales
were reported), as quoted on such system or exchange, or the exchange
with the greatest volume of trading in Common Stock, for the trading
day immediately preceding such given date;
[ii] if the Common Stock is quoted on the Nasdaq System (but
not on the National Market thereof) or regularly quoted by a recognized
securities dealer but selling prices are not reported, its Fair Market
Value shall be the mean between the high bid and low asked prices for
the Common Stock for the trading day immediately preceding such given
date; and
[iii] if the Common Stock is neither traded on the
over-the-counter market nor listed on a national securities exchange,
such value as the Compensation Committee, in good faith, shall
determine.
B. OPTION PERIOD. Subject to Section 7.C hereof, each Option
Agreement shall specify the period for which the Option thereunder is granted
and shall provide that the Option shall expire at the end of such period. The
Compensation Committee may extend such period provided that, in the case of an
ISO, such extension shall not in any way disqualify the Option as an ISO without
the Optionee's consent. In no case shall such period, including any such
extensions, exceed ten (10) years from the Date of Grant, provided, however,
that in the case of an ISO granted to a Ten Percent Stockholder, such period,
including extensions, shall not exceed five (5) years from the Date of Grant.
C. LAPSE OF ISO. An Option shall expire and no longer be
exercisable at the earliest of the following times (but in no event later than
the expiration date of the term of such Option as set forth in the Option
Agreement):
[1] ten (10) years from the Date of Grant;
[2] five (5) years after the Date of Grant, if an
Optionee is a Ten Percent Shareholder on the Date of Grant;
[3] three (3) months after termination of employment
with the Company or a Subsidiary for reasons other than death,
Disability or discharge for cause (as determined by the Compensation
Committee in its sole discretion);
[4] one (1) year after termination of employment with
the Company or a Subsidiary because of Disability;
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[5] one (1) year after the date of death if an
Optionee dies [i] while employed by the Company or a Subsidiary, or
[ii] within three (3) months after ceasing to be an employee of the
Company or a Subsidiary; or
[6] immediately upon termination of employment
through discharge for cause, as determined by the Compensation
Committee in its sole discretion.
D. EXERCISE PERIOD. Each Option granted under Section 5 hereof
shall be exercisable in the following cumulative installments:
First installment. Up to twenty percent (25%) of the total Optioned
shares may be exercised at any time after one (1) year following the
Date of Grant;
Second installment. Up to an additional twenty percent (25%) of the
total Optioned shares may be exercised at any time after two (2) years
following the Date of Grant;
Third installment. Up to an additional twenty percent (25%) of the
total Optioned shares may be exercised at any time after three (3)
years following the Date of Grant;
Fourth installment. Up to an additional twenty percent (25%) of the
total Optioned shares may be exercised at any time after four (4) years
following the Date of Grant; provided, however, that if Optionee is a
Ten Percent Shareholder the fifth installment may be exercised at any
time after fifty-nine (59) months following the Date of Grant.
If an installment covers a fractional share, such installment shall be
rounded off to the next highest share, except for the final installment, which
will be for the balance of the total Optioned shares.
E. LEAVES OF ABSENCE. The Compensation Committee may, in its
discretion, treat all or any portion of any period during which an Optionee is
on military or on an approved leave of absence from the Company or a Subsidiary
as a period of employment of the Optionee by the Company or Subsidiary for
purposes of accrual of the Optionee's rights under the Plan. Notwithstanding the
foregoing, if a leave of absence exceeds ninety (90) days and reemployment is
not guaranteed by contract or statute, the Optionee's employment by the Company
or a Subsidiary for the purposes of the Plan shall be deemed to have terminated
on the 91st day of the leave.
F. MANNER OF EXERCISE. To exercise an Option, the Optionee
shall deliver to the Company: [i] seven (7) days' prior written notice
specifying
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the number of shares as to which the Option is being exercised and, if
determined by counsel for the Company to be necessary, representing that such
shares are being acquired for investment purposes only and not for purpose of
resale or distribution; and [ii] payment by the Optionee, or a broker-dealer (as
provided in Section 7.G hereof), for such shares of the Option Price for the
number of shares with respect to which the Option is exercised. On or before the
expiration of the seven (7) day notice period, and provided that all conditions
precedent contained in the Plan are satisfied, the Company shall, without
transfer or issuance tax or other incidental expenses to Optionee, deliver to
Optionee, at the offices of the Company, or at such other place as may be
mutually acceptable, or, at the election of the Company, by certified mail
addressed to Optionee at Optionee's address as shown in the records of the
Company, a certificate or certificates for the Common Stock. Options are
exercisable only in whole shares, and fractional share interests shall be
treated in the manner described in Section 7.D. If Optionee fails to accept
delivery of the Common Stock, the Optionee's rights to exercise the applicable
portion of the Option shall terminate.
G. PAYMENT FOR SHARES. Except as otherwise provided in this
Section 7, the Option Price for the Common Stock shall be paid in full when the
Option is exercised. Subject to such rules as the Committee may impose and the
terms of the Option Agreement, the Option Price may be paid in whole or in part
[i] in cash, [ii] by certified or cashier's check, [iii] in whole shares of
Common Stock owned by the Optionee evidenced by negotiable certificates, [iv] by
such other consideration as shall constitute lawful consideration for the
issuance of Common Stock and be approved by the Committee (including without
limitation, assurance satisfactory to the Committee from a broker registered
under the Exchange Act of the delivery of the proceeds of an imminent sale of
the Common Stock to be issued pursuant to the exercise of such Option, such sale
to be made at the direction of the Optionee), or [v] by a combination of such
methods of payment. If payment of the Option Price is made in Common Stock, the
value of the Common Stock used for payment of the Option Price shall be the fair
market value of the Common Stock, determined in accordance with Section 7.A
hereof, on the business day preceding the day written notice of exercise is
delivered to the Company.
H. ISOS. Each Option Agreement which provides for the grant of
an ISO shall contain such terms and provisions as the Compensation Committee
deems necessary or desirable to qualify such Option as an ISO within the meaning
of Code Section 422.
I. TRANSFERABILITY OF OPTIONS. During Optionee's lifetime, the
Option shall be exercisable only by Optionee, and neither the Option nor any
right hereunder shall be transferable except by will or by the laws of descent
and distribution. The Option may not be subject to execution or other similar
process. If Optionee attempts to alienate, assign, pledge, hypothecate or
otherwise dispose of the Option or any of Optionee's rights hereunder, except as
provided herein, or in the event of any levy, attachment, execution or similar
process upon the
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rights or interests hereby conferred, the Company may, in its sole and absolute
discretion, terminate the Option by notice to Optionee and it shall thereupon
become null and void.
8. ADJUSTMENT OF SHARES. In the event of capital adjustment after the
effective date of the Plan in the Common Stock of the Company by reason of any
reorganization, recapitalization, stock split, stock dividend, combination or
exchange of shares, merger or consolidation, or any other change (after the
effective date of the Plan) in the nature or number of shares of Common Stock of
the Company, a proportionate adjustment shall be made in the maximum number and
kind of shares which may be delivered under the Plan, and in the Option Price
under and the number and kind of shares of Common Stock covered by outstanding
Options granted under the Plan. By virtue of such a capital adjustment, the
price of any share under Option shall be adjusted so that there will be no
change in the aggregate purchase price payable upon exercise of any such Option.
No fractional shares shall become available for Options as a result of such
adjustments. Such determination by the Compensation Committee shall be
conclusive.
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9. CHANGE IN CONTROL.
A. ASSUMPTION OR REPLACEMENT OF OPTIONS BY SUCCESSOR. In the
event of (a) a dissolution or liquidation of the Company, (b) a merger or
consolidation in which the Company is not the surviving corporation (other than
a merger or consolidation with a wholly-owned subsidiary, a re-incorporation of
the Company in a different jurisdiction, or other transaction in which there is
no substantial change in the stockholders of the Company or their relative stock
holdings and the Options granted under this Plan are assumed, converted or
replaced by the successor corporation, which assumption will be binding on
Optionees), (c) a merger in which the Company is the surviving corporation but
after which the stockholders of the Company immediately prior to such merger
(other than any stockholder that merges, or which owns or controls another
corporation that merges, with the Company in such merger) cease to own their
shares or other equity interests in the Company, (d) the sale of substantially
all of the assets of the Company; or (e) the acquisition, sale, or transfer of
more than 50% of the outstanding shares of the Company by tender offer or
similar transaction (any of the foregoing shall be referred to herein as a
"Corporate Transaction"), any or all outstanding Options may be assumed,
converted or replaced by the successor corporation (if any), which assumption,
conversion or replacement will be binding on all Optionees. In the alternative,
the successor corporation may substitute equivalent Options or provide
substantially similar consideration to Optionees as was provided to stockholders
(after taking into account the existing provisions of the Options). In the event
such successor corporation (if any) refuses to assume or substitute such
Options, as provided above, pursuant to a Corporate Transaction described in
this Subsection 9.A, at the discretion of the Compensation Committee, the
vesting of such Options through and as of the Optionee's next vesting date may
accelerate and become exercisable prior to the consummation of such Corporate
Transaction at such times and on such conditions as the Committee determines,
and if such Options are not exercised prior to the consummation of the Corporate
Transaction, they shall terminate in accordance with the provisions of this
Plan. A Corporate Transaction shall not include the acquisition, directly or
indirectly, of beneficial ownership of more than fifty percent (50%) of the
outstanding shares of the Company, by Vulcan Ventures, Incorporated or any
affiliate of Vulcan Ventures, Incorporated (as such term is defined under the
Securities Act, and the rules and regulations promulgated thereunder).
B. OTHER TREATMENT OF OPTIONS. Subject to any greater rights
granted to Optionees under the foregoing provisions of this Section 9, in the
event of the occurrence of any transaction described in Subsection 9.A, any
outstanding Options will be treated as provided in the applicable agreement or
plan of merger, consolidation, dissolution, liquidation, or sale of assets.
C. ASSUMPTION OF OPTIONS BY THE COMPANY. The Company, from
time to time, also may substitute or assume outstanding awards granted by
another company, whether in connection with an acquisition of such other company
or otherwise, by either; (a) granting Options under this Plan in substitution of
such other company's award; or (b) assuming such award as if it had been granted
under this Plan if the terms of
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such assumed award could be applied to an Option granted under this Plan. Such
substitution or assumption will be permissible if the holder of the substituted
or assumed award would have been eligible to be granted an Option under this
Plan if the other company had applied the rules of this Plan to such grant. In
the event the Company assumes an award granted by another company, the terms and
conditions of such award will remain unchanged (except that the exercise price
and the number and nature of shares issuable upon exercise of any such option
will be adjusted appropriately pursuant to Section 424(a) of Code). In the event
the Company elects to grant a new Option rather than assuming an existing
option, such new Option may be granted with a similarly adjusted Exercise Price.
10. COMPLIANCE WITH OTHER LAWS AND REGULATIONS. Upon the exercise of an
Option at a time when there is not in effect a registration statement under the
Securities Act and any applicable state securities laws (the "Securities Laws")
relating to the shares of Common Stock issuable upon exercise thereof and
available for delivery a prospectus meeting the requirements of the Securities
Laws, the shares of Common Stock may be issued only if the Optionee or Optionee
Representative represents and warrants in writing to the Company that the shares
being purchased are being acquired for investment and not with a view to the
distribution thereof. The shares of the Common Stock shall contain such legends
or other restrictive endorsements as counsel for the Company shall deem
necessary or proper. No shares of Common Stock shall be purchased upon the
exercise of any Option unless and until there shall have been satisfied any
applicable requirements of the Securities and Exchange Commission or other
regulatory agencies having jurisdiction and of any exchanges upon which stock of
the Company may be listed.
11. NO RIGHTS AS SHAREHOLDER. No Optionee or Optionee's Representative
shall have any rights as a shareholder with respect to Common Stock subject to
Optionee's Option before the date of transfer to the Optionee of a certificate
or certificates for such shares.
12. NO RIGHTS TO CONTINUED EMPLOYMENT.The Plan and any Option granted
under the Plan shall not confer upon any Optionee any right with respect to
continuance of employment by the Company or any Subsidiary, nor shall it
interfere in any way with the right of the Company or any Subsidiary by which an
Optionee is employed to terminate Optionee's employment at any time.
13. TERMINATION. The Plan shall terminate on March 10, 2009, ten (10)
years from the earlier of the date it was adopted by the Board or approved by
the shareholders of the Company, and may be terminated at any earlier time by
the Compensation Committee. No Option shall be granted after termination of the
Plan.
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Termination of the Plan, however, shall not affect the validity of any
Option theretofore granted under the Plan.
14. AMENDMENT. The Board shall have the right, at any time, to amend,
suspend or terminate the Plan in any respect that it may deem to be in the best
interests of the Company, except that, without approval by shareholders of the
Company holding not less than a majority of the votes represented and entitled
to be voted at a duly held meeting of the Company's shareholders, no amendment
shall be made if shareholder approval is required by applicable law, rule or
regulation, including, without limitation, Securities and Exchange Commission
Rule 16b-3 and Code Sections 162(m) or 422. No amendment of the Plan, however,
may, without the consent of the Optionee or Optionee Representative, make any
changes in any outstanding Option theretofore granted under the Plan which would
adversely affect the rights of such Optionee or Optionee Representative.
15. TAX WITHHOLDING. Upon the exercise of any Option granted under the
Plan, or upon the disposition of any Common Stock acquired by the exercise of an
ISO granted under the Plan within two (2) years from the Date of Grant or one
(1) year after such Common Stock is transferred to the Optionee, the Company
shall have the right to require Optionee to remit to the Company an amount
sufficient to satisfy all federal, state and local withholding tax requirements,
or, alternatively, the Company shall have the right to retain Common Stock
otherwise payable to the Optionee pursuant to exercise of an Option in an amount
sufficient to satisfy such withholding requirements, before the delivery to the
Optionee of any certificate(s) for shares of Common Stock.
16. GOVERNING LAW. This Plan and the Option Agreements entered into
under the Plan shall be governed by, and construed in accordance with, the laws
of the State of Delaware.
17. EFFECTIVE DATE. The effective date of the Plan shall be March 10,
1999.
HIGH SPEED ACCESS CORP.
By: /s/ High Speed Access Corp.
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Title:
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