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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. 1)
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Filed by a Party other than the Registrant [ ]
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[ ] 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 sec.240.14a-11(c) or sec.240.14a-12
NETWORK PLUS CORP.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
N/A
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
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0-11(a)(2) and identify the filing for which the offsetting fee was paid
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NETWORK PLUS CORP.
234 COPELAND STREET
QUINCY, MA 02169
April 6, 2001
Dear Network Plus Stockholder:
You are cordially invited to the annual meeting of stockholders of Network
Plus Corp. (the "Company"), which will be held at the offices of Hale and Dorr
LLP, 60 State Street, Boston, Massachusetts 02109, on Monday, May 7, 2001 at
10:00 a.m. We look forward to greeting as many of our stockholders as possible.
Details of the business to be conducted at the annual meeting are provided
in the attached Notice of Annual Meeting of Stockholders and Proxy Statement.
Whether or not you plan to attend, it is important that your shares be
represented and voted at the meeting. Therefore, we urge you to sign and
promptly return the enclosed proxy in the enclosed postage paid envelope. Please
refer to the enclosed proxy card for detailed instructions. If you decide to
attend the annual meeting, you will have the opportunity to vote in person.
Sincerely,
ROBERT T. HALE, JR.
President and Chief Executive Officer
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NETWORK PLUS CORP.
234 COPELAND STREET
QUINCY, MA 02169
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MONDAY, MAY 7, 2001
The Annual Meeting of Stockholders of Network Plus Corp., a Delaware
corporation (the "Company"), will be held at the offices of Hale and Dorr LLP,
60 State Street, Boston, Massachusetts 02109, on Monday, May 7, 2001 at 10:00
a.m., local time, to consider and act upon the following matters:
1. To elect two Class II directors to serve for a three-year term.
2. To approve an amendment to the Company's 1998 Stock Incentive Plan, as
described herein, and the continuance of the Company's 1998 Stock
Incentive Plan.
3. To ratify the selection by the Board of Directors of
PricewaterhouseCoopers LLP as the Company's independent accountants for
the current fiscal year.
4. To transact such other business as may properly come before the meeting
or any adjournment or adjournments thereof.
Stockholders of record at the close of business on March 12, 2001 will be
entitled to notice of and to vote at the meeting or any adjournments thereof.
The stock transfer books of the Company will remain open.
A copy of the Company's Annual Report to Stockholders for the year ended
December 31, 2000, which contains consolidated financial statements and other
information of interest to stockholders, accompanies this Notice of Annual
Meeting of Stockholders and Proxy Statement.
All stockholders are cordially invited to attend the meeting.
By Order of the Board of Directors,
JAMES J. CROWLEY
Secretary
Quincy, Massachusetts
April 6, 2001
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE AND
SIGN THE ENCLOSED PROXY AND MAIL IT PROMPTLY IN THE ENCLOSED ENVELOPE IN ORDER
TO ENSURE REPRESENTATION OF YOUR SHARES. NO POSTAGE NEED BE AFFIXED IF THE PROXY
IS MAILED IN THE UNITED STATES.
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NETWORK PLUS CORP.
234 COPELAND STREET
QUINCY, MA 02169
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Network Plus Corp., a Delaware corporation
(the "Company"), for use at the Annual Meeting of Stockholders (the "Annual
Meeting") to be held on Monday, May 7, 2001 and at any adjournments of the
Annual Meeting. All proxies will be voted in accordance with the stockholders'
instructions, and if no choice is specified, the proxies will be voted in favor
of the matters set forth in the accompanying Notice of Annual Meeting of
Stockholders. Any proxy may be revoked by a stockholder at any time before its
exercise by delivery of written revocation or a subsequently dated proxy to the
Secretary of the Company or by voting in person at the Annual Meeting.
At the close of business on March 12, 2001, the record date for the
determination of stockholders entitled to vote at the Annual Meeting (the
"Record Date"), there were outstanding and entitled to vote an aggregate of
63,443,366 shares of common stock, par value $.01 per share, of the Company (the
"Common Stock"). Stockholders are entitled to one vote per share of Common
Stock.
The Company's Annual Report to Stockholders for fiscal year 2000, which
includes the Company's Annual Report on Form 10-K, and these proxy materials
were first mailed to stockholders on or about April 6, 2001.
VOTES REQUIRED
The holders of a majority of the number of shares of Common Stock issued,
outstanding and entitled to vote at the Annual Meeting shall constitute a quorum
at the Annual Meeting. Shares of Common Stock present in person or represented
by proxy (including shares which abstain or do not vote with respect to one or
more of the matters presented for stockholder approval) will be counted for
purposes of determining whether a quorum is present.
The director nominees must receive a plurality of the votes cast at the
Annual Meeting, which means that a vote withheld from one or both of the
nominees will not affect the outcome of the election. The approval of the
amendment to, and the continuance of, the Company's 1998 Stock Incentive Plan
and the selection of PricewaterhouseCoopers LLP as the Company's independent
accountants for the current fiscal year must be approved by a majority of the
votes cast on the matter.
Shares that abstain from voting as to a particular matter, and shares held
in street name by brokers or nominees who indicate on their proxy that they do
not have discretionary authority to vote such shares as to a particular matter
(a "broker non-vote"), will not be counted as votes in favor of such matter and
will also not be counted as shares voting on such matter. Accordingly, an
abstention or a broker non-vote on a matter that requires the affirmative vote
of a plurality or a majority of the shares present and voting on the matter,
such as the election of the directors, the approval of the amendment to, and the
continuance of, the Company's 1998 Stock Incentive Plan and the ratification of
independent accountants, has no effect on the voting on such matter.
Stockholders may vote by any one of the following means:
- by mail
- in person at the meeting
To vote by mail, sign, date and complete the enclosed proxy card and return
it in the enclosed self-addressed stamped envelope. No postage is necessary if
mailed in the United States. If you hold your shares through a bank, broker or
other nominee, they will give you separate instructions on voting your shares.
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BENEFICIAL OWNERSHIP OF COMMON STOCK
The following table sets forth certain information, as of December 31,
2000, with respect to the beneficial ownership of the Company's Common Stock by
(i) each person known by the Company to beneficially own more than 5% of the
outstanding shares of Common Stock, (ii) each director of the Company, (iii)
each current or former executive officer of the Company named in the Summary
Compensation Table set forth under the caption "Executive Compensation" below
and (iv) all directors and executive officers of the Company as of December 31,
2000 as a group. The address of each 5% stockholder listed below is c/o Network
Plus Corp., 234 Copeland Street, Quincy, Massachusetts 02169.
NUMBER OF SHARES ISSUABLE
SHARES UPON EXERCISE OF PERCENTAGE OF
BENEFICIALLY STOCK COMMON STOCK
BENEFICIAL OWNER OWNED(1) OPTIONS(2) OUTSTANDING(3)
- ---------------- ------------ ---------------- ---------------
5% STOCKHOLDERS
Robert T. Hale............................. 21,889,177(4) 0 35.4%
Robert T. Hale, Jr......................... 22,953,960(5) 0 37.1
OTHER DIRECTORS
James J. Crowley........................... 0 604,286 *
David D. Martin............................ 30,000 90,432 *
Joseph C. McNay............................ 0 65,332 *
OTHER EXECUTIVE OFFICERS LISTED IN THE
SUMMARY COMPENSATION TABLE
George C. Alex............................. 8,000 455,332 *
Richard Kendall............................ 19,182 439,044 *
ALL DIRECTORS AND EXECUTIVE OFFICERS AS A
GROUP (6 PERSONS).......................... 44,873,137(4)(5) 1,250,050 73.1
- ---------------
* Less than 1%
(1) The inclusion herein of any shares of Common Stock deemed beneficially owned
does not constitute an admission of beneficial ownership of those shares.
Unless otherwise indicated, each person listed above has sole voting and
investment power with respect to the shares listed.
(2) Shares of common stock issuable under stock options that are exercisable
within 60 days after December 31, 2000 are deemed outstanding for computing
the percentage ownership of the person holding the options but are not
deemed outstanding for computing the percentage ownership of any other
person.
(3) Number of shares deemed outstanding includes 61,809,727 shares outstanding
as of December 31, 2000 plus any shares of common stock issuable under stock
options that are exercisable within 60 days after December 31, 2000.
(4) Includes 272,000 shares held by a trust for the benefit of grandchildren of
Robert T. Hale, over which shares Mr. Hale has sole voting and dispositive
power. Mr. Hale disclaims beneficial ownership of such shares.
(5) Includes 657,333 shares held by various trusts for the benefit of Robert T.
Hale's children and grandchildren, including Mr. Hale, Jr. and his children,
over which shares Mr. Hale, Jr. has shared voting and dispositive power, and
excludes the shares described in (4) above. Mr. Hale, Jr. disclaims
beneficial ownership of such shares.
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PROPOSAL NO. 1 -- ELECTION OF CLASS II DIRECTORS
The Company's certificate of incorporation divides its board of directors
into three classes (designated Class I directors, Class II directors and Class
III directors), with members of each class holding office for staggered
three-year terms. At the time of the Annual Meeting there will be two Class I
directors, whose term expires at the 2003 annual meeting, two Class II
directors, whose terms expire at the Annual Meeting, and two Class III
directors, whose terms expire at the 2002 annual meeting.
The persons named in the proxy will vote to elect Robert T. Hale and David
D. Martin as the Class II directors unless authority to vote for their election
is withheld by marking the proxy to that effect. If elected, Messrs. Hale and
Martin will hold office until the third annual meeting of stockholders following
the Annual Meeting and until their successors are elected and qualified. Messrs.
Hale and Martin have indicated their willingness to serve, if elected, but if
they should be unable or unwilling to serve, the proxies may vote for a
substitute nominee designated by the Board of Directors.
DIRECTORS AND NOMINEES
The following table sets forth, for each director of the Company (including
the nominees for Class II directors), his name and age, his positions with the
Company (including the predecessor to the Company prior to its incorporation in
Delaware in 1998), his principal occupation and business experience during the
past five years, the names of the other public reporting corporations for which
he serves as director and the year during which he first became a director of
the Company:
FIRST
BECAME A
NAME, OFFICES AND POSITIONS WITH THE COMPANY, PRINCIPAL OCCUPATION AND DIRECTORSHIPS AGE DIRECTOR
- ------------------------------------------------------------------------------------ ---- --------
NOMINEES FOR CLASS II DIRECTORS
Robert T. Hale.......................................................... 62 1990
Mr. Hale has served as Chairman of the Board of the Company since its inception in
1990. Mr. Hale is a founding member of Ascent, an industry trade group, and has
served as Chairman of its Carrier Committee since 1993 and served as Chairman of
its Board from May 1995 to May 1997. Mr. Hale was President of Hampshire Imports
from 1968 to 1992.
David D. Martin......................................................... 61 1998
Mr. Martin has served as a director of the Company since August 1998. Mr. Martin
was employed by Texas Instruments, a digital signal processing and analog
technologies company, from 1960 until June 1998, most recently as Executive Vice
President. Mr. Martin is a member of the Board of Directors of MathSoft, an
educational software company.
CLASS III DIRECTORS (TERMS EXPIRE AT 2002 ANNUAL MEETING)
James J. Crowley........................................................ 36 1998
Mr. Crowley has served as Executive Vice President of the Company since 1994 and
Chief Operating Officer, Secretary and a director of the Company since July 1998.
Mr. Crowley was an attorney at Hale and Dorr LLP, a Boston law firm, from 1992 to
1994.
Joseph C. McNay......................................................... 66 1998
Mr. McNay has served as a director of the Company since August 1998. Mr. McNay
serves as Chairman and Chief Investment Officer of Essex Investment Management
Company, a private investment Management company founded by Mr. McNay in l976.
Previously he served as Executive Vice President and a Director of Endowment
Management & Research Corp. Mr. McNay serves as a Trustee of Children's Hospital
and Children's Hospital Trust, Boston, Trustee of Simmons College, Trustee of the
Dana Farber Cancer Institute and Trustee of National Public Radio.
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FIRST
BECAME A
NAME, OFFICES AND POSITIONS WITH THE COMPANY, PRINCIPAL OCCUPATION AND DIRECTORSHIPS AGE DIRECTOR
- ------------------------------------------------------------------------------------ ---- --------
CLASS I DIRECTOR (TERM EXPIRES AT 2003 ANNUAL MEETING)
Robert T. Hale, Jr...................................................... 34 1990
Mr. Hale, Jr. has served as President and Chief Executive Officer of the Company
since its inception in 1990. From 1989 to 1990, Mr. Hale, Jr. was employed by U.S.
Telecenters, a sales agent for NYNEX Corporation, and from 1988 to 1989 as a sales
representative at MCI.
Lawrence E. Strickling.................................................. 49 2001
Mr. Strickling has served as a director of the Company since February 2001. Mr.
Strickling has been Executive Vice President and General Counsel of Core Express,
Inc., a telecommunications company, since August 2000. From September 1997 to
August 2000, Mr. Strickling was with the Federal Communications Commission, most
recently serving as Chief of the Common Carrier Bureau. From May 1987 to September
1997, Mr. Strickling was employed at Ameritech Corp., a telecommunications
company, most recently as Vice President, Public Policy.
BOARD AND COMMITTEE MEETINGS
Audit Committee. The Company has a standing Audit Committee of the Board
of Directors, which acts pursuant to the charter attached to this Proxy
Statement as Appendix A. The members of the Audit Committee for 2000 were
Messrs. Martin and McNay. In February 2001, the Audit Committee was expanded to
include Mr. Strickling.
AUDIT COMMITTEE REPORT
The Audit Committee of the Company's Board of Directors is currently
composed of three members and acts under a written charter first adopted and
approved in January, 2000. A copy of this charter is attached to this proxy
statement as Appendix A. The members of the Audit Committee are independent
directors, as defined by its charter and the rules of The Nasdaq Stock Market.
The Audit Committee held five meetings during the year ended December 31, 2000.
The Audit Committee reviewed the Company's audited financial statements for
the fiscal year ended December 31, 2000 and discussed these financial statements
with the Company's management. Management is responsible for the Company's
internal controls and the financial reporting process. The Company's independent
accountants are responsible for performing an independent audit of the Company's
financial statements in accordance with generally accepted accounting principles
and to issue a report on those financial statements. The Audit Committee is
responsible for monitoring and overseeing these processes. As appropriate, the
Audit Committee reviews and evaluates, and discusses with the Company's
management, internal accounting, financial and auditing personnel and the
independent auditors, the following:
- the plan for, and the independent auditor's report on, audits of the
Company's financial statements;
- the Company's financial disclosure documents, including all financial
statements and reports filed with the Securities and Exchange Commission
or sent to shareholders;
- changes in the Company's accounting practices, principles, controls or
methodologies;
- significant developments or changes in accounting rules applicable to the
Company; and
- the adequacy of the Company's internal controls and accounting, financial
and auditing personnel.
The Audit Committee also reviewed and discussed the audited financial
statements and the matters required by Statement on Auditing Standards 61
(Communication with Audit Committees) with PricewaterhouseCoopers LLP, the
Company's independent auditors. Statement on Auditing Standards 61 requires
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the Company's independent auditors to discuss with the Company's Audit
Committee, among other things, the following:
- methods to account for significant unusual transactions;
- the effect of significant accounting policies in controversial or
emerging areas for which there is a lack of authoritative guidance or
consensus;
- the process used by management in formulating particularly sensitive
accounting estimates and the basis for the auditors' conclusions
regarding the reasonableness of those estimates; and
- disagreements with management over the application of accounting
principles, the basis for management's accounting estimates and the
disclosures in the financial statements.
The Company's independent auditors also provided the Audit Committee with
the written disclosures and the letter required by Independence Standards Board
Standard No. 1 (Independence Discussions with Audit Committees). Independence
Standards Board Standard No. 1 requires auditors annually to disclose in writing
all relationships that in the auditor's professional opinion may reasonably be
thought to bear on independence, confirm their perceived independence and engage
in a discussion of independence. In addition, the Audit Committee discussed with
the independent auditors their independence from the Company. The Audit
Committee also considered whether the independent auditors' provision of certain
other, non-audit related services to the Company is compatible with maintaining
such auditors' independence.
Based on its discussions with management and the independent auditors, and
its review of the representations and information provided by management and the
independent auditors, the Audit Committee recommended to the Company's Board of
Directors that the audited financial statements be included in the Company's
Annual Report on Form 10-K for the year ended December 31, 2000.
By the Audit Committee of the Board of
Directors of Network Plus Corp.
DAVID D. MARTIN
JOSEPH C. MCNAY
LAWRENCE E. STRICKLING*
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* Mr. Strickling joined the Audit Committee in February 2001 and did not serve
on the Audit Committee during 2000.
Compensation Committee. The Company has a standing Compensation Committee
of the Board of Directors, which has the authority to provide recommendations to
the Board regarding compensation programs of the Company, to administer the
executive compensation programs and to grant stock options under the Company's
1998 Stock Incentive Plan. The Compensation Committee met one time during 2000.
The members of the Compensation Committee are Messrs. Martin and McNay.
Stock Option Committee. The Company has a standing Stock Option Committee
of the Board of Directors, which has the authority to grant stock options to
non-executives under the Company's 1998 Stock Incentive Plan. The Stock Option
Committee acts by written consent. The member of the Stock Option Committee is
Mr. Hale, Jr.
Nominating Committee. The Company does not have a nominating committee or
committee serving a similar function. Nominations are made by and through the
full Board of Directors.
The Board of Directors met eleven times and acted by written consent three
times during 2000. Each current director attended at least 75% of the aggregate
of the total number of Board meetings and the total number of meetings held by
all committees of the Board on which he then served.
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DIRECTOR COMPENSATION
Under the Company's 1998 Director Stock Option Plan (as amended, the
"Director Option Plan"), each director who is not also an employee of the
Company or any subsidiary of the Company receives on the date of each annual
meeting of the stockholders, or on August 1 of each year if no annual meeting is
held by such date, a fully vested option to purchase 11,333 shares of Common
Stock at an exercise price which is equal to the fair market value of the Common
Stock on the date of grant. Pursuant to the Director Option Plan, on June 6,
2000, Messrs. Martin and McNay each received a fully vested option to purchase
11,333 shares of Common Stock at an exercise price of $14.06 per share. In
addition, pursuant to the Company's 1998 Stock Incentive Plan, on July 26, 2000,
Mr. McNay and Mr. Martin each received a fully vested option to purchase 10,000
and 20,000 shares of Common Stock, respectively, at an exercise price of $13.19
per share, and on December 29, 2000, Mr. McNay and Mr. Martin each received a
fully vested option to purchase 10,000 and 25,000 shares of Common Stock,
respectively, at an exercise price of $2.50 per share. Under the Director Option
Plan, non-employee directors receive an option to purchase 22,666 shares upon
their initial election. There were no new directors elected during 2000.
Directors are reimbursed for their out-of-pocket expenses incurred as a result
of their service as directors.
EXECUTIVE COMPENSATION
Summary Compensation
The following table sets forth certain information concerning the
compensation earned in each of the last three fiscal years by (i) the Company's
Chief Executive Officer during fiscal 2000, (ii) the Company's two other
executive officers on December 31, 2000 whose salary and bonus during 2000 was
over $100,000 and (iii) two former executive officers (the "Named Executive
Officers").
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION (1) AWARDS
------------------------------ --------------
SECURITIES
UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($)(2) OPTIONS (#)(3) COMPENSATION($)
- --------------------------- ---- --------- ----------- -------------- ---------------
Robert T. Hale, Jr................ 2000 $285,012 -- -- --
President and Chief Executive 1999 294,349 $ 3,394 -- --
Officer 1998 246,163 2,671 -- --
Robert T. Hale.................... 2000 $225,008 $ 1,653 -- --
Chairman of the Board of 1999 225,008 1,029 -- --
Directors 1998 187,708 1,484 -- --
James J. Crowley.................. 2000 $220,001 -- 50,500 --
Executive Vice President, Chief 1999 197,504 $30,000 40,000 --
Operating Officer and Secretary 1998 156,500 -- 543,998 --
Richard Kendall (4)............... 2000 $347,564 $31,062 254,263 --
Senior Vice President, Sales 1999 315,766 40,227 45,000 --
1998 167,219 66,465 158,665 --
George C. Alex (5)................ 2000 $210,005 $ 1,331 -- --
Former Executive Vice President, 1999 181,161 25,000 463,332 $8,895
Chief Financial Officer and 1998 -- -- -- --
Treasurer
- ---------------
(1) In accordance with the rules of the Securities and Exchange Commission,
other compensation in the form of perquisites and other personal benefits
has been omitted in those instances where the aggregate
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amount of such perquisites and other personal benefits constituted less than
the lesser of $50,000 or 10% of the total of annual salary and bonus for the
Named Executive Officer for such year.
(2) Represents amounts earned under the Company's incentive compensation
programs.
(3) Reflects the grant of options to purchase Common Stock. The Company has
never granted any stock appreciation rights.
(4) Mr. Kendall ceased to be deemed an executive officer of the Company in
January 2001 but remains a non-executive employee of the Company.
(5) Mr. Alex joined the Company in February 1999 and ceased employment with the
Company in October 2000.
Option Grants, Exercises and Year-End Values
The following tables set forth certain information concerning option grants
and exercises by the Named Executive Officers during fiscal year ended December
31, 2000 and the number and value of the unexercised options held by such
persons on December 31, 2000.
OPTION GRANTS IN THE LAST FISCAL YEAR
POTENTIAL REALIZABLE VALUE AT
ASSUMED ANNUAL RATE OF
STOCK PRICE APPRECIATION FOR
INDIVIDUAL GRANTS OPTION TERM(3)
----------------------------------------------------- -----------------------------
NUMBER OF PERCENT OF TOTAL
SECURITIES OPTIONS EXERCISE
UNDERLYING GRANTED TO OR BASE
OPTIONS EMPLOYEES IN PRICE EXPIRATION
NAME GRANTED(#) FISCAL YEAR(%) ($/SH) DATE 5%($) 10%($)
- ---- ---------- ---------------- -------- ---------- ----------- -------------
Robert T. Hale, Jr......... 0 -- -- -- -- --
Robert T. Hale............. 0 -- -- -- -- --
James J. Crowley........... 4,000(1) 0.1% $ 8.31 8/23/10 $ 20,911 $ 52,992
6,500(1) 0.2 6.69 10/06/10 27,337 69,278
40,000(1) 1.0 2.50 12/29/10 62,889 159,374
Richard Kendall............ 10,000(2) 0.3 19.00 4/28/10 119,490 302,811
25,000(2) 1.0 12.06 7/28/10 189,659 480,633
186,388(1) 7.0 8.31 8/23/10 974,378 2,469,265
2,875(2) 0.1 7.88 10/31/10 14,239 36,083
30,000(1) 1.0 2.50 12/29/10 47,167 119,531
George C. Alex............. 0 -- -- -- -- --
- ---------------
(1) One quarter of the options were vested upon grant. The remainder vest in
three equal annual installments, subject to accelerated vesting in certain
circumstances.
(2) The options vest in four equal annual installments beginning on the first
anniversary of grant, subject to accelerated vesting in certain
circumstances.
(3) Amounts represent potential realizable values based on assumed rates of
appreciation. These assumed rates are based on Securities and Exchange
Commission requirements and do not reflect the Company's projections or
estimates of future stock price growth. Actual gains, if any, will depend on
the future performance of the Common Stock.
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AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS
SHARES FISCAL YEAR-END(#) AT FISCAL YEAR-END($)(1)
ACQUIRED ---------------------- ------------------------
ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE(#) REALIZED($) UNEXERCISABLE UNEXERCISABLE
- ---- ----------- ----------- ---------------------- ------------------------
Robert T. Hale, Jr......... 0 -- 0/0 0/0
Robert T. Hale............. 0 -- 0/0 0/0
James J. Crowley........... 30,211 $463,941 263,662/340,624(2) 0/0
Richard Kendall............ 18,882 157,275 159,882/279,152 0/0
George C. Alex............. 8,000 29,582 455,332/0 0/0
- ---------------
(1) Based on the fair market value of the Common Stock on December 31, 2000
($2.50), less the option exercise price.
(2) Mr. Crowley's options are subject to accelerated vesting upon an acquisition
or change in control of the Company.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based solely on its review of copies of reports filed by all officers and
directors of the Company who are persons required to file reports ("Reporting
Persons") pursuant to Section 16(a) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), or written representations from certain Reporting
Persons that no Form 5 filing was required for such persons, the Company
believes that during fiscal 2000 all filings required to be made by its
Reporting Persons were timely made in accordance with the requirements of the
Exchange Act, except that (i) Mr. Crowley filed a Form 5 reporting stock sales
in November 2000, and (ii) Mr. Martin and Mr. McNay each filed a late Form 5
reporting stock option grants in July 2000.
CERTAIN TRANSACTIONS
In July 2000, the Company entered into a Separation Agreement and Release
with Mr. Alex. Pursuant to the Separation Agreement and Release, Mr. Alex
resigned from all officer and director positions with the Company and its
subsidiaries. Mr. Alex remained an employee of the Company through October 2000
and continued to receive his salary through December 2000. The Separation
Agreement and Release also provided that all unvested options would become
exercisable for a period of ninety days following the last day of Mr. Alex's
employment with the Company. The Separation Agreement and Release contained a
mutual release of claims.
The Company's corporate headquarters are currently located in a
39,500-square foot facility in Quincy, Massachusetts. The Company leases the
Quincy facility from a realty trust whose beneficiaries are Robert T. Hale and
Robert T. Hale, Jr. In January 2001, the term of this lease was extended through
February 2013. From January 1, 2000 through February 28, 2001, the Company made
rental and condominium fee payments to this trust in the aggregate amount of
approximately $1.2 million.
The Company leases 80,000 square-feet of office space in Randolph,
Massachusetts under a sublease that was entered into in October 1999 and expires
in 2005. Subsequent to the effectiveness of this sublease, the Randolph facility
was purchased by a limited liability company owned by Robert T. Hale and Robert
T. Hale, Jr. Through March 2001, the Company paid no rent to the sublessor, in
accordance with the sublease. From January 1, 2000 through February 28, 2001,
the Company made approximately $5.4 million of improvements to the Randolph
facility. In August 2000, the Company entered into a lease for the Randolph
facility that will commence upon the termination of the sublease in 2005 and
terminate in 2013. The lease also grants the Company two five-year renewal
options. The lease provides for base monthly rental payments of $100,000 during
the first four years of the initial term and $113,333 during the second four
years of the initial
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term. The Company has obtained a third-party opinion that the rental payments
under this lease are fair to the Company.
On September 2, 1998, the Company paid a dividend to its stockholders,
including $2.5 million to Robert T. Hale, Jr. Mr. Hale, Jr. reinvested
approximately $1.9 million (representing approximately the total distribution to
him, net of his estimated tax liability resulting from such dividend) in the
form of a loan. Interest on this loan accrues at Fleet's prime rate. The note
was originally due 10 days after the redemption of the Company's Series A
preferred stock in July 1999. Mr. Hale, Jr. agreed to extend the date of this
note until June 30, 2003. As of February 28, 2001, the outstanding balance on
the loan was approximately $2.3 million, including accrued interest.
Robert T. Hale, Jr. is the son of Robert T. Hale. Richard Kendall is the
brother-in-law of Robert T. Hale, Jr. and the son-in-law of Robert T. Hale.
REPORT OF COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Company's executive compensation program is administered by the
Compensation Committee. The Company's executive compensation program, consisting
of base salaries, bonus awards and stock option grants, is designed to attract,
retain and reward executives who are responsible for leading the Company in
achieving its business objectives. The Compensation Committee establishes the
compensation of the Chief Executive Officer, subject to review by the full board
and subject to the terms of any applicable executive employment agreements.
Compensation Philosophy
The Company's executive compensation philosophy is based on the belief that
competitive compensation is essential to attract, motivate and retain highly
qualified employees. The Company's policy is to provide total compensation that
is competitive for comparable work and comparable corporate performance. The
compensation program includes both motivational and retention-related
compensation components. Bonuses are included to encourage effective performance
relative to current plans and objectives. Stock options are included to help
retain productive people and to more closely align their interests with those of
stockholders.
In executing its compensation policy, the Company seeks to relate
compensation with the Company's financial performance and business objectives,
reward high levels of individual performance and tie a significant portion of
total executive compensation to the performance of the Company. While
compensation survey data are useful guides for comparative purposes, the Company
believes that a successful compensation program also requires the application of
judgment and subjective determinations of individual performance, and the
Compensation Committee applies subjective judgment in reconciling the program's
objectives with the realities of retaining valued employees.
Executive Compensation Program
Annual compensation for the Company's executives consists of three
principal elements -- base salary, cash bonus awards and stock options.
BASE SALARY
In setting the annual cash compensation for Company executives, the
Compensation Committee reviews compensation for comparable positions. The
Company also periodically compares its pay practices with other
telecommunications companies through review of survey and proxy data.
Increases in annual base salary are based on a review and evaluation of the
performance of the operation or activity for which the executive has
responsibility, the impact of that operation or activity on the Company and the
skills and experience required for the job, coupled with a comparison of these
elements with similar elements for other executives both within and outside the
Company.
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CASH BONUS AWARDS
The cash bonus awards for each executive are tied to financial and other
performance objectives and targets, fixed by the Board of Directors for the
Chief Executive Officer, and by the Chief Executive Officer for the other
executive officers. During 2000, based principally on the performance of the
Company's stock, the Company awarded no significant cash bonuses to its
executives.
EQUITY OWNERSHIP
Total compensation at the executive level also includes long-term
incentives afforded by stock options. The purpose of the Company's stock option
program is to (i) reinforce the mutuality of long-term interests between
employees and the stockholders and (ii) assist in the attraction and retention
of executives, key managers and individual contributors who are essential to the
Company's success. Existing levels of equity ownership are taken into account
when determining stock option awards.
The Company's stock option program includes multi-year vesting periods to
optimize the retention value of these options and to orient the Company's
executives and managers to longer-term success. Generally, stock options granted
to executives vest over a three-year or four-year period following the date of
grant. If the employee leaves the Company before the options vest, he or she
forfeits the unvested portions of these awards. The size of the stock option
awards is generally intended to reflect the significance of the recipient's then
current and anticipated contributions to the Company. Prior to the Company's
initial public offering in June 1999, the exercise price of options was 100% or
greater of the fair market value per share on the date of grant. Since the
Company's initial public offering, the exercise price of options has been equal
to the fair market value per share on the date of grant.
The Company also has an employee stock purchase plan, which is available to
all of its full-time employees, including executives but exclusive of any
employee who owns, or would own after purchase under this plan, 5% or more of
the total combined voting power or value of the stock of the Company or of any
subsidiary. Such plan generally permits employees to purchase shares at a
discount of 15% from the lesser of the fair market value at the beginning or end
of an offering period.
CHIEF EXECUTIVE OFFICER FISCAL 2000 COMPENSATION
Mr. Hale, Jr. served as Chief Executive Officer of the Company during 2000.
The Compensation Committee set Mr. Hale, Jr.'s base salary for 2000 at $285,000,
which was considered to be a salary level competitive with that of comparable
companies. Based on the performance of the Company's stock, Mr. Hale, Jr. was
not awarded a cash bonus in 2000. Because of his significant equity ownership of
the Company, Mr. Hale Jr. was not awarded any stock options in 2000.
Compliance with Internal Revenue Code Section 162(m)
Section 162(m) of the Internal Revenue Code (the "Code") generally
disallows a tax deduction to public companies for compensation over $1 million
paid to its chief executive officer and its four other most highly compensated
executive officers. Qualifying performance-based compensation will not be
subject to the deduction limit if certain requirements are met. The Company may
from time to time attempt to structure certain elements of its executive
compensation program in a manner that complies with the performance-based
requirements of the statute. In any event, there can be no assurance that any
element of the Company's executive compensation will be exempted from the
deduction limit of Section 162(m).
By the Compensation Committee of the
Board of
Directors of Network Plus Corp.
DAVID D. MARTIN
JOSEPH C. MCNAY
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COMPARATIVE STOCK PERFORMANCE
The following graph compares the cumulative total stockholder return on the
Company's Common Stock with the cumulative return of (i) the Total Return Index
for the Nasdaq National Market (U.S. & Foreign Companies) (the "Nasdaq Index")
and (ii) the CRSP Nasdaq Total Return Industry Index for Telecommunications
Stocks (the "CRSP Telecommunications Index"). This graph assumes the investment
on June 30, 1999 of $100 in the Company's Common Stock, the Nasdaq Index and the
CRSP Telecommunications Index and assumes dividends are reinvested.
PERFORMANCE LINE GRAPH
CRSP TELECOMMUNICATIONS
NETWORK PLUS CORP. NASDAQ INDEX INDEX
------------------ ------------ -----------------------
6/30/99 100.00 100.00 100.00
12/31/99 131.25 151.91 132.99
12/31/00 15.63 91.73 57.19
JUNE 30, DECEMBER 31, DECEMBER 31,
1999 1999 2000
-------- ------------ ------------
Network Plus Corp........................................ $100.00 $131.25 $15.63
Nasdaq Index............................................. 100.00 151.91 91.73
CRSP Telecommunications Index............................ 100.00 132.99 57.19
PROPOSAL NO. 2 -- APPROVAL OF AMENDMENT TO, AND THE CONTINUANCE OF, 1998 STOCK
INCENTIVE PLAN
The Board of Directors believes that the success of the Company depends, in
large part, upon the ability of the Company to maintain a competitive position
in attracting and retaining key personnel. As of December 31, 2000, only
1,359,512 shares were available for future Awards (as defined below) under the
Company's 1998 Stock Incentive Plan (as amended, the "1998 Plan"). Accordingly,
on January 16, 2001, the Board of Directors adopted, subject to stockholder
approval, an amendment to the 1998 Plan that increased from 9,000,000 to
18,000,000 the number of shares of Common Stock available for issuance under the
1998 Plan (subject to a proportionate adjustment for certain changes in the
Company's capitalization, such as a stock split).
Section 162(m) of the Internal Revenue code of 1986, as amended (the
"Code"), generally disallows a tax deduction to public companies for
compensation over $1 million paid to the corporation's chief executive officers
and four other most highly compensated executive officers. Qualifying
performance-based compensation is not subject to the deduction limit if certain
requirements are met. In order for options and restricted stock awarded under
the 1998 Plan, as amended by the amendment, to comply with Section 162(m) after
the Annual Meeting, the continuance of the 1998 Plan must be approved by
stockholders. If the stockholders do not vote to continue the 1998 Plan, the
Company will not grant any further options or make any further Awards under the
1998 Plan.
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL OF THE
AMENDMENT TO, AND THE CONTINUANCE OF, THE 1998 PLAN.
The following is a brief summary of the provisions of the 1998 Plan. This
summary is qualified in all respects by reference to the full text of the 1998
Plan, a copy of which is available from the Secretary of the Company.
The 1998 Plan provides for the grant of incentive stock options,
nonstatutory stock options, awards of restricted stock and unrestricted stock,
and other stock-based awards ("Awards"). Currently, an aggregate of 9,000,000
shares of Common Stock may be issued pursuant to the 1998 Plan. As of February
28, 2001, options to purchase 6,807,278 shares of the Company's Common Stock
were outstanding under the 1998 Plan, options to purchase 833,210 shares had
been exercised and 1,359,512 shares were available for grant under the 1998
Plan. The 1998 Plan provides that the maximum number of shares of Common Stock
with respect to which Awards may be granted to any employee may not exceed
3,173,333 during any calendar year. No Award may be made under the 1998 Plan
after July 15, 2008, but Awards previously granted may extend beyond that date.
The 1998 Plan contains provisions relating to the disposition of Awards in
the event of mergers, acquisitions and other extraordinary corporate
transactions involving the Company. Except as otherwise provided in an Award,
upon an acquisition of the Company, all outstanding options will be assumed, or
equivalent options will be substituted, by the acquiring corporation. If an
acquiring corporation does not agree to assume, or substitute for, such options,
either all unexercised options will become immediately exercisable or each
participant will receive a cash payment equal to the sum of the spread between
the option exercise prices and the acquisition price of the shares of common
stock underlying such options. In addition, options will become fully
exercisable if the employee's employment is terminated under certain
circumstances within one year of the acquisition.
The 1998 Plan is administered by the Board of Directors of the Company and
the Compensation Committee of the Board of Directors. The Board has the
authority to adopt, amend and repeal the administrative rules, guidelines and
practices relating to the 1998 Plan, to interpret the provisions of the 1998
Plan and to terminate the 1998 Plan. The Board also has the authority to grant
Awards under the 1998 Plan and to accelerate, waive or amend certain provisions
of outstanding Awards. Pursuant to the terms of the 1998 Plan, the Board has
appointed the Compensation Committee to administer certain aspects of the 1998
Plan and the Stock Option Committee to authorize the grant of options other than
to members of the executive team. No amendment to the 1998 Plan may be made
without stockholder approval if such approval is necessary to comply with any
applicable tax or regulatory requirement, including any requirements for
compliance with Rule 16b-3 of the Exchange Act ("Rule 16b-3").
All of the employees, officers, directors, consultants and advisors of the
Company and its subsidiaries who are expected to contribute to the Company's
future growth and success, other than persons who have irrevocably elected not
to be eligible, are eligible to participate in the 1998 Plan. Incentive stock
options, however, may only be granted to employees of the Company or any of its
parent or subsidiary corporations. As of February 28, 2001, approximately 900
employees were eligible to receive Awards under the 1998 Plan. As of March 15,
2001, the market value of the Company's Common Stock was $3.63 per share.
The granting of Awards under the 1998 Plan is discretionary, and the
Company cannot now determine the number or type of Awards to be granted in the
future to any particular person or group. Since the adoption of the 1998 Stock
Incentive Plan, the following persons and groups received options to purchase
the number of shares listed: James J. Crowley, the Company's Executive Vice
President, Chief Operating Officer and Secretary - 634,498 shares; Robert J.
Cobuzzi, the Company's Executive Vice President of Finance, Chief Financial
Officer and Treasurer - 490,000 shares; George C. Alex, the Company's former
Executive Vice President, Chief Financial Officer and Treasurer - 463,332
shares; Richard Kendall, the Company's Senior Vice President, Sales - 457,927
shares; Joseph McNay, Director of the Company - 20,000 shares; David D. Martin,
Director of the Company - 45,000 shares; all current executive officers as a
group - 1,124,498 shares; all current directors who are not executive officers
as a group - 65,000 shares. No associate of any such directors, executive
officers or nominees has received any options under the 1998 Stock Incentive
Plan. As of
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February 28, 2001, current employees of the Company, excluding current executive
officers, have received options to purchase an aggregate of 6,515,990 shares
under this plan.
Description of Awards under the 1998 Plan
Incentive Stock Options and Nonstatutory Options. Optionees receive the
right to purchase a specified number of shares of Common Stock at an option
price and subject to such terms and conditions as are specified at the time of
the grant. Incentive stock options and options that the Board of Directors or
Compensation Committee intend to qualify as performance-based compensation under
Section 162(m) of the Code may not be granted at an exercise price less than the
fair market value of the Common Stock on the date of grant (or less than 110% of
the fair market value in the case of incentive stock options granted to
optionees holding 10% or more of the total combined voting power of all classes
of stock of the Company or of its parent or subsidiary corporation). All other
options may be granted at an exercise price that may be less than, equal to or
greater than the fair market value of the Common Stock on the date of grant.
Restricted and Unrestricted Stock. Restricted stock awards entitle
recipients to acquire shares of Common Stock, subject to the right of the
Company to repurchase all or part of such shares at their purchase price from
the recipient in the event that the conditions specified in the applicable stock
award are not satisfied prior to the end of the applicable restriction period
established for such award. The Company may also grant or sell to participants
shares of Common Stock free of any restrictions under the 1998 Plan.
Federal Income Tax Consequences
The following is a summary of the United States federal Income tax
consequences that generally will arise with respect to Awards granted under the
1998 Plan and with respect to the sale of Common Stock acquired under the 1998
Plan. This summary is based on the federal tax laws in effect on the date of
this proxy statement. Changes to these laws would alter the tax consequences
described below.
Incentive Stock Options. In general, a participant will not recognize
taxable income upon the grant or exercise of an incentive stock option. Instead,
a participant will recognize taxable income with respect to an incentive stock
option only upon the sale of Common Stock acquired through the exercise of the
option ("ISO Stock"). The exercise of an incentive stock option, however, may
subject the participant to the alternative minimum tax.
Generally, the tax consequences of selling ISO Stock will vary with the
length of time that the participant has owned the ISO Stock at the time it is
sold. If the participant sells ISO Stock after having owned it for at least two
years from the date the option was granted (the "Grant Date") and one year from
the date the option was exercised (the "Exercise Date"), then the participant
will recognize long-term capital gain in an amount equal to the excess of the
sale price of the ISO Stock over the exercise price.
If the participant sells ISO Stock for more than the exercise price prior
to having owned it for at least two years from the Grant Date and one year from
the Exercise Date (a "Disqualifying Disposition"), then all or a portion of the
gain recognized by the participant will be ordinary compensation income and the
remaining gain, if any, will be a capital gain. This capital gain will be a
long-term capital gain if the participant has held the ISO Stock for more than
one year prior to the date of sale.
If a participant sells ISO Stock for less than the exercise price, then the
participant will recognize capital loss in an amount equal to the excess of the
exercise price over the sale price of the ISO Stock. This capital loss will be a
long-term capital loss if the participant has held the ISO Stock for more than
one year prior to the date of sale.
Nonstatutory Stock Options. As in the case of an incentive stock option, a
participant will not recognize taxable income upon the grant of a nonstatutory
stock option. Unlike an incentive stock option, however, a participant who
exercises a nonstatutory stock option generally will recognize ordinary
compensation income in an amount equal to the difference between the fair market
value of the Common Stock acquired through the exercise of the option ("NSO
Stock") on the Exercise Date and the exercise price.
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With respect to any NSO Stock, a participant will have a tax basis equal to
the exercise price plus any income recognized upon the exercise of the option.
Upon selling NSO Stock, a participant generally will recognize capital gain or
loss in an amount equal to the difference between the sale price of the NSO
Stock and the participant's tax basis in the NSO Stock. This capital gain or
loss will be a long-term gain or loss if the participant has held the NSO Stock
for more than one year prior to the date of the sale.
Restricted Stock. A participant will not recognize taxable income upon the
grant of a restricted stock Award, unless the participant makes an election
under Section 83(b) of the Code (a "Section 83(b) Election"). If the participant
makes a valid Section 83(b) Election within 30 days of the date of the grant,
then the participant will recognize ordinary compensation income, for the year
in which the Award is granted, in an amount equal to the difference between the
fair market value of the Common Stock at the time the Award is granted and the
purchase price paid for the Common Stock. If a valid Section 83(b) Election is
not made, then the participant will recognize ordinary compensation income, at
the time that the forfeiture provisions or restrictions on transfer lapse, in an
amount equal to the difference between the fair market value of the Common Stock
at the time of such lapse and the original purchase price paid for the Common
Stock. The participant will have a tax basis in the Common Stock acquired equal
to the sum of the price paid and the amount of ordinary compensation income
recognized.
Upon the disposition of the Common Stock acquired pursuant to a restricted
stock Award, the participant will recognize a capital gain or loss equal to the
difference between the sale price of the Common Stock and the participant's tax
basis in the Common Stock. This capital gain or loss will be a long-term gain or
loss if the shares are held for more than one year.
Other Stock-Based Awards. The tax consequences associated with any other
stock-based Award granted under the Plan will vary depending on the specific
terms of the Award. Among the relevant factors are whether or not the Award has
a readily ascertainable fair market value, whether or not the Award is subject
to forfeiture provisions or restrictions on transfer, the nature of the property
to be received by the participant under the Award, and the participant's holding
period and tax basis for the Award or underlying Common Stock.
Tax Consequences to the Company. The grant of an Award under the 1998 Plan
will have no tax consequences to the Company. Moreover, in general, neither the
exercise of an incentive stock option nor the sale of any Common Stock acquired
under the 1998 Plan will have any tax consequences to the Company. The Company
generally will be entitled to a business-expense deduction, however, with
respect to any ordinary compensation income recognized by a participant under
the 1998 Plan, including in connection with a restricted stock Award or as a
result of the exercise of a nonstatutory stock option or a Disqualifying
Disposition. Any such deduction will be subject to the limitations of Section
162(m) of the Code.
PROPOSAL NO. 3 -- RATIFICATION OF SELECTION OF INDEPENDENT ACCOUNTANTS
The Board of Directors, at the recommendation of the Audit Committee, has
selected the firm of PricewaterhouseCoopers LLP as the Company's independent
accountants for the current fiscal year. PricewaterhouseCoopers LLP (previously
Coopers & Lybrand L.L.P.) has served as the Company's independent accountants
since 1996. Although stockholder approval of the Board of Directors' selection
of PricewaterhouseCoopers LLP is not required by law, the Board of Directors
believes that it is advisable to give stockholders an opportunity to ratify this
selection. If this proposal is not approved at the Annual Meeting, the Board of
Directors will reconsider its selection of PricewaterhouseCoopers LLP.
Representatives of PricewaterhouseCoopers LLP are expected to be present at the
Annual Meeting and will have the opportunity to make a statement if they desire
to do so and will also be available to answer appropriate questions from
stockholders.
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION OF THE
SELECTION OF PRICEWATERHOUSECOOPERS LLP AS THE COMPANY'S INDEPENDENT
ACCOUNTANTS.
The following is certain information regarding amounts billed by
PricewaterhouseCoopers LLP to the Company during 2000:
Audit Fees
PricewaterhouseCoopers LLP billed the Company an aggregate of $195,000 in
fees for professional services rendered in connection with the audit of the
Company's financial statements for fiscal year 2000 and the reviews of the
financial statements included in each of the Company's Quarterly Reports on Form
10-Q during the fiscal year ended December 31, 2000.
All Other Fees
PricewaterhouseCoopers LLP billed the Company an aggregate of $1,153,772 in
fees for other services rendered to the Company and its affiliates for the
fiscal year ended December 31, 2000.
STOCKHOLDER PROPOSALS
Any proposal that a stockholder of the Company wishes to be considered for
inclusion in the Company's proxy statement and proxy card for the 2002 Annual
Meeting of Stockholders (the "2002 Annual Meeting") must be received by the
Secretary of the Company at its offices, 234 Copeland Street, Quincy,
Massachusetts 02169 on or before December 8, 2001.
If a stockholder of the Company wishes to nominate a director or present a
proposal before the 2002 Annual Meeting, but does not wish to have the proposal
considered for inclusion in the Company's proxy statement and proxy card, such
stockholder must give written notice to be received by the Secretary of the
Company at the principal offices of the Company, on or after February 6, 2002,
but prior to March 8, 2002; provided, however, that if the date of the 2002
Annual Meeting is advanced by more than 20 days or delayed by more than 60 days
from May 7, 2002, a stockholder's notice of a nomination or proposal must be
received by the Secretary not earlier than the ninetieth day prior to the 2002
Annual Meeting and not later than the close of business on the later of (i) the
sixtieth day prior to the 2002 Annual Meeting and (ii) the tenth day following
the day on which notice of the date of the 2002 Annual Meeting was mailed or
public disclosure of the date of the 2002 Annual Meeting was made, whichever
occurs first. No stockholder nomination or proposal is required to be considered
unless it is presented in accordance with the requirements of the Company's
By-laws and the Securities Exchange Act of 1934. The persons designated in the
Company's proxy card will be granted discretionary authority with respect to any
stockholder proposal to the full extent permitted by the rules and regulations
of the Securities and Exchange Commission.
OTHER MATTERS
The Board of Directors does not know of any other matters which may come
before the Annual Meeting. However, if any other matters are properly presented
to the Annual Meeting, it is the intention of the persons named in the
accompanying proxy to vote, or otherwise act, in accordance with their judgment
on such matters. All costs of solicitation of proxies will be borne by the
Company. In addition to solicitations by mail, the Company's directors, officers
and regular employees, without additional remuneration, may solicit proxies by
telephone, e-mail, telecopy and personal interviews, and the Company reserves
the right to retain outside agencies for the purpose of soliciting proxies.
Brokers, custodians and fiduciaries will be requested to forward
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proxy soliciting material to the owners of stock held in their names, and, as
required by law, the Company will reimburse them for their out-of-pocket
expenses in this regard.
By Order of the Board of Directors,
James J. Crowley
Secretary
April 6, 2001
THE BOARD OF DIRECTORS HOPES THAT STOCKHOLDERS WILL ATTEND THE MEETING.
WHETHER OR NOT YOU PLAN TO ATTEND, YOU ARE URGED TO COMPLETE, DATE, SIGN AND
RETURN THE ENCLOSED PROXY IN THE ACCOMPANYING ENVELOPE. YOUR PROMPT RESPONSE
WILL GREATLY FACILITATE ARRANGEMENTS FOR THE ANNUAL MEETING AND YOUR COOPERATION
WILL BE APPRECIATED. STOCKHOLDERS WHO ATTEND THE MEETING MAY VOTE THEIR STOCK
PERSONALLY EVEN THOUGH THEY HAVE SENT IN THEIR PROXIES.
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APPENDIX A
NETWORK PLUS CORP.
AUDIT COMMITTEE CHARTER
I. PURPOSE
The primary function of the Network Plus (the "Corporation") Audit
Committee is to assist the Board of Directors in fulfilling its oversight
responsibilities by reviewing: the financial reports and other financial
information provided by the Corporation to any governmental body or the public;
the Corporation's systems of internal controls regarding finance, accounting,
legal compliance and ethics that management and the Board have established; and
the Corporation's auditing, accounting and financial reporting processes
generally. Consistent with this function, the Audit Committee should encourage
continuous improvement of, and should foster adherence to, the Corporation's
policies, procedures and practices at all levels. The Audit Committee's primary
duties and responsibilities are to:
- Serve as an independent and objective party to monitor the Corporation's
financial reporting process and internal control system.
- Review and appraise the audit efforts of the Corporation's independent
accountants and internal auditing department.
- Provide an open avenue of communication among the independent
accountants, financial and senior management and the Board of Directors.
The Audit Committee will primarily fulfill these responsibilities by
carrying out the activities enumerated in Section IV of this Charter.
II. COMPOSITION
The Audit Committee shall be comprised of at least two directors as
determined by the Board, each of whom shall be independent directors, and free
from any relationship that, in the opinion of the Board, would interfere with
the exercise of his or her independent judgment as a member of the Committee.
All members of the Committee shall have a working familiarity with basic finance
and accounting practices, and at least one member of the Committee shall have
accounting or related financial management expertise. Committee members may
enhance their familiarity with finance and accounting by participating in
educational programs conducted by the Corporation or an outside consultant.
The members of the Committee shall be elected by the Board at the annual
organizational meeting of the Board or until their successors shall be duly
elected and qualified. Unless a Chair is elected by the full Board, the members
of the Committee may designate a Chair by majority vote of the full Committee
membership.
III. MEETINGS
The Committee shall meet at least four times annually, or more frequently
as circumstances dictate. As part of its job to foster open communication, the
Committee should meet at least annually with management, financial management
and the independent accountants in separate executive sessions to discuss any
matters that the Committee or each of these groups believe should be discussed
privately. In addition, the Committee or at least its Chair should meet with the
independent accountants and management quarterly to review the Corporation's
financials consistent with IV.4 below.
IV. RESPONSIBILITIES AND DUTIES
To fulfill its responsibilities and duties, the Audit Committee shall:
DOCUMENTS/REPORTS REVIEW
1. Review and update this Charter periodically, at least annually, as
conditions dictate.
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2. Review the organization's annual financial statements and any reports or
other financial information submitted to any governmental body, or the public,
including any certification, report, opinion, or review rendered by the
independent accountants.
3. Review the reports to management prepared by the independent accountants
and management's response.
4. Review with financial management and the independent accountants the
10-K prior to its filing or prior to the release of earnings. The Chair of the
Committee may represent the entire Committee for purposes of this review.
INDEPENDENT ACCOUNTANTS
5. Recommend to the Board of Directors the selection of the independent
accountants, considering independence and effectiveness and approve the fees and
other compensation to be paid to the independent accountants. On an annual
basis, the Committee should review and discuss with the accountants all
significant relationships the accountants have with the Corporation to determine
the accountants' independence.
6. Review the performance of the independent accountants and approve any
proposed discharge of the independent accountants when circumstances warrant.
7. Periodically consult with the independent accountants out of the
presence of management about internal controls and the fullness and accuracy of
the organization's financial statements.
FINANCIAL REPORTING PROCESSES
8. In consultation with the independent accountants and financial
management, review the integrity of the organization's financial reporting
processes, both internal and external.
9. Consider the independent accountants' judgments about the quality and
appropriateness of the Corporation's accounting principles as applied in its
financial reporting.
10. Consider and approve, if appropriate, major changes to the
Corporation's auditing and accounting principles and practices as suggested by
the independent accountants or management.
PROCESS IMPROVEMENT
11. Establish regular and separate systems of reporting to the Audit
Committee by each of management, the independent accountants and financial
management regarding any significant judgments made in management's preparation
of the financial statements and the view of each as to appropriateness of such
judgments.
12. Following completion of the annual audit, review separately with each
of management, the independent accountants and financial management any
significant difficulties encountered during the course of the audit, including
any restrictions on the scope of work or access to required information.
13. Review any significant disagreement among management and the
independent accountants in connection with the preparation of the financial
statements.
14. Review with the independent accountants and management the extent to
which changes or improvements in financial or accounting practices, as approved
by the Audit Committee, have been implemented. (This review should be conducted
at an appropriate time subsequent to implementation of changes or improvements,
as decided by the Committee.)
ETHICAL AND LEGAL COMPLIANCE
15. Establish, review and update periodically a Code of Ethical Conduct and
ensure that management has established a system to enforce this Code.
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16. Review management's monitoring of the Corporation's compliance with the
organization's Ethical Code, and ensure that management has the proper review
system in place to ensure that Corporation's financial statements, reports and
other financial information disseminated to governmental organizations, and the
public satisfy legal requirements.
17. Review activities, organizational structure, and the need for an
internal audit department.
18. Review, with the organization's counsel, legal compliance matters
including corporate securities trading policies.
19. Review, with the organization's counsel, any legal matter that could
have a significant impact on the organization's financial statements.
20. Perform any other activities consistent with this Charter, the
Corporation's by-laws and governing law, as the Committee or the Board deems
necessary or appropriate.
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NETWORK PLUS CORP.
1998 STOCK INCENTIVE PLAN
1. Purpose
The purpose of this 1998 Stock Incentive Plan (the "Plan") of Network Plus
Corp., a Delaware corporation (the "Company"), is to advance the interests of
the Company's stockholders by enhancing the Company's ability to attract, retain
and motivate persons who make (or are expected to make) important contributions
to the Company by providing such persons with equity ownership opportunities and
performance-based incentives and thereby better aligning the interests of such
persons with those of the Company's stockholders. Except where the context
otherwise requires, the term "Company" shall include any of the Company's
present or future subsidiary corporations, as defined in Section 424(f) of the
Internal Revenue Code of 1986, as amended, and any regulations promulgated
thereunder (the "Code").
2. Eligibility
All of the Company's employees, officers, directors, consultants and
advisors (and any individuals who have accepted an offer for employment) are
eligible to be granted options, restricted stock awards, or other stock-based
awards (each, an "Award") under the Plan. Each person who has been granted an
Award under the Plan shall be deemed a "Participant".
3. Administration, Delegation
(a) Administration by Board of Directors. The Plan will be administered by
the Board of Directors of the Company (the "Board"). The Board shall have
authority to grant Awards and to adopt, amend and repeal such administrative
rules, guidelines and practices relating to the Plan as it shall deem advisable.
The Board may correct any defect, supply any omission or reconcile any
inconsistency in the Plan or any Award in the manner and to the extent it shall
deem expedient to carry the Plan into effect and it shall be the sole and final
judge of such expediency. All decisions by the Board shall be made in the
Board's sole discretion and shall be final and binding on all persons having or
claiming any interest in the Plan or in any Award. No director or person acting
pursuant to the authority delegated by the Board shall be liable for any action
or determination relating to or under the Plan made in good faith.
(b) Delegation to Executive Officers. To the extent permitted by
applicable law, the Board may delegate to one or more executive officers of the
Company the power to make Awards and exercise such other powers under the Plan
as the Board may determine, provided that the Board shall fix the maximum number
of shares subject to Awards and the maximum number of shares for any one
Participant to be made by such executive officers.
(c) Appointment of Committees. To the extent permitted by applicable law,
the Board may delegate any or all of its powers under the Plan to one or more
committees
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or subcommittees of the Board (a "Committee"). All references in the Plan to the
"Board" shall mean the Board or a Committee of the Board or the executive
officer referred to in Section 3(b) to the extent that the Board's powers or
authority under the Plan have been delegated to such Committee or executive
officer.
4. Stock Available for Awards
(a) Number of Shares. Subject to adjustment under Section 8, Awards may be
made under the Plan for up to 1,400,000 shares of common stock, $.01 par value
per share, of the Company (the "Common Stock"). If any Award expires or is
terminated, surrendered or canceled without having been fully exercised or is
forfeited in whole or in part or results in any Common Stock not being issued,
the unused Common Stock covered by such Award shall again be available for the
grant of Awards under the Plan, subject, however, in the case of Incentive Stock
Options (as hereinafter defined), to any limitation required under the Code.
Shares issued under the Plan may consist in whole or in part of authorized but
unissued shares or treasury shares.
(b) Per-Participant Limit. Subject to adjustment under Section 8, for
Awards granted after the Common Stock is registered under the Securities
Exchange Act of 1934 (the "Exchange Act"), the maximum number of shares of
Common Stock with respect to which an Award may be granted to any Participant
under the Plan shall be 700,000 per calendar year. The per-Participant limit
described in this Section 4(b) shall be construed and applied consistently with
Section 162(m) of the Code.
5. Stock Options
(a) General. The Board may grant options to purchase Common Stock (each,
an "Option") and determine the number of shares of Common Stock to be covered by
each Option, the exercise price of each Option and the conditions and
limitations applicable to the exercise of each Option, including conditions
relating to applicable federal or state securities laws, as it considers
necessary or advisable. An Option which is not intended to be an Incentive Stock
Option (as hereinafter defined) shall be designated a "Nonstatutory Stock
Option".
(b) Incentive Stock Options. An Option that the Board intends to be an
"incentive stock option" as defined in Section 422 of the Code (an "Incentive
Stock Option") shall only be granted to employees of the Company and shall be
subject to and shall be construed consistently with the requirements of Section
422 of the Code. The Company shall have no liability to a Participant, or any
other party, if an Option (or any part thereof) which is intended to be an
Incentive Stock Option is not an Incentive Stock Option.
(c) Exercise Price. The Board shall establish the exercise price at the
time each Option is granted and specify it in the applicable option agreement.
(d) Duration of Options. Each Option shall be exercisable at such times
and subject to such terms and conditions as the Board may specify in the
applicable option agreement.
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(e) Exercise of Option. Options may be exercised by delivery to the
Company of a written notice of exercise signed by the proper person or by any
other form of notice (including electronic notice) approved by the Board
together with payment in full as specified in Section 5(f) for the number of
shares for which the Option is exercised.
(f) Payment Upon Exercise. Common Stock purchased upon the exercise of an
Option granted under the Plan shall be paid for as follows:
(1) in cash or by check, payable to the order of the Company;
(2) except as the Board may, in its sole discretion, otherwise provide in
an option agreement, by (i) delivery of an irrevocable and unconditional
undertaking by a creditworthy broker to deliver promptly to the Company
sufficient funds to pay the exercise price or (ii) delivery by the Participant
to the Company of a copy of irrevocable and unconditional instructions to a
creditworthy broker to deliver promptly to the Company cash or a check
sufficient to pay the exercise price;
(3) when the Common Stock is registered under the Exchange Act, by
delivery of shares of Common Stock owned by the Participant valued at their fair
market value as determined by (or in a manner approved by) the Board in good
faith ("Fair Market Value"), which Common Stock was owned by the Participant at
least six months prior to such delivery;
(4) to the extent permitted by the Board, in its sole discretion by (i)
delivery of a promissory note of the Participant to the Company on terms
determined by the Board, or (ii) payment of such other lawful consideration as
the Board may determine; or
(5) by any combination of the above permitted forms of payment.
6. Restricted Stock
(a) Grants. The Board may grant Awards entitling recipients to acquire
shares of Common Stock, subject to the right of the Company to repurchase all or
part of such shares at their issue price or other stated or formula price (or to
require forfeiture of such shares if issued at no cost) from the recipient in
the event that conditions specified by the Board in the applicable Award are not
satisfied prior to the end of the applicable restriction period or periods
established by the Board for such Award (each, a "Restricted Stock Award").
(b) Terms and Conditions. The Board shall determine the terms and
conditions of any such Restricted Stock Award, including the conditions for
repurchase (or forfeiture) and the issue price, if any. Any stock certificates
issued in respect of a Restricted Stock Award shall be registered in the name of
the Participant and, unless otherwise determined by the Board, deposited by the
Participant, together with a stock power endorsed in blank, with the Company (or
its designee). At the expiration of the applicable restriction periods, the
Company (or such designee) shall deliver the certificates no longer subject to
such restrictions to the Participant or if the Participant has
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died, to the beneficiary designated, in a manner determined by the Board, by a
Participant to receive amounts due or exercise rights of the Participant in the
event of the Participant's death (the "Designated Beneficiary"). In the absence
of an effective designation by a Participant, Designated Beneficiary shall mean
the Participant's estate.
7. Other Stock-Based Awards
The Board shall have the right to grant other Awards based upon the Common
Stock having such terms and conditions as the Board may determine, including the
grant of shares based upon certain conditions, the grant of securities
convertible into Common Stock and the grant of stock appreciation rights.
8. Adjustments for Changes in Common Stock and Certain Other Events
(a) Changes in Capitalization. In the event of any stock split, reverse
stock split, stock dividend, recapitalization, combination of shares,
reclassification of shares, spin-off or other similar change in capitalization
or event, or any distribution to holders of Common Stock other than a normal
cash dividend, (i) the number and class of securities available under this Plan,
(ii) the per-Participant limit set forth in Section 4(b), (iii) the number and
class of securities and exercise price per share subject to each outstanding
Option, (iv) the repurchase price per share subject to each outstanding
Restricted Stock Award, and (v) the terms of each other outstanding Award shall
be appropriately adjusted by the Company (or substituted Awards may be made, if
applicable) to the extent the Board shall determine, in good faith, that such an
adjustment (or substitution) is necessary and appropriate. If this Section 8(a)
applies and Section 8(c) also applies to any event, Section 8(c) shall be
applicable to such event, and this Section 8(a) shall not be applicable.
(b) Liquidation or Dissolution. In the event of a proposed liquidation or
dissolution of the Company, the Board shall upon written notice to the
Participants provide that all then unexercised Options will (i) become
exercisable in full as of a specified time at least 10 business days prior to
the effective date of such liquidation or dissolution and (ii) terminate
effective upon such liquidation or dissolution, except to the extent exercised
before such effective date. The Board may specify the effect of a liquidation or
dissolution on any Restricted Stock Award or other Award granted under the Plan
at the time of the grant of such Award.
(c) Acquisition and Change in Control Events
(1) Definitions
(A) An "Acquisition Event" shall mean:
(i) any merger or consolidation of the Company with or
into another entity as a result of which the Common Stock is converted into or
exchanged for the right to receive cash, securities or other property; or
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(ii) any exchange of shares of the Company for cash,
securities or other property pursuant to a statutory share exchange transaction.
(B) A "Change in Control Event" shall mean:
(i) the acquisition by an individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act")) (a "Person") of beneficial
ownership of any capital stock of the Company if, after such acquisition, such
Person beneficially owns (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) 50% or more of either (x) the then-outstanding shares of common
stock of the Company (the "Outstanding Company Common Stock") or (y) the
combined voting power of the then-outstanding securities of the Company entitled
to vote generally in the election of directors (the "Outstanding Company Voting
Securities"); provided, however, that for purposes of this subsection (i), the
following acquisitions shall not constitute a Change in Control Event: (A) any
acquisition directly from the Company (excluding an acquisition pursuant to the
exercise, conversion or exchange of any security exercisable for, convertible
into or exchangeable for common stock or voting securities of the Company,
unless the Person exercising, converting or exchanging such security acquired
such security directly from the Company or an underwriter or agent of the
Company), (B) any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any corporation controlled by the
Company, (C) any acquisition by any corporation pursuant to a Business
Combination (as defined below) which complies with clauses (x) and (y) of
subsection (ii) of this definition or (D) any acquisition by Robert T. Hale,
Robert T. Hale, Jr., or any member of their immediate families, or any trust,
partnership, corporation or other entity controlled directly or indirectly by,
or any trust for the benefit of, Robert T. Hale, Robert T. Hale, Jr., or any
member of their immediate families (each such party is referred to herein as an
"Exempt Person"); or
(ii) the consummation of a merger, consolidation,
reorganization or statutory share exchange involving the Company or a sale or
other disposition of all or substantially all of the assets of the Company (a
"Business Combination"), unless, immediately following such Business
Combination, each of the following two conditions is satisfied: (x) all or
substantially all of the individuals and entities who were the beneficial owners
of the Outstanding Company Common Stock and Outstanding Company Voting
Securities immediately prior to such Business Combination beneficially own,
directly or indirectly, more than 50% of the then-outstanding shares of common
stock and the combined voting power of the then-outstanding securities entitled
to vote generally in the election of directors, respectively, of the resulting
or acquiring corporation in such Business Combination (which shall include,
without limitation, a corporation which as a result of such transaction owns the
Company or substantially all of the Company's assets either directly or through
one or more subsidiaries) (such resulting or acquiring corporation is referred
to herein as the "Acquiring Corporation") in substantially the same proportions
as their ownership of the Outstanding Company Common Stock and Outstanding
Company Voting Securities, respectively, immediately prior to such Business
Combination and (y) no Person (excluding any Exempt Person, the Acquiring
Corporation or any employee benefit plan
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or related trust maintained or sponsored by the Company or by the Acquiring
Corporation) beneficially owns, directly or indirectly, 50% or more of the
then-outstanding shares of common stock of the Acquiring Corporation, or of the
combined voting power of the then-outstanding securities of such corporation
entitled to vote generally in the election of directors (except to the extent
that such ownership existed prior to the Business Combination).
(C) "Good Reason" shall mean any significant diminution in the
Participant's title, authority, or responsibilities from and after such
Acquisition Event or Change in Control Event, as the case may be, or any
reduction in the annual cash compensation payable to the Participant from and
after such Acquisition Event or Change in Control Event, as the case may be, or
the relocation of the place of business at which the Participant is principally
located to a location that is greater than 50 miles from the current site.
(D) "Cause" shall mean any (i) willful failure by the
Participant, which failure is not cured within 30 days of written notice to the
Participant from the Company, to perform his or her material responsibilities to
the Company or (ii) willful misconduct by the Participant which affects the
business reputation of the Company. The Participant shall be considered to have
been discharged for "Cause" if the Company determines, within 30 days after the
Participant's resignation, that discharge for Cause was warranted.
(2) Effect on Options
(A) Acquisition Event. Upon the occurrence of an Acquisition
Event (regardless of whether such event also constitutes a Change in Control
Event), or the execution by the Company of any agreement with respect to an
Acquisition Event (regardless of whether such event will result in a Change in
Control Event), the Board shall provide that all outstanding Options shall be
assumed, or equivalent options shall be substituted, by the acquiring or
succeeding corporation (or an affiliate thereof). If such Acquisition Event also
constitutes a Change in Control Event, except to the extent specifically
provided to the contrary in the instrument evidencing any Option or any other
agreement between a Participant and the Company, the Option shall continue to
become vested in accordance with the original vesting schedule set forth in such
Option; provided, however, that such Options shall become immediately
exercisable in full if, on or prior to the first anniversary of the date of the
consummation of the Acquisition Event, the Participant's employment with the
Company or the acquiring or succeeding corporation is terminated for Good Reason
by the Participant or is terminated without Cause by the Company or the
acquiring or succeeding corporation.
For purposes hereof, an Option shall be considered to be
assumed if, following consummation of the Acquisition Event, the Option confers
the right to purchase, for each share of Common Stock subject to the Option
immediately prior to the consummation of the Acquisition Event, the
consideration (whether cash, securities or other property) received as a result
of the Acquisition Event by holders of Common Stock for each share of Common
Stock held immediately prior to the
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consummation of the Acquisition Event (and if holders were offered a choice of
consideration, the type of consideration chosen by the holders of a majority of
the outstanding shares of Common Stock); provided, however, that if the
consideration received as a result of the Acquisition Event is not solely common
stock of the acquiring or succeeding corporation (or an affiliate thereof), the
Company may, with the consent of the acquiring or succeeding corporation,
provide for the consideration to be received upon the exercise of Options to
consist solely of common stock of the acquiring or succeeding corporation (or an
affiliate thereof) equivalent in fair market value to the per share
consideration received by holders of outstanding shares of Common Stock as a
result of the Acquisition Event.
Notwithstanding the foregoing, if the acquiring or
succeeding corporation (or an affiliate thereof) does not agree to assume, or
substitute for, such Options, then the Board shall, upon written notice to the
Participants, provide that all then unexercised Options will become exercisable
in full as of a specified time prior to the Acquisition Event and will terminate
immediately prior to the consummation of such Acquisition Event, except to the
extent exercised by the Participants before the consummation of such Acquisition
Event; provided, however, that in the event of an Acquisition Event under the
terms of which holders of Common Stock will receive upon consummation thereof a
cash payment for each share of Common Stock surrendered pursuant to such
Acquisition Event (the "Acquisition Price"), then the Board may instead provide
that all outstanding Options shall terminate upon consummation of such
Acquisition Event and that each Participant shall receive, in exchange therefor,
a cash payment equal to the amount (if any) by which (A) the Acquisition Price
multiplied by the number of shares of Common Stock subject to such outstanding
Options (whether or not then exercisable), exceeds (B) the aggregate exercise
price of such Options.
(B) Change in Control Event that is not an Acquisition Event.
Upon the occurrence of a Change in Control Event that does not also constitute
an Acquisition Event, except to the extent specifically provided to the contrary
in the instrument evidencing any Option or any other agreement between a
Participant and the Company, the Option shall continue to become vested in
accordance with the original vesting schedule set forth in such Option;
provided, however, that each such Option shall be immediately exercisable in
full if, on or prior to the first anniversary of the date of the consummation of
the Change in Control Event, the Participant's employment with the Company or
the acquiring or succeeding corporation is terminated for Good Reason by the
Participant or is terminated without Cause by the Company or the acquiring or
succeeding corporation.
(3) Effect on Restricted Stock Awards
(A) Acquisition Event that is not a Change in Control Event.
Upon the occurrence of an Acquisition Event that is not a Change in Control
Event, the repurchase and other rights of the Company under each outstanding
Restricted Stock Award shall inure to the benefit of the Company's successor and
shall apply to the cash, securities or other property which the Common Stock was
converted into or exchanged
30
for pursuant to such Acquisition Event in the same manner and to the same extent
as they applied to the Common Stock subject to such Restricted Stock Award.
(B) Change in Control Event. Upon the occurrence of a Change
in Control Event (regardless of whether such event also constitutes an
Acquisition Event), except to the extent specifically provided to the contrary
in the instrument evidencing any Restricted Stock Award or any other agreement
between a Participant and the Company, the shares subject to the Restricted
Stock Award shall continue to become free from conditions or restrictions in
accordance with the original schedule set forth in such Restricted Stock Award;
provided, however, that each such Restricted Stock Award shall immediately
become free from all conditions or restrictions if, on or prior to the first
anniversary of the date of the consummation of the Change in Control Event, the
Participant's employment with the Company or the acquiring or succeeding
corporation is terminated for Good Reason by the Participant or is terminated
without Cause by the Company or the acquiring or succeeding corporation.
(4) Effect on Other Awards
(A) Acquisition Event that is not a Change in Control Event.
The Board shall specify the effect of an Acquisition Event that is not a Change
in Control Event on any other Award granted under the Plan at the time of the
grant of such Award.
(B) Change in Control Event. Upon the occurrence of a Change
in Control Event (regardless of whether such event also constitutes an
Acquisition Event), except to the extent specifically provided to the contrary
in the instrument evidencing any Award or any other agreement between a
Participant and the Company, each other Award shall continue to become
exercisable, realizable, vested or free from conditions or restrictions in
accordance with the original schedule set forth in such Award; provided,
however, that each such Award shall immediately become fully exercisable,
realizable, vested or free from conditions or restrictions if, on or prior to
the first anniversary of the date of the consummation of the Change in Control
Event, the Participant's employment with the Company or the acquiring or
succeeding corporation is terminated for Good Reason by the Participant or is
terminated without Cause by the Company or the acquiring or succeeding
corporation.
9. General Provisions Applicable to Awards
(a) Transferability of Awards. Except as the Board may otherwise determine
or provide in an Award, Awards shall not be sold, assigned, transferred, pledged
or otherwise encumbered by the person to whom they are granted, either
voluntarily or by operation of law, except by will or the laws of descent and
distribution, and, during the life of the Participant, shall be exercisable only
by the Participant. References to a Participant, to the extent relevant in the
context, shall include references to authorized transferees.
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(b) Documentation. Each Award shall be evidenced by a written instrument
in such form as the Board shall determine. Each Award may contain terms and
conditions in addition to those set forth in the Plan.
(c) Board Discretion. Except as otherwise provided by the Plan, each Award
may be made alone or in addition or in relation to any other Award. The terms of
each Award need not be identical, and the Board need not treat Participants
uniformly.
(d) Termination of Status. The Board shall determine the effect on an
Award of the disability, death, retirement, authorized leave of absence or other
change in the employment or other status of a Participant and the extent to
which, and the period during which, the Participant, the Participant's legal
representative, conservator, guardian or Designated Beneficiary may exercise
rights under the Award.
(e) Withholding. Each Participant shall pay to the Company, or make
provision satisfactory to the Board for payment of, any taxes required by law to
be withheld in connection with Awards to such Participant no later than the date
of the event creating the tax liability. Except as the Board may otherwise
provide in an Award, when the Common Stock is registered under the Exchange Act,
Participants may satisfy such tax obligations in whole or in part by delivery of
shares of Common Stock, including shares retained from the Award creating the
tax obligation, valued at their Fair Market Value. The Company may, to the
extent permitted by law, deduct any such tax obligations from any payment of any
kind otherwise due to a Participant.
(f) Amendment of Award. The Board may amend, modify or terminate any
outstanding Award, including but not limited to, substituting therefor another
Award of the same or a different type, changing the date of exercise or
realization, and converting an Incentive Stock Option to a Nonstatutory Stock
Option, provided that the Participant's consent to such action shall be required
unless the Board determines that the action, taking into account any related
action, would not materially and adversely affect the Participant.
(g) Conditions on Delivery of Stock. The Company will not be obligated to
deliver any shares of Common Stock pursuant to the Plan or to remove
restrictions from shares previously delivered under the Plan until (i) all
conditions of the Award have been met or removed to the satisfaction of the
Company, (ii) in the opinion of the Company's counsel, all other legal matters
in connection with the issuance and delivery of such shares have been satisfied,
including any applicable securities laws and any applicable stock exchange or
stock market rules and regulations, and (iii) the Participant has executed and
delivered to the Company such representations or agreements as the Company may
consider appropriate to satisfy the requirements of any applicable laws, rules
or regulations.
(h) Acceleration. The Board may at any time provide that any Options shall
become immediately exercisable in full or in part, that any Restricted Stock
Awards shall be free of restrictions in full or in part or that any other Awards
may become exercisable
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in full or in part or free of some or all restrictions or conditions, or
otherwise realizable in full or in part, as the case may be.
10. Miscellaneous
(a) No Right To Employment or Other Status. No person shall have any claim
or right to be granted an Award, and the grant of an Award shall not be
construed as giving a Participant the right to continued employment or any other
relationship with the Company. The Company expressly reserves the right at any
time to dismiss or otherwise terminate its relationship with a Participant free
from any liability or claim under the Plan, except as expressly provided in the
applicable Award.
(b) No Rights As Stockholder. Subject to the provisions of the applicable
Award, no Participant or Designated Beneficiary shall have any rights as a
stockholder with respect to any shares of Common Stock to be distributed with
respect to an Award until becoming the record holder of such shares.
Notwithstanding the foregoing, in the event the Company effects a split of the
Common Stock by means of a stock dividend and the exercise price of and the
number of shares subject to such Option are adjusted as of the date of the
distribution of the dividend (rather than as of the record date for such
dividend), then an optionee who exercises an Option between the record date and
the distribution date for such stock dividend shall be entitled to receive, on
the distribution date, the stock dividend with respect to the shares of Common
Stock acquired upon such Option exercise, notwithstanding the fact that such
shares were not outstanding as of the close of business on the record date for
such stock dividend.
(c) Effective Date and Term of Plan. The Plan shall become effective on
the date on which it is adopted by the Board. No Awards shall be granted under
the Plan after the completion of ten years from the earlier of (i) the date on
which the Plan was adopted by the Board or (ii) the date the Plan was approved
by the Company's stockholders, but Awards previously granted may extend beyond
that date.
(d) Amendment of Plan. The Board may amend, suspend or terminate the Plan
or any portion thereof at any time.
(e) Governing Law. The provisions of the Plan and all Awards made
hereunder shall be governed by and interpreted in accordance with the laws of
the State of Delaware, without regard to any applicable conflicts of law.
Adopted by the Board of Directors of
July 15, 1998
Approved by the Stockholders on
July 15, 1998
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AMENDMENT TO THE 1998 STOCK INCENTIVE PLAN
OF NETWORK PLUS CORP.
Subsection 4(a) of the 1998 Stock Incentive Plan (the "Plan") of Network
Plus Corp. is hereby amended, subject to stockholder approval, to increase from
1,400,000 to 1,985,294 the number of shares of Common Stock, $.01 par value per
share, authorized for issuance under the Plan.
Adopted by the Board of Directors on
June 9, 1999
Approved by the Stockholders on
June 9, 1999
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PROPOSED AMENDMENT TO THE 1998 STOCK INCENTIVE PLAN
OF NETWORK PLUS CORP.
Subsection 4(a) of the 1998 Stock Incentive Plan (the "Plan") of Network
Plus Corp. is hereby amended, subject to stockholder approval, to increase from
9,000,000 to 18,000,000 the number of shares of Common Stock, $.01 par value per
share, authorized for issuance under the Plan.
Adopted by the Board of Directors
on January 16, 2001
35
NETWORK PLUS CORP.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
ANNUAL MEETING OF STOCKHOLDERS
MAY 7, 2001
The undersigned, revoking all prior proxies, hereby appoint(s) Robert T. Hale,
Jr., James J. Crowley and Robert J. Cobuzzi, and each or any of them, with full
power of substitution, as proxies for the undersigned to act and to vote at the
2001 Annual Meeting of Stockholders of Network Plus Corp. and at any adjournment
or adjournments thereof as designated herein upon all matters referred to on the
reverse side and as described in the Proxy Statement for the Meeting and, in
their discretion, upon any other matters that may properly come before the
Meeting.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED HEREIN BY THE
UNDERSIGNED STOCKHOLDER(S). IF NO DIRECTION IS MADE, THE PROXIES WILL VOTE FOR
THE ELECTION OF THE DIRECTOR NOMINEES AND FOR PROPOSALS 2 AND 3.
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PLEASE VOTE, DATE AND SIGN ON REVERSE AND
RETURN PROMPTLY IN THE ENCLOSED ENVELOPE
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Please sign exactly as name(s) appear(s) hereon. Joint owners should each sign.
When signing as attorney, executor, administrator, trustee or guardian, please
give full title as such. If a corporation or partnership, please sign by
authorizing person.
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HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
____________________________________ ________________________________
____________________________________ ________________________________
____________________________________ ________________________________
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/X/ PLEASE MARK VOTES
AS IN THIS EXAMPLE
NETWORK PLUS CORP.
PLEASE READ THE REVERSE SIDE OF THIS CARD.
A VOTE FOR EACH PROPOSAL IS RECOMMENDED BY THE BOARD OF DIRECTORS.
RECORD DATE SHARES:
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Please be sure to sign and Date date this Proxy. Date
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Stockholder sign here Co-owner sign here
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DETACH CARD
1. To elect the following persons Class II Directors to serve for the ensuing
three years.
For Withhold
ROBERT T. HALE / / / /
DAVID D. MARTIN / / / /
2. To approve an amendment to the Company's 1998 Stock Incentive Plan increasing
the number of shares of common stock available for future awards from
9,000,000 to 18,000,000.
For Against Abstain
/ / / / / /
3. To ratify the selection by the Board of Directors of PricewaterhouseCoopers
LLP as the Company's independent accountants for the current fiscal year.
For Against Abstain
/ / / / / /
Mark box at right if an address change or comment has been noted on the reverse
side of this card / /
DETACH CARD
NETWORK PLUS CORP.
Dear Stockholder:
Please take note of the important information enclosed with this Proxy. There
are a number of issues related to the management and operation of your Company
that require your immediate attention and approval. These are discussed in the
enclosed proxy materials.
Your vote counts, and you are strongly encouraged to exercise your right to vote
your shares.
Please mark the boxes on this proxy card to indicate how your shares will be
voted, then sign the card, detach it and return it in the enclosed postage-paid
envelope.
If you wish to vote by proxy, your vote must be received prior to the Annual
Meeting of Stockholders to be held on May 7, 2001.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
Network Plus Corp.