Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
CTC COMMUNICATIONS CORP.
(Exact name of registrant as specified in its charter)
Massachusetts 04-2731202
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
360 Second Avenue, Waltham, Massachusetts 02154
(Address of principal executive offices) (Zip Code)
CTC Communications Corp. 1998 Incentive Plan
CTC Communications Corp. 1996 Stock Option Plan
CTC Communications Corp. Employee Stock Purchase Plan
(Full title of Plans)
Robert J. Fabbricatore, Chief Executive Officer
CTC Communications Corp.
360 Second Avenue
Waltham, Massachusetts 02154
(Name and address of agent for service)
(781) 466-8080
(Telephone number, including area code, of agent for service)
With a copy to:
Leonard R. Glass, Esq.
Law Offices of Leonard R. Glass, P.A.
45 Central Avenue
Tenafly, New Jersey 07670
(201) 894-9300
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C A L C U L A T I O N O F R E G I S T R A T I O N F E E
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Proposed Maximum Proposed Maximum Amount of
Title of Securities Amount to be Offering Price Aggregate Registration
to be Registered(1)(5) Registered(1)(5) Per Share Offering Price Fee
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<S> <C> <C> <C> <C>
1998 Incentive Plan
Common Stock, $.01
par value (4) 1,500,000 shares $7.047 $10,570,500 $2,939
1996 Stock Option Plan
Common Stock, $.01
par value (outstanding options)(3) 1,000,000 shares $7.19 $ 7,190,000 $1,999
Employee Stock Purchase Plan
Common Stock, $.01
par value (2)(4) 75,000 shares $7.047 $ 528,525 $ 147
Total 2,575,000 shares $18,289,025 $5,085
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<FN>
(1) This Registration Statement also covers any additional shares that may hereafter become issuable as a
result of the operation of the anti-dilution provisions of the CTC Communications Corp. 1998 Incentive
Plan, the CTC Communications Corp. 1996 Stock Option Plan and the CTC Communications Corp. Employee Stock
Purchase Plan.
(2) Pursuant to Rule 416(c), this Registration Statement also covers an indeterminate amount of interests
to be offered or sold pursuant to the CTC Communications Corp. Employee Stock Purchase Plan.
(3) The Proposed Maximum Offering Price Per Share for the purpose of calculating the registration fee has
been determined in accordance with Rule 457(h) and is based upon the weighted average exercise price per
share of approximately $7.19 as to the 1,000,000 outstanding but unexercised options to purchase Common
Stock under the 1996 Stock Option Plan.
(4) The Proposed Maximum Offering Price Per Share for the purpose of calculating the registration fee has
been determined in accordance with Rule 457(c) and is based on the average of the high and low prices
reported on the Nasdaq National Market on December 7, 1998.
(5) Pursuant to Rule 429, the prospectus related to this registration statement also relates to (a) the
registration statement on Form S-8 (No. 333-17613), which registered 750,000 shares of Common Stock to be
issued upon the exercise of options to be granted under the 1996 Stock Option Plan. A filing fee of
$1,601.03 was paid at that the time of filing (December 11, 1996); and (b) the registration statement on
Form S-8 (No. 33-44337), which registered an indeterminate number of Plan interests and 98,042 shares of
Common Stock issuable under the Employee Stock Purchase Plan. A filing fee of $100.00 was paid at the
time of filing (December 4, 1991).
</FN>
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents as filed with the Securities and Exchange Commission
(the "Commission") by CTC Communications Corp. (the "Company") are hereby
incorporated by reference in this Registration Statement.
a. Annual Report of the Company on Form 10-K for the
fiscal year ended March 31, 1998.
b.1 Quarterly Report of the Company on Form 10-Q for the
quarter ended June 30, 1998.
b.2 Amendment No. 1 to the Quarterly Report of the Company
on Form 10-Q/A for the quarter ended June 30, 1998.
b.3 Quarterly Report of the Company on Form 10-Q for the
quarter ended September 30, 1998.
b.4 Current Reports of the Company on Form 8-K (a) filed on
May 15, 1998 (b) filed on June 3, 1998 (c) filed on
August 4, 1998 (d) filed on October 2, 1998 and
(e) filed on November 6, 1998.
c. The description of the Company's Common Stock, $.01 par
value per share, as set forth under the description
"Class 1 Common Stock" in the Company's Registration
Statement on Form S-18 [Reg. No. 2-96419-B] as filed
with the Commission and declared effective on May 13,
1985.
All documents filed by the Company pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act
of 1934 subsequent to the filing of this Registration Statement
and prior to the filing of a post-effective amendment hereto that
indicates that all securities offered have been sold or that
deregisters all such securities then remaining unsold, shall be
deemed to be incorporated herein by reference in this
Registration Statement and to be a part hereof from the date of
filing of such documents.
Item 4. Description of Securities.
Not applicable.
Item 5. Interest of Named Experts and Counsel.
The validity of the shares of Common Stock being registered
hereunder has been passed upon for the Company by Law Offices of
Leonard R. Glass, P.A. Attorneys in such law firm beneficially own
approximately two (2%) percent of the issued and outstanding shares of
the Company's Common Stock.
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Item 6. Indemnification of Directors and Officers.
Article 6(e) of the Restated Articles of Organization of the
Company provides that no director shall be personally liable to
the Company or any stockholder for monetary damages for breach of
fiduciary duty as a director, except for any matter in respect of
which such director shall be liable under Sections 61 and 62 of
Chapter 156B of the Massachusetts General Laws or any amendment
thereto or successor provision thereto or shall be liable by
reason that, in addition to any and all other requirements for
such liability, he (i) shall have breached his duty of loyalty to
the Company or its stockholders, (ii) shall not have acted in
good faith or, in failing to act, shall not have acted in good
faith, (iii) shall have acted in a manner involving intentional
misconduct or a knowing violation of law or, in failing to act,
shall have acted in a manner involving intentional misconduct or
a knowing violation of law or, in failing to act, shall have
acted in a manner involving intentional misconduct or knowing
violation of law, or (iv) shall have derived an improper personal
benefit.
Article IV of the bylaws of the Company provides for the
indemnification of directors and officers of the Company, as well
as others serving at the Company's request in such capacity for
another entity, against all expenses and liabilities reasonably
incurred while serving in such capacity; except that no
indemnification may be afforded in instances where the individual
is adjudged not to have acted in good faith in the reasonable
belief that such action was in the best interests of the Company.
Indemnification may be afforded in connection with the settlement
of an action but only in accordance with a Board resolution and
if the Company has received an opinion of counsel that such
settlement is in the best interest of the Company and that such
individual appears to have acted in good faith in the reasonable
belief that his action was in the best interests of the Company.
The Company is authorized pursuant to Section 67 of Chapter
156B of the Massachusetts General Laws to purchase and maintain
insurance on behalf of directors, officers, employees, and
agents, as well as others serving at the Company's request in
such capacity for another entity, against any liabilities
asserted against such persons whether or not the Company would
have the power to indemnify such directors, officers, employees,
or agents against such liability under the Massachusetts Business
Corporation Law. The Company has purchased such insurance for
its officers and directors.
Item 7. Exemption from Registration Claimed
Not Applicable.
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Item 8. Exhibits
The Exhibits listed on the accompanying Index to Exhibits are filed as
part hereof, or incorporated by reference into, this Registration Statement.
(See Exhibit Index below).
9. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement:
(i) To include any prospectus required by section
10(a)(3) of the Securities Act of 1933.
(ii) To reflect in the prospectus any facts or events
arising after the effective date of this Registration
Statement (or the most recent post-effective amendment
thereto) which, individually or in the aggregate, represent
a fundamental change in the information set forth in this
Registration Statement (or the most recent post-effective
amendment thereto).
(iii) To include any material information with respect
to the plan of distribution not previously disclosed in the
registration statement or any material change in such
information in the registration statement.
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii)
above shall not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to Section 13
or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in this Registration Statement.
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(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-
effective amendment any of the securities being registered which
remain unsold at the termination of the offering.
(b) The undersigned issuer hereby undertakes that, for purposes
of determining any liability under the Securities Act of 1933,
each filing of the registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act of
1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities
and Exchange Act of 1934) that is incorporated by reference in
the registration statement shall be deemed to be a new
registration statement relating to the securities offered
therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(h) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers,
and controlling persons of the registrant pursuant to the
provisions described in Item 6 of this Part II, or otherwise, the
registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefor, unenforceable.
In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer, or controlling person of
the registrant in the successful defense of any action, suit, or
proceeding) is asserted by such director, officer, or controlling
person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the registrant, CTC Communications Corp., certifies that it has
reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this
registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Waltham,
Commonwealth of Massachusetts, on the 11th day of December, 1998.
CTC Communications Corp.
Registrant
By: /s/ Robert J. Fabbricatore
------------------------------------
Robert J. Fabbricatore, Chairman of
the Board and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, the CTC
Communications Corp. Employee Stock Purchase Plan has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Waltham, Commonwealth of Massachusetts, on
December 11, 1998.
CTC Communications Corp., as Agent for the CTC
Communications Corp. Employee Stock Purchase Plan
By: /s/ Robert J. Fabbricatore
-------------------------------------------
Robert J. Fabbricatore, Chairman of Agent
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POWER OF ATTORNEY
Know All Men By These Presents, that each person whose signature appears
below constitutes and appoints Robert J. Fabbricatore, Steven C Jones and John
D. Pittenger, jointly and severally, his attorneys-in-fact, each with full
power of substitution, and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement on Form S-8, and to
file the same, with exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, hereby ratifying and
confirming all that each of said attorneys-in fact, or his substitute or
substitutes, may do or cause to be done by virtue hereof. This Power of
Attorney may be signed in several counterparts.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
- -------------------------- ------------------ ---------
/s/ Robert J. Fabbricatore Chairman of the Board December 11, 1998
Robert J. Fabbricatore and Chief Executive
Officer, Director
/s/ Steven C. Jones Principal Financial December 11, 1998
Steven C. Jones Officer
/s/ John D. Pittenger Principal Accounting December 11, 1998
John D. Pittenger Officer
/s/ Richard J. Santagati
Richard J. Santagati Director December 11, 1998
/s/ J. Richard Murphy
J. Richard Murphy Director December 11, 1998
/s/ Henry Hermann
Henry Hermann Director December 11, 1998
/s/ Ralph C. Sillari
Ralph C. Sillari Director December 11, 1998
/s/ Kevin J. Maroni
Kevin J. Maroni Director December 11, 1998
/s/ Robert A. Nicholson
Robert A. Nicholson Director December 11, 1998
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EXHIBIT INDEX
Exhibit No. Description
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4.1 CTC Communications Corp. 1998 Incentive Plan.
4.2 CTC Communications Corp. 1996 Stock Option Plan, as amended.
4.3* CTC Communications Corp. Employee Stock Purchase Plan.
5 Opinion of Law Offices of Leonard R. Glass, P.A.
as to the legality of the shares being
registered.
23.1 Consent of Law Offices of Leonard R. Glass, P.A.,
(contained in Exhibit 5 hereto)
23.2 Consent of Ernst & Young LLP.
24.1 Power of Attorney (contained on page II-6 hereof).
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* Incorporated by reference to Exhibit 4(a) filed as part of the Registrant's
Registration Statement on Form S-8 (File No. 33-44337) effective
December 4, 1991.
EXHIBIT 4.1
CTC COMMUNICATIONS CORP.
1998 INCENTIVE PLAN
1. DEFINED TERMS
Exhibit A, which is incorporated by reference, defines the terms used in
the Plan and sets forth certain operational rules related to those terms.
2. GENERAL
The Plan has been established to advance the interests of the Company by
giving selected Employees, directors and other persons (including both
individuals and entities) who provide services to the Company or its
Affiliates Stock-based incentives or incentives based on Performance Criteria.
3. ADMINISTRATION
The Administrator has discretionary authority, subject only to the
express provisions of the Plan, to interpret the Plan; determine eligibility
for and grant Awards; determine, modify or waive the terms and conditions of
any Award; prescribe forms, rules and procedures (which it may modify or
waive); and otherwise do all things necessary to carry out the purposes of the
Plan. Once an Award has been communicated in writing to a Participant, the
Administrator may not, without the Participant's consent, alter the terms of
the Award so as to affect adversely the Participant's rights under the Award,
unless the Administrator expressly reserved the right to do so in writing at
the time of such communication. In the case of any Award intended to be
eligible for the performance-based compensation exception under Section
162(m), the Administrator shall exercise its discretion consistent with
qualifying the Award for such exception.
4. LIMITS ON AWARD UNDER THE PLAN
a. Number of Shares. A maximum of 1,500,000 shares of Stock may be
delivered in satisfaction of Awards under the Plan. For purposes of the
preceding sentence, the following shares shall not be considered to have been
delivered under the Plan: (i) shares remaining under an Award that
terminates without having been exercised in full; (ii) shares subject to an
Award, where cash is delivered to a Participant in lieu of such shares; (iii)
shares of Restricted Stock that have been forfeited in accordance with the
terms of the applicable Award; and (iv) shares held back, in satisfaction of
the exercise price or tax withholding requirements, from shares that would
otherwise have been delivered pursuant to an Award. The number of shares of
Stock delivered under an Award shall be determined net of any previously
acquired Shares tendered by the Participant in payment of the exercise price
or of withholding taxes.
b. Type of Shares. Stock delivered by the Company under the Plan may
be authorized but unissued Stock or previously issued Stock acquired by the
Company and held in treasury. No fractional shares of Stock will be delivered
under the Plan.
c. Option & SAR Limits. The maximum number of shares of Stock for
which Stock Options may be granted to any person in any calendar year, the
maximum number of shares of Stock subject to SARs granted to any person in any
calendar year and the aggregate maximum number of shares of Stock subject to
other Awards that may be delivered to any person in any calendar year shall
each be 1,000,000. For purposes of the preceding sentence, the repricing of a
Stock Option or SAR shall be treated as a new grant to the extent required
under Section 162(m). Subject to these limitations, each person eligible to
participate in the Plan shall be eligible in any year to receive Awards
covering up to the full number of shares of Stock then available for Awards
under the Plan.
d. Other Award Limits. No more than $1,000,000 may be paid to any
individual with respect to any Cash Performance Award. In applying the
limitation of the preceding sentence: (A) multiple Cash Performance Awards to
the same individual that are determined by reference to performance periods of
one year or less ending with or within the same fiscal year of the Company
shall be subject in the aggregate to one limit of such amount, and
(B) multiple Cash Performance Awards to the same individual that are
determined by reference to one or more multi-year performance periods ending
in the same fiscal year of the Company shall be subject in the aggregate to a
separate limit of such amount. With respect to any Performance Award other
than a Cash Performance Award or a Stock Option or SAR, the maximum Award
opportunity shall be 1,000,000 shares of Stock or their equivalent value in
cash, subject to the limitations of Section 4.c.
5. ELIGIBILITY AND PARTICIPATION
The Administrator will select Participants from among those key
Employees, directors and other individuals or entities providing services to
the Company or its Affiliates who, in the opinion of the Administrator, are in
a position to make a significant contribution to the success of the Company
and its Affiliates. Eligibility for ISOs is further limited to those
individuals whose employment status would qualify them for the tax treatment
described in Sections 421 and 422 of the Code.
6. RULES APPLICABLE TO AWARDS
a. ALL AWARDS
(1) Terms of Awards. The Administrator shall determine the
terms of all Awards subject to the limitations provided herein.
(2) Performance Criteria. Where rights under an Award depend in
whole or in part on satisfaction of Performance Criteria, actions by the
Company that have an effect, however material, on such Performance Criteria or
on the likelihood that they will be satisfied will not be deemed an amendment
or alteration of the Award.
(3) Alternative Settlement. The Company may at any time
extinguish rights under an Award in exchange for payment in cash, Stock
(subject to the limitations of Section 4) or other property on such terms as
the Administrator determines, provided the holder of the Award consents to
such exchange.
(4) Transferability Of Awards. Except as the Administrator
otherwise expressly provides, Awards may not be transferred other than by will
or by the laws of descent and distribution, and during a Participant's
lifetime an Award requiring exercise may be exercised only by the Participant
(or in the event of the Participant's incapacity, the person or persons
legally appointed to act on the Participant's behalf).
(5) Vesting, Etc. Without limiting the generality of Section
3, the Administrator may determine the time or times at which an Award will
vest (i.e., become free of forfeiture restrictions) or become exercisable and
the terms on which an Award requiring exercise will remain exercisable.
Unless the Administrator expressly provides otherwise, immediately upon the
cessation of the Participant's employment or other service relationship with
the Company and its Affiliates, an Award requiring exercise will cease to be
exercisable, and all Awards to the extent not already fully vested will be
forfeited, except that:
(A) all Stock Options and SARs held by a Participant immediately prior
to his or her death, to the extent then exercisable, will remain exercisable
by such Participant's executor or administrator or the person or persons to
whom the Stock Option or SAR is transferred by will or the applicable laws of
descent and distribution, for the lesser of (i) a one year period ending with
the first anniversary of the Participant's death or (ii) the period ending on
the latest date on which such Stock Option or SAR could have been exercised
without regard to this Section 6.a.(5) and shall thereupon terminate;
(B) All Stock Options and SARs held by the Participant immediately
prior to the cessation of the Participant's employment or other service
relationship for reasons other than death and except as provided in (C) below,
to the extent then exercisable, will remain exercisable for the lesser of (i)
a period of three months or (ii) the period ending on the latest date on which
such Stock Option or SAR could have been exercised without regard to this
Section 6.a.(5), and shall thereupon terminate; and
(C) all Stock Options and SARs held by the Participant whose cessation
of employment or other service relationship is determined by the Administrator
in its sole discretion to result for reasons which cast such discredit on the
Participant as to justify immediate termination of the Award shall immediately
terminate upon such cessation.
Unless the Administrator expressly provides otherwise, a Participant's
"employment or other service relationship with the Company and its Affiliates"
will be deemed to have ceased, in the case of an employee Participant, upon
termination of the Participant's employment with the Company and its
Affiliates (whether or not the Participant continues in the service of the
Company or its Affiliates in some capacity other than that of an employee of
the Company or its Affiliates), and in the case of any other Participant, when
the service relationship in respect of which the Award was granted terminates
(whether or not the Participant continues in the service of the Company or its
Affiliates in some other capacity).
(6) Taxes. The Administrator will make such provision for the
withholding of taxes as it deems necessary. The Administrator may, but need
not, hold back shares of Stock from an Award or permit a Participant to tender
previously owned shares of Stock in satisfaction of tax withholding
requirements.
(7) Dividend Equivalents, Etc. The Administrator may provide
for the payment of amounts in lieu of cash dividends or other cash
distributions with respect to Stock subject to an Award.
(8) Rights Limited. Nothing in the Plan shall be construed as
giving any person the right to continued employment or service with the
Company or its Affiliates, or any rights as a shareholder except as to shares
of Stock actually issued under the Plan. The loss of existing or potential
profit in Awards will not constitute an element of damages in the event of
termination of employment or service for any reason, even if the termination
is in violation of an obligation of the Company or Affiliate to the
Participant.
(9) Section 162(m). In the case of an Award intended to be
eligible for the performance-based compensation exception under Section
162(m), the Plan and such Award shall be construed to the maximum extent
permitted by law in a manner consistent with qualifying the Award for such
exception. In the case of a Performance Award intended to qualify as
performance-based for the purposes of Section 162(m) (other than a Stock
Option or SAR with an exercise price at least equal to the fair market value
of the underlying Stock on the date of grant), the Committee shall in writing
preestablish one or more specific Performance Criteria no later than 90 days
after the commencement of the period of service to which the performance
relates (or at such earlier time as is required to qualify the Award as
performance-based under Section 162(m)). Prior to payment of any Performance
Award (other than a Stock Option or SAR with an exercise price at least equal
to the fair market value of the underlying Stock on the date of grant)
intended to qualify as performance-based under Section 162(m), the Committee
shall certify whether the Performance Criteria have been attained and such
determination shall be final and conclusive. If the Performance Criteria with
respect to any such Award are not attained, no other Award shall be provided
in substitution of the Performance Award.
b. AWARDS REQUIRING EXERCISE
(1) Time And Manner Of Exercise. Unless the Administrator
expressly provides otherwise, (a) an Award requiring exercise by the holder
will not be deemed to have been exercised until the Administrator receives a
written notice of exercise (in form acceptable to the Administrator) signed by
the appropriate person and accompanied by any payment required under the
Award; and (b) if the Award is exercised by any person other than the
Participant, the Administrator may require satisfactory evidence that the
person exercising the Award has the right to do so.
(2) Exercise Price. The Administrator shall determine the
exercise price of each Stock Option provided that each Stock Option intended
to qualify for the performance-based exception under Section 162(m) of the
Code and each ISO must have an exercise price that is not less than the fair
market value of the Stock subject to the Stock Option, determined as of the
date of grant. An ISO granted to an Employee described in Section 422(b)(6)
of the Code must have an exercise price that is not less than 110% of such
fair market value.
(3) Payment Of Exercise Price, If Any. Where the exercise of an
Award is to be accompanied by payment, the Administrator may determine the
required or permitted forms of payment, subject to the following: (a) all
payments will be by cash or check acceptable to the Administrator, or, if so
permitted by the Administrator (with the consent of the optionee of an ISO if
permitted after the grant), (i) through the delivery of shares of Stock which
have been outstanding for at least six months (unless the Administrator
approves a shorter period) and which have a fair market value equal to the
exercise price, (ii) by delivery of a promissory note of the person exercising
the Award to the Company, payable on such terms as are specified by the
Administrator, (iii) by delivery of an unconditional and irrevocable
undertaking by a broker to deliver promptly to the Company sufficient funds to
pay the exercise price, or (iv) by any combination of the foregoing
permissible forms of payment; and (b) where shares of Stock issued under an
Award are part of an original issue of shares, the Award shall require an
exercise price equal to at least the par value of such shares.
(4) Reload Awards. The Administrator may provide that upon the
exercise of an Award, either by payment of cash or (if permitted under Section
6.b.(3) above) through the tender of previously owned shares of Stock, the
Participant or other person exercising the Award will automatically receive a
new Award of like kind covering a number of shares of Stock equal to the
number of shares of Stock for which the first Award was exercised.
(5) ISOs. No ISO may be granted under the Plan after November
16, 2008, but ISOs previously granted may extend beyond that date.
c. AWARDS NOT REQUIRING EXERCISE
Awards of Restricted Stock and Unrestricted Stock may be made in return
for either (i) services determined by the Administrator to have a value not
less than the par value of the Awarded shares of Stock, or (ii) cash or other
property having a value not less than the par value of the Awarded shares of
Stock plus such additional amounts (if any) as the Administrator may determine
payable in such combination and type of cash, other property (of any kind) or
services as the Administrator may determine.
7. EFFECT OF CERTAIN TRANSACTIONS
a. MERGERS, ETC.
In the event of a Covered Transaction, all outstanding Awards shall vest
and if relevant become exercisable and all deferrals, other than deferrals of
amounts that are neither measured by reference to nor payable in shares of
Stock, shall be accelerated, immediately prior to the Covered Transaction and
upon consummation of such Covered Transaction all Awards then outstanding and
requiring exercise shall be forfeited unless assumed by an acquiring or
surviving entity or its affiliate as provided in the following sentence. In
connection with any Covered Transaction in which there is an acquiring or
surviving entity, the Administrator may provide for substitute or replacement
Awards from, or the assumption of Awards by, the acquiring or surviving entity
or its affiliates, any such substitution, replacement or assumption to be on
such terms as the Administrator determines.
b. CHANGES IN AND DISTRIBUTIONS WITH RESPECT TO THE STOCK
(1) Basic Adjustment Provisions. In the event of a stock
dividend, stock split or combination of shares, recapitalization or other
change in the Company's capital structure, the Administrator will make
appropriate adjustments to the maximum number of shares that may be delivered
under the Plan under Section 4.a. and to the maximum share limits described in
Section 4.b., and will also make appropriate adjustments to the number and
kind of shares of stock or securities subject to Awards then outstanding or
subsequently granted, any exercise prices relating to Awards and any other
provision of Awards affected by such change.
(2) Certain Other Adjustments. The Administrator may also make
adjustments of the type described in paragraph (1) above to take into account
distributions to common stockholders other than those provided for in Section
7.a. and 7.b.(1), or any other event, if the Administrator determines that
adjustments are appropriate to avoid distortion in the operation of the Plan
and to preserve the value of Awards made hereunder; provided, that no such
adjustment shall be made to the maximum share limits described in Section 4.c.
or 4.d., or otherwise to an Award intended to be eligible for the performance-
based exception under Section 162(m), except to the extent consistent with
that exception, nor shall any change be made to ISOs except to the extent
consistent with their continued qualification under Section 422 of the Code.
(3) Continuing Application of Plan Terms. References in the Plan
to shares of Stock shall be construed to include any stock or securities
resulting from an adjustment pursuant to Section 7.b.(1) or 7.b.(2) above.
8. LEGAL CONDITIONS ON DELIVERY OF STOCK
The Company will not be obligated to deliver any shares of Stock
pursuant to the Plan or to remove any restriction from shares of Stock
previously delivered under the Plan until the Company's counsel has approved
all legal matters in connection with the issuance and delivery of such shares;
if the outstanding Stock is at the time of delivery listed on any stock
exchange or national market system, the shares to be delivered have been
listed or authorized to be listed on such exchange or system upon official
notice of issuance; and all conditions of the Award have been satisfied or
waived. If the sale of Stock has not been registered under the Securities Act
of 1933, as amended, the Company may require, as a condition to exercise of
the Award, such representations or agreements as counsel for the Company may
consider appropriate to avoid violation of such Act. The Company may require
that certificates evidencing Stock issued under the Plan bear an appropriate
legend reflecting any restriction on transfer applicable to such Stock.
9. AMENDMENT AND TERMINATION
Subject to the last sentence of Section 3, the Administrator may at any
time or times amend the Plan or any outstanding Award for any purpose which
may at the time be permitted by law, or may at any time terminate the Plan as
to any further grants of Awards; provided, that (except to the extent
expressly required or permitted by the Plan) no such amendment will, without
the approval of the stockholders of the Company, effectuate a change for which
stockholder approval is required in order for the Plan to continue to qualify
under Section 422 of the Code and for Awards to be eligible for the
performance-based exception under Section 162(m).
10. NON-LIMITATION OF THE COMPANY'S RIGHTS
The existence of the Plan or the grant of any Award shall not in any way
affect the Company's right to Award a person bonuses or other compensation in
addition to Awards under the Plan.
11. GOVERNING LAW
The Plan shall be construed in accordance with the laws of the State of
Massachusetts.
EXHIBIT A
Definition of Terms
The following terms, when used in the Plan, shall have the meanings and be
subject to the provisions set forth below:
"Administrator": The Board or, if one or more has been appointed, the
Committee.
"Affiliate": Any corporation or other entity owning, directly or indirectly,
50% or more of the outstanding Stock of the Company, or in which the Company
or any such corporation or other entity owns, directly or indirectly, 50% of
the outstanding capital stock (determined by aggregate voting rights) or other
voting interests.
"Award": Any or a combination of the following:
(i) Stock Options.
(ii) SARs.
(iii) Restricted Stock.
(iv) Unrestricted Stock.
(v) Deferred Stock.
(vi) Securities (other than Stock Options) that are convertible
into or exchangeable for Stock on such terms and conditions
as the Administrator determines.
(vii) Cash Performance Awards.
(viii) Performance Awards.
(ix) Grants of cash, or loans, made in connection with other
Awards in order to help defray in whole or in part the
economic cost (including tax cost) of the Award to the
Participant.
"Board": The Board of Directors of the Company.
"Cash Performance Award": A Performance Award payable in cash. The right of
the Company under Section 6.a.(3) to extinguish an Award in exchange for cash
or the exercise by the Company of such right shall not make an Award otherwise
not payable in cash a Cash Performance Award.
"Code": The U.S. Internal Revenue Code of 1986 as from time to time amended
and in effect, or any successor statute as from time to time in effect.
"Committee": One or more committees of the Board which in the case of Awards
granted to officers of the Company shall be comprised solely of two or more
outside directors within the meaning of Section 162(m). Any Committee may
delegate ministerial tasks to such persons (including Employees) as it deems
appropriate.
"Company": CTC Communications Corp.
"Covered Transaction": Any of (i) a consolidation or merger in which the
Company is not the surviving corporation or which results in the acquisition
of all or substantially all of the Company's then outstanding common stock by
a single person or entity or by a group of persons and/or entities acting in
concert, (ii) a sale or transfer of all or substantially all the Company's
assets, or (iii) a dissolution or liquidation of the Company.
"Deferred Stock": A promise to deliver Stock or other securities in the
future on specified terms.
"Employee": Any person who is employed by the Company or an Affiliate.
"ISO": A Stock Option intended to be an "incentive stock option" within the
meaning of Section 422 of the Code. No Stock Option Awarded under the Plan
will be an ISO unless the Administrator expressly provides for ISO treatment.
"Participant": An Employee, director or other person providing services to
the Company or its Affiliates who is granted an Award under the Plan.
"Performance Award": An Award subject to Performance Criteria. The Committee
in its discretion may grant Performance Awards that are intended to qualify
for the performance-based compensation exception under Section 162(m) and
Performance Awards that are not intended so to qualify.
"Performance Criteria": Specified criteria the satisfaction of which is a
condition for the exercisability, vesting or full enjoyment of an Award. For
purposes of Performance Awards that are intended to qualify for the
performance-based compensation exception under Section 162(m), a Performance
Criterion shall mean an objectively determinable measure of performance
relating to any of the following (determined either on a consolidated basis
or, as the context permits, on a divisional, subsidiary, line of business,
project or geographical basis or in combinations thereof): (i) sales;
revenues; assets; expenses; earnings before or after deduction for all or any
portion of interest, taxes, depreciation, amortization or other items, whether
or not on a continuing operations or an aggregate or per share basis; return
on equity, investment, capital or assets; one or more operating ratios;
borrowing levels, leverage ratios or credit rating; market share; capital
expenditures; cash flow; stock price; stockholder return; network deployment;
sales of particular products or services; customer acquisition, expansion and
retention; or any combination of the foregoing; or (ii) acquisitions and
divestitures (in whole or in part); joint ventures and strategic alliances;
spin-offs, split-ups and the like; reorganizations; recapitalizations,
restructurings, financings (issuance of debt or equity) and refinancings;
transactions that would constitute a change of control; or any combination of
the foregoing. A Performance Criterion measure and targets with respect
thereto determined by the Administrator need not be based upon an increase, a
positive or improved result or avoidance of loss.
"Plan": The CTC Communications Corp. 1998 Incentive Plan as from time to time
amended and in effect.
"Restricted Stock": An Award of Stock subject to restrictions requiring that
such Stock be redelivered to the Company if specified conditions are not
satisfied.
"Section 162(m)": Section 162(m) of the Code.
"SARs": Rights entitling the holder upon exercise to receive cash or Stock,
as the Administrator determines, equal to a function (determined by the
Administrator using such factors as it deems appropriate) of the amount by
which the Stock has appreciated in value since the date of the Award.
"Stock": Common Stock of the Company, par value $ .01 per share.
"Stock Options": Options entitling the recipient to acquire shares of Stock
upon payment of the exercise price.
"Unrestricted Stock": An Award of Stock not subject to any restrictions under
the Plan.
EXHIBIT 4.2
AMENDMENT NO. 1 TO CTC COMMUNICATIONS CORP. 1996 STOCK OPTION PLAN
Pursuant to a vote of a majority of the Company's stockholders at the
Annual Meeting of Stockholders duly held on October 20, 1997, paragraph 6
of the CTC Communications Corp. 1996 Stock Option Plan is hereby amended
to read as follows:
"6. Shares Subject to Plan. The aggregate maximum number of Shares for which
Options may be granted pursuant to the Plan is one million seven hundred fifty
thousand (1,750,000), subject to adjustment as provided in Section 10 of the
Plan. The Shares shall be issued from authorized and unissued Common Stock
or Common Stock held in or hereafter acquired for the treasury of the
Company."
CTC COMMUNICATIONS CORP.
1996 STOCK OPTION PLAN
1. Purpose. The CTC Communications Corp. 1996 Stock
Option Plan (the "Plan") is intended to recognize the
contributions made to the Company or an Affiliate by employees of
the Company or any Affiliate (as hereinafter defined), members of
the Board of Directors of the Company or an Affiliate, and
certain consultants and advisors to the Company or any Affiliate,
to provide such persons with additional incentive to devote
themselves to the future success of the Company or an Affiliate,
and to improve the ability of the Company or an Affiliate to
attract, retain, and motivate individuals upon whom the Company's
sustained growth and financial success depend, by providing such
persons with an opportunity to acquire or increase their
proprietary interest in the Company through receipt of rights to
acquire the Company's Common Stock, $.01 par value (the "Common
Stock").
2 Definitions. Unless the context clearly indicates
otherwise, the following terms shall have the following meanings:
(a) "Act" means the Securities Act of 1933, as
amended.
(b) "Affiliate" means a corporation which is a parent
corporation or a subsidiary corporation with respect to the
Company within the meaning of Section 424(e) or (f) of the Code.
(c) "Board of Directors" means the Board of Directors
of the Company.
(d) "Change of Control" shall have the meaning as set
forth in Section 9 of the Plan.
(e) "Code" means the Internal Revenue Code of 1986, as
amended.
(f) "Committee" means the Board of Directors or the
committee designated by the Board of Directors in accordance with
the provisions set forth in Section 3 of the Plan.
(g) "Company" means CTC Communications Corp., a
Massachusetts corporation.
(h) "Disability" shall have the meaning set forth in
Section 22(e)(3) of the Code.
(i) "Exchange Act" means the Securities Exchange Act
of 1934, as amended.
(j) "Fair Market Value" shall have the meaning set
forth in Subsection 8(b) of the Plan.
(k) "ISO" means an Option granted under the Plan which
is intended to qualify as an "incentive stock option" within the
meaning of Section 422(b) of the Code.
(l) "Non-Employee Director" shall have the meaning set
forth in Rule 16b-3.
(m) "Non-qualified Stock Option" means an Option
granted under the Plan which is not intended to qualify, or
otherwise does not qualify, as an "incentive stock option" within
the meaning of Section 422(b) of the Code.
(n) "Option" means either an ISO or a Non-qualified
Stock Option granted under the Plan.
(o) "Optionee" means a person to whom an Option has
been granted under the Plan, which Option has not been exercised
and has not expired or terminated.
(p) "Option Document" means the document described in
Section 8 of the Plan which sets forth the terms and conditions
of each grant of Options.
(q) "Option Price" means the price at which Shares may
be purchased upon exercise of an Option, as calculated pursuant
to Subsection 8(b) of the Plan.
(r) "Rule 16b-3" means Rule 16b-3 promulgated under
the Exchange Act.
(s) "Shares" means the shares of Common Stock of the
Company which are the subject of Options.
3. Administration of the Plan.
(a) Committee. The Plan shall be administered by the
Board of Directors or by a committee appointed by the Board
consisting of at least two Directors; provided, however, that any
options granted to directors and officers (within the meaning of
Section 16(a) under the Exchange Act) must be approved prior to
such grant by the Board of Directors or a committee consisting
solely of two "Non-Employee" directors.
(b) Meetings. The Committee shall hold meetings at
such times and places as it may determine. Acts approved at a
meeting by a majority of the members of the Committee or acts
approved in writing by the unanimous consent of the members of
the Committee shall be the valid acts of the Committee.
(c) Grants. The Committee shall from time to time, in
its discretion, direct the Company to grant Options pursuant to
the terms of the Plan. The Committee shall have plenary
authority to (i) determine the Optionees to whom, the times at
which, and the price at which Options shall be granted, (ii)
determine the type of Option to be granted and the number of
Shares subject thereto, and (iii) approve the form and terms and
conditions of the Option Documents; all subject, however, to the
express provisions of the Plan. In making such determinations,
the Committee may take into account the nature of the Optionee's
services and responsibilities, the Optionee's present and
potential contribution to the Company's success and such other
factors as it may deem relevant. The interpretation and
construction by the Committee of any provisions of the Plan or of
any Option granted under it shall be final, binding and
conclusive.
(d) Exculpation. No member of the Board of Directors
shall be personally liable for monetary damages for any action
taken or any failure to take any action in connection with the
administration of the Plan or the granting of Options under the
Plan, provided that this Subsection 3(c) shall not apply to (i)
any breach of such member's duty of loyalty to the Company or its
stockholders, (ii) acts or omissions not in good faith or
involving intentional misconduct or a knowing violation of law,
and (iv) any transaction from which the member derived an
improper personal benefit.
(e) Indemnification. Service on the Committee shall
constitute service as a member of the Board of Directors of the
Company. Each member of the Committee shall be entitled without
further act on his part to indemnity from the Company to the
fullest extent provided by applicable law and the Company's
Certificate of Incorporation and/or By-laws in connection with or
arising out of any action, suit or proceeding with respect to the
administration of the Plan or the granting of Options thereunder
in which he or she may be involved by reason of his or her being
or having been a member of the Committee, whether or not he or
she continues to be a member of the Committee at the time of the
action, suit or proceeding.
(f) Limitation on Grants of Options to Consultants and
Advisors. With respect to the grant of Options to consultants
and advisors, bona fide services shall be rendered by consultants
and advisors.
4. Grants under the Plan. Grants under the Plan may be in
the form of a Non-qualified Stock Option, an ISO or a combination
thereof, at the discretion of the Committee.
5 Eligibility. All employees and members of the Board of
Directors of, and (subject to Section 3(f)) consultants and
advisors to, the Company or an Affiliate shall be eligible to
receive Options hereunder. The Committee, in its sole
discretion, shall determine whether an individual qualifies as an
employee, consultant or advisor.
6. Shares Subject to Plan. The aggregate maximum number
of Shares for which Options may be granted pursuant to the Plan
is seven hundred fifty thousand (750,000), subject to adjustment
as provided in Section 10 of the Plan. The Shares shall be
issued from authorized and unissued Common Stock or Common Stock
held in or hereafter acquired for the treasury of the Company.
If an Option terminates or expires without having been fully
exercised for any reason, the Shares for which the Option was not
exercised may again be the subject of one or more Options granted
pursuant to the Plan.
7. Term of Plan.
(a) The Plan shall become effective upon the earlier
to occur of its adoption by the Board of Directors or its
approval by the stockholders of the Company as set forth in
Section 7(b) below. The Plan shall continue in effect for a term
of ten (10) years, unless sooner terminated under Section 11 of
the Plan.
(b) Stockholder approval shall be obtained within 12
months of adoption of the Plan by the Board of Directors.
Stockholder approval may be obtained by a majority of the votes
case at a duly held stockholders' meeting at which a quorum
representing a majority of all outstanding voting stock is,
either in person or by proxy, present and voting.
8. Option Documents and Terms. Each Option granted under
the Plan shall be a Non-qualified Stock Option unless the Option
shall be specifically designated at the time of grant to be an
ISO for federal income tax purposes. If any Option designated as
an ISO is determined for any reason not to qualify as an
incentive stock option within the meaning of Section 422 of the
Code, such Option shall be treated as a Non-qualified Stock
Option for all purposes under the provisions of the Plan.
Options granted pursuant to the Plan shall be evidenced by the
Option Documents in such form as the Committee shall from time to
time approve, which Option Documents shall comply with and be
subject to the following terms and conditions and such other
terms and conditions as the Committee shall from time to time
require which are not inconsistent with the terms of the Plan.
(a) Number of Option Shares. Each Option Document
shall state the number of Shares to which it pertains. An
Optionee may receive more than one Option, which may include
Options which are intended to be ISO's and Options which are not
intended to be ISO's, but only on the terms and subject to the
conditions and restrictions of the Plan.
(b) Option Price. Each Option Document shall state
the Option Price which, for a Non-qualified Stock Option, may be
less than, equal to, or greater than the Fair Market Value of the
Shares on the date the Option is granted and, for an ISO, shall
be at least 100% of the Fair Market Value of the Shares on the
date the Option is granted as determined by the Committee in
accordance with this Subsection 8(b); provided, however, that if
an ISO is granted to an Optionee who then owns, directly or by
attribution under Section 424(d) of the Code, shares possessing
more than ten percent of the total combined voting power of all
classes of stock of the Company or an Affiliate, then the Option
Price shall be at least 110% of the Fair Market Value of the
Shares on the date the Option is granted. If the Common Stock is
traded in a public market, then the Fair Market Value per share
shall be, if the Common Stock is listed on a national securities
exchange or included in the Nasdaq National Market System, the
last reported sale price thereof on the relevant date, or, if the
Common Stock is not so listed or included, the mean between the
last reported "bid" and "asked" prices thereof on the relevant
date, as reported on Nasdaq or, if not so reported, as reported
by the National Daily Quotation Bureau, Inc. or as reported in a
customary financial reporting service, as applicable and as the
Committee determines.
(c) Exercise. No Option shall be deemed to have been
exercised prior to the receipt by the Company of written notice
of such exercise and of payment in full of the Option Price for
the Shares to be purchased. Each such notice shall specify the
number of Shares to be purchased and shall (unless the Shares are
covered by a then current and effective registration statement or
qualified Offering Statement under Regulation A under the Act),
contain the Optionee's acknowledgment in form and substance
satisfactory to the Company that (a) such Shares are being
purchased for investment and not for distribution or resale
(other than a distribution or resale which, in the opinion of
counsel satisfactory to the Company, may be made without
violating the registration provisions of the Act), (b) the
Optionee has been advised and understands that (i) the Shares
have not been registered under the Act and are restricted
securities within the meaning of Rule 144 under the Act and are
subject to restrictions on transfer and (ii) the Company is under
no obligation to register the Shares under the Act or to take any
action which would make available to the Optionee any exemption
from such registration, (c) such Shares may not be transferred
without compliance with all applicable federal and state
securities laws, and (d) an appropriate legend referring to the
foregoing restrictions on transfer and any other restrictions
imposed under the Option Documents may be endorsed on the
certificates. Notwithstanding the foregoing, if the Company
determines that issuance of Shares should be delayed pending (A)
registration under federal or state securities laws, (B) the
receipt of an opinion of counsel satisfactory to the Company that
an appropriate exemption from such registration is available, (C)
the listing or inclusion of the Shares on any securities exchange
or an automated quotation system or (D) the consent or approval
of any governmental regulatory body whose consent or approval is
necessary in connection with the issuance of such Shares, the
Company may defer exercise of any Option granted hereunder until
any of the events described in this sentence has occurred.
(d) Medium of Payment. An Optionee shall pay for
Shares (i) in cash, (ii) by certified or cashier's check payable
to the order of the Company, (iii) by payment through a broker in
accordance with procedures permitted by Regulation T of the
Federal Reserve Board or (iv) by such other mode of payment as
the Committee may approve. Furthermore, the Committee may
provide in an Option Document that payment may be made in whole
or in part in shares of the Company's Common Stock. If payment
is made in whole or in part in shares of the Company's Common
Stock, then the Optionee shall deliver to the Company
certificates registered in the name of such Optionee representing
the shares owned by such Optionee, free of all liens, claims and
encumbrances of every kind and having an aggregate Fair Market
Value on the date of delivery that is at least as great as the
Option Price of the Shares (or relevant portion thereof) with
respect to which such Option is to be exercised by the payment in
shares of Common Stock, endorsed in blank or accompanied by stock
powers duly endorsed in blank by the Optionee. In the event that
certificates for shares of the Company's Common Stock delivered
to the Company represent a number of shares in excess of the
number of shares required to make payment for the Option Price of
the Shares (or relevant portion thereof) with respect to which
such Option is to be exercised by payment in shares of Common
Stock, the stock certificate issued to the Optionee shall
represent (i) the Shares in respect of which payment is made, and
(ii) such excess number of shares. Notwithstanding the
foregoing, the Committee may impose from time to time such
limitations and prohibitions on the use of shares of the Common
Stock to exercise an Option as it deems appropriate.
(e) Termination of Options.
(i) No option shall be exercisable after the
first to occur of the following:
(A) Expiration of the Option term specified
in the Option Document, which shall occur on or before (1) ten
years from the date of grant, or (2) five years from the date of
grant of an ISO if the Optionee on the date of grant owns,
directly or by attribution under Section 424(d) of the Code,
shares possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company or
of an Affiliate;
(B) The date the Optionee's employment or
service with the Company or its Affiliates terminates for any
reason other than disability or death or as otherwise specified
in Subsection 8(e)(i)(D) or 8(e)(i)(E) below;
(C) Expiration of one year from the date
such employment or service with the Company or its Affiliates
terminates due to the Optionee's Disability or death;
(D) A finding by the Committee, after full
consideration of the facts presented on behalf of both the
Company and the Optionee, that the Optionee has breached his
employment or service contract with the Company or an Affiliate,
or has been engaged in disloyalty to the Company or an Affiliate,
including, without limitation, fraud, embezzlement, theft,
commission of a felony or proven dishonesty in the course of his
employment or service, or has disclosed trade secrets or
confidential information of the Company or an Affiliate. In such
event, in addition to immediate termination of the Option, the
Optionee shall automatically forfeit all Shares for which the
Company has not yet delivered the share certificates upon refund
by the Company of the Option Price. Notwithstanding anything
herein to the contrary, the Company may withhold delivery of
share certificates pending the resolution of any inquiry that
could lead to a finding resulting in a forfeiture.
(E) The date, if any, set by the Board of
Directors as an accelerated expiration date in the event of the
liquidation or dissolution of the Company.
(ii) Notwithstanding the foregoing, the Committee
may extend the period during which all or any portion of an
Option may be exercised to a date no later than the Option term
specified in the Option Document pursuant to Subsection
8(e)(i)(A), provided that any change pursuant to this Subsection
8(e)(ii) which would cause an ISO to become a Non-qualified Stock
Option may be made only with the consent of the Optionee.
(f) Transfers. No Option granted under the Plan may
be transferred, except by will or by the laws of descent and
distribution. During the lifetime of the person to whom an
Option is granted, such Option may be exercised only by him.
Notwithstanding the foregoing, a Non-qualified Stock Option may
be transferred pursuant to the terms of a "qualified domestic
relations order," within the meaning of Sections 401(a)(13) and
414(p) of the Code or within the meaning of Title I of the
Employee Retirement Income Security Act of 1974, as amended.
(g) Limitation on ISO Grants. To the extent that the
aggregate fair market value of the shares of Common Stock
(determined at the time the ISO is granted) with respect to which
incentive stock options under all incentive stock option plans of
the Company or its Affiliates are exercisable for the first time
by the Optionee during any calendar year exceed $100,000, such
options shall be treated as options which are not ISOs.
(h) Other Provisions. Subject to the provisions of
the Plan, the Option Documents shall contain such other
provisions including, without limitation, provisions authorizing
the Committee to accelerate the exercisability of all or any
portion of an Option granted pursuant to the Plan, additional
restrictions upon the exercise of the Option or additional
limitations upon the term of the Option, as the Committee shall
deem advisable.
(i) Amendment. Subject to the provisions of the Plan,
the Committee shall have the right to amend Option Documents
issued to an Optionee, subject to the Optionee's consent if such
amendment is not favorable to the Optionee, except that the
consent of the Optionee shall not be required for any amendment
made pursuant to Subsection 8(e)(i)(E) or Section 9 of the Plan,
as applicable.
9. Change of Control. In the event of a Change of
Control, all Options then outstanding under the Plan shall become
immediately exercisable in full. Any amendment to this Section 9
which diminishes the rights of Optionees shall not be effective
with respect to Options outstanding at the time of adoption of
such amendment, whether or not such outstanding Options are then
exercisable.
A "Change of Control" shall be deemed to have occurred upon
the earliest to occur of the following events: (i) the date the
stockholders of the Company (or the Board of Directors, if
stockholder action is not required) approve a plan or other
arrangement pursuant to which the Company will be dissolved or
liquidated, or (ii) the date the stockholders of the Company (or
the Board of Directors, if stockholder action is not required)
approve a definitive agreement to sell or otherwise dispose of
substantially all of the assets of the Company, or (iii) the date
the stockholders of the Company (or the Board of Directors, if
stockholder action is not required) and the stockholders of the
other constituent corporation (or its board of directors if
stockholder action is not required) have approved a definitive
agreement to merge or consolidate the Company with or into such
other corporation, other than, in either case, a merger or
consolidation of the Company in which holders of shares of the
Company's Common Stock immediately prior to the merger or
consolidation will have at least a majority of the voting power
of the surviving corporation's voting securities immediately
after the merger or consolidation, which voting securities are to
be held in the same proportion as such holders' ownership of
Common Stock of the Company immediately before the merger or
consolidation, or (iv) the date any entity, person or group,
within the meaning of Section 13(d)(3) or Section 14(d)(2) of the
Exchange Act (other than (A) the Company or any of its
subsidiaries or any employee benefit plan (or related trust)
sponsored or maintained by the Company or any of its
subsidiaries, or (B) any other person who, on the date the Plan
is effective, shall have been the beneficial owner (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of more
than thirty percent (30%) of outstanding shares of the Company's
Common Stock), shall have become the beneficial owner of, or
shall have obtained voting control over, more than thirty percent
(30%) of the outstanding shares of the Company's Common Stock, or
(v) the first day after the date this Plan is effective when
directors are elected such that a majority of the Board of
Directors shall have been members of the Board of Directors for
less than two (2) years, unless the nomination for election of
each new director who was not a director at the beginning of such
two (2) year period was approved by a vote of at least two-thirds
of the directors then still in office who were directors at the
beginning of such period.
10. Adjustments on Changes in Capitalization. The
aggregate number of Shares and class of shares as to which
Options may be granted hereunder, the number and class or classes
of shares covered by each outstanding Option and the Option Price
thereof shall be appropriately adjusted in the event of a stock
dividend, stock split, recapitalization or other change in the
number or class of issued and outstanding equity securities of
the Company resulting from a subdivision or consolidation of the
Common Stock and/or, if appropriate, other outstanding equity
securities or a recapitalization or other capital adjustment (not
including the issuance of Common Stock on the conversion of other
securities of the Company which are convertible into Common
Stock) affecting the Common Stock which is effected without
receipt of consideration by the Company. The Committee shall
have authority to determine the adjustments to be made under this
Section, and any such determination by the Committee shall be
final, binding and conclusive.
11. Amendment and Termination of the Plan. The Board of
Directors of the Company may amend or terminate the Plan from
time to time in such manner as it may deem advisable without
further action by the Company's stockholders except to the extent
required by applicable law. No amendment to the Plan shall
adversely affect any outstanding Option, however, without the
consent of the Optionee.
12. No Commitment to Retain. The grant of an Option
pursuant to the Plan shall not be construed to imply or to
constitute evidence of any agreement, express or implied, on the
part of the Company or any date to retain the Optionee in the
employ of the Company or an date and/or as a member of the
Company's Board of Directors or in any other capacity.
13. Withholding of Taxes. Whenever the Company proposes or
is required to deliver or transfer Shares in connection with the
exercise of an Option, the Company shall have the right to
(a) require the recipient to remit or otherwise make available to
the Company an amount sufficient to satisfy any federal, state
and/or local withholding tax requirements prior to the delivery
or transfer of any certificate or certificates for such Shares or
(b) take whatever other action it deems necessary to protect its
interests with respect to tax liabilities. The Company's
obligation to make any delivery or transfer of Shares shall be
conditioned on the Optionee's compliance, to the Company's
satisfaction, with any withholding requirement.
14. Interpretation.
(a) It is the intent of the Company that transactions
under the Plan with respect to directors and officers (within the
meaning of Section 16(a) under the Exchange Act) satisfy the
conditions of Rule 16b-3. To the extent that any provision of
the Plan would result in a conflict with such conditions, such
provision shall be deemed null and void. This Section shall not
be applicable if no class of the Company's equity securities is
then registered pursuant to Section 12 of the Exchange Act.
(b) It is the intent that all provisions in the Plan
pertaining to ISOs satisfy the conditions of Section 422 of the
Code and the Regulations promulgated thereunder. To the extent
that any provision of the Plan would result in a conflict with
such conditions, such provision shall be deemed null and void.
LAW OFFICES OF LEONARD R. GLASS, P.A.
45 Central Ave.
P.O. Box 579
Tenafly, New Jersey 07670-0579
(201) 894-9300
December 11, 1998
CTC Communications Corp.
360 Second Ave.
Waltham MA 02154
Re: Registration Statement on Form S-8 Under the Securities Act of 1933
Ladies and Gentlemen:
We have examined the Registration Statement on Form S-8 to be filed by
you with the Securities and Exchange Commission on or about the date hereof
(the "Registration Statement") in connection with the registration under the
Securities Act of 1933, as amended, of the 1998 Incentive Plan (as to
1,500,000 shares), the 1996 Stock Option Plan (as to 1,000,000 shares) and the
Employee Stock Purchase Plan (as to 750,000 shares) (collectively, the "Plans"
and "Shares") as appropriate. As legal counsel for CTC Communications Corp.,
we have examined the proceedings taken and are familiar with the proceedings
proposed to be taken by you in connection with the issuance and sale of the
Shares pursuant to the Plans.
It is our opinion that the Shares, when issued and sold in the manner
described in and required by the Plans, will be legally and validly issued,
fully-paid and non-assessable.
Attorneys in the law firm of Law Offices of Leonard R. Glass, P.A.,
beneficially own approximately two (2%) percent of the outstanding shares of
the Company's Common Stock.
We hereby consent to the use of our opinion as herein set forth as an
exhibit to the Registration Statement and to the use of our name under Item 5,
Interest of Named Experts and Counsel, in the Registration Statement.
Very truly yours,
/s/ LAW OFFICES OF LEONARD R. GLASS, P.A.
-------------------------------------------------
LAW OFFICES OF LEONARD R. GLASS, P.A.
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration
Statement (Form S-8) pertaining to the CTC Communications Corp. 1998 Incentive
Plan, the CTC Communications Corp. 1996 Stock Option Plan and the CTC
Communications Corp. Employee Stock Purchase Plan of our report dated
May 28, 1998, except for Note 1, as to which the date is July 15, 1998,
with respect to the financial statements and schedule of CTC Communications
Corp. included in its Annual Report (Form 10-K) for the year ended March 31,
1998, filed with the Securities and Exchange Commission.
/s/ ERNST & YOUNG LLP
Boston, Massachusetts
December 10, 1998
