<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QA
AMENDMENT No.1
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the period ended June 30, 1995
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the Transition Period from to
Commission file number 0-3035
COGNITRONICS CORPORATION
(Exact name of registrant as specified in its charter)
NEW YORK 13-1953544
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3 Corporate Drive, Danbury, Connecticut 06810-4130
(Address of principal executive offices) (Zip Code)
(203) 830-3400
Registrant's telephone number, including area code
Indicate by check mark whether the registrant (1) has
filed all reports required to be filed by Section 13 or 15(d)
of the Securities Exchange Act of 1934 during the preceding 12
months, and (2) has been subject to such filing requirements
for at least the past 90 days. Yes x No
Indicate the number of shares outstanding of each of
the issuer's classes of common stock, as of June 30, 1995.
Common Stock, par value $0.20 per share -- 3,377,599 shares
<PAGE> 2
Item 6. Exhibits and Reports on Form 8-K
(a) Index to Exhibits
Exhibit
10.1 Cognitronics Corporation Rstricted Stock Plan
(attached as Exhibit 10.1 to this Quarterly Report
on Form 10-Q).
27 Financial Data Schedule (attached as Exhibit 27 to this
Quarterly Report on Form 10-Q).
(b) No reports on Form 8-K were filed during the current quarter.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
COGNITRONICS CORPORATION
Registrant
Date: August 14, 1995 By /s/Garrett Sullivan
_________________________
Garrett Sullivan, Treasurer
and Chief Financial Officer
<PAGE> 1
EXHIBIT 10.1
Cognitronics Corporation
Restricted Stock Plan
Section 1. Purpose.
The purpose of the Cognitronics Corporation Restricted Stock Plan
is:
(a) to increase the proprietary interest in the Company of those
Key Employees whose responsibilities and decisions directly
affect the performance of the Company and its subsidiaries;
(b) to provide rewards for those Key Employees who make contribu-
tions to the success of the Company and its subsidiaries; and
(c) to attract and retain persons of superior ability as Key
Employees of the Company and its subsidiaries.
Section 2. Definitions.
"Award" means an award of Restricted Stock granted to any Key
Employee in accordance with the provisions of the Plan.
"Award Agreement" means the written agreement evidencing each
Award between the Key Employee and the Company.
"Board" means the Board of Directors of the Company.
"Cause" means (i) the Key Employee is convicted of a felony
involving moral turpitude; or (ii) the Key Employee is guilty of
willful gross neglect or willful gross misconduct in carrying out
his duties, resulting, in either case, in material economic harm
to the Company, unless the Key Employee believed in good faith
that such act or nonact was in the best interests of the Company.
"Change in Control" means an event in which:
(a) the shareholders of the Company approve (i) any consolidation
or merger of the Company or any of its subsidiaries where the
shareholders of the Company, immediately prior to the consolida-
tion or merger, would not, immediately after the consolidation or
merger, beneficially own, directly or indirectly, shares repre-
senting in the aggregate more than 50% of all votes to which all
shareholders of the corporation issuing cash or securities in the
consolidation or merger (or of its ultimate parent corporation,
if any) would be entitled under ordinary circumstances to vote in
an election of directors or where the members of the Board,
immediately prior to the consolidation or merger, would not,
immediately after the consolidation or merger, constitute a
majority of the Board of Directors of the corporation issuing
cash or securities in the consolidation or merger (or of its
ultimate parent corporation, if any), (ii) any sale, lease,
<PAGE> 2
exchange or other transfer (in one transaction or a series of
transactions contemplated or arranged by any person as a single
plan) of all or substantially all of the assets of the Company or
(iii) any plan or proposal for the liquidation or dissolution of
the Company;
(b) persons who, as of the effective date hereof, constitute the
entire Board (as of the date hereof the "Incumbent Directors")
cease for any reason to constitute at least a majority of the
Board, provided, however, that any person becoming a director
subsequent to the date hereof whose election, or nomination for
election by the Company's shareholders, is approved by a vote of
at least a majority of the then Incumbent Directors (other than
an election or nomination of a person whose assumption of office
is the result of an actual or threatened election contest relat-
ing to the election of directors of the Company, as such terms
are used in Rule 14a-11 under the Exchange Act), shall be consid-
ered an Incumbent Director; or
(c) any "person", as such term is used in Sections 13(d) and 14(d)
of the Exchange Act (other than the Company, any of its subsidi-
aries, any employee benefit plan of the Company or any of its
subsidiaries or any entity organized, appointed or established by
the Company for or pursuant to the terms of such plan), together
with all "affiliates" and "associates" (as such terms are defined
in Rule 12b-2 under the Exchange Act) of such person, becomes the
"beneficial owner" or "beneficial owners" (as defined in Rules
13d-3 and 13d-5 under the Exchange Act), directly or indirectly,
of securities of the Company representing in the aggregate 20% or
more of either (i) the then outstanding shares of Stock or (ii)
the combined voting power of all then outstanding securities of
the Company having the right under ordinary circumstances to vote
in an election of directors to the Board ("Voting Securities")
(in either such case other than as a result of acquisitions of
such securities directly from the Company).
Notwithstanding the foregoing, a "Change in Control" will not
have occurred for purposes of clause (c) solely as the result of
an acquisition of securities by the Company which, by reducing
the number of shares of Stock or other Voting Securities out-
standing, increases (i) the proportionate number of shares of
Stock beneficially owned by any person to 20% or more of the
shares of Stock then outstanding or (ii) the proportionate voting
power represented by the Voting Securities beneficially owned by
any person to 20% or more of the combined voting power of all
then outstanding Voting Securities; provided, however, that if
any person referred to in clause (i) or (ii) of this sentence
thereafter becomes the beneficial owner of any additional shares
of Stock or other Voting Securities (other than pursuant to a
stock split, stock dividend or similar transaction), then a
"Change in Control" will have occurred for purposes of clause
(c).
<PAGE> 3
"Committee" means the Committee appointed by the Board to admin-
ister the Plan pursuant to Section 4(a) hereof.
"Company" means Cognitronics Corporation and its successors and
assigns.
"Constructive Termination Without Cause" means a termination of
a Key Employee's employment at his initiative following the
occurrence, without the Key Employee's prior written consent, of
one or more of the following events (except in consequence of a
prior termination):
(i) a reduction in the Key Employee's base salary or the
termination or material reduction of any employee benefit or
perquisite enjoyed by him (other than as part of an across-the-
board reduction applicable to all executive officers of the
Company);
(ii) a material diminution in the Key Employee's duties or
the assignment to the Key Employee of duties which are materially
inconsistent with his duties or which materially impair the Key
Employee's ability to function in his position with the Company.
(iii) the failure to continue the Key Employee's partici-
pation in any incentive compensation plan unless a plan providing
a substantially similar opportunity is substituted; or
(iv) the relocation of the Key Employee's office location
as assigned to him by the Company to a location more than 50
miles from his prior office location.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time.
"Key Employee" means an officer or other key employee of any
Participating Company who, in the judgment of the Committee, is
responsible for or contributes to the management, growth, tech-
nology or profitability of the business of any Participating
Company.
"Participating Company" means the Company or any subsidiary or
other affiliate of the Company.
"Plan" means the Cognitronics Corporation Restricted Stock Plan.
"Restricted Stock" means Stock delivered under the Plan subject
to the requirements of Section 7 hereof and such other restric-
tions as the Committee deems appropriate or desirable.
"Stock" means the common stock ($.20 par value) of the Company.
"Total Disability" means the complete and permanent inability of
a Key Employee to perform substantially all of his or her duties
under the terms of his or her employment with any Participating
Company, as determined by the Committee upon the basis of such
evidence, including independent medical reports or data, as the
Committee deems appropriate or necessary.
<PAGE> 4
Section 3. Effective Date.
The effective date of the Plan shall be January 1, 1995, subject
to approval of the Plan by a majority of the Company's stockhold-
ers. Notwithstanding anything in the Plan to the contrary, if
the Plan shall have been approved by the Board prior to such
stockholder approval, Key Employees may be selected and Award
criteria may be determined and Awards may be made as provided
herein subject to subsequent stockholder approval.
Section 4. Plan Administration.
(a) Committee. The Plan shall be administered by a Committee
appointed by the Board and serving at the Board's pleasure. The
Committee shall be comprised of not less than two (2) members of
the Board. Members of the Committee shall be members of the
Board who are "disinterested persons" within the meaning of Rule
16b-3 under the Exchange Act or a successor rule or regulation.
(b) Powers. The Committee is authorized, subject to the provi-
sions of the Plan, to establish such rules and regulations as it
deems necessary or advisable for the proper administration of the
Plan and to take such other action in connection with or in
relation to the Plan as it deems necessary or advisable. Each
decision made or action taken pursuant to the Plan, including
interpretation of the Plan and the Awards granted hereunder by
the Committee, shall be final and conclusive for all purposes and
upon all persons, including without limitation, the Participating
Companies, the Committee, the Board, Key Employees and their
respective successors in interest.
(c) Indemnification. No member or former member of the Committee
or the Board shall be liable for any action or determination made
in good faith with respect to the Plan or any Award granted under
it. Each member or former member of the Committee or the Board
shall be indemnified and held harmless by the Company against all
costs and expenses (including counsel fees) and liability (in-
cluding any sum paid in settlement of a claim with the approval
of the Board) arising out of any act or omission to act in con-
nection with the Plan unless arising out of such member's own
fraud or bad faith. Such indemnification shall be in addition to
any rights of indemnification the members or former members may
have as directors or under the by-laws of the Company.
(d) Independent Advisors. The Committee may employ such independ-
ent professional advisors, including without limitation independ-
ent legal counsel and counsel regularly employed by the Company,
consultants and agents as the Committee may deem appropriate for
the administration of the Plan and may rely upon any opinion
received from any such counsel or consultant and any computations
received from any such consultant or agent. All expenses in-
curred by the Committee in interpreting and administering the
Plan, including without limitation meeting fees and expenses and
professional fees, shall be paid by the Company.
<PAGE> 5
Section 5. Participation.
Participation in the Plan shall be limited to Key Employees of
the Participating Companies who have received written notifica-
tion from the Committee, or from a person designated by the
Committee, that they have been selected to participate in the
Plan. No employee shall at any time have any right to be select-
ed to participate in the Plan. No Key Employee having been
granted an Award shall have any right to be granted an additional
Award in the future. Neither the Plan nor any action taken
thereunder shall be construed as giving any Key Employee any
right to be retained in the employ of the Participating Compa-
nies. The right and power of the Participating Companies to
dismiss or discharge any Key Employee, with or without cause, is
specifically reserved.
Section 6. Award Grants and Agreements.
(a) Grants. The Chief Executive Officer ("CEO") of the Company
may recommend Key Employees to participate in the Plan, and may
recommend the timing, amount and restrictions, if any, and other
terms and conditions of an Award, subject to the terms of the
Plan. The Committee, in its sole discretion, has the authority
to grant Awards under the Plan, which may be made in accordance
with the recommendations of the CEO or otherwise.
(b) Agreements. Each Award shall be evidenced by a written Award
Agreement, in a form adopted by the Committee. Each Award Agree-
ment shall be subject to and incorporate the express terms and
conditions, if any, required by the Plan, and contain such re-
strictions, terms and conditions as the Committee may determine.
Section 7. Restricted Stock.
(a) Shares Subject to the Plan. An aggregate of 150,000 shares of
Stock may be awarded under the Plan as Restricted Stock. Any
share of Restricted Stock that is subject to an Award but that
for any reason does not vest shall again become available for an
Award under the Plan.
(b) Adjustments. In the event of any change in the Stock subject
to the Plan (through merger, consolidation, reorganization,
recapitalization, stock dividend, split-up, spin-off, combination
of shares, exchange of shares, issuance of rights to subscribe or
other change in capital structure), the Committee shall make
appropriate adjustments in the amount of Stock available for
Awards under the Plan or subject to outstanding Awards, or the
terms, conditions or restrictions of such Awards as the Committee
deems equitable to prevent the dilution or enlargement of the
benefits intended pursuant to the Plan.
(c) Custody of Shares.
(i) Each certificate of Restricted Stock issued pursuant
to an Award shall be registered in the name of the Key Employee
and held, together with a stock power endorsed in blank, by the
Company. Unless and until such shares of Restricted Stock fail
<PAGE> 6
to vest and are forfeited as provided herein, the Key Employee
shall be entitled to vote all such shares of Restricted Stock and
receive all cash dividends, if any, with respect thereto. All
other distributions with respect to such Restricted Stock, in-
cluding, but not limited to, shares received as a result of a
stock dividend, stock split, combination of shares or otherwise,
shall be retained by the Company in escrow. Each certificate of
Restricted Stock issued pursuant to an Award shall bear the
following (or similar) legend:
"The transferability of this certificate and of the shares of
Common Stock represented hereby are subject to the terms and
conditions (including vesting) contained in the Cognitronics
Corporation Restricted Stock Plan and an Award Agreement entered
into between the registered owner and Cognitronics Corporation.
A copy of such Plan and Award Agreement is on file in the office
of the Secretary of Cognitronics Corporation."
In lieu of the foregoing, the Company may issue stop transfer
instructions to its transfer agent or take such other steps as
are necessary to preclude the transfer of Restricted Stock.
(ii) Certificates representing shares of Restricted Stock
which have become vested pursuant to Section 7 hereof and which
have been held by the Company pursuant to Section 7(c) hereof
shall be delivered by the Company to the Key Employee (or the Key
Employee's legal representative) in the form of a freely trans-
ferable certificate, without legend (provided that the Key Em-
ployee is not an "affiliate" of the Company within the meaning of
Rule 405 adopted pursuant to the Securities Act of 1933, as
amended) promptly after becoming vested, provided, however, that
the Company need not deliver such shares to a Key Employee until
the Key Employee has paid or caused to be paid all taxes required
to be withheld pursuant to Section 8 hereof.
(d) Restriction Period.
(i) Vesting Schedule. Except as provided in Section
7(d)(ii), 7(d)(iii) or 7(d)(iv) hereof, to the extent that a Key
Employee remains continuously employed by a Participating Compa-
ny, Restricted Stock received as an Award shall become vested and
shall not be subject to forfeiture in accordance with the follow-
ing schedule:
PORTION OF AWARD
PERIOD OF EMPLOYMENT VESTED
Prior to the second anniversary date of the Award 0%
On or after the second anniversary date, but prior
to the third anniversary date of the Award 20
On or after the third anniversary date, but prior
to the fourth anniversary date of the Award 40
On or after the fourth anniversary date, but prior
to the fifth anniversary date of the Award 60
On or after the fifth anniversary date, but prior
to the sixth anniversary date of the Award 80
On or after the sixth anniversary date of the Award 100
<PAGE> 7
(ii) Waiver of Vesting Schedule. Notwithstanding the
provisions of Section 7(d)(i) hereof, with respect to any Key
Employee or group of Key Employees, the Committee may elect to
waive or accelerate the vesting schedule set fort
(iii) Death, Disability and Retirement. Notwithstanding
the provisions of Section 7(d)(i) hereof, upon a Key Employee's
death, Total Disability or retirement on or after reaching the
age of 62, shares of Restricted Stock shall vest on a pro rata
basis, comparing the number of years from the date of the Award
to the date of death, Total Disability or retirement to six
years. Shares of Restricted Stock which do not so vest shall be
forfeited to the Company.
(iv) Termination of Employment Following a Change in
Control. Notwithstanding the provisions of Section 7(d)(i)
hereof, if following a Change in Control, a Key Employee's em-
ployment is terminated without Cause or there is a Constructive
Termination Without Cause, all shares of Restricted Stock subject
to an Award shall become immediately vested.
(e) Restrictions.
Until shares of Restricted Stock have vested in accordance with
Section 7(d) hereof, an Award shall be subject to the following
restrictions:
(i) Nontransferability. Except as otherwise required by
law, Restricted Stock which has not vested may not be sold,
assigned, exchanged, transferred, pledged, hypothecated or other-
wise disposed of, except to the Company as provided herein.
(ii) Other Restrictions. The Committee may impose such
other restrictions on any Award as it may deem advisable, includ-
ing without limitation, stop-transfer orders and other restric-
tions set forth in the terms of the Award Agreement or as the
Committee may deem advisable under the rules and regulations, and
other requirements of the Securities and Exchange Commission, and
any applicable federal or state securities or other laws.
Section 8. Miscellaneous.
(a) Awards Not Considered Compensation. No Award made under the
Plan shall be deemed salary or compensation for the purpose of
computing benefits under any employee benefit plan or other
arrangement of any Participating Company for the benefit of its
employees unless the Company shall determine otherwise.
(b) Absences. Absence on leave approved by a duly constituted
officer of the Company shall not be considered interruption or
termination of employment for any purposes of the Plan; provided,
however, that no Award may be granted to an employee while he or
she is absent on leave.
(c) Delivery to Persons Other Than Key Employee. If the Committee
finds that shares of Restricted Stock are to be delivered under
the Plan to a Key Employee who is unable to care for his or her
affairs because of illness or accident, then any payment due him
or her (unless a prior claim therefor has been made by a duly
<PAGE> 8
appointed legal representative) may, if the Committee so directs,
be paid to his or her spouse, a child, a relative, an institution
maintaining or having custody of such person, or any other person
deemed by the Committee to be a proper recipient on behalf of
such person otherwise entitled to delivery. Any such delivery
shall be a complete discharge of the liability of the Company
therefor.
(d) Plan Copies. Copies of the Plan and all amendments, adminis-
trative rules and procedures and interpretations shall be made
available to all Key Employees at all reasonable times at the
Company's headquarters.
(e) Withholding Taxes. The Company may withhold any taxes in
connection with the Plan that the Company determines it is re-
quired to withhold under the laws and regulations of any govern-
mental authority, whether federal, state or local and whether
domestic or foreign, including, without limitation, taxes in
connection with the delivery of shares of Restricted Stock or the
vesting of Restricted Stock. A Key Employee may elect to satisfy
such withholding requirements either by (i) delivery to the
Company of a certified check prior to the delivery of shares of
Restricted Stock which are vested pursuant to Section 7 hereof,
(ii) instructing the Company to retain a sufficient number of
shares of Stock to cover the withholding requirements, or (iii)
instructing the Company to satisfy the withholding requirements
from the Key Employee's salary.
(f) Governing Law. The Plan and all rights hereunder shall be
governed by and construed in accordance with the law as of the
State of New York, without giving effect to its rules on con-
flicts of law.
(g) Key Employee Communications. All elections, designations,
requests, notices, instructions and other communications from a
Key Employee or other person to the Committee required or permit-
ted under the Plan shall be in such form as is prescribed from
time to time by the Committee and shall be mailed by first class
or delivered to such location as shall be specified by the Com-
mittee.
(h) Binding on Successors. The terms of the Plan shall be binding
upon the Company and its successors and assigns.
(i) Captions. Captions preceding the sections and clauses hereof
are inserted solely as a matter of convenience and in no way
define or limit the scope or intent of any provisions hereof.
(j) Severability. Whenever possible, each provision of the Plan
shall be interpreted in such manner as to be effective and valid
under applicable law. If any provision of the Plan or the appli-
cation thereof to any person or circumstances is prohibited by or
invalid under applicable law, such provision shall be ineffective
to the minimal extent of such prohibition or invalidity without
invalidating the reminder of such provision or the remaining
provisions of the Plan or the application of such provision to
other persons or circumstances.
<PAGE> 9
(k) Amendment, Duration and Termination. The Board may at any
time amend or terminate this Plan as of any date specified in a
resolution adopted by the Board. The Plan may also be amended by
the Committee, provided that all such amendments are reported to
the Board. Each amendment shall be subject to stockholder ap-
proval if required by Rule 16b-3 under the Exchange Act or a
successor rule or regulation. No amendment of the Plan may
affect an Award theretofore granted under the Plan without the
written consent of the Key Employee affected. If not earlier
terminated, the Plan shall terminate on December 31, 2000. No
Award may be granted after this Plan has terminated. After the
Plan has terminated, the functions of the Committee shall be
limited to supervising the administration of Awards previously
granted. Termination of the Plan shall not affect any Award
previously granted.
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<INVENTORY> 2,524
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0
0
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