<PAGE>
BOSTON TECHNOLOGY, INC.
100 Quannapowitt Parkway
Wakefield, Massachusetts 01880
May 2, 1995
VIA EDGAR
- - ---------
Securities and Exchange Commission
450 5th Street, N.W.
Judiciary Plaza
Washington, D.C. 20549
Re: Boston Technology, Inc.
Commission File No. 0-17384
Preliminary Proxy Materials
---------------------------
Ladies and Gentlemen:
Pursuant to the requirements of Rule 14a-6 (a) promulgated
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
enclosed for filing in EDGAR electronic format pursuant to the requirements
of Regulation S-T is a copy of the Preliminary Proxy Statement and Notice of
Meeting of Boston Technology, Inc. (the "Company"), which are to be used in
connection with the 1995 Annual Meeting of Stockholders to be held on June 22,
1995. Attached as appendices to the Proxy Statement are the form of Proxy
and, pursuant to Instruction 3 to Item 10 of Schedule 14A, copies of the
Company's 1995 Employee Stock Purchase Plan and 1995 Director Stock Option
Plan. The Company anticipates mailing definitive proxy materials to
stockholders on or about May 16, 1995.
The Preliminary Proxy Statement contains a proposal to amend the
Company's Certificate of Incorporation to increase from 35,000,000 to
60,000,000 the number of authorized shares of Common Stock. The record date
for shares eligible to vote at the Annual Meeting is May 1, 1995.
In accordance with the requirements of Regulation S-T and the EDGAR
system, a wire transfer in the amount of $125.00 in payment of the filing fee
has previously been sent to the Commission's lockbox at Mellon Bank in
Pittsburgh.
If you have any questions or comments regarding the enclosed material,
kindly contact the undersigned.
Very truly yours,
/s/ Carol B. Langer
---------------------
Carol B. Langer, Secretary
<PAGE>
BOSTON TECHNOLOGY, INC.
100 Quannapowitt Parkway
Wakefield, Massachusetts 01880
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 22, 1995
To the Stockholders:
The Annual Meeting of Stockholders of Boston Technology, Inc. (the
"Company") will be held at the Marriott Hotel, 8A Centennial Drive, Peabody,
Massachusetts, on Thursday, June 22, 1995 at 3:00 p.m., local time, to
consider and act upon the following matters described in the Proxy Statement:
1. To elect six directors for the ensuing year.
2. To ratify and approve the Board of Directors adoption of the Company's
1995 Employee Stock Purchase Plan as described in the Proxy Statement.
3. To ratify and approve the Board of Directors adoption of the 1995
Director Stock Option Plan as described in the Proxy Statement.
4. To approve an Amendment to the Company's Certificate of Incorporation
increasing the authorized Common Stock of the Company to 60,000,000
shares.
5. To transact such other business as may properly come before the meeting
or any adjournment thereof.
Stockholders of record at the close of business on May 1, 1995 are
entitled to notice of, and to vote at, the meeting. The stock transfer books
of the Company will remain open for the purchase and sale of the Company's
Common Stock.
All stockholders are cordially invited to attend the meeting.
By order of the Board of Directors
/s/ Carol B. Langer
-------------------
Carol B. Langer, Secretary
Wakefield, Massachusetts
May 16, 1995
THE BOARD OF DIRECTORS CONSIDERS THE VOTE OF ALL STOCKHOLDERS TO BE
IMPORTANT. WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE,
DATE AND SIGN THE ENCLOSED PROXY AND MAIL IT PROMPTLY IN THE ENCLOSED
ENVELOPE IN ORDER TO ASSURE REPRESENTATION OF YOUR SHARES AT THE MEETING.
STOCKHOLDERS WHO ATTEND THE MEETING MAY VOTE THEIR STOCK PERSONALLY EVEN
THOUGH THEY HAVE SENT IN THEIR PROXIES.
<PAGE>
BOSTON TECHNOLOGY, INC.
100 Quannapowitt Parkway
Wakefield, Massachusetts 01880
PROXY STATEMENT FOR THE ANNUAL MEETING OF STOCKHOLDERS
June 22, 1995
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of Boston Technology, Inc. (the
"Company") for use at the Annual Meeting of Stockholders of the Company
(the "Annual Meeting") to be held at the Marriott Hotel, 8A Centennial Drive,
Peabody, Massachusetts, at 3:00 p.m. on Thursday, June 22, 1995, (and at any
adjournments thereof), for the purposes set forth in the foregoing Notice.
The close of business on May 1, 1995 has been established as the
record date for determining the stockholders entitled to notice of and to
vote at the Annual Meeting, and at any adjournments thereof. As of the
record date, there were issued and outstanding and entitled to vote
25,052,993 shares of Common Stock of the Company, par value $.001 per
share ("Common Stock"). Holders of shares of Common Stock are entitled
to one vote for each share owned at the record date on all matters to come
before the meeting and any adjournments thereof.
This Proxy Statement and the accompanying proxy materials
were mailed to stockholders of the Company on or about May 16, 1995. The
financial statements of the Company for the fiscal year ended January 31,
1995 are contained in the Annual Report to Stockholders which is being
mailed to stockholders of the Company together with this Proxy Statement.
All proxies will be voted in accordance with the instructions
contained therein. If no choice is specified, the proxies will be voted in
favor of the proposals set forth in the Notice and, with respect to any other
business which may properly come before the meeting, in the discretion of the
named proxies. Any proxy may be revoked by a stockholder at any time before
it is exercised by written revocation sent to Carol B. Langer, Secretary of
the Company.
Votes Required
A quorum at the Annual Meeting shall consist of one-third (1/3) of
the outstanding shares of Common Stock entitled to vote, represented in
person or by proxy. The six director nominees who receive a plurality of
the votes cast by stockholders entitled to vote at the Annual Meeting will
be elected. The affirmative vote of the holders of a majority of the
issued and outstanding shares of Common Stock is required for the approval
of the proposed amendment to the Company's Certificate of Incorporation.
The affirmative vote of the holders of a majority of the shares of Common
Stock present or represented at the Annual Meeting and voting on the matter
is required for the approval of the other matters set forth in the foregoing
Notice.
Shares of Common Stock represented in person or by proxy at the
Annual Meeting (including shares which abstain or do not vote with respect
to one or more of the matters presented at the Annual Meeting) will be
tabulated by the inspectors of election appointed for the meeting and will
determine whether or not a quorum is present. The inspectors of election
will treat abstentions as shares that are present and entitled to vote for
purposes of determining the number of shares that are present and entitled
to vote with respect to any particular matter, but will not be counted as
a vote in favor of such matter. Accordingly, an abstention from voting on a
matter by a stockholder present in person or represented by proxy at the
Annual Meeting has the same legal effect as a vote "against" the matter even
though the stockholder or interested parties analyzing the results of the
voting may interpret such vote differently. If a broker holding stock in
"street name" indicates on the proxy that it does not have discretionary
authority as to certain shares to vote on a particular matter, those shares
will not be considered as voting on such matter nor as present and entitled
to vote with respect to that matter. Accordingly, a "broker-no-vote" on a
matter that requires the affirmative vote of a certain percentage of shares
present and entitled to vote on the matter, such as the election of directors
and the approval of the Company's 1995 Employee Stock Purchase Plan and 1995
Director Stock Option Plan, has no effect on the voting of such matter,
while a "broker-no-vote" on a matter that requires the affirmative vote of
<PAGE>
a certain percentage of the outstanding shares, such as the approval of the
proposed Amendment to the Company's Certificate of Incorporation, has the
same effect as a vote against the matter.
Beneficial Ownership
The following table sets forth certain information regarding
beneficial ownership of the Company's Common Stock, as of March 31, 1995,
by (i) each person known by the Company to own beneficially more than 5%
of the outstanding Common Stock, (ii) each of the Company's directors,
(iii) each executive officer named in the "Summary Compensation Table" and
(iv) all directors and executive officers of the Company as a group.
Number of Shares Percentage of Common
Name of Beneficial Owner(s) Beneficially Owned(a) Stock Outstanding
- - --------------------------- --------------------- --------------------
Directors and Executive Officers
Greg C. Carr..............................3,044,000 (b) 12.0%
Richard J. Connaughton.......................67,200 (c) *
Herman B. Leonard...........................185,200 (d) *
Joseph E. Norberg............................65,000 (d) *
Richard K. Snelling..........................36,270 (d) *
John C. W. Taylor...........................199,685 (e) *
Paul W. DeLacey..............................92,847 (e) *
Francis E. Girard............................89,750 (e) *
Robert Slezak...............................103,000 (e) *
A. K. Wnorowski..............................81,874 (e) *
All directors and executive officers
as a group (13 persons)...........4,017,116 (f) 15.8%
Non-Directors or Officers
Scott A. Jones............................2,190,395 (g) 8.6%
George D. Bjurman & Associates ("GDBA")...1,568,619 (h) 6.2%
___________________
* Less than 1%
(a) The number of shares beneficially owned by each director
or executive officer is determined under rules of the
Securities and Exchange Commission, and the information
is not necessarily indicative of beneficial ownership
for any other purpose. Under such rules, beneficial
ownership includes any shares as to which the individual
has sole or shared voting power or investment power and
also any shares which the individual has the right to
acquire within 60 days after March 31, 1995 through the
exercise of any stock option or other right. Unless
otherwise indicated, each person has sole investment and
voting power (or shares such power with his or her
spouse) with respect to the shares set forth in the
table. The inclusion herein of any shares deemed
beneficially owned does not constitute an admission of
beneficial ownership of those shares.
(b) The business address for Mr. Carr is c/o Boston
Technology, Inc., 100 Quannapowitt Parkway, Wakefield,
Massachusetts 01880.
(c) Includes 65,000 shares which Mr. Connaughton has the
right to acquire within 60 days after March 31, 1995
upon exercise of outstanding stock options; and 2,200
shares which Mr. Connaughton holds in a Trust and to
which Mr. Connaughton disclaims beneficial ownership.
Mr. Connaughton has no voting or dispositive power over
the shares held in such Trust.
(d) Includes 65,000, 65,000 and 15,000 shares which Messrs.
Leonard, Norberg and Snelling, respectively, have the
right to acquire within 60 days after March 31, 1995
upon exercise of outstanding stock options.
-2-
<PAGE>
(e) Includes 199,685, 90,000, 55,750, 103,000 and 3,490
shares which Messrs. Taylor, DeLacey, Girard, Slezak and
Wnorowski, respectively, have the right to acquire
within 60 days after March 31, 1995 upon exercise of
outstanding stock options.
(f) Includes 683,259 shares which all executive officers and
directors as a group have the right to acquire within 60
days after March 31, 1995 upon exercise of outstanding
stock options. Also includes the shares described in
note (3) above.
(g) Mr. Jones' business address is P. O. Box 215, Prides
Crossing, Massachusetts 01965.
(h) George D. Bjurman & Associates ("GDBA"), including George
Andrew Bjurman and Owen Thomas Barry III, have a
business address at 10100 Santa Monica Boulevard, Suite
1200, Los Angeles, California 90067. GDBA filed a
Schedule 13G with the Securities and Exchange Commission
on February 14, 1995 declaring their beneficial
ownership in the Common Stock of the Company, and the
information contained herein is based on the information
contained in such Schedule 13G. In the Schedule 13G
filing, Messrs. Bjurman and Barry disclaimed direct
beneficial ownership in the GDBA ownership of the Common
Stock.
ELECTION OF DIRECTORS
The persons named in the enclosed Proxy will vote to elect
as directors the six nominees named below, unless authority
to vote for the election of directors is withheld by marking
the Proxy to that effect or the Proxy is marked with the
names of directors as to whom authority to vote is withheld.
The Proxy may not be voted for more than six directors.
All of the directors so elected will serve until the next
Annual Meeting of Stockholders and until their respective
successors are elected and qualified. If a nominee becomes
unavailable, the person acting under the Proxy may vote the
Proxy for the election of a substitute. It is not presently
contemplated that any of the nominees will be unavailable.
The following table sets forth the name and age of each
nominee and the positions and offices held by him, his
principal occupation and business experience and the year in
which he first became a director of the Company:
Director
Name and Principal Occupation Age Since
----------------------------- --- ---------
Greg C. Carr....................................... 35 1986
Chairman of the Board of Directors of the Company
Richard J. Connaughton............................... 44 1988
President and Chief Executive Officer of Connaughton
Development Corporation
Herman B. Leonard.................................. 42 1989
Professor and Academic Dean for Teaching Programs,
Kennedy School of Government, Harvard University
Joseph E. Norberg................................... 48 1990
Chief Financial Officer and Treasurer of
Hill, Holliday, Connors, Cosmopulos, Inc.
Richard K. Snelling...................... 63 1993
Chairman and Chief Executive Officer of
Videoconferencing Systems, Inc.
Dr. John C.W. Taylor.................................. 49 1994
President and Chief Executive Officer of the Company
-3-
<PAGE>
Mr. Carr, one of the Company's two co-founders, served as
President and Chief Executive Officer of the Company from
April 1986 to September 1991, and as Chief Executive Officer
from September 1991 to August 1992. He has served as a
director since the Company's formation in April 1986 and as
Chairman of the Board since April 1992. Mr. Carr holds a
B.S. degree in History from Utah State University and a
Masters Degree in Public Policy from Harvard University.
Mr. Connaughton has been a director of the Company since
November 1988. He has been the President and Chief Executive
Officer of Connaughton Development Corporation, a high
technology investment and development firm based in
Massachusetts, since he founded that firm in 1987. From 1972
to 1987, Mr. Connaughton held several positions with Wang
Laboratories, Inc., a manufacturer of computers, word
processing equipment and related peripheral devices,
including Vice President of Telecommunications Products from
1986 to 1987 and Vice President of Independent Sales
Organizations from 1984 to 1986. He received a B.S. degree
in Mathematics from Springfield College in 1972.
Dr. Leonard has served as a director of the Company since
November 1989 and previously served as its Treasurer from
January 1987 until November 1989. Dr. Leonard is a Baker
Professor of Public Management at the Kennedy School of
Government, Harvard University, a position which he has held
since 1986, and the Academic Dean for the Teaching Programs,
also at Harvard University, a position which he has held
since July 1992. He was an Associate Professor of Public
Policy from 1983 to 1986, and an Assistant Professor from
1979 to 1983, at Harvard University. Dr. Leonard holds A.B.,
A.M. and Ph.D. degrees in Economics from Harvard University.
Mr. Norberg, who has been a director of the Company since
May 1990, has been the Chief Financial Officer and Treasurer
of Hill, Holliday, Connors, Cosmopulos, Inc., an advertising
agency located in Boston, Massachusetts, since 1986. From
1979 to 1985, Mr. Norberg held several positions at Wang
Laboratories, Inc., including Vice President and Controller
of U.S. Operations from 1984 to 1985. Mr. Norberg received a
B.S. degree in Management from Boston College in 1968.
Mr. Snelling has served as a director of the Company since
November 1993. Mr. Snelling was employed for 35 years by
Southern Bell and BellSouth Telecommunications and retired
from BellSouth as Executive Vice President in December 1991.
He was the founder and Director/CEO of the Georgia Center of
Advanced Telecommunications Technology and served as its
Chairman of the Board until February 1993. He is currently
Chairman and Chief Executive Officer of Videoconferencing
Systems, Inc., a worldwide provider of videoconferencing
systems to businesses. Mr. Snelling is an engineering
graduate of the University of Florida and a registered
professional and member of the Georgia and National Society
of Professional Engineers. He is a Fellow in the Institute
of Electrical and Electronics Engineers in which he serves as
a member-at-large of the Communication Society and is a
member of the Georgia Tech Advisory Board and the President's
Council of the University of Florida.
Dr. Taylor has served as a director of the Company since
June 1994. He joined the Company as President and Chief
Executive Officer in January 1993. Dr. Taylor has more than
25 years of experience in the communications industry,
including senior management positions at Northern Telecom,
Inc. and General DataComm Industries, Inc. From 1991 to
1992, he served as Corporate Vice President of Business
Development for Northern Telecom, responsible for corporate
business strategy and investment for the company's billion-
dollar annual research and development program, as well as
for merger and acquisition planning. From 1987 to 1991, he
was Group Vice President of Transmission for Northern
Telecom. From 1982 to 1987, Dr. Taylor was President and
Chief Operating Officer of General DataComm Industries, Inc.,
a supplier of data communications equipment. Prior to 1982,
Dr. Taylor was at Northern Telecom for 13 years in a
succession of management positions. Dr. Taylor graduated
from the University of St. Andrews in Scotland with a degree
in physics and holds a Ph.D. in solid state physics from the
University of Alberta, Canada.
Messrs. Burke and Connaughton are first cousins. There are
no other family relationships among any of the Company's
executive officers and directors.
-4-
<PAGE>
Meetings of the Board of Directors and Committees
During the fiscal year ended January 31, 1995, the Board of
Directors held seven meetings. The Company has an Audit
Committee, consisting of Messrs. Connaughton, Leonard and
Norberg, which met twice in the fiscal year ended January 31,
1995. The Company has a Compensation Committee, consisting
of Messrs. Carr, Connaughton and Norberg, which met twice in
the fiscal year ended January 31, 1995. Its report is
included in this Proxy Statement. The Company has no
standing Nominating Committee or committee serving a similar
function. During the fiscal year ended January 31, 1995,
each director attended at least 75% of the total number of
meetings of the Board of Directors and committees of which he
was a member.
The principal responsibilities of the Audit Committee of the
Board of Directors are to (a) review the performance of the
Company's auditors during the annual audit; (b) review the
Company's internal control policies and procedures; and (c)
consider and recommend the selection of the Company's
independent auditors. The responsibilities of the
Compensation Committee are described in its report included
in this Proxy Statement.
Director Compensation
Directors who are also officers of the Company do not
receive compensation for their services to the Company as
directors. Directors who are not officers of the Company are
reimbursed for out-of-pocket expenses for attending Board and
committee meetings, but otherwise receive no compensation for
service as directors. At the 1992 Annual Meeting of
Stockholders, the stockholders approved the 1992 Directors'
Stock Option Plan, which provides for the automatic grant of
options to purchase 15,000 shares of Common Stock on each of
March 1, 1992, March 1, 1993 and March 1, 1994 to each of the
Company"s outside directors. These options vest and become
exercisable on the grant date. Messrs. Connaughton, Leonard
and Norberg were each granted options to purchase 15,000
shares of Common Stock on March 1, 1992 at an exercise price
of $3.38 per share, on March 1, 1993 at an exercise price of
$9.25 per share and on March 1, 1994 at an exercise price of
$12.63 per share, in each case representing the fair market
value of the Common Stock on the date of grant. In 1994, the
stockholders approved an Amendment to the 1992 Directors'
Stock Option Plan and authorized the issuance of an
additional 15,000 shares of Common Stock, effective March 1,
1994 at an exercise price of $12.63, to allow for the grant
of an option to purchase such shares to Mr. Richard K.
Snelling in conjunction with his election to the Board of
Directors, on November 15, 1993.
In this Proxy Statement the stockholders are being requested
to vote on the new 1995 Director Stock Option Plan, which is
described in more detail herein.
<TABLE>
Executive Officers
Executive officers are elected by the Board of Directors
annually at its meeting immediately following the Annual
Meeting of Stockholders, and hold office until the next
annual meeting unless they sooner resign or are removed from
office. The following table sets forth the name, age and
principal position with the Company of each current executive
officer:
<CAPTION>
Name Age Position
- - ----- --- --------
<S> <C> <C>
William J. Burke......................... 50 Vice President of Corporate Planning
Paul W. DeLacey.......................... 52 Executive Vice President and Chief Operating Officer
Francis E. Girard.........................56 Executive Vice President of World Sales
Carol B. Langer...........................45 Vice President of Finance, Chief Financial Officer,
Treasurer and Secretary
Robert J. Slezak.........................45 Executive Vice President of Development
Dr. John C. W. Taylor....................49 President and Chief Executive Officer
John M. Weaver...........................40 Vice President of Operations and Customer Service
Groups
A. K. Wnorowski..........................53 Senior Vice President of Administration and General
Counsel
</TABLE>
-5-
<PAGE>
Mr. Burke has served as Vice President of Corporate Planning
since October 1994. Previously, he served as Vice President
of Finance, Chief Financial Officer and Secretary of the
Company since September 1988 and as Treasurer since November
1989. From 1978 to 1988, Mr. Burke was employed by Infinet,
Inc., a provider of network control and integrated data
communications products to Regional Bell Operating Companies
("RBOCs") and other users, as its Vice President of Finance
and Administration. Prior to that time, Mr. Burke was
Corporate Controller with Hayden Wegman, Inc., a consulting
engineering subsidiary of Peabody International, from 1975 to
1978, and held senior financial planning positions with
Honeywell Information Systems, a manufacturer of computers
and related peripheral devices, from 1971 to 1975. Mr. Burke
holds a B.S. degree in Accounting from Bentley College and a
M.B.A. from Suffolk University. Mr. Burke has also completed
the MBA Program at Amos Tuck School at Dartmouth College.
Mr. DeLacey has served as Executive Vice President and Chief
Operating Officer since October 1994. He previously served
as Senior Vice President and General Manager of International
from January 1993 to October 1994. He joined the Company as
Vice President of Manufacturing in May 1989. He became Vice
President of Operations in November 1989 and General Manager
of International in November 1991. Previously, he was Vice
President of Operations for General DataComm Industries,
Inc., a manufacturer of data communications equipment and a
supplier to the RBOCs and other users, from 1985 to 1989. He
previously worked for 20 years at Honeywell Information
Systems, where he served as Vice President of Manufacturing
Operations from 1982 to 1985.
Mr. Girard has served as Executive Vice President of World
Sales since October 1994. He joined the Company in January
1989 as Senior Vice President of Sales and assumed the
position of Senior Vice President and General Manager of
North American Markets in January 1994. Previously, he was
Vice President of Sales, Marketing and Support for NEC
Information Systems, Inc., a U.S. distributor of NEC
computers and peripherals, from 1985 to 1989. Mr. Girard has
also served as Director of Marketing for the National
Independent Sales Organization and Reseller Marketing
programs at Wang Laboratories, Inc., from 1983 to 1985, in
addition to several other sales and marketing management
positions. Mr. Girard holds a B.A. degree in Business from
Merrimack College.
Ms. Langer has served as Vice President of Finance, Chief
Financial Officer, Treasurer and Secretary, since October
1994. She joined the Company in January 1993 as Corporate
Controller. Previously she was a Senior Audit Manager with
KPMG Peat Marwick from 1987 to 1993. Prior to her employment
with KPMG Peat Marwick, she was Controller for Charles River
Biotechnical Services, Inc., from 1986 to 1987. From 1982 to
1986 she was a Financial Planning Manager at M/A-Com MAC,
Inc. and from 1978 to 1982 she was an Audit Manager at KPMG
Peat Marwick. Ms. Langer holds an M.S. degree in Accounting
from Northeastern University, and an A.B. in English Language
and Literature from Boston University. She is also a
Certified Public Accountant in Massachusetts.
Mr. Slezak has served as Executive Vice President of
Development since October 1994. He joined the Company in May
1992 as Vice President of Research and Development. From
1987 to 1990, he was employed by International Computers,
Ltd., a provider of high-end computer systems to RBOCs and
other users, where he held the position of Vice President,
Engineering. Previously, Mr. Slezak was Director, Core
Systems Software, in addition to holding several other
software development and management positions, at Wang
Laboratories, Inc., from 1979 to 1987. Mr. Slezak holds a
B.S. degree in Mechanical and Aerospace Engineering, and a
Master's degree in Computer Science from the Illinois
Institute of Technology, and a Master of Management degree
from Northwestern University.
Dr. Taylor's biography appears in the "Election of
Directors" section of this Proxy Statement.
Mr. Weaver joined the Company as Vice President-Operations
and Customer Service Groups in October 1994. From 1979
through October 1994, Mr. Weaver held various positions with
Digital Equipment Corporation, including Plant Manager,
-6-
<PAGE>
Manager of Manufacturing Engineering and Operations, and
other Manufacturing Management positions. Previously he was
employed by the General Electric Corporation from 1976 to
1979. Mr. Weaver holds a B.S. Degree in Mechanical
Engineering from the University of Notre Dame. Mr. Weaver
has completed Masters Courses in C.S. and I.E. at Rensselaer
Polytechnic University.
Mr. Wnorowski joined the Company in November 1991 as Senior
Vice President of Administration, responsible for all human
resources, legal and administrative matters. He was elected
to the additional position of General Counsel in July 1992.
In October 1994, he relinquished the responsibility for human
resources and assumed responsibility for Information Services
and Support. Prior to joining the Company, Mr. Wnorowski
served from 1986 to September 1990 as Senior Vice President
and General Counsel for US Sprint Communications Company.
From 1985 to 1986, he was Vice President-General Counsel and
Regulatory for GTE Sprint Communications Company. He
previously held executive and general counsel positions with
seven GTE Corporation telephone operating companies during
the period from 1973 through 1985. After leaving US Sprint
in 1990, Mr. Wnorowski was associated with the Kansas City,
Missouri law firm of Spencer, Fane, Britt and Browne. Mr.
Wnorowski holds a B.A. degree from Niagara University and a
J.D. degree from St. John's University School of Law.
-7-
<PAGE>
<TABLE>
Compensation Tables
The following table provides information on the compensation
received by the Chief Executive Officer and the four other
most highly compensated executive officers during fiscal year
1995 (collectively, the "named executive officers") and for
the three fiscal years ended January 31, 1995.
Annual Compensation
Long-term Com-
-----------------
pensations Awards
-------------------
<CAPTION>
Name and Other Securities All other
Principal Fiscal Salary Bonus Annual Underlying Compen-
Compensation Options sation
Position Year ($) ($) ($) (#) ($)
- - ----------------- ------ -------- -------- ------------ ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
John C. W. Taylor 1995 $263,000 - - $ 52,000 a 50,000
President and CEO 1994 $250,000 - - $ 35,000 a 47,283 $40,000 d
1993 $ 9,000 b - - 340,000 $60,000 d
Paul W. DeLacey 1995 $183,000 $109,000 - - 50,000 $ 1,500 e
Executive Vice President 1994 $176,000 $ 70,000 - - 30,394 $ 1,200 e
and COO 1993 $159,000 $ 86,000 - - 8,000 $ 1,200 e
Francis E. Girard 1995 $178,000 $112,000 $ 12,000 c 50,000 $ 1,500 e
Executive Vice President of 1994 $170,000 $ 75,000 $ 12,000 c 52,980 $ 1,200 e
World Sales 1993 $153,000 $101,000 $ 12,000 c 5,000 $ 1,200 e
Robert J. Slezak 1995 $160,000 $108,000 - - 25,000 $ 1,500 e
Executive Vice President of 1994 $146,000 $ 60,000 $ 5,000 a 31,666 - -
Development 1993 $102,000 $ 31,000 $ 36,000 a 120,000 - -
A.K. Wnorowski 1995 $174,000 $ 73,000 - - 15,000 $ 1,500 e
Senior Vice President of 1994 $166,000 $ 73,000 - - 24,146 $ 1,200 e
Administration and General 1993 $153,000 $ 65,000 $ 200,000 a 8,000 $ 1,200 e
Counsel
<FN>
a) Represents relocation expenses associated with the hiring
of Messrs. Taylor, Slezak and Wnorowski.
b) Represents partial year compensation for Dr. Taylor who
began employment on January 19, 1993.
c) Represents aggregate monthly expense stipends paid pursuant
to Mr. Girard's employment agreement.
d) Represents payment for consulting services rendered prior
to, but paid subsequent to, Dr. Taylor's election as
President and Chief Executive Officer.
e) Represents Company matching contributions to the Boston
Technology Employee Savings and Profit Sharing Plan (401(K)
Plan).
</TABLE>
-8-
<PAGE>
<TABLE>
OPTIONS GRANTS IN LAST FISCAL YEAR
The following table summarizes stock options granted during
fiscal year 1995 to the named executive officers under the
Company's stock option plans. The amounts shown as potential
realizable values of these options are based on assumed
annual rates of appreciation in the price of the Company's
Common Stock of five percent and ten percent over the term of
the options, as required by the Securities and Exchange
Commission, and are not intended to forecast future
appreciation of the Company's stock price. The named
officers will realize no gain upon the exercise of these
options without an increase in the price of the Company's
Common Stock, which increase will benefit all stockholders
proportionately.
Individual Grants
<CAPTION>
Number of Percent Potential Realizable
Securities of Total Value at Assumed
Underlying Options Annual Rates of Stock
Options Granted to Exercise or Price Appreciation for
Granted Employees in Base Price Expiration Option Term
Name (#) Fiscal Year ($/Sh) Date 5% ($) 10% ($)
- - ----------------- -------- ------------ ------------ ---------- -------- ------------
<S> <C> <C> <C> <C> <C> <C>
John C. W. Taylor 50,000 a 5.9% $ 9.81 6/01/2004 $308,473 $ 781,731
Paul W. DeLacey 50,000 b 5.9% $ 12.63 9/21/2004 $397,147 $ 1,006,448
Francis E. Girard 50,000 b 5.9% $ 12.63 9/21/2004 $397,147 $ 1,006,448
Robert J. Slezak 25,000 c 3.0% $ 12.63 9/21/2004 $198,573 $ 503,224
A.K. Wnorowski 15,000 c 1.8% $ 12.63 9/21/2004 $119,144 $ 301,935
<FN>
a) Dr. Taylor's option grant vests, in its entirety, on
January 19, 1998.
b) Option grants for Messrs. DeLacey and Girard vest in four
equal annual installments beginning one year after the date
of grant.
c) Option grants for Messrs. Slezak and Wnorowski vest in
three equal annual installments beginning one year after the
date of grant.
</TABLE>
-9-
<PAGE>
<TABLE>
AGGREGATE OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUES
The following table summarizes the net value realized on the
exercise of options in fiscal year 1995, and the value of
outstanding options as of January 31, 1995 for the named
executives officers.
Value of Unexercised
Number of Securities In-the-Money Options
Underlying Unexercised at Fiscal Year-End
Options at Fiscal Year-End (#) ($)b
------------------------------- ---------------------------
<CAPTION>
Shares Acquired Value
Name on Exercise (#) Realized ($) a Exercisable Unexercisable Exercisable Unexercisable
- - ----------------- ----------------- ------------ ------------ -------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
John C. W. Taylor - - - - 186,685 250,598 $ 1,090,028 $ 1,238,837
Paul W. DeLacey - - - - 90,000 90,894 $ 895,355 $ 274,916
Francis E. Girard 28,750 $328,000 55,750 104,730 $ 488,952 $ 268,138
Robert J. Slezak - - - - 79,000 97,666 $ 773,230 $ 600,189
A.K. Wnorowski 62,510 $637,000 3,490 69,146 $ 22,231 $ 413,489
<FN>
a) The value of exercised options is calculated by subtracting
the exercise or base price from the fair market value of the
securities underlying the options as of the exercise date.
b) The value of unexercised in-the-money options is calculated
by subtracting the exercise or base price from the fair
market value of the securities underlying the options as of
the fiscal year-end.
</TABLE>
-10-
<PAGE>
PERFORMANCE GRAPH
The following table shows a five year cumulative total
return to stockholders for Boston Technology, Inc. ("BSTN"),
the CRSP Total Return Index for the Nasdaq National Market
(U.S. Companies), (the "Nasdaq Composite Index") and Standard
& Poors Communication Equipment/Manufacturers Index, assuming
an investment of $100 on January 31, 1990 and the
reinvestment of all dividends.
The x-axis is the year ended January.
The y-axis is the total cumulative stockholder return.
The graph has three lines showing the cumulative returns of $100 invested
over five years in BSTN (Line 1), the S&P Communication Equipment/
Manufacturing Index (Line 2) and the Nasdaq Composite Index (Line 3).
The graphed data is tabulated below:
Lines 1,2,3: 1/31/90 1/31/91 1/31/92 1/31/93 1/31/94 1/31/95
- - ------------ ------- ------- ------- ------- ------- -------
(1) BSTN $100 $ 35 $ 59 $131 $184 $204
(2) S&P Comm. Equip/
Manuf. Index $100 $112 $181 $192 $191 $200
(3) Nasdaq Composite Index $100 $103 $158 $179 $204 $204
-11-
<PAGE>
Report of the Board of Directors - Compensation Committee
The Company's compensation program is administered by a
Compensation Committee. This Committee was formed by the
Board of Directors in May 1993 and consists of Messrs. Carr,
Connaughton and Norberg, a majority of whom are outside
disinterested directors. With the formation of the
Compensation Committee, the Company's Stock Option Committee
was discontinued. The responsibilities of the Compensation
Committee are to (a) establish the total compensation package
of the President and Chief Executive Officer, (b) review and
approve the compensation of executive officers including
salary, bonus, stock options and other compensation, and (c)
review and approve the grant of stock options for all
employees of the Company.
Compensation Philosophy
-----------------------
The Company's Executive Compensation Program has been
structured to attract, retain and reward executive officers
for meeting the Company's goals and objectives for each
individual fiscal year, as well as to achieve its long-term
strategies. In determining executive compensation, input is
received from the President and Chief Executive Officer and
the Human Resources Department.
In establishing overall compensation for its executives, the
Company reviews compensation surveys of growth companies in
the high technology industry. In order to attract and retain
executives who can handle multiple responsibilities in a fast
growing company, the Board also considers the experience and
background of the individual executive and the breadth of
responsibilities that he or she is expected to assume with
the Company. All of the executives, including the President
and Chief Executive Officer, must be familiar with all
aspects of the business in order for the Company to identify
and implement, through its executive officer team, the
necessary vision to allow the Company to grow its business
and reward stockholders through increased value of their
holdings.
Executive Compensation Structure
--------------------------------
The compensation of executive officers consists of a base
salary, an annual bonus, which is based upon a percentage of
the executive's base salary, and stock options granted
through the Company's long-term 1989 Stock Option Plan
("Stock Option Plan") and the 1994 Stock Incentive Plan. The
only exception to the award of an annual bonus is to Dr.
Taylor, the President and Chief Executive Officer. In his
case, in 1994 the Committee approved the grant of 35,283 non-
statutory stock options, at an exercise price of $11.50 per
share vesting over a period of four to ten year, in lieu of
any bonus for fiscal year 1994 and the next four (4) years of
Dr. Taylor's service with the Company, including fiscal year
1995.
Base Salary:
- - -----------
In fixing salary, the Committee's goal is to
assure a base salary level sufficient to attract and retain
key executives, but to balance that goal with significant
bonus and long-term incentives which assure that a
significant portion of compensation is dependent upon
financial performance of the Company. For fiscal year 1996,
the Committee limited general salary increases for all
executives, including Dr. Taylor, to five percent (5%),
consistent with the current inflation trend and general
increases nationwide.
Bonuses:
- - -------
The annual bonus is allocated at fifty percent
(50%) for achievement of the Company's financial goals, and
the resultant increase in stockholder value and fifty percent
(50%) for achievement of the individual's personal
performance. During fiscal year 1995 the Company exceeded
its financial goals, with a growth in net income amounting to
48% over fiscal year 1994 and net income per share increasing
by 93% over fiscal year 1994. As a result of this
performance, the Board approved the payment of the bonuses,
and agreed that the Company performance be valued at an
additional eight percent (8%). The aggregate of bonus
payments to the executive officers as a group amounted to
$630,775. The determination of the actual percentage which
was paid to each executive was based upon an evaluation by
the President and Chief Executive Officer of the individual's
performance and contribution to the Company's overall
performance, and were approved in each case by the
Compensation Committee.
Stock Options:
- - -------------
In 1989, the Company adopted the Stock
Option Plan to motivate and reward not only executives but
all employees of the Company for their contributions to the
growth of stockholder value. In 1994, the stockholders
approved the 1994 Stock Incentive Plan which allows the
Company further flexibility to issue stock options and/or
Common Stock to executives and employees, as determined by
-12-
<PAGE>
the Compensation Committee. It is the judgment of the
Compensation Committee that stock options are important
incentives for executive officers to remain with the Company
and to align their interests with those of the stockholders.
Stock options are granted to executive officers on the same
terms as other employees of the Company, without any discount
in the exercise price, which price is fixed at a market value
on the date of the grant. Furthermore, executive officers'
stock options generally vest over a period of three or more
years.
The Committee considers the grant of options to executive
officers on an annual basis, in order to permit the regular
valuation of management equity participation and to monitor
the corresponding impact on equity dilution to stockholders.
During fiscal year 1995, the Compensation Committee approved
the grant of 305,000 options to purchase shares for all
executive officers as a group (including Dr. Taylor), at
exercise prices ranging from $9.00 to $14.33 per share, in
each case representing the fair market value of the Common
Stock on the date of grant.
The Compensation Committee also believes that the grant of
stock options may, under certain circumstances, provide an
incentive for executive officers to achieve "stretch"
financial goals. In 1994, the Committee, with the
concurrence of the full Board, adopted a Special Fiscal Year
1995 incentive program, under which it established "stretch"
financial goals for the executive officers and granted
options to purchase an aggregate of 78,750 shares to the
executive officers as a group (excluding Dr. Taylor) at an
exercise price of $11.50 per share, representing the fair
market value of the Company Stock on the date of grant. The
Committee and Board concluded that "stretch goals" were not
met for fiscal year 1995, and hence no such options became
vested. For fiscal year 1996, the Compensation Committee,
with the concurrence of the full Board, again established
"stretch" financial goals for the executive officers, under
which the options for 78,750 shares previously described
will, if the Company achieves the stretch goals for the
fiscal year 1996, be fully vested. If the goals are not
achieved, the options will not vest until the year 2003. The
Compensation Committee and the full Board of Directors
believe that incentives tied directly to financial
performance of the Company benefit not only the executives,
but the stockholders through increased stockholder value.
Other Benefits:
- - --------------
In addition, executive officers also
participate in various other benefit programs, such as the
health, dental and life insurance programs, the Employee
Savings and Profit Sharing Plan ("the 401(k) Plan"), and the
Employee Stock Purchase Plan. These benefit programs are
available to executive officers on the same terms and
conditions as they are available to all employees. The
Employee Stock Purchase Plan, for example, allows
participants to purchase shares in the Company at a discount
of approximately 15% of the fair market value at the
beginning or end of the applicable purchase period. This
provides an additional incentive for executives to
participate in the long-term success of the Company through
further investment in Company stock. The Company has no
defined benefit or actuarial pension plan.
In addition, an Officers Deferred Compensation Plan is made
available to executive officers. Under the Deferred
Compensation Plan, the officer has the option to defer all or
a portion of salary and/or bonus until retirement, separation
or a fixed date at least five years from the date of
election. The deferred amounts are retained as Company
assets but are invested, at the officer's election, in either
a guaranteed interest investment option or a designated
mutual fund. This is a non-qualified plan which will be
administered by the Board, and is subject to revision or
termination at the Board's discretion. As of January 31,
1995, a total of $100,646 has been deferred by various
officers under the Plan.
Summary of Compensation of Chief Executive Officer
- - --------------------------------------------------
During fiscal year 1995, the Company's President and Chief
Executive Officer, Dr. John C. W. Taylor, received salary
compensation of $263,000. In addition, in fiscal year 1995,
the Committee approved a grant to Dr. Taylor of stock options
for the purchase of 50,000 shares of the Company's Common
Stock at an exercise price of $9.81, vesting in their
entirety on January 19, 1998. This grant was made to
continue to align the interests of Dr. Taylor with those of
the stockholders and to provide an additional incentive to
Dr. Taylor to continue to improve the performance of the
Company over this period of time and to increase the
stockholder value in the Company.
Compliance with Internal Revenue Code Section 162(m)
----------------------------------------------------
The Company does not believe that Section 162(m) of the
Internal Revenue Code of 1986, as amended (the "Code"), which
-13-
<PAGE>
disallows a tax deduction to public companies for certain
compensation in excess of $1 million paid to the Company's
Chief Executive Officer and four other most highly
compensated executive officers, will generally have an effect
on the Company. The Committee intends to periodically review
the potential consequences of Section 162(m) and may
structure the performance-based portion of its executive
officer compensation to comply with certain exemptions
provided in Section 162(m).
Compensation Committee
Greg C. Carr
Richard J. Connaughton
Joseph E. Norberg
Compensation Committee Interlocks and Insider Participation
Messrs. Carr, Connaughton and Norberg served on the
Compensation Committee during fiscal year 1995. Greg C. Carr
is a former officer of the Company.
In July, 1991, the Company entered into an equipment lease
agreement (the "Lease") with Voice Messaging of Colorado,
Inc. ("VMC"), pursuant to which the Company leased certain
voice processing equipment to VMC for a period of five years.
During fiscal year 1994, VMC subleased and assigned certain
of the equipment to a current customer of the Company. The
Company approved the sublease and assignment. Gordon J.
Heuser, the principal stockholder and an executive officer of
VMC, and Kenneth W. Carr, the brother of Greg C. Carr, are
partners in a law firm that has guaranteed the payment of the
obligations of VMC under the Lease. Messrs. Heuser and
Kenneth Carr have also provided their personal guarantees.
Kenneth C. Carr is neither a stockholder nor a principal in
VMC. The Company believes that the terms of the Lease are no
less favorable to the Company than could have been obtained
from an unrelated third party.
Employment Agreements
- - ---------------------
The Company has entered into employment agreements with
Messrs. Taylor, DeLacey, Girard, Slezak, and Wnorowski.
These agreements have no stated term and may be terminated by
the Company at any time. Upon a termination without cause,
Messrs. DeLacey, Girard, Slezak and Wnorowski are entitled to
receive a payment equal to six months of their base salary
(plus accrued bonuses), and Dr. Taylor is entitled to receive
a payment equal to one year's base salary for the life of his
Agreement. In the event that a majority of the outstanding
Common Stock is ever controlled by a person or an affiliated
group of persons other than Messrs. Carr and Jones, all
unvested options granted to Messrs. Taylor, DeLacey, Girard,
Slezak, and Wnorowski (1,027,959 shares as of March 31, 1995)
will become immediately vested.
Employee Severance Benefit Plan
- - --------------------------------
The Company considers it essential to the best interest of
its stockholders to foster the continuous employment of its
personnel. In this regard, the Board of Directors of the
Company recognizes that, as is the case with many
corporations, the possibility of a change in control may
exist and that such possibility, and the uncertainty and
questions which it may raise among employees, may result in
the departure or distraction of personnel to the detriment of
the Company, its stockholders and its customers. Therefore,
in May 1991, the Board of Directors adopted the Employee
Severance Benefit Plan ("Severance Plan"), under which the
Company will provide certain benefits to eligible employees
in the event that a change in control (as defined in the
Severance Plan) of the Company occurs and the employees'
employment with the Company is terminated within twelve
months after the change in control other than for cause or
disability, or by the employee for good reason (as such terms
are defined in the Severance Plan). In any such event, the
Company will (i) pay to the employee fifty percent (50%) of
his or her annual salary (in the case of an employee who has
been employed by the Company for less than one year) or one
hundred percent (100%) of his or her annual salary (in the
case of an employee who has been employed by the Company for
more than one year), reduced by the amount of any other
severance benefits payable by the Company to the employee,
(ii) provide to the employee life, disability, accident and
health insurance benefits for a period of one year after
termination and (iii) accelerate the vesting of each stock
option held by the employee.
-14-
<PAGE>
All full-time employees of the Company or its subsidiaries
who have been employed for at least 90 days automatically
participate in the Severance Plan. As of March 31, 1995,
approximately 318 employees were entitled to participate in
the Severance Plan. The Severance Plan commenced on May 9,
1991 and automatically continues for additional one year
periods thereafter unless at least six months prior to the
beginning of any calendar year, the Board of Directors elects
not to extend the term. The Severance Plan may be
terminated or amended by the Board of Directors at any time,
except that the Severance Plan may not be terminated or
amended after the occurrence of a change in control (as
defined in the Severance Plan).
RATIFICATION AND APPROVAL OF BOARD OF DIRECTORS ADOPTION
OF 1995 EMPLOYEE STOCK PURCHASE PLAN
Because the final offering under the Company's 1993 Employee
Stock Purchase Plan will terminate on August 31, 1995, and
because management believes it advisable and in the best
interest of the Company to continue to encourage stock
ownership by employees of the Company, on March 1, 1995 the
Board of Directors of the Company adopted, subject to
ratification by the stockholders, the 1995 Employee Stock
Purchase Plan (the "1995 Stock Purchase Plan") covering
200,000 shares of the Company's Common Stock. The 200,000
shares available for issuance under the 1995 Stock Purchase
Plan are less than 1% of the outstanding Common Stock on
March 31, 1995.
Summary of the Plan
-------------------
The 1995 Stock Purchase Plan is in all material respects
similar to the 1993 Stock Purchase Plan. The effect of the
adoption of the 1995 Stock Purchase Plan will be to extend
the benefits provided by the 1993 Stock Purchase Plan for
another two years. The 1995 Stock Purchase Plan is
summarized below. This summary is qualified in all respects
by reference to the full text of the 1995 Stock Purchase
Plan, which appears as Appendix A to this Proxy Statement.
The 1995 Stock Purchase Plan consists of four semiannual
offerings of 50,000 shares each. The number of shares
available for an offering may be increased, at the election
of the Board of Directors, by the shares, if any, which were
made available but not purchased during the previous
offerings. The first offering under the 1995 Stock Purchase
Plan will commence on September 1, 1995, or such time
thereafter as the Company shall have qualified and registered
all the shares subject to the 1995 Stock Purchase Plan under
applicable Federal and state securities laws, and will end on
February 28, 1996 . The second offering will commence on
March 1, 1996 and end on August 31, 1996. The third offering
will commence on September 1, 1996 and terminate on February
28, 1997 and the final offering will commence on March 1,
1997 and terminate on August 31, 1997. The maximum number of
shares issuable under the 1995 Stock Purchase Plan will be
subject to adjustment for any dividend, stock split or other
relevant change in the Company's capitalization.
With certain exceptions, all full-time employees, including
officers and directors, who have been employed by the Company
or an eligible subsidiary for at least three months, are
eligible to participate in the 1995 Stock Purchase Plan. As
of March 31, 1995, approximately 318 employees of the Company
would have been eligible to participate. However, no person
will be eligible to participate in the 1995 Stock Purchase
Plan if he or she possesses at least 5% of the voting power
of the Company's Common Stock. The purchase of shares under
the 1995 Stock Purchase Plan is voluntary, and the Company
cannot now determine the number of shares to be purchased
under such plan by any person or group.
During each semiannual offering, the maximum number of
shares which may be purchased by a participating employee is
determined on the first day of the offering period under a
formula whereby 85% of the market value of a share of the
Company's Common Stock on the first day of the offering is
divided into an amount equal to 6% of that employee's
annualized base pay (as defined in the 1995 Stock Purchase
Plan). An employee may elect to have up to ten percent of
his or her base pay withheld from his or her pay for this
purpose. The price at which the employee may purchase shares
is the lower of (i) 85% of the last sale price of the Common
Stock on the Nasdaq National Market System on the date that
the offering commenced, or (ii) 85% of such price on the day
that the offering terminates. The last sale price of the
Company's Common Stock on the Nasdaq Market on March 31, 1995
was $15.75.
-15-
<PAGE>
Amendment and Administration of the Plan
- - ----------------------------------------
The 1995 Stock Purchase Plan is administered by the
Compensation Committee, which is authorized to decide
questions of eligibility and to make rules and regulations
for the administration and interpretation of the 1995 Stock
Purchase Plan, subject to final authority of the Board of
Directors. The Board of Directors of the Company may at any
time, and from time to time, modify, terminate or amend the
1995 Stock Purchase Plan in any respect, except that if at
any time the approval of the stockholders of the Company is
required as to such modification or amendment under (i)
Section 423 of the Code, or (ii) under Rule 16b-3 of the
Securities Exchange Act of 1934, as amended, or any successor
provisions ("Rule 16b-3"), or (iii) under any applicable
listing requirements, the Board of Directors may not effect
such modification or amendment without such approval.
The termination or any modification or amendment of the 1995
Stock Purchase Plan shall not, without the consent of a
participant, affect his or her rights under a purchase option
previously selected by the participant. With the consent of
the participant affected, the Board of Directors may amend
outstanding purchase options in a manner not inconsistent
with the terms of the 1995 Stock Purchase Plan. The Board of
Directors shall have the right to amend or modify the terms
and provisions of the 1995 Stock Purchase Plan and of any
purchase options previously granted under the 1995 Stock
Purchase Plan to the extent necessary to ensure the continued
qualification of the 1995 Stock Purchase Plan under
Section 423 of the Code and Rule 16b-3. The 1995 Stock
Purchase Plan also contains provisions relating to the
disposition of the options in the event of certain mergers or
other significant transactions involving the Company.
Federal Income Tax Consequences
- - -------------------------------
The following is a summary of the federal income tax
treatment of the stock purchased under the 1995 Stock
Purchase Plan. For precise advice as to any specific
transactions, a recipient should consult his or her tax
advisor since tax treatment can vary.
The 1995 Stock Purchase Plan is intended to qualify as an
"Employee Stock Purchase Plan" within the meaning of
Section 423 of the Code, which provides that the participant
does not have to pay any federal income tax upon joining the
1995 Stock Purchase Plan or when an offering ends and he or
she receives shares of Common Stock. The participant is,
however, required to pay federal income tax on the
difference, if any, between the price at which he or she
sells the shares and the price that he or she paid for them.
If the participant has owned the shares for more than one
year and disposes of them at least two years after the date
the offering commenced, he or she will be taxed as follows.
If the sale price of the shares is equal to or less than the
price paid for the shares under the 1995 Stock Purchase Plan,
the participant will incur a long-term capital loss in the
amount equal to the price paid over the sale price. If the
sale price is higher than the price paid under the 1995 Stock
Purchase Plan, the participant will recognize ordinary income
in an amount equal to the lesser of (i) the market price of
the shares on the day the offering commenced over the price
paid, or (ii) the excess of the sale price over the price
paid. Any further gain is treated as long-term capital gain.
If the employee sells the shares before he or she has owned
them for more than one year or before the expiration of a
two-year period commencing on the day the offering period
commenced, the employee will have to recognize ordinary
income on the amount of the difference between the purchase
price and the market price of the shares on the date of
purchase and the Company will receive an expense deduction
for the same amount. The employee will recognize a capital
gain or loss (long or short-term, depending on the period the
employee has owned the shares) for the difference between the
sale price and the market price on the date of purchase.
Other than as described above, the Company will not be
entitled to a tax deduction upon the purchase or sale or
shares under the 1995 Stock Purchase Plan.
THE BOARD OF DIRECTORS BELIEVES THAT THIS PROPOSAL IS IN THE
BEST INTEREST OF THE COMPANY AND ITS STOCKHOLDERS AND
RECOMMENDS A VOTE "FOR" THIS PROPOSAL.
- - -------------------------------------------------------------
RATIFICATION AND APPROVAL OF THE BOARD OF DIRECTORS ADOPTION
OF 1995 DIRECTOR STOCK OPTION PLAN
Because the 1992 Director Stock Option Plan terminated in
1994, and because the Board of Directors believes it is
necessary to attract and retain qualified individuals as
-16-
<PAGE>
directors, on March 1, 1995, the Board of Directors adopted,
subject to ratification by the stockholders, the Company's
1995 Director Stock Option Plan (the "1995 Director Plan").
The purpose of the 1995 Director Plan is to encourage
ownership of stock of the Company by outside (non-employee)
directors whose continued services are essential to the
Company's future progress, and to provide them with an
additional incentive to serve as directors of the Company.
Set forth below is a summary of the provisions of the 1995
Director Plan. This summary is qualified in all respects by
reference to the full text of the 1995 Director Plan, which
appears as Appendix B to this Proxy Statement.
Summary of the Plan
- - -------------------
The 1995 Director Plan provides for the grant to outside
directors of the Company of options to purchase shares of
Common Stock. Only directors of the Company who are not
employees of the Company are eligible to receive options
under the 1995 Director Plan. In any event, no options may
be granted under the 1995 Director Plan to Greg C. Carr, a
founder of the Company and currently Chairman of the Board of
Directors. A total of 180,000 shares of the Company's Common
Stock may be issued under the 1995 Director Plan (subject to
an adjustment for any dividend, stock split or other relevant
changes in the Company's capitalization).
The 1995 Director Plan provides that an option to purchase
30,000 shares of Common Stock of the Company shall be granted
to eligible directors on March 1, 1995. Accordingly, on
March 1, 1995, Messrs. Connaughton, Leonard, Norberg and
Snelling each received an option to purchase 30,000 shares of
Common Stock at an exercise price of $12.63 per share,
subject to ratification of the 1995 Director Plan by the
stockholders of the Company. The 1995 Director Plan also
provides that an option to purchase 30,000 shares shall be
granted to an eligible director upon his or her initial
election as a director. All options granted under the 1995
Director Plan vest and become exercisable in increments of
10,000 each on the date of the first, second and third annual
meetings of the stockholders after the date of grant.
Each option granted under the 1995 Director Plan has an
exercise price equal to the closing sale price of the Common
Stock on the Nasdaq National Market on the date of grant.
The exercise price of each option may be paid in cash, shares
of Common Stock of the Company or any combination thereof.
Options are not transferable or assignable other than upon
the death of the optionee or pursuant to a Qualified Domestic
Relations Order, nor may an option be assigned or pledged by
the optionee or be subject to execution, attachment or
similar process.
An optionee may exercise his or her option only while he or
she is a director of the Company, or up to three (3) years
after he or she ceases to be a director of the Company. All
options granted under the 1995 Director Plan terminate on the
tenth anniversary of the date of grant.
Amendment and Administration of the Plan
- - ----------------------------------------
The Board of Directors may suspend or discontinue the 1995
Director Plan or amend it in any respect whatsoever;
provided, however, that without approval of the stockholders
of the Company, no amendment may (i) change the number of
shares subject to the 1995 Director Plan, (ii) change the
designation of the class of directors eligible to receive
options under the 1995 Director Plan or (iii) materially
increase the benefits accruing to participants under the 1995
Director Plan. The 1995 Director Plan also contains certain
provisions relating to the disposition of options in the
event of certain mergers or other significant transactions
involving the Company. In addition, the Board of Directors
may not amend the 1995 Director Plan more frequently than
once in any six-month period. The 1995 Director Plan will
terminate upon the earlier to occur of (i) December 31,
1998, or (ii) the date on which all shares available for
issuance under the 1995 Director Plan shall have been issued
pursuant to the exercise of options granted under the 1995
Director Plan.
Federal Income Tax Consequences
- - -------------------------------
The following is a summary of the federal income tax
treatment of the options granted under the 1995 Director
Plan. For precise advice as to any specific transactions, a
recipient should consult his or her tax advisor since tax
treatment can vary.
No taxable income is recognized by the optionee upon the
grant of an option under the 1995 Director Plan. The
optionee must recognize as ordinary income in the year in
which the option is exercised the amount by which the fair
-17-
<PAGE>
market value of the purchased shares on the date of exercise
exceeds the option price (and the Company is required to
withhold an appropriate amount for tax purposes). Upon the
exercise of an option within six months from the date of
grant, no income will be recognized by the optionee until six
months have expired from the date the option was granted, and
the income then recognized will include any appreciation in
the value of the shares during the period between the date of
exercise and the date six months after the date of grant
(unless the optionee makes an election under Section 83(b) of
the Code to have the difference between the exercise price
and fair market value at the time of exercise recognized as
ordinary income as of the time of exercise). The Company
will be entitled to a business expense deduction equal to the
amount of ordinary income recognized by the optionee, subject
to the limitations of Section 162(m) of the Code. Any
additional gain or any loss recognized upon the subsequent
disposition of the purchased shares will be a capital gain or
loss, and will be a long-term gain or loss if the shares are
held for more than one year.
THE BOARD OF DIRECTORS BELIEVES THAT THIS PROPOSAL IS IN THE
BEST INTEREST OF THE COMPANY AND ITS STOCKHOLDERS AND
RECOMMENDS A VOTE "FOR" THIS PROPOSAL.
- - -------------------------------------------------------------
APPROVAL OF AN AMENDMENT TO THE COMPANY'S CERTIFICATE OF
INCORPORATION TO INCREASE THE AUTHORIZED COMMON STOCK TO 60,000,000 SHARES
On March 1, 1995, the Board of Directors adopted, subject to
stockholder approval, an Amendment to the Company's
Certificate of Incorporation authorizing an increase in the
number of shares of Common Stock authorized for issuance from
35,000,000 to 60,000,000 ("Amended Certificate"). As of
March 31, 1995, the Company had a total of 24,851,397 shares
of Common Stock outstanding and 3,785,249 shares reserved for
issuance under its various stock plans and stockholder rights
plan.
If the Amended Certificate is approved, the additional
authorized shares of Common Stock would be available for
issuance in the future for corporate purposes, including
without limitation, financings, acquisitions, stock splits,
stock dividends and management incentive, employee benefit
and stockholder rights plans, as the Board may deem
advisable, in certain cases without the necessity of further
stockholder action. The issuance of additional shares of
Common Stock, while providing desirable flexibility in
connection with possible acquisitions and other corporate
purposes, would have the effect of diluting the Company's
current stockholders. The issuance of additional shares,
through the Company's Stockholder Rights Plan or otherwise,
could also have the effect of making it more difficult for a
third party to acquire control of the Company and to remove
management. The Company is not aware of any attempts on the
part of a third party to effect a change of control of the
Company. The purpose of this Amended Certificate is to
provide shares for issuance in connection with the Company's
existing stock option, incentive and purchase plans, the
stock option and purchase plans submitted for approval at the
Annual Meeting and, if required under its terms, the
Company's Stockholder Rights Plan. Other than in connection
with such plans, the Company has no present intention or
plans to issue any shares of Common Stock.
THE BOARD OF DIRECTORS BELIEVES THAT THIS PROPOSAL IS IN THE
BEST INTEREST OF THE COMPANY AND ITS STOCKHOLDERS AND
RECOMMENDS A VOTE "FOR" THIS PROPOSAL.
- - --------------------------------------------------------------------------
OTHER MATTERS
Coopers & Lybrand, the Company's independent auditors since
1989, will be present at the Annual Meeting and will be
available to respond to appropriate questions from
stockholders.
The Board of Directors knows of no other business which will
be presented at the Annual Meeting. However, if any other
matters properly come before the meeting, the persons named
in the enclosed Proxy will take action, and vote the shares
represented by the Proxies, in accordance with their judgment
on such matters.
The Company will bear all expenses in connection with the
solicitations of proxies, including preparing, assembling and
mailing the Proxy Statement. In addition to solicitations by
mail, the Company's directors, officers and regular
employees, without additional remuneration, may solicit
proxies by telephone, telegraph and personal interviews, and
the Company reserves the right to retain outside agencies for
purposes of soliciting proxies.
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Deadline for Submission of Stockholder Proposals
- - ------------------------------------------------
Proposals of stockholders intended to be presented at the
next Annual Meeting of Stockholders must be received by the
Company at its principal offices not later than January 16,
1996 for inclusion in the Proxy Statement for that meeting.
STOCKHOLDERS MAY OBTAIN, WITHOUT CHARGE, A COPY OF THE
COMPANY'S ANNUAL REPORT ON FORM 10-K, INCLUDING THE FINANCIAL
STATEMENTS AND SCHEDULES THERETO, FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION FOR THE FISCAL YEAR ENDED JANUARY 31,
1995 BY WRITING TO THE INVESTOR RELATIONS DEPARTMENT, BOSTON
TECHNOLOGY, INC., 100 QUANNAPOWITT PARKWAY, WAKEFIELD,
MASSACHUSETTS 01880.
By Order of the Board of Directors
/s/ Carol B. Langer
-------------------
May 16, 1995 Carol B. Langer, Secretary
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Appendix A
BOSTON TECHNOLOGY, INC.
1995 EMPLOYEE STOCK PURCHASE PLAN
1. Purposes.
The 1995 Employee Stock Purchase Plan of Boston Technology,
Inc. (the "Plan") is intended to provide a method whereby
employees of Boston Technology, Inc. and its subsidiary
corporations, if any (hereinafter collectively referred to,
unless the context otherwise requires, the "Company"), will
have an opportunity to acquire a proprietary interest in the
Company through the purchase of shares of Common Stock of the
Company. It is the intention of the Company to have the Plan
qualify as an "employee stock purchase plan" under
Section 423 of the Internal Revenue Code of 1986, as amended
(the "Code"). The provisions of the Plan shall, accordingly,
be construed so as to extend and limit participation in a
manner consistent with the requirements of Section 423 of the
Code.
2. Definitions.
(a) "base pay" means regular straight-time earnings (as the
same may be adjusted from time to time) but excluding
payments for overtime, shift differentials, incentive
compensation, sales commissions, bonuses and other special
payments.
(b) "employee" means any person who is customarily employed
for 20 or more hours per week and more than five months in a
calendar year by the Company or by a subsidiary corporation.
(c) "Offering Commencement Date" means the applicable date
on which an Offering under the Plan commences pursuant to
Paragraph 4.
(d) "Offering Termination Date" means the applicable date on
which an Offering under the Plan terminates pursuant to
Paragraph 4.
(e) "subsidiary corporation" means any present or future
corporation which (i) is a "subsidiary corporation" as that
term is defined in Section 424 (f) of the Code and (ii) is
designated as a participant in the Plan by the Board of
Directors or Committee described in Paragraph 13.
3. Eligibility.
(a) Any employee who shall have completed three months of
employment and shall be employed by the Company on the
applicable Offering Commencement Date shall be eligible to
participate in the Plan.
(b) Any provision of the Plan to the contrary
notwithstanding, no employee shall be granted an option to
participate in the Plan:
(i) if, immediately after the grant, such employee would
own stock, and/or hold outstanding options to purchase stock,
possessing 5% or more of the total combined voting power or
value of all classes of stock of the Company or of any
subsidiary corporation (for purposes of this Paragraph the
rules of Section 424(d) of the Code shall apply in
determining stock ownership of any employee); or
(ii) which permits his or her rights to purchase stock
under all employee stock purchase plans maintained by the
Company and its subsidiaries to accrue at a rate which
exceeds $25,000 of the fair market value of the stock
(determined at the time such option is granted) for each
calendar year in which such option is outstanding at any
time.
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4. Offering Dates.
The Plan will be implemented by four semiannual offerings
(referred to herein collectively as "Offerings" and
individually as an "Offering") of a maximum of 50,000 shares
each (subject to adjustment as provided in Paragraphs 12(a)
and 17) of the Common Stock of the Company ("Common Stock"),
subject to Paragraphs 12, 17 and 22 below, as follows:
(i) Offering I shall commence on September 1, 1995 and
terminate on February 28, 1996.
(ii) Offering II shall commence on March 1, 1996 and
terminate on August 31, 1996.
(iii) Offering III shall commence on September 1, 1996 and
terminate on February 28, 1997.
(iv) Offering IV shall commence on March 1, 1997 and
terminate on August 31, 1997.
Participation in any one Offering under the Plan shall
neither limit, nor require, participation in any other
Offering.
5. Participation.
All eligible employees will become participants in an
Offering on the applicable Offering Commencement Date.
Payroll deductions, if any, for a participant shall commence
on the applicable Offering Commencement Date of the Offering
and shall end on the Offering Termination Date of such
Offering, unless sooner terminated pursuant to Paragraph 10.
6. Payroll Deductions.
(a) Participants may elect to have amounts withheld from
their base pay by completing an authorization for a payroll
deduction ("Authorization") on the form provided by the
Company and filing it with the Company's Director of Treasury
Operations. At the time a participant files his or her
Authorization for a payroll deduction, the participant shall
elect to have deductions made from his or her pay on each
payday during the time he or she is a participant in an
Offering at the rate of 0, 1, 2, 3, 4, 5, 6, 7, 8, 9 or 10%
of his or her annualized base pay. If a participant has not
filed an Authorization for a previous Offering or for the
applicable Offering at least seven (7) days prior to the
applicable Offering Commencement Date, he or she shall be
deemed to have filed an Authorization electing to withhold 0%
of his or her annualized base pay.
(b) All payroll deductions made for the participant shall be
credited to his or her account maintained by the Company
under the Plan. A participant may not make any separate cash
payment into such account.
(c) Except as provided in Paragraph 8(b) or 10, a
participant may only make changes to the rate of deductions
from his or her annualized base pay, on not more than one
occasion during an Offering, by completing a new
Authorization on the form provided by the Company and filing
it with the Company's Director of Treasury Operations as
provided herein. Such new Authorization shall be effective
upon the commencement of the first pay period subsequent to
its filing. A participant may change his or her
Authorization only once during any Offering.
7. Granting of Option.
(a) For each of the Offerings, a participating employee
shall be deemed to have been granted an option (the
"Option"), on the applicable Offering Commencement Date, to
purchase a maximum number of shares of the Common Stock equal
to an amount determined as follows: 85% of the market value
of a share of the Company's Common Stock on the applicable
Offering Commencement Date shall be divided into an amount
equal to 6% of the employee's annualized base pay as of such
Offering Commencement Date. For all purposes of the Plan,
the market value of the Company's Common Stock shall be
determined as provided in subparagraph (b) below.
An employee's "annualized base pay" for any Offering shall
be determined as follows: (i) for any employee who was
employed by the Company for an entire twelve-month period
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<PAGE>
ending on the day prior to the Offering Commencement Date,
the employee's total base pay for such twelve-month period;
(ii) for any employee not employed for the entire twelve-
month period, the sum of the base pay earned in each of the
full calendar months prior to the Offering Commencement Date
during which the employee was employed by the Company,
divided by the number of full calendar months for which the
employee was employed, multiplied by twelve.
(b) The purchase price of a share of Common Stock purchased
with payroll deductions made during each Offering (the
"Option Exercise Price") shall be the lower of:
(i) 85% of the last sale price of the Common Stock on the
Nasdaq National Market (or on such other national securities
exchange on which the Common Stock is then traded) as
reported in The Wall Street Journal, on the applicable
Offering Commencement Date (or on the next regular business
date on which shares of Common Stock shall be traded if no
shares of Common Stock shall have been traded on such
Offering Commencement Date); or
(ii) 85% of the last sale price of Common Stock on the
Nasdaq National Market (or on such other national securities
exchange on which the Common Stock is then traded) as
reported in The Wall Street Journal, on the applicable
Offering Termination Date (or on the next regular business
date on which shares of Common Stock shall be traded if no
shares of Common Stock shall have been traded on such
Offering Termination Date).
8. Exercise of Option.
With respect to each Offering during the term of the Plan:
(a) Unless a participant gives written notice of withdrawal
to the Company as provided in Paragraphs 8(b) and 10, his or
her Option will be deemed to have been exercised
automatically on the Offering Termination Date applicable to
such Offering, for the purchase of the number of full shares
of Common Stock which the accumulated payroll deductions
(without interest) in his or her account maintained by the
Company under the Plan at that time will purchase at the
applicable Option Exercise Price (but not in excess of the
number of shares for which options have been granted to the
employee pursuant to Paragraph 7(a)), and any excess in his
or her account at that time will be returned to him or her,
with interest as determined by the Committee prior to each
Offering Commencement Date, based on the assumption that such
excess comprises funds most recently deducted from the
participant's pay; provided that any excess returned on
account of fractional shares will not be credited with any
interest.
(b) By written notice to the Director of Treasury Operations
of the Company at any time prior to the Offering Termination
Date applicable to any such Offering, a participant may elect
to withdraw all, but not less than all, of the accumulated
payroll deductions in his or her account at such time, with
interest as determined by the Committee prior to each
Offering Commencement Date.
(c) Fractional shares will not be issued under the Plan and
any accumulated payroll deductions which would have been used
to purchase fractional shares shall be returned to an
employee without interest promptly following the termination
of an Offering.
9. Delivery.
As promptly as practicable after the Offering Termination
Date of each Offering, the Company will deliver to each
participant, as appropriate, the certificate or certificates
representing the shares of Common Stock purchased upon the
exercise of such participant's Option.
10. Withdrawal.
(a) As indicated in Paragraph 8(b), a participant may
withdraw payroll deductions credited to his or her account
with the Company under any Offering at any time prior to the
applicable Offering Termination Date by giving written notice
of withdrawal to the Director of Treasury Operations. All of
the participant's payroll deductions credited to his or her
account will be paid to the participant promptly after
receipt of such notice of withdrawal and no further payroll
deductions will be made from his or her pay during such
Offering. The Company may, at its option, treat any attempt
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<PAGE>
by an employee to borrow on the security of accumulated
payroll deductions as an election, under Paragraph 8(b), to
withdraw such deductions.
(b) A participant's withdrawal from any Offering will not
have any effect upon his or her eligibility to participate in
any succeeding Offering or in any similar Plan which may
hereafter be adopted by the Company. Notwithstanding the
foregoing, employees who are also directors or officers of
the Company within the meaning of Section 16 of the
Securities Exchange Act of 1934, as amended, and the rules
promulgated thereunder may not participate again for a period
of at least six months as provided in Rule 16b-3 (d) (2) (i)
or any successor provision.
(c) Upon termination of the participant's employment for any
reason, including retirement but excluding death or
disability, while in the employ of the Company, the payroll
deductions credited to his or her account will be returned to
the participant, with interest as determined by the Committee
prior to each Offering Commencement Date, or, in the case of
his or her death subsequent to the termination of employment,
to the person or persons entitled thereto under Paragraph 14.
(d) Upon termination of the participant's employment because
of disability or death, the participant or his or her
beneficiary (as defined in Paragraph 14) shall have the right
to elect, by written notice given to the Company's Director
of Treasury Operations prior to the expiration of the period
of 30 days commencing with the date of the disability or
death of the participant, either
(i) to withdraw all of the payroll deductions credited to
the participant's account under the Plan; or
(ii) to exercise the participant's Option on the Offering
Termination Date next following the date of the participant's
disability or death for the purchase of the number of full
shares of Common Stock which the accumulated payroll
deductions in the participant's account at the date of the
participant's disability or death will purchase at the
applicable Option Exercise Price, and any excess in such
account will be returned to the participant or said
beneficiary.
If no such written notice of election is received by the
Director of Treasury Operations, the participant or
beneficiary shall automatically be deemed to have elected to
withdraw the payroll deductions credited to the participant's
account at the date of the participant's disability or death
and the same will be paid promptly to the participant or said
beneficiary with interest as determined by the Committee
prior to each Offering Commencement Date.
11. Interest.
No interest will be paid or allowed on any money paid into
the Plan or credited to the account of any participant
employee except upon withdrawal as provided under
Paragraphs 8(b) and 10 or upon the return of payroll
deductions as provided under Paragraphs 8(a) and 12(a). In
the event of the return of excess payroll deductions under
Paragraphs 8(a) and 12(a), interest thereon, if any, shall be
computed assuming that such excess comprises funds most
recently deducted from the participant's pay.
12. Stock.
(a) The maximum number of shares of Common Stock which shall
be made available for sale under the Plan during any Offering
under the Plan shall be 50,000 shares, subject to adjustment
upon changes in capitalization of the Company as provided in
Paragraph 17. If the total number of shares for which
Options are exercised on any Offering Termination Date in
accordance with Paragraph 8 exceeds 50,000, the Company shall
make a pro rata allocation of the shares available for
delivery and distribution in as nearly a uniform manner as
shall be practicable and as it shall determine to be
equitable, and the balance of payroll deductions credited to
the account of each participant under the Plan shall be
returned to him or her as promptly as possible, with interest
on such balance at the rate determined by the Committee prior
to each Offering Commencement Date, based on the assumption
that such excess comprises funds most recently deducted from
the participant's pay. If less than 50,000 shares are
purchased during an Offering, the amount not purchased may be
carried over to and made available during any subsequent
Offering.
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<PAGE>
(b) The participant will have no interest in Common Stock
covered by his or her Option until such Option has been
exercised.
(c) Common Stock to be delivered to a participant under the
Plan will be registered in the name of the participant, or,
if the participant so directs, by written notice to the
Company prior to the Offering Termination Date applicable
thereto, in the names of the participant and one such other
person as may be designated by the participant, as joint
tenants with rights of survivorship, to the extent permitted
by applicable law.
13. Administration.
The Plan shall be administered by the Compensation Committee
appointed by the Board of Directors of the Company (the
committee so designated by the Board of Directors shall
hereinafter be referred to as the "Committee"). The officer
of the Company charged with day-to-day administration of the
Plan shall, for matters involving the Plan, be an ex-officio
member of the Committee. The interpretation and construction
of any provision of the Plan and the adoption of rules and
regulations for administering the Plan shall be made by the
Committee, subject, however, at all times to the final
approval of the Board of Directors of the Company. Such
rules may include, without limitation, restrictions on the
frequency of changes in withholding rates. Determinations
made by the Committee and approved by the Board of Directors
of the Company with respect to any matter or provision
contained in the Plan shall be final, conclusive and binding
upon the Company and upon all participants, their heirs or
legal representatives. Any rule or regulation adopted by the
Committee shall remain in full force and effect unless and
until altered, amended or repealed by the Committee or the
Board of Directors of the Company.
14. Designation of Beneficiary.
A participant may file a written designation of a
beneficiary who is to receive any shares of Common Stock
and/or cash in the event of the death of the participant
prior to the delivery of such shares or cash to the
participant. Such designation of beneficiary may be changed
by the participant at any time by written notice to the
Company's Director of Treasury Operations. Within 30 days
after the participant's death, the beneficiary may, as
provided in Paragraph 10(d), elect to exercise the
participant's Option when it becomes exercisable on the
Offering Termination Date of the then current Offering. Upon
the death of a participant and upon receipt by the Company of
proof of identity and existence at the participant's death,
(of a beneficiary validly designated by the participant under
the Plan) and upon and notice of election of the validly
designated beneficiary to exercise the participant's Option,
the Company shall deliver such cash to such beneficiary. In
the event of the death of a participant and in the absence of
a beneficiary validly designated under the Plan who is living
at the time of such participant's death, the Company shall
deliver such stock and/or cash to the executor or
administrator of the estate of the participant, or if no such
executor or administrator has been appointed (to the
knowledge of the Company) the Company, in its discretion, may
deliver such stock and/or cash to the spouse or to any one or
more dependents of the participant as the Company may
determine. No beneficiary shall prior to the death of the
participant by whom he or she has been designated acquire any
interest in the stock or cash credited to the participant's
account maintained by the Company under the Plan.
15. Transferability.
Neither payroll deductions credited to a participant's
account nor any rights with regard to the exercise of an
Option or to receive stock under the Plan may be assigned,
transferred, pledged or otherwise disposed of in any way by
the participant otherwise than by will or the laws of descent
and distribution. Any such attempted assignment, transfer,
pledge or other disposition shall be without effect, except
that the Company may treat such act as an election to
withdraw funds in accordance with Paragraph 8(b).
16. Use of Funds.
All payroll deductions received or held by the Company under
this Plan may be used by the Company for any corporate
purpose and the Company shall not be obligated to segregate
such payroll deductions.
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<PAGE>
17. Effects of Changes of Common Stock.
In the event of any changes of outstanding shares of the
Common Stock by reason of stock dividends, subdivisions,
combinations and exchanges of shares, recapitalizations,
mergers in which the Company is the surviving corporation,
consolidations, and the like, the aggregate number and class
of shares available under the Plan and Option Exercise Price
per share shall be appropriately adjusted by the Board of
Directors of the Company, whose determination shall be
conclusive. Any such adjustments may provide for the
elimination of any fractional shares which would otherwise
become subject to any Options.
18. Amendment or Termination.
(a) The Board of Directors of the Company may at any time,
and from time to time, modify, terminate or amend the Plan in
any respect, except that if at any time the approval of the
stockholders of the Company is required as to such
modification or amendment under (i) Section 423 of the Code,
or (ii) under Rule 16b-3 of the Securities Exchange Act of
1934, as amended, or any successor provisions ("Rule 16b-3"),
or (iii) under any applicable listing requirements, the Board
of Directors may not effect such modification or amendment
without such approval.
(b) The termination or any modification or amendment of the
Plan shall not, without the consent of a participant, affect
his or her rights under an Option previously granted to him
or her. With the consent of the participant affected, the
Board of Directors may amend outstanding Options in a manner
not inconsistent with the Plan. The Board of Directors shall
have the right to amend or modify the terms and provisions of
the Plan and of any Options previously granted under the Plan
to the extent necessary to ensure the continued qualification
of the Plan under Section 423 of the Code and Rule 16b-3.
19. Notices.
All notices or other communications by a participant to the
Company under or in connection with the Plan shall be deemed
to have been duly given when received by the Company's
Director of Treasury Operations.
20. Merger or Consolidation.
If the Company shall at any time merge into or consolidate
with another corporation and the Company is the surviving
entity, the holder of each Option then outstanding will
thereafter be entitled to receive at the next Offering
Termination Date upon the automatic exercise of such Option
under Paragraph 8(a) (unless previously withdrawn pursuant to
Paragraph 10) for each share as to which such Option shall be
exercised the securities or property which a holder of one
share of the Common Stock was entitled to upon and at the
time of such merger or consolidation, and the Board of
Directors of the Company shall take such steps in connection
with such merger or consolidation as the Board of Directors
shall deem necessary to assure that the provisions of
Paragraph 17 shall thereafter be applicable, as nearly as
reasonably practicable, to such securities or property. In
the event of a merger or consolidation in which the Company
is not the surviving entity, or of a sale of all or
substantially all of the assets of the Company, the Plan
shall terminate, and all payroll deductions credited to
participants' accounts shall be returned to them, with
interest as determined by the Committee prior to each
Offering Commencement Date; provided, however, that the Board
of Directors may, in the event of such merger, consolidation
or sale, accelerate the Offering Termination Date of the
Offering then in effect and permit participants to purchase
shares under the Plan at such accelerated Offering
Termination Date.
21. Approval of Stockholders.
The Plan has been adopted by the Board of Directors of the
Company, but all grants of Options shall be conditional upon
the ratification and approval of the Plan by the stockholders
of the Company within twelve months after the adoption of the
Plan by the Board of Directors.
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22. Registration and Qualification of the Plan Under
Applicable Securities Laws.
Notwithstanding anything to the contrary herein, no Option
shall be granted under the Plan until such time as the
Company has qualified or registered the shares which are
subject to the Options under all applicable state and federal
securities laws to the extent required by such laws. In the
event the shares shall not have been so qualified and
registered prior to the date an Offering is scheduled to
commence, the Offering Commencement Date shall be the date
upon which the registration of the shares and other
qualification shall have become effective.
Adopted by the Board of Directors on March 1, 1995
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Appendix B
BOSTON TECHNOLOGY, INC.
1995 DIRECTOR STOCK OPTION PLAN
1. Purpose.
The purpose of this 1995 Director Stock Option Plan (the
"Plan") of Boston Technology, Inc. (the "Company") is to
encourage ownership in the Company by outside (non-employee)
directors of the Company whose continued services are
considered essential to the Company's future progress and to
provide them with a further incentive to serve as directors
of the Company.
2. Administration.
The Plan will be administered by the Board of Directors of
the Company, whose construction and interpretation of the
terms and provisions of the Plan shall be final and
conclusive. Grants of stock options under the Plan and the
amount and nature of the awards to be granted shall be
automatic and non-discretionary in accordance with Section 5.
However, all questions of interpretation of the Plan or of
any options issued under it shall be determined by the Board
of Directors and such determination shall be final and
binding upon all persons having an interest in the Plan. No
director shall be liable for any action or determination
under the Plan made in good faith.
3. Participation in the Plan.
Directors of the Company who are not employees of the
Company shall be eligible to be granted options under the
Plan; provided that, in any event, no options under the Plan
shall be granted to Greg C. Carr.
4. Stock Subject to the Plan.
(a) The maximum number of shares which may be issued under
the Plan shall be 180,000 shares of the Company's Common
Stock, $.001 par value per share ("Common Stock"), subject to
adjustment as provided in Section 9.
(b) If any outstanding option under the Plan for any reason
expires or is terminated without having been exercised in
full, the shares allocable to the unexercised portion of such
option shall again become available for grant pursuant to the
Plan.
(c) All options granted under the Plan shall be non-
statutory options which are not intended to meet the
requirements of Section 422 of the Code.
5. Terms, Conditions and Form of Option Agreements.
Each option granted under the Plan shall be evidenced by a
written agreement in such form as the Board of Directors
shall from time to time approve, which agreements shall
comply with and be subject to the following terms and
conditions:
(a) Option Grant Dates. Options shall be granted
automatically to all eligible directors as follows:
(i) each eligible director shall be granted an option to
purchase 30,000 shares of Common Stock on March 1, 1995; and
(ii) upon the initial election of any eligible director as
a director of the Company, such director shall be granted an
option to purchase 30,000 shares of Common Stock.
(b) Option Exercise Price. The option exercise price per
share for each option granted under the Plan shall equal
(i) the closing sale price per share of the Company's Common
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Stock on the Nasdaq National Market (or, if the Company is
traded on a nationally recognized securities exchange on the
date of grant, the reported closing sale price per share of
the Company's Common Stock by such exchange) on the date of
grant (or if no such price is reported on such date, such
price as reported on the nearest preceding day) or (ii) if
the Common Stock is not traded on the Nasdaq National Market
or an exchange, the fair market value per share on the date
of grant as determined by the Board of Directors.
(c) Options Non-Transferable. Each option granted under the
Plan by its terms shall not be transferable by the optionee
otherwise than by will or by the laws of descent and
distribution, or pursuant to a qualified domestic relations
order (as defined in Section 414(p) of the Code), and shall
be exercised during the lifetime of the optionee only by such
optionee. No option or interest therein may be transferred,
assigned, pledged or hypothecated by the optionee during his
or her lifetime, whether by operation of law or otherwise, or
be made subject to execution, attachment or similar process.
(d) Exercise Period. Each option granted pursuant to
Section 5(a) above shall become exercisable on a cumulative
basis as to one-third of the shares subject to the option on
the date of each of the first, second and third annual
meeting of stockholders of the Company following the date of
grant; provided, however, that (i) no option granted under
the Plan may be exercised more than three years after the
date the optionee ceases to serve as a director of the
Company, (ii) all options granted under the Plan shall
terminate on the tenth anniversary of the date of grant and
(iii) all options granted under the Plan are subject to
Section 12(a) below.
(e) Exercise Procedure. Options may be exercised only by
written notice to the Company at its principal office
accompanied by payment in cash of the full consideration for
the shares as to which they are exercised.
(f) Payment of Purchase Price. Payment of the exercise
price may be made, at the election of the optionee, (i) by
delivery of cash or a check to the order of the Company in an
amount equal to the exercise price, (ii) by delivery to the
Company of shares of Common Stock of the Company already
owned and held by the optionee for at least twelve months and
having a fair market value equal in amount to the exercise
price of the options being exercised, or (iii) by any
combination of such methods of payment. The fair market
value of any shares of Common Stock that may be delivered
upon exercise of an option shall be determined by the Company
as of the date that such shares are delivered.
6. Assignments.
The rights and benefits under the Plan may not be assigned,
whether voluntarily or by operation of law, except as
provided in Section 5(c).
7. Time for Granting Options.
All options for shares subject to the Plan shall be granted,
if at all, not later than December 31, 1998.
8. Limitation of Rights.
(a) No Right to Continue as a Director. Neither the Plan,
nor the granting of an option nor any other action taken
pursuant to the Plan, shall constitute or be evidence of any
agreement or understanding, express or implied, that the
Company will retain a director for any period of time.
(b) No Stockholder Rights for Options. An optionee shall
have no rights as a stockholder with respect to the shares
covered by his or her option until the date of the issuance
to him or her of a stock certificate therefor, and no
adjustment will be made for dividends or other rights for
which the record date is prior to the date such certificate
is issued.
9. Changes in Common Stock.
(a) If the outstanding shares of Common Stock are increased,
decreased or exchanged for a different number or kind of
shares or other securities, or if additional shares or new or
different shares or other securities are distributed with
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respect to such shares of Common Stock or other securities,
through merger, consolidation, sale of all or substantially
all of the assets of the Company, reorganization,
recapitalization, reclassification, stock dividend, stock
split, reverse stock split or other distribution with respect
to such shares of Common Stock, or other securities, an
appropriate and proportionate adjustment will be made in
(i) the maximum number and kind of shares reserved for
issuance under the Plan, (ii) the number and kind of shares
or other securities subject to then outstanding options under
the Plan and (iii) the price for each such share subject to
any then outstanding options under the Plan, without changing
the aggregate purchase price as to which such options remain
exercisable. No fractional shares will be issued under the
Plan on account of any such adjustments.
(b) In the event that the Company is merged or consolidated
into or with another corporation (in which consolidation or
merger the stockholders of the Company receive distributions
of cash or securities of another issuer as a result thereof),
or in the event that all or substantially all of the assets
of the Company are acquired by any other person or entity, or
in the event of a reorganization or liquidation of the
Company, the Board of Directors of the Company, or the board
of directors of any corporation assuming the obligations of
the Company, shall, as to outstanding options, either
(i) provide that such options shall be assumed, or equivalent
options shall be substituted, by the acquiring or successor
corporation (or an affiliate thereof), or (ii) upon written
notice to the optionees, provide that all unexercised options
will terminate immediately prior to the consummation of such
merger, consolidation, acquisition, reorganization or
liquidation unless exercised by the optionee within a
specified number of days following the date of such notice.
10. Amendment of the Plan.
The Board of Directors may suspend or discontinue the Plan
or amend it in any respect whatsoever; provided, however,
that without approval of the stockholders of the Company no
revision or amendment shall change the number of shares
subject to the Plan (except as provided in Section 9), change
the designation of the class of directors eligible to receive
options, or materially increase the benefits accruing to
participants under the Plan. The Plan may not be amended
more than once in any six-month period.
11. Notice.
Any written notice to the Company required by any of the
provisions of the Plan shall be addressed to the Treasurer of
the Company and shall become effective when it is received.
12. Miscellaneous Provisions.
(a) Effective Date. The Plan shall become effective when
ratified by the Company's stockholders. No option granted
under the Plan may be exercised prior to such approval, and
in the event such approval is not obtained all options
granted hereunder shall immediately terminate.
(b) Termination. The Plan shall terminate upon the earlier
of (i) December 31, 1998, or (ii) the date on which all
shares available for issuance under the Plan shall have been
issued pursuant to the exercise of options granted under the
Plan. If the date of termination is determined under (i)
above, then options outstanding on such date shall continue
to have force and effect in accordance with the provisions of
the instruments evidencing such options.
(c) Governing Law. The Plan and all determinations made and
actions taken pursuant hereto shall be governed by the laws
of the State of Delaware.
Adopted by the Board of Directors on March 1, 1995
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APPENDIX C
Dear Stockholder:
Please take note of the important information enclosed with this Proxy Ballot.
There are a number of issues related to the management and operation of your
Company that require your immediate attention and approval. These are
discussed in detail in the enclosed proxy materials.
Your vote counts, and you are strongly encouraged to exercise your right to
vote your shares.
Please mark the boxes on the proxy card to indicate how your shares will be
voted. Then sign the card, detach it and return your proxy vote in the
enclosed postage paid envelope.
Your vote must be received prior to the Annual Meeting of Stockholders,
June 22, 1995.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
Boston Technology, Inc.
For All
For Withhold Except
a) To fix the number of directors at six
and elect the six nominees listed below. ______ _______ _______
Nominees: Greg C. Carr, Richard J. Connaughton, Herman B. Leonard,
Joseph E. Norberg, Richard K. Snelling and Dr. John C.W. Taylor
If you do not wish your shares voted "For" a particular nominee, mark the
"All For Except" box and strike a line through the nominee(s) name. Your
shares will be voted for the remaining nominees.
b) To ratify and approve the Board of For Against Abstain
Directors adoption of the 1995 Employee
Stock Purchase Plan as described in the
Proxy Statement. ______ ______ _______
c) To ratify and approve the Board of For Against Abstain
Directors adoption of the 1995 Director
Stock Option Plan as described in the
Proxy Statement. ______ ______ _______
d) To approve an amendment to the Company's For Against Abstain
Certificate of Incorporation to increase
the authorized Common Stock of the
Company to 60,000,000 shares. ______ ______ _______
In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before said Meeting or any adjournment thereof.
A vote FOR each proposal is recommended by the Board of Directors.
Mark box at right if comments or address change has been noted on the reverse
side of this card.
BOSTON TECHNOLOGY, INC.
Proxy for Annual Meeting of Stockholders to be held June 22, 1995
The undersigned, having received notice of the meeting and management's proxy
statement therefor, and revoking all prior proxies, hereby appoint(s) Greg C.
Carr, and Carol B. Langer, and each of them, attorneys or attorneys of the
undersigned (with full power of substitution) for and in the name(s) of the
undersigned to attend the Annual Meeting of Stockholders of Boston Technology,
Inc. (the "Company") to be held at the Marriott Hotel, 8A Centennial Drive,
Peabody, Massachusetts, 01960, on Thursday, June 22, 1995 at 3:00 p.m. and any
adjourned sessions thereof, and there to vote and act upon the following
matters in respect of all shares of stock of the Company which the undersigned
will be entitled to vote or act upon, with all powers the undersigned would
possess if personally present.
Attendance of the undersigned at the meeting or at any adjourned session
thereof will not be deemed to revoke this proxy unless the undersigned shall
affirmatively indicate at the meeting the intention of the undersigned to vote
said shares in person. If the undersigned hold(s) any of the shares of the
Company in fiduciary, custodial or joint capacities, this proxy is signed by
the undersigned in every such capacity as well as individually.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED BY THE
UNDERSIGNED STOCKHOLDER(S). IF NO DIRECTION IS MADE, THE PROXIES SHALL VOTE
FOR THE ELECTION OF THE DIRECTOR NOMINEES AND FOR PROPOSALS b, c AND d.
This proxy is solicited on behalf of the Board of Directors of the Company.
PLEASE VOTE AND SIGN ON OTHER SIDE AND RETURN PROMPTLY IN ENCLOSED ENVELOPE.
Please sign this Proxy exactly as your name appears on the books of the
Corporation. Joint owners should each sign personally. Trustees and other
fiduciaries should indicate the capacity in which they sign, and where more
than one name appears, a majority must sign. If a corporation, this signature
should be that of an authorized officer who should state his or her title.
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
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