<PAGE>
BOSTON TECHNOLOGY, INC.
100 Quannapowitt Parkway
Wakefield, MA 01880
September 13, 1995 VIA EDGAR
Securities and Exchange Commission
Division of Corporation Finance
450 5th Street, N.W.
Judiciary Plaza
Washington, D.C. 20549
Re: Boston Technology, Inc.
Commission File No. 0-17384
Form 10-Q
Dear Sir/Madam:
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), enclosed for filing in EDGAR electronic format is
a copy of the Form 10-Q and required Exhibits for the quarter ended
July 31, 1995.
If you have any questions or comments regarding the enclosed material, please
contact the undersigned.
Very truly yours,
/s/ Carol B. Langer
________________________________
Carol B. Langer, Secretary
<PAGE>
============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 10-Q
_______________
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarter ended July 31, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission File No. 0-17384
Boston Technology, Inc.
(Exact name of registrant as specified in its charter)
Delaware 04-3073385
(State or other jurisdiction of (I.R.S Employer
incorporation or organization) Identification Number)
100 Quannapowitt Parkway
Wakefield, Massachusetts 01880
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (617) 246-9000
___________________________
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for at least the past 90 days.
Yes X No .
___ ___
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Shares Outstanding
Class of Securities (as of August 31, 1995)
___________________ _______________________
Common Stock, $.001 par value per share 24,844,064
Total Number of Pages: 29
The Exhibit Index is located on page: 11
===============================================================================
<PAGE>
INDEX
BOSTON TECHNOLOGY, INC.
PART I. FINANCIAL INFORMATION Page No.
<TABLE>
<CAPTION>
Item 1. Consolidated Financial Statements
<S> <C>
Consolidated Balance Sheets:
As of July 31, 1995 (Unaudited) and January 31, 1995............ 3
Unaudited Consolidated Statements of Income:
For the three and six months ended
July 31, 1995 and 1994.......................................... 4
Unaudited Consolidated Statements of Cash Flows:
For the six months ended
July 31, 1995 and 1994.......................................... 5
Notes to Consolidated Financial Statements...................... 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations................... 7
PART II. OTHER INFORMATION
Item 1. Legal Proceedings........................................ 9
Item 2. Changes in Securities.................................... 9
Item 3. Defaults upon Senior Securities.......................... 9
Item 4. Submission of Matters to a Vote of Security Holders...... 9
Item 5. Other Information........................................ 9
Item 6. Exhibits and Reports on Form 8-K......................... 9
Signatures....................................................... 10
Exhibit Index.................................................... 11
</TABLE>
Page 2
<PAGE>
PART I
BOSTON TECHNOLOGY, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
July 31, 1995 January 31, 1995
______________ ________________
ASSETS (UNAUDITED)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 28,871,000 $ 19,715,000
Short-term investments 2,889,000 6,057,000
Accounts receivable, less allowances of $926,000 and $799,000 30,320,000 30,476,000
Net investment in sales type leases 1,487,000 1,234,000
Inventories 10,481,000 8,298,000
Prepaid Taxes 1,913,000 --
Prepaid expenses and other current assets 1,452,000 1,047,000
__________ __________
Total current assets 77,413,000 66,827,000
Net investment in sales type leases 2,159,000 3,118,000
Property and equipment, net 8,537,000 7,474,000
Other assets 2,822,000 2,870,000
__________ __________
TOTAL ASSETS $ 90,931,000 $ 80,289,000
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt 11,000 542,000
Accounts payable 5,506,000 4,880,000
Accrued expenses 12,222,000 10,229,000
Income taxes payable -- 669,000
Deferred customer funding 3,164,000 4,267,000
Deferred revenues 2,800,000 1,741,000
__________ __________
Total current liabilities 23,703,000 22,328,000
Long-term debt and other long-term liabilities 1,143,000 1,169,000
Stockholders' equity:
Common stock, $.001 par value, 60,000,000 shares authorized;
25,308,964 and 24,759,302 shares issued and outstanding 25,000 25,000
Additional paid-in capital 38,145,000 35,094,000
Retained earnings 27,927,000 21,689,000
Cumulative translation adjustment (12,000) (16,000)
__________ __________
Total stockholders' equity 66,085,000 56,792,000
__________ __________
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 90,931,000 $ 80,289,000
========== ==========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
Page 3
<PAGE>
BOSTON TECHNOLOGY, INC.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
Three months ended July 31, Six months ended July 31,
___________________________ _________________________
1995 1994 1995 1994
___________ ___________ ___________ ___________
<S> <C> <C> <C> <C>
Revenues $ 26,127,000 $ 21,782,000 $ 52,148,000 $ 40,068,000
Cost and expenses:
Cost of revenues 8,147,000 6,800,000 17,621,000 12,980,000
Research and development 5,384,000 3,140,000 9,325,000 6,011,000
Marketing, general and adminstrative 8,692,000 7,192,000 16,729,000 13,352,000
__________ __________ __________ __________
22,223,000 17,132,000 43,675,000 32,343,000
Income from operations 3,904,000 4,650,000 8,473,000 7,725,000
Interest income 285,000 205,000 802,000 437,000
Interest expense (27,000) (25,000) (69,000) (95,000)
_________ _________ _________ _________
Income before provision for
income taxes 4,162,000 4,830,000 9,206,000 8,067,000
Provision for income taxes 1,202,000 1,449,000 2,968,000 2,420,000
_________ _________ _________ _________
Net income $ 2,960,000 $ 3,381,000 $ 6,238,000 $ 5,647,000
========= ========= ========= =========
Net income per share $ .11 $ .13 $ .24 $ .22
========= ========= ========= =========
Weighted average number of common and
common equivalent shares outstanding 26,445,000 25,623,000 26,270,000 25,685,000
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
Page 4
<PAGE>
BOSTON TECHNOLOGY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Six months ended July 31,
__________________________
1995 1994
___________ ___________
<S> <C> <C>
Cash flows from (used by) operating activities:
Net Income $ 6,238,000 $ 5,647,000
Reconciliation to cash flows from (used by)
operating activities:
Depreciation and amortization 2,137,000 1,435,000
Rent expense in excess of payments (98,000) (78,000)
Changes in operating assets and liabilities:
Accounts receivable 156,000 (12,548,000)
Net investment in sales type leases 706,000 1,811,000
Inventories (2,183,000) (86,000)
Prepaid expenses and other current assets (405,000) (399,000)
Accounts payable 626,000 1,589,000
Accrued expenses 1,993,000 1,064,000
Deferred revenues 1,059,000 (425,000)
Customer funding (1,103,000) (3,168,000)
Other long-term liabilities 72,000 (99,000)
Income taxes (1,694,000) (913,000)
__________ __________
Cash flows from (used by) operating activities: 7,504,000 (5,998,000)
Cash flows from (used by) investing activities:
Purchase of investments (3,429,000) (6,937,000)
Redemption of investments 6,597,000 7,789,000
Purchase of property and equipment, net (3,000,000) (2,077,000)
Purchase of license agreements and other assets (80,000) -
(Increase) in other long-term assets (72,000) -
__________ __________
Cash flows from (used by) investing activities 16,000 (1,225,000)
Cash flows from (used by) financing activities:
Principal payments under financing obligations (531,000) (99,000)
Proceeds from exercise of common stock options 1,867,000 537,000
Proceeds from employee stock purchase plan 296,000 183,000
__________ __________
Cash flows from financing activities 1,632,000 621,000
Effect of exchange rate changes on cash 4,000 -
__________ __________
Net increase (decrease) in cash and cash equivalents 9,156,000 (6,602,000)
Cash and cash equivalents at beginning of period 19,715,000 28,043,000
__________ __________
Cash and cash equivalents at end of period $ 28,871,000 $ 21,441,000
========== ==========
Supplemental disclosure of cash flow information:
Tax benefit of disqualifying dispositions of
incentive stock options $ 888,000 $ 239,000
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
Page 5
<PAGE>
Boston Technology, Inc.
Notes to Consolidated Financial Statements
1. BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements of Boston Tech-
nology, Inc. (the "Company") have been prepared in accordance with generally
accepted accounting principles for interim financial information and pursuant
to the instructions to Form 10-Q and Article 10 of Regulation S-X. Accord-
ingly, these consolidated financial statements do not include all of the infor-
mation and footnote disclosures required by generally accepted accounting
principles for complete financial statements. In the opinion of management,
all adjustments (consisting of normal recurring accruals) necessary for a
fair presentation of the unaudited consolidated statements of income for the
three and six months ended July 31, 1995 and 1994, the unaudited consolidated
statements of cash flows for the six months ended July 31, 1995 and 1994, and
the unaudited consolidated balance sheet at July 31, 1995 have been made.
It is suggested that the financial statements contained herein be read in con-
junction with the consolidated financial statements and notes thereto included
in the Company's audited Annual Report on Form 10-K for the year ended
January 31, 1995. The results for interim periods are not necessarily
indicative of the results for the full fiscal year.
2. CASH AND SHORT-TERM INVESTMENTS
In accordance with the terms of a patent license agreement, as of July 31, 1995
the Company has restricted cash of $500,000 which is included in short-term
investments.
3. INVENTORIES
Inventories consist of:
<TABLE>
<CAPTION>
July 31, 1995 January 31, 1995
______________ ________________
(Unaudited)
<S> <C> <C>
Materials and purchased parts $ 5,648,000 $ 3,285,000
Work in process 4,614,000 4,349,000
Finished goods 219,000 664,000
__________ _________
Total $ 10,481,000 $ 8,298,000
========== =========
</TABLE>
4. COMMITMENTS AND CONTINGENCIES
During fiscal 1995, the Company received $1,741,000 from the sale of sales type
lease receivables, and at July 31, 1995, was contingently liable for $1,432,000.
Page 6
<PAGE>
ITEM 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
1. Material Changes in Financial Condition
Aggregate cash, cash equivalents and short-term investments increased by $6.0
million to $31.8 million at July 31, 1995 as compared to $25.8 million at
January 31, 1995. The increase in cash, cash equivalents and short-term
investments is due primarily to income generated of $6.2 million, increases in
accounts payable and accruals of $2.6 million and deferred revenues of $1.1
million, partially offset by an increase in inventory of $2.2 million and
prepaid taxes of $1.9 million.
Accounts payable and accrued expenses increased $2.6 million to $17.7 million at
July 31, 1995 due primarily to increases in trade payables as a result of the
timing of inventory purchases, increases in accrued distributor commissions
from higher international sales volume and increases in accrued marketing
costs and sales and use taxes, partially offset by a reduction in compensa-
tion-related accruals that were paid during the first quarter of fiscal 1996.
Inventories increased $2.2 million to $10.5 million at July 31, 1995, compared
to January 31, 1995. The increase is due primarily to an expected second
quarter shipment that did not occur and slightly higher raw material levels
from new product ramp up.
The prepaid taxes of $1.9 million at July 31, 1995 represent estimated federal
and state tax payments and an $888,000 tax benefit for disqualifying disposi-
tions of incentive stock options offset by the estimated current year tax
liability though July 31, 1995.
Net investments in sales type leases decreased $706,000 from $4.4 million at
January 31, 1995 to $3.7 million at July 31, 1995, due primarily to scheduled
customer payments.
Prepaid expenses and other current assets increased by $405,000 to $1.5 million
at July 31, 1995 due primarily to an increase in prepaid insurance premiums and
other deposits.
The Company anticipates that its cash, cash equivalents and investments, along
with cash generated from operations and existing credit facilities, will be
sufficient to meet the Company's cash requirements, including the potential
repurchase of up to one million shares of its common stock authorized by the
Board of Directors in August 1995, through August 1996. As of September 13,
1995, 500,000 shares have been repurchased at an average price of $15.08 per
share.
2. Material Changes in the Results of Operations
During the three and six months ended July 31, 1995, the Company recorded
revenues of $26.1 million and $52.1 million, respectively, compared to $21.8
million and $40.1 million, respectively, during the corresponding periods of
fiscal 1995, an increase of $4.3 million or 20%, and $12.0 million or 30%,
respectively. For the three and six months ended July 31, 1995, North
American revenues generated by sales to Regional Bell Operating Companies,
Independent Telephone Companies and a Competitive Access Provider, decreased
by $12.1 million and $12.2 million or 64% and 40%, respectively, from the
corresponding periods in fiscal 1995 due to what the Company believes is a
temporary softness in the North American market. International sales
increased by $16.4 million and $24.3 million or 589% and 252% for the three
and six months ended July 31, 1995, respectively, from the corresponding
periods in fiscal 1995. The increase in year-to-date international sales
reflects the Company's continued emphasis on worldwide expansion,
particularly in the Asia. For the three and six months ended July 31, 1995,
international revenues comprised 74% and 65%, respectively, of total revenues.
The Company's gross margin as a percentage of revenues remained constant at 69%
for the quarter ended July 31, 1995 as compared to the prior year period.
Although the second quarter gross margin was comparable to the prior year,
the Company expects gross margin percentage to decrease during the remainder of
1995 due to competitive pricing pressures. The lower year-to-date margin of 66%
as compared to the prior year period of 68% reflects an unfavorable margin
generated during the first quarter of fiscal 1996 on a custom modification
contract.
Page 7
<PAGE>
Research and development expenses were $5.4 million and $9.3 million for the
three and six months ended July 31, 1995, respectively, as compared to $3.1
million and $6.0 million for the corresponding periods in the prior fiscal
year, an increase of $2.3 million or 74%, and $3.3 million or 55%, respec-
tively. As a percentage of revenues, research and development expenses
increased from 14% and 15% for the three and six months ended July 31, 1994,
respectively, to 21% and 18% for the three and six months ended July 31, 1995,
respectively.
The increase in the Company's research and development expenses, in both dollar
and percentage terms, is due to a reduction in several research and development
programs which are funded in whole or in part by its customers. Customer
funding is recognized as a reduction to research and development expense as
development activities occur. Customer funding for the three and six months
ended July 31, 1995 amounted to $1.2 million and $2.7 million, respectively.
For the three and six months ended July 31, 1994 customer funding amounted to
$1.7 million and $3.5 million, respectively. Research and development expenses
for the remainder of fiscal 1996 are expected to continue at present levels in
absolute dollars, but to decline as a percentage of revenue, as the Company
continues to develop new applications for the domestic and international
marketplaces, while taking advantage of customer funding opportunities.
During the three and six months ended July 31, 1995, marketing, general and
administrative expenses were $8.7 million and $16.7 million, respectively,
as compared to $7.2 million and $13.4 million, respectively, in the corre-
sponding periods of the prior fiscal year, an increase of $1.5 million, or
21%, and $3.3 million, or 25%, respectively. As a percentage of revenues,
marketing, general and administrative expenses remained relatively constant
at 33% for each of the three and six months ended July 31, 1994, compared to
33% and 32% for the three and six month periods ended July 31, 1995.
Absolute spending increased due primarily to additional staffing in the
worldwide customer service and sales organizations to support the Company's
growth.
Net interest income for the three and six months ended July 31, 1995 was
$258,000 and $733,000, respectively, as compared to $180,000 and $342,000,
respectively, for the comparable periods in the prior fiscal year. This
increase in interest income is attributable to higher cash and investment
balances and interest income earned on sales type leases.
The effective tax rate for the six months ended July 31, 1995 and 1994, was 32%
and 30%, respectively. The increase in the effective tax rate is due principally
to reductions in the utilization of tax credits and to additional state income
taxes. The 32% effective rate for the six months ended July 31, 1995 is below
the expected rate of 35% due to a $250,000 refund received during the second
quarter.
3. Future Operating Results
The Company's future operating results may vary from period to period. The
Company has operated historically with minimal backlog; as a result, revenues
in any quarter are dependent on orders booked, built, and shipped in that
quarter. In addition, the Company has experienced a pattern of recording
the majority of its quarterly revenues in the third month of the quarter.
Meanwhile, the Company's operating expenses are incurred ratably throughout
each quarter and are relatively fixed in the short term. As a result, if
projected revenues are not realized in the expected period, the Company's
operating results for that period could be adversely affected.
Although North American revenue for the six months ended July 31, 1995 declined
by 40% compared to the prior year period, the Company believes the current
softness in the North American market is temporary. Management believes the
Regional Bell Operating Companies are committed to deploying enhanced
services since the increased revenue generated from higher call completion
offers them attractive investment returns. The Company believes interna-
tional revenue will continue to increase in fiscal 1996 as the Company
continues to expand its international presence and benefits from the growth
of wireless service, particularly in Japan.
Page 8
<PAGE>
PART II.
ITEM 1. Legal Proceedings
Not Applicable.
ITEM 2. Changes in Securities
On July 10, 1995 the Company filed a Certificate of Amendment to its Certifi-
cate of Incorporation with the Delaware Secretary of State increasing the
number of shares of its $.001 par value Common Stock authorized for issuance
from 35,000,000 to 60,000,000. A copy of the Company's Certificate of
Incorporation and the Certificate of Amendment are included as an Exhibit
to this filing. The issuance of additional shares of Common Stock would
have the effect of diluting the Company's current stockholders and could
also have the effect of making it more difficult for a third party to
acquire control of the Company and to remove management.
ITEM 3. Defaults upon Senior Securities
Not applicable.
ITEM 4. Submission of Matters to a Vote of Security Holders
At the Annual Meeting of Stockholders on June 22, 1995, the Company's stock-
holders adopted the following proposals by the votes specified below:
<TABLE>
<CAPTION>
Against or Broker
Proposal For Withheld Abstain Non-votes
________ ___ __________ _______ _________
<C> <C> <C> <C> <C>
1. Election of Directors:
Greg C. Carr 20,450,546 65,920 -- 18,165
Richard J. Connaughton 20,447,787 68,679 -- 18,165
Herman B. Leonard 20,448,612 67,854 -- 18,165
Joseph E. Norberg 20,448,842 67,624 -- 18,165
Richard K. Snelling 20,448,627 67,839 -- 18,165
John C. W. Taylor, Ph.D. 20,449,662 66,804 -- 18,165
2. Approval of the Company's
1995 Employee Stock Purchase
Plan 20,175,947 242,888 97,631 18,165
3. Approval of the Company's
1995 Director Stock Option
Plan 18,068,445 2,326,316 121,705 18,165
4. Approval of an Amendment
to the Company's Certificate
of Incorporation 19,671,773 705,632 139,061 18,165
</TABLE>
ITEM 5. Other Information
None.
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits
The exhibits listed in the Exhibit Index are filed as part of or
included in this report.
(b) Reports on Form 8-K
None.
Page 9
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned, thereunto duly authorized.
BOSTON TECHNOLOGY, INC.
Date: September 13, 1995
/s/ John C. W. Taylor
By: _________________________________________
John C.W. Taylor, Ph.D.
President and Chief Executive Officer
(principal executive officer)
/s/ Carol B. Langer
By: _________________________________________
Carol B. Langer
Senior Vice President of Finance and
Administration, Chief Financial Officer,
Treasurer and Secretary
(principal financial officer)
Page 10
<PAGE>
BOSTON TECHNOLOGY. INC.
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Page
Number Title of Document Number
_______ ___________________________________________________ ______
<C> <S> <C>
3 Certificate of Incorporation, as amended 12
10.20 1995 Director Stock Option Plan 24
11 Statement re: Weighted Shares used in Computation 28
of Earnings per Share
27 Financial Data Schedule 29
</TABLE>
Page 11
<PAGE>
EXHIBIT 11
BOSTON TECHNOLOGY, INC.
Weighted Shares used in Computation of Earnings Per Share
<TABLE>
<CAPTION>
Three months ended July 31, Six months ended July 31,
1995 1994 1995 1994
__________ __________ __________ __________
<S> <C> <C> <C> <C>
Common stock outstanding, beginning of period 24,896,000 24,383,000 24,759,000 24,217,000
Weighted average common stock issued during
the three and six months ended July 31, 226,000 33,000 193,000 143,000
Weighted average common stock equivalents 2,830,000 2,188,000 2,856,000 2,226,000
Weighted average treasury shares acquired using
the treasury stock method (1,507,000) (981,000) (1,538,000) (901,000)
__________ __________ __________ __________
Weighted average shares of common stock outstanding 26,445,000 25,623,000 26,270,000 25,685,000
========== ========== ========== ==========
</TABLE>
Page 28
<PAGE>
EXHIBIT 3
PAGE 3
State of Delaware
Office of the Secretary of State
______________________________________
I, MICHAEL HARKINS, SECRETARY OF STATE OF THE STATE OF DELAWARE DO HEREBY
CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF INCOR-
PORATION OF BOSTON TECHNOLOGY, INC. FILED IN THIS OFFICE ON THE TWENTY-SIXTH
DAY OF OCTOBER, A.D. 1989, AT 10 O'CLOCK A.M.
/s/ Michael Harkins
___________________________
Michael Harkins, Secretary of State
AUTHENTICATION: :2391158
899304010
DATE: 10/31/1989
Page 14
<PAGE>
EXHIBIT 3
PAGE 4
8902990024
CERTIFICATE OF INCORPORATION
OF
BOSTON TECHNOLOGY, INC.
(A Delaware Corporation)
I, the undersigned, being a person capable of contracting for the purpose of
forming a corporation pursuant to Chapter 1 of Title 8 of the General Corpora-
tion Law of Delaware, do hereby adopt this Certificate of Incorporation (the
"Charter") and for such purpose certify that:
ARTICLE I
NAME AND DURATION
The name of this corporation is Boston Technology, Inc. (the "Company"). It
shall have perpetual existence.
ARTICLE II
REGISTERED OFFICE AND AGENT
The location of the Company's Registered Office in the State of Delaware is
The Corporation Trust Center, 1209 Orange Street, City of Wilmington, County
of New Castle, Delaware 19801. The Company's Registered Agent at this
address is The Corporation Trust Company.
ARTICLE III
INCORPORATOR
The Incorporator's name is Ronald J. Miller and his mailing address is 501
South Cherry Street, Suite 500, Denver, Colorado 80222.
ARTICLE IV
PURPOSE
The Company may engage in any lawful activities for which corporations may be
formed under the General Corporation Law of Delaware and the laws of any other
state wherein the Company transacts business.
ARTICLE V
CAPITAL STOCK
5.01 Authorized Shares. The aggregate number of shares of Common Stock
the Company shall have authority to issue is Thirty-Five Million (35,000,000),
$.001 par value. All shares of the Company shall be issued for such consider-
ation, expressed in dollars, as the Board of Directors may, from time to time,
determine.
Page 15
<PAGE>
EXHIBIT 3
PAGE 5
5.02 Consideration for Stock. Shares of Common Stock issued shall be fully
paid and nonassessable if (a) the entire amount of consideration has been
received by the Company in the form of cash, services rendered, personal
property, real property, leases of real property, or a combination thereof;
or (b) not less than the amount of the consideration determined to be capital
pursuant to Section 154 of the General Corporation Law of Delaware has been
received by the Company in the form specified in clause (a) and the Company
has received a binding obligation of the subscriber to pay the balance of the
consideration due. The Board of Directors shall have sole authority to deter-
mine the consideration to be received for the Company's stock and treasury
stock, which shall not be less than the par value thereof.
5.03 Common Stock. The Common Stock may be issued from time to time in one
or more classes or series in any manner permitted by law, as determined by the
Board of Directors and stated in the resolution or resolutions providing for
issuance thereof. Each class or series shall be appropriately designated,
prior to issuance of any shares thereof, by some distinguishing letter,
number or title. All shares of each class or series of Common Stock shall
be alike in every particular and shall be of equal rank and have the same
power, preferences and rights, and shall be subject to the same qualifications,
limitations and restrictions, if any. The Common Stock may have such voting
powers (full, limited, contingent or no voting powers), such designations,
preferences and relative, participating, optional or other special rights,
and be subject to such qualifications, limitations and restrictions, as the
Board of Directors shall determine by resolution or resolutions. Unless
otherwise resolved by the Board of Directors, each Common Stock share shall
be of the same class and carry such voting rights as elsewhere provided for
in this Charter, without any designation, preference or relative, participa-
ting, optional or other special rights, and subject to no qualification,
limitation or restriction.
5.04 Amendment of Shareholder Rights. So long as no shares of any class or
series established by resolution of the Board of Directors have been issued,
the voting rights, designations, preferences and relative, optional, partici-
pating or other rights of these shares may be amended by resolution of the
Board of Directors.
5.05 Shares Reacquired by the Company. Shares of the Company's Common
Stock redeemed or otherwise reacquired by the Company shall not be canceled
and retired, unless the Board of Directors specifically so resolves at the
time issuance thereof is authorized, but shall be given the status of author-
ized and unissued shares.
5.06 Dividends. Dividends in cash, property or shares of the Company may
be paid upon the Common Stock, as and when declared by the Board of Directors,
out of funds of the Company to the extent and in the manner permitted by law.
If at any time the Company has outstanding more than one class of shares, it
may pay dividends on its shares to the holders of any class of shares, with-
out the vote of shareholders of the class in which the payment is to be made.
5.07 Voting Rights; Cumulative Voting. Each outstanding share of Common
Stock shall be entitled to one vote and each fractional share of Common Stock
shall be entitled to a corresponding fractional vote on each matter submitted
to a vote of shareholders. Cumulative voting shall not be allowed in the
election of directors of the Company.
5.08 Voting Rights of Debt Holders. Holders of debentures, bonds or other
obligations of the Company may, at the time of issuance thereof, be given the
right to vote in the election of Directors or other voting rights. Any such
voting rights may be fixed or contingent.
Page 16
<PAGE>
EXHIBIT 3
PAGE 6
5.09 Denial of Preemptive Rights. No holder of any shares of the Company,
whether now or hereafter authorized, shall have any preemptive or preferential
right to acquire any shares or securities of the Company, including shares or
securities held in the treasury of the Company.
5.10 Distribution in Liquidation. Upon any liquidation, dissolution or
winding up of the Company, and after paying or adequately providing for the
payment of all its obligations, the remainder of the Company, a portion of
its assets, in cash or property, subject to the limitations contained in the
General Corporation Law of Delaware. Any such partial liquidation may be
made without the vote or approval of shareholders. The Company may also make
purchases of its Common, directly or indirectly, to the extent of unreserved
and unrestricted earned surplus available, without the vote or approval of
shareholders.
ARTICLE VI
REGISTERED HOLDERS
The Company shall be entitled to treat the registered holder of any shares of
the Company as the owner of such shares, and shall not be bound to recognize
any equitable or other claim to, or interest in, such shares or rights deriving
from such shares, unless and until such purchaser, assignee, transferee or
other person becomes the registered holder of such shares, whether or not the
Company shall have either actual or constructive notice of the interests of
such purchaser, assignee, or transferee or other person. The purchaser,
assignee, or transferee of any of the shares of the Company shall not be
entitled: to receive notice of the meetings of the shareholders; to vote at
such meetings; to examine a list of the shareholders; to be paid dividends or
other sums payable to shareholders; or to own, enjoy and exercise any other
property or rights deriving from such shares against the Company, until such
purchaser, assignee, or transferee has become the registered holder of such
Shares.
ARTICLE VII
DIRECTORS
7.01 Initial Directors. The powers of the incorporator shall terminate upon
the filing of this Charter. The number of Directors shall be as fixed in the
Company's By-Laws; provided that, in the absence of such provision in the
By-Laws, the Company shall have no fewer than three (3) Directors. The
following individuals shall serve as the Company's initial directors until
the first annual meeting of shareholders or until their successors are duly
elected and qualified. Directors shall be elected by plurality vote and need
not be elected by written ballot.
Greg C. Carr
1600 Massachusetts Avenue, #508
Cambridge, MA 02139
Scott A. Jones
170 Gore St., Apt. 618
Cambridge, MA 02141
Page 17
<PAGE>
EXHIBIT 3
PAGE 7
Ronald J. Miller
501 S. Cherry Street
Suite 500
Denver, Colorado 80222
Richard J. Connaughton
50 Commonwealth Avenue, #805
Boston, MA 02116
7.02 Exclusion of Liability. As authorized by Section 102 (b) (7) of the
General Corporation Law of Delaware, no Director of the Company shall be
personally liable to the company or any shareholder thereof for monetary
damages for breach of his fiduciary duty as a Director, except for liability
(i) for any breach of a Director's duty of loyalty to the Company or its
shareholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) for acts in
violation of Section 174 of the General Corporation Law of Delaware, as it
now exists or may hereafter be amended, or (iv) for any transaction from
which a Director derives an improper personal benefit. This Article 7.02
shall apply to a person who has ceased to be a Director of the Company with
respect to any breach of fiduciary duty which occurred when such person was
serving as a Director. This Article 7.02 shall not be construed to limit or
modify in any way any Director's right to indemnification or other right
whatsoever under this Charter, the Company's ByLaws or the General Corpora-
tion Law of Delaware. If the General Corporation Law of Delaware hereafter is
amended to authorize the further elimination or limitation of the liability
of directors, then the liability of the Company's Directors, in addition to
the limitation on personal liability provided herein, shall be limited to
the fullest extent permitted by the General Corporation Law of Delaware as
so amended. Any repeal or modification of this Article 7.02 by the share-
holders shall be prospective only and shall not adversely affect any limita-
tion on the personal liability of any Director existing at the time of such
repeal or modification. The affirmative vote of at least a majority of the
total voting power shall be required to amend or repeal, or adopt any provi-
sion inconsistent with, this Article 7.02.
ARTICLE VIII
SHAREHOLDERS
8.01 Definition. Whenever the term "total voting power" appears in this
Charter, it shall mean all shares of the Company entitled to vote on the
question presented, and of every class or series of shares entitled to vote
by class or series. Whenever the term "voting power present" appears in this
Charter, it shall mean that portion of the total voting power (if less than
100%) which is present at a legal meeting of the Company's shareholders, duly
called and held, at which a quorum is present.
8.02 Vote Recruited. Any action to be taken by the Company's shareholders
may be taken by a majority of the voting power present, in person or by proxy,
except where this Charter or the Company's by-laws then in effect require a
higher proportion of the voting power present, a proportion of the total
voting power, or both. Nothing contained in this Article shall affect the
voting rights of holders of any class or series of shares entitled to vote as
a class or by series.
8.03 Manner of Voting. The vote of shareholders may be taken at a meeting
by a show of hands or other method authorized by the Board of Directors.
Written ballots shall be used only upon authorization of the Board of
Directors or as provided in the company's Bylaws.
Page 18
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EXHIBIT 3
PAGE 8
8.04 Action Without Meeting. Notwithstanding any other provision of this
Charter, any action by the shareholders may be taken by written consent in lieu
of a meeting, without prior notice or vote, of the holders of that portion of
the total voting power necessary to authorize such action. The manner of
obtaining any such written consent shall be governed by the Company's By-Laws.
ARTICLE IX
BYLAWS
The initial Bylaws of the Company shall be adopted by its Board of Directors.
The power to alter, amend or repeal the Bylaws or adopt new Bylaws shall be
vested in the Board of Directors, subject to the right of the shareholders to
alter, amend or repeal such Bylaws or adopt new Bylaws by the affirmative
vote of at least two-thirds (2/3) of the total voting power. The Bylaws may
contain any provisions for the regulation and management of the affairs of
the Company not inconsistent with law or this Charter.
ARTICLE X
COMPROMISE AND REORGANIZATION
Whenever a compromise or arrangement is proposed between the Company and its
creditors or any class of them and/or between the Company and its shareholders
or any class of them, any court of equitable jurisdiction within the State of
Delaware may, on the application in a summary way of the Company or of any
creditor or shareholder thereof or on the application of any receiver or
receivers appointed for the Company under Section 291 of the General Corpora-
tion Law of Delaware or on the application of trustees in dissolution or of
any receiver or receivers appointed for the Company under Section 279 of the
General Corporation Law of Delaware order a meeting of the creditors or
class of creditors, and/or of the shareholders or class of shareholders of
the Company, as the case may be, to be summoned in such manner as the said
court directs. If a majority in number representing three fourths in value
of the creditors or class of creditors, and/or of the shareholders or class
of shareholders of the Company, as the case may be, agree to any compromise
or arrangement and to any reorganization of the Company as consequence of
such compromise or arrangement, the said compromise or arrangement and the
said reorganization shall, if sanctioned by the court to which the said
application has been made, be binding on all the creditors or class of
creditors, and/or on all the shareholders or class of shareholders, of the
Company, as the case may be, and also on the Company.
ARTICLE XI
INDEMNIFICATION
11.01. Actions, Suits or Proceedings Other than by or in the Right of the
Company. The Company shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Company), by reason of the
fact that he is or was or has agreed to become a director or officer of the
Company, or is or was serving or has agreed to serve at the request of the
company as a director or officer of another corporation, partnership, joint
venture, trust or other enterprise, or by reason of any action alleged to
have been taken or omitted in such capacity, against costs, charges, expenses
(including attorney's fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him or on his behalf in connection with
such action, suit or proceeding and any appeal therefrom, if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the Company. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a presumption that
the person did not act in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interests of the Company.
Page 19
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EXHIBIT 3
PAGE 9
11.02. Actions or Suits by or in the Right of the Company. The Company shall
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action or suit by or in the right of
the Company to procure a judgment in its favor by reason of the fact that he
is or was or has agreed to become a director or officer of the Company, or
is or was serving or has agreed to serve at the request of the Company as a
director or officer of another corporation, partnership, joint venture,
trust or other enterprise, or by reason of any action alleged to have been
taken or omitted in such capacity, against costs, charges and expenses
(including attorney's fees) actually and reasonably incurred by him or on his
behalf in connection with the defense or settlement of such action or suit
and any appear therefrom, if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Company except that no indemnification shall be made in respect of any claim,
issue or matter as to which such person shall have been adjudged to be liable
to the Company unless and only to the extent that the Court of Chancery of
Delaware or the court in which such action or suit was brought shall deter-
mine upon application that, despite the adjudication of such liability but
in view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such costs, charges and expenses which
the Court of Chancery or such other court shall deem proper.
11.03. Indemnification for Costs, Charges and Expenses of Successful Party.
Notwithstanding the other provisions of this Article, to the extent that a
director or officer of the Company has been successful on the merits or
otherwise, including, without limitation, the dismissal of an action without
prejudice, in defense of any action, suit or proceeding referred to in
Sections 11.01 and 11.02 of this Article, or in defense of any claim, issue
or matter therein, he shall be indemnified against all costs, charges and
expenses (including attorney's fees) actually and reasonably incurred by him
or on his behalf in connection therewith.
11.04. Determination of Right to Indemnification. Any indemnification under
Sections 11.01 and 11.02 of this Article (unless ordered by a court) shall be
paid by the Company unless a determination is made (i) by a disinterested
majority of the Board of Directors who were not parties to such action, suit
or proceeding, or (ii) if such disinterested majority of the Board of Direc-
tors so directs, by independent legal counsel in a written opinion, or (iii)
by the shareholders, that indemnification of the director or officer is not
proper in the circumstances because he has not met the applicable standard of
conduct set forth in Sections 11.01 and 11.02 of this Article.
11.05. Advances of Costs, Charges and Expenses. Costs, charges and expenses
(including attorney's fees) incurred by a person referred to in Sections 11.01
or 11.02 of this Article in defending a civil or criminal action, suit or
proceeding shall be paid by the Company in advance of the final disposition
of such action, suit or proceeding; provided, however, that the payment of
such costs, charges and expenses incurred by a director or officer in his
capacity as a director or officer (and not in any other capacity in which
service was or is rendered by such person while a director or officer) in
advance of the final disposition of such action, suit or proceeding shall be
made only upon receipt of an undertaking by or on behalf of the director or
officer to repay all amounts so advanced in the event that it shall ultimate-
ly be determined that such director or officer is not entitled to be indem-
nified by the Company as authorized in this Article. Such costs, charges and
expenses incurred by other employees and agents may be so paid upon such
terms and conditions, if any, as the majority of the Directors deems appro-
priate. The majority of the Directors may, in the manner set forth above,
and upon approval of such director, officer, employee or agent of the
Company, authorize the Company's counsel to represent such person, in any
action, suit or proceeding, whether or not the Company is a party to such
action, suit or proceeding.
Page 20
<PAGE>
EXHIBIT 3
PAGE 10
11.06 Procedure for Indemnification. Any indemnification under Sections
11.01, 11.02 and 11.03, or advance of costs, charges and expenses under
Section 11.05 of this Article, shall be made promptly, and in any event
within 60 days, upon the written request of the director or officer. The
right to indemnification or advances as granted by this Article shall be
enforceable by the director or officer in any court of competent jurisdiction
if the Company denies such request, in whole or in part, or if no disposition
thereof is made within 60 days. Such person's costs and expenses incurred
in connection with successfully establishing his right to indemnification,
in whole or in part, in any such action shall also be indemnified by the
Company. It shall be a defense to any such action (other than an action
brought to enforce a claim for the advance of costs, charges and expenses
under Section 11.05 of this Article where the required undertaking, if any,
has been received by the Company) that the claimant has not met the standard
of conduct set forth in Sections 11.01 or 11.02 of this Article, but the
burden of proving such defense shall be on the Corporation. Neither the
failure of the Company (including its Board of Directors, its independent
legal counsel and its shareholders) to have made a determination prior to
the commencement of such action that indemnification of the claimant is
proper in the circumstances because he has met the applicable standard of
conduct set forth in Sections 11.01 or 11.02 of this Article, nor the fact
that there has been an actual determination by the Company (including its
Board of Directors, its independent legal counsel and its shareholders) that
the claimant has not met such applicable standard of conduct, shall be a
defense to the action or create a presumption that the claimant has not met
the applicable standard of conduct.
11.07. Other Rights; Continuation of Right to Indemnification. The indemni-
fication provided by this Article shall not be deemed exclusive of any other
rights to which any director, officer, employee or agent seeking indemnifica-
tion may be entitled under any law (common or statutory), agreement, vote of
stockholders or disinterested directors or otherwise, both as to action in his
official capacity and as to action in another capacity while holding office or
while employed by or acting as agent for the Company, and shall continue as to
a person who has ceased to be a director, officer, employee or agent, and
shall inure to the benefit of the estate, heirs, executors and administrators
of such person. All rights to indemnification under this Article shall be
deemed to be a contract between the Company and each director or officer of
the Company who serves or served in such capacity at any time while this
Article is in effect. Any repeal or modification of this Article or any
repeal or modification of relevant provisions of the General Corporation Law
of Delaware or any other applicable laws shall not in any way diminish any
rights to indemnification of such director, officer, employee or agent or
the obligations of the Company arising hereunder. This Article shall be
binding upon any successor corporation to this Company, whether by way of
acquisition, merger, consolidation or otherwise.
11.08. Insurance. The Company may purchase and maintain insurance on behalf
of any person who is or was or has agreed to become a director, officer,
employee or agent of the Company, or is or was serving at the request of the
Company as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against any liability
asserted against him and incurred by him or an his behalf in any such capa-
city, or arising out of his status as such, whether or not the Company would
have the power to indemnify him against such liability under the provisions
of this Article; provided, however, that such insurance is available on
acceptable terms, which determination shall be made by a vote of a majority
of the Directors.
11.09. Savings Clause. If this Article or any portion hereof shall be
invalidated on any ground by any court of competent jurisdiction, then the
Company (i) shall nevertheless indemnify each director and officer of the
Company and (ii) may nevertheless indemnify each employee and agent of the
Company, as to any cost, charge and expense (including attorney's fees),
Page 21
<PAGE>
EXHIBIT 3
PAGE 11
judgment, fine and amount paid in settlement with respect to any action, suit
or proceeding, whether civil, criminal, administrative or investigative,
including an action by or in the right of the Company, to the full extent
permitted by any applicable portion of this Article that shall not have been
invalidated and to the full extent permitted by applicable law.
11.10. Amendment. The affirmative vote of at least a majority of the total
voting power shall be required to amend, repeal, or adopt any provision
inconsistent with, this Article. No amendment, termination or repeal of
this Article shall affect or impair in any way the rights of any director or
officer of the Company to indemnification under the provisions hereof with
respect to any action, suit or proceeding arising out of, or relating to,
any actions, transactions or facts occurring prior to the final adoption of
such amendment, termination or appeal.
11.11. Subsequent Legislation. If the General Corporation Law of Delaware is
amended after approval by the shareholders of this Article to further expand
the indemnification permitted to directors, officers, employees or agents of
the Company, then the Company shall indemnify such persons to the fullest
extent (except with respect to the voting requirements specifically set forth
in Section 11.10 above) permitted by the General Corporation Law of Delaware,
as so amended.
IN WITNESS WHEREOF, the above named Incorporator has signed this Certificate
of Incorporation on the 20th day of October, 1989.
INCORPORATOR:
/s/ Ronald J. Miller
_______________________
Ronald J. Miller
Page 22
<PAGE>
EXHIBIT 3
PAGE 12
STATE OF COLORADO )
) ss.
COUNTY OF ARAPAHOE )
I, the undersigned, a notary public, hereby certify that on the 20th day of
October 1989, the above named Incorporator personally declared before me and,
being by me first duly sworn, declared that he is the person who signed the
foregoing Certificate of Incorporation as Incorporator, and that the state-
ments therein contained are true.
WITNESS my hand and official seal.
/s/ Rosemarie J. Simone
_____________________________
Notary Public
(SEAL)
My Commission Expires:
August 12, 1991
_______________
Page 23
<PAGE>
EXHIBIT 10.20
PAGE 1
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 deter-
mined 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.
Page 24
<PAGE>
EXHIBIT 10.20
PAGE 2
(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 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 hypo-
thecated 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 pay-
ment. 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.
Page 25
<PAGE>
EXHIBIT 10.20
PAGE 3
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 under-
standing, 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 divi-
dends 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 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 cor-
poration 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, reor-
ganization 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.
Page 26
<PAGE>
EXHIBIT 10.20
PAGE 4
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 outstand-
ing 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
Page 27
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<NAME> BOSTON TECHNOLOGY, INC
<MULTIPLIER> 1,000
<S> <C>
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<FISCAL-YEAR-END> JAN-31-1995
<PERIOD-END> JUL-31-1995
<CASH> 28,871
<SECURITIES> 2,889
<RECEIVABLES> 31,246
<ALLOWANCES> 926
<INVENTORY> 10,481
<CURRENT-ASSETS> 77,413
<PP&E> 22,387
<DEPRECIATION> 13,850
<TOTAL-ASSETS> 90,931
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0
0
<OTHER-SE> 66,060
<TOTAL-LIABILITY-AND-EQUITY> 90,931
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<CGS> 17,621
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</TABLE>
