<PAGE>
BOSTON TECHNOLOGY, INC.
100 Quannapowitt Parkway
Wakefield, MA 01880
May 29,1996 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
Definitive Proxy Materials
Dear Sir/Madam:
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 Definitive Proxy Statement and Notice of
Meeting of Boston Technology Inc. (the "Company"), which are to be used in
connection with the 1996 Annual Meeting of Stockholders to be held on June 25,
1996. Attached as Appendices to the Proxy Statement are the form of Proxy
and, pursuant to Instruction 3 to Item 10 of Schedule 14A, a copy of the
Company's 1996 Stock Incentive Plan (the Plan). The Company expects to
register the securities covered by the Plan being approved by stockholders
on Form S-8 as soon as practicable after the annual meeting.
The Company anticipates mailing definitive proxy materials to stockholders on
or about June 5, 1996.
In accordance with the requirements of Regulation S-T and the EDGAR system,
a wire transer 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, please
contact the undersigned.
Very truly yours,
/s/ Carol B. Langer
________________________________
Carol B. Langer, Secretary
<PAGE>
<PAGE>
BOSTON TECHNOLOGY, INC.
100 Quannapowitt Parkway
Wakefield, Massachusetts 01880
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JUNE 25, 1996
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 Tuesday, June 25, 1996 at 3:00 p.m., local
time, to consider and act upon the following matters described in the
Proxy Statement:
1. To elect seven directors for the ensuing year.
2. To approve the 1996 Stock Incentive Plan as described in the
Proxy Statement.
3. To transact such other business as may properly come before
the meeting or any adjournments thereof.
Stockholders of record at the close of business on May 3, 1996 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
Carol B. Langer, Secretary
Wakefield, Massachusetts
May 24, 1996
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>
<PAGE>
BOSTON TECHNOLOGY, INC.
100 Quannapowitt Parkway
Wakefield, Massachusetts 01880
PROXY STATEMENT FOR THE ANNUAL MEETING OF STOCKHOLDERS June 25, 1996
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 Tuesday
June 25, 1996, (and at any adjournments thereof), for the purposes set
forth in the foregoing Notice.
The close of business on May 3, 1996 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
25,349,984 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 24, 1996. The financial
statements of the Company for the fiscal year ended January 31, 1996
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 seven 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 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.
-1-<PAGE>
<PAGE>
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 dis-
cretionary 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 non-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 1996 Stock Incentive Plan, has no effect on the voting
of such matter, while a "broker non-vote" on a matter that requires
the affirmative vote of a certain percentage of the outstanding shares
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 April 30, 1996, 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.
-2-<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Percentage of
Number of Shares Common
Name of Beneficial Owners Beneficially Owned(1) Stock
Outstanding
Directors and Executive Officers
<S> <C> <C>
Greg C. Carr (2)............................... 2,864,000 11.0%
Richard J. Connaughton......................... 87,200 (3) *
Herman B. Leonard.............................. 201,900 (4) *
Joseph E. Norberg.............................. 50,000 (4) *
Richard K. Snelling............................ 71,644 (4) *
John C. W. Taylor.............................. 484,030 (5) 1.9%
Francis E. Girard.............................. 118,267 (5) *
Robert Slezak.................................. 149,001 (5) *
John M. Weaver................................. 30,631 (5) *
A. K. Wnorowski................................ 110,374 (5) *
All directors and executive officers
as a group (13 persons).................... 4,272,755 (6) 16.5%
Non-Directors or Officers
Scott A. Jones................................. 1,793,395 (7) 6.9%
Swiss Bank Corporation......................... 1,277,300 (8) 4.9%
</TABLE>
* Less than 1%
(1) 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
April 30, 1996 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.
(2) The business address for Mr. Carr is c/o Boston Technology, Inc., 100
Quannapowitt Parkway, Wakefield, Massachusetts 01880.
(3) Includes 65,000 shares which Mr. Connaughton has the right to acquire
within 60 days after April 30, 1996 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.
(4) Includes 85,000, 50,000 and 35,000 shares which Messrs. Leonard,
Norberg and Snelling, respectively, have the right to acquire within 60
days after April 30, 1996 upon exercise of outstanding stock options.
-3-<PAGE>
<PAGE>
(5) Includes 484,030, 55,667, 149,001, 30,000 and 11,980 shares which
Messrs. Taylor, Girard, Slezak, Weaver and Wnorowski, respectively,
have the right to acquire within 60 days after April 30, 1996 upon
exercise of outstanding stock options.
(6) Includes 1,033,430 shares which all executive officers and directors as
a group have the right to acquire within 60 days after April 30, 1996
upon exercise of outstanding stock options. Also includes the shares
described in note (3) above.
(7) Mr. Jones is one of Company's co-founders; his business address is 1150
West 116th Street, Carmel Indiana 46032.
(8) On February 9, 1996, Brinson Partners, Inc. ("BPI") filed a Schedule
13G on behalf of itself, Brinson Trust Company ("BTC"), Brinson
Holdings, Inc. ("BHI"), SBC Holding (USA), Inc. ("SBCUSA") and
Swiss Bank Corporation ("SBC"), denoting their aggregate purchase of
the shares shown above. BTC is a wholly-owned subsidiary of BPI.
BPI is a wholly-owned subsidiary of BHI. BHI is a wholly-owned
subsidiary of SBCUSA. SBCUSA is a wholly-owned subsidiary of SBC.
ELECTION OF DIRECTORS
The persons named in the enclosed Proxy will vote to elect as directors
the seven 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 seven
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:
-4-<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Director
Name and Principal Occupation Age Since
<S> <C> <C>
Greg C. Carr................................................ 36 1986
Chairman of the Board of Directors of the Company
Richard J. Connaughton...................................... 45 1988
President and Chief Executive Officer of Connaughton
Development Corporation
Herman B. Leonard........................................... 43 1989
Professor and Academic Dean for Teaching Programs,
Kennedy School of Government, Harvard University
Joseph E. Norberg........................................... 49 1990
Senior Vice President and Chief Financial Officer of
AST Research, Inc.
Richard K. Snelling......................................... 64 1993
Chairman and Chief Executive Officer of
Videoconferencing Systems, Inc.
Francis E. Girard........................................... 57 New
President and Chief Executive Officer of the Company
Robert J. Slezak............................................ 46 New
Executive Vice President of Development of the Company
</TABLE>
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.
-5-<PAGE>
<PAGE>
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 Senior Vice President and Chief Financial Officer of AST
Research Inc., since April 1996. Previously, he served as 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.
Mr. Girard was elected President and Chief Executive Officer of the
Company effective May 31, 1996, and appointed as a director effective
May 16, 1996. Previously he 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.
-6-<PAGE>
<PAGE>
Mr. Slezak, who was appointed as a director effective May 16, 1996, has
served as Executive Vice President of Development of the Company 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.
There are no family relationships among any of the Company's executive
officers and directors.
Meetings of the Board of Directors and Committees
During the fiscal year ended January 31, 1996, the Board of Directors
held eleven meetings. The Company has an Audit Committee, consisting
of Messrs. Connaughton, Leonard and Norberg, which met three times in
the fiscal year ended January 31, 1996. The Company has a Compensation
Committee, consisting of Messrs. Carr, Connaughton and Norberg, which
met three times in the fiscal year ended January 31, 1996. 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, 1996, each director attended over
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.
In June 1995, the stockholders of the Company approved the 1995
Director Stock Option Plan (the "1995 Director Plan"). The 1995
Director Plan provides that an option to purchase 30,000 shares of
Common Stock of the Company 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. 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 stock-
holders after the date of grant. 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 have an exercise
price equal to the fair market value of the Common Stock on the date of
grant and terminate on the tenth anniversary of the date of grant.
-7-<PAGE>
<PAGE>
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:
<TABLE>
<CAPTION>
Name Age Position
<S> <C> <S>
Valerie H. Gilman............ 38 Vice President of Human Resources
Francis E. Girard............ 57 President and Chief Executive
Officer
Carol B. Langer.............. 46 Senior Vice President of Finance
and Administration,
Chief Financial Officer, Treasurer
and Secretary
Robert J. Slezak............. 46 Executive Vice President of
Development
John M. Weaver............... 41 Vice President of Operations and
Customer Service Groups
A. K. Wnorowski.............. 54 Senior Vice President of Strategic
Alliances and General Counsel
</TABLE>
Ms. Gilman has served as Vice President of Human Resources since August
1995. Previously, from 1990 to 1995, Ms. Gilman held several positions
with Avnet, Inc., a distributor of electronic components and computers,
including Regional Director of Human Resources. Prior to her
employment at Avnet, she was employed as Corporate Director of
Human Resources at Maynard Plastics from 1988 to 1990. From 1979 to
1982 and 1984 to 1990, Ms. Gilman held various Human Resources
positions at M/A-COM, Inc., which included five years at the MAC
division where she assumed the role of Director of Human Resources.
From 1982 to 1984, Ms. Gilman was a College Relations Coordinator and
Human Resources Representative at GTE Communications Systems Division.
Ms. Gilman holds a B.A. degree in Psychology from the University of
Massachusetts at Amherst.
-8-<PAGE>
<PAGE>
Mr. Girard's biography appears in the "Election of Directors" section
of this Proxy Statement.
Ms. Langer has served as Senior Vice President of Finance and
Administration, Chief Financial Officer, Treasurer and Secretary, since
August 1995, and as Vice President of Finance, Chief Financial Officer-
Treasurer, 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.
degree in English Language and Literature from Boston University.
She is also a Certified Public Accountant in Massachusetts.
Mr. Slezak'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,
a computer manufacturing company, including Plant Manager, 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 has served as Senior Vice President of Strategic
Alliances and General Counsel since August 1995. He 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 until August 1995. 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.
-9-<PAGE>
<PAGE>
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 1996 (collectively,
the "named executive officers") and for the three fiscal years ended
January 31, 1996.
<TABLE>
<CAPTION> Long-term Compensation
Annual Compensation Awards
Name ------------------------- -----------------------
and Other All other
Principal Annual Securities Compensation
Fiscal Salary Bonus Compensation Underlying
Position Year ($) ($) ($) Options (#) ($)
- - - --------- ------- -------- ------ -------------- ------------ --------------
<S> <C> <C> <S> <C> <C> <C> <S>
John C. W. Taylor........... 1996 $275,000 -- $ 42,000 (2) 27,717 --
President and CEO (1) 1995 $263,000 -- $ 52,000 (2) 50,000 --
1994 $250,000 -- $ 35,000 (2) 47,283 $40,000 (3)
Francis E. Girard........... 1996 $200,000 $ 63,000 $ 12,000 (4) 85,000 $1,500 (5)
Executive Vice President of 1995 $178,000 $112,000 $ 12,000 (4) 50,000 $1,500 (5)
Worldwide Sales 1994 $170,000 $ 75,000 $ 12,000 (4) 52,980 $1,200 (5)
Robert J. Slezak............ 1996 $192,000 $ 63,000 -- 55,000 $1,500 (5)
Executive Vice President of 1995 $160,000 $108,000 -- 25,000 $1,500 (5)
Development 1994 $146,000 $ 60,000 $ 5,000 (2) 31,666 --
John M. Weaver.............. 1996 $153,000 $ 37,000 -- 40,000 $1,500 (5)
Vice President of Operations 1995 $ 30,000(6) $ 38,000 $ 44,000 (2) 60,000 --
and Customer Service
A.K. Wnorowski.............. 1996 $183,000 $ 37,000 -- 20,000 $1,500 (5)
Senior Vice President of 1995 $174,000 $ 73,000 -- 15,000 $1,500 (5)
Strategic Alliances and 1994 $166,000 $ 73,000 -- 24,146 $1,200 (5)
General Counsel
</TABLE>
(1) Dr. Taylor resigned as the Company's President and CEO effective
May 31, 1996.
(2) Represents relocation expenses associated with the hiring of Messrs.
Taylor, Slezak and Weaver.
(3) Represents payment for consulting services rendered prior to, but paid
subsequent to, Dr. Taylor's election as President and Chief
Executive Officer.
(4) Represents aggregate monthly expense stipends paid pursuant to
Mr. Girard's employment agreement.
(5) Represents Company matching contributions to the Boston Technology
Employee Savings and Profit Sharing Plan (401(K) Plan).
(6) Mr. Weaver joined the Company on November 15, 1994.
-10-<PAGE>
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
The following table summarizes stock options granted during fiscal year
1996 to the named executive officers under the Company's stock option
plans. The amounts shown as potential realizable values of these
options are based on assumed annual rates of appreciation in the price
of the Company's Common Stock of five percent and ten percent over
the term of the options, as required by the Securities and Exchange
Commission, and are not intended to forecast future appreciation of the
Company's stock price. The named officers will realize no gain upon
the exercise of these options without an increase in the price of the
Company's Common Stock, which increase will benefit all stockholders
proportionately.
<TABLE>
<CAPTION>
Individual Grants
Potential Realizable
Number of Percent Value at Assumed
Securities of Total Annual Rates of Stock
Underlying Options Price Appreciation for
Options Granted to Exercise or Option Term
Granted Employees in Base Price Expiration ------------
Name (#) Fiscal Year ($/Sh) Date 5% ($) 10% ($)
- - - ----------------- --------- ------------ ----------- ---------- ----------------------
<S> <C> <C> <C> <C> <C>
John C. W. Taylor..... 27,717 1 0.5% $ 14.00 05/15/2005 $ 89,617 $227,108
Francis E. Girard..... 35,000 2 0.6% $ 14.00 05/15/2005 $308,158 $780,934
50,000 2 0.9% $ 14.25 11/29/2005 $448,087 $1,135,542
Robert J. Slezak...... 20,000 2 0.3% $ 14.00 05/15/2005 $176,090 $780,934
35,000 2 0.6% $ 14.25 11/29/2005 $313,661 $794,879
John M. Weaver........ 30,000 2 0.5% $ 14.00 05/15/2005 $264,136 $669,372
10,000 2 0.2% $ 14.25 11/29/2005 $ 89,617 $227,108
A.K. Wnorowski........ 20,000 2 0.3% $ 14.25 11/29/2005 $179,235 $454,217
</TABLE>
1 Options vest as follows: 15,000 on May 31, 1996 and 12,717 on January
1, 1997 pursuant to Dr. Taylor's Agreement with the Company to serve
as a Strategic Advisor after his resignation as President and C.E.O.
effective May 31, 1996.
2 Options vest in three equal annual installments beginning one year
after the date of grant.
-11-<PAGE>
<PAGE>
The following table summarizes the net value realized on the exercise
of options in fiscal year 1996, and the value of outstanding options as
of January 31, 1996, for the named executives officers.
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL
YEAR END OPTIONS VALUES
<TABLE>
<CAPTION>
Value of Unexercised
Number of Securities In-the-Money Options
Underlying Unexercised at Fiscal Year-End
Options at Fiscal Year-End (#) ($) 2
------------------------------ ---------------------
Shares Acquired Value
Name on Exercise (#) Realized ($) 1 Exerciseable Unexerciseable Exerciseable Unexerciseable
- - - ----------------- --------------- --------------- ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
John C. W. Taylor - - - - 314,712 150,288 $ 1,952,837 $ 651,516
Francis E. Girard 47,500 $503,190 44,000 153,980 $ 181,975 $ 150,042
Robert J. Slezak - - - - 118,334 113,337 $ 1,138,334 $ 346,385
John M. Weaver - - - - 20,000 80,000 $ 7,600 $ 15,200
A.K. Wnorowski - - - - 44,490 48,146 $ 396,970 $ 84,511
</TABLE>
1 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.
2 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.
-12-<PAGE>
<PAGE>
PERFORMANCE GRAPH
The following table shows a five year cumulative total return to stock
holders 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,
1991 and the reinvestment of all dividends. Measurement points are
the last trading days for the fiscal years ending on the dates listed
below.
This section depicts a graph, with the y-axis being $ from
$100 to $600, and the x-axis being dates from 1/31/91
through 1/31/96. Three lines appear on the graph. The first
line depicts Boston Technology's five year cumulative total
return. The second line depicts the Standard & Poor Cummu-
nication Equipment/Manufacturing Index during the period.
The third line depicts the Nasdaq Composite Index for the
period.
<TABLE>
<CAPTION>
1/31/91 1/31/92 1/31/93 1/31/94 1/31/95 1/31/96
<S> <C> <C> <C> <C> <C> <C>
Boston Technology, Inc. $100 $167 $372 $522 $578 $606
S&P Comm. Equip./Manuf. Index $100 $162 $171 $171 $179 $288
Nasdaq Composite Index $100 $153 $173 $199 $190 $268
</TABLE>
-13-<PAGE>
<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. 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 are qualified
to undertake 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 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 years, 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 1996.
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. During 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. For fiscal year 1997, the
Committee has deferred any general salary increases for all executives
including, Dr. Taylor, until the Company's financial performance meets
the Company's financial goals during fiscal year 1997.
-14-<PAGE>
<PAGE> 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 goals. During fiscal year
1996, the Company failed to meet its financial goals. As a result,
the Board determined that no bonus would be paid for the Company
portion of the bonus award. The aggregate of bonus payments to the
executive officers as a group amounted to $275,494, representing bonus
payments for achievement of personal performance goals. 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 1994, the stockholders approved the 1994 Stock
Incentive Plan which allows the Company the flexibility to issue stock
options and/or Common Stock to executives and employees, as determined
by 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 the fair
market value on the date of the grant. Furthermore, executive officers'
stock options generally vest over a period of three or more years,
providing an incentive for continued employment with the Company.
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 1996, the Compensation
Committee approved the grant of 372,717 options to purchase shares for
all executive officers as a group (including Dr. Taylor), at exercise
prices ranging from $14.00 to $14.25 per share, in each case re
presenting the fair market value of the Common Stock on the date of
grant. In addition, and in recognition of the Company's overall
performance in adding twelve (12) new major customers, including
AT&T Corp., Telstra Mobile of Australia, Telefonos de Mexico (TELMEX)
and Time-Warner Communications to its customer base, the Committee
recommended, and the full Board of Directors approved on May 15, 1996,
the immediate vesting of 66,972 shares granted to the executive officers
as a group (except Dr. Taylor) under the 1995 Special Incentive Grant.
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.
-15-<PAGE>
<PAGE> 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,
1996, a total of $89,547 has been deferred by various officers under the
Plan.
Summary of Compensation of Chief Executive Officer
During fiscal year 1996, the Company's President and Chief Executive
Officer, Dr. John C. W. Taylor, received salary compensation of
$275,000. In addition, in fiscal year 1996, the Committee approved a
grant to Dr. Taylor of stock options for the purchase of 27,717 shares
of the Company's Common Stock at an exercise price of $14.00. These
grants were 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, which 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.
-16-<PAGE>
<PAGE>
Employment Agreements
The Company has entered into employment agreements with Messrs. Girard,
Slezak, Weaver and Wnorowski. These agreements have no stated term and
may be terminated by the Company at any time. Upon a termination with-
out cause, Messrs. Girard, Slezak, Weaver and Wnorowski are entitled to
receive a payment equal to six months of their base salary (plus
accrued bonuses). 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. Girard, Slezak, Weaver and Wnorowski (395,458 shares as of
April 30, 1996) will become immediately vested.
Employee Severance Benefit Plan
The Company considers it essential to the best interest of its stock-
holders 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 stock-
holders 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 term-
ination and (iii) accelerate the vesting of each stock option held by
the employee.
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 April 30, 1996, approximately 482 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 term-
inated or amended after the occurrence of a change in control (as
defined in the Severance Plan).
-17-<PAGE>
<PAGE>
Other Arrangements
In connection with Dr. Taylor's resignation as President and Chief
Executive Officer and a director of the Company effective May 31, 1996,
Dr. Taylor entered into an agreement with the Company pursuant to
which Dr. Taylor will be employed by the Company as a Strategic Advisor
through May 31, 1997. As a Strategic Advisor, Dr. Taylor has agreed
to (i) assist in the transition to the Company's new Chief Executive
Officer, (ii) act as the Company's special liaison to AT&T in connection
with the Company's business relationship with AT&T, and (iii) continue
his active participation on the Company's International Advisory
Council. In consideration of such services, the Company has agreed to
pay Dr. Taylor an annual salary of approximately $200,000 and a bonus
of up to $20,000 if certain performance goals are satisfied. The
Company has also agreed to accelerate the vesting of stock options held
by Dr. Taylor covering 135,288 shares with exercise prices ranging from
$7.00 to $14.00.
APPROVAL OF 1996 STOCK INCENTIVE PLAN
Summary of the Plan
As in the past, it is the opinion of the Board of Directors that the
continuing success of the Company depends, in large part, on its ability
to attract, retain and motivate key employees and others who are in a
position to contribute to the Company's future growth and success. In
1994 , in order to develop a more flexible approach to the issuance of
stock options and Common Stock to the employees of the Company, and to
give the Board flexibility to determine the manner and the type of
shares to be issued, the stockholders approved the 1994 Stock Incentive
Plan. Under the 1994 Stock Incentive Plan, the awards of options or
Common Stock can be in the form of Incentive Stock Options, Non-
Statutory Stock Options, Stock Appreciation Rights, Performance Shares,
Restricted Stock or Unrestricted Stock.
Due to the growth of the employee base and changes in Internal Revenue
Service Regulations affecting Stock Incentive Plans, the Board has
adopted a new 1996 Stock Incentive Plan (the "Stock Incentive Plan" or
the "Plan"), to reflect the regulations and to provide for additional
shares to be issued for awards under the Plan. Subject to conditions
described in the Stock Incentive Plan, the Board approved the issuance
of up to 1,000,000 shares of Common Stock that may be awarded under
this new Plan. The following summary is qualified in all respects by
reference to the full text of the 1996 Stock Incentive Plan, which
appears as Exhibit A to this Proxy Statement.
-18-<PAGE>
<PAGE>
General
The 1996 Stock Incentive Plan will be administered by the Board of
Directors, which is authorized to decide questions of eligibility and
to make rules and regulations for the administration and interpretation
of the Plan. Pursuant to the terms of the Plan, the Board of Directors
may delegate its administrative authority under the Plan to the
Compensation Committee. All Company employees, officers, directors,
consultants and advisors who are expected to contribute to the
Company's future growth and success are eligible to be participants in
the Stock Incentive Plan. As of April 30, 1996, approximately 482
employees of the Company (including seven officers and 105 consultants)
were eligible to receive awards under the Plan. The maximum number of
shares that may be awarded to any one employee under the Plan in any
one fiscal year is 250,000 shares (subject to adjustment for stock
splits, stock dividends and other relevant changes to the Company's
capitalization). Incentive stock options which the Board intends to
qualify as performance-based compensation under Section 162(m) of the
Code may not be granted at an exercise price less than the fair
market value of the Common Stock on the date of grant (or less than
110% of the fair market value in the case of incentive stock options
granted to optionees holding 10% or more of the voting stock of the
Company). All other options may be granted at an exercise price which
may be less than, equal to or greater than the fair market value of
the Common Stock on the date of grant. Participants under the Plan may
be awarded shares or other awards under the various categories except
that Incentive Stock Options may only be awarded to persons eligible to
receive incentive stock options under Section 422 of the Code, i.e.,
employees of the Company. All shares under the Stock Incentive Plan
must be authorized but may be unissued or Treasury shares.
The various types of awards that may be granted under the Stock
Incentive Plan may be in different forms. If Incentive Stock Options
are awarded, they must be awarded under the terms of Section 422 of the
Code and the price of such incentive stock options shall not be less
than 100% of the fair market value of the Common Stock on the date of
the award. As of May 20, 1996 the fair market value of one share of
Common Stock was $18.25. The exercise period of Incentive Stock Options
shall not exceed ten years from the date of the grant. In addition,
options granted under the Stock Incentive Plan (whether Incentive Stock
Options or non-statutory stock options) may provide for the payment of
the exercise price by the delivery of cash or check, delivery of shares
of Common Stock owned by the optionee for at least six months,
delivery of a promissory note of the optionee to the Company on terms
determined by the Board, delivery of an irrevocable undertaking by a
broker to deliver promptly to the Company sufficient funds to pay the
exercise price in the form of cash or check, and payment of such other
lawful consideration as the Board may determine, or a combination of
the foregoing.
The Plan also provides that where Incentive Stock Options are granted
to any employee under the Stock Incentive Plan, and the aggregate
options granted under the Stock Incentive Plan or any other Company
incentive stock option plan become exercisable for the first time in
any one calendar year for shares of Common Stock with an aggregate fair
market value of more than $100,000, then the number of shares with a
value in excess of $100,000 shall not constitute Incentive Stock
Options, but are classified as non-statutory stock options. Further-
more, no Incentive Stock Option may be exercised unless at the time of
such exercise the participant is and has been continually, since the
date of the grant, an employee of the Company, except that Incentive
Stock Options may be exercised within a period of three months after
the participant ceases to be an employee.
-19-<PAGE>
<PAGE> In addition to stock options, the Stock Incentive Plan allows the Board
to grant Stock Appreciation Rights ("SARs") entitling the recipient,
on the exercise of the SAR, to receive an amount in cash or stock or a
combination thereof determined in whole or in part by reference to
appreciation in the fair market value of the stock between the date of
the award and the exercise of the award. The SAR shall entitle the
participant to receive, with respect to each share of stock as
to which the stock appreciation right is exercised, the excess of the
shares' fair market value on the date of the exercise over the fair
market value on the date the SAR was granted. SARs may be granted in
tandem with or independently of options granted under the Stock
Incentive Plan. If granted with Incentive Stock Options, the SAR must
be granted at the time that the Incentive Stock Option is granted.
The Stock Incentive Plan also allows the Board to award Performance
Shares entitling the recipient to acquire shares of Common Stock upon
the attainment of specified performance goals. The Board may award
Performance Shares independent of or in connection with the grant of
any other award under the Stock Incentive Plan. If Performance Shares
are granted, the participant shall only be entitled to receive a stock
certificate upon satisfaction of all conditions specified in the
agreement evidencing the Performance Share award. The Board has the
flexibility to at any time accelerate or waive any or all of the goals,
restrictions or conditions imposed under any Performance Share award.
The Stock Incentive Plan also allows the Board to grant Restricted
Stock entitling the recipient to acquire shares of stock subject to the
right of the Company to repurchase all or a part of such shares at their
purchase price (or require the forfeiture of such shares if purchased at
no cost) from the recipient in the event that the conditions specified
by the Board in the applicable award were not satisfied prior to the end
of the applicable restricted period or periods. Conditions for
repurchase (or forfeiture) may be based on continuing employment,
service or achievement of pre-established performance or other goals
and objectives. Restricted Stock may not be sold, assigned,
transferred, pledged or otherwise encumbered except as permitted by the
Board during the applicable restricted period. Any certificates issued
in respect of shares of Restricted Stock shall be registered in the name
of the participant and deposited by the participant together with a
stock power endorsed in blank with the Company. The Board may also
grant or sell at a purchase price determined by the Board, which price
shall not be lower than 85% of the fair market value on the date of the
sale to participants, shares of stock free of any restrictions
("Unrestricted Stock"). No shares of stock may be sold for less than
par value of the Common Stock. The granting of awards under the Plan is
discretionary, and the Company cannot now determine the number or
type of awards to be granted in the future to any particular executive
officer, all current executive officers as a group, all non-executive
directors as a group, each nominee for director, or all non-executive
officers as a group.
As of the date of this Proxy Statement, the Board of Directors has
awarded 107,250 options to purchase shares to non-executive officers
and 478,950 options to purchase shares to executive officers. Such
grants are all subject to approval of the Plan by the stockholders.
The granting of awards under the Plan is discretionary, and the Company
cannot now determine the number of type of awards to be granted to any
individual or group.
-20-<PAGE>
<PAGE> The Stock Incentive Plan provides that it shall become effective when
adopted by the Board of Directors, but that no award granted under the
Stock Incentive Plan shall become exercisable unless and until the Stock
Incentive Plan shall have been approved by the Company's stockholders.
Amendments to the Stock Incentive Plan do not require stockholder
approval except as required to comply with any applicable tax or
regulatory requirement. Such amendments are not effective until they
have been approved by the Company's stockholders. The Stock Incentive
Plan shall terminate upon the earlier of the tenth anniversary of the
date of its adoption by the Board or the date upon which all shares
available for issuance under the Stock Incentive Plan shall have been
issued pursuant to awards granted under the Stock Incentive Plan.
The provisions of the Stock Incentive Plan shall be governed by and
interpreted in accordance with the laws of the State of Delaware.
Federal Income Tax Consequences
Incentive Stock Options. No taxable income will be recognized by an
optionee upon the grant or exercise of an incentive stock option
(provided that the difference between the option exercise price and the
fair market value of the stock on the date of exercise must be included
in the optionee's "alternative minimum taxable income"), and no
corresponding expense deduction will be available to the Company.
Generally, if an optionee holds shares acquired upon the exercise of
incentive stock options until the later of (i) two years from the
grant of the option and (ii) one year from the date of transfer of the
purchased shares to him or her (the "Statutory Holding Period"), any
gain to the optionee upon a sale of such shares will be treated as
capital gain. The gain recognized upon the sale of the stock is
the difference between the option price and the sale price of the
stock. The net federal income tax effect on the holder of incentive
stock options is to defer, until the stock is sold, taxation of any
increase in the stock's value from the time of grant to the time of
exercise, and to cause all such increase to be treated as capital gain.
If the optionee sells the shares prior to the expiration of the
Statutory Holding Period (a "disqualifying disposition"), he or she
will realize taxable income at ordinary income tax rates in an amount
equal to the lesser of (i) the fair market value of the shares on the
date of exercise less the option price, or (ii) the amount realized
on the sale less the option price, and the Company will receive a
corresponding business expense deduction. Any additional gain will be
treated as long-term capital gain if the shares are held for a shorter
period. If the optionee sells the stock for less than the option price,
he or she will recognize a capital loss equal to the difference between
the sale price and the option price. The loss will be a long-term
capital loss if the shares are held for more than one year prior to the
sale and a short-term capital loss if the shares are held for a shorter
period.
For purposes of the "alternative minimum tax" applicable to individuals,
the exercise of an incentive stock option is treated in the same manner
as the exercise of a nonstatutory option. Thus, an optionee must, in
the year of option exercise, include the difference between the exercise
price and the fair market value of stock on the date of exercise in
alternative minimum taxable income. The alternative minimum tax is
imposed upon an individual's alternative minimum taxable income current-
ly at rates of 26% to 28%, but only to the extent that such tax exceeds
the taxpayer's regular income tax liability for the taxable year.
-21-<PAGE>
<PAGE>
Nonstatutory Stock Options. No taxable income is recognized by the
optionee upon the grant of a nonstatutory option. The optionee must
recognize as ordinary income in the year in which the option is
exercised the amount by which the fair 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).
If the optionee is a Reporting Person, then 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.
Stock Appreciation Rights. No taxable income is recognized by the
recipient upon the grant of a stock appreciation right. The recipient
must recognize as ordinary income any cash delivered and the fair
market value of any shares of Common Stock delivered in payment of an
amount due under a stock appreciation right. Special rules apply to
Reporting Persons. On the disposition by the recipient of any Common
Stock received in payment of a stock appreciation right, any additional
gain or any loss recognized 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 Company will be entitled to a business expense deduction equal to
the amount of ordinary income recognized by the recipient, subject to
the limitations of Section 162(m) of the Code.
Performance Shares. No taxable income is recognized by the recipient
upon the grant of a performance share award. The recipient must
recognize as ordinary income the fair market value of any shares of
Common Stock actually delivered in accordance with the terms of the
performance share award. Special rules apply to Reporting Persons.
On the disposition by the recipient of any Common Stock received
pursuant to a performance share award, any additional gain or any loss
recognized 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 Company
will be entitled to a business expense deduction equal to the amount of
ordinary income recognized by the recipient, subject to the limitations
of Section 162(m) of the Code.
-22-<PAGE>
<PAGE>
Restricted Stock. Neither the Company nor the recipient of a restricted
stock award will realize any federal tax consequences at the time the
award is granted. If, however, the recipient makes a Section 83(b)
election within 30 days of the date of grant, then special rules will
apply. The Company will be entitled to deduct as a compensation
expense, the same amount as the employee is required to recognize as
ordinary income, in the same year as the employee includes the amount
in income for federal tax purposes, subject to the limitations of
Section 162(m) of the Code. Any additional gain or any loss recognized
upon the disposition of the Common Stock acquired pursuant to a
restricted stock award 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 Stock Incentive Plan also provides that the participants shall pay
to the Company, or make provisions satisfactory to the Board, for the
payment of any taxes required by law to be withheld in respect of shares
awarded under the Stock Incentive Plan no later than the date of the
event creating the tax liability. The Board has the discretion subject
conditions as may be established by the Board, that tax obligations
may be paid in whole or in part of shares of Common Stock, including
shares retained from the award creating the tax obligation valued at
their fair market value. The Company has the right to the extent
permitted by law to deduct any such tax obligations from any payment of
any kind otherwise due to the participant.
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 L.L.P., the Company's independent auditors since 1989,
will be present at the Annual Meeting and will have the opportunity to
make a statement if they so desire and 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.
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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.
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 21, 1997 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, 1996 BY WRITING TO THE INVESTOR
RELATIONS DEPARTMENT, BOSTON TECHNOLOGY, INC., 100 QUANNAPOWITT PARKWAY,
WAKEFIELD, MASSACHUSETTS 01880.
By Order of the Board of Directors
May 24, 1995
/s/Carol B. Langer
__________________
Carol B. Langer,
Secretary
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EXHIBIT A
Boston Technology, Inc.
1996 Stock Incentive Plan
Section 1. Purpose
The purpose of this Stock Incentive Plan (the "Plan") is to advance
the interests of Boston Technology, Inc. by enhancing its ability to
attract and retain key employees, consultants and others who are in a
position to contribute to the Company's future growth and success.
Section 2. Definitions
"Award" means any Option, Stock Appreciation Right, Performance Share,
Restricted Stock or Unrestricted Stock awarded under the Plan.
"Board" means the Board of Directors of the Company.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time.
"Committee" means a committee of not less than two members of the Board
appointed by the Board to administer the Plan, provided that if and
when the Common Stock is registered under Section 12 of the Securities
Exchange Act of 1934, each member of the Committee shall be a
"disinterested person" within the meaning of Rule 16 b-3 under the
Securities Exchange Act of 1934 ("Rule 16 b-3").
"Common Stock" or "Stock" means the Common Stock, $.01 par value per
share, of the Company.
"Company" means Boston Technology, Inc. and, except where the content
otherwise requires, all present and future subsidiaries of the Company
as defined in Section 424 (f) of the Code.
"Designated Beneficiary" means the beneficiary designated by a
Participant, in a manner determined by the Board, to receive amounts
due or exercise rights of the Participant in the event of the
Participant's death. In the absence of an effective designation by a
Participant, Designated Beneficiary shall mean the Participant's
estate.
"Fair Market Value" means, with respect to Common Stock or any other
property, the fair market value of such property as determined by the
Board in good faith or in the manner established by the Board from
time to time.
"Incentive Stock Option" means an option to purchase shares of Common
Stock awarded to a Participant under Section 6 which is intended to
meet the requirements of Section 422 of the Code or any successor
provision.
"Nonstatutory Stock Option" means an option to purchase shares of
Common Stock awarded to a Participant under Section 6 which is not
intended to be an Incentive Stock Option.
"Option" means an Incentive Stock Option or a Nonstatutory Stock
Option.
"Participant" means a person selected by the Board to receive an Award
under the Plan.
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"Performance Shares" mean shares of Common Stock which may be earned
by the achievement of performance goals awarded to a Participant under
Section 8.
"Reporting Person" means a person subject to Section 16 of the
Securities Exchange Act of 1934 or any successor provision.
"Restricted Period" means the period of time selected by the Board
during which shares subject to a Restricted Stock Award may be
repurchased by or forfeited to the Company.
"Restricted Stock" means shares of Common Stock awarded to a Participant
under Section 9.
"Stock Appreciation Right" or "SAR" means a right to receive any excess
in Fair Market Value of shares of Common Stock over the exercise price
awarded to a Participant under Section 7.
"Unrestricted Stock" means shares of Common Stock awarded to a
Participant under Section 9 (c).
Section 3. Administration
The Plan will be administered by the Board. The Board shall have
authority to make Awards and to adopt, amend and repeal such
administrative rules, guidelines and practices relating to the Plan
as it shall deem advisable from time to time, and to interpret the
provisions of the Plan. The Board's decisions shall be final and
binding. No member of the Board shall be liable for any action or
determination relating to the Plan made in good faith. To the extent
permitted by applicable law, the Board may delegate to one or more
executive officers of the Company the power to make Awards to
Participants who are not Reporting Persons and all determinations under
the Plan with respect thereto, provided that the Board shall fix the
maximum amount of such Awards to be made by such executive officers and
a maximum amount for any one Participant. To the extent permitted by
applicable law, the Board may appoint a Committee to administer the Plan
and, in such event, all references to the Board in the Plan shall mean
such Committee or the Board. All decisions by the Board or the
Committee pursuant to the Plan shall be final and binding on all persons
having or claiming any interest in the Plan or in any Award.
Section 4. Eligibility
All of the Company's employees, officers, directors, consultants and
advisors who are expected to contribute to the Company's future growth
and success, other than persons who have irrevocably elected not to be
eligible, are eligible to be Participants in the Plan. Subject to
adjustment pursuant to Section 5 (b) below, the maximum number of shares
of Common Stock which may be the subject of Awards made to any one
employee under the Plan during any calendar year shall be 250,000 shares
of Common Stock. For the purposes of calculating such maximum number,
(a) an Award shall continue to be treated as outstanding notwithstanding
its repricing, cancellation or expiration and (b) the repricing of
an outstanding Award or the issuance of a new Award in substitution for
a cancelled Award shall be deemed to constitute the grant of a new
additional Award separate from the original grant of the Award that is
repriced or cancelled. Incentive Stock Options may be awarded only to
persons eligible to receive Incentive Stock Options under the Code.
Section 5. Stock Available for Awards
(a) Subject to adjustment under subsection (b) below, Awards may be
made under the Plan for up to 1,000,000 shares of Common Stock. If any
Award in respect of shares of Common Stock expires or is terminated
unexercised or is forfeited for any reason or settled in a manner that
results in fewer shares outstanding than were initially awarded, the
shares subject to such Award or so surrendered, as the case may be, to
the extent of such expiration, termination, forfeiture or decrease, shall
again be available for award under the Plan, subject, however, in the
case of Incentive Stock Options, to any limitation required under the
Code. Shares issued under the Plan may consist in whole or in part of
authorized but unissued shares or treasury shares.
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(b) In the event that the Board, in its sole discretion, determines
that any stock dividend, extraordinary cash dividend, recapitalization,
reorganization, merger, consolidation, split-up, spin-off, combination or
other similar transaction affects the Common Stock such that an adjustment
is required in order to preserve the benefits or potential benefits
intended to be made available under the Plan, then the Board, subject, in
the case of Incentive Stock Options and any adjustments made to Section
4, to any limitation required under the Code, shall equitably adjust any
or all of (i) the number and kind of shares in respect of which Awards may
be made under the Plan, (ii) the number and kind of shares in respect to
the maximum number of Awards issuable to any one employee (iii) the number
and kind of shares subject to outstanding Awards, and (iv) the award,
exercise or conversion price with respect to any of the foregoing, and if
considered appropriate, the Board may make provision for a cash payment
with respect to an outstanding Award, provided that the number of shares
subject to any Award shall always be a whole number.
(c) The Board may grant Awards under the Plan in substitution for
stock and stock based awards held by employees of another corporation who
concurrently become employees of the Company as a result of a merger or
consolidation of the employing corporation with the Company or a
Subsidiary or the acquisition by the Company or a subsidiary of property or
stock of the employing corporation. The substitute Awards shall be granted
on such terms and conditions as the Board considers appropriate in the
circumstances. The shares which may be delivered under such substitute
Awards shall be in addition to the maximum number of shares provided for
in Section 5 (a) only to the extent that the substitute Awards are (i)
granted to persons whose relationship to the Company does not make (and is
not expected to make) them Reporting Persons; (ii) granted in substitution
for awards issued under a plan approved, to the extent then required under
Rule 16 b-3, by the stockholders of the entity which issued such
predecessor awards; and (iii) not intended to be Incentive Stock Options
or exempt from Section 162 (m) of the Code.
Section 6. Stock Options
(a) General.
(i) Subject to the provisions of the Plan, the Board may award
Incentive Stock Options and Nonstatutory Stock Options, and determine the
number of shares to be covered by each Option, the option price therefor
and the conditions and limitations applicable to the exercise of the
Option. The terms and conditions of Incentive Stock Options shall be
subject to and comply with Section 422 of the Code, or any successor
provision, and any regulations thereunder.
(ii) The Board shall establish the exercise price at the time each
Option is awarded. In the case of Incentive Stock Options, such price
shall not be less than 100% of the Fair Market Value of the Common Stock
on the date of award.
(iii) Each Option shall be exercisable at such times and subject to such
terms and conditions as the Board may specify in the applicable Award or
thereafter. The Board may impose such conditions with respect to the
exercise of Options, including conditions relating to applicable federal
or state securities laws, as it considers necessary or advisable.
(iv) Options granted under the Plan may provide for the payment of the
exercise price by delivery of cash or check in an amount equal to the
exercise price of such Options or, to the extent permitted by the Board at
or after the award of the Option, by (A) delivery of shares of Common
Stock owned by the optionee for at least six months (or such shorter period
as is approved by the Board), valued at their Fair Market Value, (B)
delivery of a promissory note of the optionee to the Company on terms
determined by the Board, (C) delivery of an irrevocable undertaking by a
broker to deliver promptly to the Company sufficient funds to pay the
exercise price or delivery of irrevocable instructions to a broker to
deliver promptly to the Company cash or a check sufficient to pay the
exercise price, (D) payment of such other lawful consideration as the Board
may determine, or (E) any combination of the foregoing.
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(v) The Board may provide for the automatic award of an Option upon the
delivery of shares to the Company in payment of the exercise price of an
Option for up to the number of shares so delivered.
(vi) The Board may at any time accelerate the time at which all or any
part of an Option may be exercised.
(b) Incentive Stock Options.
Options granted under the Plan which are intended to be Incentive Stock
Options shall be subject to the following additional terms and conditions:
(i) All Incentive Stock Options granted under the Plan shall, at the
time of grant, be specifically designated as such in the option agreement
covering such Incentive Stock Options. The Option exercise period shall
not exceed ten years from the date of grant.
(ii) If any employee to whom an Incentive Stock Option is to be granted
under the Plan is, at the time of the grant of such option, the owner of
stock possessing more than 10% of the total combined voting power of all
classes of stock of the Company (after taking into account the attribution
of stock ownership rule of Section 424 (d) and of the Code), then the
following special provisions shall be applicable to the Incentive Stock
Option granted to such individual:
(x) The purchase price per share of the Common Stock subject to such
Incentive Stock Option shall not be less than 110% of the Fair Market
Value of one share of Common Stock at the time of grant; and
(y) The option exercise period shall not exceed five years from the
date of grant.
(iii) For so long as the Code shall so provide, options granted to any
employee under the Plan (and any other incentive stock option plans of the
Company) which are intended to constitute Incentive Stock Options shall not
constitute Incentive Stock Options to the extent that such options, in the
aggregate, become exercisable for the first time in any one calendar year
for shares of Common Stock with an aggregate Fair Market Value (determined
as of the respective date or dates of grant) of more than $100,000.
(iv) No Incentive Stock Option may be exercised unless, at the time of
such exercise, the Participant is, and has been continuously since the date
of grant of his or her Option, employed by the Company, except that:
(x) an Incentive Stock Option may be exercised within the period of
three months after the date the Participant ceases to be an employee of
the Company (or within such lesser period as may be specified in the appli
cable option agreement), provided, that the agreement with respect to such
Option may designate a longer exercise period and that the exercise after
such three-month period shall be treated as the exercise of a Nonstatutory
Stock Option under the Plan;
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(y) if the Participant dies while in the employ of the Company, or
within three months after the Participant ceases to be such an employee,
the Incentive Stock Option may be exercised by the Participant's Designated
Beneficiary within the period of one year after the date of death (or
within such lesser period as may be specified in the applicable Option
agreement); and
(z) if the Participant becomes disabled (within the meaning of Section
22 (e)(3) of the Code or any successor provision thereto) while in the
employ of the Company, the Incentive Stock Option may be exercised within
the period of one year after the date of death (or within such lesser
period as may be specified in the Option agreement).
For all purposes of the Plan and any Option granted hereunder, "employment"
shall be defined in accordance with the provisions of Section 1.421-7 (h) of
the Income Tax Regulations (or any successor regulations). Notwithstanding
the foregoing provisions, no Incentive Stock Option may be exercised after
its expiration date.
Section 7. Stock Appreciation Rights.
(a) The Board may grant Stock Appreciation Rights entitling recipients
on exercise of the SAR to receive an amount, in cash or Stock or a combin-
ation thereof (such form to be determined by the Board), determined in
whole or in part by reference to appreciation in the Fair Market Value of
the Stock between the date of the Award and the exercise of the Award. A
Stock Appreciation Right shall entitle the Participant to receive, with
respect to each share of Stock as to which the SAR is exercised, the excess
of the share's Fair Market Value on the date of exercise over its Fair
Market Value on the date the SAR was granted. The Board may also grant
Stock Appreciation Rights that provide that, following a change in control
of the Company (as defined by the Board at the time of the Award), the
holder of such SAR will be entitled to receive, with respect to each share
of Stock subject to the SAR, an amount equal to the excess of a specified
value (which may include an average of values) for a share of Stock during
a period preceding such change in control over the Fair Market Value of a
share of Stock on the date the SAR was granted.
(b) Stock Appreciation Rights may be granted in tandem with, or
independently of, Options granted under the Plan. A Stock Appreciation
Right granted in tandem with an Option which is not an Incentive Stock
Option may be granted either at or after the time the Option is granted. A
Stock Appreciation Right granted in tandem with an Incentive Stock
Option may be granted only at the time the Option is granted.
(c) When Stock Appreciation Rights are granted in tandem with Options,
the following provisions will apply:
(i) The Stock Appreciation Right will be exercisable only at such time
or times, and to the extent, that the related Option is exercisable in
accordance with the procedure required for exercise of the related Option.
(ii) The Stock Appreciation Right will terminate and no longer be exer-
cisable upon the termination or exercise of the related Option, except that
a Stock Appreciation Right granted with respect to less than the full
number of shares covered by an Option will not be reduced until the number
of shares as to which the related Option has been exercised or has
terminated exceeds the number of shares not covered by the Stock
Appreciation Right.
(iii) The Option will terminate and no longer be exercisable upon the
exercise of the related Stock Appreciation Right.
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(iv) The Stock Appreciation Right will be transferable only with the
related Option.
(v) A Stock Appreciation Right granted in tandem with an Incentive
Stock Option may be exercised only when the market price of the Stock
subject to the Option exceeds the exercise price of such option.
(d) A Stock Appreciation Right not granted in tandem with an Option
will become exercisable at such time or times, and on such conditions, as
the Board may specify.
(e) The Board may at any time accelerate the time at which all or any
part of the SAR may be exercised.
Section 8. Performance Shares.
(a) The Board may make Performance Share Awards entitling recipients
to acquire shares of Stock upon the attainment of specified performance
goals. The Board may make Performance Share Awards independent of or in
connection with the granting of any other Award under the Plan. The
Board in its sole discretion shall determine the performance goals
applicable under each such Award, the periods during which performance is
to be measured, and all other limitations and conditions applicable to the
awarded Performance Shares; provided, however, that the Board may rely on
the performance goals and other standards applicable to other performance
plans of the Company in setting the standards for Performance Share Awards
under the Plan.
(b) Performance Share Awards and all rights with respect to such
Awards may not be sold, assigned, transferred, pledged or otherwise
encumbered.
(c) A Participant receiving a Performance Share Award shall have the
rights of a stockholder only as to shares actually received by the
Participant under the Plan and not with respect to shares subject to an
Award but not actually received by the Participant. A Participant shall
be entitled to receive a stock certificate evidencing the acquisition of
shares of Stock under a Performance Share Award only upon satisfaction of
all conditions specified in the agreement evidencing the Performance
Share Award.
(d) The Board may at any time accelerate or waive any or all of the
goals, restrictions or conditions imposed under any Performance Share
Award.
Section 9. Restricted and Unrestricted Stock.
(a) The Board may grant Restricted Stock Awards entitling recipients
to acquire shares of Stock, subject to the right of the Company to
repurchase all or part of such shares at their purchase price (or to
require forfeiture of such shares if purchased at no cost) from the
recipient in the event that conditions specified by the Board in the
applicable Award are not satisfied prior to the end of the applicable
Restricted Period or Restricted Periods established by the Board for such
Award. Conditions for repurchase (or forfeiture) may be based on
continuing employment or service or achievement of pre-established
performance or other goals and objectives.
(b) Shares of Restricted Stock may not be sold, assigned, transferred,
pledged or otherwise encumbered, except as permitted by the Board, during
the applicable Restricted Period. Shares of Restricted Stock shall be
evidenced in such manner as the Board may determine. Any certificates
issued in respect of shares of Restricted Stock shall be registered in the
name of the Participant and, unless otherwise determined by the Board,
deposited by the Participant, together with a stock power endorsed in
blank, with the Company (or its designee). At the expiration of the
Restricted Period, the Company (or such designee) shall deliver such
certificates to the Participant or if the Participant has died, to the
Participant's Designated Beneficiary.
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(c) The Board may, in its sole discretion, grant (or sell at a
purchase price determined by the Board, which shall not be lower than 85%
of Fair Market Value on the date of sale) to Participants shares of Stock
free of any restrictions under the Plan ("Unrestricted Stock").
(d) The purchase price for each share of Restricted Stock and
Unrestricted Stock shall be determined by the Board of Directors and may
not be less than the par value of the Common Stock. Such purchase price
may be paid in the form of past services or such other lawful consideration
as is determined by the Board.
(e) The Board may at any time accelerate the expiration of the
Restricted Period applicable to all, or any particular, outstanding
shares of Restricted Stock.
Section 10. General Provisions Applicable to Awards.
(a) Applicability of Rule 16 b-3. Those provisions of the Plan which
make an express reference to Rule 16 b-3 shall apply to the Company only at
such time as the Company's Common Stock is registered under the Securities
Exchange Act of 1934, or any successor provision, and then only to Reporting
Persons.
(b) Nontransferability. Notwithstanding any other provision of the
Plan, to the extent required to qualify for the exemption provided by Rule
16 b-3, (i) any Option, SAR, Performance Share Award or other similar right
related to an equity security issued under the Plan to a Reporting Person
shall not be transferable other than by will or the laws of descent and
distribution or pursuant to a qualified domestic relations order as defined
by the Code or Title I or the Employee Retirement Income Security Act
("ERISA"), or the rules thereunder, and shall be exercisable during the
Participant's lifetime only by the Participant or the Participant's guardian
or legal representative, and (ii) the selection of a Reporting Person as a
Participant and the terms of his or her Award shall be determined only in
accordance with the applicable provisions of Rule 16 b-3. In addition,
Awards shall not be assignable or transferable by the person to whom they
are granted, either voluntarily or by operation of law, except by will or
the laws of descent and distribution, and, during the life of the optionee,
shall be exercisable only by the optionee; provided, however, that Awards
other than Incentive Stock Options may be transferred pursuant to a
qualified domestic relations order (as defined in Rule 16 b-3).
(c) Documentation. Each Award under the Plan shall be evidenced by an
instrument delivered to the Participant specifying the terms and conditions
thereof and containing such other terms and conditions not inconsistent with
the provisions of the Plan as the Board considers necessary or advisable.
Such instruments may be in the form of agreements to be executed by both the
Company and the Participant, or certificates, letters or similar documents,
acceptance of which will evidence agreement to the terms thereof and of
this Plan.
(d) Board Discretion. Each type of Award may be made alone, in addition
to or in relation to any other type of Award. The terms of each type of
Award need not be identical, and the Board need not treat Participants uni-
formly. Except as otherwise provided by the Plan or a particular Award, any
determination with respect to an Award may be made by the Board at the time
of award or at any time thereafter.
(e) Termination of Status. Subject to the provisions of Section 6
(b)(iv), the Committee shall determine the effect on an Award of the
disability, death, retirement, authorized leave of absence or other
termination of employment or other status of a Participant and the extent
to which, and the period during which, the Participant's legal
representative, guardian or Designated Beneficiary may exercise rights
under such Award.
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(f) Mergers, Etc. In the event of a consolidation, merger or other
reorganization in which all of the outstanding shares of Common Stock are
exchanged for securities, cash or other property of any other corporation
or business entity (an "Acquisition"), or in the event of a 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, may,
in its discretion, take any one or more of the following actions as to
outstanding Awards: (i) provide that such Awards shall be assumed, or
substantially equivalent Awards shall be substituted, by the acquiring or
succeeding corporation (or an affiliate thereof) on such terms as the Board
determines to be appropriate, (ii) upon written notice to Participants,
provide that all unexercised Options or SARs will terminate immediately
prior to the consummation of such transaction unless exercised by the
Participant within a specified period following the date of such notice,
(iii) in the event of an Acquisition under the terms of which holders
of the Common Stock of the Company will receive upon consummation thereof a
cash payment for each share surrendered in the Acquisition (the "Acquisition
Price"), make or provide for a cash payment to Participants equal to the
difference between (A) the Acquisition Price times the number of shares of
Common Stock subject to outstanding Options or SARs (to the extent then
exercisable at prices not in excess of the Acquisition Price) and (B) the
aggregate exercise price of all such outstanding Options or SARs in exchange
for the termination of such Options and SARs, and (iv) provide that all or
any outstanding Awards shall become exercisable or realizable in full prior
to the effective date of such Acquisition.
(g) Withholding. The Participant shall pay to the Company, or make
provision satisfactory to the Board for payment of, any taxes required by
law to be withheld in respect of Awards under the Plan no later than the
date of the event creating the tax liability. In the Board's discretion,
and subject to such conditions as the Board may establish, such tax
obligations may be paid in whole or in part in shares of Common Stock,
including shares retained from the Award creating the tax obligation, valued
at their Fair Market Value. The Company may, to the extent permitted by
law, deduct any such tax obligations from any payment of any kind other-
wise due to the Participant.
(h) Foreign Nationals. Awards may be made to Participants who are
foreign nationals or employed outside the United States on such terms and
conditions different from those specified in the Plan as the Board
considers necessary or advisable to achieve the purposes of the Plan or
comply with applicable laws.
(i) Amendment of Award. The Board may amend, modify or terminate any
outstanding Award, including substituting therefor another Award of the
same or a different type, changing the date of exercise or realization and
converting an Incentive Stock Option to a Nonstatutory Stock Option,
provided that the Participant's consent to such action shall be required
unless the Board determines that the action, taking into account any related
action, would not materially and adversely affect the Participant.
(j) Cancellation and New Grant of Options. The Board of Directors shall
have the authority to effect, at any time and from time to time, with the
consent of the affected optionees, (i) the cancellation of any or all
outstanding Options under the Plan and the grant in substitution therefor
of new Options under the Plan covering the same or different numbers of
shares of Common Stock and having an option exercise price per share which
may be lower or higher than the exercise price per share of the cancelled
Options or (ii) the amendment of the terms of any and all outstanding
Options under the Plan to provide an option exercise price per share which
is higher or lower than the then current exercise price per share of such
outstanding Options.
(k) Conditions on Delivery of Stock. The Company will not be obligated
to deliver any shares of Stock pursuant to the Plan or to remove
restrictions from shares previously delivered under the Plan (i) until all
conditions of the Award have been satisfied or removed, (ii) until, in the
opinion of the Company's counsel, all applicable federal and state laws and
regulations have been complied with, (iii) if the outstanding Stock is at
the time listed on any stock exchange, until the shares to be delivered have
been listed or authorized to be listed on such exchange upon official notice
of notice of issuance, and (iv) until all other legal matters in connection
with the issuance and delivery of such shares have been approved by the
Company's counsel. If the sale of Stock has not been registered under the
Securities Act of 1933, as amended, the Company may require, as a condition
to exercise of the Award, such representations or agreements as the Company
may consider appropriate to avoid violation of such Act and may require
that the certificates evidencing such Stock bear an appropriate legend
restricting transfer.
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Section 11. Miscellaneous
(a) No Right To Employment or Other Status. No person shall have any
claim or right to be granted an Award, and the grant of an Award shall not
be construed as giving a Participant the right to continued employment or
service for the Company. The Company expressly reserves the right at any
time to dismiss a Participant free from any liability or claim under the
Plan, except as expressly provided in the applicable Award.
(b) No Rights As Stockholder. Subject to the provisions of the
applicable Award, no Participant or Designated Beneficiary shall have any
rights as a stockholder with respect to any shares of Common Stock to be
distributed under the Plan until he or she becomes the record holder
thereof.
(c) Exclusion from Benefit Computations. No amounts payable upon
exercise of Awards granted under the Plan shall be considered salary, wages
or compensation to Participants for purposes of determining the amount or
nature of benefits that Participants are entitled to under any insurance,
retirement or other benefit plans or programs of the Company.
(d) Effective Date and Term.
(i) Effective Date. The Plan shall become effective when adopted by
the Board of Directors, but no Award granted under the Plan shall become
exercisable or effective unless and until the Plan shall have been approved
by the Company's stockholders. If such stockholder approval is not obtained
within twelve months after the date of the Board's adoption of the Plan,
each Award previously granted under the Plan shall be deemed to be cancelled
and no Awards shall be granted thereafter. Amendments to the Plan not
requiring stockholder approval shall become effective when adopted by the
Board of Directors; amendments requiring stockholder approval shall become
effective when adopted by the Board of Directors, but no Award granted
after the date of such amendment shall become exercisable or vested (to the
extent that such amendment to the Plan was required to enable the Company
to grant such Award to a particular optionee) unless and until such
amendment shall have been approved by the Company's stockholders. If such
stockholder approval is not obtained within twelve months of the Board's
adoption of such amendment, any Award granted on or after the date of such
amendment shall terminate to the extent that such amendment to the Plan
was required to enable the Company to grant such Award to a particular
optionee. Subject to the limitations set forth in this Section 11(d),
Awards may be made under the Plan at any time after the effective date and
before the date fixed for termination of the Plan.
(ii) Termination. The Plan shall terminate upon the earlier of (i) the
close of business on the day next preceding the tenth anniversary of the
date of its adoption by the Board of Directors, or (ii) the date on which
all shares available for issuance under the Plan shall have been issued
pursuant to Awards under the Plan. Awards outstanding on such date shall
continue to have force and effect in accordance with the provisions of the
instruments evidencing such Awards.
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<PAGE>
(e) Amendment of Plan. The Board may amend, suspend or terminate the
Plan or any portion thereof at any time, provided that no amendment shall
be made without stockholder approval if such approval is necessary to
comply with any applicable tax or regulatory requirement, including any
requirements for compliance with Rule 16b-3. Prior to any such approval,
Awards may be made under the Plan expressly subject to such approval.
(f) Governing Law. The provisions of the Plan shall be governed by and
interpreted in accordance with the laws of the State of Delaware.
Adopted by the Board of Directors
on February 28, 1996
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<PAGE>
APPENDIX B
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 25, 1996.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
Boston Technology, Inc.
For All
For Withhold Except
1.) To fix the number of directors at seven
and elect the seven nominees listed below. ______ _______ _______
Nominees: Greg C. Carr, Richard J. Connaughton, Herman B. Leonard,
Joseph E. Norberg, Richard K. Snelling Francis E. Girard and
Robert J. Slezak
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.
2.) To ratify and approve the 1996 Stock For Against Abstain
Incentive Plan as described in the Proxy
Statement. ______ ______ _______
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.
Please be sure to sign and date this Proxy. Date _________________
_________________________ _______________________
Stockholder sign here Co-owner sign here
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 25, 1996
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 25, 1996 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 PROPOSAL 2.
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?
__________________________________ ___________________________
__________________________________ ___________________________
__________________________________ ___________________________
