<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
Amendment No. 1 to Form 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
FOR THE FISCAL YEAR ENDED MARCH 31, 1996
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from _____________ to ______________
Commission File Number 0-22210
SUMMA FOUR, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 02-0329497
-------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
25 SUNDIAL AVENUE
MANCHESTER, NEW HAMPSHIRE 03103
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
(603) 625-4050
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Common Stock, $.01
par value
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant
<PAGE> 2
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES: [X] NO: [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [ ]
The aggregate market value of the voting stock held by non-affiliates of the
Registrant as of April 30, 1996 was $108,484,000. As of May 31, 1996, 6,381,437
shares of the Registrant's Common Stock, $.01 par value, were issued and
outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
(1) Specified portions of the Company's Proxy Statement, which is expected to
be filed within 120 days after the end of the Company's fiscal year, are
incorporated by reference into Part III (Items 10, 11, 12 and 13) of this
Report.
This Amendment No. 1 on Form 10-K/A to the Registrant's Annual Report on Form
10-K for the fiscal year ended March 31, 1996 (the "Report") is being filed to
amend and restate the Exhibit Index to the Report. Such Exhibit Index is hereby
amended and restated in its entirety. The actual exhibits previously filed with
the Securities and Exchange Commission with the Report, or incorporated therein
by reference, are not being amended. New exhibits listed are being filed
herewith.
<PAGE> 3
Exhibit Index
Exhibit No. Description
3.1 - Amended and Restated Certificate of Incorporation of the
Registrant.(1)
3.2 - Amended and Restated By-laws of the Registrant.(1)
4.1 - Specimen Certificate representing the Registrant's Common
Stock.(1)
4.2 - Rights Agreement, dated February 22, 1995, by and among the
Registrant and State Street Bank and Trust Company.(5)
10.1 - Lease Agreement, dated July 18, 1990, by and between the
Registrant and Northern Manchester Trust.(1)
10.2 - Lease Agreement, as amended, dated December 21, 1992, by and
between the Registrant and 1100 Corporation.(1)
10.3 - Lease Agreement, dated February 15, 1993 by and between the
Registrant and Atrium Executive Center, Inc.(1)
10.4 - Registration Agreement, dated July 25, 1984, as amended, by
and among the Registrant and certain investors. (Originally
filed as Exhibit 10.5)(1)
10.5 - Purchase Agreement, dated July 25, 1984, by and among the
Registrant and certain investors. (Originally filed as
Exhibit 10.6)(1)
10.6 - +1994 Executive Incentive Bonus Plan. (Originally filed as
Exhibit 10.7)(1)
10.7 - +1993 Stock Incentive Plan, as amended. (Originally filed
as Exhibit 10.8)(1)
10.8 - +1993 Employee Stock Purchase Plan. (Originally filed as
Exhibit 10.9)(1)
10.9 - +1993 Director Stock Option Plan, as amended.
10.10 - +Stock Option Plan of August 1, 1992. (Originally filed as
Exhibit 10.11)(1)
10.11 - +Incentive Stock Option Plan of January 1, 1985.
(Originally filed as Exhibit 10.12)(1)
10.12 - +Stock Option Agreement, dated July 23, 1987, by and between
the Registrant and Mr. William M. Scranton. (Originally
filed as Exhibit 10.13)(1)
10.13 - +Non-Qualified Employee Option Agreement, dated July 23,
1987, by and between the Registrant and Mr. Barry R. Gorsun.
(Originally filed as Exhibit 10.14)(1)
10.14 - +Stock Option Agreement, Dated July 1, 1984, by and between
the Registrant and Mr. Robert A. Degan. (Originally filed
as Exhibit 10.15)(1)
10.15 - +Employment Agreement, dated April 3, 1993, by and between
the Registrant and Thomas A. St. Germain. (Originally filed
as Exhibit 10.16)(1)
10.16 - +Agreement, dated April 30, 1991, by and between the
Registrant and Barry R. Gorsun. (Originally filed as
Exhibit 10.17)(1)
10.17 - +Promissory Note, dated February 12, 1993, by
Barry R. Gorsun. (Originally filed as Exhibit 10.18)(1)
10.18 - Promissory Note, dated April 1, 1991, by Summa Four, Ltd.
(Originally filed as Exhibit 10.19)(1)
10.19 - +Promissory Note and amendment thereto, dated April 11,
1989, by John T. Boatwright. (Originally filed as Exhibit
10.20)(1)
10.20 - Letter Agreement, dated October 15, 1992, by and between the
Registrant and Fleet Bank of Massachusetts, N.A., as
modified. (Originally filed as Exhibit 10.21)(1)
10.21 - Customer Purchase Agreement, dated November 20, 1992, by and
between the Registrant and Sprint/United Management Company.
(Originally filed as Exhibit 10.22)(1)
10.22 - Specialty Switches Contract, dated March 13, 1992, by and
between the Registrant and AT&T, Inc. (Originally filed as
Exhibit 10.23)(1)
10.23 - Customer Purchase Agreement, dated September 11, 1991, by
and between the Registrant and United States Advanced
Networks. (Originally filed as Exhibit 10.24)(1)
10.24 - Customer Purchase Agreement, dated October 10, 1990, by and
between the Registrant and Unisys Corporation. (Originally
filed as Exhibit 10.25)(1)
10.25 - Resale Agreement, dated November 5, 1992, by and between the
Registrant and IBM Canada Ltd. (Originally filed as
Exhibit 10.26)(1)
<PAGE> 4
EXHIBIT INDEX
10.26 - Agreement, dated October 14, 1992, by and between the Registrant
and Claircom Communications Group, L.P. (Originally filed as
Exhibit 10.27)(1)
10.27 - Release, Settlement and License Agreement, dated November 2, 1992,
by and among the Registrant, Omnitel Corporation, Aspect
Telecommunications Corporation and Richard L. Scully.
(Originally filed as Exhibit 10.28)(1)
10.28 - License Agreement, dated December 1, 1983, by and between the
Registrant and Industrial Programming, Inc. (Originally filed as
Exhibit 10.29)(1)
10.29 - Product Development and Licensing Agreement, dated January 19,
1990, by and between the Registrant and The Telephone Connection,
Inc. (Originally filed as Exhibit 10.30)(1)
10.30 - +Letter Agreement, dated June 16, 1993, by and between the
Registrant and Mr. Mel R. Ethem. (Originally filed as Exhibit
10.31)(1)
10.31 - +Severance and Settlement Agreement and Release, dated August 8,
1994, by and between the Registrant and James J. Fiedler.
(Originally filed as Exhibit 10.33)(4)
10.32 - +Agreement, dated August 1, 1994, by and between the Registrant
and Barry R. Gorsun. (Originally filed as Exhibit 10.34)(4)
10.33 - Loan Modification Agreement, dated July 28, 1993, by and between
the Registrant and Fleet Bank of Massachusetts, N.A. (Originally
filed as Exhibit 10.32)(2)
10.34 - Promissory Note, dated July 28, 1993, by and between the
Registrant and Fleet Bank of Massachusetts, N.A. (Originally
filed as Exhibit 10.33)(2)
10.35 - Amendment, dated August 31, 1994, to Lease Agreement dated
July 18, 1990 with Northern Manchester Trust. (3)
10.36 - Amendment, dated August 2, 1994, to Letter Agreement dated
October 15, 1992 by and between the Registrant and Fleet Bank of
Massachusetts, N.A. (6)
10.37 - +Employment Agreement, dated May 3, 1995, by and between the
Registrant and Edward C. Callahan. (Originally filed as Exhibit
10.36)(7)
10.38 - +Stock Option Agreement, dated October 16, 1995, by and between
the Registrant and Edgar L. Brown, Jr. (Originally filed as
Exhibit 10.37)(7)
10.39 - Amendment, dated August 23, 1995, to Lease Agreement dated
July 18, 1990 with Northern Manchester Trust. (Originally filed
as Exhibit 10.38)(7)
10.40 - Customer Purchase Agreement, dated March 19, 1996, by and between
the Registrant and NewNet, Inc. (Originally filed as Exhibit
10.39)(7)
10.41 - +1996 Management Incentive Compensation Plan. (Originally filed
as Exhibit 10.40)(7)
10.42 - +1995 Stock Option Plan.
10.43 - Amendment, dated August 24, 1995, to Letter Agreement dated
October 15, 1992 by and between the Registrant and Fleet Bank of
Massachusetts, N.A.
11 - Statement Regarding Computation of Per Share Earnings. (7)
21 - Subsidiaries of the Registrant. (7)
23 - Consent of Coopers & Lybrand. (7)
(1) Incorporation herein by reference to the Registrant's Registration
Statement on Form S-1 (File No. 33-66602), as declared effective by the
Commission on September 23, 1993.
(2) Incorporation herein by reference to the Registrant's Amendment No. 2 to
its Annual Report on Form 10-K/A for the fiscal year ended March 31, 1994
filed with the Commission on June 19, 1998.
(3) Incorporation herein by reference to the Registrant's Annual Report on Form
10-K for the fiscal year ended March 31, 1995, filed with the Commission
on June 27, 1995.
(4) Incorporation herein by reference to the Registrant's Amendment No. 1 to
its Annual Report on Form 10-K/A for the fiscal year ended March 31, 1995,
filed with the Commission on May 9, 1997.
+ Management contract or compensatory plan or arrangement filed as an exhibit
pursuant to Item 14(c) of this report.
(5) Incorporation herein by reference to the Registrant's report on Form 8-K
filed with the Commission on March 6, 1995.
(6) Incorporation herein by reference to the Registrant's Amendment No. 2 to
its Annual Report on Form 10-K/A for the fiscal year ended March 31, 1995
as filed with the Commission on June 19, 1998
(7) Incorporation herein by reference to the Registrant's Annual Report on
Form 10-K for the fiscal year ended March 31, 1996 filed with the
Commission on June 17, 1996.
<PAGE> 5
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this amendment to the
report to be signed on its behalf by the undersigned, thereunto duly authorized.
Dated: June 19, 1998 Summa Four, Inc.
By: /s/ Jeffrey A. Weber
------------------------
Jeffrey A. Weber
Vice President and
Chief Financial Officer
<PAGE> 1
EXHIBIT 10.9
SUMMA FOUR, INC.
1993 DIRECTOR STOCK OPTION PLAN, AS AMENDED
1. PURPOSE
The purpose of this 1993 Director Stock Option Plan (the
"Plan") of Summa Four, Inc. (the "Company") is to encourage ownership in the
Company by outside directors of the Company whose continued services are
considered essential to the Company's future progress and to provide them with a
further incentive to remain as directors of the Company.
2. ADMINISTRATION
The Board of Directors shall supervise and administer the
Plan. Grants of stock options under the Plan and the amount and nature of the
awards to be granted shall be automatic in accordance with Section 5. However,
all questions of interpretation of the Plan or of any options issued under it
shall be determined by the Board of Directors and such determination shall be
final and binding upon all persons having an interest in the Plan.
3. PARTICIPATION IN THE PLAN
Directors of the Company who are not employees of the Company
or any subsidiary of the Company shall be eligible to participate in the Plan.
4. STOCK SUBJECT TO THE PLAN
a. The maximum number of shares which may be issued
under the Plan shall be 63,000 shares of the Company's Common Stock, par value
$.01 per share ("Common Stock"), subject to adjustment as provided in Section 9
of the Plan. All share amounts set forth in this Plan reflect the 3.5-for-1
stock split approved by the Board of Directors on July 14, 1993.
b. If any outstanding option under the Plan for any
reason expires or is terminated without having been exercised in full, the
shares allocable to the unexercised portion of such option shall again become
available for grant pursuant to the Plan.
c. All options granted under the Plan shall be
nonstatutory options not entitled to special tax treatment under Section 422 of
the Internal Revenue Code of 1986, as amended to date and as it may be amended
from time to time (the "Code").
<PAGE> 2
5. TERMS, CONDITIONS AND FORM OF OPTIONS
Each option granted under the Plan shall be evidenced by a
written agreement in such form as the Board of Directors shall from time to time
approve, which agreements shall comply with and be subject to the following
terms and conditions:
a. OPTION GRANT DATES.
i. Upon the initial election of any eligible director as
a director of the Company, the Company shall grant to
such director an option to purchase 7,000 shares of
Common Stock (the "Initial Option").
ii. On the date of each annual meeting of stockholders of
the Company, the Company shall grant to each eligible
director an option to purchase 2,500 shares of Common
Stock (the "Annual Option").
b. OPTION EXERCISE PRICE. The option exercise price per
share for each option granted under the Plan shall equal (i) the last reported
sales price per share of the Company's Common Stock on the NASDAQ National
Market System (or, if the Company is traded on a nationally recognized
securities exchange on the date of grant, the reported closing sales price per
share of the Company's Common Stock by such exchange) on the date of grant (or
if no such price is reported on such date such price as reported on the nearest
preceding day) or (ii) if the Common Stock is not traded on NASDAQ or an
exchange, the fair market value per share on the date of grant as determined by
the Board of Directors.
c. OPTIONS NON-TRANSFERABLE. Each option granted under
the Plan by its terms shall not be transferable by the optionee otherwise than
by will, or by the laws of descent and distribution, and shall be exercised
during the lifetime of the optionee only by him. No option or interest therein
may be transferred, assigned, pledged or hypothecated by the optionee during his
lifetime, whether by operation of law or otherwise, or be made subject to
execution, attachment or similar process.
d. EXERCISE PERIOD. Each Initial Option shall become
exercisable on a cumulative basis as to one-fifth of the shares subject to the
option on the date of grant of such option and each of the first, second, third
and fourth anniversaries of the date of grant. Each Annual Option shall be fully
exercisable on the date of grant. In the event an optionee ceases to serve as a
director, each such option may be exercised by the optionee (or, in the event of
his death, by his administrator, executor or heirs), at any time within 12
months after the optionee ceases to serve as a director, to the extent such
option was exercisable at the time of such cessation of
-2-
<PAGE> 3
service. Notwithstanding the foregoing, no option shall be exercisable after
the expiration of ten years from the date of grant.
e. EXERCISE PROCEDURE. Options may be exercised only by
written notice to the Company at its principal office accompanied by (i) payment
in cash of the full consideration for the shares as to which they are exercised
or (ii) 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.
6. ASSIGNMENTS
The rights and benefits of participants under the Plan may not
be assigned, whether voluntarily or by operation of law, except as provided in
Section 5(d).
7. EFFECTIVE DATE
The Plan shall become effective immediately upon its adoption
by the Board of Directors, but all grants of options shall be conditional upon
the approval of the Plan by the stockholders of the Company within 12 months
after adoption of the Plan by the Board of Directors.
8. LIMITATION OF RIGHTS
a. NO RIGHT TO CONTINUE AS A DIRECTOR. Neither the Plan,
nor the granting of an option nor any other action taken pursuant to the Plan,
shall constitute or be evidence of any agreement or understanding, express or
implied, that the Company will retain a director for any period of time.
b. NO STOCKHOLDERS' RIGHTS FOR OPTIONS. An optionee
shall have no rights as a stockholder with respect to the shares covered by his
options until the date of the issuance to him of a stock certificate therefor,
and no adjustment will be made for dividends or other rights (except as provided
in Section 9) for which the record date is prior to the date such certificate is
issued.
9. CHANGES IN COMMON STOCK
If the outstanding shares of Common Stock are increased,
decreased or exchanged for a different number or kind of shares or other
securities, or if additional shares or new or different shares or other
securities are distributed with respect to such shares of Common Stock or other
securities, through merger, consolidation, sale of all or substantially all of
the assets of the Company, reorganization, recapitalization, reclassification,
stock dividend, stock split, reverse stock split or
-3-
<PAGE> 4
other distribution with respect to such shares of Common Stock, or other
securities, an appropriate and proportionate adjustment will be made in (i) the
maximum number and kind of shares reserved for issuance under the Plan, (ii) the
number and kind of shares or other securities subject to then outstanding
options under the Plan and (iii) the price for each share subject to any then
outstanding options under the Plan, without changing the aggregate purchase
price as to which such options remain exercisable. No fractional shares will be
issued under the Plan on account of any such adjustments.
10. CHANGE IN CONTROL
Notwithstanding any other provision to the contrary in this
Plan, in the event of a Change of Control (as defined below), all options
outstanding as of the date such Change in Control occurs shall become
exercisable in full, whether or not exercisable in accordance with their terms.
A "Change in Control" shall occur or be deemed to have occurred only if any of
the following events occur: (i) any "person," as such term is used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") (other than the Company, any trustee or other fiduciary holding
securities under an employee benefit plan of the Company, or any corporation
owned directly or indirectly by the stockholders of the Company in substantially
the same proportion as their ownership of stock of the Company) is or becomes
the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Company representing 50% or more of
the combined voting power of the Company's then outstanding securities; (ii)
individuals who, as of the date this Plan is adopted, constitute the Board of
Directors of the Company (as of the date thereof, the "Incumbent Board") cease
for any reason to constitute at least a majority of the Board, provided that any
person becoming a director subsequent to the date thereof whose election, or
nomination for election by the Company's stockholders, was approved by a vote of
at least a majority of the directors then comprising the Incumbent Board (other
than an election or nomination of an individual whose initial assumption of
office is in connection with an actual or threatened election contest relating
to the election of the directors of the Company, as such terms are used in Rule
14a-11 of Regulation 14A under the Exchange Act) shall be, for purposes of this
Agreement, considered as though such person were a member of the Incumbent
Board; (iii) the stockholders of the Company approve a merger or consolidation
of the Company with any other corporation, other than (A) a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) more than 50% of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately after
such merger or consolidation or (B) a merger or consolidation effected to
implement a recapitalization of the Company (or similar transaction) in which no
"person" (as hereinabove defined) acquires more than 30% of the combined voting
power of the Company's then
-4-
<PAGE> 5
outstanding securities; or (iv) the stockholders of the Company approve a plan
of complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the Company's assets.
11. AMENDMENT OF THE PLAN
The Board of Directors may suspend or discontinue the Plan or
review or amend it in any respect whatsoever; provided, however, that without
approval of the stockholders of the Company no revision or amendment shall
change the number of shares subject to the Plan (except as provided in Section
9), change the designation of the class of directors eligible to receive
options, or materially increase the benefits accruing to participants under the
Plan. The Plan may not be amended more than once in any six-month period.
12. NOTICE
Any written notice to the Company required by any of the
provisions of the Plan shall be addressed to the Treasurer of the Company and
shall become effective when it is received.
13. GOVERNING LAW
The Plan and all determinations made and actions taken
pursuant hereto shall be governed by the laws of the State of New Hampshire.
-5-
<PAGE> 6
Adopted by the Board of Directors
on June 7, 1993.
Approved by the stockholders
on August 16, 1993.
Amended by the Board of Directors
on May 1, 1995.
Amendment approved by stockholders
on July 21, 1995.
-6-
<PAGE> 1
EXHIBIT 10.42
SUMMA FOUR, INC.
1995 STOCK OPTION PLAN
Adopted by the Board of Directors
on May 30, 1995
1. PURPOSE.
The purpose of this plan (the "Plan") is to secure for Summa Four, Inc.
(the "Company") and its stockholders the benefits arising from capital stock
ownership by employees and officers of, and consultants or advisors to, the
Company and its subsidiary corporations who are expected to contribute to the
Company's future growth and success. Except where the context otherwise
requires, the term "Company" shall include the parent and all present and future
subsidiaries of the Company as defined in Sections 424(e) and 424(f) of the
Internal Revenue Code of 1986, as amended or replaced from time to time (the
"Code") . Those provisions of the Plan which make express reference to Section
422 shall apply only to Incentive Stock Options (as that term is defined in the
Plan).
2. TYPE OF OPTIONS AND ADMINISTRATION.
(a) TYPES OF OPTIONS. Options granted pursuant to the Plan may be
either incentive stock options ("Incentive Stock Options") meeting the
requirements of Section 422 of the Code or Non-Statutory Options which are not
intended to meet the requirements of Section 422 of the Code ("Non-Statutory
Options").
(b) ADMINISTRATION.
(i) The Plan will be administered by the Board of
Directors of the Company, whose construction and interpretation of the
terms and provisions of the Plan shall be final and conclusive. The
Board of Directors may in its sole discretion grant options to purchase
shares of the Company's Common Stock ("Common Stock") and issue shares
upon exercise of such options as provided in the Plan. The Board shall
have authority, subject to the express provisions of the Plan, to
construe the respective option agreements and the Plan, to prescribe,
amend and rescind rules and regulations relating to the Plan, to
determine the terms and provisions of the respective option agreements,
which need not be identical, and to make all other determinations which
are, in the judgment of the Board of Directors, necessary or desirable
for the administration of the Plan. The Board of Directors may correct
any defect, supply any omission or reconcile any inconsistency in the
Plan or in any option agreement in the manner and to the extent it
shall deem expedient to carry the Plan into effect and it shall be the
sole and final judge of such expediency. No director or person acting
pursuant to authority delegated by
<PAGE> 2
the Board of Directors shall be liable for any action or determination
under the Plan made in good faith.
(ii) The Board of Directors may, to the full extent
permitted by or consistent with applicable laws or regulations and
Section 3(b) of this Plan delegate any or all of its powers under the
Plan to a committee (the "Committee") appointed by the Board of
Directors, and if the Committee is so appointed all references to the
Board of Directors in the Plan shall mean and relate to such Committee.
(c) APPLICABILITY OF RULE 16b-3. Those provisions of the Plan
which make express reference to Rule 16b-3 promulgated under the Securities
Exchange Act of 1934 (the "Exchange Act"), or any successor rule ("Rule 16b-3"),
or which are required in order for certain option transactions to qualify for
exemption under Rule 16b-3, shall apply only to such persons as are required to
file reports under Section 16(a) of the Exchange Act (a "Reporting Person").
3. ELIGIBILITY.
(a) GENERAL. Options may be granted to persons who are, at the
time of grant, employees (including employees who are directors of the Company)
or officers of, or consultants or advisors to, the Company; PROVIDED, that the
class of employees to whom Incentive Stock Options may be granted shall be
limited to all employees of the Company. A person who has been granted an option
may, if he or she is otherwise eligible, be granted additional options if the
Board of Directors shall so determine. Subject to adjustment as provided in
Section 15 below, the maximum number of shares with respect to which options may
be granted to any employee under the Plan shall not exceed 500,000 shares of
common stock in any one calendar year. For the purpose of calculating such
maximum number, (a) an option shall continue to be treated as outstanding
notwithstanding its repricing, cancellation or expiration and (b) the repricing
of an outstanding option or the issuance of a new option in substitution for a
cancelled option shall be deemed to constitute the grant of a new additional
option separate from the original grant of the option that is repriced or
cancelled.
(b) GRANT OF OPTIONS TO OFFICERS. For so long as Common Stock of
the Company is registered under the Exchange Act, the selection of an officer or
an officer who is also a director (as the terms "director" and "officer" are
defined for purposes of Rule 16b-3) as a recipient of an option, the timing of
the option grant, the exercise price of the option and the number of shares
subject to the option shall be determined either (i) by the Board of Directors,
of which all members shall be "disinterested persons" (as hereinafter defined),
or (ii) by two or more directors having full authority to act in the matter,
each of whom shall be a "disinterested person." For the purposes of the Plan, a
director shall be deemed to be a
-2-
<PAGE> 3
"disinterested person" only if such person qualifies as a "disinterested person"
within the meaning of Rule 16b-3, as such term is interpreted from time to time.
4. STOCK SUBJECT TO PLAN.
Subject to adjustment as provided in Section 15 below, the maximum
number of shares of Common Stock which may be issued and sold under the Plan is
500,000 shares. If an option granted under the Plan shall expire or terminate
for any reason without having been exercised in full, the unpurchased shares
subject to such option shall again be available for subsequent option grants
under the Plan. If shares issued upon exercise of an option under the Plan are
tendered to the Company in payment of the exercise price of an option granted
under the Plan, such tendered shares shall again be available for subsequent
option grants under the Plan; provided, that in no event shall such shares be
made available for issuance to Reporting Persons or pursuant to exercise of
Incentive Stock Options.
5. FORMS OF OPTION AGREEMENTS.
As a condition to the grant of an option under the Plan, each recipient
of an option shall execute an option agreement in such form not inconsistent
with the Plan as may be approved by the Board of Directors. Such option
agreements may differ among recipients.
6. PURCHASE PRICE.
(a) GENERAL. Subject to Section 3(b), the purchase price per share
of stock deliverable upon the exercise of an option shall be determined by the
Board of Directors at the time of grant of such option; provided, however, that
(i) in the case of Incentive Stock Options, the exercise price shall not be less
than 100% of the fair market value of such stock and (ii) in the case of
Non-Statutory Options, the exercise price shall not be less than 75% of the fair
market value of such stock, and (iii) in the case of options described in
Section 11(b), the exercise price shall not be less than 110% of the fair market
value of such stock.
(b) PAYMENT OF PURCHASE PRICE. Options granted under the Plan may
provide for the payment of the exercise price by delivery of cash or a check to
the order of the Company in an amount equal to the exercise price of such
options, or, to the extent provided in the applicable option agreement, or
otherwise agreed to by the Company, (i) by delivery to the Company of shares of
Common Stock of the Company already owned by the optionee having a fair market
value equal in amount to the exercise price of the options being exercised or
(ii) by any other means (including, without limitation, by delivery of a
promissory note of the optionee payable on such terms as are specified by the
Board of Directors) which the Board of Directors determines are consistent with
the purpose of the Plan and with applicable
-3-
<PAGE> 4
laws and regulations (including, without limitation, the provisions of
Regulation T promulgated by the Federal Reserve Board). The fair market value of
any shares of the Company's Common Stock or other non-cash consideration which
may be delivered upon exercise of an option shall be determined by the Board of
Directors.
7. OPTION PERIOD.
Each option and all rights thereunder shall expire on such date as
shall be set forth in the applicable option agreement, except that, in the case
of an Incentive Stock Option, such date shall not be later than ten years after
the date on which the option is granted and, in all cases, options shall be
subject to earlier termination as provided in the Plan.
8. EXERCISE OF OPTIONS.
Each option granted under the Plan shall be exercisable either in full
or in installments at such time or times and during such period as shall be set
forth in the agreement evidencing such option, subject to the provisions of the
Plan.
9. NONTRANSFERABILITY OF OPTIONS.
All options granted 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
Non-Statutory Options may be transferred pursuant to a qualified domestic
relations order (as defined in Rule 16b-3).
10. EFFECT OF TERMINATION OF EMPLOYMENT OR OTHER RELATIONSHIP.
Except as provided in Section 11(d) with respect to Incentive Stock
Options, and subject to the provisions of the Plan, the Board of Directors shall
determine the period of time during which an optionee may exercise an option
following (i) the termination of the optionee's employment or other relationship
with the Company or (ii) the death or disability of the optionee. Such periods
shall be set forth in the agreement evidencing such option.
11. 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:
-4-
<PAGE> 5
(a) EXPRESS DESIGNATION. 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.
(b) 10% STOCKHOLDER. 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 rules of Section 424(d) of the Code), then the
following special provisions shall be applicable to the Incentive Stock Option
granted to such individual:
(i) 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
(ii) the option exercise period shall not exceed five
years from the date of grant.
(c) DOLLAR LIMITATION. 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.
(d) TERMINATION OF EMPLOYMENT, DEATH OR DISABILITY. No Incentive
Stock Option may be exercised unless, at the time of such exercise, the optionee
is, and has been continuously since the date of grant of his or her option,
employed by the Company, except that:
(i) an Incentive Stock Option may be exercised within the
period of three months after the date the optionee ceases to be an
employee of the Company (or within such lesser period as may be
specified in the applicable 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 non-statutory option under the Plan;
(ii) if the optionee dies while in the employ of the
Company, or within three months after the optionee ceases to be such an
employee, the Incentive Stock Option may be exercised by the person to
whom it is transferred by will or the laws of descent and distribution
within the period of
-5-
<PAGE> 6
one year after the date of death (or within such lesser period as may
be specified in the applicable option agreement); and
(iii) if the optionee 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 the optionee
ceases to be such an employee because of such disability (or within
such lesser period as may be specified in the applicable 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.
12. ADDITIONAL PROVISIONS.
(a) ADDITIONAL OPTION PROVISIONS. The Board of Directors may, in
its sole discretion, include additional provisions in option agreements covering
options granted under the Plan, including without limitation restrictions on
transfer, repurchase rights, commitments to pay cash bonuses, to make, arrange
for or guaranty loans or to transfer other property to optionees upon exercise
of options, or such other provisions as shall be determined by the Board of
Directors; PROVIDED THAT such additional provisions shall not be inconsistent
with any other term or condition of the Plan and such additional provisions
shall not cause any Incentive Stock Option granted under the Plan to fail to
qualify as an Incentive Stock Option within the meaning of Section 422 of the
Code.
(b) ACCELERATION, EXTENSION, ETC. The Board of Directors may, in
its sole discretion, (i) accelerate the date or dates on which all or any
particular option or options granted under the Plan may be exercised or (ii)
extend the dates during which all, or any particular, option or options granted
under the Plan may be exercised.
13. GENERAL RESTRICTIONS.
(a) INVESTMENT REPRESENTATIONS The Company may require any person
to whom an option is granted, as a condition of exercising such option, to give
written assurances in substance and form satisfactory to the Company to the
effect that such person is acquiring the Common Stock subject to the option for
his or her own account for investment and not with any present intention of
selling or otherwise distributing the same, and to such other effects as the
Company deems necessary or appropriate in order to comply with federal and
applicable state securities laws, or
-6-
<PAGE> 7
with covenants or representations made by the Company in connection with any
public offering of its Common Stock.
(b) COMPLIANCE WITH SECURITIES LAWS. Each option shall be subject
to the requirement that if, at any time, counsel to the Company shall determine
that the listing, registration or qualification of the shares subject to such
option upon any securities exchange or under any state or federal law, or the
consent or approval of any governmental or regulatory body, or that the
disclosure of non-public information or the satisfaction of any other condition
is necessary as a condition of, or in connection with, the issuance or purchase
of shares thereunder, such option may not be exercised, in whole or in part,
unless such listing, registration, qualification, consent or approval, or
satisfaction of such condition shall have been effected or obtained on
conditions acceptable to the Board of Directors. Nothing herein shall be deemed
to require the Company to apply for or to obtain such listing, registration or
qualification, or to satisfy such condition.
14. RIGHTS AS A STOCKHOLDER.
The holder of an option shall have no rights as a stockholder with
respect to any shares covered by the option (including, without limitation, any
rights to receive dividends or non-cash distributions with respect to such
shares) until the date of issue of a stock certificate to him or her for such
shares. No adjustment shall be made for dividends or other rights for which the
record date is prior to the date such stock certificate is issued.
15. ADJUSTMENT PROVISIONS FOR RECAPITALIZATIONS AND RELATED TRANSACTIONS.
(a) GENERAL. If, through or as a result of any merger,
consolidation, sale of all or substantially all of the assets of the Company,
reorganization, recapitalization, reclassification, stock dividend, stock split,
reverse stock split or other similar transaction, (i) the outstanding shares of
Common Stock are increased, decreased or exchanged for a different number or
kind of shares or other securities of the Company, or (ii) additional shares or
new or different shares or other securities of the Company or other non-cash
assets are distributed with respect to such shares of Common Stock or other
securities, an appropriate and proportionate adjustment may be made in (x) the
maximum number and kind of shares reserved for issuance under the Plan, (y) the
number and kind of shares or other securities subject to any then outstanding
options under the Plan, and (z) the price for each share subject to any then
outstanding options under the Plan, without changing the aggregate purchase
price as to which such options remain exercisable. Notwithstanding the
foregoing, no adjustment shall be made pursuant to this Section 15 if such
adjustment would cause the Plan to fail to comply with Section 422 of the Code.
-7-
<PAGE> 8
(b) BOARD AUTHORITY TO MAKE ADJUSTMENTS. Any adjustments under
this Section 15 will be made by the Board of Directors, whose determination as
to what adjustments, if any, will be made and the extent thereof will be final,
binding and conclusive. No fractional shares will be issued under the Plan on
account of any such adjustments.
16. CHANGE OF CONTROL.
Notwithstanding any other provision to the contrary in this Plan, in
the event of a Change of Control (as defined below), all options outstanding as
of the date such Change in Control occurs shall become exercisable in full,
whether or not exercisable in accordance with their terms. A "Change in Control"
shall occur or be deemed to have occurred only if any of the following events
occur: (i) any "person," as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") (other than the
Company, any trustee or other fiduciary holding securities under an employee
benefit plan of the Company, or any corporation owned directly or indirectly by
the stockholders of the Company in substantially the same proportion as their
ownership of stock of the Company) is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing 50% or more of the combined voting power
of the Company's then outstanding securities; (ii) individuals who, as of the
date this Plan is adopted, constitute the Board of Directors of the Company (as
of the date thereof, the "Incumbent Board") cease for any reason to constitute
at least a majority of the Board, provided that any person becoming a director
subsequent to the date thereof whose election, or nomination for election by the
Company's stockholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board (other than an election or
nomination of an individual whose initial assumption of office is in connection
with an actual or threatened election contest relating to the election of the
directors of the Company, as such terms are used in Rule 14a-11 of Regulation
14A under the Exchange Act) shall be, for purposes of this Agreement, considered
as though such person were a member of the Incumbent Board; (iii) the
stockholders of the Company approve a merger or consolidation of the Company
with any other corporation, other than (A) a merger or consolidation which would
result in the voting securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) more than 50% of the
combined voting power of the voting securities of the Company or such surviving
entity outstanding immediately after such merger or consolidation or (B) a
merger or consolidation effected to implement a recapitalization of the Company
(or similar transaction) in which no "person" (as hereinabove defined) acquires
more than 30% of the combined voting power of the Company's then outstanding
securities; or (iv) the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all of the Company's assets.
-8-
<PAGE> 9
17. NO SPECIAL EMPLOYMENT RIGHTS.
Nothing contained in the Plan or in any option shall confer upon any
optionee any right with respect to the continuation of his or her employment by
the Company or interfere in any way with the right of the Company at any time to
terminate such employment or to increase or decrease the compensation of the
optionee.
18. OTHER EMPLOYEE BENEFITS.
Except as to plans which by their terms include such amounts as
compensation, the amount of any compensation deemed to be received by an
employee as a result of the exercise of an option or the sale of shares received
upon such exercise will not constitute compensation with respect to which any
other employee benefits of such employee are determined, including, without
limitation, benefits under any bonus, pension, profit-sharing, life insurance or
salary continuation plan, except as otherwise specifically determined by the
Board of Directors.
19. AMENDMENT OF THE PLAN.
(a) The Board of Directors may at any time, and from time to time,
modify or amend the Plan in any respect, except that if at any time the approval
of the stockholders of the Company is required under Section 422 of the Code or
any successor provision with respect to Incentive Stock Options, or under Rule
16b-3, the Board of Directors may not effect such modification or amendment
without such approval.
(b) The termination or any modification or amendment of the Plan
shall not, without the consent of an optionee, affect his or her rights under an
option previously granted to him or her. With the consent of the optionee
affected, the Board of Directors may amend outstanding option agreements in a
manner not inconsistent with the Plan. The Board of Directors shall have the
right to amend or modify (i) the terms and provisions of the Plan and of any
outstanding Incentive Stock Options granted under the Plan to the extent
necessary to qualify any or all such options for such favorable federal income
tax treatment (including deferral of taxation upon exercise) as may be afforded
incentive stock options under Section 422 of the Code and (ii) the terms and
provisions of the Plan and of any outstanding option to the extent necessary to
ensure the qualification of the Plan under Rule 16b-3.
20. WITHHOLDING.
(a) The Company shall have the right to deduct from payments of
any kind otherwise due to the optionee any federal, state or local taxes of any
kind required by
-9-
<PAGE> 10
law to be withheld with respect to any shares issued upon exercise of options
under the Plan. Subject to the prior approval of the Company, which may be
withheld by the Company in its sole discretion, the optionee may elect to
satisfy such obligations, in whole or in part, (i) by causing the Company to
withhold shares of Common Stock otherwise issuable pursuant to the exercise of
an option or (ii) by delivering to the Company shares of Common Stock already
owned by the optionee. The shares so delivered or withheld shall have a fair
market value equal to such withholding obligation. The fair market value of the
shares used to satisfy such withholding obligation shall be determined by the
Company as of the date that the amount of tax to be withheld is to be
determined. An optionee who has made an election pursuant to this Section 20(a)
may only satisfy his or her withholding obligation with shares of Common Stock
which are not subject to any repurchase, forfeiture, unfulfilled vesting or
other similar requirements.
(b) Notwithstanding the foregoing, in the case of a Reporting
Person, no election to use shares for the payment of withholding taxes shall be
effective unless made in compliance with any applicable requirements of Rule
16b-3 (unless it is intended that the transaction not qualify for exemption
under Rule 16b-3).
21. CANCELLATION AND NEW GRANT OF OPTIONS, ETC.
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.
22. EFFECTIVE DATE AND DURATION OF THE PLAN.
(a) EFFECTIVE DATE. The Plan shall become effective when adopted
by the Board of Directors, but no option granted under the Plan shall become
exercisable 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, options previously granted
under the Plan shall not vest and shall terminate and no options 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 (as provided in Section 19) shall become
effective when adopted by the Board of Directors, but no option granted after
the date of such amendment shall become exercisable (to the extent that such
amendment to the Plan was required to grant such option to a
-10-
<PAGE> 11
particular person) 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 options granted on
or after the date of such amendment shall terminate to the extent that such
amendment was required to enable the Company to grant such option to a
particular optionee. Subject to this limitation, options may be granted under
the Plan at any time after the effective date and before the date fixed for
termination of the Plan.
(b) TERMINATION. Unless sooner terminated in accordance with
Section 16 herein, the Plan shall terminate upon the close of business on the
day next preceding the tenth anniversary of the date of its adoption by the
Board of Directors. Options outstanding on such date shall continue to have
force and effect in accordance with the provisions of the instruments evidencing
such options.
23. PROVISION FOR FOREIGN PARTICIPANTS.
The Board of Directors may, without amending the Plan, modify awards or
options granted to participants who are foreign nationals or employed outside
the United States to recognize differences in laws, rules, regulations or
customs of such foreign jurisdictions with respect to tax, securities, currency,
employee benefit or other matters.
Adopted by the Board of Directors on
May 30, 1995
Adopted by the Stockholders of the Company
on July 21, 1995
-11-
<PAGE> 1
EXHIBIT 10.43
FLEET BANK
August 24, 1995
Mr. Thomas A. St. Germain
Chief Financial Officer
Summa Four, Inc.
25 Sundial Avenue
Manchester, NH 03103
Dear Tom:
Reference is hereby made to the Letter Agreement (the "Agreement") executed by
and between Summa Four, Inc. and Fleet Bank of Massachusetts, N.A. as of October
15, 1992 and amended as of July 28, 1993 and August 2, 1994. We are pleased to
inform you that we have approved an extension of the Expiration from September
1, 1995 to September 1, 1996. Nothing herein shall be deemed to constitute a
waiver, release or amendment of any other terms of the agreement.
The Borrower represents and warrants that the execution of this amendment has
been duly authorized by the Borrower by all necessary corporate and other action
and that the execution will not conflict with, violate the provisions of, or
cause a default or constitute an event which, with the passage of time or giving
of notice or both, could cause a default on the part of the Borrower under its
charter documents or by-laws or under any contract, agreement, law, rule, order,
ordinance, franchise, instrument or other document, or result in the imposition
of any lien or encumbrance of any property or asset of the Borrower.
The Borrower further represents that this agreement and the attached Promissory
Note each represent legal, valid and binding obligations of the Borrower,
enforceable against the Borrower in accordance with their respective terms. In
addition, the statements, representations and warranties made in the Agreement
continue to be correct as of the date hereof and the Borrower is in compliance
with all terms of the Agreement. Except as expressly affected hereby, the
Agreement remains in full force and effect as heretofore.
<PAGE> 2
Tom, we are pleased to extend the Agreement and look forward to continuing our
relationship with Summa Four. Please sign below and execute the attached note to
evidence your acceptance of this amendment.
Sincerely,
/s/Thomas W. Davies
- ----------------------------
Thomas W. Davies
Vice President
High Technology Group
Agreed and Accepted: /s/ Thomas A. St. Germain 9/28/95
--------------------------------- ------------
by: date:
title:
