LOGO
This Amendment No. 1 on Form 10-K/A to Annual Report on Form 10-K, originally
filed with the Securities and Exchange Commission on March 31, 1998, is being
filed for the purposes of revising Item 11.
ITEM 11. EXECUTIVE COMPENSATION
The following table sets forth information concerning the compensation for
the last three fiscal years of the Company's Chief Executive Officer and the
Company's other most highly compensated executive officers (together, the "Named
Executive Officers") for the year ended December 31, 1997.
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
----------------------------------------------- -----------------
NAME/POSITION YEAR SALARY($) BONUS($) OTHER(1) OPTIONS(#)
- ---------------------------------- ------- ----------------- ----------------- ------------------- -----------------
Lynn C. Chapman (2)............... 1995 141,928 11,355 -- 25,000
President and Chief 1996 140,578 -- 1,125 75,000
Executive Officer 1997 156,546 21,750 2,375 29,000
Richard D. Rose (3)............... 1995 -- -- -- --
Vice President, Finance and 1996 -- -- -- --
Chief Financial Officer 1997 120,000 4,000 -- 45,000
J. Gerard Cregan.................. 1995 147,744 11,355 -- 25,000
Vice President, Operations 1996 143,948 -- -- 50,000
1997 115,946 9,063 -- 9,000
G. Brent Wilson................... 1995 96,796 -- -- 20,000
Vice President, Engineering 1996 109,701 -- -- 25,000
Services 1997 114,815 14,500 -- 12,000
Charles W. Stein (4).............. 1995 203,542 22,710 -- 60,000
Former President and Chief 1996 204,789 -- 1,125 150,000
Financial Officer 1997 225,592 -- 693 --
Karl W. Finkelnburg............... 1995 366,356 -- -- --
Vice President, Sales 1996 219,180 -- 750 7,500
American Operations 1997 197,230 -- 1,544 13,000
_____________
(1) Represents matching 401(k) plan contributions by the Company.
(2) Mr. Chapman was made President and Chief Executive Officer of the Company in
February 1997.
(3) Mr. Rose joined the Company as Chief Financial Officer in October 1997.
Salary amount represents annualized compensation.
(4) Mr. Stein resigned as President and Chief Executive Officer of the Company
and was elected to serve as Chairman of the Board of Directors of the
Company in January 1997. He resigned as Chairman of the Board of Directors
of the Company in March 1997.
OPTION GRANTS
The following table summarizes option grants during 1997 to the Named
Executive Officers:
STOCK OPTION GRANTS IN LAST FISCAL YEAR
Percent
of Total Potential Realizable
OPTIONS VALUE AT ASSUMED
GRANTED TO MARKET ANNUAL RATES OF
OPTIONS EMPLOYEES EXERCISE PRICE STOCK PRICE APPRECIATION
Granted In Fiscal Price ($/Share) Expiration FOR OPTION TERM (C)
------------------------------
Name (#)(A) Year ($/Share) (B) Date 0%($) 5%($) $10%($)
- -----------------------------------------------------------------------------------------------------------------
Lynn C. Chapman 29,000(D) 7.3% $2.33 $2.33 3/12/07 -- $42,494 $107,689
Richard D. Rose 45,000(E) 11.3 1.63 1.63 11/20/07 -- 46,129 116,901
J. Gerard Cregan 9,000(D) 2.3 2.33 2.33 3/12/07 -- 13,188 33,421
G. Brent Wilson 12,000(D) 3.0 2.33 2.33 3/12/07 -- 17,584 44,561
Charles W. Stein -- -- -- -- -- -- -- --
Karl W. Finkelnburg 13,000(D) 3.3 2.33 -- 3/12/07 -- 19,049 48,224
_____________
(A) Under the terms of the Company's incentive stock option plan, the Board of
Directors retains discretion, subject to plan limits, to modify the terms of
the outstanding options and to reprice the options. The options were
granted for a term of 10 years, subject to earlier termination in the event
of termination of employment. The options were granted with tandem tax
withholding rights.
(B) Equals fair market value of Common Stock on the date of grant.
(C) Amounts represent hypothetical gains that could be achieved for the
respective options if exercised at the end of the option term. These gains
are based on assumed rates of stock price appreciation of 0%, 5% and 10%
compounded annually from the date of grant to their expiration date. Actual
gains, if any, on stock option exercises will depend upon the future
performance of the Common Stock and the date on which the options are
exercised.
(D) Identified options were granted March 11, 1997, and become exercisable in
equal monthly installments on the 11th day of each calendar month following
the date of grant, with full vesting occurring on the fifth anniversary
date.
(E) Identified options were granted November 19, 1997, and become exercisable in
equal monthly installments on the 19th day of each calendar month following
the date of grant, with full vesting occurring on the fifth anniversary
date.
OPTION EXERCISES AND YEAR-END VALUES
The following table summarizes option exercises during 1997 by the Named
Executive Officers and the value of the options held by such persons at the end
of 1997:
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND YEAR-END OPTION VALUES
SHARES
ACQUIRED NUMBER OF VALUE OF UNEXERCISED
ON VALUE UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
EXERCISE REALIZED AT FISCAL YEAR-END (#) AT FISCAL YEAR-END ($)(A)
---------------------------- ---------------------------
NAME (#) ($) $EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------------------------------------------------------------------------------------------------
Lynn C. Chapman -- -- 66,996 74,004 -- --
Richard D. Rose -- -- 750 44,250 -- --
J. Gerard Cregan -- -- 65,425 42,658 -- --
G. Brent Wilson -- -- 31,247 36,779 -- --
Charles W. Stein 44,048 $(13,743) 91,327 101,625 -- --
_____________
(A) Value is based on the closing sales price of the Company's Common Stock on
December 31, 1997 ($1.06), the last trading day of 1997, less the applicable
option exercise price.
Option Repricing
The following table sets forth certain information concerning all
repricings of options held by any executive officer of the Corporation since
October 24, 1996 (the date on which the Corporation became a reporting company
under the Securities Exchange Act of 1934, as amended (the "Exchange Act")):
10-YEAR OPTION REPRICINGS
Number of Exercise Price
Shares per Share at Length of
Subject to Time of New Exercise Original Option Term
Option Repricing or Price Per Remaining at Date of
Executive Officer Date Repriced (#) Amendment ($) Share ($)(1) Repricing or Amendment
----------------- ---- ------------ ------------- ------------ ----------------------
Stephen J. Byars...... 7/11/97 730 $5.75 $2.33 5.9 years
7/11/97 10,000 4.13 2.33 8.3 years
7/11/97 4,000 7.87 2.33 8.9 years
7/11/97 19,000 3.25 2.33 9.7 years
Lynn C. Chapman....... 12/17/97 5,000 5.75 2.33 5.4 years
12/17/97 10,000 6.25 2.33 6.4 years
12/17/97 10,000 8.69 2.33 7.2 years
12/17/97 15,000 2.56 2.33 7.5 years
12/17/97 72,000 4.75 2.33 8.3 years
12/17/97 29,000 3.25 2.33 9.3 years
Nicholas Doyle....... 7/11/97 5,000 5.13 2.33 8.2 years
7/11/97 8,833 4.13 2.33 8.3 years
7/11/97 2,000 7.87 2.33 9.7 years
7/11/97 7,000 3.25 2.33 10.8 years
J. Gerard Creegan.... 7/11/97 2,083 1.68 2.33 3.8 years
7/11/97 5,000 6.72 2.33 4.5 years
7/11/97 8,000 5.75 2.33 5.9 years
7/11/97 9,000 6.25 2.33 6.8 years
7/11/97 10,000 8.69 2.33 7.6 years
7/11/97 15,000 2.56 2.33 8.2 years
7/11/97 50,000 4.75 2.33 8.7 years
7/11/97 9,000 3.25 2.33 9.7 years
Karl W. Finkelnburg.. 7/11/97 7,500 7.87 2.33 8.9 years
7/11/97 13,000 3.25 2.33 9.7 years
Glenn Hunt........... 7/11/97 2,075 5.75 2.33 5.9 years
7/11/97 1,500 6.25 2.33 6.8 years
7/11/97 12,000 4.13 2.33 8.3 years
7/11/97 2,500 7.87 2.33 8.9 years
7/11/97 18,000 3.25 2.33 9.7 years
Damon W. Kenison..... 7/11/97 1,724 5.75 2.33 5.9 years
7/11/97 2,000 6.25 2.33 6.8 years
7/11/97 8,000 4.13 2.33 8.3 years
7/11/97 5,500 7.87 2.33 8.9 years
7/11/97 2,390 3.25 2.33 9.7 years
Steven J. Rebovich... 7/11/97 8,000 5.13 2.33 8.2 years
7/11/97 7,000 4.13 2.33 8.3 years
7/11/97 2,000 7.87 2.33 8.9 years
7/11/97 17,000 3.25 2.33 9.7 years
G. Brent Wilson...... 7/11/97 1,666 1.68 2.33 3.7 years
7/11/97 6,360 5.75 2.33 5.9 years
7/11/97 3,000 6.25 2.33 6.8 years
7/11/97 20,000 4.13 2.33 8.3 years
7/11/97 25,000 4.75 2.33 8.7 years
7/11/97 12,000 3.25 2.33 9.7 years
(1) The exercise price per share is equal to 120% of the market price per share
of the Common Stock at the time of the repricing.
SIGNATURES
----------
PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(D) OF THE SECURITIES AND
EXCHANGE ACT OF 1934, THE REGISTRANT HAS DULY CAUSED THIS AMENDMENT NO. 1 TO BE
SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED.
NETRIX CORPORATION
Date: September 9, 1998 By: /s/ Lynn C. Chapman
-------------------------------------
LYNN C. CHAPMAN
PRESIDENT AND CHIEF EXECUTIVE OFFICER