<PAGE> <PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
______ Exchange Act of 1934
For the quarterly period ended March 31, 1994 or
Transition Report Pursuant to Section 13 or 15(d) of the Securities
______ Exchange Act of 1934
For the transition period from ____________ to ____________
Commission file number 1-6435
___________________________________
Bolt Beranek and Newman Inc.
__________________________________________________________________________
(Exact name of registrant as specified in its charter)
Massachusetts 04-2164398
____________________________________ ________________________
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
150 CambridgePark Drive, Cambridge, Massachusetts 02140
__________________________________________________________________________
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (617) 873-2000
------------------------
__________________________________________________________________________
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the Company (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
Company was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
______ ______
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Number of shares of common stock, $1.00 par value, outstanding as of
April 30, 1994: 16,372,695
Exhibit index appears on page 15
Page 1 of 44 pages
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BOLT BERANEK AND NEWMAN INC.
INDEX
Page No.
________
Part I. Financial Information
Consolidated Statements of Operations -
Three Months Ended March 31, 1994 and 1993 ......3
Consolidated Statements of Operations -
Nine Months Ended March 31, 1994 and 1993 .......4
Consolidated Balance Sheets -
as of March 31, 1994 and June 30, 1993 ..........5
Consolidated Statements of Cash Flows -
Nine Months Ended March 31, 1994 and 1993 .......6
Notes to Consolidated Financial Statements ..........7
Management's Discussion and Analysis of Financial
Condition and Results of Operations .............9
Part II.Other Information
Item 6. Exhibits and Reports on Form 8-K ..........14
Signatures .........................................14
<PAGE> <PAGE>
PART I. FINANCIAL INFORMATION
BOLT BERANEK AND NEWMAN INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Dollars in thousands, except per-share data
Three Months Ended
______________________________
March 31 March 31
1994 1993
____________ ____________
Revenue:
Services $ 40,847 $ 42,234
Products 7,678 12,579
____________ ____________
48,525 54,813
____________ ____________
Costs and expenses:
Cost of services 29,860 29,145
Cost of products 3,031 7,080
Research and development expenses 5,787 8,697
Selling, general and administrative expenses 12,203 15,595
____________ ___________
50,881 60,517
____________ ____________
Loss from operations (2,356) (5,704)
Interest income 494 326
Interest expense (1,142) (1,109)
Minority interest 743
Other income (expense), net 2 (153)
____________ ____________
Net loss $ (2,259) $ (6,640)
============ ============
Net loss per share $ (.14) $ (.42)
============ ============
Shares used in per-share calculations 16,295,000 15,754,000
The accompanying notes are an integral
part of the consolidated financial statements
<PAGE> <PAGE>
BOLT BERANEK AND NEWMAN INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Dollars in thousands, except per-share data
Nine Months Ended
______________________________
March 31 March 31
1994 1993
____________ _____________
Revenue:
Services $ 124,090 $ 131,034
Products 22,772 48,051
____________ ____________
146,862 179,085
____________ ____________
Costs and expenses:
Cost of services 89,177 89,296
Cost of products 9,518 23,112
Research and development expenses 16,709 26,238
Selling, general and administrative expenses 37,866 49,186
Restructuring charge 20,470
____________ ____________
153,270 208,302
____________ ____________
Loss from operations (6,408) (29,217)
Interest income 1,718 1,047
Interest expense (3,478) (3,390)
Minority interest 1,328
Other income, net 968 (87)
____________ ____________
Net loss $ (5,872) $ (31,647)
============ ============
Net loss per share $ (.36) $ (2.02)
============ ============
Shares used in per-share calculations 16,116,000 15,687,000
The accompanying notes are an integral
part of the consolidated financial statements
<PAGE> <PAGE>
BOLT BERANEK AND NEWMAN INC.
CONSOLIDATED BALANCE SHEETS
Dollars in thousands
March 31 June 30
1994 1993
___________ ___________
(Unaudited) (Audited)
ASSETS
Current assets:
Cash and temporary investments $ 63,710 $ 56,835
Accounts receivable, net 49,118 49,676
Inventories, net 1,168 1,830
Other current assets 3,410 6,742
___________ ___________
Total current assets 117,406 115,083
Property, plant and equipment, net 19,741 20,861
Other assets 3,278 4,701
___________ ___________
$ 140,425 $ 140,645
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 3,070 $ 2,891
Accrued compensation and retirement plan 4,575 3,600
Accrued restructuring charges 14,024 18,343
Other accrued costs 23,302 20,921
Deferred revenue 11,268 11,338
___________ ___________
Total current liabilities 56,239 57,093
6% convertible subordinated debentures due 2012 73,510 73,510
Commitments and contingencies
Minority interest 2,918
Shareholders' equity:
Common stock, $1 par value, authorized:
100,000,000 shares; issued: 21,133,011 shares at
March 31, 1994 and 20,710,223 shares at
June 30, 1993 21,133 20,710
Additional paid-in capital 55,044 52,093
Foreign currency translation adjustment (135) (206)
Accumulated deficit (34,175) (28,303)
___________ ___________
41,867 44,294
Less shares in treasury, at cost: 4,797,734 shares
at March 31, 1994 and 4,817,936 shares at
June 30, 1993 34,109 34,252
___________ ___________
Total shareholders' equity 7,758 10,042
___________ ___________
$ 140,425 $ 140,645
============ ===========
The accompanying notes are an integral
part of the consolidated financial statements
<PAGE> <PAGE>
BOLT BERANEK AND NEWMAN INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Dollars in thousands
Nine Months Ended
_________________________
March 31 March 31
1994 1993
___________ ___________
Cash flows from operating activities:
Net loss $ (5,872) $ (31,647)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and amortization 6,659 9,088
Amortization of purchased and capitalized software 1,120 1,064
Restructuring charge 20,470
Change in assets and liabilities:
Accounts receivable 558 10,715
Inventories 662 (78)
Other assets 3,635 (31)
Accounts payable and other liabilities 3,581 2,448
Accrued restructuring charges (4,319) (4,650)
Deferred revenue (70) 373
Other (2,010) 613
___________ __________
Total adjustments 9,816 40,012
___________ ___________
Net cash provided by operating activities 3,944 8,365
Cash used by investing activities:
Additions to property, plant and equipment (4,479) (6,022)
Cash flows from financing activities:
Proceeds from sale of LightStream stock 5,000
Proceeds from employee stock purchase and option plans 2,197 648
(Purchase)/sale of treasury shares 213 (723)
Dividends paid (473)
___________ ___________
Net cash provided (used) by financing activities 7,410 (548)
___________ ___________
Net increase in cash and temporary investments 6,875 1,795
Cash and temporary investments-beginning of period 56,835 45,769
___________ ___________
Cash and temporary investments-end of period $ 63,710 $ 47,564
=========== ===========
Supplemental cash flow information:
Interest paid $ 2,225 $ 2,239
=========== ===========
The accompanying notes are an integral
part of the consolidated financial statements
<PAGE> <PAGE>
BOLT BERANEK AND NEWMAN INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A. Basis of Presentation
The financial information included herein, with the exception of the
consolidated balance sheet at June 30, 1993, has not been audited.
However, in the opinion of management, all material adjustments,
consisting only of normal recurring accruals (except for the $20,470,000
restructuring charge recorded in the second quarter of FY1993) necessary
for a fair presentation of the results for these periods, have been
reflected. The results for these periods are not necessarily indicative
of the results for the full fiscal year. Certain amounts reported for
the prior periods presented have been reclassified to be consistent with
the current year's presentation.
B. Commitments and Contingencies
The company, like other companies doing business with the U.S.
government, is subject to routine audit, and in certain circumstances to
inquiry, review, or investigation, by U.S. government agencies, of its
compliance with government procurement policies and practices. In April
1991, the company was informed that it was the subject of an
investigation by U.S. government agencies of its compliance with certain
government procurement policies and practices. No allegations have been
made by the government agencies. Based upon government procurement
regulations, under certain circumstances a contractor violating or not
complying with procurement regulations can be subject to legal or
administrative proceedings, including fines and penalties, as well as be
suspended or debarred from contracting with the government. The
company's policy has been and continues to be to conduct its activities
in compliance with all applicable rules and regulations.
The company is subject to other legal proceedings and claims which arise
in the ordinary course of its business. In the opinion of management,
the results of these other legal proceedings and claims will not have a
material effect on the company's consolidated financial position and
results of operations.
C. Organizational Structure
The company is comprised of the Systems and Technologies Division,
LightStream Corporation and Software Products Corporation. The Systems
and Technologies Division is responsible for virtually all government
contracts as well as the company's network systems and defense
communications systems businesses and, effective April 1, 1994, the T/10
Integrated Access Device activities. LightStream Corporation is
responsible for the development, marketing and sale of the LightStream
2010TM Asynchronous Transfer Mode ("ATM") switch. Software Products
Corporation develops, markets and supports data analysis computer
software products designed primarily for manufacturing, research and
development, engineering, clinical research, and scientific
applications.
<PAGE> <PAGE>
BOLT BERANEK AND NEWMAN INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)
D. Formation of LightStream Corporation
In October 1993, the company and Ungermann-Bass Inc. completed an
agreement to form LightStream Corporation, a new ATM networking company.
Under the terms of the agreement, the company and Ungermann-Bass have
combined ATM-related technology, staff and other resources to form
LightStream Corporation, which is initially 80% owned by the company and
a 20% minority interest owned by Ungermann-Bass. The company and
Ungermann-Bass have contributed $15,000,000 and $5,000,000 in cash,
respectively, to fund the enterprise. The company and Ungermann-Bass
have signed non-exclusive OEM agreements with LightStream Corporation
under which they will distribute the company's products.
<PAGE> <PAGE>
BOLT BERANEK AND NEWMAN INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Summary
- - -------
The company reported a loss of $2.3 million, or $.14 per share, on revenue
of $48.5 million for the third quarter ended March 31, 1994. These results
compare to a loss of $6.6 million, or $.42 per share, on revenue of $54.8
million for the same period a year ago. Results for the prior year's
quarter included revenue of approximately $6.7 million from the company's
former Advanced Simulation business unit which was sold in April 1993. The
decrease in revenue for the third quarter of FY1994 compared to the prior
year's third quarter also reflects a decline in the company's defense
communications systems business. For the three months ended March 31, 1994
the company reported an operating loss of $2.4 million compared to an
operating loss of $5.7 million for the comparable period a year ago.
For the nine months ended March 31, 1994, the company reported a loss of
$5.9 million, or $.36 per share, on revenue of $146.9 million compared to a
loss of $31.6 million, or $2.02 per share, on revenue of $179.1 million for
the same period a year ago. Results for the prior year included a
restructuring charge $20.5 million, or $1.31 per share, and revenue of
approximately $24.5 million from the company's former Advanced Simulation
business unit. For the nine months ended March 31, 1994 the company
reported an operating loss of $6.4 million compared to an operating loss of
$8.7 million (excluding the $20.5 million restructuring charge) for the
comparable period a year ago.
The Systems and Technologies Division, which includes all of the company's
defense systems business, is operating profitably and maintaining a steady
level of revenue. The company's traditional commercial business continues
to experience lower demand for its mature products. The company's results
also reflect expenditures on the LightStreamTM 2010 Asynchronous Transfer
Mode ("ATM") switch and other new product activities. The company
continues to invest in new product development efforts, recognizing that
such investments are likely to result in operating losses for the next few
quarters.
Revenue
- - -------
Revenue for the three and nine months ended March 31, 1994 decreased $6.3
million and $32.2 million, respectively, from the prior year periods
primarily reflecting the sale of the Advanced Simulation business unit in
April 1993 and reduced defense communications systems revenue.
The company, like other companies doing business with the Department of
Defense, has been adversely affected by reduced defense spending. Overall
defense budgets have been declining, and the company expects this general
decline and attendant increased competition within the defense industry to
continue over the next several years. Further, there is the possibility
that funding limitations could result in a reduction, delay, or
cancellation of existing or emerging programs. These factors have reduced
the company's U.S. government revenue and operating margins in recent
fiscal years. Uncertainty continues to exist on the size and scope of
reductions in future defense budgets and the impact on the company's
defense-related business.
<PAGE>
BOLT BERANEK AND NEWMAN INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(continued)
The company anticipates lower revenue for FY1994 compared to FY1993
primarily as a result of the sale of the Advanced Simulation business unit
in FY1993 as well as lower revenue from the company's defense
communications systems business, reflecting the completion of the Mobile
Subscriber Equipment program and a decline in the Defense Data Network
("DDN") program.
In FY1991, the Defense Information Systems Agency awarded the company a
one-year contract in support of the DDN, with up to four one-year optional
extensions. In September 1993, the company completed the third year of the
contract which was valued at approximately $25 million. In October 1993,
the company was awarded an extension covering the fourth year of the
contract, valued at approximately $20 million, which will continue the
company's existing activities through October 1994. While one option year
remains under the contract, there can be no assurance of an extension
beyond October 1994. For the nine months ended March 31, 1994 and 1993,
approximately $15 million and $20 million of revenue, respectively, has
been recorded under this contract.
The company conducts its commercial businesses in an environment
characterized by rapid technological change, which requires continued
research and development expenditures to develop new products to address
emerging market requirements, and to improve its existing products. The
company's traditional commercial business, consisting principally of data
analysis software products operating on minicomputer platforms and of X.25
network systems, continues to experience lower revenue reflecting declining
demand for these mature products. The company is currently offering three
new products: the LightStream 2010 ATM switch, the T/10TM Integrated Access
Device and BBN/CornerstoneTM data analysis software.
The company's LightStream Corporation subsidiary has been developing an
enterprise backbone ATM switch, LightStream 2010, to provide switching
capability for campus and wide area backbone network requirements.
LightStream Corporation is investing heavily in the continuing development
of this product. The market for ATM products is expected to be very
competitive, and LightStream Corporation anticipates facing competition in
the market from established communications companies with marketing,
distribution and financial resources more extensive than those available to
LightStream Corporation. There have been a number of announcements by
other companies, including major communications companies, of planned
introductions of new ATM products. However, LightStream Corporation
believes it is among the first to market with an ATM switch addressing
private wide area network requirements. In October 1993, LightStream
Corporation announced general release of the LightStream 2010 switch. ATM
is an emerging technology market characterized by a long sales cycle. The
LightStream ATM switch is in the early phase of its product life.
LightStream Corporation's business plan includes establishing strategic
partnerships in key market segments. Such partnerships could include
Original Equipment Manufacturer distribution agreements, technology
licenses and joint development arrangements. In March, LightStream
Corporation announced its intent to form a world-wide alliance with Tellabs
Operations, Inc. to jointly develop and distribute ATM switching systems to
<PAGE> <PAGE>
BOLT BERANEK AND NEWMAN INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(continued)
information service providers. Recently, LightStream Corporation also
reported a value-added reseller agreement with NEC Corporation under which
NEC will sell the LightStream product in Japan under the NEC label. During
the third quarter, LightStream Corporation received an order, valued at
approximately $.6 million, from Continental Cablevision's New England
Division for use in providing a wide range of services to residential and
business customers.
The company's near-term growth opportunities are strongly dependent upon
the success of the LightStream 2010 switch. The success of the LightStream
2010 switch will depend upon its technological superiority, its cost
competitiveness, the timely establishment of worldwide sales distribution,
and the continued availability of capital resources.
Several important trends have adversely affected the company's X.25 network
systems business, including the growth of desktop computing, the widespread
installation of local area networks and increased transmission circuit
speed and improved quality. These trends have led to market requirements
for networking technologies such as routers which have generally better
price performance than X.25 switches. The company's X.25 network systems
business has experienced significantly lower revenue in recent fiscal
years, and in FY1993, the company discontinued sales of certain X.25
products and substantially reduced its selling effort related to its
network systems business.
The company has also developed the T/10 Integrated Access Device, designed
to help customers consolidate traffic from their traditional terminal-to-
computer and computer-to-computer traffic with new desktop computing
applications over a single enterprise network. Development delays for the
T/10 in FY1993 unfavorably affected the company's competitive position and
sales of the T/10 in FY1994 have been disappointing. Effective April 1,
1994, the T/10 activities were merged into the Systems and Technologies
Division where the T/10 effort is being focused on high leverage reseller
opportunities and related development priorities. These changes will
reduce spending relating to the T/10 business. Recently the company
announced a three-year agreement with NEC that enables NEC to sell the T/10
in Japan under the NEC label.
The company is making a transition in its data analysis software products
business which is being affected by the growth of distributed processing
and the associated use of personal computers, workstations, and other
desktop computers. Most of the company's mature data analysis software
products, primarily the RS/SeriesTM software, operate on minicomputer
systems. As demand for minicomputer-based software declines, the company
is experiencing lower RS/Series software revenue and downward pressure on
prices.
<PAGE> <PAGE>
BOLT BERANEK AND NEWMAN INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(continued)
In response to the trend toward desktop computing, Software Products
Corporation introduced its BBN/Cornerstone software during the fourth
quarter of FY1993. BBN/Cornerstone software is the first of a new series
of data analysis software products specifically designed for use on desktop
computers in a client/server environment. The initial release of
BBN/Cornerstone software operates on Unix-based workstations, utilizing a
number of established graphical user interfaces. Planned subsequent
releases will permit operation on personal computers. The company believes
that BBN/Cornerstone software addresses a desktop market different from the
company's RS/Series software products, and BBN/Cornerstone will require
distribution channels additional to those used for RS/Series products. To
date, sales of BBN/Cornerstone have been disappointing and Software
Products Corporation is increasing its sales and marketing activities and
developing industry specific applications for BBN/Cornerstone. The company
is conducting a search for a new president of Software Products
Corporation.
Cost of Sales
- - -------------
Cost of services and products as a percentage of revenue for the three and
nine months ended March 31, 1994 was 68% and 67%, respectively, compared to
66% and 63%, respectively, for the corresponding prior year periods,
reflecting a lower proportion of products revenue primarily as a result of
the sale of the Advanced Simulation business unit. Competitive price
pressures in the company's defense-related businesses and higher costs
associated with fixed price government contracts also contributed to the
increase. Services revenue, which typically contributes lower margins than
products sales, represented 84% of total revenue for the three and nine
months ended March 31, 1994, compared to 77% and 73%, respectively, for the
corresponding prior year periods.
Research and Development Expenses
- - ---------------------------------
The majority of the company's internally funded research and development
spending is currently directed toward communications networking
technologies. Research and development expenses for the three and nine
months ended March 31, 1994 were $5.8 million and $16.7 million,
respectively, compared to $8.7 million and $26.2 million, respectively, for
the comparable prior year periods. The decrease is related to higher
spending in FY1993 associated with the Advanced Simulation business unit
and the T/10 program. The company's ability to continue its significant
investment in research and development is dependent upon the timely market
acceptance of its new products.
Selling, General and Administrative Expenses
- - --------------------------------------------
Selling, general and administrative expenses for the three and nine months
ended March 31, 1994 decreased $3.4 million and $11.3 million,
respectively, from the corresponding prior year periods, primarily as a
result of cost reduction actions taken in FY1993 and lower selling expenses
in FY1994 reflecting the sale of the Advanced Simulation business unit.
<PAGE> <PAGE>
BOLT BERANEK AND NEWMAN INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(continued)
Interest
- - --------
Interest income for the three months ended March 31, 1994 was comparable to
the prior year period. The increase of $.7 million for the nine-month
period includes interest in connection with a state tax refund.
Interest expense, primarily representing interest on the company's 6%
convertible subordinated debentures, was comparable for the periods
presented.
Other Income
- - ------------
Other income for the nine months ended March 31, 1994 includes
approximately $.9 million resulting from lower than expected costs
associated with a previously divested contract.
Liquidity and Capital Resources
- - -------------------------------
As of March 31, 1994, the company's cash and temporary investments, which
consisted primarily of money market funds and short term U.S. government
securities, were $63.7 million, an increase of $6.9 million from June 30,
1993. The increase is primarily attributable to lower working capital
requirements and the investment by Ungermann-Bass in LightStream
Corporation.
As a result of the FY1993 downsizing, the company has significant
unutilized space which it is in the process of subleasing. Substantially
all of this space is located in Massachusetts which continues to experience
a difficult commercial real estate market.
The company's ability to meet the continuing cash requirements of its
investment in new products is dependent on new product revenue and adequate
margins.
<PAGE> <PAGE>
PART II. OTHER INFORMATION
BOLT BERANEK AND NEWMAN INC.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
10.14 LightStream Corporation 1993 Stock Option Plan
10.15 LightStream Corporation 1994 Stock Option Plan
10.16 BBN Stoftware Products Corporation 1993 Stock Option
Plan
11.1 Computation of Net Loss Per Share
(b) No reports on Form 8-K were filed during the quarter ended
March 31, 1994.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
company has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
BOLT BERANEK AND NEWMAN INC.
By RALPH A. GOLDWASSER
________________________________
Ralph A. Goldwasser
Senior Vice President and Chief Financial Officer
Date: May 16, 1994
<PAGE> <PAGE>
BOLT BERANEK AND NEWMAN INC.
LIST OF EXHIBITS
10.14 LightStream Corporation 1993 Stock Option Plan (page 16)
10.15 LightStream Corporation 1994 Stock Option Plan (page 25)
10.16 BBN Stoftware Products Corporation 1993 Stock
Option Plan (page 34)
11.1 Computation of Net Loss Per Share (page 44)
<PAGE> <PAGE>
<PAGE> <PAGE>
EXHIBIT 10.14
LIGHTSTREAM CORPORATION
1993 STOCK OPTION PLAN
1. PURPOSE
_______
The purpose of this 1993 Stock Option Plan (the "Plan") is to advance
the interests of LightStream Corporation (the "Company") by enhancing the
ability of the Company and its parent and subsidiaries to attract and
retain able employees, consultants or advisors to the Company; to reward
such individuals for their contributions; and to encourage such individuals
to take into account the long-term interests of the Company through
interests in shares of the Company's common stock, $.01 par value (the
"Stock"). Any employee, consultant, or advisor selected to receive an
award under the Plan is referred to as a "participant".
Options granted pursuant to the Plan may be incentive stock options as
defined in section 422 of the Internal Revenue Code of 1986 (as from time
to time amended, the "Code") (any option that is intended so to qualify as
an incentive stock option being referred to herein as an "incentive
option"), or options that are not incentive options, or both. Except as
otherwise expressly provided with respect to an option grant, no option
granted pursuant to the Plan shall be an incentive option.
2. ADMINISTRATION
______________
The Plan shall be administered by the Board of Directors (the "Board")
of the Company. The Board shall have authority, not inconsistent with the
express provisions of the Plan: (a) to grant awards consisting of options
or stock appreciation rights ("SARs"), or both, to such participants as the
Board may select; (b) to determine the time or times when awards shall be
granted and the number of shares of Stock subject to each award; (c) to
determine which options are, and which options are not, intended to be
incentive options; (d) to determine the terms and conditions of each award;
(e) to prescribe the form or forms of any instruments evidencing awards and
any other instruments required under the Plan and to change such forms from
time to time; (f) to adopt, amend, and rescind rules and regulations for
the administration of the Plan; and (g) to interpret the Plan and to decide
any questions and settle all controversies and disputes that may arise in
connection with the Plan. Such determinations of the Board shall be
conclusive and shall bind all parties. Subject to Section 8, the Board
shall also have the authority, both generally and in particular instances,
to waive compliance by a participant with any obligation to be performed by
the participant under an award, to waive any condition or provision of an
award, and to amend or cancel any award (and if an award is cancelled, to
grant a new award on such terms as the Board shall specify) except that the
Board may not take any action with respect to an outstanding award that
would adversely affect the rights of the participant under such award
without such participant's consent. Nothing in the preceding sentence
shall be construed as limiting the power of the Board to make adjustments
required by Section 4(c) and Section 6(j).
<PAGE> <PAGE>
EXHIBIT 10.14
LIGHTSTREAM CORPORATION
1993 STOCK OPTION PLAN
(continued)
The Board may, in its discretion, delegate some or all of its powers
with respect to the Plan to a committee (the "Committee"), in which event
all references (as appropriate) to the Board hereunder shall be deemed to
refer to the Committee. The Committee, if one is appointed, shall consist
of at least two directors. A majority of the members of the Committee
shall constitute a quorum, and all determinations of the Committee shall be
made by a majority of its members. Any determination of the Committee
under the Plan may be made without notice or meeting of the Committee by a
writing signed by a majority of the Committee members. On and after
registration of the Stock under the Securities Exchange Act of 1934 (the
"1934 Act"), the Board shall delegate the power to select directors and
officers to receive awards under the Plan and the timing, pricing, and
amount of such awards to a Committee, all members of which shall be
disinterested persons within the meaning of Rule 16b-3 under the 1934 Act
and "outside directors" within the meaning of section 162(m)(4)(c)(i) of
the Code.
3. EFFECTIVE DATE AND TERM OF PLAN
_______________________________
The Plan shall become effective on the date on which it is approved by
the shareholders of the Company. Grants of awards under the Plan may be
made prior to that date (but after Board adoption of the Plan), subject to
approval of the Plan by the shareholders.
No awards shall be granted under the Plan after the completion of ten
years from the date on which the Plan was adopted by the Board, but awards
previously granted may extend beyond that date.
4. SHARES SUBJECT TO THE PLAN
__________________________
(a) Number of Shares. Subject to adjustment as provided in Section
4(c), the aggregate number of shares of Stock that may be delivered upon
the exercise of award granted under the Plan shall be 1,300,000. If any
award granted under the Plan terminates without having been exercised in
full, or upon exercise is satisfied other than by delivery of Stock, the
number of shares of Stock as to which such award was not exercised shall be
available for future grants within the limits set forth in this
Section 4(a).
(b) Shares to be Delivered. Shares delivered under the Plan shall be
authorized but unissued Stock or, if the Board so decides in its sole
discretion, previously issued Stock acquired by the Company and held in its
treasury. No fractional shares of Stock shall be delivered under the Plan.
<PAGE> <PAGE>
EXHIBIT 10.14
LIGHTSTREAM CORPORATION
1993 STOCK OPTION PLAN
(continued)
(c) Changes in Stock. In the event of a stock dividend, stock split,
or combination of shares, recapitalization, or other change in the
Company's capital stock, the number and kind of shares of stock or
securities of the Company subject to awards then outstanding or
subsequently granted under the Plan, the exercise price of such awards, the
maximum number of shares or securities that may be delivered under the
Plan, and other relevant provisions shall be appropriately adjusted by the
Board, whose determination shall be binding on all persons.
The Board may also adjust the number of shares subject to outstanding
awards, the exercise price of outstanding awards, and the terms of
outstanding awards, to take into consideration material changes in
accounting practices or principles, extraordinary dividends, consolidations
or mergers (except as described in Section 6(j)), acquisitions or
dispositions of stock or property, or any other event if it is determined
by the Board that such adjustment is appropriate to avoid distortion in the
operation of the Plan, provided that no such adjustment shall be made in
the case of an incentive option, without the consent of the participant, if
it would constitute a modification, extension, or renewal of the option
within the meaning of section 424(h) of the Code.
5. ELIGIBILITY FOR AWARDS
______________________
Persons eligible to receive awards under the Plan shall be those
employees of the Company, its parent, or subsidiaries, or consultants, or
advisors to any of them, who in the opinion of the Board are in a position
to make a contribution to the Company. Participants shall be selected by
the Board. A parent for purposes of the Plan shall be a corporation which
owns, directly or indirectly, 50% or more of the total combined voting
power of all classes of the Company's stock. A subsidiary for purposes of
the Plan shall be (i) a corporation in which the Company owns, directly or
indirectly, stock possessing 50% or more of the total combined voting power
of all classes of stock, or (ii) a corporation in which the Company's
parent owns, directly or indirectly, stock possessing 50% or more of the
total combined voting power of all classes of stock. The Board may grant
awards covering up to the entire number of shares available for issuance
under the Plan (as determined under Section 4(a)) to any one participant or
to several participants, in the sole discretion of the Board.
Incentive options shall be granted only to "employees" as defined in
the provisions of the Code or regulations thereunder applicable to
incentive stock options.
<PAGE> <PAGE>
EXHIBIT 10.14
LIGHTSTREAM CORPORATION
1993 STOCK OPTION PLAN
(continued)
6. TERMS AND CONDITIONS OF OPTIONS AND SARs
(a) Exercise Price of Options. The exercise price of each option
shall be determined by the Board but in the case of an incentive option
shall not be less than 100% (110%, in the case of an incentive option
granted to a ten-percent shareholder) of the fair market value of the Stock
at the time the option is granted; nor shall the exercise price be less, in
the case of an original issue of authorized stock, than par value. For
this purpose, "fair market value" in the case of incentive options shall
have the same meaning as it does in the provisions of the Code and the
regulations thereunder applicable to incentive options; and "ten-percent
shareholder" shall mean any participant who at the time of grant owns
directly, or by reason of the attribution rules set forth in section 424(d)
of the Code is deemed to own, stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company or of any of
its parent or subsidiary corporations.
(b) Duration of Options. An option shall be exercisable during such
period or periods as the Board may specify. The latest date on which an
option may be exercised (the "Final Exercise Date") shall be the date which
is ten years (five years, in the case of an incentive option granted to a
"ten-percent shareholder" as defined in (a) above) from the date the option
was granted or such earlier date as may be specified by the Board at the
time the option is granted.
(c) Exercise of Options.
(1) An option shall become exercisable at such time or times and upon
such conditions as the Board shall specify. In the case of an option not
immediately exercisable in full, the Board may at any time accelerate the
time at which all or any part of the option may be exercised.
(2) Any exercise of an option shall be in writing, signed by the
proper person and furnished to the Company, accompanied by (i) such
documents, representations, agreements, and certifications as may be
required by the Board and (ii) payment in full as specified below in
Section 6(d) for the number of shares for which the option is exercised.
(3) In the case of an option that is not an incentive option, the
Board shall have the right to require that the participant exercising the
option remit to the Company an amount sufficient to satisfy any federal,
state, or local withholding tax requirements (or make other arrangements
satisfactory to the Company with regard to such taxes) prior to
<PAGE> <PAGE>
EXHIBIT 10.14
LIGHTSTREAM CORPORATION
1993 STOCK OPTION PLAN
(continued)
the delivery of any Stock pursuant to the exercise of the option. If
permitted by the Board either at the time of the grant of the option or the
time of exercise, the participant may elect, at such time and in such
manner as the Board may prescribe, to satisfy such withholding obligation
by (i) delivering to the Company Stock owned by such individual having a
fair market value equal to such withholding obligation, or (ii) requesting
that the Company withhold from the shares of Stock to be delivered upon the
exercise a number of shares of Stock having a fair market value equal to
such withholding obligation.
In the case of an incentive option, the Board may require as a
condition of exercise that the participant exercising the option agree to
inform the Company promptly of any disposition (within the meaning of
section 424(c) of the Code and the regulations thereunder) of Stock
received upon exercise. In addition, if at the time the option is
exercised the Board determines that under applicable law and regulations
the Company could be liable for the withholding of any federal or state tax
with respect to a disposition of the Stock received upon exercise, the
Board may require as a condition of exercise that the participant
exercising the option agree to give such security as the Board deems
adequate to meet the potential liability of the Company for the withholding
of tax, and to augment such security from time to time in any amount
reasonably deemed necessary by the Board to preserve the adequacy of such
security.
(4) If an option is exercised by the executor or administrator of a
deceased participant, or by the person or persons to whom the option has
been transferred by the participant's will or the applicable laws of
descent and distribution, the Company shall be under no obligation to
deliver Stock pursuant to such exercise until the Company is satisfied as
to the authority of the person or persons exercising the option.
(d) Payment for Stock. Stock purchased upon exercise of an option
under the Plan shall be paid for as follows: (i) in cash, check acceptable
to the Company (determined in accordance with such guidelines as the Board
may prescribe), or money order payable to the order of the Company, or (ii)
if so permitted by the Board (which, in the case of an incentive option,
shall specify such method of payment at the time of grant), (A) through the
delivery of shares of Stock (which, in the case of Stock acquired from the
Company, shall have been held for at least six months unless the Board
specifies a shorter period) having a fair market value on the date of
exercise equal to the purchase price, or (B) by delivery of a promissory
note of the participant to the Company, such note to be payable
<PAGE> <PAGE>
EXHIBIT 10.14
LIGHTSTREAM CORPORATION
1993 STOCK OPTION PLAN
(continued)
on such terms as are specified by the Board, or (C) by delivery of an
unconditional and irrevocable undertaking by a broker to deliver promptly
to the Company sufficient funds to pay the exercise price, or (D) by any
combination of the permissible forms of payment; provided, that if the
Stock delivered upon exercise of the option is an original issue of
authorized Stock, at least so much of the exercise price as represents the
par value of such Stock shall be paid other than with a personal check or
promissory note of the person exercising the option.
(e) Stock Appreciation Rights. The Board in its discretion may grant
SARs either in tandem with or independent of options awarded under the
Plan. Except as hereinafter provided, each SAR will entitle the
participant to receive upon exercise, with respect to each share of Stock
to which the SAR relates, the excess of (i) the share's value on the date
of exercise, over (ii) the share's fair market value on the date it was
granted. For purposes of clause (i), "value" shall mean fair market value;
provided, that the Board may adjust such value to take into account
dividends on the Stock and may also grant SARs that provide, in such
limited circumstances following a change in control of the Company (as
determined by the Board) as the Board may specify, that "value" for
purposes of clause (i) is to be determined by reference to an average value
for the Stock during a period immediately preceding the change in control,
all as determined by the Board. The amount payable to a participant upon
exercise of an SAR shall be paid either in cash or in shares of Stock, as
the Board determines. Each SAR shall be exercisable during such period or
periods and on such terms as the Board may specify. No SAR shall be
exercisable after the date which is ten years from the date of grant.
(f) Delivery of Stock. A participant shall not have the rights of a
shareholder with regard to awards under the Plan except as to Stock
actually received by such participant under the Plan.
The Company shall not be obligated to deliver any shares of Stock
(i) until, in the opinion of the Company's counsel, all applicable federal
and state laws and regulations have been complied with, (ii) 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 issuance, and (iii) 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 counsel for 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.
<PAGE> <PAGE>
EXHIBIT 10.14
LIGHTSTREAM CORPORATION
1993 STOCK OPTION PLAN
(continued)
(g) Nontransferability of Awards. No award may be transferred other
than by will or by the laws of descent and distribution, and during a
participant's lifetime an award may be exercised only by him or her.
(h) Death. Except as otherwise provided in an award, if a participant
dies, each award held by the participant immediately prior to death may be
exercised, to the extent it was exercisable immediately prior to death, by
his executor or administrator, or by the person or persons to whom the
award is transferred by will or the applicable laws of descent and
distribution, at any time within the period ending (i) 180 days after the
participant's death (in the event the participant's employment or other
service relationship with the Company shall terminate by reason of death),
or (ii) 120 days after the participant's death (in the event the
participant dies within the 60-day period following termination of the
participant's employment or other service relationship with the Company),
or such longer period as the Committee may determine. In no event shall an
award be exercised beyond the Final Exercise Date. Except as otherwise
provided in an award, all awards held by a participant immediately prior to
death that are not then exercisable shall terminate on the date of death.
(i) Other Termination of Service. Except as otherwise provided in an
award, if a participant's employment or other service relationship with the
Company terminates for any reason other than death, all awards held by the
participant shall terminate to the extent not exercisable immediately prior
to such event. To the extent exercisable immediately prior to termination
of employment or other service relationship, the award shall continue to be
exercisable thereafter for a period of 60 days (or such longer period as
the Board may determine, but in no event beyond the Final Exercise Date),
unless the participant's employment or other service relationship is
terminated for "cause" as a result of the participant's misconduct which,
in the judgment of the Board, casts discredit on him or her, or is
otherwise harmful to the business, interests, or reputation of the Company,
its parent, or a subsidiary, in which case all awards shall terminate
immediately. The Board may in any award provide for post-termination
exercise provisions different from those expressly set forth in the
preceding two sentences or in (h) above, including without limitation terms
allowing a later exercise by a former employee, consultant, or advisor (or,
in the case of a former employee, consultant, or advisor who is deceased,
the person or persons to whom the award is transferred by will or the laws
of descent and distribution) as to all or any portion of the award not
exercisable immediately prior to termination or employment or other service
relationship, but in no case may an award be exercised after the Final
Exercise Date. Except as otherwise provided in an award, after completion
of that 60-day or longer period, such awards shall terminate to the extent
not previously exercised, expired, or terminated. For purposes of this Plan,
<PAGE> <PAGE>
EXHIBIT 10.14
LIGHTSTREAM CORPORATION
1993 STOCK OPTION PLAN
(continued)
the service relationship shall not be considered terminated (i) in the case of
sick leave or other bona fide leave of absence approved for purposes of the Plan
by the Board, so long as the participant's right to reemployment or
continued service is guaranteed either by statute or by contract, or (ii)
in the case of a transfer of employment or service relationship between the
Company and a subsidiary or parent, or between subsidiaries of the Company
or parent (provided the participant's direct or indirect service to the
Company continues), or to the service of a corporation (or a parent or
subsidiary corporation of such corporation) issuing or assuming an award in
a transaction to which section 424(a) of the Code applies.
(j) Mergers, etc. In the event of any merger, consolidation,
dissolution, or liquidation of the Company, the Board in its sole
discretion may, as to any outstanding awards, make such substitution or
adjustment in the aggregate number of shares reserved for issuance under
the Plan and in the number and purchase price (if any) of shares subject to
such awards as it may determine, or accelerate, amend, or terminate such
awards upon such terms and conditions as it shall provide (which, in the
case of the termination of the vested portion of any award, shall require
payment or other consideration which the Board deems equitable in the
circumstances).
The Board may grant awards under the Plan in substitution for
awards held by employees, consultants, or advisors of another corporation
who concurrently become employees, consultants, or advisors of the Company,
its parent, or a subsidiary as the result of a merger or consolidation of
that corporation with the Company, its parent, or a subsidiary, or as the
result of the acquisition by the Company, its parent, or a subsidiary of
property or stock of that corporation. The Company may direct that
substitute awards be granted on such terms and conditions as the Board
considers appropriate in the circumstances.
(k) Cancellation of Awards. The Board may provide in any award that
the award shall be cancelled or rescinded and any associated shares
forfeited, and the participant shall be obligated to pay to the Company any
gain received upon exercise, in the event that the participant competes
with the Company, discloses confidential information of the Company, or
otherwise is not in compliance with applicable provisions of any award, in
each case on such terms and conditions as the Board considers appropriate
in the circumstances.
<PAGE> <PAGE>
EXHIBIT 10.14
LIGHTSTREAM CORPORATION
1993 STOCK OPTION PLAN
(continued)
7. EMPLOYMENT RIGHTS
_________________
Neither the adoption of the Plan nor the grant of awards shall confer
upon any participant any right to continue as an employee of, or consultant
or advisor to, the Company, its parent, or any subsidiary of either or
affect in any way the right of the Company, its parent, or a subsidiary of
either to terminate the participant's relationship at any time. Except as
specifically provided by the Board in any particular case, the loss of
existing or potential profit in awards granted under this Plan shall not
constitute an element of damages in the event of termination of the
relationship of a participant even if the termination is in violation of an
obligation of the Company, its parent, or a subsidiary of either to the
participant by contract or otherwise.
8. EFFECT, DISCONTINUANCE, CANCELLATION, AMENDMENT, AND TERMINATION
________________________________________________________________
Neither adoption of the Plan nor the grant of awards to a participant
shall affect the Company's right to make awards to such participant that
are not subject to the Plan, to issue to such participant Stock as a bonus
or otherwise, or to adopt other plans or arrangements under which Stock may
be issued, and shall in no way affect the Company's right to operate its
business at its sole discretion.
The exercise of certain awards granted under the Plan may be made
contingent upon the closing of an initial public offering of the Company's
Stock. The grant of such awards under the Plan shall in no way obligate
the Company to consummate or consider a public offering of Stock, and the
failure of the Company to close a public offering of Stock shall not
entitle a participant granted such an award to any substitute award or
other benefit, or to any damages.
The Board may at any time discontinue granting awards under the Plan.
With the consent of the participant, the Board may at any time cancel an
existing award in whole or in part and grant another award for such number
of shares as the Board specifies. The Board may at any time or times amend
the Plan or any outstanding award for the purpose of satisfying the
requirements of section 422 of the Code or of any changes in applicable
laws or regulations or for any other purpose that may at the time be
permitted by law, or may at any time terminate the Plan as to any further
grants of awards; except that no such amendment shall adversely affect the
rights of any participant (without his or her consent) under any award
previously granted.
<PAGE> <PAGE>
<PAGE> <PAGE>
EXHIBIT 10.15
LIGHTSTREAM CORPORATION
1994 STOCK OPTION PLAN
1. PURPOSE
_______
The purpose of this 1994 Stock Option Plan (the "Plan") is to advance
the interests of LightStream Corporation (the "Company") by enhancing the
ability of the Company and its parent and subsidiaries to attract and
retain able employees, consultants or advisors to the Company; to reward
such individuals for their contributions; and to encourage such individuals
to take into account the long-term interests of the Company through
interests in shares of the Company's common stock, $.01 par value (the
"Stock"). Any employee, consultant, or advisor selected to receive an
award under the Plan is referred to as a "participant".
Options granted pursuant to the Plan may be incentive stock options as
defined in section 422 of the Internal Revenue Code of 1986 (as from time
to time amended, the "Code") (any option that is intended so to qualify as
an incentive stock option being referred to herein as an "incentive
option"), or options that are not incentive options, or both. Except as
otherwise expressly provided with respect to an option grant, no option
granted pursuant to the Plan shall be an incentive option.
2. ADMINISTRATION
______________
The Plan shall be administered by the Board of Directors (the "Board")
of the Company. The Board shall have authority, not inconsistent with the
express provisions of the Plan: (a) to grant awards consisting of options
or stock appreciation rights ("SARs"), or both, to such participants as may
be selected pursuant to the provisions of the Plan; (b) to determine which
options are, and which options are not, intended to be incentive options;
(c) to determine the terms and conditions of each award; (d) to prescribe
the form or forms of any instruments evidencing awards and any other
instruments required under the Plan and to change such forms from time to
time; (e) to adopt, amend, and rescind rules and regulations for the
administration of the Plan; and (f) to interpret the Plan and to decide any
questions and settle all controversies and disputes that may arise in
connection with the Plan. Such determinations of the Board shall be
conclusive and shall bind all parties.
The Board may, in its discretion, delegate some or all of its powers
with respect to the Plan to a committee (the "Committee"), in which event
all references (as appropriate) to the Board hereunder shall be deemed to
refer to the Committee. The Committee, if one is appointed, shall consist
of at least two directors. A majority of the members of the Committee
shall constitute a quorum, and all determinations of the Committee shall be
made by a majority of its members. Any determination of the Committee under
PAGE
<PAGE>
EXHIBIT 10.15
LIGHTSTREAM CORPORATION
1994 STOCK OPTION PLAN
(continued)
the Plan may be made without notice or meeting of the Committee by a writing
signed by a majority of the Committee members. On and after registration
of the Stock under the Securities Exchange Act of 1934 (the "1934 Act"),
the Board shall delegate the power to select directors and officers to
receive awards under the Plan and the timing, pricing, and amount of such
awards to a Committee, all members of which shall be disinterested persons
within the meaning of Rule 16b-3 under the 1934 Act and "outside directors"
within the meaning of section 162(m)(4)(c)(i) of the Code.
3. EFFECTIVE DATE AND TERM OF PLAN
_______________________________
The Plan shall become effective on the date on which it is approved by
the shareholders of the Company. Grants of awards under the Plan may be
made prior to that date (but after Board adoption of the Plan), subject to
approval of the Plan by the shareholders.
No awards shall be granted under the Plan after the completion of ten
years from the date on which the Plan was adopted by the Board, but awards
previously granted may extend beyond that date.
4. SHARES SUBJECT TO THE PLAN
__________________________
(a) Number of Shares. Subject to adjustment as provided in Section
4(c), the aggregate number of shares of Stock that may be delivered upon
the exercise of award granted under the Plan shall be 300,000. If any
award granted under the Plan terminates without having been exercised in
full, or upon exercise is satisfied other than by delivery of Stock, the
number of shares of Stock as to which such award was not exercised shall be
available for future grants within the limits set forth in this
Section 4(a).
(b) Shares to be Delivered. Shares delivered under the Plan shall be
previously issued Stock acquired by the Company from Bolt Beranek and
Newman Inc. ("BBN") and held in the Company's treasury. No fractional
shares of Stock shall be delivered under the Plan.
(c) Changes in Stock. In the event of a stock dividend, stock split,
or combination of shares, recapitalization, or other change in the
Company's capital stock, the number and kind of shares of stock or
securities of the Company subject to awards then outstanding or
subsequently granted under the Plan, the exercise price of such awards, the
maximum number of shares or securities that may be delivered under the
Plan, and other relevant provisions shall be appropriately adjusted by the
Board, whose determination shall be binding on all persons.
<PAGE> <PAGE>
EXHIBIT 10.15
LIGHTSTREAM CORPORATION
1994 STOCK OPTION PLAN
(continued)
The Board may also adjust the number of shares subject to outstanding
awards, the exercise price of outstanding awards, and the terms of
outstanding awards, to take into consideration material changes in
accounting practices or principles, extraordinary dividends, consolidations
or mergers (except as described in Section 6(j)), acquisitions or
dispositions of stock or property, or any other event if it is determined
by the Board that such adjustment is appropriate to avoid distortion in the
operation of the Plan, provided that no such adjustment shall be made in
the case of an incentive option, without the consent of the participant, if
it would constitute a modification, extension, or renewal of the option
within the meaning of section 424(h) of the Code.
5. ELIGIBILITY FOR AWARDS
______________________
Persons eligible to receive awards under the Plan ("eligible persons")
shall be those employees of, or consultants or advisors to, the Company,
BBN, or a subsidiary of either of them who are in a position to make a
contribution to the Company. Awards shall be made only to such eligible
persons, at such times and in such amounts, and on such terms, as shall
from time to time be recommended by BBN and communicated in writing to the
Company. No awards shall be made under the Plan unless at the time of the
award BBN is the parent of the Company.
A parent for purposes of the Plan shall be a corporation which owns,
directly or indirectly, 50% or more of the total combined voting power of
all classes of the Company's stock. A subsidiary for purposes of the Plan
shall be (i) a corporation in which the Company owns, directly or
indirectly, stock possessing 50% or more of the total combined voting power
of all classes of stock, or (ii) a corporation in which the Company's
parent owns, directly or indirectly, stock possessing 50% or more of the
total combined voting power of all classes of stock. An award or awards
covering up to the entire number of shares available for issuance under the
Plan (as determined under Section 4(a)), to any one participant or to
several participants may be granted, in the sole discretion of BBN.
Incentive options shall be granted only to "employees" as defined in
the provisions of the Code or regulations thereunder applicable to
incentive stock options.
<PAGE> <PAGE>
EXHIBIT 10.15
LIGHTSTREAM CORPORATION
1994 STOCK OPTION PLAN
(continued)
6. TERMS AND CONDITIONS OF OPTIONS AND SARs
________________________________________
(a) Exercise Price of Options. The exercise price of each option
shall be determined by the Board but in the case of an incentive option
shall not be less than 100% (110%, in the case of an incentive option
granted to a ten-percent shareholder) of the fair market value of the Stock
at the time the option is granted. For this purpose, "fair market value"
in the case of incentive options shall have the same meaning as it does in
the provisions of the Code and the regulations thereunder applicable to
incentive options; and "ten-percent shareholder" shall mean any participant
who at the time of grant owns directly, or by reason of the attribution
rules set forth in section 424(d) of the Code is deemed to own, stock
possessing more than 10% of the total combined voting power of all classes
of stock of the Company or of any of its parent or subsidiary corporations.
(b) Duration of Options. An option shall be exercisable during such
period or periods as may be specified in the award. The latest date on
which an option may be exercised (the "Final Exercise Date") shall be the
date which is ten years (five years, in the case of an incentive option
granted to a "ten-percent shareholder" as defined in (a) above) from the
date the option was granted or such earlier date as may be specified in the
award.
(c) Exercise of Options.
(1) An option shall become exercisable at such time or times and upon
such conditions as shall be specified in the award. In the case of
an option not immediately exercisable in full, the Board may, upon
advice from BBN, at any time accelerate the time at which all or
any part of the option may be exercised.
(2) Any exercise of an option shall be in writing, signed by the proper
person and furnished to the Company, accompanied by (i) such
documents, representations, agreements, and certifications as may
be required by the Board and (ii) payment in full as specified
below in Section 6(d) for the number of shares for which the option
is exercised.
<PAGE> <PAGE>
EXHIBIT 10.15
LIGHTSTREAM CORPORATION
1994 STOCK OPTION PLAN
(continued)
(3) In the case of an option that is not an incentive option, the Board
shall have the right to require that the participant exercising the
option remit to the Company an amount sufficient to satisfy any
federal, state, or local withholding tax requirements (or make
other arrangements satisfactory to the Company with regard to such
taxes) prior to the delivery of any Stock pursuant to the exercise
of the option. If permitted by the Board either at the time of the
grant of the option or the time of exercise, the participant may
elect, at such time and in such manner as the Board may prescribe,
to satisfy such withholding obligation by (i) delivering to the
Company Stock owned by such individual having a fair market value
equal to such withholding obligation, or (ii) requesting that the
Company withhold from the shares of Stock to be delivered upon the
exercise a number of shares of Stock having a fair market value
equal to such withholding obligation.
In the case of an incentive option, the Board may require as a
condition of exercise that the participant exercising the option
agree to inform the Company promptly of any disposition (within the
meaning of section 424(c) of the Code and the regulations
thereunder) of Stock received upon exercise. In addition, if at
the time the option is exercised the Board determines that under
applicable law and regulations the Company could be liable for the
withholding of any federal or state tax with respect to a
disposition of the Stock received upon exercise, the Board may
require as a condition of exercise that the participant exercising
the option agree to give such security as the Board deems adequate
to meet the potential liability of the Company for the withholding
of tax, and to augment such security from time to time in any
amount reasonably deemed necessary by the Board to preserve the
adequacy of such security.
(4) If an option is exercised by the executor or administrator of a
deceased participant, or by the person or persons to whom the
option has been transferred by the participant's will or the
applicable laws of descent and distribution, the Company shall be
under no obligation to deliver Stock pursuant to such exercise
until the Company is satisfied as to the authority of the person or
persons exercising the option.
<PAGE> <PAGE>
EXHIBIT 10.15
LIGHTSTREAM CORPORATION
1994 STOCK OPTION PLAN
(continued)
(d) Payment for Stock. Stock purchased upon exercise of an option
under the Plan shall be paid for as follows: (i) in cash, check acceptable
to the Company (determined in accordance with such guidelines as the Board
may prescribe), or money order payable to the order of the Company, or (ii)
if so permitted by the terms of the option award (or, in the case of an
option that is not an incentive option, at such later time as the Board may
determine, such determination to be made upon advice from BBN if BBN is
still the Company's parent), (A) through the delivery of shares of Stock
(which, in the case of Stock acquired from the Company, shall have been
held for at least six months unless the Board specifies a shorter period)
having a fair market value on the date of exercise equal to the purchase
price, or (B) by delivery of a promissory note of the participant to the
Company, such note to be payable on such terms as are specified by the
Board, or (C) by delivery of an unconditional and irrevocable undertaking
by a broker to deliver promptly to the Company sufficient funds to pay the
exercise price, or (D) by any combination of the permissible forms of
payment.
(e) Stock Appreciation Rights. The Board, upon advice from BBN, may
grant SARs either in tandem with or independent of options awarded under
the Plan. Except as hereinafter provided, each SAR will entitle the
participant to receive upon exercise, with respect to each share of Stock
to which the SAR relates, the excess of (i) the share's value on the date
of exercise, over (ii) the share's fair market value on the date it was
granted. For purposes of clause (i), "value" shall mean fair market value;
provided, that the Board may adjust such value to take into account
dividends on the Stock and may also grant SARs that provide, in such
limited circumstances following a change in control of the Company (as
determined by the Board) as the Board may specify, that "value" for
purposes of clause (i) is to be determined by reference to an average value
for the Stock during a period immediately preceding the change in control,
all as determined by the Board. The amount payable to a participant upon
exercise of an SAR shall be paid either in cash or in shares of Stock, as
the Board, upon advice from BBN, determines. Each SAR shall be exercisable
during such period or periods and on such terms as the Board, upon advice
from BBN, may specify. No SAR shall be exercisable after the date which is
ten years from the date of grant.
(f) Delivery of Stock. A participant shall not have the rights of a
shareholder with regard to awards under the Plan except as to Stock
actually received by such participant under the Plan.
<PAGE> <PAGE>
EXHIBIT 10.15
LIGHTSTREAM CORPORATION
1994 STOCK OPTION PLAN
(continued)
The Company shall not be obligated to deliver any shares of Stock (i)
until, in the opinion of the Company's counsel, all applicable federal and
state laws and regulations have been complied with, (ii) 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 issuance, and (iii) 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
counsel for 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.
(g) Nontransferability of Awards. No award may be transferred other
than by will or by the laws of descent and distribution, and during a
participant's lifetime an award may be exercised only by him or her.
(h) Death. Except as otherwise provided in an award, if a participant
dies, each award held by the participant immediately prior to death may be
exercised, to the extent it was exercisable immediately prior to death, by
his executor or administrator, or by the person or persons to whom the
award is transferred by will or the applicable laws of descent and
distribution, at any time within the period ending (i) 180 days after the
participant's death (in the event the participant's employment or other
service relationship with the Company, its parent, or a subsidiary of
either shall terminate by reason of death), or (ii) 120 days after the
participant's death (in the event the participant dies within the 60-day
period following termination of the participant's employment or other
service relationship with the Company, its parent, or a subsidiary of
either), or such longer period as the Committee may determine. In no event
shall an award be exercised beyond the Final Exercise Date. Except as
otherwise provided in an award, all awards held by a participant
immediately prior to death that are not then exercisable shall terminate on
the date of death.
(i) Other Termination of Service. Except as otherwise provided in an
award, if a participant's employment or other service relationship with the
Company terminates for any reason other than death, all awards held by the
participant shall terminate to the extent not exercisable immediately prior
to such event. To the extent exercisable immediately prior to termination
of employment or other service, the award shall continue to be exercisable
thereafter for a period of 60 days (or such longer period as the
<PAGE> <PAGE>
EXHIBIT 10.15
LIGHTSTREAM CORPORATION
1994 STOCK OPTION PLAN
(continued)
Board may determine, but in no event beyond the Final Exercise Date),
unless the participant's employment or other service relationship is
terminated for "cause" as a result of the participant's misconduct which,
in the judgment of the Board, casts discredit on him or her, or is
otherwise harmful to the business, interests, or reputation of the Company,
its parent, or a subsidiary, in which case all awards shall terminate
immediately. The Board may in any award provide for post-termination
exercise provisions different from those expressly set forth in the
preceding two sentences or in (h) above, including without limitation terms
allowing a later exercise by a former employee, consultant, or advisor (or,
in the case of a former employee, consultant, or advisor who is deceased,
the person or persons to whom the award is transferred by will or the laws
of descent and distribution) as to all or any portion of the award not
exercisable immediately prior to termination or employment or other service
relationship, but in no case may an award be exercised after the Final
Exercise Date. Except as otherwise provided in an award, after completion
of that 60-day or longer period, such awards shall terminate to the extent
not previously exercised, expired, or terminated. For purposes of this
Plan, the service relationship shall not be considered terminated (i) in
the case of sick leave or other bona fide leave of absence approved for
purposes of the Plan by the Board, upon advice from BBN, so long as the
participant's right to reemployment or continued service is guaranteed
either by statute or by contract, or (ii) in the case of a transfer of
employment or service relationship between the Company and a subsidiary or
parent, or between subsidiaries of the Company or parent (provided the
participant's direct or indirect service to the Company continues), or to
the service of a corporation (or a parent or subsidiary corporation of such
corporation) issuing or assuming an award in a transaction to which section
424(a) of the Code applies.
(j) Mergers, etc. In the event of any merger, consolidation,
dissolution, or liquidation of the Company, the Board in its sole
discretion may, as to any outstanding awards, make such substitution or
adjustment in the aggregate number of shares reserved for issuance under
the Plan and in the number and purchase price (if any) of shares subject to
such awards as it may determine, or accelerate, amend, or terminate such
awards upon such terms and conditions as it shall provide (which, in the
case of the termination of the vested portion of any award, shall require
payment or other consideration which the Board deems equitable in the
circumstances).
(k) Cancellation of Awards. The Board may provide in any award that
the award shall be cancelled or rescinded and any associated shares
forfeited, and the participant shall be obligated to pay to the Company any
gain received upon exercise, in the event that the participant competes
with the Company, discloses confidential information of the Company, or
otherwise is not in compliance with applicable provisions of any award, in
each case on such terms and conditions as the Board considers appropriate
in the circumstances.
<PAGE> <PAGE>
EXHIBIT 10.15
LIGHTSTREAM CORPORATION
1994 STOCK OPTION PLAN
(continued)
7. EMPLOYMENT RIGHTS
_________________
Neither the adoption of the Plan nor the grant of awards shall confer
upon any participant any right to continue as an employee of, or consultant
or advisor to, the Company, its parent, or any subsidiary of either or
affect in any way the right of the Company, its parent, or a subsidiary of
either to terminate the participant's relationship at any time. Except as
specifically provided by the Board in any particular case, the loss of
existing or potential profit in awards granted under this Plan shall not
constitute an element of damages in the event of termination of the
relationship of a participant even if the termination is in violation of an
obligation of the Company, its parent, or a subsidiary of either to the
participant by contract or otherwise.
8. EFFECT, DISCONTINUANCE, CANCELLATION, AMENDMENT, AND TERMINATION
________________________________________________________________
Neither adoption of the Plan nor the grant of awards to a participant
shall affect the Company's right to make awards to such participant that
are not subject to the Plan, to issue to such participant Stock as a bonus
or otherwise, or to adopt other plans or arrangements under which Stock may
be issued.
The exercise of certain awards granted under the Plan may be made
contingent upon the closing of an initial public offering of the Company's
Stock. The grant of such awards under the Plan shall in no way obligate
the Company to consummate or consider a public offering of Stock, and the
failure of the Company to close a public offering of Stock shall not
entitle a participant granted such an award to any substitute award or
other benefit, or to any damages.
The Board may at any time discontinue granting awards under the Plan.
With the consent of the participant and BBN, the Board may at any time
cancel an existing award in whole or in part and grant another award for
such number of shares as the Board specifies. The Board may at any time or
times amend the Plan or any outstanding award for the purpose of satisfying
the requirements of section 422 of the Code or of any changes in applicable
laws or regulations or for any other purpose that may at the time be
permitted by law, or may at any time terminate the Plan as to any further
grants of awards; except that no such amendment shall adversely affect the
rights of any participant (without his or her consent) under any award
previously granted and no such amendment shall, while BBN remains the
Company's parent, modify those provisions of the Plan relating to BBN
without BBN's written consent.
<PAGE> <PAGE>
<PAGE> <PAGE>
EXHIBIT 10.16
BBN SOFTWARE PRODUCTS CORPORATION
1993 STOCK OPTION PLAN
1. PURPOSE
_______
The purpose of this 1993 Stock Option Plan (the "Plan") is to advance
the interests of BBN Software Products Corporation (the "Company") by
enhancing the ability of the Company and its parent and subsidiaries to
attract and retain able employees, consultants or advisors to the Company;
to reward such individuals for their contributions; and to encourage such
individuals to take into account the long-term interests of the Company
through interests in shares of the Company's common stock, $.01 par value
(the "Stock"). Any employee, consultant, or advisor selected to receive an
award under the Plan is referred to as a "participant".
Options granted pursuant to the Plan may be incentive stock options as
defined in section 422 of the Internal Revenue Code of 1986 (as from time
to time amended, the "Code") (any option that is intended so to qualify as
an incentive stock option being referred to herein as an "incentive
option"), or options that are not incentive options, or both. Except as
otherwise expressly provided with respect to an option grant, no option
granted pursuant to the Plan shall be an incentive option.
2. ADMINISTRATION
______________
The Plan shall be administered by the Board of Directors (the "Board")
of the Company. The Board shall have authority, not inconsistent with the
express provisions of the Plan: (a) to grant awards consisting of options
or stock appreciation rights ("SARs"), or both, to such participants as the
Board may select; (b) to determine the time or times when awards shall be
granted and the number of shares of Stock subject to each award; (c) to
determine which options are, and which options are not, intended to be
incentive options; (d) to determine the terms and conditions of each award;
(e) to prescribe the form or forms of any instruments evidencing awards and
any other instruments required under the Plan and to change such forms from
time to time; (f) to adopt, amend, and rescind rules and regulations for
the administration of the Plan; and (g) to interpret the Plan and to decide
any questions and settle all controversies and disputes that may arise in
connection with the Plan. Such determinations of the Board shall be
conclusive and shall bind all parties. Subject to Section 8, the Board
shall also have the authority, both generally and in particular instances,
to waive compliance by a participant with any obligation to be performed by
the participant under an award, to waive any condition or provision of an
award, and to amend or cancel any award (and if an award is cancelled, to
grant a new award on such terms as the Board shall specify) except that the
Board may not take any action with respect to an outstanding award that
would adversely affect the rights of the participant under such award
without such participant's consent. Nothing in the preceding sentence
shall be construed as limiting the power of the Board to make adjustments
required by Section 4(c) and Section 6(j).
<PAGE> <PAGE>
EXHIBIT 10.16
BBN SOFTWARE PRODUCTS CORPORATION
1993 STOCK OPTION PLAN
(continued)
The Board may, in its discretion, delegate some or all of its powers
with respect to the Plan to a committee (the "Committee"), in which event
all references (as appropriate) to the Board hereunder shall be deemed to
refer to the Committee. The Committee, if one is appointed, shall consist
of at least two directors. A majority of the members of the Committee
shall constitute a quorum, and all determinations of the Committee shall be
made by a majority of its members. Any determination of the Committee
under the Plan may be made without notice or meeting of the Committee by a
writing signed by a majority of the Committee members. On and after
registration of the Stock under the Securities Exchange Act of 1934 (the
"1934 Act"), the Board shall delegate the power to select directors and
officers to receive awards under the Plan and the timing, pricing, and
amount of such awards to a Committee, all members of which shall be
disinterested persons within the meaning of Rule 16b-3 under the 1934 Act
and "outside directors" within the meaning of section 162(m)(4)(c)(i) of
the Code.
3. EFFECTIVE DATE AND TERM OF PLAN
_______________________________
The Plan shall become effective on the date on which it is approved by
the shareholders of the Company. Grants of awards under the Plan may be
made prior to that date (but after Board adoption of the Plan), subject to
approval of the Plan by the shareholders.
No awards shall be granted under the Plan after the completion of ten
years from the date on which the Plan was adopted by the Board, but awards
previously granted may extend beyond that date.
4. SHARES SUBJECT TO THE PLAN
__________________________
(a) Number of Shares. Subject to adjustment as provided in Section
4(c), the aggregate number of shares of Stock that may be delivered upon
the exercise of award granted under the Plan shall be 1,000,000. If any
award granted under the Plan terminates without having been exercised in
full, or upon exercise is satisfied other than by delivery of Stock, the
number of shares of Stock as to which such award was not exercised shall be
available for future grants within the limits set forth in this
Section 4(a).
(b) Shares to be Delivered. Shares delivered under the Plan shall be
authorized but unissued Stock or, if the Board so decides in its sole
discretion, previously issued Stock acquired by the Company and held in its
treasury. No fractional shares of Stock shall be delivered under the Plan.
<PAGE> <PAGE>
EXHIBIT 10.16
BBN SOFTWARE PRODUCTS CORPORATION
1993 STOCK OPTION PLAN
(continued)
(c) Changes in Stock. In the event of a stock dividend, stock split,
or combination of shares, recapitalization, or other change in the
Company's capital stock, the number and kind of shares of stock or
securities of the Company subject to awards then outstanding or
subsequently granted under the Plan, the exercise price of such awards, the
maximum number of shares or securities that may be delivered under the
Plan, and other relevant provisions shall be appropriately adjusted by the
Board, whose determination shall be binding on all persons.
The Board may also adjust the number of shares subject to outstanding
awards, the exercise price of outstanding awards, and the terms of
outstanding awards, to take into consideration material changes in
accounting practices or principles, extraordinary dividends, consolidations
or mergers (except as described in Section 6(j)), acquisitions or
dispositions of stock or property, or any other event if it is determined
by the Board that such adjustment is appropriate to avoid distortion in the
operation of the Plan, provided that no such adjustment shall be made in
the case of an incentive option, without the consent of the participant, if
it would constitute a modification, extension, or renewal of the option
within the meaning of section 424(h) of the Code.
5. ELIGIBILITY FOR AWARDS
______________________
Persons eligible to receive awards under the Plan shall be those
employees of the Company, its parent, or subsidiaries, or consultants, or
advisors to any of them, who in the opinion of the Board are in a position
to make a contribution to the Company. Participants shall be selected by
the Board. A parent for purposes of the Plan shall be a corporation which
owns, directly or indirectly, 50% or more of the total combined voting
power of all classes of the Company's stock. A subsidiary for purposes of
the Plan shall be (i) a corporation in which the Company owns, directly or
indirectly, stock possessing 50% or more of the total combined voting power
of all classes of stock, or (ii) a corporation in which the Company's
parent owns, directly or indirectly, stock possessing 50% or more of the
total combined voting power of all classes of stock. The Board may grant
awards covering up to the entire number of shares available for issuance
under the Plan (as determined under Section 4(a)) to any one participant or
to several participants, in the sole discretion of the Board.
Incentive options shall be granted only to "employees" as defined in
the provisions of the Code or regulations thereunder applicable to
incentive stock options.
<PAGE> <PAGE>
EXHIBIT 10.16
BBN SOFTWARE PRODUCTS CORPORATION
1993 STOCK OPTION PLAN
(continued)
6. TERMS AND CONDITIONS OF OPTIONS AND SARs
________________________________________
(a) Exercise Price of Options. The exercise price of each option
shall be determined by the Board but in the case of an incentive option
shall not be less than 100% (110%, in the case of an incentive option
granted to a ten-percent shareholder) of the fair market value of the Stock
at the time the option is granted; nor shall the exercise price be less, in
the case of an original issue of authorized stock, than par value. For
this purpose, "fair market value" in the case of incentive options shall
have the same meaning as it does in the provisions of the Code and the
regulations thereunder applicable to incentive options; and "ten-percent
shareholder" shall mean any participant who at the time of grant owns
directly, or by reason of the attribution rules set forth in section 424(d)
of the Code is deemed to own, stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company or of any of
its parent or subsidiary corporations.
(b) Duration of Options. An option shall be exercisable during such
period or periods as the Board may specify. The latest date on which an
option may be exercised (the "Final Exercise Date") shall be the date which is
ten years (five years, in the case of an incentive option granted to a "ten-
percent shareholder" as defined in (a) above) from the date the option was
granted or such earlier date as may be specified by the Board at the time the
option is granted.
(c) Exercise of Options.
(1) An option shall become exercisable at such time or times and upon
such conditions as the Board shall specify. In the case of an
option not immediately exercisable in full, the Board may at any
time accelerate the time at which all or any part of the option may
be exercised.
(2) Any exercise of an option shall be in writing, signed by the proper
person and furnished to the Company, accompanied by (i) such
documents, representations, agreements, and certifications as may
be required by the Board and (ii) payment in full as specified
below in Section 6(d) for the number of shares for which the option
is exercised.
<PAGE> <PAGE>
EXHIBIT 10.16
BBN SOFTWARE PRODUCTS CORPORATION
1993 STOCK OPTION PLAN
(continued)
(3) In the case of an option that is not an incentive option, the Board
shall have the right to require that the participant exercising the
option remit to the Company an amount sufficient to satisfy any
federal, state, or local withholding tax requirements (or make
other arrangements satisfactory to the Company with regard to such
taxes) prior to the delivery of any Stock pursuant to the exercise
of the option. If permitted by the Board either at the time of the
grant of the option or the time of exercise, the participant may
elect, at such time and in such manner as the Board may prescribe,
to satisfy such withholding obligation by (i) delivering to the
Company Stock owned by such individual having a fair market value
equal to such withholding obligation, or (ii) requesting that the
Company withhold from the shares of Stock to be delivered upon the
exercise a number of shares of Stock having a fair market value
equal to such withholding obligation.
In the case of an incentive option, the Board may require as a
condition of exercise that the participant exercising the option
agree to inform the Company promptly of any disposition (within the
meaning of section 424(c) of the Code and the regulations
thereunder) of Stock received upon exercise. In addition, if at
the time the option is exercised the Board determines that under
applicable law and regulations the Company could be liable for the
withholding of any federal or state tax with respect to a
disposition of the Stock received upon exercise, the Board may
require as a condition of exercise that the participant exercising
the option agree to give such security as the Board deems adequate
to meet the potential liability of the Company for the withholding
of tax, and to augment such security from time to time in any
amount reasonably deemed necessary by the Board to preserve the
adequacy of such security.
(4) If an option is exercised by the executor or administrator of a
deceased participant, or by the person or persons to whom the
option has been transferred by the participant's will or the
applicable laws of descent and distribution, the Company shall be
under no obligation to deliver Stock pursuant to such exercise
until the Company is satisfied as to the authority of the person or
persons exercising the option.
<PAGE> <PAGE>
EXHIBIT 10.16
BBN SOFTWARE PRODUCTS CORPORATION
1993 STOCK OPTION PLAN
(continued)
(d) Payment for Stock. Stock purchased upon exercise of an option
under the Plan shall be paid for as follows: (i) in cash, check acceptable
to the Company (determined in accordance with such guidelines as the Board
may prescribe), or money order payable to the order of the Company, or (ii)
if so permitted by the Board (which, in the case of an incentive option,
shall specify such method of payment at the time of grant), (A) through the
delivery of shares of Stock (which, in the case of Stock acquired from the
Company, shall have been held for at least six months unless the Board
specifies a shorter period) having a fair market value on the date of
exercise equal to the purchase price, or (B) by delivery of a promissory
note of the participant to the Company, such note to be payable on such
terms as are specified by the Board, or (C) by delivery of an unconditional
and irrevocable undertaking by a broker to deliver promptly to the Company
sufficient funds to pay the exercise price, or (D) by any combination of
the permissible forms of payment; provided, that if the Stock delivered
upon exercise of the option is an original issue of authorized Stock, at
least so much of the exercise price as represents the par value of such
Stock shall be paid other than with a personal check or promissory note of
the person exercising the option.
(e) Stock Appreciation Rights. The Board in its discretion may grant
SARs either in tandem with or independent of options awarded under the
Plan. Except as hereinafter provided, each SAR will entitle the
participant to receive upon exercise, with respect to each share of Stock
to which the SAR relates, the excess of (i) the share's value on the date
of exercise, over (ii) the share's fair market value on the date it was
granted. For purposes of clause (i), "value" shall mean fair market value;
provided, that the Board may adjust such value to take into account
dividends on the Stock and may also grant SARs that provide, in such
limited circumstances following a change in control of the Company (as
determined by the Board) as the Board may specify, that "value" for
purposes of clause (i) is to be determined by reference to an average value
for the Stock during a period immediately preceding the change in control,
all as determined by the Board. The amount payable to a participant upon
exercise of an SAR shall be paid either in cash or in shares of Stock, as
the Board determines. Each SAR shall be exercisable during such period or
periods and on such terms as the Board may specify. No SAR shall be
exercisable after the date which is ten years from the date of grant.
(f) Delivery of Stock. A participant shall not have the rights of a
shareholder with regard to awards under the Plan except as to Stock
actually received by such participant under the Plan.
<PAGE> <PAGE>
EXHIBIT 10.16
BBN SOFTWARE PRODUCTS CORPORATION
1993 STOCK OPTION PLAN
(continued)
The Company shall not be obligated to deliver any shares of Stock (i)
until, in the opinion of the Company's counsel, all applicable federal and
state laws and regulations have been complied with, (ii) 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 issuance, and (iii) 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
counsel for 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.
(g) Nontransferability of Awards. No award may be transferred other
than by will or by the laws of descent and distribution, and during a
participant's lifetime an award may be exercised only by him or her.
(h) Death. Except as otherwise provided in an award, if a participant
dies, each award held by the participant immediately prior to death may be
exercised, to the extent it was exercisable immediately prior to death, by
his executor or administrator, or by the person or persons to whom the
award is transferred by will or the applicable laws of descent and
distribution, at any time within the period ending (i) 180 days after the
participant's death (in the event the participant's employment or other
service relationship with the Company shall terminate by reason of death),
or (ii) 120 days after the participant's death (in the event the
participant dies within the 60-day period following termination of the
participant's employment or other service relationship with the Company),
or such longer period as the Committee may determine. In no event shall an
award be exercised beyond the Final Exercise Date. Except as otherwise
provided in an award, all awards held by a participant immediately prior to
death that are not then exercisable shall terminate on the date of death.
(i) Other Termination of Service. Except as otherwise provided in an
award, if a participant's employment or other service relationship with the
Company terminates for any reason other than death, all awards held by the
participant shall terminate to the extent not exercisable immediately prior
to such event. To the extent exercisable immediately prior to termination
of employment or other service relationship, the award shall continue to be
exercisable thereafter for a period of 60 days (or such longer period as
the Board may determine, but in no event beyond the Final Exercise Date),
unless the participant's employment or other service relationship is
terminated for "cause" as a result of the participant's misconduct which, in
PAGE
<PAGE>
EXHIBIT 10.16
BBN SOFTWARE PRODUCTS CORPORATION
1993 STOCK OPTION PLAN
(continued)
the judgment of the Board, casts discredit on him or her, or is otherwise
harmful to the business, interests, or reputation of the Company, its parent,
or a subsidiary, in which case all awards shall terminate immediately. The
Board may in any award provide for post-termination exercise provisions
different from those expressly set forth in the preceding two sentences or in
(h) above, including without limitation terms allowing a later exercise by a
former employee, consultant, or advisor (or, in the case of a former employee,
consultant, or advisor who is deceased, the person or persons to whom the
award is transferred by will or the laws of descent and distribution) as to
all or any portion of the award not exercisable immediately prior to
termination or employment or other service relationship, but in no case may
an award be exercised after the Final Exercise Date. Except as otherwise
provided in an award, after completion of that 60-day or longer period,
such awards shall terminate to the extent not previously exercised,
expired, or terminated. For purposes of this Plan, the service
relationship shall not be considered terminated (i) in the case of sick
leave or other bona fide leave of absence approved for purposes of the Plan
by the Board, so long as the participant's right to reemployment or
continued service is guaranteed either by statute or by contract, or (ii)
in the case of a transfer of employment or service relationship between the
Company and a subsidiary or parent, or between subsidiaries of the Company
or parent (provided the participant's direct or indirect service to the
Company continues), or to the service of a corporation (or a parent or
subsidiary corporation of such corporation) issuing or assuming an award in
a transaction to which section 424(a) of the Code applies.
(j) Mergers, etc. In the event of any merger, consolidation,
dissolution, or liquidation of the Company, the Board in its sole
discretion may, as to any outstanding awards, make such substitution or
adjustment in the aggregate number of shares reserved for issuance under
the Plan and in the number and purchase price (if any) of shares subject to
such awards as it may determine, or accelerate, amend, or terminate such
awards upon such terms and conditions as it shall provide (which, in the
case of the termination of the vested portion of any award, shall require
payment or other consideration which the Board deems equitable in the
circumstances).
The Board may grant awards under the Plan in substitution for awards
held by employees, consultants, or advisors of another corporation who
concurrently become employees, consultants, or advisors of the Company, its
parent, or a subsidiary as the result of a merger or consolidation of that
corporation with the Company, its parent, or a subsidiary, or as the result
of the acquisition by the Company, its parent, or a subsidiary of property
or stock of that corporation. The Company may direct that substitute
awards be granted on such terms and conditions as the Board considers
appropriate in the circumstances.
<PAGE> <PAGE>
EXHIBIT 10.16
BBN SOFTWARE PRODUCTS CORPORATION
1993 STOCK OPTION PLAN
(continued)
(k) Cancellation of Awards. The Board may provide in any award that
the award shall be cancelled or rescinded and any associated shares
forfeited, and the participant shall be obligated to pay to the Company any
gain received upon exercise, in the event that the participant competes
with the Company, discloses confidential information of the Company, or
otherwise is not in compliance with applicable provisions of any award, in
each case on such terms and conditions as the Board considers appropriate
in the circumstances.
7. EMPLOYMENT RIGHTS
_________________
Neither the adoption of the Plan nor the grant of awards shall confer
upon any participant any right to continue as an employee of, or consultant
or advisor to, the Company, its parent, or any subsidiary of either or
affect in any way the right of the Company, its parent, or a subsidiary of
either to terminate the participant's relationship at any time. Except as
specifically provided by the Board in any particular case, the loss of
existing or potential profit in awards granted under this Plan shall not
constitute an element of damages in the event of termination of the
relationship of a participant even if the termination is in violation of an
obligation of the Company, its parent, or a subsidiary of either to the
participant by contract or otherwise.
8. EFFECT, DISCONTINUANCE, CANCELLATION, AMENDMENT, AND TERMINATION
________________________________________________________________
Neither adoption of the Plan nor the grant of awards to a participant
shall affect the Company's right to make awards to such participant that
are not subject to the Plan, to issue to such participant Stock as a bonus
or otherwise, or to adopt other plans or arrangements under which Stock may
be issued, and shall in no way affect the Company's right to operate its
business at its sole discretion.
The exercise of certain awards granted under the Plan may be made
contingent upon the closing of an initial public offering of the Company's
Stock. The grant of such awards under the Plan shall in no way obligate
the Company to consummate or consider a public offering of Stock, and the
failure of the Company to close a public offering of Stock shall not
entitle a participant granted such an award to any substitute award or
other benefit, or to any damages.
<PAGE> <PAGE>
EXHIBIT 10.16
BBN SOFTWARE PRODUCTS CORPORATION
1993 STOCK OPTION PLAN
(continued)
The Board may at any time discontinue granting awards under the Plan.
With the consent of the participant, the Board may at any time cancel an
existing award in whole or in part and grant another award for such number
of shares as the Board specifies. The Board may at any time or times amend
the Plan or any outstanding award for the purpose of satisfying the
requirements of section 422 of the Code or of any changes in applicable
laws or regulations or for any other purpose that may at the time be
permitted by law, or may at any time terminate the Plan as to any further
grants of awards; except that no such amendment shall adversely affect the
rights of any participant (without his or her consent) under any award
previously granted.
<PAGE> <PAGE>
<PAGE> <PAGE>
BOLT BERANEK AND NEWMAN INC.
EXHIBIT 11.1
COMPUTATION OF NET LOSS PER SHARE
(000's except per-share data)
Three Months Ended
________________________________________________
March 31, 1994 March 31, 1993
______________________ _______________________
Fully Fully
Primary Diluted Primary Diluted
_________ __________ __________ __________
Weighted average
shares outstanding 16,295 16,295 15,754 15,754
Incremental shares from use
of treasury stock method
for stock options (a) (a) (a) (a)
_________ __________ __________ __________
Shares used in per-share
calculations 16,295 16,295 15,754 15,754
========= ========== ========== ==========
Net loss $ (2,259) $ (2,259) $ (6,640) $ (6,640)
========= ========== ========== ==========
Net loss per share $ (.14) $ (.14) $ (.42) $ (.42)
========= ========== ========== ==========
Nine Months Ended
________________________________________________
March 31, 1994 March 31, 1993
______________________ _______________________
Fully Fully
Primary Diluted Primary Diluted
_________ __________ __________ __________
Weighted average
shares outstanding 16,116 16,116 15,687 15,687
Incremental shares from use
of treasury stock method
for stock options (a) (a) (a) (a)
__________ __________ __________ _________
Shares used in per-share
calculations 16,116 16,116 15,687 15,687
========== ========== ========== =========
Net loss $ (5,872) $ (5,872) $ (31,647) $ (31,647)
========== ========== ========== =========
Net loss per share $ (.36) $ (.36) $ (2.02) $ (2.02)
========== ========== ========== =========
(a) Incremental shares were not used as their effect would be antidilutive.
<PAGE> <PAGE>
