As filed with the Securities and Exchange Commission on February 10, 1997
Registration No. 33-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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BBN CORPORATION
(Exact name of registrant as specified in its charter)
MASSACHUSETTS 1986 STOCK INCENTIVE PLAN 04-2164398
(State or other jurisdiction (Full title of the plans) (I.R.S. Employer
of incorporation or organization) Identification Number)
--------------------------------
150 CAMBRIDGEPARK DRIVE
CAMBRIDGE, MASSACHUSETTS 02140
(617) 873-2000
(Address, including zip code, and telephone number,
including area code, of principal executive offices)
RALPH A. GOLDWASSER
SENIOR VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
BBN CORPORATION
150 CAMBRIDGEPARK DRIVE
CAMBRIDGE, MASSACHUSETTS 02140
(617) 873-2000
(Name and address, including zip code, and telephone
number, including area code, of agent for service)
------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
CALCULATION OF REGISTRATION FEE
Amount Proposed maximum Proposed maximum Amount of
Title of each class of to be offering price aggregate offering registration
securities to be registered registered<F1> per share<F2> price<F2> fee
Common Stock -- $1.00 Par Value: 850,000 $23.1875 $19,709,375 $5,972.54
<FN>
<F1> This Registration Statement also covers such indeterminable number
of additional shares of Common Stock, par value $1.00 per share ("Common
Stock"), of BBN Corporation (the "Company") as may become deliverable
as a result of future adjustments in accordance with the Company's 1986 Stock
Incentive Plan.
<F2> The offering price has been estimated solely for the purpose of
determining the registration fee pursuant to Rule 457(h) on the basis of the
average high and low prices for the Common Stock on February 5, 1997 as
reported on the New York Stock Exchange.
</FN>
</TABLE>
EXPLANATORY NOTE
This registration Statement covers 850,000 shares of the Company's Common Stock
to be issued pursuant to the Company's 1986 Stock Incentive Plan.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents previously filed by the Company with the Commission
pursuant to the Securities Exchange Act of 1934 (the "Exchange Act") are hereby
incorporated by reference:
(1) The Company's Annual Report on Form 10-K for the year ended June 30,
1996, including the portions of the Company's Proxy Statement dated
October 2, 1996 relating to its 1996 Annual Meeting of Shareholders.
(2) The Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1996.
(3) The Company's Current Report on Form 8-K filed with the Commission on
November 14, 1996.
(4) The description of the Common Stock contained in the Company's
Registration Statement on Form 8-A filed in 1961, as supplemented by
the description of the Company's Common Stock Purchase Rights contained
in its Registration Statement on Form 8-A filed on June 28, 1988.
All other reports and other documents filed by the Company pursuant to
Section 13(a), 13(c), 14, or 15(d) of the Exchange Act after the date of this
Registration Statement and prior to the termination of this offering shall be
incorporated by reference into this Registration Statement and shall be deemed
to be a party of this Registration Statement from the date of filing of such
reports and documents. Any statement contained herein or in a document
incorporated by reference shall be deemed to be modified or superseded for
purposes of this Registration Statement to the extent that a statement contained
in this Registration Statement or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Registration Statement.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
The Company is organized under the laws of Massachusetts. The Massachusetts
Business Corporation Law provides that indemnification of directors, officers,
employees, and other agents of a Massachusetts corporation, and persons who
serve at its request as directors, officers, employees, or other agents of
another organization, or who serve at its request in any capacity with respect
to any employee benefit plan, may be provided by the
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corporation to whatever extent is specified in charter document or votes adopted
by its shareholders, except that no indemnification may be provided for any
person with respect to any matter as to which the person shall have been
adjudicated in any proceeding not to have acted in good faith in the reasonable
belief that his action was in the best interest of the corporation, or to the
extent that such matter relates to services with respect to an employee benefit
plan, with best interests of the participants or beneficiaries of such employee
benefit plan. Under Massachusetts law, a corporation can purchase and maintain
insurance on behalf of any person against any liability incurred as a director,
officer, employee, agent, or person serving at the request of the corporation as
a director, officer, employee, or other agent of another organization or with
respect to any employee benefit plan, in his capacity as such, whether or not
the corporation would have the power to itself indemnify him against such
liability.
The Company's Restated Articles of Organization provide that a director of
the Company shall not be liable to the Company or its shareholders for monetary
damages for breach of fiduciary duty as a director, except to the extent that
such exculpation from liability is not permitted by the Business Corporation Law
of Massachusetts as the same exists now or may hereafter be amended. Such
Restated Articles of Organization provide further that no amendment to or repeal
of the foregoing provision shall apply to or have any effect on the liability or
alleged liability of any director for or with respect to any act or omission of
such director occurring prior to such amendment or repeal.
The Company's By-laws provide the Company shall, to the extent legally
permissible, indemnify each of its directors and officers (including persons who
serve at its request as directors, officers, or trustees of another organization
in which it has any interest, as a shareholder, creditor or otherwise) against
all liabilities and expenses, including amounts paid in satisfaction of
judgments, in compromise or as fines and penalties, and counsel fees, reasonably
incurred by him in connection with the defense or disposition of any action,
suit or other proceeding, whether civil or criminal, in which he may be involved
or with which he may be threatened, while in office or thereafter, by reason of
his being or having been such a director or officer, except with respect to any
matter as to which he shall have been adjudicated in any proceeding not to have
acted in good faith in the reasonable belief that his action was in the best
interests of the Company; provided, however, that as to any matter disposed of
by a compromise payment by such director or officer, pursuant to a consent
decree or otherwise, no indemnification either for said payment or for any other
expenses shall be provided unless such compromise shall be approved as in the
best interests of the Company, after notice that it involves such
indemnification, (a) by a disinterested majority of the directors then in
office; or (b) by a majority of the disinterested directors then in office,
provided that there has been obtained an opinion in writing of independent legal
counsel to the effect that such director or officer appears to have acted in
good faith in the reasonable belief that his action was in the best interests of
the Company; or (c) by the holders of a majority of the outstanding stock at the
time entitled to vote for directors, voting as a single class, exclusive of any
stock owned by any interested director or officer. The By-laws further provide
that the right of indemnification provided therein shall not be exclusive of or
affect any other rights to which any director or officer may be entitled.
The Company maintains a Directors and Officers Liability and Corporate
Reimbursement Insurance Policy and a Fiduciary Responsibility Insurance Policy
covering its directors and officers.
Insofar as indemnification for liabilities under the Securities Act of 1933
may be permitted to directors, officers, or persons controlling the Company
pursuant to the foregoing provisions, the Company has been informed that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act of 1933 and is
therefore unenforceable.
Item 7. Exemption From Registration Claimed.
Not applicable.
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Item 8. Exhibits.
Exhibit
4.1 1986 Stock Incentive Plan, as amended through November 6, 1996.
5.1 Opinion of Ropes & Gray.
23.1 Consent of Coopers & Lybrand L.L.P.
23.2 Consent of Ropes & Gray (contained in the opinion filed as Exhibit 5.1
to this Registration Statement).
24.1 Power of Attorney (included on the signature page of this Registration
Statement under the caption "Power of Attorney").
Item 9. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1) to file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement: (i) to include any
prospectus required by Section 10(a)(3) of the Securities Act of 1933, (ii)
to reflect in the prospectus any facts or events arising after the effective
date of the Registration Statement (or the most recent post-effective
amendment thereof), which, individually or in the aggregate, represent a
fundamental change in the information set forth in the Registration
Statement, and (iii) to include any material information with respect to the
plan of distribution not previously disclosed in the Registration Statement
or any material change to such information in the Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) shall not apply
if the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the registrant
pursuant to section 13 or section 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in the Registration Statement.
(2) that, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) to remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination
of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) The undersigned Registrant hereby undertakes to deliver or cause to be
delivered with the Prospectus, to each person to whom the Prospectus is sent or
given, the latest annual report to security holders that is incorporated by
reference in the Prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be presented by
Article 3 of Regulation S-X are not set forth in the Prospectus, to deliver, or
cause to be delivered to
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each person to whom the Prospectus is sent or given, the latest quarterly report
that is specifically incorporated by reference in the Prospectus to provide such
interim financial information.
(d) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
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Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement on Form S-8 to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Cambridge, the Commonwealth of Massachusetts, on
this 6th day of February, 1997.
BBN Corporation
By: /s/George H. Conrades
_____________________________________
George H. Conrades
President and Chief Executive Officer
POWER OF ATTORNEY
Pursuant to the requirement of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated. Each person whose signature appears below
hereby authorizes and constitutes George H. Conrades, Ralph A. Goldwasser, and
John Montjoy and each of them singly, his or her true and lawful attorneys with
full power to them, and each of them singly, to sign for him or her and in his
or her name in the capacities indicated below any and all amendments (including
post-effective amendments) to this Registration Statement and to file the same,
with exhibits thereto, and other documents in connection therewith, and he or
she hereby ratifies and confirms his or her signature as it may be signed by
said attorneys, or any of them, to any and all such amendments.
<TABLE>
<CAPTION>
<S> <C> <C>
Signature Capacity in Which Signed Date
/s/George H. Conrades Chairman, President, Chief Executive Officer, February 6, 1997
_____________________________ and Director
George H. Conrades
(principal executive officer)
/s/Ralph A. Goldwasser Senior Vice President and Chief Financial February 6, 1997
_____________________________ Officer
Ralph A. Goldwasser
(principal financial officer)
/s/Paul F. Brauneis Vice President and Controller February 6, 1997
_____________________________
Paul F. Brauneis
(principal accounting officer)
/s/John M. Albertine Director February 6, 1997
______________________________
John M. Albertine
/s/Lucie J. Fjeldstad Director February 6, 1997
______________________________
Lucie J. Fjeldstad
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/s/Max D. Hopper Director February 6, 1997
_________________________
Max D. Hopper
/s/Stephen R. Levy Director February 6, 1997
________________________
Stephen R. Levy
/s/Regis McKenna Director February 6, 1997
________________________
Regis McKenna
/s/Andrew L. Nichols Director February 6, 1997
________________________
Andrew L. Nichols
/s/Roger D. Wellington Director February 6, 1997
________________________
Roger D. Wellington
</TABLE>
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EXHIBIT INDEX
Number Title of Exhibit
4.1 1986 Stock Incentive Plan, as amended through
November 6, 1996
5.1 Opinion of Ropes & Gray
23.1 Consent of Coopers & Lybrand L.L.P.
23.2 Consent of Ropes & Gray (contained in the opinion filed
as Exhibit 5.1 to this Registration Statement).
24.1 Power of Attorney (included on the signature page of this
Registration Statement under the caption "Power of
Attorney").
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EXHIBIT 4.1
BBN CORPORATION
1986 STOCK INCENTIVE PLAN
SECTION 1. General Purpose of the Plan; Definitions.
The name of the plan is the BBN Corporation 1986 Stock Incentive Plan
(the "Plan"). The purpose of the Plan is to secure for BBN Corporation (the
"Company") and its stockholders the benefit of the incentives of Common Stock
ownership and the receipt of incentive awards by directors of the Company and by
selected key employees of the Company and its subsidiaries, and by other key
persons and entities, who contribute to and will be responsible for continued
long-term growth of the Company. The Plan is intended to stimulate the efforts
of such persons by providing an opportunity for capital appreciation and giving
suitable recognition for services which contribute materially to the success of
the Company.
The following terms shall be defined as set forth below:
a. "Act" means the Securities Exchange Act of 1934.
b. "Award" or "Awards" except where referring to a particular
category of grant under the Plan shall include Incentive Stock
Options, Non-Qualified Stock Options, Stock Appreciation
Rights, Restricted Stock Awards, Unrestricted Stock Awards,
Deferred Stock Awards, Performance Unit Awards, and Other
Stock-based Awards.
c. "Board" means the Board of Directors of the Company.
d. "Code" means the Internal Revenue Code of 1986, as
amended, and any successor Code, and related rules,
regulations, and interpretations.
e. "Committee" means the Committee referred to in
Section 2. If at any time no Committee shall be in office,
the functions of the Committee shall be exercised by the
Board.
f. "Deferred Stock Award" is defined in Section 9(a).
g. "Disability" means disability as determined in
accordance with standards and procedures similar to those
used under the Company's long-term disability program.
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h. [Intentionally left blank]
i. "Fair Market Value" on any given date means the last sale
price regular way at which Stock is traded on such date as
reflected in the New York Stock Exchange-Composite
Transactions Index or, where applicable, the value of a share
of Stock as determined by the Committee in accordance with the
applicable provisions of the Code.
j. "Incentive Stock Option" means any Stock Option
intended to be and designated as an "incentive stock option"
as defined in the Code.
k. "Non-employee Director" means an individual who is a
director of the Company but who is not a full-time employee
of the Company or a Subsidiary.
l. "Non-Qualified Stock Option" means any Stock Option
that is not an Incentive Stock Option.
m. "Normal Retirement" means retirement from active
employment with the Company and its Subsidiaries on or after
the normal retirement date specified in the BBN Corporation
Retirement Trust Agreement.
n. "Other Stock-based Award" is defined in Section 11(a).
o. "Performance Unit Award" is defined in Section 10(a).
p. "Restricted Stock Award" is defined in Section 8(a).
q. "Stock" means the Common Stock, $1.00 par value, of
the Company, subject to adjustments pursuant to Section 3.
r. "Stock Appreciation Right" means a right described
in Section 7(a) and granted, either independently of other
Awards or in tandem with the grant of a Stock Option.
s. "Stock Option" means any option to purchase shares
of Stock granted pursuant to Section 6.
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t. "Subsidiary" means any corporation or other entity (other than
the Company) in an unbroken chain beginning with the Company
if each of the entities (other than the last entity in the
unbroken chain) owns stock or other interests possessing 50%
or more of the total combined voting power of all classes of
stock or other interest in one of the other corporations in
the chain.
u. "Unrestricted Stock Award" is defined in Section 8(f).
SECTION 2. Committee Authority to Select Participants and
Determine Awards, Etc.
The Plan shall be administered by a Committee of Directors who shall be
appointed by the Board and shall serve at the pleasure of the Board. The
Committee shall be comprised solely of two or more individuals who qualify as
"Non-Employee Directors" as that term is defined in Rule 16b-3(b)(3) promulgated
under the Act, provided, however, that in the case of any Awards of Stock
Options or Stock Appreciation Rights intended to be exempt under Section
162(m)(4)(C) of the Code, including any such Awards awarded to an Employee who
is a "covered employee" (within the meaning of Section 162(m)(3) of the Code) of
the Company, all actions required by Section 162(m)(4)(C) of the Code or the
regulations thereunder to be taken by a committee consisting solely of "outside
directors" within the meaning of Treasury Regulations ss.1.162-27(e)(3)(i) shall
be taken (i) by the Committee if it consists solely of such "outside directors",
or (ii) in every other case, by a subcommittee of the Committee consisting
solely of two or more such "outside directors". With respect to those actions
taken pursuant to clause (ii) of the preceding sentence by the subcommittee
described therein, such subcommittee shall be deemed the Committee for purposes
of the Plan. Notwithstanding the foregoing, if at any time there shall be fewer
than two "outside directors" (within the meaning of Treasury Regulations
ss.1.162-27(e)(3)(i)) on the Committee, the Committee as a whole rather than a
subcommittee shall act as the Committee for purposes of the Plan.
The Committee shall have the power and authority to grant Awards
consistent with the terms of the Plan, including the power and authority:
i. to select from among the eligible persons and entities
described in Section 4 those to whom Awards may from
time to time be granted;
ii. to determine the time or times of grant, and the extent,
if any, of Incentive Stock Options, Non-Qualified Stock
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Options, Stock Appreciation Rights,
Restricted Stock, Unrestricted Stock,
Deferred Stock, Performance Units, and any
Other Stock-based Awards, or any combination
of the foregoing, granted to any one or more
participants;
iii. to determine the number of shares to be covered by any
Award;
iv. to determine the terms and conditions, including
restrictions, not inconsistent with the terms of the
Plan, of any Award, which terms and conditions may
differ among individual Awards and participants;
v. to determine whether, to what extent, and under what
circumstances Stock and other amounts payable with
respect to an Award shall be deferred either
automatically or at the election of the participant and
whether and to what extent the Company shall pay or
credit amounts equal to interest (at rates determined
by the Committee) or dividends or deemed dividends on
such deferrals; and
vi. to adopt, alter, and repeal such rules, guidelines and
practices for administration of the Plan and for its
own acts and proceedings as it shall deem advisable; to
interpret the terms and provisions of the Plan and any
Award (including related Award Agreements); to make
all determinations it deems advisable for the
administration of the Plan; to decide all disputes
arising in connection with the Plan; and to otherwise
supervise the administration of the Plan.
All decisions and interpretations of the Committee shall be binding on
all persons, including the Company and Plan participants.
SECTION 3. Shares Issuable Under the Plan; Mergers; Substitution
a. Shares Issuable. The maximum number of
shares of Stock reserved and available for issuance
under the Plan shall be 4,700,000, including shares
issued in lieu of or upon reinvestment of dividends
arising from Awards. Of this number, 150,000 are
reserved and available for issuance under
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stock options granted to Non-employee Directors under
Section 6(m). For purposes of the foregoing
limitations and to the maximum extent consistent with
continued qualification of the Plan under Section 422
of the Code and Rule 16b-3 promulgated under the Act,
Awards and Stock which are forfeited, reacquired by
the Company, or satisfied without the issuance of
Stock shall not be counted. Subject to such overall
limitation, shares may be issued up to such maximum
pursuant to any type or types of Award, including
Incentive Stock Options. Shares issued under the Plan
may be authorized but unissued shares or shares
reacquired by the Company.
The maximum number of shares of Stock for which any individual
(other than a Non-employee Director) may be issued Stock
Options under the Plan during the limitation period shall be
750,000 shares. The maximum number of shares of Stock as to
which any individual may be issued Stock Appreciation Rights
under the Plan during the limitation period shall likewise be
750,000 shares. For purposes of the two preceding sentences,
(i) the limitation period shall be the period beginning
January 1, 1994 and ending December 1, 1999, and (ii) Stock
Options granted prior to January 1, 1994 but subject to
shareholder approval occurring after January 1, 1994 shall be
treated as having been granted during the limitation period.
The limitations described in this paragraph shall be construed
and applied in accordance with Section 162(m) of the Code and
the regulations thereunder. Subject to the foregoing, a Stock
Option or Stock Appreciation Right that is canceled and
reissued, or repriced, shall be treated as a new Award, and
both the old Award and the new Award shall count against the
applicable limit described in this paragraph.
b. Stock Dividends, Mergers, etc. In the event of a stock
dividend, stock split, or similar change in capitalization
affecting the Stock, the Committee shall make appropriate
adjustments in (i) the number and kind of shares of stock or
securities on which Awards may thereafter be granted, (ii)
the number and kind of shares remaining subject to
outstanding Awards, and (iii) the option or purchase price
in respect of such shares. In the event of any merger,
consolidation, dissolution, or liquidation of the Company,
the Committee 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
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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 Committee
deems equitable in the circumstances).
c. Substitute Awards. The Company may grant Awards
under the Plan in substitution for stock and stock based
awards held by employees of or other persons providing
services to another corporation who concurrently become
employees of or providers of service to the Company or a
Subsidiary as the result of a merger or consolidation of
the employing corporation with the Company or a Subsidiary
or the acquisition by the Company or a Subsidiary of
property or stock of the employing corporation. The
Committee may direct that the substitute awards be granted
on such terms and conditions as the Committee considers
appropriate in the circumstances. The shares which may be
delivered under such substitute Awards shall be in addition
to the maximum number of shares provided for in the first
paragraph of Section 3(a) only to the extent that the
substitute Awards are both granted to persons whose
relationship to the Company does not make (and
is not expected to make) them subject to Section 16(b) of
the Act and are granted in substitution for awards issued
under a plan approved, to the extent then required under
Rule 16b-3 (or any successor rule under the Act) by the
stockholders of the entity which issued such predecessor
awards.
SECTION 4. Eligibility.
Participants in the Plan will be such full or part time officers and
other key employees of the Company and its Subsidiaries ("Employees") and other
persons or entities who are responsible for or contribute to the management,
growth, or profitability of the Company and its Subsidiaries and who are
selected from time to time by the Committee. Notwithstanding the foregoing,
persons who are directors of the Company, other than any such person who is a
full time employee, shall not be eligible for awards under the Plan except as
provided in Section 6(m).
SECTION 5. Limitations on Term and Dates of Awards.
a. Duration of Awards. Subject to Sections 15(a), 15(c),
and 15(d) below, no restrictions or limitations on Awards
shall extend beyond 10 years (or 10 years and one day in
the case of
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Non-Qualified Stock Options) from the grant date,
except that deferrals, elected by participants, of
the receipt of Stock or other benefits under the Plan
may extend beyond such date.
b. Latest Grant Date. No Award shall be granted after
December 1, 1999, but then-outstanding Awards may extend
beyond such date.
SECTION 6. Stock Options.
Any stock option granted under the Plan shall be in such form as the
Committee may from time to time approve.
Stock Options granted under the Plan may be either Incentive Stock
Options or Non-Qualified Stock Options. To the extent that any option does not
qualify as an Incentive Stock Option, it shall constitute a Non-Qualified Stock
Option. Incentive Stock Options may be granted only to Employees.
Anything in the Plan to the contrary notwithstanding, no term of this
Plan relating to Incentive Stock Options shall be interpreted, amended, or
altered, nor shall any discretion or authority granted to the Committee under
the Plan be so exercised, so as to disqualify the Plan or, without the consent
of the optionee, any Incentive Stock Option under Section 422 of the Code.
Stock Options granted under the Plan shall be subject to the following
terms and conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of the Plan, as the Committee shall deem desirable.
a. Option Price. The option price per share of Stock
purchasable under a Stock Option shall be determined by the
Committee at the time of grant but shall be, in the case of
Incentive Stock Options, not less than 100% of Fair Market
Value on the date of grant and, in the case of Non-Qualified
Stock Options, not less than 50% of Fair Market Value on the
date of grant. If an employee owns or is deemed to own (by
reason of the attribution rules applicable under Section 424(d)
of the Code) more than 10% of the combined voting power of
all classes of stock of the Company or any Subsidiary or parent
corporation and an Incentive Stock Option is granted to such
employee, the option price shall be no less than 110% of Fair
Market Value on the date of grant.
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b. Option Term. The term of each Stock Option shall be
fixed by the Committee, but no Incentive Stock Option shall be
exercisable more than 10 years after the date the option is
granted and no Non-Qualified Stock Option shall be exercisable
more than 10 years and one day after the date the option is
granted. If an employee owns or is deemed to own (by reason
of the attribution rules of Section 424(d) of the Code) more
than 10% of the combined voting power of all classes of stock
of the Company or any Subsidiary or parent corporation and an
Incentive Stock Option is granted to such employee, the term
of such option shall be no more than five years from the date
of grant.
c. Exercisability. Stock Options shall be exercisable at
such future time or times, whether or not in installments, as
shall be determined by the Committee at or after the date of
grant. The Committee may at any time accelerate the
exercisability of all or any portion of any Stock Option.
d. [Intentionally left blank.]
e. Method of Exercise. Stock Options may be exercised in
whole or in part, by giving written notice of exercise to the
Company specifying the number of shares to be purchased.
Such notice shall be accompanied by payment in full of the
purchase price, either by certified or bank check or other
instrument acceptable to the Committee. As determined by the
Committee, in its discretion, at (or, in the case of Non-
Qualified Stock Options, at or after) the time of grant, payment
in full or in part may also be made in the form of shares of
Stock not then subject to restrictions under any Company plan
(but which may include shares the disposition of which
constitutes a disqualifying disposition for purposes of
obtaining incentive stock option treatment for federal tax
purposes), unless the Board should in any case determine
otherwise. Such surrendered shares shall be valued at Fair
Market Value on the exercise date. An optionee shall have the
rights of a shareholder only as to shares acquired upon the
exercise of a Stock Option and not as to unexercised Stock
Options.
f. Non-transferability of Options. No Stock Option shall
be transferable by the optionee otherwise than by will or by the
laws of descent and distribution, and all Stock Options shall be
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exercisable, during the optionee's lifetime, only by the
optionee.
g. Termination by Death. If an optionee's employment by
or other service relationship with the Company and its
Subsidiaries terminates by reason of death, the Stock Option
may thereafter be exercised, both as to that portion which was
exercisable by the optionee immediately prior to death and,
except as otherwise determined by the Committee, as to any
remaining portion, by the legal representative or legatee of the
optionee, for a period of three years (or such other period, not
to exceed three years, as the Committee shall specify at or
after the time of grant) from the date of death or until the
expiration of the stated term of the option, if earlier.
h. Termination by Reason of Disability. Any Stock Option
held by an optionee whose employment by or whose service
relationship with the Company and its Subsidiaries has
terminated, or who has been designated an inactive employee,
by reason of Disability may thereafter be exercised to the
extent it was exercisable at the time of the earlier of such
termination or such designation (or on such accelerated basis as
the Committee shall at any time determine prior to such
termination or designation) for a period of three years (or such
other period, not to exceed three years, as the Committee shall
specify at or after the time of grant) from the date of such
termination of employment or other service relationship or
designation or until the expiration of the stated term of the
option, if earlier. Except as otherwise provided by the
Committee at the time of grant, the death of an optionee during
the final year of such exercise period shall extend such period
for one year following death, or until the expiration of the
stated term of the option, if earlier. The Committee shall have
the authority to determine whether a participant has been
terminated or designated an inactive employee by reason of
Disability.
i. Termination by Reason of Normal Retirement. If an
optionee's employment by the Company and its Subsidiaries
terminates by reason of Normal Retirement, any Stock Option
held by such optionee may thereafter be exercised to the extent
that it was then exercisable (or on such accelerated basis as
the Committee shall at any time determine) for a period of three
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years (or such other period, not to exceed three
years, as the Committee shall specify at or after the
time of grant) from the date of Normal Retirement or
until the expiration of the stated term of the
option, if earlier. Except as otherwise provided by
the Committee at the time of grant, the death of an
optionee during the final year of such exercise
period shall extend such period for one year
following death, or until the expiration of the
stated term of the option, if earlier.
j. Other Termination. Unless otherwise determined by the
Committee, if an optionee's employment by or other service
relationship with the Company or its Subsidiaries terminates
for any reason other than death, Disability or Normal
Retirement, any Stock Option held by such optionee may
thereafter be exercised to the extent it was exercisable on the
date of termination of employment or other termination of the
service relationship (or on such accelerated basis as the
Committee shall determine at or after the time of grant) for a
period of sixty (60) days (or such longer period up to three
years as the Committee shall specify at or after the time of
grant) from the date of termination of employment or other
termination of the service relationship or until the expiration
of the stated term of the option, if earlier, provided, that if
the optionee's employment or other service relationship is
terminated for "cause" as a result of the optionee's misconduct
which, in the judgment of the Committee, casts discredit on
him or her, or is otherwise harmful to the business, interests
or reputation of the Company, its parent, or a Subsidiary, all
Stock Options shall terminate immediately.
For purposes of the preceding paragraph, if an optionee's
employment by the Company or its Subsidiaries is terminated
under circumstances entitling the optionee to cash severance
pay under any written severance plan, program, policy, or
agreement of the Company or its Subsidiaries in force at the
time of such termination of employment (a "Severance
Program"), then except as otherwise determined by the
Committee any Stock Option held by the optionee at termination
of employment shall be treated as "exercisable on the date of
termination of employment" as to those shares for which it was
in fact exercisable immediately prior to termination of
employment plus any additional shares for which it would have
become exercisable during the severance period (as hereinafter
defined) had the optionee remained employed by the Company or
its Subsidiaries. For purposes of the
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preceding sentence, the severance period in the case of any
terminated employee entitled to severance under a Severance
Program shall be the period of weeks over which his or her
cash severance, if paid as salary continuation, would have
been paid (whether or not such severance is in fact so paid in
such form).
k. Incentive Stock Options. Notwithstanding any
designation of a Stock Option as an Incentive Stock Option,
such Stock Option shall be treated for tax purposes as a Non-
Qualified Stock Option to the extent prescribed under Section
422(d) of the Code.
l. Form of Settlement. Subject to Sections 15(a), 15(c),
and 15(d) below, shares of Stock issued upon exercise of a
Stock Option shall be free of all restrictions under the
Plan, except as provided in the following sentence. The
Committee may provide at time of grant that the shares to be
issued upon the exercise of a Stock Option shall be in the
form of Restricted Stock or Deferred Stock, or may reserve
the right to so provide after time of grant.
m. Options Granted to Non-employee Directors. Subject to
the limits and adjustment provisions set forth in Section 3,
each Non-employee Director serving in such position on the
third business day following the date of each annual meeting
of the stockholders of the Company (such third day being
hereinafter referred to as the "determination date") shall be
granted effective as of the determination date a
Non-Qualified Stock Option covering 3,000 shares of Stock.
The option price under such Stock Option shall be the fair
market value of the Stock on the determination date.
If, on account of the limit set forth in the second
sentence of Section 3(a), there are insufficient
shares as of any determination date to permit the grant of a
Stock Option covering 3,000 shares (as adjusted) to each Non-
employee Director then eligible for a grant, the number of
shares available for grant shall be allocated evenly
(disregarding any fractional shares) among the Non-employee
Directors then eligible for a grant (an "incomplete grant"),
and if additional shares later become available under said
limit while any such Non-employee Director who received an
incomplete grant remains a Non-employee Director and during
the terms of the Plan, such Non-employee Director shall be
granted automatically upon such availability a supplemental
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Non-Qualified Stock Option covering a number of
shares equal to the lesser of (a) 3,000 shares
(appropriately adjusted pursuant to Section 3) less
the number of shares (as so adjusted) covered by the
incomplete grant, or (b) the number of shares then
available under Section 3, subject to allocation
among Non-employee Directors in accordance with the
preceding provisions of this paragraph. The option
price of any supplemental Stock Option shall be the
fair market value of the Stock on the date of grant
(i.e., the date of the availability of additional
shares).
Each Stock Option granted under this subsection (m) may be
exercised as follows:
(1) (A) 25% of the shares subject to such Stock Option may be
purchased commencing one year after the date of grant, and
(B) an additional 25% of such shares may be purchased
commencing on the second, third, and fourth anniversaries of
the date of grant; and
(2) subject to (1) above, such Stock Option may only be
exercised during the five-year period beginning on the date
the Stock Option is granted.
To the extent that a Stock Option granted hereunder to a
Non-employee Director is not exercised when it initially
becomes exercisable, it shall be carried forward and be
exercisable until the expiration of the term of such Stock
Option as described in (2) above; provided, that if the
Non-employee Director ceases to be a Director for any reason
other than death, mandatory retirement by reason of age, or
Disability, any Stock Option held by such Non-employee
Director may thereafter be exercised, as to that portion of
the Stock Option which was exercisable immediately prior to
the date the optionee ceased to be a Director, only within the
three-month period beginning from such date (but in no event
beyond the five-year term described in (2) above); and further
provided, that if a Non-employee Director ceases to be a
Director by reason of death, mandatory retirement by reason of
age, or Disability, any Stock Option held by such Non-employee
Director immediately prior to his or her so ceasing to be a
Director, whether or not then exercisable, shall be
exercisable in whole or in part at any time within the
three-month period beginning from the date on which the
individual so ceased to be
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a Director (but in no event beyond the five-year term
described in (2) above) and then shall terminate.
All options granted under this subsection (m) may be exercised
by delivery of cash and/or Stock.
Non-employee Directors shall not be granted any Award or Grant
under this Plan (including any Stock Appreciation Right or
Supplemental Grant) other than Stock Options as specifically
provided hereunder.
SECTION 7. Stock Appreciation Rights; Discretionary Payments.
a. Nature of Stock Appreciation Right. A Stock
Appreciation Right is an Award entitling the recipient to
receive an amount in cash or shares of Stock (or forms of
payment permitted under paragraph (e) below) or a
combination thereof having a value equal to (or if the
Committee shall so determine at time of grant, less than) the
excess of the Fair Market Value of a share of Stock on the date
of exercise over the Fair Market Value of a share of Stock on
the date of grant (or over the option exercise price, if the Stock
Appreciation Right was granted in tandem with a Stock Option)
multiplied by the number of shares with respect to which the
Stock Appreciation Right shall have been exercised, with the
Committee having the right to determine the form of payment.
b. Grant and Exercise of Stock Appreciation Rights. Stock
Appreciation Rights may be granted in tandem with, or
independently of, any Stock Option granted under the Plan. In
the case of a Stock Appreciation Right granted in tandem with
a Non-Qualified Stock Option, such Right may be granted
either at or after the time of the grant of such option. In the
case of a Stock Appreciation Right granted in tandem with an
Incentive Stock Option, such Right may be granted only at the
time of the grant of the option.
A Stock Appreciation Right or applicable portion thereof
granted in tandem with a given Stock Option shall terminate
and no longer be exercisable upon the termination or exercise
of the related Stock Option, except that a Stock Appreciation
Right granted with respect to less than the full number of
shares covered by a related Stock Option shall not be reduced
until the exercise or termination of the related
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Stock Option exceeds the number of shares not covered by the
Stock Appreciation Right.
c. Terms and Conditions of Stock Appreciation Rights.
Stock Appreciation Rights shall be subject to such terms and
conditions as shall be determined from time to time by the
Committee, subject to the following:
i. Stock Appreciation Rights granted in tandem
with Stock Options shall be exercisable only
at such time or times and to the extent that
the related Stock Options shall be
exercisable.
ii.Upon the exercise of a Stock Appreciation Right, the
applicable portion of any related Stock Option shall be
surrendered.
iii.Stock Appreciation Rights granted in tandem with a
Stock Option shall be transferable only with such Stock
Option. Stock Appreciation Rights shall not be
transferable otherwise than by will or the laws of
descent and distribution. All Stock Appreciation Rights
shall be exercisable during the participant's lifetime
only by the participant or the participant's legal
representative.
iv. A Stock Appreciation Right granted in tandem
with an Incentive Stock Option may be
exercised only when the market price of the
Stock subject to the Incentive Stock Option
exceeds the exercise price of such option.
d. Discretionary Payments. Notwithstanding that a Stock
Option at the time of exercise shall not be accompanied by a
related Stock Appreciation Right, if the market price of the
shares subject to such Stock Option exceeds the exercise price
of such Stock Option at the time of its exercise, the Committee
may, in its discretion, cancel such Stock Option, in which
event the Company shall pay to the person exercising such
Stock Option an amount equal to the difference between the
Fair Market Value of the Stock to have been purchased
pursuant to such exercise of such Stock Option (determined on
the date the Stock Option is canceled) and the aggregate
consideration to have been paid by such person upon such
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exercise. Such payment shall be by check or in Stock
(or in a form of payment permitted under paragraph
(e) below) having a Fair Market Value (determined on
the date the payment is to be made) equal to the
amount of such payments or any combination thereof,
as determined by the Committee. The Committee may
exercise its discretion under the first sentence of
this paragraph (d) only in the event of a written
request of the person exercising the option, which
request shall not be binding on the Committee.
e. Settlement in the Form of Restricted Shares or Rights to
Receive Deferred Stock. Subject to Sections 15(a), 15(c), and
15(d) below, shares of Stock issued upon exercise of a Stock
Appreciation Right or as a Discretionary Payment shall be free
of all restrictions under the Plan, except as provided in the
following sentence. The Committee may provide at time of
grant in the case of a Stock Appreciation Right (and at the time
of payment in the case of a Discretionary Payment) that such
shares shall be in the form of shares of Restricted Stock or
rights to acquire Deferred Stock, or in the case of a Stock
Appreciation Right may reserve the right to so provide at any
time after the time of grant. Any such shares and any shares
subject to rights to acquire Deferred Stock shall be valued at
Fair Market Value on the date of exercise of the Stock
Appreciation Right or the date the Stock Option is canceled in
the case of Discretionary Payments.
f. Rules Relating to Exercise. In the case of a participant
subject to the restrictions of Section 16(b) of the Act, no
stock appreciation right (as referred to in Rule 16b-3(e) or any
successor Rule under the Act) shall be exercised (and no
request or payment under paragraph (d) above shall be honored
or made) except in compliance with any applicable
requirements of Rule 16b-3(e) or any successor rule.
Notwithstanding paragraph (a) above, in the event of such
exercise (or request and payment) during an exercise period
currently prescribed by such rule, the Committee may
prescribe, by rule of general application, such other measure of
value as it may determine but not in excess of the highest per
share closing sale price of the Common Stock reported on the
New York Stock Exchange Composite Transactions Index
during such period and, where a Stock Appreciation Right
relates to an Incentive Stock Option, not in excess of an
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amount consistent with the qualification of such
Stock Option as an "incentive stock option" under
Section 422 of the Code.
SECTION 8. Rstricted Stock; Unrestricted Stock.
a. Nature of Restricted Stock Award. A Restricted Stock
Award is an Award entitling the recipient to acquire shares of
Stock for a purchase price (which may be zero), subject to such
conditions, including a Company right during a specified
period or periods to repurchase such shares at their original
purchase price (or to require forfeiture of such shares, if the
purchase price was zero) upon the participant's termination of
employment or other service relationship, as the Committee
may determine at the time of grant. The original purchase
price, if any, shall be determined by the Committee, but if any
purchase price is payable in an amount which exceeds the
lesser of the par value of the shares or 10% of the fair market
value of the Common Stock on the award date, it shall be equal
to at least 50% of the fair market value of the Common Stock
on the award date.
b. Award Agreement. A participant who is granted a
Restricted Stock Award shall have no rights with respect to
such Award unless the participant shall have accepted the
Award within 60 days (or such shorter date as the Committee
may specify) following the award date by making payment to
the Company by certified or bank check or other instrument
acceptable to the Committee in an amount equal to the
specified purchase price, if any, of the shares covered by the
Award and by executing and delivering to the Company a
Restricted Stock Award Agreement in such form as the
Committee shall determine.
c. Rights as a Shareholder. Upon complying with
paragraph (b) above, a participant shall have all the rights of
a shareholder with respect to the Restricted Stock including
voting and dividend rights, subject to nontransferability
restrictions and Company repurchase or forfeiture rights
described in this Section and subject to any other conditions
contained in the Award Agreement. Unless the Committee
shall otherwise determine, certificates evidencing shares of
Restricted Stock shall remain in the possession of the Company
until such shares are free of any restrictions under the Plan.
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d. Restrictions. Shares of Restricted Stock may not be
sold, assigned, transferred, pledged, or otherwise encumbered
or disposed of except as specifically provided herein. In the
event of termination of employment or other service
relationship of the participant with the Company and its
Subsidiaries for any reason, such shares shall be resold to
the Company at their purchase price, or forfeited to the
Company if the purchase price was zero, except as set forth
below.
i. The Committee at the time of grant shall specify the
date or dates (which may depend upon or be related to
the attainment of performance goals and other
conditions) on which the nontransferability of the
Restricted Stock and the obligation to resell such shares
to the Company shall lapse. The Committee at any time
may accelerate such date or dates and otherwise waive
or, subject to Section 13, amend any conditions of the
Award.
ii.Except as may otherwise be provided in the Award
Agreement, in the event of termination of employment
or other service relationship of a participant with the
Company and its Subsidiaries for any reason (including
death), the participant or the participant's legal
representative shall offer to resell to the Company, at
the price paid therefor, all Restricted Stock, and the
Company shall have the right to purchase the same at
such price, or if the price was zero to require forfeiture
of the same, provided that except as provided in the
Award Agreement, the Company must exercise such
right of repurchase or forfeiture not later than the 60th
day following such termination of employment or other
service relationship.
e. Waiver, Deferral, and Investment of Dividends. The
Restricted Stock Award Agreement may require or permit the
immediate payment, waiver, deferral, or investment of
dividends paid on the Restricted Stock.
f. Unrestricted Stock. The Committee may, in its sole
discretion, grant (or sell at a purchase price not to exceed
the lesser of the par value of the shares or 10% of the fair
market
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value of the Common Stock at the time of sale) to any
participant shares of Stock free of restrictions
under the Plan ("Unrestricted Stock"). Shares of
Unrestricted Stock may be granted or sold as
described in the preceding sentence in respect of
past services or other valid consideration. Any sale
of Unrestricted Stock must take place within 60 days
after the time of grant of the right to purchase such
shares.
SECTION 9. Deferred Stock Awards.
a. Nature of Deferred Stock Award. A Deferred Stock
Award is an award entitling the recipient to acquire
shares of Stock without payment in one or more
installments at a future date or dates, all as
determined by the Committee. The Committee may also
condition such acquisition on the attainment of
specified performance goals.
b. Award Agreement. A participant who is granted a
Deferred Stock Award shall have no rights with respect to
such Award unless within 60 days of the grant of such Award
or such shorter period as the Committee may specify, the
participant shall have accepted the Award by executing and
delivering to the Company a Deferred Stock Award
Agreement.
c. Restrictions on Transfer. Deferred Stock Awards and
all rights with respect to such Awards may not be sold,
assigned, transferred, pledged, or otherwise encumbered.
Rights with respect to such Awards shall be exercisable
during the participant's lifetime only by the participant
or the participant's legal representative.
d. Rights as a Shareholder. A participant receiving a
Deferred Stock Award will have rights of a shareholder
only as to shares actually received by the participant
under the Plan and not with respect to shares subject to
the Award but not actually received by the participant.
A participant shall be entitled to receive a stock
certificate for shares of Deferred Stock only upon
satisfaction of all conditions therefor specified
in the Deferred Stock Award Agreement.
e. Termination. Except as may otherwise be provided in
the Award Agreement, a participant's rights in all Deferred
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Stock Awards shall automatically terminate upon the
participant's termination of employment by or other
service relationship with the Company and its
Subsidiaries for any reason (including death).
f. Acceleration, Waiver, etc. At any time prior to the
participant's termination of employment or other service
relationship the Committee may in its discretion
accelerate, waive, or, subject to Section 13, amend any
or all of the restrictions or conditions imposed under
any Deferred Stock Award.
g. Payments in Respect of Deferred Stock. Without
limiting the right of the Committee to specify different
terms, the Deferred Stock Award Agreement may either make
no provisions for, or may require or permit the immediate
payment, deferral, or investment of amounts equal to, or
less than, any cash dividends which would have been
payable on the Deferred Stock had such stock been
outstanding, all as determined by the Committee in its
sole discretion.
SECTION 10. Performance Unit Awards.
a. Nature of Performance Units. A Performance Unit
Award is an award entitling the recipient to acquire cash
or shares of Stock, or a combination of cash and Stock,
upon the attainment of specified performance goals.
The Committee in its sole discretion shall determine
whether and to whom Performance Unit Awards shall be
made, the performance goals applicable under each such
Award, the periods during which performance is to be
measured, and all other limitations and conditions
applicable to the awarded Performance Unit.
Performance Units may be awarded independent of or in
connection with the granting of any other Award under the
Plan.
b. Award Agreement. A participant shall have no rights
with respect to a Performance Unit Award unless
within 60 days of the grant of such Award or such
shorter period as the Committee may specify, the
participant shall have accepted the Award by
executing and delivering to the Company a Performance
Unit Award Agreement.
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c. Restrictions on Transfer. Performance Unit Awards
and all rights with respect to such Awards may not be
sold, assigned, transferred, pledged, or otherwise
encumbered, and if exercisable over a specified period,
shall be exercisable during the participant's lifetime
only by the participant or the participant's legal
representative.
d. Rights as a Shareholder. A participant receiving a
Performance Unit Award will have rights of a shareholder
only as to shares actually received by the participant
under the Plan and not with respect to shares subject to
the Award but not actually received by the participant.
A participant shall be entitled to receive a stock
certificate evidencing the acquisition of shares
of Stock under a Performance Unit Award only upon
satisfaction of all conditions therefor specified in the
Performance Unit Award Agreement.
e. Termination. Except as may otherwise be provided by
the Committee at any time prior to termination of
employment or other service relationship, a
participant's rights in all Performance Unit Awards
shall automatically terminate upon the participant's
termination of employment by or other service
relationship with the Company and its Subsidiaries for
any reason (including death).
f. Acceleration, Waiver, etc. At any time prior to the
participant's termination of employment by or other
service relationship with the Company and its
Subsidiaries, the Committee may in its sole discretion
accelerate, waive, or, subject to Section 13, amend any
or all of the goals, restrictions, or conditions
imposed under any Performance Unit Award.
g. Exercise. The Committee in its sole discretion shall
establish procedures to be followed in exercising any
Performance Unit, which procedures shall be set forth in
the Performance Unit Award Agreement. The Committee
may at any time provide that payment under a Performance
Unit shall be made, upon satisfaction of the applicable
performance goals, without exercise by the participant.
Except as otherwise specified by the Committee, (i) a
Performance Unit granted in tandem with a Stock Option
may be exercised only while the Stock Option is
exercisable, and (ii) the exercise of a
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Performance Unit granted in tandem with any Award
shall reduce the number of shares subject to the
related Award on such basis as is specified in the
Performance Unit Award Agreement.
SECTION 11. Other Stock-Based Awards; Supplemental Grants.
a. Nature of Awards. The Committee may grant other
Awards under which Stock is or may in the future be
acquired ("Other Stock-based Awards"). Such awards may
include, without limitation, debt securities convertible
into or exchangeable for shares of Stock upon such
conditions, including attainment of performance goals,
as the Committee shall determine. Subject to the
purchase price limitations in paragraph (b) below, such
convertible or exchangeable securities may have such
terms and conditions as the Committee may determine at
the time of grant. However, no convertible or
exchangeable debt shall be issued unless the
Committee shall have provided (by Company right of
repurchase, right to require conversion or exchange, or
other means deemed appropriate by the Committee) a means
of avoiding any right of the holders of such debt to
prevent a Company transaction by reason of covenants
in such debt.
b. Purchase Price; Form of Payment. The Committee
may determine the consideration, if any, payable upon
the issuance or exercise of an Other Stock-based Award.
However, no shares of Stock (whether acquired by
purchase, conversion, or exchange or otherwise) shall
be issued unless (i)issued at no cost to the recipient
(or for a purchase price not in excess of the lesser of
the par value of the Shares or 10% of the Fair Market
Value of the Stock as of the time of sale), or
(ii) sold, exchanged, or converted by the Company, and
the Company shall have received payment for such Stock
or securities so sold, exchanged, or converted equal to
at least 50% of Fair Market Value of the Stock on the
grant or effective date, or the exchange or conversion
date, under the Award, as specified by the Committee.
The Committee may permit payment by certified check or
bank check or other instrument acceptable to the
Committee or by surrender of other shares of Stock
(excluding shares then subject to restrictions under
the Plan).
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c. Forfeiture of Awards; Repurchase of Stock;
Acceleration or Waiver of Restrictions. The Committee
may determine the conditions under which an Other
Stock-based Award shall be forfeited or, in the case
of an Award involving a payment by the recipient, the
conditions under which the Company may or must
repurchase such Award or related Stock. At any time
the Committee may in its sole discretion
accelerate, waive, or, subject to Section 13, amend
any or all of the limitations or conditions imposed
under any Other Stock-based Award.
d. Award Agreements. A participant shall have no rights
with respect to any Other Stock-based Award unless
within 60 days after the grant of such Award (or such
shorter period as the Committee may specify) the
participant shall have accepted the Award by
executing and delivering to the Company an Other
Stock-based Award Agreement.
e. Nontransferability. Other Stock-based Awards may not
be sold, assigned, transferred, pledged, or encumbered
except as may be provided in the Other Stock-based
Award Agreement. However, in no event shall any Other
Stock-based Award be transferred other than by will or
by the laws of descent and distribution or be
exercisable during the participant's lifetime by other
than the participant or the participant's legal
representative.
f. Rights as a Shareholder. A recipient of any Other
Stock-based Award will have rights of a shareholder
only at the time and to the extent, if any, specified
by the Committee in the Other Stock-based Award
Agreement.
g. Deemed Dividend Payments; Deferrals. Without limiting
the right of the Committee to specify different
terms, an Other Stock-based Award Agreement may
require or permit the immediate payment, waiver,
deferral, or investment of dividends or deemed
dividends payable or deemed payable on Stock subject
to the Award.
h. Supplemental Grants. The Company may in its sole
discretion make a loan to the recipient of an Award
hereunder, either on or after the date of grant of
such Award. Such loans may be made either in connection
with the exercise of a Stock
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Option, a Stock Appreciation Right, or an Other
Stock-based Award, in connection with the purchase of
shares under any Award, or in connection with the
payment of any federal income tax in respect of
income recognized under an Award. The Committee shall
have full authority to decide whether to make a loan
hereunder and to determine the amount, term, and
provisions of any such loan, including the interest
rate (which may be zero) charged in respect of any
such loan, whether the loan is to be secured or
unsecured, the terms on which the loan is to be
repaid and the conditions, if any, under which it may
be forgiven. However, no loan hereunder shall provide
or reimburse to the borrower the amount used by him
for the payment of the par value of any shares of
Common Stock issued, have a term (including
extensions) exceeding ten years in duration, or be in
an amount exceeding the total exercise or purchase
price paid by the borrower under an Award or for
related Stock under the Plan plus an amount equal to
the cash payment permitted in the following
paragraph.
The Committee may at any time authorize a cash payment, in
respect of the grant or exercise of an Award under the Plan or
the lapse or waiver of restrictions under an Award which shall
not exceed the amount which would be required in order to pay
in full the federal income tax due as a result of income
recognized by the recipient under both the Award and such cash
payment, in each case assuming that such income is taxed at
the regular maximum marginal rate applicable to individuals
under the Code as in effect at the time such income is
includable in the recipient's income. Subject to the
foregoing, the Committee shall have complete authority to
decide whether to make such cash payments in any case, to make
provision for such payments either simultaneously with or
after the grant of the associated Award, and to determine the
amount of each such payment.
SECTION 12. Transfer, Leave of Absence, Etc.
For purposes of the Plan, the following events shall not be deemed a
termination of employment:
a. a transfer to the employment of the Company from a
Subsidiary or from the Company to a Subsidiary, or
from one Subsidiary to another; or
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b. an approved leave of absence for military service
or sickness, or for any other purpose approved by
the Company, if the employee's right to reemployment
is guaranteed either by a statute or by contract or
under the policy pursuant to which the leave of
absence was granted or if the Committee otherwise so
provides in writing.
For purposes of Section 6(j), Section 8(a), Section 8(d),
Section 9(e), Section 9(f), Section 10(e) and Section 10(f),
except as otherwise determined by the Committee an optionee
employed as an employee by the Company and its Subsidiaries
shall be treated as having incurred a termination of
employment by or other service relationship with the Company
and its Subsidiaries on the date he or she ceases to be an
employee, whether or not he or she continues to provide
services to the Company or its Subsidiaries on some other
basis.
SECTION 13. Amendments and Termination.
The Board may at any time amend or discontinue the Plan and the
Committee may at any time amend or cancel any outstanding Award (or provide
substitute Awards at the same or reduced exercise or purchase price or with no
exercise or purchase price, but such price, if any, must satisfy the
requirements which would apply to the substitute or amended Award if it were
then initially granted under this Plan) for the purpose of satisfying changes in
law or for any other lawful purpose, but no such action shall adversely affect
rights under any outstanding Award without the holder's consent. However, no
such amendment, unless approved by stockholders, shall be effective if it would
cause the Plan to fail to satisfy the incentive stock option requirements of the
Code or the requirements of Rule 16b-3 or any successor rule under the Act as in
effect on the date of such amendment.
SECTION 14. Status of Plan.
With respect to the portion of any Award which has not been exercised
and any payments in cash, stock, or other consideration not received by a
participant, a participant shall have no rights greater than those of a general
creditor of the Company unless the Committee shall otherwise expressly determine
in connection with any Award or Awards. In its sole discretion, the Committee
may authorize the creation of trusts or other arrangements to meet the Company's
obligations to deliver Stock or make payments with respect to awards hereunder,
provided that the existence of such trusts or other arrangements is consistent
with the provision of the foregoing sentence.
SECTION 15. General Provisions.
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a. No Distribution; Compliance with Legal Requirements,
etc. The Committee may require each person acquiring
shares pursuant to an Award to represent to and agree
with the Company in writing that such person is
acquiring the shares without a view to distribution
thereof.
No shares of Stock shall be issued pursuant to an Award until
all applicable securities laws and other legal and stock
exchange requirements have been satisfied. The Committee may
require the placing of such stop-orders and restrictive
legends on certificates for Stock and Awards as it deems
appropriate.
b. Other Compensation Arrangements; No
Employment Rights. Nothing contained in this Plan
shall prevent the Board of Directors from adopting
other or additional compensation arrangements,
subject to stockholder approval if such approval
is required; and such arrangements may be either
generally applicable or applicable only in specific
cases. The adoption of the Plan does not confer upon
any employee or other person any right to continued
employment or the continuation of any service
relationship with the Company or a Subsidiary, nor
does it interfere in any way with the right of the
Company or a Subsidiary to terminate the employment
or other service relationship that may exist between
it and any person.
c. Tax Withholding, etc. Each participant
shall, no later than the date as of which the value
of an Award or of any Stock or other amounts
received thereunder first becomes includable in the
gross income of the participant for Federal
income tax purposes, pay to the Company, or make
arrangements satisfactory to the Committee regarding
payment of, any Federal, state, or local taxes of
any kind required by law to be withheld with respect
to such income. The Company and its Subsidiaries
shall, to the extent permitted by law, have
the right to deduct any such taxes from any payment
of any kind otherwise due to the participant.
d. Cancellation of Awards. The Committee may
provide, with respect to any Award, that the Award
shall be canceled or rescinded and any associated
shares forfeited, and that the participant be
obligated to pay to the Company any gain received
upon exercise or vesting, in the event that the
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participant competes with the Company or its
Subsidiaries, discloses confidential information of
the Company or its Subsidiaries, or otherwise is not
in compliance with any provision of the Award, in
each case on such terms and conditions as the
Committee considers appropriate in the circumstances.
SECTION 16. Effective Date of Plan.
The Plan shall not become effective unless approved by the vote of the
holders of a majority of the shares of capital stock of the Company represented
at a meeting of stockholders. Subject to such effectiveness, and to the
requirement that no Stock may be issued hereunder prior to such approval,
Options and other Awards may be granted hereunder on and after adoption of the
Plan by the Board.
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Ropes & Gray
One International Place
Boston, Massachusetts 02110-2624
(617) 951-7000
FAX: (617) 951-7050
Exhibit 5.1
February 7, 1997
BBN Corporation
150 CambridgePark Drive
Cambridge, MA 02140
Ladies and Gentlemen:
This opinion is furnished to you in connection with a registration
statement on Form S-8 (the "Registration Statement"), filed with the Securities
and Exchange Commission (the "Commission") under the Securities Act of 1933, as
amended, for the registration of an additional 850,000 shares of common stock,
$1.00 par value (the "Shares of Common Stock"), of BBN Corporation (the
"Company"), which are to be issued pursuant to the Company's 1986 Stock
Incentive Plan (the "1986 Plan").
We have acted as counsel for the Company in the past and are familiar
with the action taken by the Company in connection with the 1986 Plan. For
purposes of this opinion we have examined the 1986 Plan and certain corporate
records of the Company, including its Restated Articles of Organization, its
By-laws, minutes of meetings of its Board of Directors and stockholders, and
such other documents as we deemed appropriate.
We have made such examination of Massachusetts law as we have deemed
relevant for purposes of this opinion, but have not made any review of the laws
of any other state or jurisdiction. Accordingly, this opinion is limited to
Massachusetts law.
Based upon and subject to the foregoing, we are of the opinion that the
Shares of Common Stock to be issued and sold from time to time by the Company in
accordance with the terms of the 1986 Plan will be duly authorized, validly
issued, fully paid and non-assessable.
We hereby consent to your filing this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/Ropes & Gray
Ropes & Gray
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Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Registration Statement of
BBN Corporation on Form S-8 relating to the BBN Corporation 1986 Stock Incentive
Plan of our reports dated August 8, 1996, except as to the information presented
in the first and second paragraphs of the Subsequent Events note for which the
dates are August 14, 1996 and September 9, 1996, respectively, on our audits of
the consolidated financial statements and financial statement schedule of BBN
Corporation as of June 30, 1996 and 1995, and for the years ended June 30, 1996,
1995, and 1994, which reports are included in the Annual Report on Form 10-K of
BBN Corporation for the year ended June 30, 1996.
/s/Coopers & Lybrand L.L.P.
Coopers & Lybrand L.L.P.
Boston, Massachusetts
February 7, 1997
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