<PAGE>
As filed with the Securities and Exchange Commission on September 1, 1998
Registration No. 333-
-------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------------
CONVERSE INC.
(Exact name of registrant as specified in its charter)
DELAWARE 43-1419731
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
ONE FORDHAM ROAD
NORTH READING, MASSACHUSETTS 01864
(Address of principal executive offices)
CONVERSE INC. 1994 STOCK OPTION PLAN, AS AMENDED AND RESTATED
AS OF FEBRUARY 25, 1998
CONVERSE INC. EMPLOYEE STOCK PURCHASE PLAN
(Full title of the plans)
JACK A. GREEN
SENIOR VICE PRESIDENT AND GENERAL COUNSEL
CONVERSE INC.
ONE FORDHAM ROAD
NORTH READING, MASSACHUSETTS 01864
(Name and address of agent for service)
(978) 664-1100
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
-------------------------------
<TABLE>
<CAPTION>
=====================================================================================================================
Proposed Proposed
maximum maximum Amount of
Title of securities Amount to be offering price per aggregate offering registration fee
to be registered registered share price
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------
Common stock, without par value.. 1,500,000 shares (1) $3.09 (2) $4,635,000 $1,367.33
=====================================================================================================================
</TABLE>
(1) Consisting of 1,000,000 shares issuable under the Converse Inc. 1994 Stock
Option Plan, as Amended and Restated as of February 25, 1998, and 500,000 shares
issuable under the Converse Inc. Employee Stock Purchase Plan. Pursuant to Rule
416 under the Securities Act of 1933, this Registration Statement also covers
such additional shares as may hereinafter be offered or issued to prevent
dilution resulting from stock splits, stock dividends, recapitalizations or
certain other capital adjustments.
(2) Estimated pursuant to Paragraphs (c) and (h) of Rule 457 under the
Securities Act of 1933 solely for the purpose of calculating the registration
fee, based upon the average of the high and low sales prices of shares of the
Company's Common Stock on August 31, 1998, as reported on the New York Stock
Exchange.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENTS
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
---------------------------------------
The following documents, as filed by the Company with the Securities and
Exchange Commission (the "Commission"), are incorporated by reference in this
Registration Statement and made as a part hereof:
(a) the Company's Annual Report on Form 10-K for the year ended January
1998;
(b) the Company's Quarterly Reports on Form 10-Q for the quarters ended
April 4, 1998 and July 4, 1998; and
(c) the description of the Common Stock of the Company that is
contained in the Company's Form 10/A Amendment No. 2 to the
Company's Registration Statement on Form 10, as filed with the
Commission under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), on November 23, 1994.
All reports and other documents subsequently filed by the Company with
the Commission pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange
Act after the date of this Registration Statement, but prior to the filing of a
post-effective amendment to this Registration Statement which indicates that all
securities offered by this Registration Statement have been sold or which
deregisters all such securities then remaining unsold, shall be deemed to be
incorporated by reference into this Registration Statement. Each document
incorporated by reference into this Registration Statement shall be deemed to be
a part of this Registration Statement, from the date of the filing of such
document with the Commission until the information contained therein is
superseded or updated by any subsequently filed document which is incorporated
by reference into the Registration Statement.
Any statement contained in a document incorporated by reference herein
shall be deemed to be modified or superseded for purposes hereof to the extent
that a statement contained herein (or in any other subsequently filed document
that is also 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 hereof.
Experts
- -------
The financial statements incorporated in the Registration Statement by
reference to the Annual Report on Form 10-K of Converse Inc. for the year ended
January 3, 1998 have been so incorporated in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
ITEM 4. DESCRIPTION OF SECURITIES.
-------------------------
Not Applicable
<PAGE>
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
--------------------------------------
Not Applicable
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
-----------------------------------------
Section 145 of the Delaware General Corporation Law ("DGCL") permits
indemnification of directors, officers, agents and controlling persons of a
corporation under certain conditions and subject to certain limitations.
Section 145 of the DGCL empowers a corporation to indemnify any person who was
or is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that such person is or was a director,
officer or agent of the corporation or another enterprise if serving at the
request of the corporation. Depending on the character of the proceeding, a
corporation may indemnify against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
in connection with such action, suit or proceeding if the person indemnified
acted in good faith and in a manner such person reasonably believed to be in or
not opposed to, the best interests of the corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe such person's
conduct was unlawful. In the case of an action by or in the right of the
corporation, no indemnification may be made with respect to any claim, issue or
matter as to which such person shall have been adjudged to be liable to the
corporation unless and only to the extent that the Delaware Court of Chancery or
the court in which such action or suit was brought shall determine that despite
the adjudication of liability such person is fairly and reasonably entitled to
indemnity for such expenses which the court shall deem proper. Section 145 of
the DGCL further provides that to the extent a director or officer of a
corporation has been successful in the defense of any action, suit or proceeding
referred to above or in the defense of any claim, issue or matter therein, such
person shall be indemnified against expenses (including attorneys' fees)
actually and reasonably incurred by such person in connection therewith.
As permitted by the DGCL, the Company's Amended and Restated Certificate
of Incorporation provides that the directors of the Company shall not be
personally liable to the Company or its stockholders for monetary damages for
breach of fiduciary duty as a director, except for liability (i) for any breach
of the director's duty of loyalty to the Company or its stockholders, (ii) for
acts of omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the DGCL, relating to
prohibited dividends or distributions or the repurchase or redemption of stock,
or (iv) for any transaction from which the director derives an improper personal
benefit.
The Company's By-laws contain provisions for indemnification of
directors, officers, employees and agents which are substantially the same as
Section 145 of the DGCL and also permit Converse to purchase insurance on behalf
of any such person against any liability asserted against such person and
incurred by such person in any such capacity, or arising out of such person's
status as such, whether or not Converse would have the power to indemnify such
person against such liability under the foregoing provision of the By-laws.
Converse maintains such insurance.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
-----------------------------------
Not Applicable
2
<PAGE>
ITEM 8. EXHIBITS.
--------------
<TABLE>
<CAPTION>
EXHIBIT NUMBERS EXHIBIT
- ------------------------------------------------------------------------------------
<S> <C>
4.1 Converse Inc. 1994 Stock Option Plan, as Amended and Restated as
of February 25, 1998
4.2 Converse Inc. Employee Stock Purchase Plan
5 Opinion of General Counsel of the Registrant
23.1 Consent of General Counsel of the Registrant (included as part of
Exhibit 5)
23.2 Consent of PriceWaterhouse Coopers, LLP
24 Power of Attorney (included as part of the signature page)
</TABLE>
ITEM 9. UNDERTAKINGS.
------------
(a) The undersigned 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,
represents a fundamental change in the information set
fourth 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 subparagraphs (a)(1)(i) and (a)(1)(ii) of this
section do not apply if the information required to be included in a
post-effective amendment by those subparagraphs is contained in periodic
reports filed by the Company pursuant to Section 13 or Section 15(d) of
the Exchange Act 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 that remain unsold at
the termination of the offering.
3
<PAGE>
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Company's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in this Registration Statement
shall be deemed to be a new Registration Statement relating to the securities
offered herein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted by 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 Commission such
indemnification is against public policy as expressed in the Securities Act of
1933 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 Securities
Act of 1933 and will be governed by the final adjudication of such issue.
4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Company
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 to be signed on its behalf by the undersigned, thereunto duly
authorized, in North Reading, Massachusetts on this 27th day of August, 1998.
CONVERSE INC.
By: /s/ Glenn N. Rupp
-----------------------------------
Glenn N. Rupp
Chief Executive Officer and
Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by or on behalf of the following
persons in the capacities and on the dates indicated.
Each person, in so signing, also makes, constitutes and appoints Glenn N.
Rupp and Donald J. Camacho, and each such officer acting singly, his true and
lawful attorney-in-fact, in his name, place and stead to execute and cause to be
filed with the Securities and Exchange Commission any or all amendments to this
Registration Statement, with all exhibits and any and all documents required to
be filed with respect thereto, and to do and perform each and every act and
thing necessary to effectuate the same.
<TABLE>
<CAPTION>
Name Title Date
- ----------------------- --------------------------------- ---------------
<S> <C> <C>
Chairman of the Board and
Chief Executive Officer and
Director (Principal Executive
/s/ Glenn N. Rupp Officer) August 27, 1998
- -----------------------
Glenn N. Rupp
Chief Financial Officer and
Senior Vice President (Principal
Financial and Accounting
/s/ Donald J. Camacho Officer) August 27, 1998
- -----------------------
Donald J. Camacho
/s/ Gilbert Ford Director August 27, 1998
- -----------------------
Gilbert Ford
Director August 27, 1998
- -----------------------
Donald J. Barr
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Director August 27, 1998
- -----------------------
Leon D. Black
/s/ Julius W. Erving Director August 27, 1998
- -----------------------
Julius W. Erving
/s/ Robert H. Falk Director August 27, 1998
- -----------------------
Robert H. Falk
/s/ Michael S. Gross Director August 27, 1998
- -----------------------
Michael S. Gross
/s/ Josh J. Hannan Director August 27, 1998
- -----------------------
John J. Hannan
/s/ Joshua J. Harris Director August 27, 1998
- -----------------------
Joshua J. Harris
/s/ John H. Kissick Director August 27, 1998
- -----------------------
John H. Kissick
/s/ Richard B. Loynd Director August 27, 1998
- -----------------------
Richard B. Loynd
/s/ John J. Ryan, III Director August 27, 1998
- -----------------------
John J. Ryan, III
Director August 27, 1998
- -----------------------
Michael D. Weiner
</TABLE>
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NUMBERS EXHIBIT
- ------------------------------------------------------------------------------------
<C> <S>
4.1 Converse Inc. 1994 Stock Option Plan, as Amended and Restated as
of February 25, 1998
4.2 Converse Inc. 1995 Employee Stock Purchase Plan
5 Opinion of General Counsel of the Registrant
23.1 Consent of General Counsel of the Registrant (included as part of
Exhibit 5)
23.2 Consent of PriceWaterhouse Coopers, LLP
24 Power of Attorney (included as part of the signature page)
</TABLE>
<PAGE>
EXHIBIT 4.1
CONVERSE INC.
1994 STOCK OPTION PLAN
(As Amended and Restated as of February 25, 1998)
A. Objectives of the Plan.
The Converse Inc. 1994 Stock Option Plan (the "Plan") of Converse Inc.
(the "Corporation") is intended to encourage and provide opportunities for
ownership of the Corporation's Common Stock by such key employees (including
officers) of the Corporation and any subsidiaries of the Corporation, and
persons providing bona fide consulting or advisory services to the Corporation
and any subsidiaries (other than in connection with the offer or sale of
securities of the Corporation in a capital raising transaction) ("consultants")
as the Board of Directors of the Corporation (the "Board") or a committee
thereof constituted for this purpose may from time to time determine. The Plan
is also intended to provide incentives for such employees and consultants to put
forth maximum efforts for the successful operation of the Corporation and its
subsidiaries. By extending to such key employees and consultants the
opportunity to acquire proprietary interests in the Corporation and to
participate in its success, the Plan may be expected to benefit the Corporation
and its shareholders by making its possible for the Corporation and its
subsidiaries to attract and retain the best available talent and by providing
such key employees and consultants with added incentives to increase the value
of the Corporation's stock.
B. Grants and Stock Subject to the Plan.
Awards under the Plan may consist of grants of nonqualified stock
options as described in Section 6, incentive stock options as described in
Section 7, and restricted stock as described in Section 8. All grants shall be
subject to the terms and conditions set forth herein and to such other terms and
conditions consistent with this Plan as the Committee deems appropriate and as
are specified in writing by the Committee to the individual in a grant
instrument or an amendment to the grant instrument. The Committee shall approve
the form and provisions of each grant instrument. Grants under a particular
section of the Plan need not be uniform as among the grantees.
There are reserved for issue under the Plan 3,300,000 shares of the
Common Stock, without nominal or per value, of the Corporation (the "Shares").
Such Shares may be, in whole or in part, as the Board shall from time to time
determine, authorized but unissued Shares, or issued Shares which shall have
been reacquired by the Corporation. The maximum number of Shares with respect
to which options may be granted to any individual during any calendar year is
500,000 and the maximum number of Shares with respect to which options may be
granted to any individual during the term of the Plan is 750,000. Similarly,
the maximum number of shares of restricted stock that may be granted to any
individual during any calendar year is 500,00 and the maximum number of Shares
with respect to which options may be granted to any individual during the term
of the Plan is 750,000.
C. Administration.
Subject to the express provisions of the Plan, the Plan shall be
administered by the Executive Compensation and Stock Option Committee of the
Board (the "Committee"), and the Committee shall have
<PAGE>
plenary authority, in its discretion, to determine the individuals to whom, and
the time or times at which, options, if any, shall be granted, the type of
option to be granted (e.g., incentive or nonqualified) and the number of Shares
to be subject to an option. Subject to the express provisions of the Plan, the
Committee shall also have the plenary authority to interpret the Plan, to
prescribe, amend and rescind rules and regulations regarding it, and to take
whatever action is necessary to carry out the purposes of the Plan. The
Committee's determinations or matters referred to in this Section 3 shall be
conclusive.
D. The Committee.
The Committee shall consist of three or more members of the Board.
The Committee shall be appointed by the Board, which may from time to time
designate the number to serve on the Committee, appoint members of the Committee
in substitution for members previously appointed and fill vacancies, however
caused, in the Committee. No member of the Board while a member of the
Committee shall be eligible to receive an option under the Plan. The Committee
shall elect one of is members as its Chairman and shall hold its meetings at
such times and places as it may determine. A majority of the members shall
constitute a quorum. Any determination reduced to writing and signed by all the
members of the Committee shall be fully as effective as if it had been made by a
majority vote at a meeting duly called and held. The Committee may appoint a
secretary, shall keep minutes of its meetings and shall make such rules and
regulations for the conduct of its business as it shall deem advisable.
1. Eligibility.
Options may be granted only to key employees (which term as used
herein includes officers) of, and consultants to, the Corporation and of its
subsidiary corporations (the "Subsidiaries") as the term "subsidiary
corporation" is define in Section 424(f) of the Internal Revenue Code of 1986,
as amended, (the "Code"). For the purposes of the Plan the term "employee"
shall be an individual with an "employment relationship" as defined in Section
421 (Treasury Regulation Section 1.421-7(h)) of the Code. A member of the Board
or of the board of directors of a subsidiary who is not also an employee of an
consultant to the Corporation or of one of its subsidiaries shall not be
eligible to receive an option. Nothing contained in the Plan shall be construed
to limit the right of the Corporation to grant options otherwise than under the
Plan in connection with (i) the employment of any person, (ii) the acquisition,
by purchase, lease, merger, consolidation or otherwise, of the business or
assets of another corporation, firm or association, including grants to
employees thereof who become employees of the Corporation or a subsidiary, or
(iii) other proper corporate purposes.
2. Nonqualified Stock Options.
Unless it is designated an incentive stock option by the Committee,
any option granted under the Plan shall be nonqualified and shall be in such
form as the Committee may from time to time approve. Any such nonqualified stock
option shall be subject to the following terms and conditions and shall contain
such additional terms and conditions, not inconsistent with the provisions of
the Plan, as the Committee shall deem desirable:
a. Option Price. The option price of Shares purchasable under
------------
an option shall be determined by the Committee in accordance
with procedures established by the Committee.
<PAGE>
b. Option Period. The term of an option shall be fixed by the
-------------
Committee, but no option shall be exercisable after the
expiration of ten years from the date the option is granted.
c. Exercisability. Option shall be exercisable at such time or
--------------
times as determined by the Committee at or subsequent to
grant; provided, however, that except as provided in
Subsections (f), (g) and (h) of this Section 6, no option
may be exercised at any time unless the holder is then
regular employee of, or consultant to, the Corporation or a
subsidiary and has continuously remained and employee or
consultant at all times since the date of granting of the
option. If any option granted under the Plan shall expire
or terminate for any reason without ever having been
exercised in full, the unissued shares subject thereto shall
again be available for the purposes of the Plan. The
proceeds of the sale of Shares subject to options are to be
added to the general funds of the Corporation.
d. Method of Exercise. Options which are exercisable may be
------------------
exercised in whole or in part at any time during the option
period, by completing and delivering to the Corporation an
option exercise from provided by the Corporation specifying
the number of Shares to be purchased. Such form shall be
accompanied by payment in full of the purchase price in
cash. No shares shall be issued until full payment therefor
has been made.
e. Transferability of Options. No option shall be transferable
--------------------------
by the optionee otherwise that as set forth below or by will
or by the laws of descent and distribution, and such options
shall be exercisable, during the optionee's lifetime, only
by the optionee. Notwithstanding the foregoing, if the
Committees in its sole discretion so permits, an optionee
may transfer a nonqualified stock option to the optionee's
spouse, parents or lineal descendants or to a trust for the
benefit of such family members or to a partnership in which
such family members are the only partners; provided that the
option shall continue to be subject to the same terms and
conditions as were applicable thereto immediately prior to
the transfer.
f. Termination by Reason of Death. If an optionee's
------------------------------
employment, or engagement as a consultant, by the
Corporation or any subsidiary terminates by reason of death,
as to those Shares with respect to which the option had
become exercisable (under the provisions of the particular
option) on the date of death, the stock option may
thereafter be exercised by the legal representative of the
estate or by the legatee of the optionee under the will of
the optionee, during a period of one year (six month in the
case of options granted before July 30, 1997) from the date
of such death or until the expiration of the stated period
of the option, whichever period is shorter.
g. Terminating by Reason of Retirement or Permanent Disability.
------------------------------------------------------------
If an optionee's employment, or engagement as a consultant,
by the Corporation
<PAGE>
or any subsidiary terminates by reason of retirement or
permanent disability, as to those Shares with respect to
which the option had become exercisable (under provisions of
the particular option) on the date of termination of
employment or such engagement, any stock option held by such
optionee may thereafter be exercised for a period of one
year following such date (or until three months following
such date in the case of options granted before July 30,
1997); provided, however, that if the optionee dies within
such period, any unexercised stock options held by such
optionee shall thereafter be exercisable, to the extent it
was exercisable at the time of death, for a period of one
year (six months in the case of options granted before July
30, 1997) from the date of such death or for the stated term
of the option, whichever period is shorter.
h. Other Termination. If an optionee's employment, or
-----------------
engagement as a consultant, terminates for any reason other
than death, permanent disability, or retirement, as to those
Shares with respect to which the option had become
exercisable (under the provisions of the particular option)
on the date of termination of employment or engagement as a
consultant, any option held by such optionee may thereafter
be exercised during the period of one month from the date of
such termination of employment or the expiration of the
stated period of the option, whichever period is shorter;
provided, however, that if the optionee dies within such
one-month period, any unexercised option held by such
optionee shall thereafter be exercisable, to the extent to
which it was exercisable at the time of death, for a period
of six months from the date of such death or for the stated
period of the option, whichever period is shorter.
i. Option Buy out. The Committee may at any time offer to
--------------
repurchase an option, other than an option which has been
held for less than six months by an optionee who is subject
to Section 16(b) of the Securities Exchange Act of 1934, the
("1934 Act"), based on such terms and conditions as the
Committee shall establish and Communicate to the optionee at
the time that such offer is made.
E. Incentive Stock Option.
Any option granted under the Plan shall, at the discretion of the
Committee, qualify as an incentive stock option as defined in Section 422(b) of
the Code and shall be in such form as the Committee may from time to time
approve. Any such incentive sock option shall be subject to the following terms
and conditions in addition to those set forth in Section 6 and shall contain
such additional terms and conditions, not inconsistent with the provisions of
the Plan, as the Committee shall deem desirable.
1. Eligibility. Incentive stock options shall not be granted to any
-----------
individual who, at the time the option is granted, owns stock
possessing more than ten percent of the total combined voting
power of all classes of stock of the Corporation or its parent
corporation (as the term "parent corporation" is defined in
Section 424(e) of the Code) or its subsidiaries (a "Ten Percent
Shareholder") unless: 1) the option price
<PAGE>
is at least 110% of the fair market value of the Shares subject
to the option, and 2) the option states that it is not
exercisable after the expiration of five years from the date the
option is granted. Incentive stock options shall not be granted
to a person who is not a Ten Percent Shareholder unless the
option price is at least 100% of the faire market value of the
Shares subject to the option on the date the option is granted.
a. Limitation on Exercise of Options. The maximum aggregate
---------------------------------
fair market value (determined at the time an option is
granted) of the Shares with respect to which incentive stock
options are exercisable for the first time by any optionee
during any calendar year (under all plans of the Company and
its parent corporation and subsidiaries) shall not exceed
$100,000. If the foregoing $100,000 limit is exceeded with
respect to an incentive stock option on account of the
acceleration of the exercise of the option pursuant to
Section 9 of the Plan, the portion of the incentive stock
option in excess of the $100,000 limit shall be treated as a
nonqualified stock option. If the provisions of this
Section limit the exercisability of certain incentive stock
options which would otherwise become exercisable on account
of termination of employment, the Committee, in its sole
discretion, shall determine the times at which such
incentive stock options become exercisable so that the
provisions of this Section 7(b) are not violated; provided,
that in no event shall any incentive stock option be
exercisable more than ten years from the date it is granted
(five years in the case of incentive stock options granted
to Ten Percent Shareholders (described in Section 7(a)).
2. Restricted Stock Grants.
The Committee may issue or transfer shares of Corporation stock
to an employee under a grant of restricted stock, upon such terms as the
Committee deems appropriate. The following provisions are applicable to
restricted stock:
a. General Requirements. Shares of Corporation stock issued or
--------------------
transferred pursuant to restricted stock grants may be
issued or transferred for consideration or for no
consideration, as determined by the Committee. The Committee
may establish conditions under which restrictions on shares
of restricted stock shall lapse over a period of time or
according to such other criteria as the Committee deems
appropriate. The period of time during which the restricted
stock will remain subject to restrictions will be designated
in the grant instrument as the "Restriction Period."
b. Number of Shares. The Committee shall determine the number
----------------
of shares of Corporation stock to be issued or transferred
pursuant to a restricted stock grant and the restrictions
applicable to such shares.
c. Requirement of Employment or Service. If the grantee ceases
------------------------------------
to be employed by, or provide service to, the Corporation
during a period
<PAGE>
designated in the grant instrument as the Restriction
Period, or if other specified conditions are not met, the
restricted stock grant shall terminate as to all shares
covered by the grant as to which the restrictions have not
lapsed, and those shares of Corporation stock must be
immediately returned to the Corporation. The Committee may,
however, provide for complete or partial exceptions to this
requirement as it deems appropriate.
d. Restrictions on Transfer and Legend on Stock Certificate.
--------------------------------------------------------
During the Restriction Period, a grantee may not sell,
assign, transfer, pledge or otherwise dispose of the shares
of restricted stock except to a successor grantee under
subsection (g). Each certificate for a share of restricted
stock shall contain a legend giving appropriate notice of
the restrictions in the grant. The grantee shall be
entitled to have the legend removed from the stock
certificate covering the shares subject to restrictions when
all restrictions on such shares have lapsed. The Committee
may determine that the Corporation will not issue
certificates for shares of restricted stock until all
restrictions on such shares have lapsed, or that the
Corporation will retain possession of certificates for
shares of restricted stock until all restrictions on such
shares have lapsed.
e. Right to Vote and to Receive Dividends. Unless the
--------------------------------------
Committee determines otherwise, during the Restriction
Period, the grantee shall have the right to vote shares of
restricted stock and to receive any dividends or other
distributions paid on such shares, subject to any
restrictions deemed appropriate by the Committee.
f. Lapse of Restrictions. All restrictions imposed on
---------------------
restricted stock shall lapse upon the expiration of the
applicable Restriction Period and the satisfaction of all
conditions imposed by the Committee. The Committee may
determine, as to any or all restricted stock grants, that
the restrictions shall lapse without regard to any
Restriction Period. Further, all restrictions on restricted
stock grants shall automatically lapse upon the occurrence
of Change of Control (as defined under Section 9).
g. Nontransferability of Restricted Stock Grants. Except as
---------------------------------------------
provided below, only the grantee may exercise rights under a
restricted stock grant during the grantee's lifetime. A
grantee may not transfer those rights except by will or by
the laws of descent and distribution. When a grantee dies,
the personal representative or other person entitled to
succeed to the rights of the grantee may exercise such
rights. A successor grantee must furnish proof satisfactory
to the Corporation of his or her right to receive the grant
under the grantee's will or under the applicable laws of
descent and distribution.
<PAGE>
3. Adjustment Upon Changes in Capitalization, Etc.
The aggregate number and class of share reserved under the Plan
and with respect to which options may be granted to any individual, the
number and class of shares subject to each option granted pursuant to the
Plan and the option price per Share payable under each such option shall be
appropriately and equitably adjusted in the event of any reclassification
or increase or decrease in the number of the issued Shares of the
Corporation by reason of a split-up or consolidation of Shares; the payment
of a stock dividend; a recapitalization; a combination or exchange of
Shares; a spin-off; or any like capital adjustment.
Subject to the next paragraph, if the Corporation shall be
reorganized or shall be merged with or into or consolidated with any other
corporation, or shall set all or substantially all of its assets or effect
a complete liquidation, each option, if any, then outstanding under the
Plan, shall thereafter apply to such number and kind of securities, cash or
other property as would have been issuable by reason of such
reorganization, merger, consolidation, sale or liquidation to a holder of
the number of Shares which were subject to the option, if any, immediately
prior to such transaction.
If the event of a proposed transaction of the type set forth in
the preceding paragraph, the Committee may determine that each option then
outstanding under the Plan, shall terminate as of a date to be fixed by the
Committee and approved by the Board upon not less than thirty days' written
notice to the optionee; and may further determine when and to the extent
that, any option granted at least six months prior to such event to any
optionee who has been an employee or consultant for one year or more prior
to the date of such notice, shall be accelerated and such optionee shall be
entitled to exercise such option without regard to any installment
provision of the option prior to the termination date fixed in said notice;
provided, however, that in no event shall the Committee have the right to
make any determination provided for in this paragraph, if doing so would
make any transaction ineligible for pooling of interest accounting
treatment under APB No. 16 or any successor provision that but for such
determination would be eligible for such treatment.
All adjustments under this Section 9 shall be made by the
Committee, subject to the approval of the Board, which action shall be
final and conclusive.
Anything to the contrary notwithstanding, upon a Change of
Control (as hereinafter defined) and, in the case of options granted on or
after April 1, 1996, subsequent termination of an optionee's employment by
the Corporation or by the optionee as a result of a material breach by the
Corporation of any employment agreement between the optionee and the
Corporation, each option granted prior to such Change of Control shall
become immediately exercisable in full. As used herein, "Change of
Control" shall mean any of the following events:
a. The acquisition (other than (i) from the Corporation of
INTERCO INCORPORATED or (ii) by Apollo (as hereinafter
defined)) by any
<PAGE>
person, entity or "group", within the meaning of Section
13(d)(3) or 14(d)(2) of the 1934 Act, excluding, for this
purpose, the Corporation of its subsidiaries, or any
employee benefit plan of the Corporation or its
subsidiaries, of beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the 1934 Act) of 20% or more of
either the then outstanding Shares or the combined voting
power of the Corporation's then outstanding voting
securities entitled to vote generally in the election of
directors if the beneficial ownership of such person, entity
or "group" exceeds the beneficial ownership of Shares and
the combined voting power of the Corporation's then
outstanding securities entitled to vote generally in the
election of directors held by any person or entity that
acquired such Shares or securities having such voting power
from the Corporation and by Apollo; or
b. Individuals who, as of the Effective Date (as defined in
Section 13), constitute the Board (as of such date, the
"Incumbent Board"), cease for any reason to constitute at
least a majority of the Board; provided, that any person
becoming a director subsequent to the first anniversary of
the Effective Date whose election, or nomination for
election by the Corporation's stockholders, was approved by
a vote of at least majority of the directors then
compromising the Incumbent Board (other than an election or
nomination of an individual whose initial assumption of
office is in connection with an actual or threatened
election contest relating to the election of the directors
of the Corporation, as such terms are sued in Rule 14a-11 of
Regulation 14A promulgated under the 1934 Act) shall be
considered as though such person were a member of the
Incumbent Board; or
c. Approval by the stockholders of the Corporation of a
reorganization, merger or consolidation, in each case, with
respect to which persons who were the stockholders of the
Corporation immediately prior to such reorganization, merger
or consolidation do not, immediately thereafter, own,
directly or indirectly, more than 50% of the combined voting
power entitled to vote generally in the election of
directors of the reorganized, merged or consolidated
company's then outstanding voting securities, or a
liquidation or dissolution of the Corporation or the sale of
all or substantially all of the assets of the Corporation,
in each case, unless the transaction was approved by a
majority of the directors then comprising the Incumbent
Board.
For purposes of the definition of "Change of Control", the term
"Apollo" shall mean Apollo Advisors, L.P. and Lion Advisors, L.P. and any
entity that controls, is controlled by or is under common control with
Apollo Advisors, L.P. and Lion Advisors, L.P., including accounts under
common management.
<PAGE>
4. Amendments and Termination.
The Board may amend, alter, or discontinue the Plan, but no
amendment, alteration, or discontinuation shall be made which would impair
the rights of an optionee under an option without the optionee's consent,
or which without the approval of the stockholders would, except as is
provided in Section 9, increase the total number of Shares reserved for the
purpose of the Plan, change the employees or class of employees and
consultants eligible to participant in the Plan, or extend the maximum
option period under Section 6(b).
The Committee may amend the terms of any option theretofore
granted, prospectively or retroactively, but no such amendment shall impair
the rights of any optionee without the consent of the optionee. The
Committee may also substitute new options for previously granted options,
including substitution for previously granted options having higher option
prices.
5. General Provisions.
a. The Committee may require each person purchasing Shares
pursuant to an option under the Plan to represent to and
agree with the Corporation in writing that the optionee is
acquiring the Shares without a view to distribution thereof.
The certificates for such Shares may include any legend
which the Committee deems appropriate to reflect any
restrictions on transfer.
b. All certificates for Shares delivered under the Plan shall
be subject to such stock-transfer orders and other
restrictions as the Committee may deem advisable under the
rules, regulations, and other requirements of the Securities
and Exchange Commission, any stock exchange upon which the
Shares are then listed, and any applicable federal or state
securities law, and the Committee may cause a legend or
legends to be put on any such certificates to make
appropriate reference to such restrictions.
c. Nothing contained in the Plan shall prevent the Board 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.
6. Withholding of Taxes.
a. Required Withholding. All grants under the Plan shall be
--------------------
subject to applicable federal (including FICA), state and
local tax withholding requirements. The Corporation shall
have the right to deduct from all grants paid in cash, or
from other wages paid to the grantee, any federal, state or
local taxes required by law to be withheld with respect to
such Grants. In the case of options and other grants paid
in Corporation stock, the Corporation may require the
grantee or other person receiving such
<PAGE>
shares to pay to the Corporation the amount of any such
taxes that the Corporation is required to withhold with
respect to such grants, or the Corporation may deduct from
other wages paid by the Corporation the amount of any
withholding taxes due with respect to such grants.
b. Election to Withhold Shares. If the Committee so permits, a
---------------------------
grantee may elect to satisfy the Corporation's income tax
withholding obligation with respect to an option, or
restricted stock paid in Corporation stock by having Shares
withheld up to an amount that does not exceed the grantee's
minimum applicable withholding tax rate for federal
(including FICA), state and local tax liabilities. The
election must be in a form and manner prescribed by the
Committee and shall be subject to the prior approval of the
Committee.
7. Effective Date of Plan.
The Plan became effective on October 19, 1994 the date it was
adopted by the Board and by the Company's then sole stockholder (the
"Effective Date"). The Plan as amended and restated became be effective as
of April 1, 1996. The Plan as further amended and restated herein shall be
effective May 11, 1998, subject to stockholder approval.
8. Term of Plan.
No option shall be granted pursuant to the Plan more than 10
years after the Effective Date, but options theretofore granted may extend
beyond and be exercised after that date.
<PAGE>
EXHIBIT 4.2
CONVERSE INC.
EMPLOYEE STOCK PURCHASE PLAN
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I. Introduction............................ 1
1.01 Statement of Purpose........................ 1
1.02 Internal Revenue Code Considerations........ 1
1.03 ERISA Considerations........................ 1
ARTICLE II. Definitions............................ 1
2.01 Board of Directors.......................... 1
2.02 Code........................................ 1
2.03 Committee................................... 1
2.04 Company..................................... 1
2.05 Effective Date.............................. 1
2.06 Election Date............................... 1
2.07 Eligible Employee........................... 1
2.08 Employee.................................... 1
2.09 Employer.................................... 1
2.10 Exchange Act................................ 1
2.11 Market Value................................ 1
2.12 Participant................................. 2
2.13 Plan........................................ 2
2.15 Purchase Agreement.......................... 2
2.16 Purchase Date............................... 2
2.17 Purchase Period............................. 2
2.18 Purchase Price.............................. 2
2.19 Stock....................................... 2
2.20 Subsidiary.................................. 2
ARTICLE III. Admission to Participation............ 2
3.01 Initial Participation....................... 2
3.02 Discontinuance of Participation............. 2
3.03 Readmission to Participation................ 2
ARTICLE IV. Stock Purchase and Resale.............. 3
4.01 Reservation of Shares....................... 3
4.02 Limitation on Shares Available.............. 3
4.03 Purchase Price of Shares.................... 3
4.04 Exercise of Purchase Privilege.............. 3
4.05 Payroll Deductions.......................... 3
4.06 Payment for Stock........................... 4
4.07 Share Ownership; Issuance of Certificates... 4
(i)
<PAGE>
4.08 Withdrawal of Shares or Resale of Stock..... 5
ARTICLE V. Special Adjustments..................... 5
5.01 Shares Unavailable.......................... 5
5.02 Anti-Dilution Provisions.................... 5
5.03 Effect of Certain Transactions.............. 5
ARTICLE VI. Miscellaneous.......................... 5
6.01 Non-Alienation.............................. 5
6.02 Administrative Costs........................ 6
6.03 The Committee............................... 6
6.04 Amendment of the Plan....................... 6
6.05 Expiration and Termination of the Plan...... 6
6.06 Repurchase of Stock......................... 6
6.07 Notice...................................... 6
6.08 Government Regulation....................... 6
6.09 Headings, Captions, Gender.................. 6
6.10 Severability of Provisions, Prevailing Law.. 6
</TABLE>
(ii)
<PAGE>
CONVERSE INC.
EMPLOYEE STOCK PURCHASE PLAN
----------------------------
ARTICLE I. Introduction.
1.01 Statement of Purpose. The purpose of the Converse Inc. Employee
--------------------
Stock Purchase Plan is to provide eligible employees of Converse Inc. (the
"Company") and its Subsidiaries, who wish to become shareholders, an opportunity
to purchase common stock of the Company. The Board of Directors of the Company
believes that employee participation in stock ownership will be to the mutual
benefit of both the employees and the Company.
1.02 Internal Revenue Code Considerations. The Plan is intended to
------------------------------------
constitute an "employee stock purchase plan" within the meaning of section 423
of the Internal Revenue Code of 1986, as amended.
1.03 ERISA Considerations. The Plan is not intended and shall not be
--------------------
construed as constituting an "employee benefit plan," within the meaning of
section 3(3) of the Employee Retirement Income Security Act of 1974, as amended.
ARTICLE II. Definitions.
2.01 "Board of Directors" means the board of directors of the Company
or a committee of the board of directors authorized to act on its behalf.
2.02 "Code" means the Internal Revenue Code of 1986, as amended.
2.03 "Committee" means the Company's Executive Compensation and Stock
Option Committee.
2.04 "Company" means Converse Inc., a Delaware corporation.
2.05 "Effective Date" shall mean September 1, 1998.
2.06 "Election Date" means September 1 and March 1 within a Plan Year
or such other dates as the Committee shall specify.
2.07 "Eligible Employee" means each Employee who (a) is classified by
the Company as an employee (and not as an independent contractor no matter how
characterized by a court or administrative agency), (b) is regularly scheduled
to work more than 20 hours per week for the Employer, (c) has been an Employee
for at least a 12 consecutive month period; and (d) is not deemed, for purposes
of section 423(b)(3) of the Code, to own stock possessing five percent (5%) or
more of the total combined voting power or value of all classes of stock of the
Company or any Subsidiary. The term "Employee" shall not include any person
employed by an Employer on a temporary basis nor shall it include any member of
the Board who is not also employed by the Employer.
2.08 "Employee" means each person employed by an Employer.
2.09 "Employer" means the Company and each Subsidiary.
2.10 "Exchange Act" means the Securities Exchange Act of 1934, as
amended, and as the same may hereafter be amended.
2.11 "Market Value" means the closing price of the Stock as reported
in the Wall Street Journal as composite transactions for the relevant date (or
the latest date for which such price was reported if such date is not a business
<PAGE>
day), or if not available, the last reported sale price thereof on the relevant
date or (if there were no trades on that date) the latest preceding date upon
which a sale was reported.
2.12 "Participant" means each Eligible Employee who elects to
participate in the Plan.
2.13 "Plan" means the Converse Inc. Employee Stock Purchase Plan, as
amended from time to time.
2.14 "Plan Year" means each 12 month period beginning each September
1 and ending on the next following August 31 during which the Plan is in effect.
2.15 "Purchase Agreement" means the instrument prescribed by the
Committee pursuant to which an Eligible Employee may enroll as a Participant and
subscribe for the purchase of shares of Stock on the terms and conditions
offered by the Company. The Purchase Agreement is intended to evidence the
Company's offer of an option to the Eligible Employee to purchase Stock on the
terms and conditions set forth therein and herein.
2.16 "Purchase Date" means the last day of each Purchase Period.
2.17 "Purchase Period" means each period that begins on each Election
Date coinciding with or following the Effective Date and ending on the day
before the next Election Date or other period specified by the Committee during
which the Participant's Stock purchase is funded through payroll deduction
accumulations.
2.18 "Purchase Price" means the purchase price for shares of Stock
purchased under the Plan, determined as set forth in Section 4.03.
2.19 "Stock" means the common stock of the Company.
2.20 "Subsidiary" means any present or future corporation (a) which
constitutes a "subsidiary corporation" of the Company as that term is defined in
section 424 of the Code, and (b) is designated as a participating entity in the
Plan by the Committee.
ARTICLE III. Admission to Participation.
3.01 Initial Participation. An Eligible Employee may elect to
---------------------
participate in the Plan and may become a Participant effective as of any
Election Date, by executing and filing with the Committee a Purchase Agreement
at such time in advance of such Election Date as the Committee shall prescribe.
The Purchase Agreement shall remain in effect until modified or canceled in
accordance with the terms of this Plan.
3.02 Discontinuance of Participation. A Participant may voluntarily
-------------------------------
cease his or her participation in the Plan and stop payroll deductions at any
time by filing a notice of cessation of participation on such form and at such
time in advance of the effective date as the Committee shall prescribe.
Notwithstanding anything in the Plan to the contrary, if a Participant ceases to
be an Eligible Employee, his or her participation automatically shall cease and
no further purchase of Stock shall be made for the Participant. Any amounts
withheld from a Participant's compensation that were not applied to the purchase
of Stock prior to such cessation shall be returned to the Participant as soon as
possible, without interest.
3.03 Readmission to Participation. Any Eligible Employee who has
----------------------------
previously been a Participant, who has discontinued participation (whether by
cessation of eligibility or otherwise), and who wishes to be reinstated as a
Participant may again become a Participant by executing and filing with the
Committee a new Purchase Agreement. Reinstatement to Participant status shall be
effective as of any Election Date, provided the Participant files a new Purchase
Agreement with the Committee at such time in advance of the Election Date as the
Committee shall prescribe.
2
<PAGE>
ARTICLE IV. Stock Purchase and Resale.
4.01 Reservation of Shares. There shall be 500,000 shares of Stock
---------------------
reserved for issuance or transfer under the Plan, subject to adjustment in
accordance with the antidilution provisions hereinafter set forth. Except as
provided in Section 5.02, the aggregate number of shares of Stock that may be
purchased under the Plan shall not exceed the number of shares of Stock reserved
under the Plan.
4.02 Limitation on Shares Available. Stock must be purchased in
------------------------------
whole shares only and the maximum number of shares of Stock that may be
purchased for each Participant on a Purchase Date is the lesser of (a) the
number of shares of Stock that can be purchased by applying the full balance of
the Participant's withheld funds to the purchase of shares of Stock at the
Purchase Price, or (b) the Participant's proportionate part of the maximum
number of shares of Stock available under the Plan, as stated in Section 4.01.
Notwithstanding the foregoing, if any person entitled to purchase shares
pursuant to any offering under the Plan would be deemed for purposes of section
423(b)(3) of the Code to own stock (including any number of shares of Stock that
such person would be entitled to purchase under the Plan) possessing five
percent (5%) or more of the total combined voting power or value of all classes
of stock of Company, the maximum number of shares of Stock that such person
shall be entitled to purchase pursuant to the Plan shall be reduced to that
number which, when added to the number of shares of stock that such person is
deemed to own (excluding any number of shares of Stock that such person would be
entitled to purchase under the Plan), is one less than such five percent (5%).
Any amounts withheld from a Participant's compensation that cannot be applied to
the purchase of Stock by reason of the foregoing limitation shall be returned to
the Participant as soon as practicable, without interest. Notwithstanding the
foregoing, however, any amounts withheld from a Participant's compensation that
cannot be applied to the purchase of Stock solely by reason of the requirement
that Stock be purchased in whole shares shall remain in the Plan and applied to
the Participant's purchase of Stock during the subsequent Purchase Period,
unless otherwise distributable under the terms of the Plan.
4.03 Purchase Price of Shares. Before the first day of each Purchase
------------------------
Period the Committee shall set the Purchase Price for such Purchase Period;
provided, however, that in no event shall the Purchase Price per share of Stock
sold to Participants pursuant to any offering under the Plan for any Purchase
Period be less than the lesser of (a) 85% of the Market Value of such share on
the first day of the Purchase Period, or (b) 85% of the Market Value of such
share on the Purchase Date.
4.04 Exercise of Purchase Privilege.
------------------------------
(a) Each Participant shall be granted an option to purchase shares of
Stock as of the first day of each Purchase Period at the Purchase Price
specified in Section 4.03. The option shall continue in effect through the
Purchase Date for the Purchase Period. Subject to the provisions of Section
4.02 above and of paragraph (c) of this Section 4.04, on each Purchase Date, the
Participant shall automatically be deemed to have exercised his or her option to
purchase shares of Stock.
(b) There shall be purchased for the Participant on each Purchase
Date, at the Purchase Price for the Purchase Period, the largest number of whole
shares of Stock as can be purchased with the amounts withheld from the
Participant's compensation during the Purchase Period. Each such purchase shall
be deemed to have occurred on the Purchase Date occurring at the close of the
Purchase Period for which the purchase was made.
(c) In addition to the dollar limit prescribed under Section 4.02, a
Participant may not purchase shares of Stock having an aggregate Market Value of
more than $25,000, determined at the beginning of each Purchase Period, for any
calendar year in which one or more offerings under this Plan are outstanding at
any time, and a Participant may not purchase a share of Stock under any offering
after the expiration of the Purchase Period for the offering.
4.05 Payroll Deductions. Each Participant shall authorize payroll
------------------
deductions from his or her compensation for the purpose of funding the purchase
of Stock pursuant to his or her Purchase Agreement. In
3
<PAGE>
the Purchase Agreement, each Participant shall authorize an after-tax payroll
deduction from each payment of compensation during a Purchase Period of an
amount not less than $10 per paycheck (in multiples of $10). Notwithstanding the
foregoing, in no event shall a Participant authorize payroll deductions in
excess of $10,000 for any Plan year. A Participant may change the deduction to
any permissible level effective as of any Election Date. A change shall be made
by the Participant's filing with the Committee a notice in such form and at such
time in advance of the date on which the change is to be effective as the
Committee shall prescribe.
4.06 Payment for Stock. The Purchase Price for all shares of Stock
-----------------
purchased by a Participant under the Plan shall be paid out of the Participant's
authorized payroll deductions. All funds received or held by the Company under
the Plan are general assets of the Company, shall be held free of any trust or
other restriction, and may be used for any corporate purpose.
4.07 Share Ownership; Issuance of Certificates.
-----------------------------------------
(a) The shares of Stock purchased by a Participant on a Purchase Date
shall, for all purposes, be deemed to have been issued or sold at the close of
business on the Purchase Date. Prior to that time, none of the rights or
privileges of a shareholder of the Company shall inure to the Participant with
respect to such shares of Stock. All the shares of Stock purchased under the
Plan shall be delivered by the Company in a manner as determined by the
Committee and credited to a bookkeeping account maintained on behalf of such
Participant and delivered in accordance with subsection (b).
(b) The Committee, in its sole discretion, may determine that shares
of Stock shall be delivered by the Company by (i) issuing and delivering to the
Participant a certificate for the number of shares of Stock purchased by the
Participant on a Purchase Date or during a calendar year or other period
determined by the Committee, (ii) issuing and delivering a certificate or
certificates for the number of shares of Stock purchased by all Participants on
a Purchase Date or during a calendar year or other period determined by the
Committee to a firm which is a member of the National Association of Securities
Dealers, as selected by the Committee from time to time, which shares shall be
maintained by such firm in a separate brokerage account for each Participant, or
(iii) issuing and delivering a certificate or certificates for the number of
shares of Stock purchased by all Participants on a Purchase Date or during the
calendar year or other period determined by the Committee to a bank or trust
company or affiliate thereof, as selected by the Committee from time to time,
which shares may be held by such bank or trust company or affiliate in street
name, but with a separate account maintained by such entity for each Participant
reflecting such Participant's share interests in the Stock. Each certificate or
account, as the case may be, may be in the name of the Participant or, if he or
she designates on the Participant's Purchase Agreement, in the Participant's
name jointly with the Participant's spouse, with right of survivorship. A
Participant who is a resident of a jurisdiction that does not recognize such
joint tenancy may have a certificate or account in the Participant's name as
tenant in common with the Participant's spouse, with or without right of
survivorship. No fractional shares may be purchased under the Plan and the
balance of any amounts withheld from a Participant's compensation which are not
applied to the purchase of Stock shall be returned to the Participant, without
interest.
(c) In addition to any restrictions or limitations on the resale of
Stock purchased under the Plan set as forth in Section 4.08 or otherwise under
the Plan, the Committee, in its sole discretion, may impose such restrictions or
limitations as it shall determine on the resale of Stock, the issuance of
individual stock certificates or the withdrawal from any shareholder accounts
established for a Participant.
(d) Any dividends payable with respect to shares of Stock credited to
a shareholder account of a Participant established pursuant to Section 4.07(a)
will be reinvested in shares of Stock and credited to the Participant's account.
4
<PAGE>
4.08 Withdrawal of Shares or Resale of Stock.
---------------------------------------
(a) A Participant may request a withdrawal of shares of Stock
purchased under the Plan or order the sale of those shares at any time by making
a request in such form and at such time as the Committee shall prescribe.
(b) Notwithstanding the foregoing, in the event a Participant
terminates his or her employment with all Employers or otherwise ceases to be an
Eligible Employee, the Participant shall receive a distribution of his or her
shares of Stock held in any shareholder account established pursuant to Section
4.07(a), unless the Participant elects to have the shares of Stock sold in
accordance with such procedures as the Committee shall prescribe.
(c) If a Participant is to receive a withdrawal or distribution of
shares of Stock, or if shares are to be sold, the withdrawal, distribution or
sale shall be made in whole shares of Stock.
ARTICLE V. Special Adjustments.
5.01 Shares Unavailable. If, on any Purchase Date, the aggregate
------------------
funds available for the purchase of Stock would purchase a number of shares in
excess of the number of shares of Stock then available for purchase under the
Plan, the number of shares of Stock that would otherwise be purchased by each
Participant for that Plan Year shall be proportionately reduced on the Purchase
Date in order to eliminate such excess. The balance of any amounts withheld
from a Participant's compensation which had not by such time been applied to the
purchase of Company Stock shall be returned to the Participant, without
interest.
5.02 Anti-Dilution Provisions. The aggregate number of shares of
------------------------
Stock reserved for purchase under the Plan, as provided in Section 4.01, and the
calculation of the Purchase Price per share may be appropriately adjusted to
reflect any increase or decrease in the number of issued shares of Stock
resulting from a subdivision or consolidation of shares or other capital
adjustment, or the payment of a stock dividend, or other increase or decrease in
such shares, if effected without receipt of consideration by the Company. Any
such adjustment shall be made by the Committee acting with the consent of, and
subject to the approval of, the Board of Directors.
5.03 Effect of Certain Transactions. Subject to any required action
------------------------------
by the shareholders, if the Company shall be the surviving corporation in any
merger or consolidation, any offering under the Plan shall pertain to and apply
to the shares of stock of the Company. However, in the event of (a) a
dissolution or liquidation of the Company, (b) a merger or consolidation in
which the Company is not the surviving corporation, (c) any transaction that
results in the Stock ceasing to be publicly traded, the Plan and any offering
under the Plan shall terminate upon the effective date of such dissolution,
liquidation, merger consolidation or transaction, and the balance of any amounts
withheld from a Participant's compensation which had not by such time been
applied to the purchase of Stock shall be returned to the Participant, without
interest.
ARTICLE VI. Miscellaneous.
6.01 Non-Alienation. The right to purchase shares of Stock under the
--------------
Plan is personal to the Participant, is exercisable only by the Participant
during the Participant's lifetime except as hereinafter set forth, and may not
be assigned or otherwise transferred by the Participant. If a Participant dies,
there shall be delivered to the executor, administrator or other personal
representative of the deceased Participant such shares of Stock and such
residual amounts as may remain to the Participant's credit from amounts withheld
from the Participant's compensation as of the Purchase Date occurring at the
close of the Purchase Period in which the Participant's death occurs, including
shares of Stock purchased as of that date or prior thereto with moneys withheld
from the Participant's compensation.
5
<PAGE>
6.02 Administrative Costs. The Company shall pay all administrative
--------------------
expenses associated with the operation of the Plan including expenses of
issuance and sale of shares but excluding brokerage commissions on the sale of
shares of Stock pursuant to Section 4.08.
6.03 The Committee. The Committee, shall have the authority and
-------------
power to administer the Plan and to make, adopt, construe, and enforce rules and
regulations not inconsistent with the provisions of the Plan and to make all
required determinations including factual determinations. The Committee shall
adopt and prescribe the contents of all forms required in connection with the
administration of the Plan, including, but not limited to, the Purchase
Agreement, payroll withholding authorizations, withdrawal documents, and all
other notices required under the Plan. The Committee shall have the fullest
discretion permissible under law in the discharge of its duties. The
Committee's interpretations and decisions with respect to the Plan, shall be
final, binding and conclusive. The Committee may, at its discretion, delegate
or assign any or all of its day to day responsibilities, other than fiduciary
and fiscal responsibilities, to the Company's Benefits Committee.
6.04 Amendment of the Plan. The Board of Directors may, at any time
---------------------
and from time to time, amend the Plan in any respect, except that the
shareholders of the Company must approve any amendment that increases the number
of shares reserved for purposes of the Plan, any amendment that allows any
person who is not an Eligible Employee to become a Participant, or any other
amendment for which shareholder approval is required under Section 423 of the
Code.
6.05 Expiration and Termination of the Plan. The Plan shall continue
--------------------------------------
in effect for ten years from the Effective Date, unless terminated prior to that
date pursuant to the provisions of the Plan or pursuant to action by the Board
of Directors. The Board of Directors shall have the right to terminate the Plan
at any time without prior notice to any Participant and without liability to any
Participant. Upon the expiration or termination of the Plan, the balance, if
any, then standing to the credit of each Participant from amounts withheld from
the Participant's compensation which has not, by such time, been applied to the
purchase of Stock shall be refunded to the Participant, without interest.
6.06 Repurchase of Stock. The Company shall not be required to
-------------------
purchase or repurchase from any Participant any of the shares of Stock that the
Participant acquires under the Plan.
6.07 Notice. A Purchase Agreement and any notice that a Participant
------
files pursuant to the Plan shall be on the form prescribed by the Committee and
shall be effective only when received by the Committee. Delivery of such forms
may he made by hand or by certified mail, sent postage prepaid, to Corporate
Secretary, Converse Inc., Fordham Road, North Reading, MA 018642680. Delivery
by any other mechanism shall be deemed effective at the option and discretion of
the Committee.
6.08 Government Regulation. The Company's obligation to sell and to
---------------------
deliver the Stock under the Plan is at all times subject to all approvals of any
governmental authority required in connection with the authorization, issuance,
sale or delivery of such Stock.
6.09 Headings, Captions, Gender. The headings and captions herein
--------------------------
are for convenience of reference only and shall not be considered as part of the
text. The masculine shall include the feminine, and vice versa.
6.10 Severability of Provisions, Prevailing Law. The provisions of
------------------------------------------
the Plan shall be deemed severable. In the event any such provision is
determined to be unlawful or unenforceable by a court of competent jurisdiction
or by reason of a change in an applicable statute, the Plan shall continue to
exist as though such provision had never been included therein (or, in the case
of a change in an applicable statute, had been deleted as of the date of such
change). The Plan shall be governed by the laws of the State of Delaware to the
extent such laws are not in conflict with, or superseded by, federal law.
6
<PAGE>
EXHIBIT 5
Converse Inc.
One Fordham Road
North Reading, Massachusetts 01864
August 27, 1998
Converse Inc.
One Fordham Road
North Reading, Massachusetts 01864
RE: CONVERSE INC. REGISTRATION STATEMENT ON FORM S-8
Ladies and Gentlemen:
I am employed as General Counsel of Converse Inc., a Delaware corporation
("Converse" or the "Company"), and as such I, and attorneys working for me, have
acted on behalf of Converse as counsel in connection with the preparation of the
Registration Statement on Form S-8 (the "Registration Statement"), which
Converse proposes to file with the Securities and Exchange Commission. The
Registration Statement relates to the registration under the Securities Act of
1933, as amended (the "Securities Act"), of 1,500,000 shares of the Company's
common stock, without par value (the "Shares"). The Shares are to be issued by
the Company (i) upon exercise of certain stock options, and pursuant to awards
of restricted stock, granted, or to be granted, to certain employees or
consultants of Converse and its subsidiaries pursuant to the Converse Inc. 1994
Stock Option Plan, as amended and restated as of February 25, 1998 (the "1994
Plan") and (ii) upon purchase of shares by employees pursuant to the Converse
Inc. Employee Stock Purchase Plan (the "Employee Stock Purchase Plan").
This opinion is rendered in accordance with the requirements of Item 601(b)
(5) of Regulation S-K of the Securities and Exchange Commission.
I, or such attorneys working for me, have examined or considered such
matters of law and fact and such corporate records, certificates and other
documents as I, or they, have deemed necessary. In the course of such
examination, I, and such attorneys working for me, have assumed the genuineness
of all signatures, the authenticity of all documents submitted as originals and
the conformity to the originals of all documents submitted as certified,
photostatic or conformed copies. I have relied, as to certain legal matters, on
the advice of such attorneys working for me who are more familiar with such
matters.
Based on and subject to the foregoing and the qualifications set forth
below, I am of the opinion that upon the issuance, delivery and, if applicable,
payment for the Shares under the terms of the 1994 Plan and the Employee Stock
Purchase Plan, as applicable, the Shares will be duly authorized, validly
issued, fully paid and non-assessable.
<PAGE>
Converse Inc.
August 27, 1998
Page 2
I am admitted to the Bar of the Commonwealth of Massachusetts, and I
express no opinion as to the laws of any other jurisdiction other than the
Delaware General Corporation Law. In that connection, you should be aware that
I am not admitted to the Bar of the State of Delaware and am not an expert in
the law of such jurisdiction. Accordingly, such opinions concerning the
Delaware General Corporation Law are based upon my review of the Delaware
General Corporation Law and my reasonable (although not necessarily complete)
familiarity with the Delaware General Corporation Law as a result of my prior
involvement in transactions involving such Law.
I hereby consent to the filing of this opinion with the Securities and
Exchange Commission as an Exhibit to the Registration Statement on Form S-8
being filed by the Company. In giving such consent, I do not thereby admit that
I am acting within the category of persons whose consent is required under
Section 7 of the Securities Act or the regulations of the Securities and
Exchange Commission thereunder.
Very truly yours,
/s/ Jack A. Green
------------------
Jack A. Green
<PAGE>
Exhibit 23.2: Consent of Independent Accountants
-------------------------------------------------
We hereby consent to the incorporation by reference in this
Registration Statement on Form S-8 of our report dated February 18, 1998,
appearing on page F-2 of Converse Inc.'s Annual Report on Form 10-K for the year
ended January 3, 1998. We also consent to the application of such report to the
Financial Statement Schedule for the three years ended January 3, 1998 listed
under Item 14(a) of Converse Inc.'s Annual Report on Form 10-K for the year
ended January 3, 1998 when such schedule is read in conjunction with the
financial statements referred to in our report. The audits referred to in such
report also included this Financial Statement Schedule. We also consent to the
reference to us under the heading "Experts" in such Registration Statement.
/s/ PricewaterhouseCoopers LLP
Boston, Massachusetts
August 28, 1998
