<PAGE> 1
As filed with the Securities and Exchange Commission on August 12, 1996
REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
---------------------------
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
---------------------------
GENZYME CORPORATION
(Exact name of registrant as specified in its charter)
MASSACHUSETTS 06-1047163
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification No.)
ONE KENDALL SQUARE, CAMBRIDGE, MASSACHUSETTS 02139
(Address of Principal Executive Offices)
---------------------------
1990 EQUITY INCENTIVE PLAN
(Full Title of the Plan)
HENRI A. TERMEER, PRESIDENT
Genzyme Corporation
One Kendall Square
Cambridge, Massachusetts 02139
(617) 252-7500
(Name, address and telephone number of agent for service)
with copies to:
MAUREEN P. MANNING, ESQUIRE
Palmer & Dodge
One Beacon Street
Boston, Massachusetts 02108
(617) 573-0100
---------------------------
<TABLE>
CALCULATION OF REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Proposed Proposed maximum
Title of each class of securities to Amount to be maximum offering aggregate offering Amount of
be registered registered price per share(1) price(1) registration fee
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
General Division Common 4,602,000 shares(2)(3) $23.19 $106,720,380 $36,800.13
Stock, $0.01 par value
- ------------------------------------------------------------------------------------------------------------------------------------
Tissue Repair Division Common 1,300,000 shares(3) $ 8.56 $11,128,000 $3,837.24
Stock, $0.01 par value
- ------------------------------------------------------------------------------------------------------------------------------------
<FN>
(1) Estimated solely for the purpose of determining the registration fee and computed pursuant to Rule 457(h) and based upon
the average of the high and low sale prices on August 9, 1996 in the case of the General Division Common Stock, and on
August 5, 1996 in the case of the Tissue Repair Division Common Stock, each as reported by the Nasdaq National Market
System.
(2) After giving effect to a two-for-one stock split of shares of General Division Common Stock effective on July 25, 1996.
(3) This Registration Statement registers an additional 4,602,000 shares of General Division Common Stock under the 1990 Equity
Incentive Plan (the "Plan"). An aggregate of 15,398,770 shares (as adjusted to reflect the stock split referred to above)
of General Division Common Stock ("General Stock", formerly Common Stock) and 2,000,000 shares of Tissue Repair Division
Common Stock ("TR Stock") have previously been registered under the Plan (SEC File Nos. 33-8881, 33-15616, 33-26329,
33-29918, 33-35067, 33-37236, 33-41933, 33-55656, 33-68188, 33-58359 and 33-60437). Pursuant to Rule 416 under the
Securities Act of 1933, the above listed registration statements also cover shares of TR Stock issuable under the Plan to
the holders of options to purchase General Stock as a result of anti-dilution adjustments made in connection with the
dividend on December 23, 1994 of TR Stock to all holders of record of General Stock on December 16, 1994.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
- -----------------------------------------------
The following documents filed with the Securities and Exchange Commission
(the "Commission") are incorporated herein by reference:
(a) The Registrant's latest annual report on Form 10-K filed pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act").
(b) All other reports of the registrant filed pursuant to Section 13(a) or
15(d) of the Exchange Act since the end of the fiscal year covered by the annual
report referred to in (a) above.
(c) The description of the Registrant's General Division Common Stock
contained in the Registrant's Registration Statement on Form 8-B filed on
February 28, 1992, as amended by Form 8-B/A filed on March 31, 1995, including
any further amendment or report filed hereafter for the purpose of updating such
description.
(d) The description of the Registrant's General Division Common Stock
Purchase Rights contained in the Registrant's Registration Statement on Form 8-A
filed on March 23, 1989, as amended by Form 8-A/A filed on November 28, 1994,
including any further amendment or report filed hereafter for the purpose of
updating such description.
(e) The description of the Registrant's Tissue Repair Division Common Stock
filed in the Registrant's Registration Statement on Form 8-A filed on September
9, 1994, as amended by Form 8-A/A filed on December 14, 1994, including any
further amendment or report filed hereafter for the purpose of updating such
description.
(f) The description of the Registrant's Tissue Repair Division Common Stock
Purchase Rights contained in the Registrant's Registration Statement on Form 8-A
filed on November 28, 1994, including any amendment or report filed hereafter
for the purpose of updating such description.
All documents filed after the date of this Registration Statement by the
Registrant pursuant to Section 13(a), 13(d), 14 and 15(d) of the Exchange Act
and prior to the filing of a post-effective amendment that indicates that all
shares of General Division Common Stock ("General Stock") and Tissue Repair
Division Common Stock ("TR Stock") offered hereunder have been sold or which
deregisters all shares of General Stock and TR Stock remaining unsold shall be
deemed to be incorporated by reference herein and to be a part hereof from the
date of the filing of such reports and documents.
Item 4. Description of Securities.
- ---------------------------------
Not Applicable.
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<PAGE> 3
Item 5. Interests of Named Experts and Counsel.
- ----------------------------------------------
The validity of the General Stock offered hereby will be passed upon for
the Registrant by Palmer & Dodge LLP, counsel for the Registrant. Peter Wirth, a
partner in Palmer & Dodge LLP, is a Senior Vice President, the General Counsel
and the Clerk of the Registrant. As of August 1, 1996, Mr. Wirth beneficially
owned 11,720 and 3,520 shares of General Stock and the Registrant's Tissue
Repair Division Common Stock, respectively, including shares subject to options
exercisable within 60 days.
Item 6. Indemnification of Directors and Officers.
- -------------------------------------------------
Section 67 of chapter 156B of the Massachusetts Business Corporation Law
grants the Registrant the power to indemnify any director, officer, employee or
agent to whatever extent permitted by the Registrant's Restated Articles of
Organization, Bylaws or a vote adopted by the holders of a majority of the
shares entitled to vote thereon, if such indemnitee acted (a) in good faith in
the reasonable belief that his action was in the best interests of the
corporation or (b) to the extent that the matter for which indemnification is
sought relates to service with respect to an employee benefit plan, in the best
interests of the participants or beneficiaries of such employee benefit plan.
Such indemnification may include payment by the Registrant of expenses incurred
in defending a civil or criminal action or proceeding in advance of the final
disposition of such action or proceeding, upon receipt of an undertaking by the
person indemnified to repay such payment if he shall be adjudicated to be not
entitled to indemnification under the statute.
Article VI of the Registrant's Bylaws provides that the Registrant shall,
to the extent legally permissible, indemnify each person who may serve or who
has served at any time as a director or officer of the corporation or of any of
its subsidiaries, or who at the request of the corporation may serve or at any
time has served as a director, officer or trustee of, or in a similar capacity
with, another organization or an employee benefit plan, against all expenses and
liabilities (including counsel fees, judgments, fines, excise taxes, penalties
and amounts payable in settlements) reasonably incurred by or imposed upon such
person in connection with any threatened, pending or completed action, suit or
other proceeding, whether civil, criminal, administrative or investigative, in
which he may become involved by reason of his serving or having served in such
capacity (other than a proceeding voluntarily initiated by such person unless he
is successful on the merits, the proceeding was authorized by the corporation or
the proceeding seeks a declaratory judgment regarding his own conduct). Such
indemnification shall include payment by the Registrant of expenses incurred in
defending a civil or criminal action or proceeding in advance of the final
disposition of such action or proceeding, upon receipt of an undertaking by the
person indemnified to repay such payment if he shall be adjudicated to be not
entitled to indemnification under Article VI, which undertaking may be accepted
without regard to the financial ability of such person to make repayment.
The indemnification provided for in Article VI is a contract right inuring
to the benefit of the directors, officers and others entitled to
indemnification. In addition, the indemnification is expressly not exclusive of
any other rights to which such director, officer or other person may be entitled
by contract or otherwise under law, and inures to the benefit of the heirs,
executors and administrators of such a person.
The Registrant also has in place agreements with certain officers and
directors which affirm the Registrant's obligation to indemnify them to the
fullest extent permitted by law and contain
- 3 -
<PAGE> 4
various procedural and other provisions which expand the protection afforded by
the Registrant's Bylaws.
Section 13(b)(1/2) of chapter 156B of the Massachusetts Business
Corporation Law provides that a corporation may, in its Articles of
Organization, eliminate the directors' personal liability to the corporation and
its stockholders for monetary damages for breaches of fiduciary duty, except in
circumstances involving (i) a breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii)
unauthorized distributions and loans to insiders, and (iv) transactions from
which the director derived an improper personal benefit. Section VI.C.5 of the
Registrant's Restated Articles of Organization provides that no director shall
be personally liable to the corporation or its stockholders for monetary damages
for any breach of fiduciary duty as a director, except to the extent that such
exculpation is not permitted under the Massachusetts Business Corporation Law as
in effect when such liability is determined.
Item 7. Exemption from Registration Claimed.
- -------------------------------------------
Not Applicable.
Item 8. Exhibits.
- ----------------
See Exhibit Index immediately following the signature page.
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 this Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represents a fundamental change in the information set forth in this
Registration Statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in this Registration Statement or
any material change to such information in this Registration Statement;
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) do 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 this Registration Statement.
- 4 -
<PAGE> 5
(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 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 to directors, officers and controlling
persons of the Registrant pursuant to the provisions referred to in Item 6
hereof, 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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<PAGE> 6
SIGNATURES
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 to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Cambridge, Commonwealth of Massachusetts, on this
12th day of August, 1996.
GENZYME CORPORATION
By /s/ Henri A. Termeer
---------------------------------
Henri A. Termeer, President
POWER OF ATTORNEY
We, the undersigned officers and directors of Genzyme Corporation, hereby
severally constitute and appoint Henri A. Termeer, David J. McLachlan, Evan M.
Lebson and Peter Wirth, and each of them singly, our true and lawful
attorneys-in-fact, with full power to them in any and all capacities, to sign
any and all amendments to this Registration Statement on Form S-8 (including any
post-effective amendments thereto), and to file the same, with exhibits thereto
and other documents in connection therewith, with the Securities and Exchange
Commission, hereby ratifying and confirming all that each of said
attorneys-in-fact may do or cause to be done by virtue hereof.
<TABLE>
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated:
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Henri A. Termeer Director and Principal August 12, 1996
- ------------------------------------------ Executive Officer
Henri A. Termeer
/s/ David J. McLachlan Principal Financial and August 12, 1996
- ------------------------------------------ Accounting Officer
David J. McLachlan
/s/ Constantine E. Anagnostopoulos Director August 12, 1996
- ------------------------------------------
Constantine E. Anagnostopoulos
/s/ Douglas A. Berthiaume Director August 12, 1996
- ------------------------------------------
Douglas A. Berthiaume
/s/ Henry E. Blair Director August 12, 1996
- ------------------------------------------
Henry E. Blair
/s/ Robert J. Carpenter Director August 12, 1996
- ------------------------------------------
Robert J. Carpenter
/s/ Charles L. Cooney Director August 12, 1996
- ------------------------------------------
Charles L. Cooney
/s/ Henry R. Lewis Director August 12, 1996
- ------------------------------------------
Henry R. Lewis
</TABLE>
- 6 -
<PAGE> 7
EXHIBIT INDEX
-------------
EXHIBIT Page
NUMBER Description Number
- ------ ----------- ------
5.1 Opinion of Palmer & Dodge LLP as to the legality of the 8
securities registered hereunder. Filed herewith.
23.1 Consent of Coopers & Lybrand L.L.P., independent 9
accountants. Filed herewith.
23.2 Consent of Palmer & Dodge (contained in Exhibit 5.1). *
99.1 Genzyme Corporation 1990 Equity Incentive Plan, as 10
amended through May 16, 1996. Filed herewith.
- 7 -
<PAGE> 1
Exhibit 5.1
PALMER & DODGE LLP
One Beacon Street
Boston, Massachusetts 02018
Telephone: (617) 573-0100 Facsimile: (617) 227-4420
August 12, 1996
Genzyme Corporation
One Kendall Square
Cambridge, Massachusetts 02139
We are rendering this opinion in connection with the Registration Statement
on Form S-8 (the "Registration Statement") filed by Genzyme Corporation (the
"Company") with the Securities and Exchange Commission (the "Commission") under
the Securities Act of 1933, as amended (the "Act"), on or about the date hereof.
The Registration Statement relates to 4,602,000 shares of the Company's General
Division Common Stock, $0.01 par value and 1,300,000 shares of the Company's
Tissue Repair Division Common Stock (collectively, the "Shares") offered
pursuant to the provisions of the Company's 1990 Equity Incentive Plan (the
"Plan").
We have acted as your counsel in connection with the preparation of the
Registration Statement and are familiar with the proceedings taken by the
Company in connection with authorization, issuance and sale of the Shares. We
have examined all such documents as we consider necessary to enable us to render
this opinion.
Based upon the foregoing, we are of the opinion that when issued in
accordance with the terms of the Plan and the options or other rights granted
thereunder, the Shares will be duly authorized, validly issued, fully paid and
nonassessable.
We hereby consent to the filing of this opinion as a part of the
Registration Statement and to the reference to our firm under Item 5 thereof.
Very truly yours,
/s/ Palmer & Dodge LLP
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<PAGE> 1
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
----------------------------------
We consent to the incorporation by reference in this registration statement on
Form S-8 of Genzyme Corporation for its 1990 Equity Incentive Plan of our
reports dated March 1, 1996 except as to Note Q which is March 26, 1996 on our
audits of the consolidated financial statements and financial statement schedule
of Genzyme Corporation, dated March 1, 1996 except as to Note R which is March
26, 1996 on our audits of the combined financial statements and financial
statement schedule of Genzyme General Division and dated March 1, 1996 except as
to Note O which is March 26, 1996 on our audits of the combined financial
statements and financial statement schedule of Genzyme Tissue Repair Division
all as of December 31, 1994 and 1995 and for each of the three years in the
period ended December 31, 1995, which reports are included in Genzyme
Corporation's 1995 Annual Report on Form 10-K.
/s/ Coopers & Lybrand L.L.P.
Coopers & Lybrand L.L.P.
Boston, Massachusetts
August 7, 1996
- 9 -
<PAGE> 1
Exhibit 99.1
Adopted by directors on March 15, 1990
Approved by shareholders on May 17, 1990
Amended by directors on March 14, 1991
Approved by shareholders on May 16, 1991
Amended by directors on March 17, 1993
Approved by shareholders on May 21, 1993
Amended and restated by directors on August 25,
1994
Approved by shareholders on December 12, 1994
Amended by directors on March 10, 1995
Approved by shareholders on May 18, 1995
Amended by directors on March 14, 1996
Approved by shareholders on May 16, 1996
Restated to reflect 2:1 stock split of the General
Stock on July 25, 1996
GENZYME CORPORATION
1990 EQUITY INCENTIVE PLAN
--------------------------
SECTION 1. PURPOSE
-------
The purpose of the Genzyme Corporation 1990 Equity Incentive Plan (the
"Plan") is to attract and retain key employees and consultants to provide an
incentive for them to assist the Company to achieve long-range performance
goals, and to enable them to participate in the long-term growth of the Company.
The Plan constitutes an amendment and restatement of the Company's 1983
Stock Option Plan, 1985 U.K. Stock Option Scheme, 1988 Officer Stock Option Plan
and 1989 Stock Option Plan (collectively, the "Prior Plans"), which are hereby
merged with and into the Plan, and the separate existence of the Prior Plans
shall terminate on the effective date of the Plan. The rights and privileges of
holders of outstanding options and rights under the Prior Plans shall not be
adversely affected by the foregoing action.
SECTION 2. DEFINITIONS
-----------
"Affiliate" means any business entity in which the Company owns directly
or indirectly 50% or more of the total combined voting power or has a
significant financial interest as determined by the Committee.
"Award" means any Option, Stock Appreciation Right, Performance Share,
Restricted Stock or Stock Unit awarded under the Plan.
"Board" means the Board of Directors of the Company.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Committee" means a committee of not less than three members of the
Board appointed by the Board to administer the Plan, each of whom is a
"disinterested person" within the meaning of Rule 16b-3 under the Securities
Exchange Act of 1934, or any successor provision.
"General Stock" means the General Division Common Stock, $0.01 par
value, of the Company.
"Company" means Genzyme Corporation.
- 10 -
<PAGE> 2
"Designated Beneficiary" means the beneficiary designated by a
Participant, in a manner determined by the Committee, to receive amounts due or
exercise rights of the Participant in the event of the Participant's death. In
the absence of an effective designation by a Participant, designated Beneficiary
shall mean the Participant's estate.
"Fair Market Value" means, with respect to General Stock, TR Stock or
any other property, the fair market value of such property as determined by the
Committee in good faith or in the manner established by the Committee from time
to time.
"Incentive Stock Option" means an option to purchase shares of General
Stock or TR Stock awarded to a Participant under Section 6 which is intended to
meet the requirements of Section 422 of the Code or any successor provision.
"Nonstatutory Stock Option" means an option to purchase shares of
General Stock or TR Stock awarded to a Participant under Section 6 which is not
intended to be an Incentive Stock Option.
"Option" means an Incentive Stock Option or a Nonstatutory Stock Option.
"Participant" means a person selected by the Committee to receive an
Award under the Plan.
"Performance Cycle" or "Cycle" means the period of time selected by the
Committee during which performance is measured for the purpose of determining
the extent to which an award of Performance Shares has been earned.
"Performance Shares" mean shares of General Stock or TR Stock which may
be earned by the achievement of performance goals awarded to a Participant under
Section 8.
"Reporting Person" means a person subject to Section 16 of the
Securities Exchange Act of 1934 or any successor provision.
"Restricted Period" means the period of time selected by the Committee
during which an award of Restricted Stock may be forfeited to the Company.
"Restricted Stock" means shares of General Stock or TR Stock subject to
forfeiture awarded to a Participant under Section 9.
"Stock Appreciation Right" or "SAR" means a right to receive any excess
in value of shares of General Stock or TR Stock over the exercise price awarded
to a Participant under Section 7.
"Stock Unit" means an award of General Stock or TR Stock or units that
are valued in whole or in part by reference to, or otherwise based on, the value
of General Stock or TR Stock, respectively, awarded to a Participant under
Section 10.
"TR Stock" means the Tissue Repair Division Common Stock, $0.01 par
value, of the Company.
SECTION 3. ADMINISTRATION
--------------
The Plan shall be administered by the Committee. The Committee shall
have authority to adopt, alter and repeal such administrative rules, guidelines
and practices governing the operation of the Plan as it shall from time to time
consider advisable, and to interpret the provisions of the Plan. The Committee's
decisions shall be final and binding. To the extent permitted by applicable law,
the Committee may delegate to one or more executive officers of the Company the
power to make Awards to Participants who are not Reporting Persons and all
determinations under the Plan with respect thereto, provided that the Committee
shall fix the maximum amount of such Awards for the group and a maximum for any
one Participant.
- 11 -
<PAGE> 3
SECTION 4. ELIGIBILITY
-----------
All employees, and in the case of Awards other than Incentive Stock
Options, consultants of the Company or any Affiliate capable of contributing
significantly to the successful performance of the Company, other than a person
who has irrevocably elected not to be eligible, are eligible to be Participants
in the Plan.
SECTION 5. STOCK AVAILABLE FOR AWARDS
--------------------------
(a) Subject to adjustment under subsection (b), Awards may be made
under the Plan for up to 19,800,000 shares of General Stock (including
outstanding Awards under the Prior Plans) and up to 3,300,000 shares of TR
Stock. If any Award in respect of shares of General Stock or TR Stock expires or
is terminated unexercised or is forfeited for any reason or settled in a manner
that results in fewer shares outstanding than were initially awarded, including
without limitation the surrender of shares in payment for the Award or any tax
obligation thereon, the shares subject to such Award or so surrendered, as the
case may be, to the extent of such expiration, termination, forfeiture or
decrease, shall again be available for award under the Plan, subject, however,
in the case of Incentive Stock Options, to any limitation required under the
Code. General Stock or TR Stock issued through the assumption or substitution of
outstanding grants from an acquired company shall not reduce the shares
available for Awards under the Plan. Shares issued under the Plan may consist in
whole or in part of authorized but unissued shares or treasury shares.
(b) In the event that the Committee determines that any stock
dividend, extraordinary cash dividend, creation of a class of equity securities,
recapitalization, reorganization, merger, consolidation, split-up, spin-off,
combination, exchange of shares, warrants or rights offering to purchase General
Stock or TR Stock at a price substantially below fair market value, or other
similar transaction affects the General Stock or TR Stock such that an
adjustment is required in order to preserve the benefits or potential benefits
intended to be made available under the Plan, then the Committee, subject, in
the case of Incentive Stock Options, to any limitation required under the Code,
shall equitably adjust any or all of (i) the number and kind of shares in
respect of which Awards may be made under the Plan, (ii) the number and kind of
shares subject to outstanding Awards, and (iii) the award, exercise or
conversion price with respect to any of the foregoing, and if considered
appropriate, the Committee may make provision for a cash payment with respect to
an outstanding Award, provided that the number of shares subject to any Award
shall always be a whole number.
SECTION 6. STOCK OPTIONS
-------------
(a) Subject to the provisions of the Plan, the Committee may award
Incentive Stock Options and Nonstatutory Stock Options relating to either
General Stock or TR Stock and determine the number of shares to be covered by
each Option, the option price therefor and the conditions and limitations
applicable to the exercise of the Option. The terms and conditions of Incentive
Stock Options shall be subject to and comply with Section 422 of the Code, or
any successor provision, and any regulations thereunder.
(b) The Committee shall establish the option price at the time each
Option is awarded, which price shall not be less than 100% of the Fair Market
Value of the General Stock or TR Stock, as the case may be, on the date of
award.
(c) Each Option shall be exercisable at such times and subject to
such terms and conditions as the Committee may specify in the applicable Award
or thereafter. The Committee may impose such conditions with respect to the
exercise of Options, including conditions relating to applicable federal or
state securities laws, as it considers necessary or advisable.
(d) No shares shall be delivered pursuant to any exercise of an
Option until payment in full of the option price therefor is received by the
Company. Such payment may be made in whole or in part in cash or, to
- 12 -
<PAGE> 4
the extent permitted by the Committee at or after the award of the Option, by
delivery of a note or shares of General Stock or TR Stock owned by the optionee,
including Restricted Stock, valued at their Fair Market Value on the date of
delivery, or such other lawful consideration as the Committee may determine.
(e) The Committee may provide for the automatic award of an Option
upon the delivery of shares to the Company in payment of an Option for up to the
number of shares so delivered.
SECTION 7. STOCK APPRECIATION RIGHTS
-------------------------
(a) Subject to the provisions of the Plan, the Committee may award
SARs in tandem with an Option (at or after the award of the Option), or alone
and unrelated to an Option. SARs in tandem with an Option shall terminate to the
extent that the related Option is exercised, and the related Option shall
terminate to the extent that the tandem SARs are exercised. SARs shall have an
exercise price of not less than the Fair Market Value of the General Stock or TR
Stock, as the case may be, on the date of award, or in the case of SARs in
tandem with Options, the exercise price of the related Option.
(b) An SAR related to an Option which can only be exercised during
limited periods following a change in control of the Company, may entitle the
Participant to receive an amount based upon the highest price paid or offered
for General Stock or TR Stock, as the case may be, in any transaction relating
to the change in control or paid during the thirty-day period immediately
preceding the occurrence of the change in control in any transaction reported in
the stock market in which the General Stock or TR Stock is normally traded.
SECTION 8. PERFORMANCE SHARES
------------------
(a) Subject to the provisions of the Plan, the Committee may award
Performance Shares and determine the number of such shares for each Performance
Cycle and the duration of each Performance Cycle. There may be more than one
Performance Cycle in existence at any one time, and the duration of Performance
Cycles may differ from each other. The payment value of Performance Shares shall
be equal to the Fair Market Value of the General Stock or TR Stock, as the case
may be, on the date the Performance Shares are earned or, in the discretion of
the Committee, on the date the Committee determines that the Performance Shares
have been earned.
(b) The Committee shall establish performance goals for each Cycle,
for the purpose of determining the extent to which Performance Shares awarded
for such Cycle are earned, on the basis of such criteria and to accomplish such
objectives as the Committee may from time to time select. During any Cycle, the
Committee may adjust the performance goals for such Cycle as it deems equitable
in recognition of unusual or non-recurring events affecting the Company, changes
in applicable tax laws or accounting principles, or such other factors as the
Committee may determine.
(c) As soon as practicable after the end of a Performance Cycle, the
Committee shall determine the number of Performance Shares which have been
earned on the basis of performance in relation to the established performance
goals. The payment values of earned Performance Shares shall be distributed to
the Participant or, if the Participant has died, to the Participant's Designated
Beneficiary, as soon as practicable thereafter. The Committee shall determine,
at or after the time of award, whether payment values will be settled in whole
or in part in cash or other property, including General Stock, TR Stock or
Awards.
SECTION 9. RESTRICTED STOCK
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(a) Subject to the provisions of the Plan, the Committee may award
shares of Restricted Stock and determine the duration of the Restricted Period
during which, and the conditions under which, the shares may be forfeited to the
Company and the other terms and conditions of such Awards. Shares of Restricted
Stock shall be issued for no cash consideration or such minimum consideration as
may be required by applicable law.
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(b) Shares of Restricted Stock may not be sold, assigned,
transferred, pledged or otherwise encumbered, except as permitted by the
Committee, during the Restricted Period. Shares of Restricted Stock shall be
evidenced in such manner as the Committee may determine. Any certificates issued
in respect of shares of Restricted Stock shall be registered in the name of the
Participant and unless otherwise determined by the Committee, deposited by the
Participant, together with a stock power endorsed in blank, with the Company. At
the expiration of the Restricted Period, the Company shall deliver such
certificates to the Participant or if the Participant has died, to the
Participant's Designated Beneficiary.
SECTION 10. STOCK UNITS
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(a) Subject to the provisions of the Plan, the Committee may award
Stock Units subject to such terms, restrictions, conditions, performance
criteria, vesting requirements and payment rules as the Committee shall
determine.
(b) Shares of General Stock or TR Stock awarded in connection with a
Stock Unit Award shall be issued for no cash consideration or such minimum
consideration as may be required by applicable law.
SECTION 11. GENERAL PROVISIONS APPLICABLE TO AWARDS
---------------------------------------
(a) LIMITATIONS ON GRANTS OF OPTIONS AND SARS. Subject to adjustment
under Section 5(b), the number of shares subject to Options and SARs granted to
any one individual during any fiscal year may not exceed 400,000 shares of
General Stock and 300,000 shares of TR Stock.
(b) REPORTING PERSON LIMITATIONS. Notwithstanding any other
provision of the Plan, to the extent required to qualify for the exemption
provided by Rule 16b-3 under the Securities Exchange Act of 1934, and any
successor provision, (i) any General Stock, TR Stock or other equity security
offered under the Plan to a Reporting Person may not be sold for at least six
months after acquisition, except in case of death or disability and (ii) any
Option, SAR or other similar right related to an equity security, issued under
the Plan to a Reporting Person shall not be transferable other than by will or
the laws of descent and distribution, shall not be exercisable for at least six
months except in the case of death or disability, and shall be exercisable
during the Participant's lifetime only by the Participant or the Participant's
guardian or legal representative.
(c) DOCUMENTATION. Each Award under the Plan shall be evidenced by a
writing delivered to the Participant specifying the terms and conditions thereof
and containing such other terms and conditions not inconsistent with the
provisions of the Plan as the Committee considers necessary or advisable to
achieve the purposes of the Plan or comply with applicable tax and regulatory
laws and accounting principles.
(d) COMMITTEE DISCRETION. Each type of Award may be made alone, in
addition to or in relation to any other type of Award. The terms of each type of
Award need not be identical, and the Committee need not treat Participants
uniformly. Except as otherwise provided by the Plan or a particular Award, any
determination with respect to an Award may be made by the Committee at the time
of award or at any time thereafter.
(e) SETTLEMENT. The Committee shall determine whether Awards are
settled in whole or in part in cash, General Stock, TR Stock, other securities
of the Company, Awards or other property. The Committee may permit a Participant
to defer all or any portion of a payment under the Plan, including the crediting
of interest on deferred amounts denominated in cash and dividend equivalents on
amounts denominated in General Stock or TR Stock.
(f) DIVIDENDS AND CASH AWARDS In the discretion of the Committee,
any Award under the Plan may provide the Participant with (i) dividends or
dividend equivalents payable currently or deferred with or without interest,
and (ii) cash payments in lieu of or in addition to an Award.
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<PAGE> 6
(g) TERMINATION OF EMPLOYMENT. The Committee shall determine the
effect on an Award of the disability, death, retirement or other termination of
employment of a Participant and the extent to which, and the period during
which, the Participant's legal representative, guardian or Designated
Beneficiary may receive payment of an Award or exercise rights thereunder.
(h) CHANGE IN CONTROL. In order to preserve a Participant's rights
under an Award in the event of a change in control of the Company, the Committee
in its discretion may, at the time an Award is made or at any time thereafter,
take one or more of the following actions: (i) provide for the acceleration of
any time period relating to the exercise or realization of the Award, (ii)
provide for the purchase of the Award upon the Participant's request for an
amount of cash or other property that could have been received upon the exercise
or realization of the Award had the Award been currently exercisable or payable,
(iii) adjust the terms of the Award in a manner determined by the Committee to
reflect the change in control, (iv) cause the Award to be assumed, or new rights
substituted therefor, by another entity, or (v) make such other provision as the
Committee may consider equitable and in the best interests of the Company.
(i) WITHHOLDING. The Participant shall pay to the Company, or make
provision satisfactory to the Committee for payment of, any taxes required by
law to be withheld in respect of Awards under the Plan no later than the date of
the event creating the tax liability. In the Committee's discretion, such tax
obligations may be paid in whole or in part in shares of General Stock or TR
Stock, including shares retained from the Award creating the tax obligation,
valued at their Fair Market Value on the date of delivery. The Company and its
Affiliates may, to the extent permitted by law, deduct any such tax obligations
from any payment of any kind otherwise due to the Participant.
(j) FOREIGN NATIONALS. Awards may be made to Participants who are
foreign nationals or employed outside the United States on such terms and
conditions different from those specified in the Plan as the Committee considers
necessary or advisable to achieve the purposes of the Plan or comply with
applicable laws. In this connection, the provisions of the 1985 U.K. Stock
Option Scheme shall remain in effect to govern Awards to Participants in the
United Kingdom until otherwise determined by the Committee.
(k) AMENDMENT OF AWARD. The Committee may amend, modify or terminate
any outstanding Award, including substituting therefor another Award of the same
or a different type, changing the date of exercise or realization and converting
an Incentive Stock Option to a Nonstatutory Stock Option, provided that the
Participant's consent to such action shall be required unless the Committee
determines that the action, taking into account any related action, would not
materially and adversely affect the Participant.
SECTION 12. MISCELLANEOUS
-------------
(a) NO RIGHT TO EMPLOYMENT. No person shall have any claim or right
to be granted an Award, and the grant of an Award shall not be construed as
giving a Participant the right to continued employment. The Company expressly
reserves the right at any time to dismiss a Participant free from any liability
or claim under the Plan, except as expressly provided in the applicable Award.
(b) NO RIGHTS AS SHAREHOLDER. Subject to the provisions of the
applicable Award, no Participant or Designated Beneficiary shall have any rights
as a shareholder with respect to any shares of General Stock or TR Stock to be
distributed under the Plan until he or she becomes the holder thereof. A
Participant to whom General Stock or TR Stock is awarded shall be considered the
holder of the Stock at the time of the Award except as otherwise provided in the
applicable Award.
(c) EFFECTIVE DATE. Subject to the approval of the shareholders of
the Company, the Plan shall be effective on March 15, 1990. Prior to such
approval, Awards may be made under the Plan expressly subject to such approval.
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<PAGE> 7
(d) AMENDMENT OF PLAN. The Board may amend, suspend or terminate the
Plan or any portion thereof at any time, provided that no amendment shall be
made without shareholder approval if such approval is necessary to comply with
any applicable tax or regulatory requirement, including any requirement for
exemptive relief under Section 16(b) of the Securities Exchange Act of 1934, or
any successor provision.
(e) GOVERNING LAW. The provisions of the Plan shall be governed by
and interpreted in accordance with the laws of Massachusetts.
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