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Registration No. 33-
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
__________
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
__________
RAYTHEON COMPANY
(Exact name of registrant as specified in its charter)
__________
DELAWARE 04-1760395
(State of Incorporation) (I.R.S. Employer Identification No.)
141 Spring Street, Lexington, Massachusetts 02173
(Address of Principal Executive Offices)
RAYTHEON COMPANY 1995 STOCK OPTION PLAN
(Full Title of the Plan)
THOMAS D. HYDE
Vice President and General Counsel
RAYTHEON COMPANY
141 Spring Street
Lexington, Massachusetts 02173
Telephone: (617) 862-6600
(Name, Address and Telephone Number of Agent for Service)
__________
C A L C U L A T I O N O F R E G I S T R A T I O N F E E
===========================================================================
Proposed Proposed
Maximum Maximum
Title of Amount Offering Aggregate Amount of
Securities to be Price Offering Registration
Being Registered Registered per Share* Price* Fee*
===========================================================================
Raytheon
Common Stock 20,000,000 $78.50 $157,000,000 $541,380
===========================================================================
* Estimated using the average of the high and low prices on June 26, 1995
solely for purposes of determining the Registration Fee pursuant to Rule
457(h)(1) under the Securities Act of 1933, as amended.<PAGE>
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RAYTHEON COMPANY
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. Incorporation of Documents by Reference
The following documents are incorporated by reference:
(a) The registrant's latest annual report filed pursuant to Sections
13(a) or 15(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act") containing audited financial statements for
the latest fiscal year for which such statements have been filed;
(b) All other reports filed pursuant to Sections 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 common stock contained in the
registration statement on Form S-3 filed May 11, 1995 under such
Securities Act of 1933, as amended (Registration No. 33-59241),
including any amendment or report filed for the purpose of
updating such description; and
(d) All reports and other documents subsequently filed by the
registrant pursuant to Sections 13(a), 13(c), 14 and 15(d) of the
Exchange Act prior to the filing of a post-effective amendment
which indicates that all securities offered hereby have been sold
or which deregisters all securities remaining unsold.
ITEM 6. Indemnification of Directors and Officers
Section 145 of the General Corporation Law of the State of Delaware reads
as follows:
(a) A corporation may 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 (other than an action by or in the
right of the corporation) by reason of the fact that he is or was
a director, officer, employee or agent of the corporation, or is
or was serving at the request of the corporation as a director,
officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against expenses
(including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection
with such action, suit or proceeding if he acted in good faith and
in a manner he reasonably believed to be in or not opposed to the
best interest of the corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to
believe<PAGE>
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his conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or upon a
plea of nolo contendere or its equivalent, shall not, of itself,
create a presumption that the person did not act in good faith and
in a manner which he 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 reasonable cause to believe
that his conduct was unlawful.
(b) A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the corporation to
procure a judgment in its favor by reason of the fact that he is
or was a director, officer, employee or agent of the corporation,
or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against
expenses (including attorneys' fees) actually and reasonably
incurred by him in connection with the defense or settlement of
such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests
of the corporation and except that no indemnification shall be
made in respect of 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 Court of Chancery or the
court in which such action or suit was brought shall determine
upon application that, despite the adjudication or liability but
in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses
which the Court of Chancery or such other court shall deem proper.
(c) To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in
defense of any action, suit or proceeding referred to in
subsections (a) and (b) of this section, or in defense of any
claim, issue or matter therein, he shall be indemnified against
expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith.
(d) Any indemnification under subsections (a) and (b) of this section
(unless ordered by a court) shall be made by the corporation only
as authorized in the specific case upon a determination that
indemnification of the director, officer, employee or agent is
proper in the circumstances because he has met the applicable
standard of conduct set forth in subsections (a) and (b) of this
section. Such determination shall be made (1) by the board of
directors by a majority vote of the directors who are not parties
to such action, suit or proceeding, even though less than a
quorum, or (2) if there are no such directors, or if such
directors so direct, by independent legal counsel in a written
opinion, or (3) by the stockholders. <PAGE>
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(e) Expenses (including attorneys' fees) incurred by an officer or
director in defending any civil, criminal, administrative or
investigative action, suit or proceeding may be paid by the
corporation in advance of the final disposition of such action,
suit or proceeding upon receipt of an undertaking by or on behalf
of such director or officer to repay such amount if it shall
ultimately be determined that he is not entitled to be indemnified
by the corporation as authorized in this section. Such expenses
(including attorneys' fees) incurred by other employees and agents
may be so paid upon such terms and conditions, if any, as the
board of directors deems appropriate.
(f) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other subsections of this section shall
not be deemed exclusive of any other rights to which those seeking
indemnification or advancement of expenses may be entitled under
any bylaw, agreement, vote of stockholders or disinterested
directors, or otherwise, both as to action in his official
capacity and as to action in another capacity while holding such
office.
(g) A corporation shall have power to purchase and maintain insurance
on behalf of any person who is or was a director, officer,
employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or
other enterprise against any liability asserted against him and
incurred by him in any such capacity, or arising out of his status
as such, whether or not the corporation would have the power to
indemnify him against such liability under this section.
(h) For purposes of this section, references to "the corporation"
shall include, in addition to the resulting corporation, any
constituent corporation (including any constituent of a
constituent) absorbed in a consolidation or merger which, if its
separate existence had continued, would have had power and
authority to indemnify its directors, officers, and employees or
agents, so that any person who is or was a director, officer,
employee or agent of such constituent corporation, or is or was
serving at the request of such constituent corporation as a
director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, shall stand
in the same position under this section with respect to the
resulting or surviving corporation as he would have with respect
to such constituent corporation if its separate existence had
continued.
(i) For purposes of this section, references to "other enterprises"
shall include employee benefit plans; references to "fines" shall
include any excise taxes assessed on a person with respect to any
employee benefit plan; and references to "serving at the request<PAGE>
PAGE 5
of the corporation" shall include any service as a director,
officer, employee or agent of the corporation which imposes duties
on, or involves services by, such director, officer, employee or
agent with respect to any employee benefit plan, its participants
or beneficiaries; and a person who acted in good faith and in a
manner he reasonably believed to be in the interest of the
participants and beneficiaries of an employee benefit plan shall
be deemed to have acted in a manner not opposed to the best
interests of "the corporation" as referred to in this section.
(j) The indemnification and advancement of expenses provided by, or
granted pursuant to, this section shall, unless otherwise provided
when authorized or ratified, continue as to a person who has
ceased to be a director, officer, employee or agent and shall
inure to the benefit of the heirs, executors and administrators of
such a person.
(k) The Court of Chancery is hereby vested with exclusive jurisdiction
to hear and determine all actions for advancement of expenses or
indemnification brought under this section or under any bylaw,
agreement, vote of stockholders or disinterested directors, or
otherwise. The Court of Chancery may summarily determine a
corporation's obligations to advance expenses (including
attorneys' fees).
Article VI of the registrant's Bylaws provides as follows:
Each person who is or was a director or officer of the Corporation
(and the heirs, executors or administrators of such person) who is or was
made a party to, or is or was involved in, 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 or officer of the Corporation or is or was serving at the
request or for the benefit of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture,
trust, employee benefit plan, or other enterprise shall be held harmless
and indemnified by the Corporation against any expense, liability or loss
(including, without limitation, judgments, fines, settlement payments and
the expense of legal counsel) incurred by such person in any such capacity
to the fullest extent permitted by applicable law. The right to
indemnification conferred in this Article shall also include the right to
be paid by the Corporation the expenses incurred in defending any such
proceeding in advance of its final disposition to the fullest extent
permitted by applicable law. The Corporation may provide indemnification
to other employees and agents of the Corporation as may be authorized from
time to time by the Board of Directors to the fullest extent permitted by
applicable law.
The Corporation may purchase and maintain insurance, at its
expense, to protect itself and any person who is or was a director,
officer, employee or agent of the Corporation, or who is or was serving at<PAGE>
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the request or for the benefit of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise, against any expense,
liability or loss incurred by such person in any such capacity, whether or
not the Corporation would have the power to indemnify such person against
such expense, liability or loss under applicable law.
The rights and authority conferred in this Article shall not be
exclusive of any other right which any person may have or hereafter acquire
under any statute, provision of the Certificate of Incorporation or Bylaws
of the Corporation, agreement, vote of stockholders or disinterested
directors or otherwise.
Neither the amendment nor repeal of this Article nor the adoption
of any provision of the Certificate of Incorporation or Bylaws or of any
statute inconsistent with this Article shall eliminate or reduce the effect
of this Article in respect of any acts or omissions occurring prior to such
amendment, repeal or adoption of an inconsistent provision.
Subparagraph 11 of Article Ninth of Registrant's Restated Certificate of
Incorporation provides as follows:
No director shall be personally liable to the Corporation or its
stockholders for monetary damages for any breach of fiduciary duty by such
director as a director. Notwithstanding the foregoing sentence, a director
shall be liable to the extent provided by applicable law (i) for breach of
the director's duty of loyalty to the Corporation or its stockholders, (ii)
for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) pursuant to Section 174 of
the Delaware General Corporation Law, or (iv) for any transaction from
which the director derived an improper personal benefit. If the Delaware
Corporation Law hereafter is amended to authorize, with the approval of the
Corporation's stockholders, further reductions in the liability of a
Corporation's directors for breach of fiduciary duty, then a director of
the Corporation shall not be liable for any such breach to the fullest
extent permitted by the Delaware Corporation Law as so amended. No
amendment to alter or repeal this subparagraph 11 shall apply to or have
any effect on the liability or alleged liability of any director of the
Corporation for or with respect to any acts or omissions of such director
occurring prior to such amendment.
ITEM 8. Exhibits
(3) Raytheon Company Bylaws, as amended through August 22, 1990,
heretofore filed as an Exhibit to Raytheon's Form 10-K for the
year ended December 31, 1990, are hereby incorporated by
reference.
(5) Opinion of Counsel
Raytheon has submitted the Plan and will submit, in a timely<PAGE>
PAGE 7
manner, any amendments thereto to the Internal Revenue Service
("IRS") and has made or will make all changes required by the IRS
in order to qualify the Plan.
(24) Consent of Independent Accountants
(28) Additional Exhibits
(a) Raytheon 1995 Stock Option Plan
ITEM 9. Undertakings
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement;
(i) To include any prospectus required by section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represents a fundamental change in the information set forth in
the registration statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the registration
statement or any material change to such information in the registration
statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply
if the registration statement is on Form S-3, or Form S-8 or Form F-3, and
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed with or furnished
to the Commission by the registrant pursuant to Sections 13 or 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(4) If the registrant is a foreign private issuer, to file a
post-effective amendment to the registration statement to include any<PAGE>
PAGE 8
financial statements required by Rule 3-19 of Regulation S-X at the start
of any delayed offering or throughout a continuous 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 (and, where
applicable, each filing of an employee benefit plan's annual report
pursuant to section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the registration statement shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(h) Insofar as indemnification for liabilities arising under
the Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions,
or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than
the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense
of any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
SIGNATURE
The Registrant. 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 Town of Lexington and the
Commonwealth of Massachusetts on the 28th day of June, 1995.
Raytheon Company (Registrant)
By: /s/ Thomas D. Hyde
Thomas D. Hyde
Vice President and General Counsel
for Registrant <PAGE>
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
Dennis J. Picard Chairman of the Board
Dennis J. Picard and Director (Principal
Executive Officer) June 28, 1995
Charles F. Adams
Charles F. Adams Director June 28, 1995
Francis H. Burr
Francis H. Burr Director June 28, 1995
Ferdinand Colloredo-Mansfeld
Ferdinand Colloredo-Mansfeld Director June 28, 1995
Theodore L. Eliot, Jr.
Theodore L. Eliot, Jr. Director June 28, 1995
Barbara B. Hauptfuhrer
Barbara B. Hauptfuhrer Director June 28, 1995
Richard D. Hill
Richard D. Hill Director June 28, 1995
James N. Land, Jr.
James N. Land, Jr. Director June 28, 1995
A. Lowell Lawson
A. Lowell Lawson Director June 28, 1995
Thomas L. Phillips
Thomas L. Phillips Director June 28, 1995
Warren B. Rudman
Warren B. Rudman Director June 28, 1995
Joseph J. Sisco
Joseph J. Sisco Director June 28, 1995
Alfred M. Zeien
Alfred M. Zeien Director June 28, 1995
Peter R. D'Angelo
Peter R. D'Angelo Executive Vice President, Chief
Financial Officer and Controller June 28, 1995<PAGE>
EXHIBIT (24)
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Registration
Statement of Raytheon Company and Subsidiaries Consolidated on Form S-8 of
our reports dated January 19, 1995, except as to the information presented
in Note R for which the date is February 22, 1995, on our audits of the
consolidated financial statements and financial statement schedule of
Raytheon Company and Subsidiaries Consolidated.
/s/ Coopers & Lybrand L.L.P.
Boston, Massachusetts COOPERS & LYBRAND L.L.P.
June 28, 1995<PAGE>
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EXHIBIT (28)
RAYTHEON COMPANY 1995 STOCK OPTION PLAN
1. Definitions. As used in this Raytheon Company 1995 Stock Option
Plan the following terms have the following meanings:
1.1 "Change in Corporate Control" means (a) the time of approval
by the shareholders of the Company of (i) any consolidation or merger of the
Company in which the Company is not the continuing or surviving corporation or
pursuant to which shares of Stock would be converted into cash, securities or
other property, other than a merger in which the holders of Stock immediately
prior to the merger will have the same proportionate ownership of common stock
of the surviving corporation immediately after the merger, (ii) any sale,
lease, exchange, or other transfer (in one transaction or a series of related
transactions) of all or substantially all the assets of the Company, or (iii)
adoption of any plan or proposal for the liquidation or dissolution of the
Company; or (b) the date on which any "person" (as defined in Section 13(d) of
the Securities Exchange Act of 1934), other than the Company or a subsidiary
or employee benefit plan or trust maintained by the Company or any of its
subsidiaries, shall become (together with its "affiliates" and "associates,"
as defined in Rule 12b-2 under the Securities Exchange Act of 1934) the
"beneficial owner" (as defined in Rule 13d-3 under the Securities Exchange Act
of 1934), directly or indirectly, of more than 25% of the Stock outstanding at
the time, without the prior approval of the Board of Directors of the Company.
1.2 "Code" means the Internal Revenue Code of 1986, as amended.
1.3 "Committee" means the Compensation Committee of the
Company's Board of Directors, consisting exclusively of directors who at the
relevant time are "outside directors" within the meaning of 162(m) of the
Code.
1.4 "Company" means Raytheon Company, a Delaware corporation.
1.5 "Fair Market Value" means the value of a share of Stock of
the Company on any date as determined by the Board.
1.6 "Grant Date" means the date on which an Option is granted,
as specified in Section 7.
1.7 "Incentive Stock Option" means an Option grant that is
intended to meet the requirements of Section 422 of the Code.
1.8 "Non-Statutory Stock Option" means an Option grant that is
not intended to be an Incentive Stock Option.
1.9 "Option" means an option to purchase shares of the Stock
granted under the Plan.
1.10 "Option Agreement" means an agreement between the
Company<PAGE>
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and an Optionee setting forth the terms and conditions of an Option.
1.11 "Option Period" means the period from the date of the grant
of an Option to the date when the Option expires as stated in the terms of the
Option Agreement.
1.12 "Option Price" means the price paid by an Optionee for an
Option under this Plan.
1.13 "Option Share" means any share of Stock of the Company
transferred to an Optionee upon exercise of an Option pursuant to this Plan.
1.14 "Optionee" means a person eligible to receive an Option, as
provided in Section 6, to whom an Option shall have been granted under the
Plan.
1.15 "Plan" means this 1995 Stock Option Plan of the Company.
1.16 "Related Corporation" means a Parent Corporation or a
Subsidiary Corporation, each as defined in Section 424 of the Code.
1.17 "Stock" means common stock, $1.00 par value, of the Company.
2. Purpose. This 1995 Stock Option Plan is intended to encourage
ownership of Stock by key employees of the Company and its Related
Corporations and to provide additional incentive for them to promote the
success of the Company's business. With respect to any Incentive Stock
Options that may be granted hereunder, the Plan is intended to be an incentive
stock option plan within the meaning of Section 422 of the Code.
3. Term of the Plan. Options under the Plan may be granted not
later than March 21, 2005.
4. Stock Subject to the Plan. At no time shall the number of shares
of Stock then outstanding which are attributable to the exercise of Options
granted under the Plan, plus the number of shares then issuable upon exercise
of outstanding options granted under the Plan, exceed 20,000,000 shares,
subject, however, to the provisions of Section 15 of the Plan. No Optionee
may be granted in any year Options to purchase more than 200,000 shares of
Stock, subject to adjustment pursuant to Section 15. Shares to be issued upon
the exercise of Options granted under the Plan may be either authorized but
unissued shares or shares held by the Company in its treasury. If any Option
expires or terminates for any reason without having been exercised in full,
the shares not purchased thereunder shall again be available for Options
thereafter to be granted.
5. Administration. The Plan shall be administered by the Committee.
Subject to the provisions of the Plan (including, without limitation, the
provisions of Section 19), the Committee shall have complete authority, in its
discretion, to make the following determinations with respect to each Option
to be granted by the Company: (a) the key employee to receive the Option;<PAGE>
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(b) the time of granting the Option; (c) the number of shares subject thereto;
(d) the Option Price (subject to Section 8 below); (e) the Option Period; and
(f) whether the Option is an Incentive Stock Option or a Non-Statutory Stock
Option. Incentive Stock Options granted under this Plan shall be designated
specifically as such. In making such determinations, the Committee may take
into account the nature of the services rendered by the respective employees,
their present and potential contributions to the success of the Company and
its subsidiaries, and such other factors as the Committee in its discretion
shall deem relevant. Subject to the provisions of the Plan, the Committee
shall also have complete authority to interpret the Plan, to prescribe, amend
and rescind rules and regulations relating to it, to determine the terms and
provisions of the respective Option Agreements (which need not be identical),
and to make all other determinations necessary or advisable for the
administration of the Plan. The Committee's determinations on the matters
referred to in this Section 5 shall be conclusive.
6. Eligibility. An Option may be granted only to a key employee of
one or more of the Company and its subsidiaries. A director of one or more of
the Company and its subsidiaries who is not also an employee of one or more of
the Company and its subsidiaries shall not be eligible to receive Options.
7. Time of Granting Options. The granting of an Option shall take
place at the time specified by the Committee. Only if expressly so provided
by the Committee shall the Grant Date be the date on which an Option Agreement
shall have been duly executed and delivered by the Company and the Optionee.
8. Option Price. The Option Price under each Option shall be as
determined by the Committee but shall not be less than 100% of the Fair Market
Value of the Stock on the Grant Date.
9. Option Period. No Incentive Stock Option may be exercised later
than the tenth anniversary of the Grant Date. No Non-Statutory Stock Option
may be exercised later than one day after the tenth anniversary of the Grant
Date. An Option may become exercisable in such installments, cumulative or
non-cumulative, or may be immediately exercisable, as the Committee may
determine.
10. Maximum Size of Incentive Stock Option as Such. To the extent
that the aggregate Fair Market Value of Stock for which an Incentive Stock
Option becomes exercisable by an Optionee for the first time in any calendar
year exceeds $100,000, the portion of such Incentive Stock Option which
exceeds such $100,000 limitation shall be treated as a Non-Statutory Stock
Option, and not an incentive option under Section 422 of the Code. For
purposes of this Section 10, all Incentive Stock Options granted to an
Optionee by the Company, as well as any options that have been granted to the
Optionee under any other stock incentive plans of the Company or any related
corporation which are intended to comply with the provisions of Section 422 of
the Code, shall be considered in the order in which they were granted, and the
Fair Market Value shall be determined as of the Grant Dates.
11. Exercise of Option. <PAGE>
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11.1 An Option may be exercised only by giving written notice, in
the manner provided in Section 21 hereof, specifying the number of shares as
to which the Option is being exercised, accompanied (except as otherwise
provided in Subsection 11.2 of this Section 11) by full payment for such
shares in the form of check or bank draft payable to the order of the Company
or other shares of the Stock with a current Fair Market Value equal to the
Option Price of the shares to be purchased. Receipt by the Company of such
notice and payment shall constitute the exercise of the Option or a part
thereof. Within 20 days thereafter, the Company shall deliver or cause to be
delivered to the Optionee a certificate or certificates for the number of
shares then being purchased. Such shares shall be fully paid and
nonassessable. If such shares are not at that time effectively registered
under the Securities Act of 1933, as amended, the Optionee shall include with
such notice a letter, in form and substance satisfactory to the Company,
confirming that such shares are being purchased for the Optionee's own account
for investment and not with a view to distribution.
11.2 In lieu of payment by check, bank draft or other shares of
Stock accompanying the written notice of exercise as described in Subsection
11.2 of this Section 11, an Optionee may, unless prohibited by applicable law,
elect to effect payment by including with the written notice referred to in
Subsection 11.2 irrevocable instructions to deliver for sale to a registered
securities broker acceptable to the Company a number of the shares subject to
the Option being exercised sufficient, after brokerage commissions, to cover
the aggregate exercise price of such Option and, if the Optionee further
elects, the Optionee's withholding obligations with respect to such exercise
referred to in Sections 12 or 20, together with irrevocable instructions to
such broker to sell such shares and to remit directly to the Company such
aggregate exercise price and, if the Optionee has so elected, the amount of
such withholding obligation. The Company shall not be required to deliver to
such securities broker any stock certificate for such shares until it has
received from the broker such exercise price and, if the Optionee has so
elected, such withholding obligation amount.
12. Notice of Disposition of Stock Prior to Expiration of Specified
Incentive Stock Option Holding Period. The Company may require that the
person exercising an Incentive Stock Option give a written representation to
the Company, satisfactory in form and substance to its counsel and upon which
the Company may reasonably rely, that he or she will report to the Company any
disposition of shares purchased upon exercise prior to the expiration of the
holding periods specified by Section 422(a)(1) of the Code. If and to the
extent that the disposition imposes upon the Company federal, state, local or
other withholding tax requirements, or any such withholding is required to
secure for the Company an otherwise available tax deduction, the Company shall
have the right to require that the person making the disposition remit to the
Company an amount sufficient to satisfy those requirements.
13. Transferability of Options. Options shall not be transferable,
otherwise than by will or the laws of descent and distribution and may be
exercised during the life of the Optionee only by the Optionee.
14. Termination of Employment or Service. Each Option shall terminate<PAGE>
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and may no longer be exercised if the Optionee ceases to perform services for
the Company or a Related Corporation in accordance with the following:
14.1 If an Optionee ceases to be an active employee of the
Company or any Related Corporation other than by reason of death or
retirement, absent in any case a determination by the Committee to the
contrary, any Options which were exercisable by the Optionee on the date of
cessation of active employment may be exercised any time (a) before their
expiration date or (b) within the respective periods listed below in this
Section 14(a), depending upon the reason for cessation of active employment,
whichever is earlier, but only to the extent that the Options were exercisable
when active employment ceased. Notwithstanding the foregoing, in the event an
Optionee fails to exercise an Incentive Stock Option within three months after
the date of termination, such Option will be treated as a Non-Statutory Stock
Option pursuant to Section 422 of the Code. The respective periods following
cessation of active employment referred to in clause (a) of the first sentence
of this Section 14(a) are as follows:
Reason for Cessation Period Following Last Day
of Active Employment of Active Employment Within
Which Option May Be Exercised
Medical leave of absence During such leave
Personal leave of absence Three months
Discharge for cause or other None
severance of employment
determined by Committee to
warrant termination of option
Layoff or similar involuntary One Year
termination without cause
Voluntary termination Three Months
(non-retirement)
14.2 If an Optionee's employment terminates because of death,
Options may be exercised at any time before the expiration date or within one
year after the date of termination, whichever is earlier, but only (a) if and
to the extent that the Optionee was entitled to exercise the Option at the
date of the Optionee's death and (b) by the Optionee's estate or by the
person(s) who acquired the right to exercise such Option by bequest or
inheritance or by reason of the death of the Optionee.
14.3 If an Optionee's employment terminates because of
retirement, any Options which were exercisable by the Optionee on the date of
termination of employment may be exercised any time before their expiration
date or within three years after the date of termination, whichever is
earlier, but only to the extent that the Options were exercisable when
employment ceased (absent a determination by the Committee to the contrary at
the time any such Options were granted or prior to their expiration date), as<PAGE>
PAGE 6
provided hereunder. Notwithstanding the foregoing, in the event an Optionee
fails to exercise an Incentive Stock Option within three months after the date
of his or her retirement, such Option will be treated as a Non-Statutory Stock
Option.
15. Anti-Dilution Adjustments. Pro rata adjustment shall be made in
the maximum number of shares of Stock subject to the Plan or that may be
awarded to any individual in any year to give effect to any stock dividends,
stock splits, stock combinations, recapitalizations and other similar changes
in the capital structure of the Company. Pro rata adjustments shall be made
in the number, kind and price of shares of Stock covered by any outstanding
Option hereunder to give effect to any stock dividends, stock splits, stock
combinations, recapitalizations and similar changes in the capital structure
of the Company, or a merger, dissolution or reorganization of the Company,
after the date the Option is granted, so that the Optionee is treated in a
manner equivalent to that of holders of the underlying Stock.
16. Change in Corporate Control. Upon a Change in Corporate Control,
each outstanding Option shall immediately become fully exercisable, and a
registration statement under the Securities Act of 1933, as amended, with
respect to shares covered by all outstanding Options, whether to be issued by
the Company or by any successor corporation, shall be effective at all times
during which the Options may be exercised and, to facilitate resale of the
shares, during the twelve months after the last exercise of the Options.
17. Reservation of Stock. The Company shall at all times during the
term of the Options reserve and keep available such number of shares of the
Stock as will be sufficient to satisfy the requirements of this Plan and shall
pay all fees and expenses necessarily incurred by the Company in connection
therewith.
18. Limitation of Rights in the Option Shares. The Optionee shall not
be deemed for any purpose to be a stockholder of the Company with respect to
any of the Option Shares except to the extent that the Option shall have been
exercised with respect thereto and, in addition, a certificate shall have been
issued therefor and delivered to the Optionee.
19. Termination and Amendment of the Plan. The Committee may at any
time terminate the Plan or make such amendment to the Plan as it shall deem
advisable, provided that, except as provided in Section 14, the Committee may
not, without the approval by the holders of a majority of the Stock, change
the classes of persons eligible to receive Options, increase the maximum
number of shares available for option under the Plan or extend the period
during which Options may be granted or exercised. No termination or amendment
of the Plan may, without the consent of the Optionee to whom any Option shall
theretofore have been granted, adversely affect the rights of such Optionee
under such Option.
20. Withholding. The Company's obligations to deliver shares of Stock
upon exercise of an Option shall be subject to the Optionee's satisfaction of
all applicable federal, state and local income and employment tax withholding
obligations. The Committee may, at or after grant, permit an Optionee to<PAGE>
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satisfy such tax withholding requirements by delivery to the Company of shares
retained from the Option grant creating the tax obligation having a value
equal to the amount to be withheld. The value of shares of Stock to be
withheld or delivered shall be based on the Committee's determination of the
Fair Market Value of a share of Stock on the date the amount of tax to be
withheld is to be determined.
21. Notices. Any communication or notice required or permitted to be
given under the Plan shall be in writing, and mailed by registered or
certified mail or delivered in hand, if to the Company, to 141 Spring Street,
Lexington, Massachusetts 02173, Attention: Vice President - Human Resources
and, if to the Optionee, to the address as the Optionee shall last have
furnished to the communicating party.<PAGE>
