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Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
under
THE SECURITIES ACT OF 1933
STONE & WEBSTER, INCORPORATED
(Exact name of registrant as specified in its charter)
Delaware 13-5416910
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
245 Summer Street, Boston, Massachusetts 02210
(Address of principal executive offices, including Zip Code)
STONE & WEBSTER, INCORPORATED LONG-TERM INCENTIVE COMPENSATION PLAN
(Full title of the Plan)
JAMES P. JONES, ESQ.
Vice President, Secretary and General Counsel
Stone & Webster, Incorporated
245 Summer Street
Boston, Massachusetts 02210
(Name and address of agent for service)
(617) 589-5111
Telephone number, including area code, of agent for service
CALCULATION OF REGISTRATION FEE
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<CAPTION>
================================================================================================================================
Title of Proposed Proposed
each class of Amount maximum maximum Amount of
securities to to be offering price aggregate registration
be registered registered (1) per share (2) offering price (2) fee
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<S> <C> <C> <C> <C>
Common Stock, par value $1.00 980,777 shares $31.31 $30,708,127.87 $8,536.86
per share
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) This Registration Statement also covers such indeterminable number of
additional shares of Common Stock as may become deliverable as a result of stock
splits, stock dividends or similar transactions in accordance with the
provisions of the Plan.
(2) Determined pursuant to Rule 457(h) under the Securities Act of 1933 solely
for purposes of calculating the registration fee and based upon the average of
the high and low prices of the Common Stock on February 1, 1999 as reported in
the consolidated reporting system.
<PAGE> 2
PART II
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents, descriptions, amendments and reports filed
with the Securities and Exchange Commission (the "Commission") by Stone &
Webster, Incorporated ("Stone & Webster" or the "Company") are incorporated by
reference into this Registration Statement:
(a) Stone & Webster's Annual Report on Form 10-K for the year
ended December 31, 1997;
(b) All other reports filed by Stone & Webster pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act "), since December 31, 1997; and
(c) The description of the Company's Common Stock contained in
the Company's registration statement filed under the Exchange Act,
including any amendment or report filed for the purpose of updating
such description.
All documents subsequently filed by Stone & Webster 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 pursuant
hereto have been sold or which deregisters all securities then remaining unsold,
shall be deemed to be incorporated by reference in this Registration Statement
and to be a part hereof from the date of filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
The consolidated financial statements and the financial statement
schedule of the Company and its Subsidiaries as of December 31, 1997 and 1996,
and for each of the three years in the period ended December 31, 1997,
incorporated by reference in this Registration Statement, have been incorporated
herein in reliance upon the report of PricewaterhouseCoopers LLP, independent
accountants, given on the authority of that firm as experts in accounting and
auditing. Such firm has not been and will not receive compensation or an
interest, and is not connected with the registrant or any of its subsidiaries in
the manner described in the instructions to this item.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law (the "DGCL")
grants the Company the power to indemnify each 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 he is or was a director, officer, employee or agent of
the Company, or is or was serving at the request of the Company 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
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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 interests
of the Company, and with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful, provided, however, no
indemnification shall be made in connection with any proceeding brought by or in
the right of the Company where the person involved is adjudged to be liable to
the Company except to the extent approved by a court.
Paragraph 14 of Article Sixth of the Company's Restated Certificate
of Incorporation as amended (the "Restated Certificate") provides that the
Company shall indemnify each director, officer, employee and agent of the
Company, his or her, heirs, executors, administrators and all other persons whom
the Company is authorized to indemnify under the provisions of the DGCL, to the
fullest extent permitted by law, (a) against all expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him or her in connection with 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 Company), or in
connection with any appeal therein or otherwise, and (b) against all expenses
(including attorneys' fees) actually and reasonably incurred by him or her in
connection with the defense or settlement of any action or suit by or in the
right of the Company, or in connection with any appeal therein, or otherwise.
Pursuant to Section 102(b)(7) of the DGCL, Paragraph 15 of Article
Sixth of the Company's Restated Certificate eliminates a director's personal
liability for monetary damages to the Company and its stockholders for breaches
of fiduciary duty as a director, except in circumstances involving a breach of a
director's duty of loyalty to the Company or its stockholders, acts or omissions
not in good faith, intentional misconduct, knowing violations of the law, the
unlawful payment of dividends or repurchase of stock, or a transaction from
which the director derived an improper personal benefit.
The Company has purchased from the American International Group a
Directors and Officers Liability and Company Reimbursement policy under which
the directors and officers of the Company and its subsidiaries are insured
against loss arising from any claim made against them by reason of any wrongful
act in their respective capacities as directors and officers.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not Applicable.
ITEM 8. EXHIBITS
4.1 Restated Certificate of Incorporation of the Company, as amended,
filed as Exhibit 3(i) to the Company's Registration Statement on Form
S-4 (File No. 333-57961) filed with the Commission on June 29, 1998,
is incorporated by reference.
4.2 By-laws of the Company, as amended, filed as Exhibit 3(ii) to the
Company's Registration Statement on Form S-4 (File No. 333-57961)
filed with the Commission on June 29, 1998, is incorporated by
reference.
4.3 Rights Agreement, dated as of August 15, 1996, between Stone &
Webster, Incorporated and ChaseMellon Shareholder Services, L.L.C.,
filed as Exhibit 1.1 to the Company's Registration Statement on Form
8-A filed with the Commission on August 16, 1996, is incorporated by
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reference.
4.4 Stone & Webster, Incorporated Long-Term Incentive Compensation Plan,
amended as of May 14, 1998.
5 Opinion of Coudert Brothers.
23 Consent of PricewaterhouseCoopers LLP.
24 Powers of Attorney (included on the signature page hereof).
ITEM 9. UNDERTAKINGS
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, represent 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 (1)(i) and (1)(ii) shall not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Company pursuant to Section 13 or 15(d) of the Exchange Act
that are incorporated by reference in this 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.
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 15(d) of the Exchange
Act (and, where applicable, each filing of an employee benefits plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in this
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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.
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 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.
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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 BOSTON, COMMONWEALTH OF MASSACHUSETTS, ON FEBRUARY 5,
1999.
STONE & WEBSTER, INCORPORATED
By: /s/ Thomas L. Langford
-------------------------------
Thomas L. Langford
Executive Vice President
POWER OF ATTORNEY
We, the undersigned officers and directors of Stone & Webster,
Incorporated, hereby severally constitute and appoint H. Kerner Smith and James
P. Jones, and each of them singly, our true and lawful attorneys, with full
power to them in any and all capacities, to sign any amendments to this
Registration Statement on Form S-8, 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.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933,
THIS REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
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Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ H. Kerner Smith Chairman, President and Chief Executive February 5, 1999
- ---------------------------- Officer & Director (Principal Executive Officer) ----------------
H. Kerner Smith
/s/ Thomas L. Langford Executive Vice President February 5, 1999
- ---------------------------- (Principal Financial Officer) ----------------
Thomas L. Langford
/s/ Daniel P. Levy Vice President & Controller February 5, 1999
- ---------------------------- (Principal Accounting Officer) ----------------
Daniel P. Levy
/s/ Donna F. Bethell Director February 5, 1999
- ---------------------------- -----------------
Donna F. Bethell
Director
- ---------------------------- -----------------
Frank J. A. Cilluffo
/s/ Kent F. Hansen Director February 5, 1999
- ---------------------------- ----------------
Kent F. Hansen
/s/ Elvin R. Heiberg III Director February 5, 1999
- ---------------------------- ----------------
Elvin R. Heiberg III
</TABLE>
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<TABLE>
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<S> <C> <C>
/s/ David N. McCammon Director February 5, 1999
- ---------------------------- ----------------
David N. McCammon
/s/ J. Angus McKee Director February 5, 1999
- ---------------------------- ----------------
J. Angus McKee
/s/ John P. Merrill, Jr. Director February 5, 1999
- ---------------------------- ----------------
John P. Merrill, Jr.
/s/ Bernard W. Reznicek Director February 5, 1999
- ---------------------------- ----------------
Bernard W. Reznicek
Director
- ---------------------------- ----------------
Peter M. Wood
</TABLE>
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EXHIBIT INDEX
<TABLE>
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Exhibit Sequentially
Number Numbered Page
<S> <C> <C>
4.1 Restated Certificate of Incorporation of the Company, as
amended, filed as Exhibit 3(i) to the Company's
Registration Statement on Form S-4 (File No. 333-57961)
filed with the Commission on June 29, 1998, is
incorporated by reference.
4.2 By-laws of the Company, as amended, filed as Exhibit 3(ii)
to the Company's Registration Statement on Form S-4 (File
No. 333-57961) filed with the Commission on June 29,
1998, is incorporated by reference.
4.3 Rights Agreement, dated as of August 15, 1996, between
Stone & Webster, Incorporated and ChaseMellon
Shareholder Services, L.L.C., filed as Exhibit 1.1 to the
Company's Registration Statement on Form 8-A filed with
the Commission on August 16, 1996, is incorporated by
reference.
4.4 Stone & Webster, Incorporated Long-Term Incentive
Compensation Plan, amended as of May 14, 1998.
5 Opinion of Coudert Brothers.
23 Consent of PricewaterhouseCoopers LLP.
24 Powers of Attorney (included on the signature page hereof).
</TABLE>
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Exhibit 4.4
STONE & WEBSTER, INCORPORATED
LONG-TERM INCENTIVE COMPENSATION PLAN
AMENDED AS OF MAY 14, 1998
CONTENTS
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<S> <C>
Article 1. Establishment, Objectives, and Duration
Article 2. Definitions.......................................
Article 3. Administration....................................
Article 4. Shares Subject to the Plan and Maximum Awards
Article 5. Eligibility and Participation.....................
Article 6. Stock Options.....................................
Article 7. Restricted Stock..................................
Article 8. Performance Units and Performance Shares
Article 9. Performance Measures..............................
Article 10. Beneficiary Designation...........................
Article 11. Deferrals.........................................
Article 12. Rights of Employees/Directors.....................
Article 13. Change of Control.................................
Article 14. Amendment, Modification, and Termination
Article 15. Withholding.......................................
Article 16. Indemnification...................................
Article 17. Successors........................................
Article 18. Legal Construction................................
</TABLE>
<PAGE> 2
STONE & WEBSTER, INCORPORATED LONG-TERM INCENTIVE COMPENSATION
PLAN
AMENDED AS OF MAY 14, 1998
ARTICLE 1. ESTABLISHMENT, OBJECTIVES, AND DURATION
1.1. Establishment of the Plan. Stone & Webster, Incorporated, a Delaware
corporation (hereinafter referred to as the "Company"), hereby establishes an
incentive compensation plan to be known as the "Stone & Webster, Incorporated
Long-Term Incentive Compensation Plan" (hereinafter referred to as the "Plan"),
as set forth in this document. The Plan is intended to replace the Company's
Restricted Stock Plan and 1995 Stock Option Plan (the "Old Plans") with respect
to future grants of equity-based incentive compensation. The Plan permits the
grant of Nonqualified Stock Options, Incentive Stock Options, Restricted Stock,
Performance Shares, and Performance Units.
Subject to approval by the Company's shareholders, the Plan shall become
effective as of January 1, 1998 (the "Effective Date") and shall remain in
effect as provided in Section 1.3 hereof.
1.2. Objectives of the Plan. The objectives of the Plan are to optimize the
profitability and growth of the Company through long-term incentives which are
consistent with the Company's goals and which link the personal interests of
Participants to those of the Company's shareholders; to provide Participants
with an incentive for excellence in individual performance; and to promote
teamwork among Participants. Awards generally are made in conjunction with
services performed by the Participant within the previous 12 months.
The Plan is further intended to provide flexibility to the Company in its
ability to motivate, attract, and retain the services of Participants who make
significant contributions to the Company's success and to allow Participants to
share in the success of the Company.
1.3. Duration of the Plan. The Plan shall commence on the Effective Date, as
described in Section 1.1 hereof, and shall remain in effect, subject to the
right of the Board of Directors to amend or terminate the Plan at any time
pursuant to Article 15 hereof, until all Shares subject to it shall have been
purchased or acquired according to the Plan's provisions. However, in no event
may an Award be granted under the Plan on or after December 15, 2007.
ARTICLE 2. DEFINITIONS
Whenever used in the Plan, the following terms shall have the meanings set
forth below, and when the meaning is intended, the initial letter of the word
shall be capitalized:
2.1. "Affiliate" shall have the meaning ascribed to such term in Rule 12b-2 of
the General Rules and Regulations of the Exchange Act.
2.2. "Award" means, individually or collectively, a grant under this Plan of
Nonqualified Stock Options, Incentive Stock Options, Restricted Stock,
Performance Shares, or Performance Units.
<PAGE> 3
2.3. "Award Agreement" means an agreement entered into by the Company and each
Participant setting forth the terms and provisions applicable to Awards granted
under this Plan.
2.4. "Beneficial Owner" or "Beneficial Ownership" shall have the meaning
ascribed to such term in Rule 13d-3 of the General Rules and Regulations under
the Exchange Act.
2.5. "Board" or "Board of Directors" means the Board of Directors of the
Company.
2.6. "Change of Control" of the Company shall mean:
(a) The beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) by any Person of twenty percent (20%) or more of
either (i) the then-outstanding shares of common stock of the Company (the
"Outstanding Company Common Stock") or (ii) the combined voting power of the
then-outstanding voting securities of the Company entitled to vote generally
in the election of directors (the "Outstanding Company Voting Securities");
provided, however, that for purposes of this subsection (a), the following
accumulations and acquisitions shall not constitute a Change of Control: (i)
any acquisition directly from the Company, (ii) any acquisition or
accumulation by the Company, (iii) any acquisition or accumulation by any
employee benefit plan (or related trust) sponsored or maintained by the
Company or any corporation controlled by the Company, (iv) any acquisition
or accumulation by an corporation pursuant to a transaction which complies
with clauses (i), (ii), and (iii) of subsection (c) of this Section 2, or
(v) the beneficial ownership of twenty percent (20%) or more of either the
Outstanding Company Common Stock or the Outstanding Company Voting
Securities by a Person if such beneficial ownership occurs solely because
(x) of a change in the aggregate number of shares of Outstanding Company
Common Stock or Outstanding Company Voting Securities since the last date on
which such Persons acquired beneficial ownership of any Outstanding Company
Common Stock or Outstanding Company Voting Securities or (y) such Persons
acquired such beneficial ownership in the good faith belief that such
acquisition would not cause such beneficial ownership to equal or exceed
twenty percent (20%) of the Outstanding Company Common Stock or Outstanding
Company Voting Securities then outstanding and such Person relied in good
faith in computing the percentage of its beneficial ownership on publicly
filed reports or documents of the Company which are inaccurate or
out-of-date; or
(b) Individuals who, as of the date hereof, constitute the Board (the
"Incumbent Board") cease for any reason to constitute at least a majority of
the Board; provided, however, that any individual becoming a director
subsequent to the date hereof whose election, or nomination for election by
the Company's shareholders, was approved by a vote of at least a majority of
the directors then comprising the Incumbent Board shall be considered as
though such individual were a member of the Incumbent Board, but excluding,
for this purpose, any such individual whose initial assumption of office
occurs as a result of an actual or threatened election contest with respect
to the election or removal of directors or other actual or threatened
solicitation of proxies by or on behalf of a Person other than the Board; or
(c) Consummation of a reorganization, merger, or consolidation or sale or
other disposition of all or substantially all of the assets of the Company
(a "Business Combination"), in each case, unless, following such Business
Combination, (i) all or substantially all of the individuals and entities
who were the beneficial owners, respectively, of the Outstanding Company
Common Stock and Outstanding Company Voting Securities immediately prior to
such Business Combination beneficially own, directly or indirectly, more
than fifty percent (50%) of, respectively, the then-outstanding shares of
common stock and the combined voting power of the then outstanding voting
securities entitled to vote
<PAGE> 4
generally in the election of directors, as the case may be, of the
corporation resulting from such Business Combination (including, without
limitation, a corporation which as a result of such transaction owns the
Company or all or substantially all of the Company's assets either directly
or through one or more subsidiaries) in substantially the same proportions
as their ownership, immediately prior to such Business Combination of the
Outstanding Company Common Stock and Outstanding Company Voting Securities,
as the case may be, (ii) no Person (excluding any corporation resulting from
such Business Combination or any employee benefit plan (or related trust) of
the Company or such corporation resulting from such Business Combination)
beneficially owns, directly or indirectly, twenty percent (20%) or more of,
respectively, the then-outstanding shares of common stock, or the combined
voting power of the then-outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the
corporation resulting from such Business Combination, except to the extent
that such ownership existed prior to the Business Combination and (iii) at
least a majority of the members of the board of directors of the corporation
resulting from such Business Combination were members of the Incumbent Board
at the time of the execution of the initial agreement, or of the action of
the Board, providing for such Business Combination; or
(d) Approval by the shareholders of the Company of a complete liquidation
or dissolution of the Company.
Notwithstanding clause (v) of subsection (a) of this Section 2.6, if any
Person whose beneficial ownership is not a Change of Control due to such
clause (v) does not reduce such Person's percentage of beneficial ownership
of Outstanding Company Common Stock or Outstanding Company Voting Securities
to less than twenty percent (20%) by the close of business on the fifth
business day after notice from the Company (the date of notice being the
first day) that such Person's beneficial ownership of Outstanding Company
Common Stock or Outstanding Company Voting Securities equals or exceeds
twenty percent (20%), such Person's beneficial ownership shall be a Change
of Control at the end of such five (5) business day period (and such clause
(v) shall no longer apply); provided, however, that if such Person asserts
in writing to the Company by the end of such five (5) business day period
that a reduction in such Person's percentage of beneficial ownership would
subject such reduction to the operation of Section 16(b) of the Exchange Act
("Section 16(b)") the period during which the beneficial ownership of such
Person must be reduced to less than twenty percent (20%) so as not to
constitute a Change of Control shall be extended to the date that is the
third business day immediately following the date which is the earlier of
(i) six (6) months following the receipt by such Person of the notice from
the Company of beneficial ownership of twenty percent (20%) or more or (ii)
the date upon which such reduction would no longer be subject to Section
16(b). For purposes of this definition, the determination whether any Person
acted in "good faith" shall be conclusively determined by the Board, acting
by a vote of those directors of the Company who, at such time, shall
constitute the Incumbent Board.
2.7. "Code" means the Internal Revenue Code of 1986, as amended from time to
time.
2.8. "Committee" means the Compensation Committee or any other committee
appointed by the Board to administer Awards to Employees, as specified in
Article 3 herein. Any such Committee shall be comprised entirely of outside
Directors within the meaning of Code Section 162(m) and applicable
interpretative authority thereunder.
2.9. "Company" means Stone & Webster, Incorporated, a Delaware corporation,
and any successor thereto as provided in Article 17 herein.
<PAGE> 5
2.10. "Covered Employee" means a Participant who, as of the date of vesting
and/or payout of an Award, as applicable, is one of the group of "covered
employees," as defined in the regulations promulgated under Code Section 162(m),
or any successor statute.
2.11. "Director" means any individual who is a member of the Board of
Directors of the Company.
2.12. "Disability" shall have the meaning ascribed to such term in the
Participant's governing long-term disability plan, or if no such plan exists, at
the discretion of the Board.
2.13. "Effective Date" shall have the meaning ascribed to such term in Section
1.1 hereof.
2.14. "Employee" means any employee of the Company or its Subsidiaries or
Affiliates. Directors who are employed by the Company shall be considered
Employees under this Plan.
2.15. "Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor act thereto.
2.16. "Fair Market Value" at any date shall be the closing sale price on the
principal securities exchange on which the Shares are traded on the last
previous day on which a sale was reported.
2.17. "Incentive Stock Option" or "ISO" means an option to purchase Shares
granted under Article 6 herein and which is designated as an Incentive Stock
Option and which is intended to meet the requirements of Code Section 422.
2.18. "Insider" shall mean an individual who is, on the relevant date, an
officer, Director or ten percent (10%) beneficial owner of any class of the
Company's equity securities that is registered pursuant to Section 12 of the
Exchange Act, all as defined under Section 16 of the Exchange Act.
2.19. "Nonqualified Stock Option" or "NQSO" means an option to purchase Shares
granted under Article 6 herein and which is not intended to meet the
requirements of Code Section 422.
2.20. "Option" means an Incentive Stock Option or a Nonqualified Stock Option,
as described in Article 6 herein.
2.21. "Option Price" means the price at which a Share may be purchased by a
Participant pursuant to an Option.
2.22. "Participant" means an Employee or Director who has been selected to
receive an Award or who has outstanding an Award granted under the Plan.
2.23. "Performance-Based Exception" means the performance-based exception from
the tax deductibility limitations of Code Section 162(m).
2.24. "Performance Share" means an Award granted to a Participant, as
described in Article 8 herein.
2.25. "Performance Unit" means an Award granted to a Participant, as described
in Article 8 herein.
2.26. "Period of Restriction" means the period during which the transfer of
Shares of Restricted Stock is limited in some way (based on the passage of time,
the achievement of performance goals, or upon the
<PAGE> 6
occurrence of other events as determined by the Board, at its discretion), and
the Shares are subject to a substantial risk of forfeiture, as provided in
Article 7 herein.
2.27. "Person" shall have the meaning ascribed to such term in Section 3(a)(9)
of the Exchange Act and used in Sections 13(d) and 14(d) thereof, including a
"group" as defined in Section 13(d) thereof.
2.28. "Restricted Stock" means an Award granted to a Participant pursuant to
Article 7 herein.
2.29. "Retirement" shall have the meaning ascribed to such term in the
Employee Retirement Plan of Stone & Webster, Incorporated and Participating
Subsidiaries.
2.30. "Shares" means the shares of common stock of the Company.
2.31. "Subsidiary" means (a) a corporation a majority of whose outstanding
stock entitled to elect a majority of its Board of Directors is at the time
owned by the party in question and/or by a subsidiary or subsidiaries of such a
party, and (b) a corporation a substantial amount of the stock of which the
Company or its Subsidiaries owns or has an option to acquire.
ARTICLE 3. ADMINISTRATION
3.1. General. The Plan shall be administered by the Compensation Committee of
the Board, or by any other Committee appointed by the Board; provided, however,
that the administration of Awards granted to Directors who are not Employees
(Non-employee Directors) shall be reserved to the Board of Directors. Any
provisions in this Plan regarding administration of Awards by the Committee
shall be deemed to refer to the Board with respect to Awards granted to
Non-Employee Directors. Any Committee administering the Plan shall be comprised
entirely of "outside directors" within the meaning of Code Section 162(m) and
applicable interpretive authority thereunder. The members of the Committee shall
be appointed from time to time by, and shall serve at the discretion of, the
Board of Directors. The Committee shall have the authority to delegate
administrative duties to officers, Employees, or Directors of the Company.
3.2. Authority of the Committee. Except as limited by law or by the
Certificate of Incorporation or Bylaws of the Company, and subject to the
provisions herein, the Committee shall have full power to select Employees who
shall participate in the Plan; determine the sizes and types of Awards;
determine the terms and conditions of Awards in a manner consistent with the
Plan; construe and interpret the Plan and any agreement or instrument entered
into under the Plan; establish, amend, or waive rules and regulations for the
Plan's administration; and (subject to the provisions of Article 14 herein)
amend the terms and conditions of any outstanding Award as provided in the Plan.
Further, the Committee shall make all other determinations which may be
necessary or advisable for the administration of the Plan. As permitted by law
(and subject to Section 3.1 herein), the Committee may delegate its authority as
identified herein.
3.3. Decisions Binding. All determinations and decisions made by the Committee
pursuant to the provisions of the Plan and all related orders and resolutions of
the Board shall be final, conclusive and binding on all persons, including the
Company, its shareholders, Directors, Employees, Participants, and their estates
and beneficiaries.
<PAGE> 7
ARTICLE 4. SHARES SUBJECT TO THE PLAN AND MAXIMUM AWARDS
4.1. Number of Shares Available for Grants. Subject to adjustment as provided
in Section 4.2 herein, the number of Shares hereby reserved for issuance to
Participants under the Plan shall be six hundred fifty thousand (650,000)
Shares, plus three hundred thirty thousand, seven hundred and seventy-seven
(330,777) Shares which have been previously reserved and authorized but
remaining available for grant under the Old Plans as of the Effective Date. No
more than three hundred thousand (300,000) Shares reserved for issuance under
the Plan may be granted in the form of Restricted Shares. The Board shall
determine the appropriate methodology for calculating the number of shares
issued pursuant to the Plan. Unless and until the Board determines that an Award
to a Covered Employee shall not be designed to comply with the Performance-Based
Exception, the following rules shall apply to grants of such Awards under the
Plan:
(a) Stock Options: The maximum aggregate number of Shares that may be
granted in the form of Stock Options pursuant to any Award granted in any
one fiscal year to any one Participant shall be one hundred thousand
(100,000).
(b) Restricted Stock: The maximum aggregate grant with respect to Awards
of Restricted Stock granted in any one fiscal year to any one Participant
shall be thirty-three thousand (33,000).
(c) Performance Shares: The maximum aggregate payout (determined as of the
end of the applicable performance period) with respect to Awards of
Performance Shares granted in any one fiscal year to any one Participant
shall be equal to the value of twenty-five thousand (25,000) Shares.
(d) Performance Units: The maximum aggregate payout (determined as of the
end of the applicable performance period) with respect to Awards of
Performance Units granted in any one fiscal year to any one Participant
shall be equal to one million dollars ($1,000,000).
4.2. Adjustments in Authorized Shares. In the event of any change in corporate
capitalization, such as a stock split, or a corporate transaction, such as any
merger, consolidation, separation, including a spin-off, or other distribution
of stock or property of the Company, any reorganization (whether or not such
reorganization comes within the definition of such term in Code Section 368) or
any partial or complete liquidation of the Company, such adjustment shall be
made in the number and class of Shares which may be delivered under Section 4.1,
in the number and class of and/or price of Shares subject to outstanding Awards
granted under the Plan, and in the Award limits set forth in Section 4.1, as may
be determined to be appropriate and equitable by the Board, in its sole
discretion, to prevent dilution or enlargement of rights; provided, however,
that the number of Shares subject to any Award shall always be a whole number.
ARTICLE 5. ELIGIBILITY AND PARTICIPATION
5.1. Eligibility. Persons eligible to participate in this Plan include all
Employees and Directors.
5.2. Actual Participation. Subject to the provisions of the Plan, the
Committee may, from time to time, select from all eligible Employees, those to
whom Awards shall be granted and shall determine the nature and amount of each
Award.
ARTICLE 6. STOCK OPTIONS
<PAGE> 8
6.1. Grant of Options. Subject to the terms and provisions of the Plan,
Options may be granted to Participants in such number, and upon such terms, and
at any time and from time to time as shall be determined by the Committee. A
nonqualified option to purchase 2,000 shares of Common Stock will be granted to
each Non-employee Director who is initially elected or appointed to the Board of
Directors after the Effective Date and prior to the expiration of the Plan,
effective on the date of his or her initial election or appointment (which date
shall be the date of grant for purposes hereof), and a nonqualified option to
purchase 1,000 shares of Common Stock will be granted annually, effective as of
the anniversary date of the Effective Date in each year after the Effective Date
until the expiration of the Plan, to each person who is a Non-employee Director
on each such anniversary date (which date shall be the date of grant for
purposes hereof). Options may provide for the grant of replacement stock options
if all or any portion of the exercise price or taxes incurred in connection with
the exercise, are paid by delivery (or, in the case of payment of taxes, by
withholding of shares) of other common shares of the Company.
6.2. Award Agreement. Each Option grant shall be evidenced by an Award
Agreement that shall specify the Option Price, the duration of the Option, the
number of Shares to which the Option pertains, and such other provisions as the
Committee shall determine. The Award Agreement also shall specify whether the
Option is intended to be an ISO within the meaning of Code Section 422, or an
NQSO whose grant is intended not to fall under the provisions of Code Section
422.
6.3. Option Price. The Option Price for each grant of an Option under this
Plan shall be at least equal to one hundred percent (100%) of the Fair Market
Value of a Share on the date the Option is granted.
6.4. Duration of Options. Each Option granted to a Participant shall expire at
such time as the Committee shall determine at the time of grant; provided,
however, that no Option shall be exercisable later than the tenth (10th)
anniversary date of its grant.
6.5. Exercise of Options. Options granted under this Article 6 shall be
exercisable at such times and be subject to such restrictions and conditions as
the Committee shall in each instance approve, which need not be the same for
each grant or for each Participant.
6.6. Payment. Options granted under this Article 6 shall be exercised by the
delivery of a written notice of exercise to the Company, setting forth the
number of Shares with respect to which the Option is to be exercised,
accompanied by full payment for the Shares.
The Option Price upon exercise of any Option shall be payable to the Company
in full either: (a) in cash or its equivalent, or (b) by tendering previously
acquired Shares having an aggregate Fair Market Value at the time of exercise
equal to the total Option Price (provided that the Shares which are tendered
must have been held by the Participant for at least six (6) months prior to
their tender to satisfy the Option Price), or (c) by a combination of (a) and
(b).
The Committee also may allow cashless exercise as permitted under Federal
Reserve Board's Regulation T, subject to applicable securities law restrictions,
or by any other means which the Board determines to be consistent with the
Plan's purpose and applicable law.
Subject to any governing rules or regulations, as soon as practicable after
receipt of a written notification of exercise and full payment, the Company
shall deliver to the Participant, in the Participant's name, a statement setting
forth shares held in book entry form, or Share certificates in an appropriate
amount based upon the number of Shares purchased under the Option(s).
<PAGE> 9
6.7. Restrictions on Share Transferability. The Committee may impose such
restrictions on any Shares acquired pursuant to the exercise of an Option
granted under this Article 6 as it may deem advisable, including, without
limitation, restrictions under applicable federal securities laws, under the
requirements of any stock exchange or market upon which such Shares are then
listed and/or traded, and under any blue sky or state securities laws applicable
to such Shares.
6.8. Termination of Employment/Directorship. Each Participant's Option Award
Agreement shall set forth the extent to which the Participant shall have the
right to exercise the Option following termination of the Participant's
employment or directorship with the Company. Such provisions shall be determined
in the sole discretion of the Committee, shall be included in the Award
Agreement entered into with each Participant, need not be uniform among all
Options issued pursuant to this Article 6, and may reflect distinctions based on
the reasons for termination.
6.9. Nontransferability of Options.
(a) Incentive Stock Options. No ISO granted under the Plan may be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated, other
than by will or by the laws of descent and distribution. Further, all ISOs
granted to a Participant under the Plan shall be exercisable during his or her
lifetime only by such Participant.
(b) Nonqualified Stock Options. Except as otherwise provided in a
Participant's Award Agreement, no NQSO granted under this Article 6 may be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated, other
than by will or by the laws of descent and distribution. Further, except as
otherwise provided in a Participant's Award Agreement, all NQSOs granted to a
Participant under this Article 6 shall be exercisable during his or her lifetime
only by such Participant.
ARTICLE 7. RESTRICTED STOCK
7.1. Grant of Restricted Stock. Subject to the terms and provisions of the
Plan, the Committee, at any time and from time to time, may grant Shares of
Restricted Stock to Participants in such amounts as the Committee shall
determine.
7.2. Restricted Stock Agreement. Each Restricted Stock grant shall be
evidenced by a Restricted Stock Award Agreement that shall specify the number of
Shares of Restricted Stock granted, the Period(s) of Restriction, which will
normally extend over not less than three (3) years from the date of Grant, and
such other provisions as the Committee shall determine.
7.3. Transferability. Except as provided in this Article 7, the Shares of
Restricted Stock granted herein may not be sold, transferred, pledged, assigned,
or otherwise alienated or hypothecated until the end of the applicable Period of
Restriction established by the Committee and specified in the Restricted Stock
Award Agreement, or upon earlier satisfaction of any other conditions, as
specified by the Committee in its sole discretion and set forth in the
Restricted Stock Award Agreement. All rights with respect to the Restricted
Stock granted to a Participant under the Plan shall be available during his or
her lifetime only to such Participant.
7.4. Other Restrictions. Subject to Article 9 herein, the Committee shall
impose such other conditions and/or restrictions on any Shares of Restricted
Stock granted pursuant to the Plan as it may deem advisable including, without
limitation, a requirement that Participants pay a stipulated purchase price for
each Share of Restricted Stock, restrictions based upon the achievement of
specific performance goals
<PAGE> 10
(corporate, divisional, and/or individual), time-based restrictions on vesting
following the attainment of the performance goals, and/or restrictions under
applicable federal or state securities laws.
The Company may retain the certificates representing Shares of Restricted
Stock in the Company's possession or maintain such records in a book entry
system until such time as all conditions and/or restrictions applicable to such
Shares have been satisfied.
Except as otherwise provided in this Article 7, Shares of Restricted Stock
covered by each Restricted Stock grant made under the Plan shall become freely
transferable by the Participant after the last day of the applicable Period of
Restriction subject to applicable securities laws.
7.5. Voting Rights. Participants holding Shares of Restricted Stock granted
hereunder may be granted the right to exercise full voting rights with respect
to those Shares during the Period of Restriction.
7.6. Dividends and Other Distributions. During the Period of Restriction,
Participants holding Shares of Restricted Stock granted hereunder may be
credited with regular cash dividends paid with respect to the underlying Shares
while they are so held. The Committee may apply any restrictions to the
dividends that the Committee deems appropriate. Without limiting the generality
of the preceding sentence, if the grant or vesting of Restricted Shares granted
to a Covered Employee is designed to comply with the requirements of the
Performance-Based Exception, the Committee may apply any restrictions it deems
appropriate to the payment of dividends declared with respect to such Restricted
Shares, such that the dividends and/or the Restricted Shares maintain
eligibility for the Performance-Based Exception.
7.7. Termination of Employment/Directorship. Each Restricted Stock Award
Agreement shall set forth the extent to which the restrictions on shares awarded
under such Agreement shall lapse following termination of the Participant's
employment with the Company. Such provisions shall be determined in the sole
discretion of the Committee, shall be included in the Award Agreement entered
into with each Participant, need not be uniform among all Shares of Restricted
Stock issued pursuant to the Plan, and may reflect distinctions based on the
reasons for termination; provided, however that, except in the cases of
terminations connected with a Change of Control and terminations by reason of
death or Disability, the lapse of restrictions on Shares of Restricted Stock
which qualify for the Performance-Based Exception and which are held by Covered
Employees shall occur at the time they otherwise would have, but for the
termination.
ARTICLE 8. PERFORMANCE UNITS AND PERFORMANCE SHARES
8.1. Grant of Performance Units/Shares. Subject to the terms of the Plan,
Performance Units and/or Performance Shares may be granted to Participants in
such amounts and upon such terms, and at any time and from time to time, as
shall be determined by the Committee, provided that no more than ten (10%)
percent of Performance Shares issuable under this Plan may be issued subject to
a Performance Period (as hereinafter defined) of less than one (1) year.
8.2. Value of Performance Units/Shares. Each Performance Unit shall have an
initial value that is established by the Committee at the time of grant. Each
Performance Share shall have an initial value equal to the Fair Market Value of
a Share on the date of grant. The Committee shall set performance goals in its
discretion which, depending on the extent to which they are met, will determine
the number and/or value of Performance Units/Shares that will be paid out to the
Participant. For purposes of this Article 8, the time period during which the
performance goals must be met shall be called a "Performance Period."
<PAGE> 11
8.3. Earning of Performance Units/Shares. Subject to the terms of this Plan,
after the applicable Performance Period has ended, the holder of Performance
Units/Shares shall be entitled to receive payout on the number and value of
Performance Units/Shares earned by the Participant over the Performance Period,
to be determined as a function of the extent to which the corresponding
performance goals have been achieved.
8.4. Form and Timing of Payment of Performance Units/Shares. Payment of earned
Performance Units/Shares shall be made in a single lump sum following the close
of the applicable Performance Period. Subject to the terms of this Plan, the
Committee, in its sole discretion, may pay earned Performance Units/Shares in
the form of cash or in Shares (or in a combination thereof) which have an
aggregate Fair Market Value equal to the value of the earned Performance
Units/Shares at the close of the applicable Performance Period. Such Shares may
be granted subject to any restrictions deemed appropriate by the Committee. The
determination of the Committee with respect to the form of payout of such Awards
shall be set forth in the Award Agreement pertaining to the grant of the Award.
At the discretion of the Committee, Participants may be entitled to receive
any dividends declared with respect to Shares which have been earned in
connection with grants of Performance Units and/or Performance Shares which have
been earned, but not yet distributed to Participants (such dividends shall be
subject to the same accrual, forfeiture, and payout restrictions as apply to
dividends earned with respect to Shares of Restricted Stock, as set forth in
Section 7.6 herein). In addition, Participants may, at the discretion of the
Committee, be entitled to exercise their voting rights with respect to such
Shares.
8.5. Termination of Employment/Directorship Due to Death, Disability, or
Retirement. Unless determined otherwise by the Committee and set forth in the
Participant's Award Agreement, in the event the employment or directorship of a
Participant is terminated by reason of death, Disability, or Retirement during a
Performance Period, the Participant or his legal representative shall receive a
payout of the Performance Units/Shares which is prorated, as specified by the
Committee in its discretion.
Payment of earned Performance Units/Shares shall be made at a time specified
by the Committee in its sole discretion and set forth in the Participant's Award
Agreement. Notwithstanding the foregoing, with respect to Covered Employees who
retire during a Performance Period, payments shall be made at the same time as
payments are made to Participants who did not terminate employment during the
applicable Performance Period.
8.6. Termination of Employment/Directorship for Other Reasons. In the event
that a Participant's employment or directorship terminates for any reason other
than those reasons set forth in Section 8.5 herein, all Performance Units/Shares
shall be forfeited by the Participant to the Company unless determined otherwise
by the Committee, as set forth in the Participant's Award Agreement.
8.7. Nontransferability. Except as otherwise provided in a Participant's Award
Agreement, Performance Units/Shares may not be sold, transferred, pledged,
assigned, or otherwise alienated or hypothecated, other than by will or by the
laws of descent and distribution. Further, except as otherwise provided in a
Participant's Award Agreement, a Participant's rights under the Plan shall be
exercisable during the Participant's lifetime only by the Participant or the
Participant's legal representative.
ARTICLE 9. PERFORMANCE MEASURES
Unless and until the Board proposes for shareholder vote and shareholders
approve a change in the general performance measures set forth in this Article
9, the attainment of which may determine the
<PAGE> 12
degree of payout and/or vesting with respect to Awards to Covered Employees
which are designed to qualify for the Performance-Based Exception, the
performance measure(s) to be used for purposes of such grants shall be chosen
from among:
(a) Earnings per share;
(b) Net income (before or after taxes);
(c) Return measures (including, but not limited to, return on
assets, capital, equity, or sales);
(d) Cash flow return on investments which equals net cash flows
divided by owners equity;
(e) Earnings before or after taxes;
(f) Gross revenues;
(g) Market-to-book value ratio;
(h) Share price (including, but not limited to, growth measures
and total shareholder return);
(i) Working capital measures; and
(j) Economic value added.
Subject to the terms of the Plan, each of these measures shall be defined by
the Committee or Board on a corporation or subsidiary or business division basis
or in comparison with peer group performance, and may include or exclude
specified extraordinary items, as determined by the corporation's auditors.
The Committee shall have the discretion to adjust the determinations of the
degree of attainment of the preestablished performance goals; provided, however,
that Awards which are designed to qualify for the Performance-Based Exception,
and which are held by Covered Employee, may not be adjusted upward (the
Committee shall retain the discretion to adjust such Awards downward).
In the event that applicable tax and/or securities laws change to permit
Committee discretion to alter the governing performance measures without
obtaining shareholder approval of such changes, the Board shall have sole
discretion to make such changes without obtaining shareholder approval. In
addition, in the event that the Committee determines that it is advisable to
grant Awards which shall not qualify for the Performance-Based Exception, the
Committee may make such grants without satisfying the requirements of Code
Section 162(m).
ARTICLE 10. BENEFICIARY DESIGNATION
Each Participant under the Plan may, from time to time, name any beneficiary
or beneficiaries (who may be named contingently or successively) to whom any
benefit under the Plan is to be paid in case of his or her death before he or
she receives any or all of such benefit. Each such designation shall revoke all
prior designations by the same Participant, shall be in a form prescribed by the
Company, and will be effective only when filed by the Participant in writing
with the Company during the Participant's lifetime. In the absence of any such
designation, benefits remaining unpaid at the Participant's death shall be paid
to the Participant's estate.
<PAGE> 13
ARTICLE 11. DEFERRALS
The Board may permit or require a Participant to defer such Participant's
receipt of the payment of cash or the delivery of Shares that would otherwise be
due to such Participant by virtue of the lapse or waiver of restrictions with
respect to Restricted Stock, or the satisfaction of any requirements or goals
with respect to Performance Units/Shares. If any such deferral election is
required or permitted, the Committee shall, in its sole discretion, establish
rules and procedures for such payment deferrals.
ARTICLE 12. RIGHTS OF EMPLOYEES/DIRECTORS
12.1. Employment. Nothing in the Plan shall interfere with or limit in any way
the right of the Company to terminate any Participant's employment at any time,
nor confer upon any Participant any right to continue in the employ of the
Company.
12.2. Participation. No Employee or Director shall have the right to be
selected to receive an Award under this Plan, or, having been so selected, to be
selected to receive a future Award.
ARTICLE 13. CHANGE OF CONTROL
13.1. Treatment of Outstanding Awards. Upon the occurrence of a Change of
Control and notwithstanding the terms of the Award Agreement, unless otherwise
specifically prohibited under applicable laws, or by the rules and regulations
of any governing governmental agencies or national securities exchanges:
(a) Any and all Options granted hereunder shall become immediately
exercisable, and shall remain exercisable throughout their entire term;
(b) Any restriction periods and restrictions imposed on Restricted Shares
which are not performance-based shall lapse;
(c) The target payout opportunities attainable under all outstanding
Awards of performance-based Restricted Stock, Performance Units and
Performance Shares shall be deemed to have been fully earned for the entire
Performance Period(s) as of the effective date of the Change of Control. The
vesting of all Awards denominated in Shares shall be accelerated as of the
effective date of the Change of Control, and there shall be paid out to
Participants within thirty (30) days following the effective date of the
Change of Control a pro rata number of shares based upon an assumed
achievement of all relevant targeted performance goals and upon the length
of time within the Performance Period which has elapsed prior to the Change
of Control. Awards denominated in cash shall be paid pro rata to
participants in cash within thirty (30) days following the effective date of
the Change of Control, with the proration determined as a function of the
length of time within the Performance Period which has elapsed prior to the
Change of Control, and based on an assumed achievement of all relevant
targeted performance goals.
13.2. Termination, Amendment, and Modifications of Change-of-Control
Provisions. Notwithstanding any other provision of this Plan (but subject to the
limitations of Section 14.3 hereof) or any Award Agreement provision, the
provisions of this Article 13 may not be terminated, amended, or modified on or
after the date of a Change of Control to affect adversely any Award theretofore
granted under the Plan without the prior written consent of the Participant with
respect to said Participant's outstanding Awards;
<PAGE> 14
provided, however, the Board may terminate, amend, or modify this Article 13 at
any time and from time to time prior to the date of a Change of Control.
13.3. Pooling of Interests Accounting. Notwithstanding any other provision of
the Plan to the contrary, in the event that the consummation of a Change of
Control is contingent on using pooling of interests accounting methodology, the
Board may take any action necessary to preserve the use of pooling of interests
accounting.
ARTICLE 14. AMENDMENT, MODIFICATION, AND TERMINATION
14.1. Amendment, Modification, and Termination. Subject to the terms of the
Plan, the Board may at any time and from time to time, alter, amend, suspend or
terminate the Plan in whole or in part, but no amendment which significantly
expands the benefits available for awards under this Plan shall be effective
unless and until the same is approved by the affirmative vote (in person or by
proxy) of the holders of a majority of the shares of Common Stock of the Company
present and entitled to vote at a meeting held to take such action at which a
quorum is present.
14.2. Adjustment of Awards Upon the Occurrence of Certain Unusual or
Nonrecurring Events. The Board may make adjustments in the terms and conditions
of, and the criteria included in, Awards in recognition of unusual or
nonrecurring events (including, without limitation, the events described in
Section 4.2 hereof) affecting the Company or the financial statements of the
Company or of changes in applicable laws, regulations, or accounting principles,
whenever the Board determines that such adjustments are appropriate in order to
prevent dilution or enlargement of the benefits or potential benefits intended
to be made available under the Plan; provided that, unless the Board determines
otherwise at the time such adjustment is considered, no such adjustment shall be
authorized to the extent that such authority would be inconsistent with the
Plan's meeting the requirements of Section 162(m) of the Code, as from time to
time amended.
14.3. Awards Previously Granted. Notwithstanding any other provision of the
Plan to the contrary (but subject to Section 13.3 hereof), no termination,
amendment, or modification of the Plan shall adversely affect in any material
way any Award previously granted under the Plan, without the written consent of
the Participant holding such Award.
14.4. Compliance with Code Section 162(m). At all times when Code Section
162(m) is applicable, all Awards granted under this Plan shall comply with the
requirements of Code Section 162(m); provided, however, that in the event the
Board determines that such compliance is not desired with respect to any Award
or Awards available for grant under the Plan, then compliance with Code Section
162(m) will not be required. In addition, in the event that changes are made to
Code Section 162(m) to permit greater flexibility with respect to any Award or
Awards available under the Plan, the Board may, subject to this Article 14, make
any adjustments it deems appropriate.
ARTICLE 15. WITHHOLDING
15.1. Tax Withholding. The Company shall have the power and the right to
deduct or withhold, or require a Participant to remit to the Company, an amount
sufficient to satisfy Federal, state, and local taxes, domestic or foreign,
required by law or regulation to be withheld with respect to any taxable event
arising as a result of this Plan.
15.2. Share Withholding. With respect to withholding required upon any taxable
event arising as a
<PAGE> 15
result of Share-based Awards granted hereunder, Participants may elect, subject
to the approval of the Board, to satisfy the withholding requirement, in whole
or in part, by having the Company withhold Shares to satisfy their tax
obligations. With respect to withholding required upon the exercise of Options
or upon the lapse of restrictions on Restricted Stock, Participants may only
elect to have Shares withheld having a Fair Market Value on the date the tax is
to be determined equal to the minimum statutory total tax which could be imposed
on the transaction. All elections shall be irrevocable, made in writing, signed
by the Participant, and shall be subject to any restrictions or limitations that
the Board, in its sole discretion, deems appropriate.
ARTICLE 16. INDEMNIFICATION
Each person who is or shall have been a member of the Committee, or of the
Board, shall be indemnified and held harmless by the Company against and from
any loss, cost, liability, or expense that may be imposed upon or reasonably
incurred by him or her in connection with or resulting from any claim, action,
suit, or proceeding to which he or she may be a party or in which he or she may
be involved by reason of any action taken or failure to act under the Plan and
against and from any and all amounts paid by him or her in settlement thereof,
with the Company's approval, or paid by him or her in satisfaction of any
judgment in any such action, suit, or proceeding against him or her, provided he
or she shall give the Company an opportunity, at its own expense, to handle and
defend the same before he or she undertakes to handle and defend it on his or
her own behalf. The foregoing right of indemnification shall not be exclusive of
any other rights of indemnification to which such persons may be entitled under
the Company's Articles of Incorporation or Bylaws, as a matter of law, or
otherwise, or any power that the Company may have to indemnify them or hold them
harmless.
ARTICLE 17. SUCCESSORS
All obligations of the Company under the Plan with respect to Awards granted
hereunder shall be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or indirect purchase,
merger, consolidation, or otherwise, of all or substantially all of the business
and/or assets of the Company.
ARTICLE 18. LEGAL CONSTRUCTION
18.1. Gender and Number. Except where otherwise indicated by the context, any
masculine term used herein also shall include the feminine; the plural shall
include the singular and the singular shall include the plural.
18.2. Severability. In the event any provision of the Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining parts of the Plan, and the Plan shall be construed and enforced as
if the illegal or invalid provision had not been included.
18.3. Requirements of Law. The granting of Awards and the issuance of Shares
under the Plan shall be subject to all applicable laws, rules, and regulations,
and to such approvals by any governmental agencies or national securities
exchanges as may be required.
18.4. Securities Law Compliance. With respect to Insiders, transactions under
this Plan are intended to comply with all applicable conditions of Rule 16b-3 or
its successors under the 1934 Act. To the extent any provision of the plan or
action by the Board fails to so comply, it shall be deemed null and void, to the
extent permitted by law and deemed advisable by the Board.
<PAGE> 16
18.5. Governing Law. To the extent not preempted by federal law, the Plan, and
all agreements hereunder, shall be construed in accordance with and governed by
the laws of the state of Delaware.
<PAGE> 1
Exhibit 5
[COUDERT BROTHERS LETTERHEAD]
COUDERT BROTHERS
ATTORNEYS AT LAW
1114 AVENUE OF THE AMERICAS
NEW YORK, N.Y. 10036-7703
TEL: 212 626-4400 FAX: 212 626-4120
February 3, 1999
Stone & Webster, Incorporated
245 Summer Street
Boston, Massachusetts 02210
Re: Stone & Webster, Incorporated
Registration Statement on Form S-8
Ladies and Gentlemen:
We have acted as counsel to Stone & Webster, Incorporated, a Delaware
corporation (the "Corporation"), in connection with the Corporation's filing
with the Securities and Exchange Commission of a Registration Statement on Form
S-8 (the "Registration Statement") under the Securities Act of 1933, as amended
(the "Act") with respect to the Stone & Webster, Incorporated Long-Term
Incentive Compensation Plan, amended as of May 14, 1998 (the "Plan"). The
Registration Statement covers 980,777 shares of the Common Stock, $1.00 par
value, of the Corporation that have been reserved for issuance pursuant to the
Plan (the "Shares").
Based upon examination of originals or copies, certified or otherwise
identified to our satisfaction as being true and correct copies, of such
corporate records, certificates of public officials and other documents and upon
such investigations of law, all as we have considered necessary or appropriate
for the purpose of this opinion, we are pleased to advise you that in our
opinion:
1. The Corporation is an existing corporation in good standing
under the laws of the State of Delaware.
2. When the Registration Statement shall become effective and the
Shares are
<PAGE> 2
February 3, 1999
Page 2
delivered in accordance with the terms of the Plan, the Shares
will be legally issued, fully paid and non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. By giving the foregoing consent, we do not admit that we
are within the category of persons whose consent is required by Section 7 of the
Act.
Very truly yours,
/s/ Coudert Brothers
<PAGE> 1
Exhibit 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Registration
Statement of Stone & Webster, Incorporated on Form S-8 of our report dated
February 12, 1998, on our audits of the consolidated financial statements and
financial statement schedule of Stone & Webster, Incorporated and Subsidiaries
as of December 31, 1997 and 1996, and for each of the three years in the period
ended December 31, 1997, which report is included in the Company's 1997 Annual
Report on Form 10-K.
We further consent to the reference to our firm in this Registration
Statement under the caption "Interests of Named Experts and Counsel."
/s/ PricewaterhouseCoopers LLP
Boston, Massachusetts
February 5, 1999
