REGISTRATION NO. 33-
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
________________________________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
__________________________
THE STRIDE RITE CORPORATION
__________________________________________________
(Exact name of Issuer as specified in its charter)
Massachusetts 04-1399290
_________________________________ _______________________
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
Five Cambridge Center
Cambridge, Massachusetts 02142
_________________________________ _______________________
(Address of Principal Executive Offices) (Zip Code)
THE STRIDE RITE CORPORATION
1995 LONG-TERM GROWTH INCENTIVE PLAN
____________________________________
(Full title of Plan)
Karen K. Crider, Esq.
The Stride Rite Corporation
Five Cambridge Center
Cambridge, Massachusetts 02142
(617) 499-6036
___________________
(Name, address, and telephone
number, including area code,
of agent for service)
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Proposed
maximum maximum
Title of Amount offering aggregate Amount of
securities to to be price per offering registration
be registered(1) registered(2) share(3) price(3) fee
______________________________________________________________________________
The Stride Rite
<S> <C> <C> <C> <C>
Corporation Common 2,400,000 $12.4375 $29,850,000 $10,293.10
Stock (par value
$.25 per share)
</TABLE>
1. This Registration Statement also pertains to The Stride Rite
Corporation's Preferred Stock Purchase Rights (the "Rights").
Until the occurrence of certain prescribed events, the Rights are
not exercisable, are evidenced by the certificates for the Common
Stock and will be transferred along with and only with such
securities. Thereafter, separate Rights certificates will be
issued representing one Right for each share of Common stock
held, subject to adjustment pursuant to anti-dilution provisions.
2. Plus such indeterminate number of shares as may be issued to
prevent dilution resulting from stock splits, stock dividends or
similar transactions in accordance with Rule 416 under the
Securities Act of 1933.
3. Pursuant to Rule 457(h) and Rule 457(c) under the Securities Act
of 1933, the proposed maximum offering price per share and the
registration fee are based on the reported average of the high
and low prices for the Registrant's Common Stock on the New York
Stock Exchange on April 8, 1995.
This Registration Statement, including all exhibits and attachments,
contains 23 pages. The exhibit index may be found on page 9.
<PAGE>
PART I -INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS(1)
Item 1. Plan Information
Item 2. Registrant Information and Employee Plan Annual Information.
PART II -INFORMATION NOT REQUIRED IN PROSPECTUS
Item 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Securities and Exchange
Commission are incorporated by reference into this Prospectus:
(a) The Company's Annual Report on Form 10-K for its fiscal
year ended December 2, 1994;
(b) All other reports filed pursuant to Section 13(a) or
15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") since the end of the fiscal year covered by the annual
report referred to in paragraph (a) above; and
(c) The description of Common Stock of the Company and the
rights of holders thereof contained in the Company's registration
statement on Form 10 under the Exchange Act dated November 25, 1960 filed with
the Commission.
(d) The description of the company's Preferred Stock
Purchase Rights contained in the Company's registration statement on
Form 10 under the Exchange Act dated November 25, 1960 filed with the
Commission.
All documents subsequently filed by the Company pursuant to
Section 13(a), 13(c), 14 or 15(d) of the 1934 Act prior to the filing
of a post-effective amendment which indicates that all securities
offered 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 part hereof from their
respective dates of filing (such documents, and the documents
enumerated above, being hereinafter referred to as "Incorporated
Documents"); provided, however that the documents enumerated above or
subsequently filed by the Company pursuant to Sections 13(a), 13(c),
14 and 15(d) of the Exchange Act in each year during which the offering
made by this Registration Statement is in effect prior to the filing
with the Commission of the Company's Annual Report on Form 10-K
covering such year shall not be Incorporated Documents or be
incorporated by reference in this Registration Statement or be a part
hereof from and after the filing of such Annual Report on Form 10-K.
- -----------------------------
(1) This information is not required to be included in, and is not
incorporated by reference in, this Registration Statement.
<PAGE>
Any statement contained in an Incorporated Document shall be
deemed to be modified or superseded for purposes of this Registration
Statement to the extent that a statement contained herein or in any
other subsequently filed Incorporated Document modifies or supersedes
such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a
part of this Registration Statement.
Item 4. DESCRIPTION OF SECURITIES
Inapplicable.
Item 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Inapplicable.
Item 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's Articles of Organization provide that each person
who serves or has served as a director or in any other office filled
by election or appointment by the Stockholders or the Board of
Directors or, in the case of an organization other than a corporation,
by an equivalent body (an "Officer") of the Company (and his heirs or
personal representatives) shall be indemnified by the Company against
all liability fixed by a judgment, order, decree, or award in any
action, suit or proceeding, civil or criminal, brought or threatened
in or before any court, tribunal, administrative or legislative body
or agency (a "Proceeding"), any amount reasonably paid in settlement
of a Proceeding and any professional fees and other disbursements
reasonably incurred in a Proceeding ("Expenses") incurred by him in
connection with a Proceeding in which he is involved as a result of
his serving or having served as an Officer of the Company or, at the
request of the Company, as an Officer of any other organization in
which the Company owns shares or of which it is a creditor, except
with respect to a matter as to which it shall have been adjudicated in
any Proceeding that he did not act in good faith in the reasonable
belief that his action was in the best interests of the Company. In
the event that a Proceeding is compromised or settled so as to impose
any liability or obligation upon an Officer or the Company, no
indemnification shall be provided to the Officer with respect to a
matter if the Company has obtained an opinion of counsel that with
respect to that matter the Officer did not act in good faith in the
reasonable belief that his action was in the best interests of the
Company.
In addition, the Articles of Organization provide that a director
of the Company shall not be liable to the Company or its stockholders
for monetary damages for breach of fiduciary duty as a director,
except to the extent such exemption from liability or limitation
thereof is not permitted under the Massachusetts Business Corporation
Law.
<PAGE>
As permitted by Massachusetts law, the Company has purchased
directors' and officers' liability insurance, which insures against
certain losses arising from claims against directors or officers of
the Company by reason of certain acts, including a breach of duty,
neglect, error, misstatement misleading statement, omission or other
act done or wrongfully attempted or any of the foregoing so alleged by
any claimant or any claim against an officer or director of the
Company solely by reason of his or her being such officer or director.
Item 7. EXEMPTION FROM REGISTRATION CLAIMED
Inapplicable.
Item 8. EXHIBITS
The following exhibits are filed as part of this Registration
Statement:
4 (i) Restated Articles of Organization of the Registrant with
amendments thereto through November 28, 1986 --Such
document was filed as Exhibit 3(i) to the Registrant's Form
10-K for the fiscal year ended November 28, 1986 and is
incorporated herein by reference.
(ii) Articles of Amendment dated April 7, 1987 to Restated
Articles of Organization --Such document was filed as
Exhibit 3 to Registrant's Form 10-Q for the fiscal period
ended February 27, 1987 and is incorporated herein by
reference.
(iii) Articles of Amendment dated December 16, 1987 to Restated
Articles of Organization of the Registrant --Such document
was filed as Exhibit 3(iii) to Registrant's Form 10-K for
the fiscal year ended November 27, 1987 and is incorporated
herein by reference.
(iv) Articles of Amendment dated December 3, 1991 to the Restated
Articles of Organization of the Registrant --Such document
was filed as Exhibit 3(iv) to Registrant's Form 10-K for the
fiscal year ended November 29, 1991 and is incorporated
herein by reference.
(v) Rights Agreement dated July 2, 1987, as amended on May 1,
1989, between the Registrant and The First National Bank of
Boston --Such document was filed as an exhibit to
Registrant's Form 8 dated May 4, 1989 and its Form 8-K dated
June 27, 1989 and is incorporated herein by reference.
(vi) Note Purchase Agreement dated September 23, 1977 --Such
document was filed as Exhibit 4(ii) to the Registrant's Form
10-K for the fiscal year ended November 28, 1986 and is
incorporated herein by reference.
<PAGE>
5 Opinion of Goodwin, Procter & Hoar as to the legality of the
securities being registered.
23 (i) The consent of Goodwin, Procter & Hoar is contained in the
opinion filed as Exhibit 5 to this Registration Statement.
(ii) Consent of Coopers & Lybrand
99 The Stride Rite Corporation 1995 Long-Term Growth Incentive 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, as amended (the "Securities Act"), (ii) to reflect in the
prospectus any facts or events arising after the effective date of the
Registration Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the Registration
Statement, (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) of this section do not apply if the Registration
Statement is on Form S-3, 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 section 13 or section
15(d) of the Exchange Act that are incorporated by reference in the
Registration Statement; (2) that for the purpose of determining any
liability under the Securities Act, 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; and
(3) to remove from registration by means of a post-effective amendment
any of securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act, each
filing of the Registrant's annual report pursuant to section 13(a) or
section 15(d) of the Exchange Act (and, where applicable, each filing
of an employee benefit plan's annual report pursuant to Section 15(d)
of the Exchange Act) 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.
<PAGE>
(c) Insofar as indemnification for liabilities arising under the
Securities Act 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
Commission such indemnification is against public policy as expressed
in the Securities 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
of whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final
adjudication of such issue.
<PAGE>
SIGNATURES
THE REGISTRANT. Pursuant to the requirements of the Securities
Act of 1933 (as amended), the Registrant certifies that it has
reasonable grounds to believe that it meets all of the requirements
for filing on Form S-8 and has duly caused this Registration Statement
to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Cambridge, Commonwealth of Massachusetts,
on April 12, 1995.
THE STRIDE RITE CORPORATION THE STRIDE RITE CORPORATION
By: /s/ John M. Kelliher By: /s/ Robert C. Siegel
__________________________ ___________________________
John M. Kelliher, Vice Robert C. Siegel, Chairman
President, Finance of the Board, President and
Treasurer and Controller Chief Executive Officer
(Principal Accounting Officer)
Date: April 12, 1995 Date: April 12, 1995
Pursuant to the requirements of the Securities Act of 1933 (as
amended), this Registration Statement has been signed by the following
persons in the capacities and on the date indicated.
/s/ Robert C. Siegel /s/ Donald R. Gant
_____________________________ ______________________________
Robert C. Siegel, Chairman of Donald R. Gant, Director
the Board of Directors, President
and Chief Executive Officer
Date: April 12, 1995 Date: April 12, 1995
/s/ Theodore Levitt /s/ Margaret A. McKenna
_____________________________ ______________________________
Theodore Levitt, Director Margaret A. McKenna, Director
Date: April 12, 1995 Date: April 12, 1995
/s/ Myles J. Slosberg /s/ W. Paul Tippett, Jr.
_____________________________ ______________________________
Myles J. Slosberg, Director W. Paul Tippett, Director
Date: April 12, 1995 Date: April 12, 1995
/s/ Robert Seelert /s/ Jeanette S. Wagner
_____________________________ _____________________________
Robert Seelert, Director Jeanette S. Wagner, Director
Date: April 12, 1995 Date: April 12, 1995 <PAGE>
Exhibit Index
Exhibit Number Exhibit Name Page Number
5 Opinion of Goodwin, Procter & 10
Hoar as to the legality of the
securities being registered
23(i) Consent of Goodwin, Procter & --
Hoar is contained in Exhibit 5
to this Registration Statement
23(ii) Consent of Coopers & Lybrand L.L.P. 12
99 The Stride Rite Corporation 13
1995 Long-Term Growth Incentive
Plan
EXHIBIT 5 and 23(i)
April 11, 1995
The Stride Rite Corporation
Five Cambridge Center
Cambridge, MA 02142
Re: The Stride Rite Corporation 1995 Long-Term Growth
Incentive Plan
Ladies and Gentlemen:
This opinion is furnished in connection with the registration
pursuant to the Securities Act of 1933, as amended (the "Act"), of
2,400,000 shares (the "Shares") of Common Stock, par value $.25 per
share (the "Common Stock"), of The Stride Rite Corporation (the
"Company") which may be issued by the Company pursuant to the
Stride Rite Corporation 1995 Long-Term Growth Incentive Plan (the
"Plan").
We have acted as counsel to the Company in connection with the
registration of the Shares under the Act. We have examined the
Articles of Organization and the By-laws of the Company, each as
amended to date; such records of the corporate proceedings of the
Company as we deemed material; and a Registration Statement on Form
S-8 under the Act relating to the Shares (the "Registration
Statement").
We are attorneys admitted to practice in the Commonwealth of
Massachusetts. We express no opinion concerning the laws of any
jurisdictions other than the laws of the United States of America
and the Commonwealth of Massachusetts.
Based upon the foregoing, we are of the opinion that upon the
issuance and delivery of the Shares in accordance with the terms of
the Registration Statement, the Plan and the option agreements
under the Plan, the Shares will be validly issued, fully paid and
non-assessable shares of the Company's Common Stock.
The foregoing assumes that all requisite steps will be taken
to comply with the requirements of the Act and applicable
requirements of state laws regulating the offer and sale of the
Shares.
We hereby consent to the filing of this opinion as part of the
above-referenced Registration Statement and to the use of our name
therein.
Very truly yours,
/s/ Goodwin, Procter & Hoar
GOODWIN, PROCTER & HOAR
169730.c1
EXHIBIT 23(ii)
Consent of Independent Accountants
To the Board of Directors of
The Stride Rite Corporation
We consent to the incorporation by reference in the Registration
Statement of the Stride Rite Corporation on Form S-8 of our
report dated January 19, 1995 on our audits of the consolidated
financial statements and financial statement schedules of the
Stride Rite Corporation as of December 2, 1994 and December 3,
1993 and for each of the three years in the period ended December
2, 1994, which reports are included or incorporated by reference
in the Annual Report on Form 10-K of the Stride Rite Corporation
for fiscal year ended December 2, 1994.
/s/ Coopers & Lybrand L.L.P.
Coopers & Lybrand L.L.P.
Boston, Massachusetts
April 12, 1995
EXHIBIT 99
THE STRIDE RITE CORPORATION
1995 LONG-TERM GROWTH INCENTIVE PLAN
Section 1: Purpose
The purpose of the Stride Rite Corporation 1995 Long-Term Growth
Incentive Plan (the "Plan") is to enable The Stride Rite
Corporation (the "Corporation") and its Subsidiaries to attract
and retain key employees who will make significant contributions
towards the successful management, growth and protection of the
Corporation and to provide meaningful incentives to such
employees who are more directly linked to the achievement of
long-term business goals and increase in shareholder value. In
addition, the Plan is designed to encourage and provide
opportunities for stock ownership by such employees which will
more closely align their interests with those of the stockholders
of the Corporation.
Section 2: Definition of Terms
(a) Award means any Stock Option or Stock Award granted under
the Plan.
(b) Board means the Board of Directors of the Corporation.
(c) Code means the Internal Revenue Code of 1986, as amended
from time to time.
(d) Committee means a committee of not less than two non-
employee members of the Board, appointed by the Board to
administer the Plan. The Committee shall be comprised of
members who qualify to administer this Plan as contemplated
by (a) both Rule 16b-3 and item 402(i) under the 1934 Act or
any successor rule, and (b) Section 162(m) under the Code.
(e) Common Stock means the Common Stock of the Corporation.
(f) Corporation means The Stride Rite Corporation, a corporation
established under the laws of the State of Massachusetts,
and its Subsidiaries.
(g) Fair Market Value means, with respect to Common Stock, the
fair market value of such property as determined by the
Committee in good faith in such manner as shall be
established by the Committee from time to time. Under no
circumstances shall the Fair Market Value be less than the
par value of the Common Stock. Any time that the Common
Stock is traded on a public market, Fair Market Value means
the last reported sale price at which the Common Stock is
traded on such date or, if no Common Stock is traded on such
date, the most recent date on which Common Stock was traded,
as reflected on such public market.<PAGE>
(h) Incentive Stock Option (ISO) means a Stock Option to
purchase Shares awarded to a Participant which is intended
to be an "Incentive Stock Option" within the meaning of
Section 422 of the Code or any successor provision.
(i) Non-Qualified Stock Option (NQSO) means a Stock Option to
purchase Shares of Common Stock awarded to a Participant
which is not intended to be an incentive stock option within
the meaning of Section 422 of the Code or any successor
provision.
(j) 1934 Act means the Securities Exchange Act of 1934, as
amended from time to time.
(k) Participant means a person selected by the Committee (or its
delegate as provided under Section 4) to receive an Award
under the Plan.
(l) Reporting Person means an individual who is subject to Rule
16 of the 1934 Act or any successor rule.
(m) Shares means of the Common Stock of the Corporation.
(n) Stock Award means an Award to a Participant comprised of
Common Stock or valued by reference to Common Stock granted
under Section 7c of the Plan.
(o) Stock Option means an Award in the form of the right to
purchase a specified number of Shares at a specified price
during a specified period.
(p) Subsidiary means any entity that, directly or through one or
more intermediaries, is controlled by, controls or is under
common control with the Corporation or any entity in which
the Corporation has a significant equity interest as
determined by the Committee.
Section 3: Effective Dates
The Plan shall be effective as of the date the Shareholders
approve the Plan. No Awards may be made under the Plan after
three years from the date of approval or earlier termination of
the Plan by the Board. However, unless otherwise expressly
provided in the Plan or in an applicable Award agreement, any
Award granted prior to the termination date may extend beyond
such date, and, to the extent set forth in the Plan, the
authority of the Committee to amend, alter, adjust, suspend,
discontinue or terminate any such Award, or to waive any
conditions or restrictions with respect to any such Award, and
the authority of the Board to amend the Plan, shall extend beyond
such date.
<PAGE>
Section 4: Administration
The Plan shall be administered by the Committee. Unless
otherwise expressly provided in the Plan, all designations,
determinations, interpretations, and other decisions under or
with respect to the Plan or any Award shall be within the sole
discretion of the Committee, may be made at any time, and shall
be final, conclusive and binding upon all persons, including the
Corporation, any Subsidiary, any Participant, any holder or
beneficiary of any Award, shareholder and any employee of the
Corporation or of any Subsidiary. The Committee shall have the
authority to adopt, alter and repeal such administrative rules,
guidelines and practices governing the operation of the Plan as
it shall from time to time consider advisable. To the extent
permitted by applicable law and the terms and provisions of the
Plan, the Committee may delegate to one or more employee members
of the Board the power to make Awards to Participants who are not
Reporting Persons and are not "covered individuals" within the
meaning of Section 162(m) of the Code or any successor provision.
Section 5: Eligibility
Key executives of the Corporation and its Subsidiaries plus, on a
highly selective basis, other employees of the Corporation and
its Subsidiaries whom the Committee determines are key
contributors to the business of the Corporation and its
Subsidiaries shall be eligible to receive an Award under the
Plan, provided that such participation would not jeopardize the
Plan's compliance with Rule 16b-3 under the 1934 Act or any
successor rule.
Section 6: Stock Available for Awards
(a) Common Shares Available. Subject to adjustment as provided
in Section 6(c) below, the maximum number of Shares
available for Awards under the Plan shall be 2,400,000,
plus, to the extent permitted by Rule 16b-3 under the 1934
Act or any successor rule, the number of shares added back
pursuant to Section 6(d).
(b) Share Usage Limits. For the period that the Plan is in
effect the aggregate number of Shares that shall be granted
as Awards shall not exceed 200,000 for Stock Awards.
Additionally, the aggregate number of Shares that shall be
awarded to any one Participant of the Plan over the period
that the Plan is in effect shall not exceed 500,000 Shares.
(c) Adjustments. In the event of any stock dividend, stock
split, combination or exchange of Shares, merger,
consolidation, spin-off or other distribution (other than
normal cash dividends) of the Corporation's assets to
shareholders, or any other change affecting Shares, such
proportionate adjustments, if any, as the Committee in its
discretion may deem appropriate to reflect such change shall<PAGE>
be made with respect to (i) the aggregate number and kind of
shares that may be issued under the Plan; (ii) the number
and kind of shares covered by each outstanding Award made
under the Plan; (iii) the option, base or purchase price per
share for any outstanding Stock Option and other Awards
granted under the Plan, provided that any such actions are
consistently and equitably applicable to all affected
Participants. In addition, any shares issued by the
Corporation through the assumption or substitution of
outstanding grants or grant commitments from an acquired
entity shall not reduce the shares available for issuance
under the Plan.
(d) Common Stock Usage. Subject to Rule 16b-3 under the 1934
Act or any successor rule, the Shares of Common Stock
underlying any Awards which are forfeited, cancelled,
reacquired by the Corporation, satisfied without the
issuance of Common Stock or otherwise terminated (other than
by exercise) shall be added back to the Shares of Common
Stock available for issuance under the Plan so long as the
Participants to whom such Awards had been previously granted
received no benefits of ownership of the underlying Shares
of Common Stock to which the Award related.
(e) Accounting for Awards. The number of Shares covered by an
Award under the Plan, or to which such Award relates, shall
be counted on the date of grant of such Award against the
number of Shares available for granting Awards under the
Plan.
Section 7: Awards
(a) General. The Committee shall determine the number and
type(s) of Award(s) (as set forth below) to be made to each
Participant and shall approve the terms and conditions of
all such Awards in accordance with Sections 4 and 8 of the
Plan. Awards may be granted singly, in combination or in
tandem such that the settlement of one Award automatically
reduces or cancels the other. Awards may also be made in
replacement of, as alternatives to or as forms of payment
for grants or rights under any other employee compensation
plan or arrangement of the Corporation, including the plans
of any acquired entity.
(b) Stock Options. A Stock Option shall confer on a Participant
the right to purchase a specified number of Shares from the
Corporation subject to the terms and conditions of the Stock
Option grant. The Committee shall establish the option
price at the time each Stock Option is awarded, provided
that the per-share price shall not be less than 100% of the
Fair Market Value of a Share on the date of grant. Stock
Options may be in the form of ISOs or NQSOs, and the
Committee shall specify at the time of grant whether the
Stock Option is an ISO or an NQSO. If a Participant owns or<PAGE>
is deemed to own (by reason of the attribution rules
applicable under Section 424(d) of the Code) more than 10%
of the combined voting power of all classes of stock of the
Corporation or any subsidiary or parent corporation and an
ISO is awarded to such Participant, the option price shall
not be less than 110% of the Fair Market Value at the time
such ISO is awarded. The aggregate Fair Market Value at
time of grant of the Shares covered by ISOs exercisable by
any one optionee in any calendar year shall not exceed
$100,000 (or such other limit as may be required by the
Code). The term of each Stock Option shall be fixed by the
Committee, provided, however, that in no event shall the
term of any Stock Option exceed a period of ten years from
the date of its grant. A Stock Option shall become
exercisable over a three year period (one third in each
year) or, alternatively, in such manner and within such
period or periods and in such installments or otherwise as
shall be determined by the Committee. The recipient of a
Stock Option grant shall pay for the Shares at the time of
exercise in cash or such other forms as the Committee may
approve, including Shares valued at their Fair Market Value
on the date of exercise, or in a combination of form(s).
The Committee may also permit Participants to have the
option price delivered to the Corporation by a broker
pursuant to an arrangement whereby the Corporation, upon
irrevocable instructions from a Participant, delivers the
exercised Shares to the broker.
(c) Stock Awards. A Stock Award shall confer on a Participant
the right to receive a specified number of Shares subject to
the terms and conditions of the Award, which may include
forfeitability contingencies based on continued employment
with the Corporation or on meeting performance criteria or
both. The restriction period for Stock Awards will be a
five year restriction period with restrictions lapsing in
equal installments in years three, four and five or any
other such terms as the Committee shall establish. Such
Stock Awards may be subject to the attainment of specified
performance goals or targets, as determined by the Committee
and set forth in the specific Stock Award agreements. The
Committee shall determine the restrictions and restriction
or performance period, and any other terms, conditions and
rights relating to a grant of Stock Awards, including the
determination to adjust performance goals (up or down) as
business conditions so warrant. The Committee may also
grant Stock Awards that are not subject to any restrictions.
Section 8: General Provisions Applicable to Awards
(a) Transferability and Exercisability. Any Award under this
Plan will be non-transferable and accordingly shall not be
assignable, alienable, saleable or otherwise transferable by
the Participant other than by will or the laws of descent
and distribution.<PAGE>
If so permitted by the Committee, a Participant may
designate a beneficiary or beneficiaries to exercise the
Participant's rights and receive any distributions under
this Plan upon the Participant's death. To the extent
required to comply with regulations and rules under the 1934
Act, including Rule 16b-3, any contrary requirements shall
prevail over the provisions set forth above in regards to
Reporting Persons.
(b) General Restrictions. Each Award shall be subject to the
requirement that, if at any time the Committee shall
determine, in its sole discretion, that the listing,
registration or qualification of any Award under the Plan
upon any securities exchange or under any state or federal
law, or the consent or approval of any government regulatory
body, is necessary or desirable as a condition of, or in
connection with, the granting of such Award or the grant or
settlement thereof, such Award may not be exercised or
settled in whole or in part unless such listing,
registration, qualification, consent or approval have been
effected or obtained free of any conditions not acceptable
to the Committee.
(c) Grant Terms and Conditions. Subject to the terms and
conditions of this Plan, the Committee shall determine the
provisions and duration of grants made under this Plan,
including the option prices for all Stock Options, the
consideration, if any, to be required from Participants for
Stock Awards, and the conditions under which a Participant
will retain rights under this Plan in the event of the
Participant's termination of employment while holding any
outstanding Awards.
(d) Tax Withholding. No later than the date as of which an
amount first becomes includible in the gross income of a
Participant for federal income tax purposes with respect to
any Award under this Plan, the Participant shall pay to the
Corporation, or make arrangements satisfactory to the
Corporation regarding the payment of, any federal, state,
local or foreign taxes of any kind required by law to be
withheld with respect to such amount. Unless otherwise
determined by the Committee, withholding obligations may be
settled with Shares, including Shares that are part of the
Award that gives rise to the withholding requirement. The
obligations of the Corporation under this Plan shall be
conditional on such payment or arrangements, and the
Corporation and its Subsidiaries shall, to the extent
permitted by law, have the right to deduct any such taxes
from any payment otherwise due to the Participants. The
Committee may establish such procedures as it deems
appropriate, including the making of irrevocable elections,
for the settlement of withholding obligations with Shares.
Shares that are used to satisfy withholding obligations<PAGE>
shall be valued at their Fair Market Value on the date the
tax withholding is effective.
(e) Documentation of Grants. Awards made under the Plan shall
be evidenced by written agreements or such other appropriate
documentation as the Committee shall prescribe. The
Committee need not require the execution of any instrument
or acknowledgment of notice of an Award under the Plan, in
which case acceptance of such Award by the respective
Participant will constitute agreement to the terms of the
Award.
(f) Settlement. The Committee shall determine, at the time of
grant or settlement of an Award, whether such Award will be
settled in whole or in part in cash, Shares, or other Awards
subject, in the case of Participants subject to Section
16(b) of the 1934 Act, to compliance with such Rule. The
Committee may require or permit a Participant to defer all
or any portion of a payment under the Plan, including the
crediting of interest on deferred amounts denominated in
cash.
(g) Change of Control. Notwithstanding any other provision of
this Plan to the contrary, in the event of a Change of
Control (as hereinafter defined), the provisions of this
Section 8(g) shall apply.
(i) Any Stock Options outstanding as of the date of Change
of Control that are not then exercisable and vested shall
become fully exercisable and vested and all restrictions
applicable to any then-outstanding Stock Award shall lapse,
upon the occurrence of a Change of Control.
(ii) During the 60-day period from and after a Change of
Control (the "Exercisable Period"), unless the Committee
shall determine otherwise at the time of grant, each holder
of a Stock Option (an "Optionee") shall have the right,
whether or not such Stock Option is then fully exercisable
and in lieu of the payment of the exercise price for the
Shares being purchased under the Stock Option and by giving
notice to the Corporation, to elect (within the Exercisable
Period) to surrender all or part of the Stock Option to the
Corporation and to receive cash, within 30 days of such
notice, in an amount equal to the amount by which the Change
of Control Price (as hereinafter defined) per Share on the
date of such election shall exceed the exercise price per
Share under the Stock Option (the "Spread"), multiplied by
the number of Shares granted under the Stock Option as to
which the right granted under this Section 8(g)(ii) shall
have been exercised; provided, however, that if the Change
of Control is within six months after the date of grant of a
particular Stock Option held by an Optionee who is an
officer or director of the Corporation and is subject to
Section 16(b) of the 1934 Act, no such election shall be<PAGE>
made by such Optionee with respect to such Stock Option
prior to six months from the date of grant. However, if the
end of such 60-day period from and after a Change of Control
is within six months after the date of grant of a Stock
Option held by an Optionee who is an officer or director of
the Corporation and is subject to Section 16(b) of the 1934
Act, such Stock Option shall be cancelled in exchange for a
cash payment to the Optionee, effected on the day which is
six months and one day after the date of grant of such
Option, equal to the Spread multiplied by the number of
Shares granted under the Stock Option. Notwithstanding the
foregoing, if any right granted pursuant to this Section
8(g)(ii) would make a Change of Control transaction
ineligible for pooling of interest accounting under APB No.
16 that but for this Section 8(g)(ii) would otherwise be
eligible for such accounting treatment, the Committee shall
have the ability to substitute for the cash payable pursuant
to this Section 8(g)(ii), Shares with a Fair Market Value
equal to the cash that would otherwise be payable hereunder.
(iii) Definition of Change of Control. For purposes of
this Plan, a "Change of Control" shall mean any of the
following events:
(A) The acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of
the 1934 Act (a "Person") of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the
1934 Act) of voting securities of the Corporation where
such acquisition causes such Person to own 20 percent
or more of the combined voting power of the then
outstanding voting securities of the Corporation
entitled to vote generally in the election of directors
(the "Outstanding Corporation Voting Securities");
provided, however, that for purposes of this subsection
(A), the following acquisitions shall not be deemed to
result in a Change of Control: (i) any acquisition
directly from the Corporation, (ii) any acquisition by
the Corporation, (iii) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained
by the Corporation or any corporation controlled by the
Corporation, or (iv) any acquisition by any corporation
pursuant to a transaction that complies with clauses
(i), (ii) and (iii) of subsection (C) below: and
provided, further, that if any Person's beneficial
ownership of the Outstanding Corporation Voting
Securities reaches or exceeds 20 percent as a result of
a transaction described in clause (i) or (ii) above,
and such Person subsequently acquires beneficial
ownership of additional voting securities of the
Corporation, such subsequent acquisition shall be
treated as an acquisition that causes such Person to
own 20 percent or more of the Outstanding Corporation
Voting Securities; or<PAGE>
(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 Corporation'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 or consents by or on
behalf of a Person other than the Board; or
(C) The approval by the shareholders of the
Corporation of a reorganization, merger or
consolidation or sale or other disposition of all or
substantially all of the assets of the Corporation
("Business Combination") or, if consummation of such
Business Combination is subject, at the time of such
approval by shareholders, to the consent of any
government or governmental agency, the obtaining of
such consent (either explicitly or implicitly by
consummation); excluding, however, such a Business
Combination pursuant to which (i) all or substantially
all of the individuals and entities who were the
beneficial owners of the Outstanding Corporation Voting
Securities immediately prior to such Business
Combination beneficially own, directly or indirectly,
more than 60% of, respectively, the then outstanding
shares of common stock and the combined voting power of
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 (including, without limitation, a
corporation that as a result of such transaction owns
the Corporation or all or substantially all of the
Corporation'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
Corporation Voting Securities, (ii) no Person
(excluding any employee benefit plan (or related trust)
of the Corporation or such corporation resulting from
such Business Combination) beneficially owns, directly
or indirectly, 20% or more of, respectively, the then
outstanding shares of common stock of the corporation
resulting from such Business Combination or the
combined voting power of the then outstanding voting
securities of such corporation except to the extent
that such ownership existed prior to the Business<PAGE>
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 Corporation of
a complete liquidation or dissolution of the
Corporation.
(iv) Change of Control Price. For purposes of this Plan,
"Change of Control Price" means the higher of (i) the
highest reported sales price of a Share in any transaction
reported on the New York Stock Exchange Composite Tape
during the 60-day period prior to and including the date of
a Change of Control and (ii) if the Change of Control is the
result of a tender or exchange offer or a Business
Combination, the highest price per share of Stock paid in
such tender or exchange offer or Business Combination;
provided, however, that (x) in the case of a Stock Option
which (A) is held by an Optionee who is an officer or
director of the Corporation and is subject to Section 16(b)
of the 1934 Act and (B) was granted within 240 days of the
Change of Control, then the Change of Control Price for such
Stock Option shall be the Fair Market Value of the Stock on
the date such Stock Option is exercised or cancelled and (y)
in the case of ISOs, the Change of Control Price shall be in
all cases the Fair Market Value of the Stock on the date
such ISO is exercised. To the extent that the consideration
paid in any such transaction described above consists all or
in part of securities or other non-cash consideration, the
value of such securities or other non-cash consideration
shall be determined in the sole discretion of the Committee.
Section 9: Miscellaneous
(a) Plan Amendment. The Board may amend, alter, suspend,
discontinue or terminate the Plan as it deems necessary or
appropriate to better achieve the purposes of the Plan
except that no amendment shall be made which would (i)
increase the total number of Shares available for issuance
under the Plan; or (ii) cause the Plan not to comply with
Rule 16b-3 of the 1934 Act or any successor rule.
(b) No Right to Employment. No person shall have any claim or
right to be granted an Award, and the grant of an Award
shall not be construed as giving a Participant the right to
continued employment. The Corporation expressly reserves
the right at any time to dismiss a Participant free from any
liability or claim under the Plan, except as expressly
provided by an applicable Award.
<PAGE>
(c) No Rights as Shareholder. Only upon issuance of Shares to a
Participant (and only with respect to such Shares) shall the
Participant obtain the rights of a shareholder, subject,
however, to any limitations imposed by the terms of the
applicable Award.
(d) No Fractional Shares. No fractional shares shall be issued
under the Plan, however, the Committee may provide for a
cash payment as settlement in lieu of any fractional shares.
(e) Other Corporate Benefit and Compensation Programs. Except
as expressly determined by the Committee, settlements of
Awards received by Participants under this Plan shall not be
deemed as part of a Participant's regular, recurring
compensation for purposes of calculating payments or
benefits from any Corporate benefit or severance program (or
severance pay law of any country). The above
notwithstanding, the Corporation may adopt other
compensation programs, plans or arrangements as it deems
appropriate or necessary.
(f) Unfunded Plan. The Plan shall be unfunded and shall not
create (or be construed to create) a trust or a separate
fund(s). Likewise, the Plan shall not establish any
fiduciary relationship between the Corporation and any
Participant or other person. To the extent any person holds
any rights by virtue of an Award granted under the Plan,
such right shall be no greater than the right of an
unsecured general creditor of the Corporation.
(g) Successors and Assignees. The Plan shall be binding on all
successors and assignees of a Participant, including,
without limitation, the estate of such Participant and the
executor, administrator or trustee of such estate, or any
receiver or trustee in bankruptcy or representative of the
Participant's creditors.
(h) Governing Law. The validity, construction and effect to the
Plan and any actions taken under or relating to the Plan
shall be determined in accordance with the laws of the State
of Massachusetts and applicable federal law.
