BOLT BERANEK AND NEWMAN INC.
EXHIBIT 10.3
THE BOLT BERANEK AND NEWMAN INC.
1983 EMPLOYEE STOCK PURCHASE PLAN
SECTION 1. PURPOSE OF PLAN.
The Bolt Beranek and Newman Inc. 1983 Employee Stock Purchase Plan (the
"Plan") is intended to provide a method by which eligible employees of Bolt
Beranek and Newman Inc. and its participating subsidiaries (the "company")
may use voluntary, systematic payroll deductions to purchase shares of Common
Stock of Bolt Beranek and Newman Inc. ("Stock") and thereby acquire an
interest in the future of the company. For purposes of the Plan, a
subsidiary is any corporation in which Bolt Beranek and Newman Inc. owns,
directly or indirectly, stock possessing 50% or more of the total combined
voting power of all classes of stock, and a participating subsidiary is a
subsidiary designated as participating by the Bolt Beranek and Newman Inc.
Board of Directors (the "Board of Directors").
SECTION 2. OPTIONS TO PURCHASE STOCK.
Under the Plan, there is available an aggregate of not more than
3,600,000 shares of Stock (subject to adjustment as provided in Section 15)
for sale pursuant to the exercise of options ("options") granted under the
Plan to employees (within the meaning of Section 3401(c) of the Internal
Revenue Code of 1986, as amended (the "Code")) of the company ("employees")
who meet the eligibility requirements set forth in Section 3 hereof
("eligible employees"). The Stock to be delivered upon exercise of options
under the Plan may be either shares of authorized but unissued Stock, or
shares of reacquired Stock, as the Board of Directors shall determine.
SECTION 3. ELIGIBLE EMPLOYEES.
Except as otherwise provided below, each employee of the company who has
completed six months or more of continuous service in the employ of the
company shall be eligible to participate in the Plan.
(a) Any employee who immediately after the grant of an option to him
would (in accordance with the provisions of Sections 423 and 425(d) of the
Code) own Stock possessing 5% or more of the total combined voting power or
value of all classes of Stock of the employer corporation or of its parent or
subsidiary corporation, as defined in Section 425 of the Code, shall not be
eligible to receive an option to purchase stock pursuant to the Plan.
(b) No employee shall be granted an option under the Plan which would
permit his rights to purchase shares of Stock under all employee stock
purchase plans of the company and any parent and subsidiary corporations to
accrue at a rate which exceeds $25,000 in fair market value of such Stock
(determined at the time the option is granted) for each calendar year during
which any such option granted to such employee is outstanding at any time, as
provided in Sections 423 and 425 of the Code.
(c) The Board of Directors may exclude from participation an eligible
employee located in a foreign country if his participation would be
impractical or illegal under the laws of that country.
SECTION 4. METHOD OF PARTICIPATION.
The periods January 1 to June 30 and July 1 to December 31 of each year
shall be option periods. Each person who will be an eligible employee on the
first day of any option period may elect to participate in the Plan by
executing and delivering, at least 15 days prior to such day, a payroll
deduction authorization in accordance with Section 5. Such employee shall
thereby become a participant ("participant") on the first day of such option
period and shall remain a participant until his participation is terminated
as provided in the Plan.
SECTION 5. PAYROLL DEDUCTIONS.
The payroll deduction authorization shall request withholding, at a rate
of not less than 2% nor more than 10%, from the participant's Compensation,
by means of substantially equal payroll deductions over the option period.
For purposes of the Plan, "Compensation" shall mean all compensation paid to
the participant by the company other than as bonuses, commissions, overrides,
overseas allowances, contributions and payments under the Bolt Beranek and
Newman Inc. Retirement Trust Plan, and payments under stock option plans and
other employee benefit plans. A participant may change the withholding rate
of his payroll deduction authorization by written notice delivered to the
company at least 15 days prior to the first day of the option period as to
which the change is to be effective. All amounts withheld in accordance with
a participant's payroll deduction authorization shall be credited to a
withholding account for such participant.
SECTION 6. GRANT OF OPTIONS.
Each person who is a participant on the first day of an option period
shall as of such day be granted an option for such period. (1) Such option
shall be for the least of: (a) 1,000 shares of Stock (400 shares in the case
of an "officer" of the company (as defined in Rule 16a-1(f) under Section 16
of the Securities Exchange Act of 1934) in office at any time during the
respective option period); or (b) the number of whole shares of Stock to be
determined by dividing: (i) the balance in the participant's withholding
account on the last day of the option period, by (ii) the purchase price of
the Stock determined under Section 7; or (c) the number of whole shares of
Stock to be determined by dividing: (I) $12,500, by (II) the fair market
value of one share of Stock on the first day of the option period. The
company shall reduce on a substantially proportionate basis the number of
shares of Stock receivable by each participant upon exercise of his option
for an option period in the event that the number of shares then available
under the Plan is otherwise insufficient.
(1) as amended effective July 1, 1994
SECTION 7. PURCHASE PRICE.
The purchase price of Stock issued pursuant to the exercise of an option
shall be 85% of the fair market value of the Stock at (a) the time of grant
of the option or (b) the time at which the option is deemed exercised,
whichever is less, provided, however, that in no event shall the price be
less than the net book value per share of the Stock as of the end of the
fiscal quarter next preceding the date on which the option is deemed
exercised. Net book value per share as of a specified date shall be
determined by dividing consolidated shareholders' equity as of that date, by
the number of shares of Stock issued and outstanding as of that date. Fair
market value shall mean the closing price of the Stock on the New York Stock
Exchange (or such other national securities exchange as shall then be listing
such Stock for trading) on the subject date, or, if there shall have been no
reported trades on such date, on the last prior date when such a trade was
reported.
SECTION 8. EXERCISE OF OPTIONS.
If an employee is a participant in the Plan on the last business day of
an option period, he shall be deemed to have exercised the option granted to
him for that period. Upon such exercise, the company shall apply the balance
of the participant's withholding account (but in no event more than $3,000)
to the purchase of the number of whole shares of Stock determined under
Section 6, and as soon as practicable thereafter shall issue and deliver
certificates for said shares to the participant and shall return to him the
balance, if any, of his withholding account in excess of the total purchase
price of the shares so issued. No fractional shares shall be issued
hereunder.
Notwithstanding anything herein to the contrary, the company's
obligation to issue and deliver shares of Stock under the Plan shall be
subject to the approval required of any governmental authority in connection
with the authorization, issuance, sale, or transfer of said shares, and to
any requirements of any national securities exchange applicable thereto.
SECTION 9. INTEREST.
Except as provided in this Section 9, no interest will be payable on
withholding accounts. In the event money withheld in respect of an option
period is returned to a participant or his beneficiary pursuant to the
provisions of Section 10, 11, or 12, the amount returned shall include simple
interest (if any) during the period from the date of withholding to the date
of return determined at such rate as shall be specified by the Chief
Executive Officer of Bolt Beranek and Newman Inc. or by such other person as
the Board of Directors may designate. The rate so specified shall not exceed
the rate then paid on ordinary passbook savings accounts by BayBank/Harvard
Trust. The interest rate, if any, applicable to any option period shall be
specified and communicated to participants prior to the beginning of the
option period. If no interest rate is specified for an option period, the
interest rate in effect for such option period shall be the rate, if any, in
effect for the immediately preceding option period.
SECTION 10. CANCELLATION AND WITHDRAWAL.
A participant who holds an option under the Plan may at any time prior
to exercise thereof under Section 8 cancel all (but not less than all) of his
option by written notice delivered to the company. Upon such cancellation,
the balance in his withholding account shall be returned to him.
A participant may terminate his payroll deduction authorization as of
any date by written notice delivered to the company and shall thereby cease
to be a participant as of such date. Any participant who voluntarily
terminates his payroll deduction authorization prior to the last business day
of an option period shall be deemed to have cancelled his option.
SECTION 11. TERMINATION OF EMPLOYMENT.
Upon the termination of a participant's service with the company for any
reason, he shall cease to be a participant, and any option held by him under
the Plan shall be deemed cancelled, the balance of his withholding account
shall be returned to him, and he shall have no further rights under the Plan.
SECTION 12. DEATH OF PARTICIPANT.
A participant may file a written designation of beneficiary specifying
who is to receive any stock and/or cash credited to the participant under the
Plan in the event of the participant's death, which designation shall also
provide for the election by the participant of either: (i) cancellation of
the participant's option upon his death, as provided in Section 10; or (ii)
application as of the last day of the option period of the balance of the
deceased participant's withholding account at the time of death to the
exercise of his option, pursuant to Section 8 of the Plan. In the absence of
a valid election otherwise, the death of a participant shall be deemed to
effect a cancellation of his option. A designation of beneficiary and
election may be changed by the participant at any time, by written notice.
In the event of the death of a participant and receipt by the company of
proof of the identity and existence at the participant's death of a
beneficiary validly designated by him under the Plan, the company shall
deliver such Stock and/or cash to which the beneficiary is entitled under the
Plan to such beneficiary. In the event of the death of a participant and in
the absence of a beneficiary validly designated under the Plan who is living
at the time of such participant's death, the company shall deliver such Stock
and/or cash to the executor or administrator of the estate of the
participant, or if no such executor or administrator has been appointed (to
the knowledge of the company), the company, in its discretion, may deliver
such Stock and/or cash to the spouse or to any one or more dependents of a
participant as the company may determine. No beneficiary shall, prior to the
death of the participant by whom he has been designated, acquire any interest
in the Stock or cash credited to the participant under the Plan.
SECTION 13. PARTICIPANT'S RIGHTS NOT TRANSFERABLE.
All participants granted options under the Plan shall have the same
rights and privileges, and each participant's rights and privileges under any
option granted under the Plan shall be exercisable during his lifetime only
by him, and shall not be sold, pledged, assigned, or transferred in any
manner. In the event any participant violates the terms of this Section, any
options held by him may be terminated by the company and upon return to the
participant of the balance of his withholding account, all his rights under
the Plan shall terminate.
SECTION 14. EMPLOYMENT RIGHTS.
Nothing contained in the provisions of the Plan shall be construed to
give to any employee the right to be retained in the employ of the company or
to interfere with the right of the company to discharge any employee at any
time; nor shall it be construed to give the company the right to require any
employee to remain in its employ or to interfere with an employee's right to
terminate his employment at any time.
SECTION 15. CHANGE IN CAPITALIZATION.
In the event of any change in the outstanding Stock by reason of stock
dividend, split-up, recapitalization, merger, consolidation, reorganization,
or other capital change, the aggregate number and class of shares available
under the Plan and the number and class of shares under option but not
exercised, the option price, and the share limit provided for in Section 6(a)
shall be appropriately adjusted.
SECTION 16. ADMINISTRATION OF PLAN.
The Plan shall be administered by the Board of Directors, which shall
have the right to determine any questions which may arise regarding the
interpretation and application of the provisions of the Plan and to make,
administer, and interpret such rules and regulations as it shall deem
necessary or advisable.
SECTION 17. AMENDMENT AND TERMINATION OF PLAN.
The company reserves the right at any time or times to amend the Plan to
any extent and in any manner it may deem advisable by vote of the Board of
Directors; provided, however, that any amendment relating to the aggregate
number of shares which may be issued under the Plan (other than an adjustment
provided for in Section 15) or to the employees (or class of employees) to
receive options under the Plan shall have no force or effect unless it shall
have been approved by the shareholders within twelve months before or after
its adoption.
The Plan may be terminated at any time by the Board of Directors, but no
such termination shall adversely affect the rights and privileges of holders
of then outstanding options. The Plan will terminate in any case when all or
substantially all of the Stock reserved for the purposes of the Plan has been
purchased.
SECTION 18. APPROVAL OF SHAREHOLDERS.
The Plan shall be subject to the approval of the shareholders of Bolt
Beranek and Newman Inc., which approval shall be secured within twelve months
after the date the Plan is adopted by the Board of Directors.