[Bold]BBN CORPORATION
1996 STOCK INCENTIVE PLAN[End-Bold]
SECTION 1. [Italics]General Purpose of the Plan; Definitions.[End-Italics]
The name of the plan is the BBN Corporation 1996 Stock Incentive Plan (the
"Plan"). The Plan has been adopted with a view toward facilitating and
increasing the long-term growth and profitability of BBN Corporation (the
"Company") and its subsidiaries by promoting Common Stock ownership by key
employees whose efforts can contribute to such long-term growth and
profitability.
The following terms shall be defined as set forth below:
a. "Award" or "Awards" means either Stock Options or Restricted Stock
awards or both, as the context requires.
b. "Board" means the Board of Directors of the Company.
c. "Code" means the Internal Revenue Code of 1986, as amended, and any
successor Code, and related rules, regulations, and interpretations.
d. "Committee" means the Committee referred to in Section 2. If at any
time no Committee shall be in office, the functions of the Committee shall be
exercised by the Board.
e. "Disability" means disability as determined in accordance with
standards and procedures similar to those used under the Company's long-term
disability program.
f. "Fair Market Value" on any given date means the last sale price
regular way at which Stock is traded on such date as reflected in the New York
Stock Exchange-Composite Transactions Index or, where applicable, the value of
a share of Stock as determined by the Committee in accordance with the
applicable provisions of the Code.
g. "Normal Retirement" means retirement from active employment with the
Company and its Subsidiaries on or after the normal retirement date specified
in the Company's tax qualified Retirement Trust Agreement.
h. "Restricted Stock Award" is defined in Section 7(a).
i. "Stock" means the Common Stock, $1.00 par value, of the Company,
subject to adjustments pursuant to Section 3.
j. "Stock Option" means any option to purchase shares of Stock granted
pursuant to Section 6.
k. "Subsidiary" means any corporation or other entity (other than the
Company) in an unbroken chain beginning with the Company if each of the
entities (other than the last entity in the unbroken chain) owns stock or other
interests possessing 50% or more of the total combined voting power of all
classes of stock or other interest in one of the other corporations in the
chain.
SECTION 2. [Italics]Committee Authority to Select Participants and Determine
Awards, Etc. [End-Italics]
The Plan shall be administered by the Compensation and Stock Option
Committee of the Board, which is appointed by the Board and serves at the
pleasure of the Board.
The Committee shall have the power and authority to grant Awards
consistent with the terms of the Plan, including the power and authority:
i. to select from among the eligible persons and entities described in
Section 4 those to whom Awards may from time to time be granted;
ii. to determine the time or times of Awards and the extent to which any
Award will consist of Stock Options or Restricted Stock or both;
iii. to determine the number of shares to be covered by any Award;
iv. to determine the terms and conditions, including restrictions, not
inconsistent with the terms of the Plan, of any Award, which terms
and conditions may differ among individual Awards and participants;
v. to determine whether, to what extent, and under what circumstances
Stock and other amounts payable with respect to an Award shall be
deferred either automatically or at the election of the participant
and whether and to what extent the Company shall pay or credit
amounts equal to interest (at rates determined by the Committee) or
dividends or deemed dividends on such deferrals; and
vi. to adopt, alter, and repeal such rules, guidelines and practices for
administration of the Plan and for its own acts and proceedings as it
shall deem advisable; to interpret the terms and provisions of the
Plan and any Award (including related Award Agreements); to make all
determinations it deems advisable for the administration of the Plan;
to decide all disputes arising in connection with the Plan; and to
otherwise supervise the administration of the Plan.
All decisions and interpretations of the Committee shall be binding on all
persons, including the Company and Plan participants.
SECTION 3. [Italics]Shares Issuable Under the Plan; Mergers; Substitution [End-
Italics]
a. [Italics]Shares Issuable. [End-Italics] The maximum number of
shares of Stock reserved and available for issuance under the Plan
shall be 820,000, including shares issued in lieu of or upon
reinvestment of dividends arising from Awards. Awards and Stock which
are forfeited, reacquired by the Company, or satisfied without the
issuance of Stock shall not be counted against this limit. Shares
issued under the Plan shall consist of previously issued shares that
have been reacquired by the Company.
b. [Italics]Stock Dividends, Mergers, etc. [End-Italics] In the
event of a stock dividend, stock split, or similar change in
capitalization affecting the Stock, the Committee shall make
appropriate adjustments in (i) the number and kind of shares of stock
or securities on which Awards may thereafter be granted, (ii) the
number and kind of shares remaining subject to outstanding Awards,
and (iii) the option or purchase price in respect of such shares. In
the event of any merger, consolidation, dissolution, or liquidation
of the Company, the Committee in its sole discretion may, as to any
outstanding Awards, make such substitution or adjustment in the
aggregate number of shares reserved for issuance under the Plan and
in the number and purchase price (if any) of shares subject to such
Awards as it may determine, or accelerate, amend, or terminate such
Awards upon such terms and conditions as it shall provide (which, in
the case of the termination of the vested portion of any Award, shall
require payment or other consideration which the Committee deems
equitable in the circumstances).
c. [Italics]Substitute Awards. [End-Italics] Subject to 3(a)
above, the Company may grant Awards under the Plan in substitution
for stock and stock based awards held by employees of or other
persons providing services to another corporation (including a
corporation affiliated with the Company) which corporation is merged
into or consolidated with the Company or a Subsidiary or the property
or stock of which is acquired by the Company or a Subsidiary. The
Committee may direct that the substitute awards be granted on such
terms and conditions as the Committee considers appropriate in the
circumstances.
SECTION 4. [Italics]Eligibility. [End-Italics]
Participants in the Plan will be such full or part time officers and other
key employees of the Company and its Subsidiaries ("Employees") and other
persons or entities who are responsible for or contribute to the management,
growth, or profitability of the Company and its Subsidiaries and who are
selected from time to time by the Committee. Persons who are directors of the
Company, other than any such person who is a full time employee or who is
providing (whether or not on a full time basis) consulting or similar services
to the Company in addition to services as a director, shall not be eligible for
awards under the Plan.
SECTION 5. [Italics]Limitations on Term and Dates of Awards. [End-Italics]
a. [Italics]Duration of Awards. [End-Italics] Subject to Sections
12(a), 12(c), and 12(d) below, no restrictions or limitations on
Awards shall extend beyond 10 years from the grant date, except that
deferrals, elected by participants, of the receipt of Stock or other
benefits under the Plan may extend beyond such date.
b. [Italics]Latest Grant Date. [End-Italics] No Award shall be
granted after January 1, 2006, but then-outstanding Awards may extend
beyond such date.
SECTION 6. [Italics]Stock Options. [End-Italics]
Each Stock Option granted under the Plan shall be in such form as the
Committee may from time to time approve. Only nonstatutory Stock Options --
[Italics]i.e.,[End-Italics] Stock Options that do not qualify as "incentive
stock options" within the meaning of Section 422(b) of the Code -- may be
granted under the Plan.
Stock Options granted under the Plan shall be subject to the following
terms and conditions and shall contain such additional terms and conditions,
not inconsistent with the terms of the Plan, as the Committee shall deem
desirable.
a. [Italics]Option Price. [End-Italics] The option price per share
of Stock purchasable under a Stock Option shall be determined by the
Committee and may be equal to or less than the Fair Market Value on
the date of grant.
b. [Italics]Option Term. [End-Italics] The term of each Stock
Option shall be fixed by the Committee but shall not exceed 10 years
from the date the option is granted.
c. [Italics]Exercisability. [End-Italics] Stock Options shall be
exercisable at such time or times, whether or not in installments, as
shall be determined by the Committee at or after the date of grant.
The Committee may at any time accelerate the exercisability of all or
any portion of any Stock Option.
d. [Italics]Method of Exercise. [End-Italics] Stock Options may be
exercised in whole or in part, by giving written notice of exercise
to the Company specifying the number of shares to be purchased. Such
notice shall be accompanied by payment in full of the purchase price,
either by certified or bank check or other instrument acceptable to
the Committee. As determined by the Committee, in its discretion, at
or after the time of grant, payment in full or in part may also be
made in the form of shares of Stock not then subject to restrictions
under any Company plan (but which may include shares the disposition
of which constitutes a disqualifying disposition for purposes of
obtaining incentive stock option treatment for federal tax purposes),
unless the Board should in any case determine otherwise. Such
surrendered shares shall be valued at Fair Market Value on the
exercise date. An optionee shall have the rights of a shareholder
only as to shares acquired upon the exercise of a Stock Option and
not as to unexercised Stock Options.
e. [Italics]Non-transferability of Options. [End-Italics] No Stock
Option shall be transferable by the optionee otherwise than by will
or by the laws of descent and distribution, and all Stock Options
shall be exercisable, during the optionee's lifetime, only by the
optionee.
f. [Italics]Termination by Death. [End-Italics] If an optionee's
employment by or other service relationship with the Company and its
Subsidiaries terminates by reason of death, the Stock Option may
thereafter be exercised, both as to that portion which was
exercisable by the optionee immediately prior to death and, except as
otherwise determined by the Committee, as to any remaining portion,
by the legal representative or legatee of the optionee, for a period
of three years (or such other period, not to exceed three years, as
the Committee shall specify at or after the time of grant) from the
date of death or until the expiration of the stated term of the
option, if earlier.
g. [Italics]Termination by Reason of Disability. [End-Italics] Any
Stock Option held by an optionee whose employment by or other service
relationship with the Company and its Subsidiaries has terminated, or
who has been designated an inactive employee, by reason of Disability
may thereafter be exercised to the extent it was exercisable at the
time of the earlier of such termination or such designation (or on
such accelerated basis as the Committee shall at any time determine
prior to such termination or designation) for a period of three years
(or such other period, not to exceed three years, as the Committee
shall specify at or after the time of grant) from the date of such
termination of employment or other service relationship or
designation or until the expiration of the stated term of the option,
if earlier. Except as otherwise provided by the Committee at the
time of grant, the death of an optionee during the final year of such
exercise period shall extend such period for one year following
death, or until the expiration of the stated term of the option, if
earlier. The Committee shall have the authority to determine whether
a participant has been terminated or designated an inactive employee
by reason of Disability.
h. [Italics]Termination by Reason of Normal Retirement. [End-
Italics] If an optionee's employment by the Company and its
Subsidiaries terminates by reason of Normal Retirement, any Stock
Option held by such optionee may thereafter be exercised to the
extent that it was then exercisable (or on such accelerated basis as
the Committee shall at any time determine) for a period of three
years (or such other period, not to exceed three years, as the
Committee shall specify at or after the time of grant) from the date
of Normal Retirement or until the expiration of the stated term of
the option, if earlier. Except as otherwise provided by the
Committee at the time of grant, the death of an optionee during the
final year of such exercise period shall extend such period for one
year following death, or until the expiration of the stated term of
the option, if earlier.
i. [Italics]Other Termination. [End-Italics] Unless otherwise
determined by the Committee, if an optionee's employment by or other
service relationship with the Company or its Subsidiaries terminates
for any reason other than death, Disability or Normal Retirement, any
Stock Option held by such optionee may thereafter be exercised to the
extent it was exercisable on the date of termination of employment or
other termination of the service relationship (or on such accelerated
basis as the Committee shall determine at or after the time of grant)
for a period of sixty (60) days (or such longer period up to three
years as the Committee shall specify at or after the time of grant)
from the date of termination of employment or other termination of
the service relationship or until the expiration of the stated term
of the option, if earlier, [Italics]provided,[End-Italics] that if
the optionee's employment or other service relationship is terminated
for "cause" as a result of the optionee's misconduct which, in the
judgment of the Committee, casts discredit on him or her, or is
otherwise harmful to the business, interests or reputation of the
Company, its parent, or a Subsidiary, all Stock Options shall
terminate immediately.
For purposes of the preceding paragraph, if an optionee's employment
by the Company or its Subsidiaries is terminated under circumstances
entitling the optionee to cash severance pay under any written
severance plan, program, policy, or agreement of the Company or its
Subsidiaries in force at the time of such termination of employment
(a "Severance Program"), then except as otherwise determined by the
Committee any Stock Option held by the optionee at termination of
employment shall be treated as "exercisable on the date of
termination of employment" as to those shares for which it was in
fact exercisable immediately prior to termination of employment plus
any additional shares for which it would have become exercisable
during the severance period (as hereinafter defined) had the optionee
remained employed by the Company or its Subsidiaries. For purposes
of the preceding sentence, the severance period in the case of any
terminated employee entitled to severance under a Severance Program
shall be the period of weeks over which his or her cash severance, if
paid as salary continuation, would have been paid (whether or not
such severance is in fact so paid in such form).
j. [Italics]Form of Settlement. [End-Italics] Subject to Sections
12(a), 12(c), and 12(d) below, shares of Stock issued upon exercise
of a Stock Option shall be free of all restrictions under the Plan,
except that the Committee in its discretion may provide at time of
grant that the shares to be issued upon the exercise of a Stock
Option shall be in the form of Restricted Stock, or may reserve the
right to so provide after time of grant.
SECTION 7. [Italics]Restricted Stock; Unrestricted Stock. [End-Italics]
a. [Italics]Nature of Restricted Stock Award. [End-Italics] A
Restricted Stock Award is an Award entitling the recipient to acquire
shares of Stock for a purchase price (which may be zero), subject to
such conditions, including a Company right during a specified period
or periods to repurchase such shares at their original purchase price
(or to require forfeiture of such shares, if the purchase price was
zero) upon the participant's termination of employment or other
service relationship, as the Committee may determine at the time of
grant. The original purchase price, if any, shall be determined by
the Committee.
b. [Italics]Award Agreement. [End-Italics] A participant who is
granted a Restricted Stock Award shall have no rights with respect to
such Award unless the participant shall have accepted the Award
(within such period following the award date as the Committee may
specify) by making payment to the Company by certified or bank check
or other instrument acceptable to the Committee in an amount equal to
the specified purchase price, if any, of the shares covered by the
Award and by executing and delivering to the Company a Restricted
Stock Award Agreement in such form as the Committee shall determine.
c. [Italics]Rights as a Shareholder. [End-Italics] Upon complying
with paragraph (b) above, a participant shall have all the rights of
a shareholder with respect to the Restricted Stock including voting
and dividend rights, subject to nontransferability restrictions and
Company repurchase or forfeiture rights described in this Section and
subject to any other conditions contained in the Award Agreement.
Unless the Committee shall otherwise determine, certificates
evidencing shares of Restricted Stock shall remain in the possession
of the Company until such shares are free of any restrictions under
the Plan.
d. [Italics]Restrictions. [End-Italics] Shares of Restricted
Stock may not be sold, assigned, transferred, pledged, or otherwise
encumbered or disposed of except as specifically provided herein. In
the event of termination of employment or other service relationship
of the participant with the Company and its Subsidiaries for any
reason, such shares shall be resold to the Company at their purchase
price, or forfeited to the Company if the purchase price was zero,
except as set forth below.
i. The Committee at the time of grant shall specify the date or
dates (which may depend upon or be related to the attainment of
performance goals and other conditions) on which the
nontransferability of the Restricted Stock and the obligation to
resell or forfeit such shares to the Company shall lapse. The
Committee at any time may accelerate such date or dates and
otherwise waive or, subject to Section 10, amend any conditions
of the Award.
ii. Except as may otherwise be provided in the Award Agreement, in
the event of termination of employment by or other service
relationship of a participant with the Company and its
Subsidiaries for any reason (including death), the participant
or the participant's legal representative shall offer to resell
to the Company, at the price paid therefor, all Restricted
Stock, and the Company shall have the right to purchase the same
at such price, or if the price was zero to require forfeiture of
the same, provided that except as provided in the Award
Agreement, the Company must exercise such right of repurchase or
forfeiture not later than the 60th day following such
termination of employment or other service relationship.
e. [Italics]Waiver, Deferral, and Investment of Dividends. [End-
Italics] The Restricted Stock Award Agreement may require or permit
the immediate payment, waiver, deferral, or investment of dividends
paid on the Restricted Stock.
f. [Italics]Unrestricted Stock.[End-Italics] The Committee may, in
its sole discretion, grant (or sell at such purchase price as the
Committee determines) to any participant shares of Stock free of
restrictions under the Plan ("Unrestricted Stock"). Shares of
Unrestricted Stock may be granted or sold as described in the
preceding sentence in respect of past services or other valid
consideration.
SECTION 8. [Italics]Deemed Dividends; Deferrals; Supplemental Grants.[End-
Italics]
a. [Italics]Deemed Dividend Payments; Deferrals. [End-Italics]
Without limiting the right of the Committee to specify different
terms, the Committee may require or permit the immediate payment,
waiver, deferral, or investment of dividends or deemed dividends
payable or deemed payable on Stock subject to an Award.
b. [Italics]Supplemental Grants. [End-Italics] The Company may in
its sole discretion make a loan to the recipient of an Award
hereunder, either on or after the date of grant of such Award. Such
loans may be made either in connection with the exercise of a Stock
Option or in connection with the payment of any federal income tax in
respect of income recognized with respect to Restricted Stock. The
Committee shall have full authority to decide whether to make a loan
hereunder and to determine the amount, term, and provisions of any
such loan, including the interest rate (which may be zero) charged in
respect of any such loan, whether the loan is to be secured or
unsecured, the terms on which the loan is to be repaid and the
conditions, if any, under which it may be forgiven. However, no loan
hereunder shall provide or reimburse to the borrower the amount used
by him for the payment of the par value of any shares of Common Stock
issued, have a term (including extensions) exceeding ten years in
duration, or be in an amount exceeding the total exercise or purchase
price paid by the borrower under an Award or for related Stock under
the Plan plus an amount equal to the cash payment permitted in the
following paragraph.
The Committee may at any time authorize a cash payment, in respect of
the grant or exercise of an Award under the Plan or the lapse or
waiver of restrictions under an Award, which shall not exceed the
amount which would be required in order to pay in full the federal
income tax due as a result of income recognized by the recipient
under both the Award and such cash payment, in each case assuming
that such income is taxed at the regular maximum marginal rate
applicable to individuals under the Code as in effect at the time
such income is includable in the recipient's income. Subject to the
foregoing, the Committee shall have complete authority to decide
whether to make such cash payments in any case, to make provision for
such payments either simultaneously with or after the grant of the
associated Award, and to determine the amount of each such payment.
SECTION 9. [Italics]Transfer, Leave of Absence, Etc. [End-Italics]
For purposes of the Plan, the following events shall not be deemed a
termination of employment:
a. a transfer to the employment of the Company from a Subsidiary or
from the Company to a Subsidiary, or from one Subsidiary to another;
or
b. an approved leave of absence for military service or sickness,
or for any other purpose approved by the Company, if the employee's
right to reemployment is guaranteed either by a statute or by
contract or under the policy pursuant to which the leave of absence
was granted or if the Committee otherwise so provides in writing.
For purposes of Section 6(i) and Section 7(a), except as otherwise determined
by the Committee an optionee employed as an employee by the Company and its
Subsidiaries shall be treated as having incurred a termination of employment by
or other service relationship with the Company and its Subsidiaries on the date
he or she ceases to be an employee, whether or not he or she continues to
provide services to the Company or its Subsidiaries on some other basis.
SECTION 10. [Italics]Amendment and Termination. [End-Italics]
The Board may at any time amend or discontinue the Plan and the Committee
may at any time amend or cancel any outstanding Award (or provide substitute
Awards at the same or reduced exercise or purchase price or with no exercise or
purchase price, but such price, if any, must satisfy the requirements which
would apply to the substitute or amended Award if it were then initially
granted under this Plan) for the purpose of satisfying changes in law or for
any other lawful purpose, but no such action shall adversely affect rights
under any outstanding Award without the holder's consent.
SECTION 11. [Italics]Status of Plan. [End-Italics]
With respect to the portion of any Award which has not been exercised and
any payments in cash, stock, or other consideration not received by a
participant, a participant shall have no rights greater than those of a general
creditor of the Company unless the Committee shall otherwise expressly
determine in connection with any Award or Awards. In its sole discretion, the
Committee may authorize the creation of trusts or other arrangements to meet
the Company's obligations to deliver Stock or make payments with respect to
awards hereunder, provided that the existence of such trusts or other
arrangements is consistent with the provision of the foregoing sentence.
SECTION 12 [Italics]General Provisions. [End-Italics]
a. [Italics]No Distribution; Compliance with Legal Requirements,
etc. [End-Italics] The Committee may require each person acquiring
shares pursuant to an Award to represent to and agree with the
Company in writing that such person is acquiring the shares without a
view to distribution thereof. No shares of Stock shall be issued
pursuant to an Award until all applicable securities laws and other
legal and stock exchange requirements have been satisfied. The
Committee may require the placing of such stop-orders and restrictive
legends on certificates for Stock and Awards as it deems appropriate.
b. [Italics]Other Compensation Arrangements; No Employment Rights.
[End-Italics] Nothing contained in this Plan shall prevent the Board
from adopting other or additional compensation arrangements, subject
to stockholder approval if such approval is required; and such
arrangements may be either generally applicable or applicable only in
specific cases. Without limiting the foregoing, nothing herein shall
be construed as limiting the right of an individual receiving or
holding an Award hereunder from being awarded, or from continuing to
hold, an award under the Company's 1986 Stock Incentive Plan. The
adoption of the Plan does not confer upon any employee or other
person any right to continued employment by or the continuation of
any service relationship with the Company or a Subsidiary, nor does
it interfere in any way with the right of the Company or a Subsidiary
to terminate the employment or other service relationship that may
exist between it and any person.
c. [Italics]Tax Withholding, etc. [End-Italics] Each participant
shall, no later than the date as of which the value of an Award or of
any Stock or other amounts received thereunder first becomes
includable in the gross income of the participant for Federal income
tax purposes, pay to the Company, or make arrangements satisfactory
to the Committee regarding payment of, any Federal, state, or local
taxes of any kind required by law to be withheld with respect to such
income. The Company and its Subsidiaries shall, to the extent
permitted by law, have the right to deduct any such taxes from any
payment of any kind otherwise due to the participant.
d. [Italics]Cancellation of Awards. [End-Italics] The Committee
may provide, with respect to any Award, that the Award shall be
canceled or rescinded and any associated shares forfeited, and that
the participant be obligated to pay to the Company any gain received
upon exercise or vesting, in the event that the participant competes
with the Company or its Subsidiaries, discloses confidential
information of the Company or its Subsidiaries, or otherwise is not
in compliance with any provision of the Award, in each case on such
terms and conditions as the Committee considers appropriate in the
circumstances.
SECTION 13. [Italics]Effective Date of Plan. [End-Italics]
The Plan shall be effective as of January 17, 1996, the date of its
adoption by the Board.