Exhibit 10.2
BOSTON EDISON COMPANY
1997 STOCK INCENTIVE PLAN
1. PURPOSE
The purpose of this 1997 Stock Incentive Plan (the "Plan") is to advance
the interests of Boston Edison Company (the "Company") and its subsidiaries
by enhancing their ability (a) to attract and retain employees who are in a
position to make contributions to the success of the Company and its
subsidiaries; (b) to reward employees for such contributions; and (c) to
encourage employees to take into account the long-term interests of the
Company and its subsidiaries through ownership of shares of, and other
interests in, the Company's common stock ("Common Stock").
The Plan is intended to accomplish these goals by enabling the Company
to grant awards ("Awards") to eligible employees. Awards may be in the form
of Stock Options (as described in Section 6), Stock Appreciation Rights (as
described in Section 7), Restricted Stock Awards (as described in Section 8),
Deferred Stock Awards (as described in Section 9), Performance Unit Awards
(as described in Section 10), Dividend Equivalent Awards (as described in
Section 11), and Other Stock-Based Awards (as described in Section 12).
2. ADMINISTRATION
The Plan will be administered by the Executive Personnel Committee of
the Board of Directors of the Company, excluding any member who would not be
(i) an "outside director" for purposes of Section 162(m) of the Internal
Revenue Code of 1986, as amended (the "Code"), and the regulations
thereunder, or (ii) a non-employee director as defined in Rule 16b-3(b)(3)
under the Securities Exchange Act of 1934, as amended (the "Exchange Act")
(the "Committee"). The Committee will have full discretionary authority,
not inconsistent with the express provisions of the Plan, to administer the
Plan in all respects, including without limitation, authority (a) to grant
Awards to such eligible employees as the Committee may select
("Participants"); (b) to determine the type of Awards to be granted and the
times of grants; (c) to determine the number of shares of Common Stock to be
covered by any Award; (d) to determine the terms and conditions of any Award,
which terms and conditions may differ among individual Awards and
Participants; (e) to prescribe the form or forms of instruments evidencing
Awards and any other instruments required under the Plan and to change such
forms from time to time; (f) to adopt, amend and rescind rules and
regulations for the administration of the Plan; (g) to interpret the Plan and
to decide any questions and settle all controversies and disputes that may
arise in connection with the Plan; and (h) to waive compliance by a
Participant with any obligation to be performed by him under an Award,
except that the Committee may not, (i) in the case of an incentive stock
option (as described in Section 6), take any action without consent of the
Participant which would cause such option to lose its status as an
"incentive stock option" ("ISO") within the meaning of section 422 of the
Code, or (ii) in the case of an Award intended to qualify as
"performance-based compensation" within the meaning of Section 162(m)(4)(C)
of the Code, increase the amount of compensation payable under the Award to
the extent that such increase would cause the Award to lose its
qualification as such performance-based compensation. Such determinations
and actions of the Committee shall be conclusive and shall bind all parties.
3. EFFECTIVE DATE AND TERM OF PLAN
The Plan will become effective on the date on which it is approved by
the stockholders of the Company. Grants of Awards under the Plan may be
made prior to that date (but after adoption of the Plan by the Board of
Directors), subject to approval of the Plan by the stockholders.
No Award may be granted under the Plan after the completion of ten years
from the date on which the Plan was adopted by the Board of Directors, but
Awards previously granted may extend beyond that date.
4. SHARES SUBJECT TO THE PLAN
(a) Number of Shares. Subject to adjustment as provided in Section 15,
the aggregate number of shares of Common Stock that may be delivered under
the Plan is 2,000,000, including shares issued in lieu of or upon
reinvestment of dividends arising from awards. Shares of Common Stock may
be issued up to this maximum pursuant to any type or types of Awards,
including ISOs. For purposes of this limitation, Awards and shares of Common
Stock which are forfeited or reacquired by the Company, and Awards which are
satisfied or otherwise terminated without the issuance of shares of Common
Stock, will not be counted.
(b) Special Limitations Applicable to Certain Awards. Subject to
adjustment as provided in Section 15 to the extent such adjustment is
consistent with the continued satisfaction by Awards of the requirements of
Section 162(m)(4)(C) of the Code, (i) the maximum number of shares of Common
Stock for which Options and SARs may be awarded under the Plan to any
Participant in any calendar year is in each case 100,000 shares, and (ii) the
maximum number of shares of Common Stock with respect to which Restricted
Stock Awards and Awards intended to qualify as "performance-based
compensation" under Section 162(m)(4)(C) of the Code may be granted to any
Participant in any calendar year is in each case the equivalent of 25,000
shares. For purposes of the preceding sentence, the regrant of a canceled
Option or SAR, or the repricing of an Option or SAR, shall be treated as a
separate Award to the extent required under Section 162(m)(4)(C) of the
Code. The per-individual Award limitations described in this paragraph are
intended to enable certain Awards under the Plan to qualify for the
performance-based compensation exemption rules set forth under Section
162(m)(4)(C) of the Code and shall be subject to amendment or revision to
the extent (but only to the extent) consistent with such rules.
(c) Shares to be Delivered. Shares delivered under the Plan will be
authorized but unissued shares of Common Stock or, if the Committee so
decides in its sole discretion, previously issued Common Stock acquired by
the Company in the open market or in private transactions, or shares of
Common Stock held in treasury. No fractional shares of Common Stock will be
delivered under the Plan.
5. ELIGIBILITY
Employees eligible to become Participants shall be those key employees
of the Company and its subsidiaries who, in the opinion of the Committee, are
in a position to make a contribution to the success of the Company or its
subsidiaries. A subsidiary for purposes of the Plan is a corporation or
other entity in which the Company owns, directly or indirectly, stock or
other equity-like interests possessing 50% or more of the total combined
voting power of all classes of stock or other equity interests. Members of
the Committee will not be eligible to become Participants.
6. STOCK OPTIONS
Stock Options granted under the Plan ("Options") may be either ISOs or
non-qualified stock options ("NSOs"). Except to the extent expressly
designated as an ISO (or to the extent it does not qualify as an ISO even if
so designated), each Option will be an NSO.
No term of this Plan relating to ISOs will be interpreted, amended or
altered, nor will any discretion or authority granted to the Committee under
the Plan be exercised, so as to disqualify the Plan or, without the consent
of the optionee, any ISO, under Section 422 of the Code. The documents
evidencing ISOs will contain such provisions as are required of ISOs under
the applicable provisions of the Code.
Options granted under the Plan will be subject to the following terms
and conditions and will contain such additional terms and conditions, not
inconsistent with the terms of the Plan, as the Committee deems desirable:
(a) Exercise Price. The exercise price of each Option will be
determined by the Committee, but may not be, in the case of an ISO, less than
100% (110%, in the case of an ISO granted to a ten-percent stockholder) of
the fair market value per share of Common Stock at the time the Option is
granted. For this purpose, "ten-percent stockholder" means any employee who
at the time of grant owns directly, or is deemed to own by reason of the
attribution rules in section 424(d) of the Code, Common Stock possessing more
than 10% of the total combined voting power of all classes of stock of the
Company or of any of its parent or subsidiary corporations.
(b) Duration of Options. An Option will be exercisable during such
period or periods as the Committee may specify. The latest date on which an
Option may be exercised will be the date which is ten years (five years, in
the case of an ISO granted to a ten-percent stockholder) from the date the
Option was granted or such earlier date as may be specified by the Committee
at the time the Option is granted.
(c) Exercise of Options.
(1) Options will be exercisable at such future time or times,
whether or not in installments, as determined by the Committee at or
after the grant date. The Committee may at any time accelerate the
exercisability of all or any portion of any Option.
(2) Any exercise of an Option must be by written notice to the
Company, accompanied by (i) the document evidencing the Option (the
"Option Certificate") and any other documents required by the Committee
and (ii) payment in accordance with Section 6(d) below for the number
of shares of Common Stock for which the Option is exercised.
(d) Payment for and Delivery of Common Stock. Common Stock purchased
upon exercise of an Option shall be paid for as follows: (1) in cash or by
certified check, bank draft or money order payable to the order of the
Company, or (2) if so permitted by the Option Certificate or otherwise
determined by the Committee, (i) through the delivery of shares of Common
Stock (held for at least six months, or such other period as the Committee
may specify) having a fair market value on the last business day preceding
the date of exercise equal to the purchase price, or (ii) by a combination of
cash and Common Stock as provided in clauses (1) and (2)(i) above, or
(iii) by delivery of a promissory note of the Participant to the Company, in
the case of an ISO, payable on such terms as are specified in the Option
Certificate, and in the case of an NSO, payable on such terms as are
specified in the Option Certificate or as are otherwise specified by the
Committee, or by a combination of cash (or cash and Common Stock) and the
Participant's promissory note; provided, however, that if the Common Stock
delivered upon exercise of the Option is an original issue of authorized
Common Stock, at least so much of the exercise price as represents the par
value of such Common Stock must be paid in cash if the Committee determines
that such cash payment is required by law.
(e) Nontransferability of Options. Except as otherwise determined by
the Committee or specified in the Option Certificate, no Option may be
transferred other than by will or by the laws of descent and distribution,
and during a Participant's lifetime an Option may be exercised only by him
or her.
(f) Death or Disability. Except as otherwise determined by the
Committee, if a Participant's employment with the Company and its
subsidiaries terminates by reason of death or total and permanent disability,
each Option held by the Participant will become fully exercisable and will
remain exercisable after the date of such termination for a period of two
years in the case of death and one year in the case of total and permanent
disability (but in no event later than the date the option would have expired
in all events under Section 6(b)). In the case of a deceased Participant,
such Option may be exercised within such time limits by his executor or
administrator, or by the person or persons to whom the Option is transferred
by will or the applicable laws of descent and distribution.
(g) Other Termination of Employment. Except as otherwise determined by
the Committee, if a Participant's employment with the Company and its
subsidiaries terminates for any reason other than death or total and
permanent disability, all Options held by the Participant that are not then
exercisable shall terminate. Options that are exercisable on the date of
termination will continue to be exercisable for a period of three months (but
in no event later than the date the option would have expired in all events
under Section 6(b)) unless the employee has admitted to, or been convicted
of, any act of fraud, theft or dishonesty arising in the course of, or in
connection with, his employment with the Company and its subsidiaries, in
which case the Option will terminate immediately and in full, all except as
otherwise determined by the Committee. Except as otherwise determined by the
Committee, after completion of that three-month period, such Options shall
terminate to the extent not previously exercised, expired or terminated.
7. STOCK APPRECIATION RIGHTS
(a) Nature of Stock Appreciation Right. A Stock Appreciation Right
("SAR") is an Award entitling the recipient to receive an amount in cash or
shares of Common Stock or a combination thereof having a value equal to the
excess of the fair market value of a share of Common Stock on the date of
exercise over the fair market value of a share of Common Stock on the date of
grant (or over the Option exercise price, if the SAR was granted in tandem
with an Option), multiplied by the number of shares with respect to which the
SAR has been exercised, with the Committee having the right to determine the
form of payment.
(b) Grant of SARs. SARs may be granted in tandem with, or
independently of, Options granted under the Plan. In the case of an SAR
granted in tandem with an NSO, such SAR may be granted either at or after the
time of the grant of such Option. In the case of an SAR granted in tandem
with an ISO, such SAR may be granted only at the time of the grant of the
Option. SARs will be evidenced by such written agreement as is deemed
appropriate by the Committee.
An SAR or applicable portion thereof granted in tandem with an Option
will terminate and no longer be exercisable upon the termination or exercise
of such Option, except that an SAR granted with respect to less than the full
number of shares covered by an Option will not be reduced until the exercise
or termination of the related Option exceeds the number of shares not covered
by the SAR.
(c) Terms and Conditions of SARs. SARs will be subject to such terms
and conditions as are determined from time to time by the Committee, subject,
in the case of SARs granted in tandem with Options, to the following:
(1) SARs will be exercisable only at such time or times and to the
extent that the related Option is exercisable.
(2) Upon the exercise of an SAR, the applicable portion of any
related Option must be surrendered.
(3) SARs will be transferable only with the related Option. Except
as otherwise determined by the Committee, all SARs will be exercisable
during the Participant's lifetime only by the Participant or his legal
representative.
(4) An SAR granted in tandem with an Option may be exercised only
when the market price of the Common Stock subject to the Option exceeds
the exercise price of such Option.
The provisions of Sections 6(f) and 6(g) relating to the exercisability
and termination of Options shall also apply to SARs, whether or not granted
in tandem with Options.
Any exercise of an SAR must be by written notice to the Company,
accompanied by the document evidencing the SAR and any other documents
required by the Committee.
(d) Discretionary Payments. Notwithstanding that an Option at the time
of exercise shall not be accompanied by a related SAR, if the market price of
the shares subject to such Option exceeds the exercise price of such Option
at the time of its exercise, the Committee may, in its discretion, cancel
such Option, in which event the Company shall pay to the person exercising
such Option an amount equal to the difference between the fair market value
of the Common Stock to have been purchased pursuant to such exercise of such
Option (determined on the date the Option is canceled) and the aggregate
consideration to have been paid by such person upon such exercise. Such
payment shall be by check or in shares of Common Stock having a fair market
value (determined on the date the payment is to be made) equal to the amount
of such payments or any combination thereof, as determined by the Committee.
The Committee may exercise its discretion under the first sentence of this
paragraph (d) only in the event of a written request of the person exercising
the option, which request shall not be binding on the Committee.
8. RESTRICTED STOCK
(a) Nature of Restricted Stock Award. A Restricted Stock Award
("Restricted Stock Award") is an Award entitling the recipient to acquire
shares of Common Stock ("Restricted Stock") for a purchase price (which may
be zero), subject to such conditions, including the restrictions specified in
Section 8(d) below, as the Committee may impose at the time of grant. The
Committee may also condition such acquisition on the attainment of specified
performance goals as described in Section 16(f) below.
(b) Restricted Stock Award Agreement. A Participant who is granted a
Restricted Stock Award will have no rights with respect to such Award unless
the Participant accepts the Award within 60 days (or such shorter period as
the Committee may specify) following the Award date 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 an
agreement (a "Restricted Stock Award Agreement") in such form as the
Committee determines.
(c) Rights as a Stockholder. Upon complying with Section 8(b) above,
a Participant will have all the rights of a stockholder with respect to the
Restricted Stock awarded to him including voting and dividend rights, subject
to the restrictions described in this Section 8 and subject to any other
conditions contained in the Restricted Stock Award Agreement. Unless the
Committee otherwise determines, certificates evidencing shares of Restricted
Stock will remain in the possession of the Company until such shares are free
of any restrictions under the Plan.
(d) Restriction. Except as otherwise determined by the Committee,
shares of Restricted Stock may not be sold, assigned, transferred, pledged or
otherwise encumbered or disposed of, except as specifically provided herein.
If a Participant ceases for any reason to be employed by the Company or its
subsidiaries other than due to death or total and permanent disability,
shares of Restricted Stock held by such Participant shall be resold to the
Company at their purchase price, or forfeited to the Company if the purchase
price was zero, except as specifically set forth herein or otherwise
determined by the Committee. Shares of Restricted Stock resold to the
Company shall have the status of authorized but unissued shares of Common
Stock.
(1) The Committee will specify in the Restricted Stock Award
Agreement 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 of the
Participant to resell such Stock to the Company will lapse. The
Committee may at any time accelerate such date or dates or waive such
performance goals and other conditions.
(2) Unless otherwise determined by the Committee or specified in
the Restricted Stock Award Agreement, if the Participant's employment
terminates because of death or total and permanent disability, all
restrictions on shares of Restricted Stock held by the Participant will
lapse.
(e) Notice of Election. Any Participant making an election under
Section 83(b) of the Code with respect to a Restricted Stock Award must
provide a copy thereof to the Company within 30 days of the filing of such
election with the Internal Revenue Service.
(f) Dividends. Dividends paid on shares of Restricted Stock shall be
either paid at the dividend payment date or deferred for payment to such date
as determined by the Committee, in cash or in unrestricted shares of Common
Stock having a fair market value equal to the amount of such dividends.
Shares distributed in connection with a stock split or dividend in shares of
stock, and other property distributed as a dividend, shall be subject to
restrictions and a risk of forfeiture to the same extent as the Restricted
Stock with respect to which such shares of Restricted Stock or other property
has been distributed.
9. DEFERRED STOCK AWARDS
(a) Nature of Deferred Stock Award. A Deferred Stock Award ("Deferred
Stock Award") is an award entitling the recipient to acquire shares of Common
Stock ("Deferred Stock") without payment in one or more installments at a
future date or dates, all as determined by the Committee. The Committee may
condition such acquisition on the attainment of specified performance goals
as described in Section 16(f) below.
(b) Deferred Stock Award Agreement. A Participant who is granted a
Deferred Stock Award shall have no rights with respect to such Award unless
within 60 days of the grant of such Award or such shorter period as the
Committee may specify, the Participant shall have accepted the Award by
executing and delivering to the Company an agreement (a "Deferred Stock
Award Agreement") in such form as the Committee determines.
(c) Restrictions on Transfer. Except as otherwise determined by the
Committee, Deferred Stock Awards and all rights with respect to such Awards
may not be sold, assigned, transferred, pledged, or otherwise encumbered,
and shall be exercisable during the Participant's lifetime only by the
Participant or the Participant's legal representative.
(d) Rights as a Stockholder. A Participant receiving a Deferred Stock
Award will have rights of a stockholder only as to shares of Deferred Stock
actually received by the Participant under the Plan and not with respect to
shares subject to the Award but not actually received by the Participant. A
Participant shall be entitled to receive a stock certificate for shares of
Deferred Stock only upon satisfaction of all conditions therefor specified
in the Deferred Stock Award Agreement.
(e) Termination. Except as otherwise determined by the Committee, a
Participant's rights in all Deferred Stock Awards shall automatically
terminate upon the termination of such Participant's employment by the
Company and its subsidiaries for any reason (including death).
(f) Acceleration, Waiver, etc. At any time prior to the termination of
a Participant's employment, the Committee may in its discretion accelerate,
waive, or, subject to Section 16, amend any or all of the restrictions or
conditions imposed under any Deferred Stock Award.
(g) Payments in Respect of Deferred Stock. Without limiting the right
of the Committee to specify different terms, the Deferred Stock Award
Agreement may either make no provisions for, or may require or permit the
immediate payment, deferral, or investment of amounts equal to, or less than,
any cash dividends which would have been payable on the Deferred Stock had
such stock been outstanding, all as determined by the Committee in its sole
discretion.
10. PERFORMANCE UNIT AWARDS
(a) Nature of Performance Units Awards. A Performance Unit Award
("Performance Unit Award") is an award entitling the recipient to acquire
cash or shares of Common Stock, or a combination of cash and shares of Common
Stock, upon the attainment of specified performance goals as described in
Section 16(f) below. The Committee in its sole discretion shall determine
whether and to whom Performance Unit Awards shall be made, the performance
goals applicable under each such Award, the periods during which performance
is to be measured and all other limitations and conditions applicable to each
such Award. Performance Unit Awards may be awarded independent of or in
connection with the granting of any other Award under the Plan.
(b) Performance Unit Award Agreement. A Participant shall have no
rights with respect to a Performance Unit Award unless within 60 days of the
grant of such Award or such shorter period as the Committee may specify, the
Participant shall have accepted the Award by executing and delivering to the
Company a Performance Unit Award Agreement.
(c) Restrictions on Transfer. Except as otherwise determined by the
Committee, Performance Unit Awards and all rights with respect to such Awards
may not be sold, assigned, transferred, pledged, or otherwise encumbered, and
if exercisable over a specified period, shall be exercisable during the
Participant's lifetime only by the Participant or the Participant's legal
representative.
(d) Rights as a Stockholder. A Participant receiving a Performance
Unit Award will have rights of a stockholder only as to shares of Common
Stock actually received by the Participant under the Plan and not with
respect to shares subject to the Award but not actually received by the
Participant. A Participant shall be entitled to receive a stock certificate
evidencing the acquisition of shares of Common Stock under a Performance Unit
Award only upon satisfaction of all conditions therefor specified in the
Performance Unit Award Agreement.
(e) Termination. Except as otherwise determined by the Committee, a
Participant's rights in all Performance Unit Awards shall automatically
terminate upon the termination of such Participant's employment by the
Company and its subsidiaries for any reason (including death).
(f) Acceleration, Waiver, etc. At any time prior to the termination of
a Participant's employment, the Committee may in its discretion accelerate,
waive, or, subject to Section 16, amend any or all of the restrictions or
conditions imposed under any Performance Unit Award.
(g) Exercise. The Committee in its sole discretion shall establish
procedures to be followed in exercising any Performance Unit Award, which
procedures shall be set forth in the Performance Unit Award Agreement. The
Committee may at any time provide that payment under a Performance Unit Award
shall be made, upon satisfaction of the applicable performance goals, without
exercise by the Participant. Except as otherwise specified by the Committee,
a Performance Unit granted in tandem with an Option may be exercised only
while the Option is exercisable, and the exercise of a Performance Unit
granted in tandem with any other Award shall reduce the number of shares
subject to the related award on such basis as is specified in the Performance
Unit Award Agreement.
11. DIVIDEND EQUIVALENT AWARDS
(a) Nature of Dividend Equivalent Awards. A Dividend Equivalent Award
("Dividend Equivalent Award") is an Award entitling the Participant to
receive cash, shares of Common Stock, or other property equal in value to
dividends paid with respect to a specified number of shares of Common Stock.
Dividend Equivalent Awards may be awarded on a free-standing basis or in
connection with another Award, and may be paid currently or on a deferred
basis. The Committee may provide at the date of grant or thereafter that the
Dividend Equivalent Award shall be paid or distributed when accrued or shall
be deemed to have been reinvested in additional shares of Common Stock or
such other investment vehicles as the Committee may specify; provided,
however, that Dividend Equivalent Awards (other than free-standing Dividend
Equivalent Awards) shall be subject to all conditions and restrictions of the
underlying Awards to which they relate. The Committee may also condition
such Award on the attainment of specified performance goals as described in
Section 16(f) below.
(b) Dividend Equivalent Award Agreement. A Participant who is granted
a Dividend Equivalent Award shall have no rights with respect to such Award
unless within 60 days of the grant of such Award or such shorter period as
the Committee may specify, the Participant shall have accepted the Award by
executing and delivering to the Company an agreement (a "Dividend Equivalent
Award Agreement") in such form as the Committee determines.
(c) Restrictions on Transfer. Except as otherwise determined by the
Committee, Dividend Equivalent Awards and all rights with respect to such
Awards may not be sold, assigned, transferred, pledged, or otherwise
encumbered.
(d) Rights as a Stockholder. A Participant receiving a Dividend
Equivalent Award will have rights of a stockholder only as to shares of
Common Stock actually received by the Participant under the Plan and not
with respect to shares subject to the Award but not actually received by the
Participant.
(e) Termination. Except as otherwise determined by the Committee, a
Participant's rights in all Dividend Equivalent Awards shall automatically
terminate upon the termination of such Participant's employment by the
Company and its subsidiaries for any reason (including death).
(f) Acceleration, Waiver, etc. At any time prior to the Participant's
termination of employment, the Committee may in its discretion accelerate,
waive, or, subject to Section 16 of the Exchange Act, amend any or all of the
restrictions or conditions imposed under any Dividend Equivalent Award.
12. OTHER STOCK-BASED AWARDS
(a) Nature of Awards. The Committee may grant other Awards under which
Common Stock is or may in the future be acquired ("Other Stock-Based
Awards"). Such awards may include, without limitation, debt securities
convertible into or exchangeable for shares of Common Stock upon such
conditions, including attainment of performance goals, as the Committee shall
determine. Subject to the purchase price limitations in paragraph (b) below,
such convertible or exchangeable securities may have such terms and
conditions as the Committee may determine at the time of grant. However, no
convertible or exchangeable debt shall be issued unless the Committee shall
have provided (by Company right of repurchase, right to require conversion or
exchange, or other means deemed appropriate by the Committee) a means of
avoiding any right of the holders of such debt to prevent a Company
transaction by reason of covenants in such debt. The Committee may also
condition such Awards on the attainment of specified performance goals as
described in Section 16(f) below.
(b) Purchase Price; Form of Payment. The Committee may determine the
consideration, if any, payable upon the issuance or exercise of an Other
Stock-Based Award. The Committee may permit payment by certified check or
bank check or other instrument acceptable to the Committee or by surrender of
other shares of Common Stock (excluding shares then subject to restrictions
under the Plan).
(c) Forfeiture of Awards; Repurchase of Stock; Acceleration or Waiver
of Restrictions. The Committee may determine the conditions under which an
Other Stock-Based Award shall be forfeited or, in the case of an Award
involving a payment by the recipient, the conditions under which the Company
may or must repurchase such Award or related Common Stock. At any time the
Committee may in its sole discretion accelerate, waive, or, subject to
Section 16 of the Exchange Act, amend any or all of the limitations or
conditions imposed under any Other Stock-Based Award.
(d) Other Stock-Based Award Agreements. A Participant shall have no
rights with respect to any Other Stock-Based Award unless within 60 days
after the grant of such Award (or such shorter period as the Committee may
specify) the Participant shall have accepted the Award by executing and
delivering to the Company an agreement (an "Other Stock-Based Award
Agreement") in such form as the Committee determines.
(e) Restrictions on Transfer. Except as otherwise determined by the
Committee, Other Stock-Based Awards may not be sold, assigned, transferred,
pledged, or encumbered nor shall any Other Stock-Based Award be transferred
other than by will or by the laws of descent and distribution or be
exercisable during the Participant's lifetime by other than the Participant
or the Participant's legal representative.
(f) Rights as a Stockholder. A recipient of any Other Stock-Based
Award will have rights of a stockholder only at the time and to the extent,
if any, specified in the Other Stock-Based Award Agreement or otherwise
determined by the Committee.
(g) Deemed Dividend Payments; Deferrals. Without limiting the right
of the Committee to specify different terms, an Other Stock-Based Award
Agreement may require or permit the immediate payment, waiver, deferral, or
investment of dividends or deemed dividends payable or deemed payable on
Common Stock subject to the Award.
13. SUPPLEMENTAL GRANTS
(a) Loans. 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, an SAR or an Other Stock-Based Award, in connection with the
purchase of shares under any Award, or in connection with the payment of any
federal, state and local income tax in respect of income recognized under any
Award. The Committee shall have full authority to decide whether to make a
loan hereunder if it determines that the making of such loan is in the best
interest of the Company, 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 Common Stock under the Plan plus an amount equal to the cash payment
permitted in the following paragraph.
(b) Cash Grants. 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 any federal, state
and local 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.
14. CHANGE OF CONTROL
Notwithstanding any other provision of this Plan, in the event of a
Change of Control of the Company as defined in EXHIBIT A hereto (a) each
outstanding Award held by each Participant the exercisability of which is
restricted or limited will immediately become fully exercisable; and
(b) restrictions and conditions on each outstanding Award subject to such
restrictions and conditions held by each Participant will immediately lapse
or be deemed waived.
15. CHANGES IN COMPANY; SUBSTITUTE AWARDS
(a) Changes in Capital Stock. In the event of a stock dividend, stock
split or combination of shares, recapitalization or other change in the
Company's capital stock, the number and kind of shares of stock, securities
of the Company or other consideration issued or issuable in respect of Awards
then outstanding or subsequently granted under the Plan, the maximum number
of shares of stock or securities that may be delivered under the Plan, the
purchase price and other relevant provisions will be appropriately adjusted
by the Committee, whose determination shall be binding on all persons.
The Committee may also adjust the number of shares, securities or other
consideration issued or issuable in respect of outstanding Awards, the
exercise price of outstanding Awards and the other terms of outstanding
Awards, and may make adjustments in the terms and conditions of, and the
criteria and performance objectives included in, Awards, to take into
consideration material changes in accounting practices or principles,
consolidations or mergers (except those described in Section 15(b) below),
acquisitions or dispositions of stock or property or any other event if it
is determined by the Committee that such adjustment is appropriate to avoid
distortion in the operation of the Plan. Adjustments under this paragraph
will be made only to the extent they are consistent with the requirements
for ISOs or under Section 162(m)(4)(C) of the Code.
(b) Merger, etc. Subject to Section 14, in the event of a dissolution
or liquidation of the Company or a merger or consolidation in which the
Company is not the surviving corporation or its outstanding shares are
converted into securities of another corporation or exchanged for other
consideration, all Awards granted hereunder will terminate, but during a
period commencing 20 days prior to the effective date of any such dissolution
or liquidation (or 20 days prior to any earlier related sale of substantially
all the assets of the Company) or of any such merger or consolidation,
subject to the effectiveness of such dissolution, liquidation, sale, merger
or consolidation (1) all Awards outstanding hereunder the exercisability of
which is restricted or limited will become immediately exercisable, and
(2) all restrictions and conditions on all Awards subject to such
restrictions and conditions will immediately lapse or be deemed waived;
provided, however, that, unless the event will give rise to a Change of
Control or it is anticipated that a Change of Control will coincide with or
follow the event, the Committee may instead arrange that the successor or
surviving corporation, if any, grant replacement or substitute Awards on
terms and conditions as the Committee considers appropriate in the
circumstances.
(c) Substitute Awards. The Company may grant Awards under the Plan in
substitution for stock and stock based awards held by employees of another
corporation who concurrently become employees of the Company or its
subsidiary as the result of a merger or consolidation of the employing
corporation with the Company or its subsidiary or the acquisition by the
Company or a subsidiary of property or stock of the employing corporation.
The Committee may direct that the substitute Awards be granted on such terms
and conditions as the Committee considers appropriate. The shares which may
be delivered under such substitute Awards will be in addition to the maximum
number of shares provided for in Section 4(a) only to the extent that the
substitute Awards are both (1) granted to persons whose relationship to the
Company does not make (and is not expected to make) them subject to Section
16(b) of the Exchange Act and (2) are granted in substitution for awards
issued under a plan approved, to the extent then required under
Rule 16b-3 (or any successor rule under the Exchange Act), by the
stockholders of the entity which issued such predecessor awards.
16. GENERAL PROVISIONS
(a) No Distribution; Compliance With Legal Requirements, etc. The
Committee may require each person acquiring Common Stock pursuant to an Award
to represent to and agree with the Company in writing that such person is
acquiring the Common Stock without a view to distribution thereof.
The Company will not be obligated to deliver any shares of Common Stock
pursuant to an Award (1) until, in the opinion of the Company's counsel, all
applicable federal and state laws and regulations have been complied with,
including, if required, the receipt of all necessary approvals from the
Massachusetts Department of Public Utilities, and (2) if the outstanding
Common Stock is at the time listed on any stock exchange, until the shares
to be delivered have been listed or authorized to be listed on such exchange
upon official notice of issuance, and (3) until all other legal matters in
connection with the issuance and delivery of such shares have been approved
by the Company's counsel. If the sale of Common Stock has not been
registered under the Securities Act of 1933, as amended, the Company may
require such representations or agreements as counsel for the Company may
consider appropriate to avoid violation of such Act and may require that the
certificates evidencing such Common Stock bear an appropriate legend
restricting transfer.
Notwithstanding any provision of the Plan, the Company will be under no
obligation to deliver shares of Common Stock to an estate of a deceased
Participant, or to the person or persons to whom the Award has been
transferred by the Participant's will or the applicable laws of descent and
distribution, until the Company is satisfied as to the authority of such
person or persons.
(b) Tax Withholding, etc. Each Participant will, no later than the
date as of which the value of an Award or of any Common Stock or other
amounts received hereunder first becomes includable in gross income for
federal income tax purposes, pay to the Company, or make arrangements
satisfactory to the Committee regarding payment of, all federal, state and
local taxes required by law to be withheld with respect to such income. The
Company and its subsidiaries will, 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.
The Committee may provide, in respect of any transfer of Common Stock
under an Award, that if and to the extent withholding of any federal, state
or local tax is required, the Participant may elect in such manner as the
Committee prescribes, to have the Company hold back from the transfer Common
Stock having a value calculated to satisfy such withholding obligation, or
to deliver to the Company previously owned shares of equal value.
Notwithstanding the foregoing, in the case of a Participant subject to the
restrictions of Section 16(b) of the Exchange Act no such election shall be
effective unless made in compliance with any applicable requirements of
Rule 16b-3(e) or any successor rule under such Act.
(c) Continuance of Employment. For purposes of the Plan, employment
of a Participant will not be considered terminated (1) in the case of sick
leave or other bona fide leave of absence approved for purposes of the Plan
by the Committee, so long as the Participant's right to re-employment is
guaranteed either by statute or by contract, or (2) in the case of a
transfer to the employment of a corporation (or a parent or subsidiary
corporation of such corporation) issuing or assuming an option in a
transaction to which section 424(a) of the Code would apply.
(d) Fair Market Value. For purposes of the Plan, in general, "fair
market value" of a share of Common Stock on any date means the closing price
on such date as reflected in the New York Stock Exchange Composite Index.
If, however, the Committee determines that a different meaning is in any
circumstance necessary in order to comply with applicable law, such
different meaning will apply in that circumstance.
(e) Employment Rights. Neither the adoption of the Plan nor the grant
of Awards will confer upon any employee any right to continued employment
with the Company or any subsidiary or affect in any way the right of the
Company or any subsidiary to terminate the employment of an employee at any
time. Except as specifically provided by the Committee in any particular
case, the loss of existing or potential profit in Awards granted under this
Plan shall not constitute an element of damages in the event of termination
of the employment of an employee even if the termination is in violation of
an obligation of the Company to the employee by contract or otherwise.
(f) Awards Subject to Performance Conditions. The Committee may, at
the time any Award described in the Plan is granted, impose the condition
(in addition to any conditions specified or authorized in any other
provisions of the Plan), that performance goals must be met prior to the
Participant's realization of any vesting, payment or benefit under the
Award. Performance goals may be related to personal performance, corporate
performance, departmental performance, or any other category of performance
established by the Committee. The Committee will determine the performance
goals, the period or periods during which performance is to be measured,
and all other terms and conditions applicable to the Award. If necessary
in order to qualify an Award for the performance based remuneration
exception described in Section 162(m)(4)(C) of the Code and the regulations
thereunder, the Committee shall in writing preestablish one or more
specific, objectively determinable performance goal or goals (based solely
on one or more qualified performance criteria) no later than ninety (90)
days after the commencement of the period to which the performance relates
(or in any such other time as is required to satisfy the conditions of
Section 162(m)(4)(C) of the Code and the regulations thereunder). For
purposes of the preceding sentence, a qualified performance criterion is
any of the following: (i) earnings per share, (ii) individual performance
objectives, (iii) net income, (iv) proforma net income, (v) return on
designated assets, (vi) return on revenues, or (vii) satisfaction of
Company-wide or departmental based objectives.
17. EFFECT, DISCONTINUANCE, CANCELLATION, AMENDMENT AND TERMINATION
Neither adoption of the Plan nor the grant of Awards to a Participant
shall affect the Company's right to grant to such Participant awards that
are not subject to the Plan, to issue Common Stock to such Participant as a
bonus or otherwise, or to adopt other plans or arrangements under which
Common Stock may be issued to employees.
The Committee may at any time discontinue granting Awards under the
Plan. With the consent of the Participant, the Committee may at any time
cancel an existing Award in whole or in part and grant the Participant
another Award for such number of shares of Common Stock as the Committee
specifies, subject to Section 4(b). The Committee may at any time or times
amend the Plan or any outstanding Award for the purpose of satisfying the
requirements of any changes in applicable laws or regulations or for any
other purpose which may at the time be permitted by law; and may at any
time terminate the Plan as to any further grants of Awards; provided,
however, that (except to the extent expressly required or permitted herein)
no such amendment shall, without the approval of the stockholders of the
Company, (a) increase the maximum number of shares available for delivery
under the Plan, (b) change the group of employees eligible to receive
Awards under the Plan, (c) reduce the price at which ISOs may be granted,
(d) extend the time within which Awards may be granted, or (e) amend the
provisions of this Section 17, and no such amendment shall adversely affect
the rights of any Participant (without his consent) under any Award
previously granted.
As Adopted by the Board of Directors: January 23, 1997
As Approved by the Stockholders: May 15, 1997
EXHIBIT A
A "Change of Control" will occur for purposes of this Plan if (i) any
individual, corporation, partnership, company or other entity (a "Person"),
which term shall include a group, becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Securities Exchange Act of 1934, as
amended (the "Exchange Act")) of securities of the Company representing
more than 30% of the combined voting power of the Company's then-outstanding
securities (other than as a result of acquisitions of such securities from
the Company), (ii) there is a change of control of the Company of a kind
which would be required to be reported under Item 6(e) of Schedule 14A of
Regulation 14A promulgated under the Exchange Act) (or a similar item in a
similar schedule or form), whether or not the Company is then subject to such
reporting requirement, (iii) the Company is a party to, or the stockholders
approve, a merger, consolidation, or other reorganization (other than (a) a
merger, consolidation or other reorganization which would result in the
voting securities of the Company outstanding immediately prior thereto
continuing to represent, either by remaining outstanding or by being
converted into vested securities of the surviving entity, more than 50% of
the combined voting power of the voting securities of the Company or such
surviving entity outstanding immediately after such merger, consolidation,
or other reorganization, or (b) a merger, consolidation, or other
reorganization effected to implement a recapitalization of the Company or
establish a holding company structure, or similar transaction in which no
Person acquires more than 20% of the combined voting power of the Company's
then outstanding securities, a sale of all or substantially all assets, or a
plan of liquidation or (iv) individuals who, at the date hereof, constitute
the Board cease for any reason to constitute a majority thereof; PROVIDED,
HOWEVER, that any director who is not in office at the date hereof but whose
election by the Board or whose nomination for election by the Company's
stockholders was approved by a vote of at least a majority of the directors
then still in office who either were directors at the date hereof or whose
election or nomination for election was previously so approved (other than
an election or nomination of an individual whose initial assumption of office
is in connection with an actual or threatened election contest relating to
the election of the Directors of the Company, as such terms are used in
Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) shall be
deemed to have been in office at the date hereof for purpose of this
definition.
Notwithstanding the foregoing provisions of this EXHIBIT A, a "Change
of Control" will not be deemed to have occurred solely because of the
acquisition of securities of the Company (or any reporting requirement under
the Exchange Act relating thereto) by an employee benefit plan maintained by
the Company for its employees.