Exhibit 10j
BELL ATLANTIC
1985 INCENTIVE STOCK OPTION PLAN
Restated as of July 1, 1996, to incorporate amendments adopted
through June 30, 1996
Section 1. Purpose. The Bell Atlantic 1985 Incentive Stock Option Plan
(the "Plan") is intended to provide key employees of Bell Atlantic Corporation
(the "Company") and its subsidiaries an opportunity to acquire common stock of
the Company. The Plan is expected to help the Company and its subsidiaries
attract, retain, and motivate key employees to work for the success of the
Company and its subsidiaries. With the exception of options granted under
section 6 of the Plan, options granted under the Plan are intended to be
incentive stock options as defined in section 422A(b) of the Internal Revenue of
1986 (the "Code"). Options granted under section 6 of the Plan are intended to
be nonqualified stock options.
Section 2. Administration.
(a) Human Resources Committee. The Plan shall be administered by the
Human Resources Committee of the Company's Board of Directors (the "Committee").
The Committee may delegate some or all of its administrative responsibility
under the Plan to one or more persons.
(b) Administration. The Vice President - Executive Compensation and
Benefits of Bell Atlantic Network Services, Inc. shall have the authority and
responsibility to act as "Plan Administrator" (as that term is used in this
Plan), including, without limitation, the authority and responsibility, with the
advice of counsel, to distribute summary descriptions of the Plan, to enter into
stock option agreements with optionees on behalf of the Company, to maintain
records of options granted and outstanding, and to administer transactions in
connection with the exercise of options by optionees. The Plan Administrator,
with the advice of counsel, shall have the authority to cause any outstanding
incentive stock options to be recharacterized as nonqualified stock options if
and when so required in order to comply with the requirements of applicable law.
Moreover, the Plan Administrator, with the advice of counsel, shall have the
right to respond to and decide any claims or disputes under the Plan and to
interpret the Plan, subject to the ultimate authority of the Committee to review
any appeal from any such claim or interpretation. In the event of any such
appeal, the action of the Committee shall be final and binding.
(c) Grant of Options. The Committee shall determine the key employees of
the Company and its subsidiaries to whom options may be granted under this Plan.
The Committee shall also determine the time at which options shall be granted
under the Plan, the number of shares for which these options shall be granted,
the time at which these options may be exercised, and the conditions under which
these options may be exercised. The Committee, in its sole discretion, shall
prescribe the terms and conditions of each option granted under the Plan.
(d) Liability. No member of the Committee may be held accountable for
any action taken under this Plan in good faith.
Section 3. Eligibility.
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Bell Atlantic 1985 Incentive Stock Option Plan (7/1/96) Page 1
(a) In General. Options may be granted to key employees of the Company
or any of its subsidiaries as defined in section 424(f) of the Code
("Subsidiaries").
(b) Directors. Options may not be granted to any director of the Company
or its Subsidiaries unless the director is also a key employee of the Company or
any of its Subsidiaries.
(c) Ten-Percent Shareholders. Incentive stock options may not be granted
under this Plan to shareholders of the Company or any of its Subsidiaries who
own more than ten percent of the total combined voting power of all classes of
stock of the Company or any of its Subsidiaries, unless the special requirements
of sections 5(a) and 5(c) relating to ten-percent shareholders are met.
(d) No Options for Committee. Options may not be granted under this Plan
to members of the Committee.
Section 4. Stock.
(a) Common Stock. Options may be granted under this Plan for shares of
the $1.00 par value common stock of the Company (the "Stock"). In the discretion
of the Treasurer of the Company, Stock distributed under this Plan may be
authorized but unissued shares or treasury shares; it may also be outstanding
shares acquired by the Company in the open market or elsewhere.
(b) Aggregate Share Limitation. The aggregate number of shares of Stock
(restated to take into account the stock splits of record on March 31, 1986 and
April 10, 1990) which may be distributed upon the exercise of options under this
Plan may not exceed 25 million shares, less the number of shares (restated to
take account of such splits) distributed under the Bell Atlantic 1985
Performance Share Plan. The expiration or termination of an option will not
reduce the number of shares which may be distributed under this Plan; but the
exercise of a stock appreciation right and the cancellation of the related
option shall reduce the number of shares which may be distributed under this
Plan by the number of shares for which the canceled option was granted. For
purposes of determining whether the aggregate share limitation of this paragraph
has been exceeded, the total number of shares distributed under this Plan shall
be reduced by the number of shares tendered by key employees in stock-for-stock
option exercise transactions under this Plan which occur after January 1, 1991.
(c) Individual Option Grant Limitation. In the absence of a Plan
amendment approved by the shareowners of the Company, the aggregate number of
options to purchase a class of stock of the Company which may be granted under
this Plan to any individual in any single calendar year shall be a number not
greater than one-half of one percent of the number of shares of that class of
stock which are issued and outstanding as of the first day of that calendar
year.
(d) Reorganization of the Company. The limitation on the aggregate
number of shares that may be distributed or granted under this Plan may be
adjusted in accordance with section 8 of the Plan (relating to
recapitalizations, etc., of the Company).
Section 5. Terms and Conditions of Incentive Stock Options. Each
incentive stock
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Bell Atlantic 1985 Incentive Stock Option Plan (7/1/96) Page 2
option granted under the Plan will be evidenced by a stock option agreement
("Agreement") between the Company and the individual to whom the option is
granted ("Optionee"). Each incentive stock option granted under the Plan will
comply with the following conditions:
(a) Option Price. The option price of an incentive stock option will not
be less than the fair market value of the Stock at the time an option is
granted. However, in the case of an Optionee who owns more than ten percent of
the total combined voting power of all classes of stock of the Company or any of
its Subsidiaries, the option price will not be less than one-hundred-ten percent
of the fair market value of the Stock at the time the option is granted. The
fair market value of the Stock shall be the mean between the highest and lowest
selling prices of the Stock on the day an option is granted, as reported on the
New York Stock Exchange Composite Tape. However, if there are no sales on the
day an option is granted, the fair market value of the Stock shall be a weighted
average of the means between the highest and lowest selling prices of the Stock
on the nearest day before and the nearest day after the day the option is
granted, as reported on the New York Stock Exchange Composite Tape; the average
is to be weighted inversely by the respective number of trading days between the
selling days and the day the option is granted.
(b) Dollar Limitation. With respect to any incentive stock options
granted on or after January 1, 1987, the aggregate fair market value (determined
at the time the option is granted) of the Stock with respect to which any such
incentive stock options are exercisable for the first time by the Optionee
during any calendar year shall not exceed $100,000. For purposes of the dollar
limitation under this Section 5(b), all incentive stock options which are
granted on or after January 1, 1987 by the Company or any of its Subsidiaries,
and which first become exercisable in the applicable year, shall be treated as
granted under this Plan and shall be subject to the aggregate fair market value
limit under this Section 5(b) for such year.
(c) Ten-Year Limitation. No incentive stock option may be exercised more
than ten years after it is granted. However, in the case of an Optionee who owns
more than ten percent of the combined voting power of all classes of stock of
the Company or any of its Subsidiaries, no incentive stock option may be
exercised more than five years after it is granted. Each Agreement must contain
this ten-year (or five-year) limitation. However, the Committee may grant
options which may only be exercised during a period of less than ten (or five)
years. In the case of any options which may only be exercised during a period of
less than ten (or five) years, each Agreement must contain this shorter
limitation.
(d) Exercise of Options. The Committee will determine the time at which
incentive stock options may be exercised and the conditions under which
incentive stock options may be exercised. Any restrictions upon exercise of an
option will be contained in the Agreement. Subject to these limitations, if any,
options may be exercised in whole or in part. They may be exercised on any
business day until they expire. However, no option may be exercised for fewer
than ten shares (or such other minimum number as may be established by the Plan
Administrator) unless fewer than ten shares (or such other number established by
the Plan Administrator) are outstanding, and the option is exhausted upon its
exercise. When an option is exercised, and before shares are transferred to an
Optionee upon his exercise of the option, the option price must be paid in full.
In the discretion of the Committee, the option price may be paid in cash, with
Stock, or in any combination of cash and Stock. If the option price may be paid
other than in cash, then the Agreement will specify the acceptable methods of
payment. If the option price may be paid in Stock, the Optionee may not tender
on or after January 1, 1991 any share of Stock which
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Bell Atlantic 1985 Incentive Stock Option Plan (7/1/96) Page 3
was acquired by the Optionee through exercise of an option less than six months
prior to the date of exercise for which the Stock is being tendered. An Optionee
will not have any of the rights of a shareholder by reason of an option until it
is exercised. The Committee in its sole discretion may accelerate the time at
which options may be exercised when it is in the best interests of the Company
and its Subsidiaries to do so.
(e) Seriatim Exercise. An incentive stock option granted prior to
December 31, 1986 (a "Pre-1987 ISO") may not be exercised by an Optionee if
there is an unexercised and unexpired incentive stock option granted to the
Optionee at an earlier time under this Plan (or under another plan of the
Company or any other company that was a Subsidiary when the incentive stock
option was granted). Each Agreement with respect to a Pre-1987 ISO grant shall
contain this restriction. This Section 5(e) shall not apply to any stock option
granted on or after January 1, 1987.
(f) Termination of Employment.
(i) In the case of any stock options for which the one-year
waiting period has not expired, the remaining waiting period shall be waived,
and a 90-day exercise period shall commence, on the day following the effective
date of either (1) an Optionee's termination of employment under a company-
initiated, voluntary or involuntary, force management or force reduction program
or initiative, or (2) an Optionee's cessation of employment by Bell Atlantic or
any Subsidiary as a direct consequence of the sale of the business unit or
Subsidiary which then employs the Optionee; provided, however, that this
paragraph will not apply to an Optionee whose employment is terminated for
unsatisfactory performance, misconduct, or refusal to accept a reassignment that
involves no relocation or downgrade. In case of a termination or cessation of
employment as described in clause "(1)" or "(2)" of the prior sentence, any
outstanding stock options which are exercisable on the date of such termination
or cessation of employment shall remain exercisable until the earlier of (a) the
90th day following the date of such termination or cessation of employment, or
(b) the tenth anniversary of the date of grant. Nothing in this paragraph is
intended to cause the post-employment exercise period to be shorter than may be
provided for under any other applicable sections of this Plan, such as those
relating either to retirement, death or termination of employment due to
disability.
(ii) Except as provided in paragraphs 5(j), 5(f)(i), 5(g) (relating
to retirement of an Optionee), 5(h) (relating to death of an Optionee), and 5(i)
(relating to disability of an Optionee), no incentive stock option may be
exercised by an Optionee after termination of the employment relationship
between the Optionee and the Company, or between the Optionee and a Subsidiary,
as the case may be. In the case of an Optionee who is transferred to the
Company, to a Subsidiary, or to Bell Communications Research, Inc. ("Bellcore"),
or who commences an approved Bellcore rotational assignment, the termination of
the employment relationship shall not be deemed to occur until the first date on
which the Optionee is employed neither by the Company, a Subsidiary, nor
Bellcore.
(g) Retirement. Except as provided in paragraph 5(j) or this paragraph
5(g), in the case of an Optionee who either:
(i) separates from service with a combination of age and years of
service (as calculated for retirement-eligibility purposes) that equals or
exceeds any of the following combinations:
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Age equal to or greater than: Service equal to or greater than:
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Any age 30 years
50 25 years
55 20 years
60 15 years
65 10 years, or
(ii) at the time of termination of employment satisfies such age and
service criteria for retirement as the Committee may have established, in its
discretion, on a case-by-case basis at the time of granting options to said
Optionee,
incentive stock options which are exercisable on the day of retirement may be
exercised during the remaining option term, but not more than five years after
the day of retirement. The Committee may, in its discretion, at the time of
granting options to some or all key employees, establish a permissible exercise
period following retirement which is shorter than the five-year period stated in
the previous sentence.
(h) Death. Except as provided in paragraph 5(j) or this paragraph 5(h),
in the case of the death of an Optionee while employed by the Company or a
Subsidiary, an incentive stock option may be exercised during the remaining
option term, but not more than one year after the day of death, by the person
entitled to exercise the option under the Optionee's will or under the laws of
descent and distribution. The Committee may, in its discretion, at the time of
granting options to some or all key employees, establish a permissible exercise
period following death which is shorter than the one-year period stated in the
previous sentence.
(i) Disability. Except as provided in paragraph 5(j) or this paragraph
5(i), in the case of an Optionee who becomes disabled within the meaning of
section 37(e)(3) of the Code while employed by the Company or a Subsidiary,
incentive stock options which are exercisable on the day the disability occurs
may be exercised during the remaining option term, but not more than five years
after the day the disability occurs, and options which are not exercisable on
the day the disability occurs may never be exercised. The Committee may, in its
discretion, at the time of granting options to some or all key employees,
establish a permissible exercise period following termination for disability
which is shorter than the five-year period stated in the previous sentence.
(j) Waiver of Limitations; Acceleration of Options. Upon an Optionee's
termination of employment, retirement, death, or disability, the Committee in
its sole discretion may waive the limitations on exercise of an incentive stock
option contained in paragraphs 5(f) through 5(i) when it is in the best
interests of the Company and its Subsidiaries to do so. Upon an Optionee's
termination of employment, retirement, death, or disability, the Committee may
also waive any requirements of paragraphs 5(d) and 5(l) that an incentive stock
option may not be exercised within a certain time of its grant when it is in the
best interests of the Company and its Subsidiaries to do so. However, the
Committee may not extend the period during which an incentive stock option could
otherwise be exercised.
(k) Transferability of Option. Except as provided in this paragraph
5(k), no incentive stock option will be transferable. Upon the death of an
Optionee, an incentive stock option may be transferred as provided in paragraph
5(h) (relating to death of an Optionee).
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Bell Atlantic 1985 Incentive Stock Option Plan (7/1/96) Page 5
Moreover, an Optionee may designate the person or persons who may exercise and
benefit from the option after the Optionee's death. During an Optionee's
lifetime, an incentive stock option may only be exercised by the Optionee. Each
Agreement will contain these restrictions on transferability.
(l) No Exercise within One Year of Grant. Except as provided in this
section 5(l) or in section 8(b) or 6(b) of this Plan, no option granted under
the Plan may be exercised within one year of its grant. The Committee may, in
its discretion, waive this limitation in the case of any or all options granted
to any or all Optionees when it is in the best interests of the Company and its
Subsidiaries to do so.
Section 6. Terms and Conditions of Nonqualified Options.
(a) General Provisions. Each nonqualified stock option granted under the
Plan will be evidenced by an Agreement between the Company and the Optionee. No
Agreement evidencing a nonqualified stock option shall also evidence an
incentive stock option. Each nonqualified option shall be subject to all the
terms and conditions of this Plan with the exception of section 5(c) (relating
to the ten-year limitation). No nonqualified stock option may be exercised more
than ten years after it is granted, except in the case of an Optionee who
becomes disabled within the meaning of section 37(e)(3) of the Code while
employed by the Company or a Subsidiary, in which case the nonqualified stock
option may be exercised not more than five years (or such shorter time limit as
the Committee may, in its discretion, prescribe) after the day the disability
occurs, without regard to the ten-year limitation. Each Agreement will contain
this restriction.
(b) Reload Options. Notwithstanding any other provision of this Plan,
the Committee may provide for the automatic granting of nonqualified stock
options ("reload options") to all or one or more classifications of key
employees, as designated by the Committee, upon the exercise by any such
designated key employees of options in transactions in which Stock is tendered
to pay the option price. In such a case, the number of reload options which
shall automatically be granted by the Company to a designated key employee shall
be equal to the number of shares of Stock tendered by the designated key
employee. The option price of each such reload option shall be equal to the fair
market value of the Stock on the date on which the reload option is
automatically granted, and such reload options shall expire on the same date as
the options then being exercised would have expired in the absence of being
exercised. Reload options shall be exercisable by the Optionee after the date on
which they are granted, subsequent to any waiting period that the Plan
Administrator with the advice of counsel determines is necessary or appropriate
to conform with legal or accounting requirements. Except as provided in this
section 6(b) to the contrary, the terms and conditions applicable to reload
options shall be the same as those that apply to other nonqualified options as
described in section 6(a).
Section 7. Stock Appreciation Rights. Incentive stock options and
nonqualified stock options granted under the Plan may, in the discretion of the
Committee, be coupled with stock appreciation rights in the same number of
shares of Stock for which the options are granted. Stock appreciation rights may
be exercised at the same time, and under the same conditions, as the incentive
stock options or nonqualified stock options to which they relate. Upon an
Optionee's exercise of a stock appreciation right, the Optionee shall be
entitled to a cash payment from the Company in an amount equal to the difference
between the fair market value of one share of Stock on the day the stock
appreciation right is exercised, as determined under section 5(a), and
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Bell Atlantic 1985 Incentive Stock Option Plan (7/1/96) Page 6
the option price of the related incentive stock option or nonqualified stock
option, and the related incentive stock option or nonqualified stock option
shall be canceled.
Section 8. Recapitalization of Company.
(a) Adjustments in Stock. In a transaction to which section 424(a) of the Code
applies, the share and option limitations of sections 4(b) and 4(c) may be
adjusted and the Stock subject to option under section 4(a) may be changed. The
Committee will determine the adjustments to be made in the case of
reorganization, recapitalization, stock split, stock dividend, combination of
shares, or any other change affecting the Stock. Adjustments in the shares
subject to option under the Plan may be in the aggregate number of shares
subject to option under the Plan; the number of shares for which any Optionee
has options; the option price of any options; and the type of stock subject to
option under the Plan.
(b) Acceleration of Options. In connection with a transaction to which section
424(a) of the Code applies, the Committee may waive any requirements of sections
5(d) and 5(l) that an incentive stock option may not be exercised within a
certain time of its grant. The Committee may waive these requirements in the
case of any or all Optionees. It may waive these requirements with respect to
any or all options granted to an Optionee. The Committee may take this action
either before or after the transaction to which section 424(a) of the Code
applies. If this action is taken by the Committee before the transaction occurs,
the action must be contingent upon the transaction occurring.
Section 9. Amendment and Termination. To the extent permitted by law, the
Committee or the Company's Board of Directors ("Board") may amend or suspend,
and the Board may terminate, this Plan. The Plan Administrator may make
administrative modifications to the Plan to comply with changes in applicable
law or to ensure effective and consistent administration of the Plan; provided,
however, that the Plan Administrator shall not amend the Plan in any manner
which alters the amount of the benefit provided under the Plan. Unless an
Optionee consents to an amendment, suspension, or termination of the Plan which
is adopted by the Board, the Committee or the Plan Administrator, no amendment,
suspension, or termination of the Plan will adversely affect the rights of an
Optionee with respect to any option granted to the Optionee. Moreover, without
approval of the owners of a majority of the shares of the Stock voting either in
person or by proxy at a duly convened meeting of the Company's shareowners, no
amendment to the Plan may:
(a) except as provided in section 8(a), increase the aggregate number
of shares subject to option under section 4(b) of the Plan or the number of
options which may be granted to an individual in a single calendar year under
section 4(c) of the Plan;
(b) except as provided in section 8(a), decrease the option price at
which options may be granted under section 5(a) of the Plan;
(c) extend the period during which any option may be exercised beyond
the limits stated in Section 5(c); or
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(d) extend the period during which options may be granted under
section 10 of the Plan.
The Vice President - Human Resources of the Company, with the advice of
counsel, has the authority to amend the Plan or modify the administration of the
Plan to the extent required to ensure that transactions under the Plan are
exempt to the maximum extent possible from the short-swing profit provisions of
Section 16(b) of the Securities Exchange Act of 1934.
Section 10. Effective Date. This Plan will be effective on the date it
is adopted by the Board. However, this adoption will be conditioned upon
approval of the Plan, within one year of its adoption, by owners of a majority
of the shares of the Stock voting either in person or by proxy at a duly
convened meeting of the Company's shareowners. All grants of incentive stock
options, nonqualified stock options, and stock appreciation rights granted
before shareowner approval of the Plan shall be conditioned on shareowner
approval of the Plan .
Section 11. Miscellaneous Provisions.
(a) No Right to Employment. No grant of an incentive stock option,
nonqualified stock option, or stock appreciation right under this plan shall
give an Optionee a right to continued employment by the Company or any
Subsidiary or otherwise interfere with the Company's or any Subsidiary's right
to discharge an Optionee, whether or not for cause.
(b) Tax Withholding. When the Company has an obligation to withhold any
federal, state, or local tax upon the exercise of an incentive stock option or a
nonqualified stock option under the Plan, the Optionee may pay the Company the
amount of the required withholding, in cash, at the time of exercising the
option, in lieu of the Company withholding the amount through the sale of
shares.
(c) Governing Law. This Plan shall be construed and enforced in
accordance with the laws of the State of Delaware (without regard to the
legislative or judicial conflict of laws rules of any state), except to the
extent superseded by federal law.
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