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Exhibit 10.1
1983 STOCK OPTION PLAN
FOR EMPLOYEES OF
BOLT BERANEK AND NEWMAN INC. AND SUBSIDIARIES
1. Purpose
This 1983 Stock Option Plan, hereinafter called the "Plan", is
intended to provide a special incentive to selected key employees of Bolt
Beranek and Newman Inc. (the "Company") and/or of its subsidiaries to further
the business of the Company and its subsidiaries. For purposes of the Plan, a
subsidiary is any corporation in which the Company owns, directly or
indirectly, stock possessing 50% or more of the total combined voting power of
all classes of stock.
2. Administration
The Plan shall be administered by the Board of Directors of the
Company and their interpretation of any provisions of the Plan or any option or
right granted under it, and the application of such provisions to any set of
facts, shall be final and binding on all concerned. That portion of the Plan
relating to stock depreciation rights shall be administered by the Committee
(as hereinafter defined). No member of the Board of Directors shall be liable
for any action or determination made in good faith. Any action or decision by
such Board or by a committee of such Board, as contemplated by the Plan, may be
by a majority of those directors present and acting, provided that a quorum is
present.
3. Eligibility
The employees who shall be eligible to participate in the Plan shall
be such key employees of the Company and its subsidiaries as a committee of the
Board of Directors consisting of not less than three Directors of the Company
(the "Committee") shall from time to time determine. Part-time as well as
full-time employees of the Company and its subsidiaries shall be eligible to
participate in the Plan. An eligible employee participating in the Plan is
hereinafter called a "Participant".
The members of the Committee shall be appointed by the Board of
Directors and may be removed by the Board at any time in its discretion.
No member of the Committee shall be eligible to receive an option or
right under the Plan or under any other plan of the Company or of any affiliate
of the Company entitling the participants therein to acquire stock, stock
options, or stock appreciation rights of the Company or any such affiliate (as
provided for in Rule 16b-3 promulgated by the Securities Exchange Commission
under the Securities Exchange Act of 1934, as amended) or shall have been so
eligible within one year prior to exercising discretion to select persons to
receive options or rights or to determine the number of shares to be covered by
options granted to any person.
No option granted under the Plan which is intended to be an "incentive
stock option" as defined in Section 422A of the Internal Revenue Code of 1986
(as it may from time to time be amended) (the "Code") shall be granted to a
Participant who at the time of grant owns stock possessing more than 10% of the
total combined voting power of all classes of stock of the Company or of its
subsidiaries unless the option so granted meets the requirements of Section
422A(c)(8) of the Code.
The number of shares subject to each option, the option price per
share of the share subject to each option, and whether each option is intended
to be an "incentive stock option" or a non-qualified stock options, shall be
determined by the Committee in its discretion, not inconsistently with the
other provisions hereof.
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4. Stock
The stock to be delivered on exercise of the options granted under the
Plan may be either shares of the Company's authorized but unissued Common Stock
or shares of reacquired Common Stock as the Board of Directors shall determine.
Subject to adjustment as hereinafter provided, the total number of shares of
Common Stock of the Company which may be issued on the exercise of options
granted under the Plan shall not exceed in the aggregate one million eight
hundred thousand (1,800,000) shares. Options may be granted in respect of
shares as to which prior options have expired or have terminated, in whole or
in part, or in respect of shares allocable to outstanding options, provided
that at no time shall options be granted which could cause the aggregate number
of shares issued or to be issued on the exercise of options granted under the
Plan to exceed the foregoing limitations of this paragraph 4.
5. Terms and Conditions of Options and Rights
Options granted under the Plan which are intended to be incentive
stock options shall contain such provisions as the Board of Directors or the
Committee considers necessary or advisable in order that the options may
qualify under Section 422A of the Code. In addition, options and rights
granted under the Plan shall be subject to the following terms and conditions,
and to such other terms and conditions not inconsistent therewith as the Board
of Directors or the Committee shall determine:
(a) Medium and Time of Payment
At the time of exercise of an option, payment in full of the option
price shall be made for all shares purchased on such exercise. Such price may
be paid in cash (including certified check or bank draft) or (unless the Board
of Directors in any case should determine otherwise) in shares of Common Stock
of the Company or partly in cash and partly in such shares, at the election of
the person exercising the option. If the price is paid in whole or in part in
shares, such shares shall be valued at their fair market value at the time of
exercise, as determined by the Board of Directors, in determining the extent to
which the option price has been paid in such shares. Notwithstanding the
foregoing, if the Board of Directors or the Committee so determines in
connection with the granting of an option or otherwise, the Company may make a
loan, on terms and at interest rates, if any, as may be specified, or otherwise
provide such assistance as the Board of Directors or the Committee deems
appropriate to enable or assist the optionee to exercise an option, provided
that no such loan or other assistance shall be made without approval of the
Board of Directors to the extent required by law or except in compliance with
other applicable laws and regulations.
(b) Number of Shares; Maximum Annual Limit
The option shall state the total number of shares to which is
pertains. Notwithstanding any other provision of the Plan, the aggregate fair
market value, determined at the time the option is granted, of the stock with
respect to which incentive stock options granted after December 31, 1986 are
exercisable for the first time by a Participant during any calendar year (under
all plans of his employer corporation and its parent and subsidiary
corporations) shall not exceed $100,000. The provisions of this subsection (b)
shall be construed and applied in accordance with Section 422(b)(7) of the Code
and the regulations, if any, promulgated thereunder.
(c) Option Price
The option price per share with respect to each option shall not be
less than the lesser of (a) 50% of the fair market value per share on the date
the option is granted, or (b) the net book value per share as of the end of the
fiscal quarter next preceding the date on which the option is granted. Net
book value per share as of a specified date shall be determined by dividing
consolidated Shareholders' equity as of that date, by the number of shares of
Common Stock issued and outstanding as of that date. The option price per
share with respect to each option which is intended to be an incentive stock
option shall not be less than the fair market value per share on the date the
option is granted.
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(d) Period of Option or Right
The period of each option and right shall be fixed by the Board of
Directors or the Committee, but no option or right shall be exercisable after
the expiration of ten years from the date it is granted.
(e) Exercise of Option or Right
Each option shall be made exercisable at such time or times, whether
or not in installments (which shall be cumulative), as the Board of Directors
or the Committee shall determine. In the case of an option not immediately
exercisable in full, the Board of Directors may at any time accelerate the time
at which all or any part of the option may be exercised. Any exercise of an
option must be in writing signed by the proper person and received by the
Company at its principal office in Cambridge, Massachusetts, accompanied by the
form of option and full payment for the number of shares in respect of which
the option is exercised. If the purchase price is paid in whole or in part in
shares of Common Stock of the Company, the certificates for such shares shall
be accompanied by appropriate instruments of transfer in form acceptable to the
Company. In the event an option is exercised by the executor or administrator
of a deceased Participant, or by the person or persons to whom the option has
been transferred by the Participant's will or the applicable laws of descent
and distribution, the Company shall be under no obligation to deliver stock
thereunder unless and until the Company is satisfied that the person or persons
exercising the option is or are the duly appointed executor or administrator of
the deceased Participant or the person or persons to whom the option has been
transferred by the Participant's will or by the applicable laws of descent and
distribution.
The Company shall not be obligated to deliver any shares or other
consideration unless and until, in the opinion of the Company's counsel, all
federal and state laws and regulations which the Company may deem applicable
have been complied with, nor, in the event the Common Stock is at the time
listed upon any national securities exchange, unless and until any shares to be
delivered have been listed or authorized to be added to the list upon official
notice of issuance upon such exchange, nor unless and until all other legal
matters in connection with issuance and deliver of the shares and exercise of
the option or right have been approved by the Company's counsel. Without
limiting the generality of the foregoing, the Company may require from the
Participant such investment representation or agreement, if any, as counsel for
the Company may consider necessary in order to comply with the Securities Act
of 1933 as amended, and may require that the Participant agree that any sale of
the shares will be made only on a national securities exchange or in such other
manner as is permitted by the Board of Directors and that the Participant will
notify the Company when he makes any disposition of the shares, whether by
sale, gift, or otherwise. The Company shall use its best efforts to achieve
any such compliance and the Participant shall take any action reasonably
requested by the Company in such connection.
(f) Non-Transferability of Options and Rights
No option or right may be transferred by the Participant otherwise
than by will or by the laws of descent and distribution, and during the
lifetime of the Participant, the option or right shall be exercisable only by
the Participant. An option or right held by the Participant at the time of his
death shall be exercisable only in accordance with the provisions and subject
to the limitations of subparagraph (h) and paragraph 6 below.
(g) Termination of Employment
Except as provided in paragraph 6 below, in the event that a
Participant shall cease to be employed by the Company other than by reason of
death, then at any time or times within 60 days thereafter any option under the
Plan may be exercised by the Participant as to all or any of the shares which
the Participant was entitled to purchase immediately prior to the termination
of his employment and except as so exercised, such option shall expire at the
end of such 60-day period, subject to the provisions of subparagraph (h) below.
Notwithstanding the foregoing, no option may be exercised after the expiration
of the option period.
For purposes of the preceding paragraph, if a Participant's employment
by the Company or its subsidiaries is terminated under circumstances entitling
the Participant to cash severance pay under any
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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
option held by the Participant at termination of employment shall be treated as
having been exercisable immediately prior to termination of employment as to
(i) those shares for which it was in fact exercisable immediately prior to
termination of employment without regard to this paragraph, plus (ii) any
additional shares for which it would have become exercisable during the
severance period (as hereinafter defined) had the Participant 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).
For purposes of this subsection (g), the following events shall not be
deemed a termination of employment:
(i) 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
(ii) 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.
(h) Death
Except as provided in paragraph 6 below, if a Participant dies at a
time when he is entitled to exercise an option, then at any time or times
within 180 days after his death, or in the event of the death of a Participant
within the 60-day period following termination of employment, then at any time
or times within 120 days after the date of death, such option may be exercised,
both as to that portion which was exercisable by the optionee immediately prior
to death and as to any remaining portion, by his executor or administrator or
the person or persons to whom the option is transferred by will or the
applicable laws of descent and distribution, and except as so exercised such
option shall expire at the end of the period specified above. Notwithstanding
the foregoing, no option may be exercised after expiration of the option
period.
(i) Other Provisions
An option granted under the Plan prior to January 1, 1987 which is
intended to be an incentive stock option shall provide that it is not
exercisable while there is outstanding (as that term is defined in Section
422A(c)(7) of the Code as in effect prior to the Tax Reform Act of 1986) any
incentive stock option (as that term is defined in the Code) which was granted,
before the granting of the new option, to such Participant to purchase stock in
his employer corporation or in a corporation which (at the time of the granting
of the new option) is a parent or subsidiary corporation of his employer
corporation, or in a predecessor corporation of any such corporations. The
foregoing provisions of this subsection (i) shall not apply to any incentive
stock option granted after December 31, 1986.
(j) Withholding
The Company shall have the right to require a Participant to remit to
the Company an amount sufficient to satisfy any federal, state or local
withholding tax requirements prior to the delivery of any shares or other
consideration upon exercise of an option or right under the Plan.
6. Award and Exercise of Replacement Options and Related Rights; Terms
The Committee may grant options under the Plan as replacement options
for outstanding units under the Company's Key Executive Performance Unit Plan
(the "Unit Plan"). Such replacement options shall include the following terms,
notwithstanding anything inconsistent therewith in other provisions of the
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Plan. In addition, replacement options may contain such other terms, not
inconsistent herewith and with the other provisions of the Plan, as the Board
of Directors or the Committee shall determine.
(a) Replacement options shall only be granted upon the voluntary
surrender by the Participant of all rights under the Unit Plan. Each
replacement option shall be for the number of shares equal to the number of
units in the Unit Plan surrendered by the Participant.
(b) In the event that a Participant shall cease to be employed
full-time by the Company, or shall die, at a time when he is entitled to
exercise a replacement option, then at any time or times after his termination
of full-time employment or his death, such replacement option may be exercised,
as to all or any of the shares which the Participant was entitled to purchase
under the replacement option immediately prior to his termination of full-time
employment or death, by him or his executor or administrator or the person or
persons to whom the option is transferred by will or the applicable laws of
descent and distribution, and except as so exercised such replacement option
shall expire at the end of the option period.
(c) For purposes of the Plan, a stock depreciation right is a
right granted to the holder thereof to receive, pursuant to the terms of the
right, an amount payable in cash generally equal to not more than the decrease
in the value of the shares purchased under the replacement option to which the
stock depreciation right is related, as more particularly set forth below in
this paragraph 6(c).
Each replacement option granted under the Plan shall be accompanied by
stock depreciation rights exercisable with respect to each share of stock
actually purchased upon exercise of the related replacement option. To the
extent a replacement option expires unexercised, the related stock depreciation
rights may not be exercised. In addition, no stock depreciation rights and no
replacement option accompanied by stock depreciation rights shall be exercised
earlier than six months after the date of grant.
Exercisable stock depreciation rights shall entitle the holder to
exercise such rights (to the ratable extent that the related replacement option
has been exercised) and to receive in satisfaction of the exercise of such
rights, subject to the limitations below, an amount, payable as provided below,
having an aggregate value equal tot he positive difference, if any, of (i) the
lesser of (A) the fair market value (if the Common Stock is at the time listed
upon any national securities exchange, on the basis of the closing price of the
Common Stock on that exchange on the date as of which such value is determined,
or if the Common Stock is not so listed, as determined by the Board of
Directors) of the shares of Common Stock purchased upon exercise of the
replacement option as of the date of such exercise, but in no event less than
an amount equal to seven times the per-share earnings of the Company publicly
reported by it for its four consecutive fiscal quarters which shall have been
reported next preceding the date of such exercise (exclusive of all
non-operating gains and losses, whether or not so considered under generally
accepted accounting principles, and disregarding the cost attributable to
amounts payable pursuant hereto and the related tax effect), times the number
of shares of Common Stock purchased upon such exercise, or (B) an amount equal
to twenty times the per-share earnings of the Company publicly reported by it
for its four consecutive fiscal quarters which shall have been reported next
preceding the date of such exercise (as limited above), times the number of
shares of Common Stock purchased upon such exercise, less (ii) the greater of
(A) $14, times the number of shares of Common Stock purchased upon such
exercise, or (B) the fair market value (if the Common Stock is at the time
listed upon any national securities exchange, on the basis of the closing price
of the Common Stock on that exchange on the date as of which such value is
determined, or if the Common Stock is not so listed, as determined by the Board
of Directors) as of the date of exercise of the stock depreciation right of the
shares of Common Stock purchased upon exercise of the replacement option (or,
to the extent such shares have been sold prior to such date of exercise of the
stock depreciation right, the amount received for such shares upon such sale).
Unless otherwise permitted or required by the Committee at any time,
any full or partial exercise of stock depreciation rights shall be made only
during the period beginning on the third business day following the date of
release for publication of quarterly or annual (as the case may be) summary
statements of sales and earnings of the Company and its subsidiaries, and
ending on the twelfth business day following such date, in each case next
succeeding the later of (i) 6 months from the date of exercise of the
replacement option as to which the stock depreciation rights relate, or (ii) in
the event that counsel for the Company should,
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during such 6 month period, render to the Company an opinion that the holder of
the stock depreciation rights is prohibited under the Federal securities laws
from selling publicly shares of Common Stock, then the date of an opinion of
counsel for the Company that the holder is not longer so prohibited. Any stock
depreciation rights exercisable but not exercised during such period shall
expire at the end of the said twelfth day.
Anything to the contrary herein notwithstanding and unless otherwise
permitted or required by the Committee at any time, stock depreciation rights
of any Participant shall not be exercisable and shall be void and of no force
or effect to the extent that the related option is exercised at a time when the
holder is not one of the persons specified in Section 16 of the Securities
Exchange Act of 1934, as amended, and at a time when the holder is not, in the
opinion of counsel for the Company, prohibited under the Federal securities
laws from selling publicly shares of Common Stock.
The Committee may elect to defer payments by the Company in respect of
exercises of stock depreciation rights, or to make such payments in
installments, if it shall determine in good faith that full payment would
unreasonably impair the operations or cash flow of the Company or would result
in any violation of any provision of any agreement to which the Company is then
a party or by which it is then bound, except in no event may any payments be
deferred beyond three years after the date of exercise of the stock
depreciation rights with respect to which such payments are owed, nor may any
payments be deferred beyond the occurrence of an event referred to in the
second sentence of Section 8 hereof, provided that in such event the obligation
of the Company to make immediate payments shall not exceed the net cash
received by the Company in such event. In the event of any deferral, all
Participants having stock depreciation rights with a common exercise date shall
be treated alike with respect to such payment, and all amounts not paid within
30 days after the exercise date shall bear interest at the lowest rate from
time to time available to the Company from its regular commercial banks under
its regular borrowing lines, such interest to be paid monthly.
(d) Upon the exercise of a replacement option by a holder thereof
who is at the time thereof a person specified in Section 16 of the Securities
Exchange Act of 1934, as amended, or who is, in the opinion of counsel for the
Company, prohibited at the time under the Federal securities laws from selling
shares of the Common Stock publicly, the Company shall make a loan to such
holder in an amount equal to the sum of the difference between the option price
per share and the par value per share, times the number of shares acquired upon
such exercise, plus any withholding taxes due as a result of the exercise.
Such loan shall accrue no interest and shall be payable in full not later than
30 days after the latest of (i) 6 months following the date of exercise if the
holder is at the time of exercise a person specified in Section 16 of the
Securities Exchange Act of 1934, as amended, (ii) the date of exercise (or
expiration, if unexercised) of the related stock depreciation rights,or (iii)
the date of an opinion of counsel for the Company that the holder is no longer
prohibited under the Federal securities laws from selling publicly shares of
Common Stock if the holder had been the subject of an opinion of such counsel
to the effect that he was so prohibited, but in no event later than 15 days
after the date of sale of any of the shares acquired upon such exercise.
7. Continuance of Employment
Neither the Plan nor any option or right imposes any obligation on the
Company or any subsidiary to continue the Participant's employment or any other
relationship between the Participant and the Company or any subsidiary, or
interferes in any way with the right of the Company or any subsidiary to
terminate the employment of any of its employees or such other relationship at
any time.
8. Adjustment upon Changes in Stock
In the event of a stock dividend, split-up, combination of shares,
recapitalization, merger in which the Company is the surviving corporation
(other than as provided below), or other similar capital change, or in the
event of a spin-off or other significant distribution of stock or property by
the Company to its shareholders, the Board of Directors shall make such
changes, if any, in the number and kind of shares of stock or securities of the
Company to be subject to the Plan and to options and rights then outstanding or
to be granted thereunder, the maximum number of shares of stock or securities
which may be issued on
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the exercise of options granted under the Plan, the option price, and other
relevant provisions as it considers equitable and appropriate, and the Board's
determination shall be binding on all persons. In the event of a consolidation
or merger in which the Company is not the surviving corporation, or in the
event another corporation acquires in a merger stock of the Company possessing
100% of the combined voting power of all classes of stock of the Company, or in
the event of complete liquidation of the Company, all outstanding options shall
thereupon terminate, provided that the Board of Directors shall, at least
twenty days prior to the effective date of any such consolidation, merger, or
liquidation, either (a) make all outstanding options immediately exercisable,
or (b) except for replacement options, arrange to have the surviving
corporation grant to the Participants substitute options on terms which the
Board determines to be fair and reasonable.
The Company may grant options under the Plan in substitution for stock
options held by employees of another corporation who concurrently become
employees of the Company or a subsidiary as the result of a merger or
consolidation of the employing corporation with the Company or a subsidiary or
the acquisition by the Company or a subsidiary of property or stock of the
employing corporation; provided that no such substitute option shall be granted
to a person who will be an executive officer or director of the Company. The
Committee may direct that the substitute options be granted on such terms and
conditions as the Committee considers appropriate in the circumstances.
9. Amendments
The Board of Directors may at any time discontinue granting options
under the Plan. The Board of Directors may at any time or times amend the Plan
or any outstanding option for the purpose of satisfying the requirements of any
applicable laws or regulations or for any other purpose which may at the time
be permitted by law, provided that, except as provided in paragraph 8, no such
amendment shall, without the approval of the shareholders of the Company, (a)
increase the maximum number of shares available under the Plan, (b) reduce the
minimum option price of options thereafter to be granted below the price
provided for in paragraph 5(c), (c) reduce the option price of outstanding
options below the price at which a new option could be granted under paragraph
5(c) at the time of such amendment, (d) extend the time within which options
may be granted, or (e) extend the period of an outstanding option beyond ten
years from the date of the amendment. No such amendment shall adversely affect
the rights of any Participant (without his consent) under any option
theretofore granted, provided, however, that the Committee may, in its sole
discretion, at any time amend or terminate that portion of any or all
replacement options as to which the Participant or Participants are, at the
time of amendment or termination, not entitled to exercise.
10. Termination of Plan
No option shall be granted under the Plan after April 27, 1993;
options theretofore granted may extend beyond that date (but not beyond April
26, 2003).
11. Approval of Shareholders
The Plan shall be subject to the approval of the shareholders of the
Company, which approval shall be secured within twelve months after the date
the Plan is adopted by the Board of Directors.
Rev. August 1994
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