-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Aj0w85ylUA2e0Mcg+mmPE0meILrh9KzHeQelFrRVWCdUy757oppzx6M/vGiDFXwt 36YoclHo7WS1qCMfS97o2Q== 0000927016-98-003322.txt : 19980902 0000927016-98-003322.hdr.sgml : 19980902 ACCESSION NUMBER: 0000927016-98-003322 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 19980901 EFFECTIVENESS DATE: 19980901 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CONVERSE INC CENTRAL INDEX KEY: 0000716934 STANDARD INDUSTRIAL CLASSIFICATION: RUBBER & PLASTICS FOOTWEAR [3021] IRS NUMBER: 041419731 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-8 SEC ACT: SEC FILE NUMBER: 333-62691 FILM NUMBER: 98702576 BUSINESS ADDRESS: STREET 1: ONE FORDHAM RD CITY: NORTH READING STATE: MA ZIP: 01864 BUSINESS PHONE: 5086641100 MAIL ADDRESS: STREET 1: ONE FORDHAM ROAD CITY: NORTH READING STATE: MA ZIP: 01864 S-8 1 CONVERSE, INC FORM S-8 As filed with the Securities and Exchange Commission on September 1, 1998 Registration No. 333- ------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 -------------------------- CONVERSE INC. (Exact name of registrant as specified in its charter) DELAWARE 43-1419731 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) ONE FORDHAM ROAD NORTH READING, MASSACHUSETTS 01864 (Address of principal executive offices) CONVERSE INC. 1994 STOCK OPTION PLAN, AS AMENDED AND RESTATED AS OF FEBRUARY 25, 1998 CONVERSE INC. EMPLOYEE STOCK PURCHASE PLAN (Full title of the plans) JACK A. GREEN SENIOR VICE PRESIDENT AND GENERAL COUNSEL CONVERSE INC. ONE FORDHAM ROAD NORTH READING, MASSACHUSETTS 01864 (Name and address of agent for service) (978) 664-1100 (Telephone number, including area code, of agent for service) CALCULATION OF REGISTRATION FEE -------------------------------
===================================================================================================================== Proposed Proposed maximum maximum Amount of Title of securities Amount to be offering price per aggregate offering registration fee to be registered registered share price - --------------------------------------------------------------------------------------------------------------------- Common stock, without par value.. 1,500,000 shares (1) $3.09 (2) $4,635,000 $1,367.33 =====================================================================================================================
(1) Consisting of 1,000,000 shares issuable under the Converse Inc. 1994 Stock Option Plan, as Amended and Restated as of February 25, 1998, and 500,000 shares issuable under the Converse Inc. Employee Stock Purchase Plan. Pursuant to Rule 416 under the Securities Act of 1933, this Registration Statement also covers such additional shares as may hereinafter be offered or issued to prevent dilution resulting from stock splits, stock dividends, recapitalizations or certain other capital adjustments. (2) Estimated pursuant to Paragraphs (c) and (h) of Rule 457 under the Securities Act of 1933 solely for the purpose of calculating the registration fee, based upon the average of the high and low sales prices of shares of the Company's Common Stock on August 31, 1998, as reported on the New York Stock Exchange. PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENTS ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE. --------------------------------------- The following documents, as filed by the Company with the Securities and Exchange Commission (the "Commission"), are incorporated by reference in this Registration Statement and made as a part hereof: (a) the Company's Annual Report on Form 10-K for the year ended January 1998; (b) the Company's Quarterly Reports on Form 10-Q for the quarters ended April 4, 1998 and July 4, 1998; and (c) the description of the Common Stock of the Company that is contained in the Company's Form 10/A Amendment No. 2 to the Company's Registration Statement on Form 10, as filed with the Commission under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), on November 23, 1994. All reports and other documents subsequently filed by the Company with the Commission pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act after the date of this Registration Statement, but prior to the filing of a post-effective amendment to this Registration Statement which indicates that all securities offered by this Registration Statement have been sold or which deregisters all such securities then remaining unsold, shall be deemed to be incorporated by reference into this Registration Statement. Each document incorporated by reference into this Registration Statement shall be deemed to be a part of this Registration Statement, from the date of the filing of such document with the Commission until the information contained therein is superseded or updated by any subsequently filed document which is incorporated by reference into the Registration Statement. Any statement contained in a document incorporated by reference herein shall be deemed to be modified or superseded for purposes hereof to the extent that a statement contained herein (or in any other subsequently filed document that is also incorporated by reference herein) modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part hereof. Experts - ------- The financial statements incorporated in the Registration Statement by reference to the Annual Report on Form 10-K of Converse Inc. for the year ended January 3, 1998 have been so incorporated in reliance on the report of PricewaterhouseCoopers LLP, independent accountants, given on the authority of said firm as experts in auditing and accounting. ITEM 4. DESCRIPTION OF SECURITIES. ------------------------- Not Applicable ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL. -------------------------------------- Not Applicable ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS. ----------------------------------------- Section 145 of the Delaware General Corporation Law ("DGCL") permits indemnification of directors, officers, agents and controlling persons of a corporation under certain conditions and subject to certain limitations. Section 145 of the DGCL empowers a corporation to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that such person is or was a director, officer or agent of the corporation or another enterprise if serving at the request of the corporation. Depending on the character of the proceeding, a corporation may indemnify against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred in connection with such action, suit or proceeding if the person indemnified acted in good faith and in a manner such person reasonably believed to be in or not opposed to, the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe such person's conduct was unlawful. In the case of an action by or in the right of the corporation, no indemnification may be made with respect to any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Delaware Court of Chancery or the court in which such action or suit was brought shall determine that despite the adjudication of liability such person is fairly and reasonably entitled to indemnity for such expenses which the court shall deem proper. Section 145 of the DGCL further provides that to the extent a director or officer of a corporation has been successful in the defense of any action, suit or proceeding referred to above or in the defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by such person in connection therewith. As permitted by the DGCL, the Company's Amended and Restated Certificate of Incorporation provides that the directors of the Company shall not be personally liable to the Company or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director's duty of loyalty to the Company or its stockholders, (ii) for acts of omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the DGCL, relating to prohibited dividends or distributions or the repurchase or redemption of stock, or (iv) for any transaction from which the director derives an improper personal benefit. The Company's By-laws contain provisions for indemnification of directors, officers, employees and agents which are substantially the same as Section 145 of the DGCL and also permit Converse to purchase insurance on behalf of any such person against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person's status as such, whether or not Converse would have the power to indemnify such person against such liability under the foregoing provision of the By-laws. Converse maintains such insurance. ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED. ----------------------------------- Not Applicable 2 ITEM 8. EXHIBITS. --------------
EXHIBIT NUMBERS EXHIBIT - ------------------------------------------------------------------------------------ 4.1 Converse Inc. 1994 Stock Option Plan, as Amended and Restated as of February 25, 1998 4.2 Converse Inc. Employee Stock Purchase Plan 5 Opinion of General Counsel of the Registrant 23.1 Consent of General Counsel of the Registrant (included as part of Exhibit 5) 23.2 Consent of PriceWaterhouse Coopers, LLP 24 Power of Attorney (included as part of the signature page)
ITEM 9. UNDERTAKINGS. ------------ (a) The undersigned hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represents a fundamental change in the information set fourth in the Registration Statement; and (iii) To include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement. Provided, however, that subparagraphs (a)(1)(i) and (a)(1)(ii) of this section do not apply if the information required to be included in a post-effective amendment by those subparagraphs is contained in periodic reports filed by the Company pursuant to Section 13 or Section 15(d) of the Exchange Act that are incorporated by reference in the Registration Statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered that remain unsold at the termination of the offering. 3 (b) The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the Company's annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act that is incorporated by reference in this Registration Statement shall be deemed to be a new Registration Statement relating to the securities offered herein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (c) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted by directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue. 4 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Company certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in North Reading, Massachusetts on this 27th day of August, 1998. CONVERSE INC. By: /s/ Glenn N. Rupp ----------------------------------- Glenn N. Rupp Chief Executive Officer and Chairman of the Board Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by or on behalf of the following persons in the capacities and on the dates indicated. Each person, in so signing, also makes, constitutes and appoints Glenn N. Rupp and Donald J. Camacho, and each such officer acting singly, his true and lawful attorney-in-fact, in his name, place and stead to execute and cause to be filed with the Securities and Exchange Commission any or all amendments to this Registration Statement, with all exhibits and any and all documents required to be filed with respect thereto, and to do and perform each and every act and thing necessary to effectuate the same.
Name Title Date - ----------------------- --------------------------------- --------------- Chairman of the Board and Chief Executive Officer and Director (Principal Executive /s/ Glenn N. Rupp Officer) August 27, 1998 - ----------------------- Glenn N. Rupp Chief Financial Officer and Senior Vice President (Principal Financial and Accounting /s/ Donald J. Camacho Officer) August 27, 1998 - ----------------------- Donald J. Camacho /s/ Gilbert Ford Director August 27, 1998 - ----------------------- Gilbert Ford Director August 27, 1998 - ----------------------- Donald J. Barr
Director August 27, 1998 - ----------------------- Leon D. Black /s/ Julius W. Erving Director August 27, 1998 - ----------------------- Julius W. Erving /s/ Robert H. Falk Director August 27, 1998 - ----------------------- Robert H. Falk /s/ Michael S. Gross Director August 27, 1998 - ----------------------- Michael S. Gross /s/ Josh J. Hannan Director August 27, 1998 - ----------------------- John J. Hannan /s/ Joshua J. Harris Director August 27, 1998 - ----------------------- Joshua J. Harris /s/ John H. Kissick Director August 27, 1998 - ----------------------- John H. Kissick /s/ Richard B. Loynd Director August 27, 1998 - ----------------------- Richard B. Loynd /s/ John J. Ryan, III Director August 27, 1998 - ----------------------- John J. Ryan, III Director August 27, 1998 - ----------------------- Michael D. Weiner
INDEX TO EXHIBITS
EXHIBIT NUMBERS EXHIBIT - ------------------------------------------------------------------------------------ 4.1 Converse Inc. 1994 Stock Option Plan, as Amended and Restated as of February 25, 1998 4.2 Converse Inc. 1995 Employee Stock Purchase Plan 5 Opinion of General Counsel of the Registrant 23.1 Consent of General Counsel of the Registrant (included as part of Exhibit 5) 23.2 Consent of PriceWaterhouse Coopers, LLP 24 Power of Attorney (included as part of the signature page)
EX-4.1 2 STOCK OPTION PLAN AMENDED AND RESTATED 02/25/98 EXHIBIT 4.1 CONVERSE INC. 1994 STOCK OPTION PLAN (As Amended and Restated as of February 25, 1998) A. Objectives of the Plan. The Converse Inc. 1994 Stock Option Plan (the "Plan") of Converse Inc. (the "Corporation") is intended to encourage and provide opportunities for ownership of the Corporation's Common Stock by such key employees (including officers) of the Corporation and any subsidiaries of the Corporation, and persons providing bona fide consulting or advisory services to the Corporation and any subsidiaries (other than in connection with the offer or sale of securities of the Corporation in a capital raising transaction) ("consultants") as the Board of Directors of the Corporation (the "Board") or a committee thereof constituted for this purpose may from time to time determine. The Plan is also intended to provide incentives for such employees and consultants to put forth maximum efforts for the successful operation of the Corporation and its subsidiaries. By extending to such key employees and consultants the opportunity to acquire proprietary interests in the Corporation and to participate in its success, the Plan may be expected to benefit the Corporation and its shareholders by making its possible for the Corporation and its subsidiaries to attract and retain the best available talent and by providing such key employees and consultants with added incentives to increase the value of the Corporation's stock. B. Grants and Stock Subject to the Plan. Awards under the Plan may consist of grants of nonqualified stock options as described in Section 6, incentive stock options as described in Section 7, and restricted stock as described in Section 8. All grants shall be subject to the terms and conditions set forth herein and to such other terms and conditions consistent with this Plan as the Committee deems appropriate and as are specified in writing by the Committee to the individual in a grant instrument or an amendment to the grant instrument. The Committee shall approve the form and provisions of each grant instrument. Grants under a particular section of the Plan need not be uniform as among the grantees. There are reserved for issue under the Plan 3,300,000 shares of the Common Stock, without nominal or per value, of the Corporation (the "Shares"). Such Shares may be, in whole or in part, as the Board shall from time to time determine, authorized but unissued Shares, or issued Shares which shall have been reacquired by the Corporation. The maximum number of Shares with respect to which options may be granted to any individual during any calendar year is 500,000 and the maximum number of Shares with respect to which options may be granted to any individual during the term of the Plan is 750,000. Similarly, the maximum number of shares of restricted stock that may be granted to any individual during any calendar year is 500,00 and the maximum number of Shares with respect to which options may be granted to any individual during the term of the Plan is 750,000. C. Administration. Subject to the express provisions of the Plan, the Plan shall be administered by the Executive Compensation and Stock Option Committee of the Board (the "Committee"), and the Committee shall have plenary authority, in its discretion, to determine the individuals to whom, and the time or times at which, options, if any, shall be granted, the type of option to be granted (e.g., incentive or nonqualified) and the number of Shares to be subject to an option. Subject to the express provisions of the Plan, the Committee shall also have the plenary authority to interpret the Plan, to prescribe, amend and rescind rules and regulations regarding it, and to take whatever action is necessary to carry out the purposes of the Plan. The Committee's determinations or matters referred to in this Section 3 shall be conclusive. D. The Committee. The Committee shall consist of three or more members of the Board. The Committee shall be appointed by the Board, which may from time to time designate the number to serve on the Committee, appoint members of the Committee in substitution for members previously appointed and fill vacancies, however caused, in the Committee. No member of the Board while a member of the Committee shall be eligible to receive an option under the Plan. The Committee shall elect one of is members as its Chairman and shall hold its meetings at such times and places as it may determine. A majority of the members shall constitute a quorum. Any determination reduced to writing and signed by all the members of the Committee shall be fully as effective as if it had been made by a majority vote at a meeting duly called and held. The Committee may appoint a secretary, shall keep minutes of its meetings and shall make such rules and regulations for the conduct of its business as it shall deem advisable. 1. Eligibility. Options may be granted only to key employees (which term as used herein includes officers) of, and consultants to, the Corporation and of its subsidiary corporations (the "Subsidiaries") as the term "subsidiary corporation" is define in Section 424(f) of the Internal Revenue Code of 1986, as amended, (the "Code"). For the purposes of the Plan the term "employee" shall be an individual with an "employment relationship" as defined in Section 421 (Treasury Regulation Section 1.421-7(h)) of the Code. A member of the Board or of the board of directors of a subsidiary who is not also an employee of an consultant to the Corporation or of one of its subsidiaries shall not be eligible to receive an option. Nothing contained in the Plan shall be construed to limit the right of the Corporation to grant options otherwise than under the Plan in connection with (i) the employment of any person, (ii) the acquisition, by purchase, lease, merger, consolidation or otherwise, of the business or assets of another corporation, firm or association, including grants to employees thereof who become employees of the Corporation or a subsidiary, or (iii) other proper corporate purposes. 2. Nonqualified Stock Options. Unless it is designated an incentive stock option by the Committee, any option granted under the Plan shall be nonqualified and shall be in such form as the Committee may from time to time approve. Any such nonqualified stock option shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not inconsistent with the provisions of the Plan, as the Committee shall deem desirable: a. Option Price. The option price of Shares purchasable under ------------ an option shall be determined by the Committee in accordance with procedures established by the Committee. b. Option Period. The term of an option shall be fixed by the ------------- Committee, but no option shall be exercisable after the expiration of ten years from the date the option is granted. c. Exercisability. Option shall be exercisable at such time or -------------- times as determined by the Committee at or subsequent to grant; provided, however, that except as provided in Subsections (f), (g) and (h) of this Section 6, no option may be exercised at any time unless the holder is then regular employee of, or consultant to, the Corporation or a subsidiary and has continuously remained and employee or consultant at all times since the date of granting of the option. If any option granted under the Plan shall expire or terminate for any reason without ever having been exercised in full, the unissued shares subject thereto shall again be available for the purposes of the Plan. The proceeds of the sale of Shares subject to options are to be added to the general funds of the Corporation. d. Method of Exercise. Options which are exercisable may be ------------------ exercised in whole or in part at any time during the option period, by completing and delivering to the Corporation an option exercise from provided by the Corporation specifying the number of Shares to be purchased. Such form shall be accompanied by payment in full of the purchase price in cash. No shares shall be issued until full payment therefor has been made. e. Transferability of Options. No option shall be transferable -------------------------- by the optionee otherwise that as set forth below or by will or by the laws of descent and distribution, and such options shall be exercisable, during the optionee's lifetime, only by the optionee. Notwithstanding the foregoing, if the Committees in its sole discretion so permits, an optionee may transfer a nonqualified stock option to the optionee's spouse, parents or lineal descendants or to a trust for the benefit of such family members or to a partnership in which such family members are the only partners; provided that the option shall continue to be subject to the same terms and conditions as were applicable thereto immediately prior to the transfer. f. Termination by Reason of Death. If an optionee's ------------------------------ employment, or engagement as a consultant, by the Corporation or any subsidiary terminates by reason of death, as to those Shares with respect to which the option had become exercisable (under the provisions of the particular option) on the date of death, the stock option may thereafter be exercised by the legal representative of the estate or by the legatee of the optionee under the will of the optionee, during a period of one year (six month in the case of options granted before July 30, 1997) from the date of such death or until the expiration of the stated period of the option, whichever period is shorter. g. Terminating by Reason of Retirement or Permanent Disability. ------------------------------------------------------------ If an optionee's employment, or engagement as a consultant, by the Corporation or any subsidiary terminates by reason of retirement or permanent disability, as to those Shares with respect to which the option had become exercisable (under provisions of the particular option) on the date of termination of employment or such engagement, any stock option held by such optionee may thereafter be exercised for a period of one year following such date (or until three months following such date in the case of options granted before July 30, 1997); provided, however, that if the optionee dies within such period, any unexercised stock options held by such optionee shall thereafter be exercisable, to the extent it was exercisable at the time of death, for a period of one year (six months in the case of options granted before July 30, 1997) from the date of such death or for the stated term of the option, whichever period is shorter. h. Other Termination. If an optionee's employment, or ----------------- engagement as a consultant, terminates for any reason other than death, permanent disability, or retirement, as to those Shares with respect to which the option had become exercisable (under the provisions of the particular option) on the date of termination of employment or engagement as a consultant, any option held by such optionee may thereafter be exercised during the period of one month from the date of such termination of employment or the expiration of the stated period of the option, whichever period is shorter; provided, however, that if the optionee dies within such one-month period, any unexercised option held by such optionee shall thereafter be exercisable, to the extent to which it was exercisable at the time of death, for a period of six months from the date of such death or for the stated period of the option, whichever period is shorter. i. Option Buy out. The Committee may at any time offer to -------------- repurchase an option, other than an option which has been held for less than six months by an optionee who is subject to Section 16(b) of the Securities Exchange Act of 1934, the ("1934 Act"), based on such terms and conditions as the Committee shall establish and Communicate to the optionee at the time that such offer is made. E. Incentive Stock Option. Any option granted under the Plan shall, at the discretion of the Committee, qualify as an incentive stock option as defined in Section 422(b) of the Code and shall be in such form as the Committee may from time to time approve. Any such incentive sock option shall be subject to the following terms and conditions in addition to those set forth in Section 6 and shall contain such additional terms and conditions, not inconsistent with the provisions of the Plan, as the Committee shall deem desirable. 1. Eligibility. Incentive stock options shall not be granted to any ----------- individual who, at the time the option is granted, owns stock possessing more than ten percent of the total combined voting power of all classes of stock of the Corporation or its parent corporation (as the term "parent corporation" is defined in Section 424(e) of the Code) or its subsidiaries (a "Ten Percent Shareholder") unless: 1) the option price is at least 110% of the fair market value of the Shares subject to the option, and 2) the option states that it is not exercisable after the expiration of five years from the date the option is granted. Incentive stock options shall not be granted to a person who is not a Ten Percent Shareholder unless the option price is at least 100% of the faire market value of the Shares subject to the option on the date the option is granted. a. Limitation on Exercise of Options. The maximum aggregate --------------------------------- fair market value (determined at the time an option is granted) of the Shares with respect to which incentive stock options are exercisable for the first time by any optionee during any calendar year (under all plans of the Company and its parent corporation and subsidiaries) shall not exceed $100,000. If the foregoing $100,000 limit is exceeded with respect to an incentive stock option on account of the acceleration of the exercise of the option pursuant to Section 9 of the Plan, the portion of the incentive stock option in excess of the $100,000 limit shall be treated as a nonqualified stock option. If the provisions of this Section limit the exercisability of certain incentive stock options which would otherwise become exercisable on account of termination of employment, the Committee, in its sole discretion, shall determine the times at which such incentive stock options become exercisable so that the provisions of this Section 7(b) are not violated; provided, that in no event shall any incentive stock option be exercisable more than ten years from the date it is granted (five years in the case of incentive stock options granted to Ten Percent Shareholders (described in Section 7(a)). 2. Restricted Stock Grants. The Committee may issue or transfer shares of Corporation stock to an employee under a grant of restricted stock, upon such terms as the Committee deems appropriate. The following provisions are applicable to restricted stock: a. General Requirements. Shares of Corporation stock issued or -------------------- transferred pursuant to restricted stock grants may be issued or transferred for consideration or for no consideration, as determined by the Committee. The Committee may establish conditions under which restrictions on shares of restricted stock shall lapse over a period of time or according to such other criteria as the Committee deems appropriate. The period of time during which the restricted stock will remain subject to restrictions will be designated in the grant instrument as the "Restriction Period." b. Number of Shares. The Committee shall determine the number ---------------- of shares of Corporation stock to be issued or transferred pursuant to a restricted stock grant and the restrictions applicable to such shares. c. Requirement of Employment or Service. If the grantee ceases ------------------------------------ to be employed by, or provide service to, the Corporation during a period designated in the grant instrument as the Restriction Period, or if other specified conditions are not met, the restricted stock grant shall terminate as to all shares covered by the grant as to which the restrictions have not lapsed, and those shares of Corporation stock must be immediately returned to the Corporation. The Committee may, however, provide for complete or partial exceptions to this requirement as it deems appropriate. d. Restrictions on Transfer and Legend on Stock Certificate. -------------------------------------------------------- During the Restriction Period, a grantee may not sell, assign, transfer, pledge or otherwise dispose of the shares of restricted stock except to a successor grantee under subsection (g). Each certificate for a share of restricted stock shall contain a legend giving appropriate notice of the restrictions in the grant. The grantee shall be entitled to have the legend removed from the stock certificate covering the shares subject to restrictions when all restrictions on such shares have lapsed. The Committee may determine that the Corporation will not issue certificates for shares of restricted stock until all restrictions on such shares have lapsed, or that the Corporation will retain possession of certificates for shares of restricted stock until all restrictions on such shares have lapsed. e. Right to Vote and to Receive Dividends. Unless the -------------------------------------- Committee determines otherwise, during the Restriction Period, the grantee shall have the right to vote shares of restricted stock and to receive any dividends or other distributions paid on such shares, subject to any restrictions deemed appropriate by the Committee. f. Lapse of Restrictions. All restrictions imposed on --------------------- restricted stock shall lapse upon the expiration of the applicable Restriction Period and the satisfaction of all conditions imposed by the Committee. The Committee may determine, as to any or all restricted stock grants, that the restrictions shall lapse without regard to any Restriction Period. Further, all restrictions on restricted stock grants shall automatically lapse upon the occurrence of Change of Control (as defined under Section 9). g. Nontransferability of Restricted Stock Grants. Except as --------------------------------------------- provided below, only the grantee may exercise rights under a restricted stock grant during the grantee's lifetime. A grantee may not transfer those rights except by will or by the laws of descent and distribution. When a grantee dies, the personal representative or other person entitled to succeed to the rights of the grantee may exercise such rights. A successor grantee must furnish proof satisfactory to the Corporation of his or her right to receive the grant under the grantee's will or under the applicable laws of descent and distribution. 3. Adjustment Upon Changes in Capitalization, Etc. The aggregate number and class of share reserved under the Plan and with respect to which options may be granted to any individual, the number and class of shares subject to each option granted pursuant to the Plan and the option price per Share payable under each such option shall be appropriately and equitably adjusted in the event of any reclassification or increase or decrease in the number of the issued Shares of the Corporation by reason of a split-up or consolidation of Shares; the payment of a stock dividend; a recapitalization; a combination or exchange of Shares; a spin-off; or any like capital adjustment. Subject to the next paragraph, if the Corporation shall be reorganized or shall be merged with or into or consolidated with any other corporation, or shall set all or substantially all of its assets or effect a complete liquidation, each option, if any, then outstanding under the Plan, shall thereafter apply to such number and kind of securities, cash or other property as would have been issuable by reason of such reorganization, merger, consolidation, sale or liquidation to a holder of the number of Shares which were subject to the option, if any, immediately prior to such transaction. If the event of a proposed transaction of the type set forth in the preceding paragraph, the Committee may determine that each option then outstanding under the Plan, shall terminate as of a date to be fixed by the Committee and approved by the Board upon not less than thirty days' written notice to the optionee; and may further determine when and to the extent that, any option granted at least six months prior to such event to any optionee who has been an employee or consultant for one year or more prior to the date of such notice, shall be accelerated and such optionee shall be entitled to exercise such option without regard to any installment provision of the option prior to the termination date fixed in said notice; provided, however, that in no event shall the Committee have the right to make any determination provided for in this paragraph, if doing so would make any transaction ineligible for pooling of interest accounting treatment under APB No. 16 or any successor provision that but for such determination would be eligible for such treatment. All adjustments under this Section 9 shall be made by the Committee, subject to the approval of the Board, which action shall be final and conclusive. Anything to the contrary notwithstanding, upon a Change of Control (as hereinafter defined) and, in the case of options granted on or after April 1, 1996, subsequent termination of an optionee's employment by the Corporation or by the optionee as a result of a material breach by the Corporation of any employment agreement between the optionee and the Corporation, each option granted prior to such Change of Control shall become immediately exercisable in full. As used herein, "Change of Control" shall mean any of the following events: a. The acquisition (other than (i) from the Corporation of INTERCO INCORPORATED or (ii) by Apollo (as hereinafter defined)) by any person, entity or "group", within the meaning of Section 13(d)(3) or 14(d)(2) of the 1934 Act, excluding, for this purpose, the Corporation of its subsidiaries, or any employee benefit plan of the Corporation or its subsidiaries, of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the 1934 Act) of 20% or more of either the then outstanding Shares or the combined voting power of the Corporation's then outstanding voting securities entitled to vote generally in the election of directors if the beneficial ownership of such person, entity or "group" exceeds the beneficial ownership of Shares and the combined voting power of the Corporation's then outstanding securities entitled to vote generally in the election of directors held by any person or entity that acquired such Shares or securities having such voting power from the Corporation and by Apollo; or b. Individuals who, as of the Effective Date (as defined in Section 13), constitute the Board (as of such date, the "Incumbent Board"), cease for any reason to constitute at least a majority of the Board; provided, that any person becoming a director subsequent to the first anniversary of the Effective Date whose election, or nomination for election by the Corporation's stockholders, was approved by a vote of at least majority of the directors then compromising the Incumbent Board (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 Corporation, as such terms are sued in Rule 14a-11 of Regulation 14A promulgated under the 1934 Act) shall be considered as though such person were a member of the Incumbent Board; or c. Approval by the stockholders of the Corporation of a reorganization, merger or consolidation, in each case, with respect to which persons who were the stockholders of the Corporation immediately prior to such reorganization, merger or consolidation do not, immediately thereafter, own, directly or indirectly, more than 50% of the combined voting power entitled to vote generally in the election of directors of the reorganized, merged or consolidated company's then outstanding voting securities, or a liquidation or dissolution of the Corporation or the sale of all or substantially all of the assets of the Corporation, in each case, unless the transaction was approved by a majority of the directors then comprising the Incumbent Board. For purposes of the definition of "Change of Control", the term "Apollo" shall mean Apollo Advisors, L.P. and Lion Advisors, L.P. and any entity that controls, is controlled by or is under common control with Apollo Advisors, L.P. and Lion Advisors, L.P., including accounts under common management. 4. Amendments and Termination. The Board may amend, alter, or discontinue the Plan, but no amendment, alteration, or discontinuation shall be made which would impair the rights of an optionee under an option without the optionee's consent, or which without the approval of the stockholders would, except as is provided in Section 9, increase the total number of Shares reserved for the purpose of the Plan, change the employees or class of employees and consultants eligible to participant in the Plan, or extend the maximum option period under Section 6(b). The Committee may amend the terms of any option theretofore granted, prospectively or retroactively, but no such amendment shall impair the rights of any optionee without the consent of the optionee. The Committee may also substitute new options for previously granted options, including substitution for previously granted options having higher option prices. 5. General Provisions. a. The Committee may require each person purchasing Shares pursuant to an option under the Plan to represent to and agree with the Corporation in writing that the optionee is acquiring the Shares without a view to distribution thereof. The certificates for such Shares may include any legend which the Committee deems appropriate to reflect any restrictions on transfer. b. All certificates for Shares delivered under the Plan shall be subject to such stock-transfer orders and other restrictions as the Committee may deem advisable under the rules, regulations, and other requirements of the Securities and Exchange Commission, any stock exchange upon which the Shares are then listed, and any applicable federal or state securities law, and the Committee may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions. c. Nothing contained in the Plan shall prevent the Board from adopting other or additional compensation arrangements, subject to stockholder approval if such approval is required; and such arrangements may be either generally applicable or applicable only in specific cases. 6. Withholding of Taxes. a. Required Withholding. All grants under the Plan shall be -------------------- subject to applicable federal (including FICA), state and local tax withholding requirements. The Corporation shall have the right to deduct from all grants paid in cash, or from other wages paid to the grantee, any federal, state or local taxes required by law to be withheld with respect to such Grants. In the case of options and other grants paid in Corporation stock, the Corporation may require the grantee or other person receiving such shares to pay to the Corporation the amount of any such taxes that the Corporation is required to withhold with respect to such grants, or the Corporation may deduct from other wages paid by the Corporation the amount of any withholding taxes due with respect to such grants. b. Election to Withhold Shares. If the Committee so permits, a --------------------------- grantee may elect to satisfy the Corporation's income tax withholding obligation with respect to an option, or restricted stock paid in Corporation stock by having Shares withheld up to an amount that does not exceed the grantee's minimum applicable withholding tax rate for federal (including FICA), state and local tax liabilities. The election must be in a form and manner prescribed by the Committee and shall be subject to the prior approval of the Committee. 7. Effective Date of Plan. The Plan became effective on October 19, 1994 the date it was adopted by the Board and by the Company's then sole stockholder (the "Effective Date"). The Plan as amended and restated became be effective as of April 1, 1996. The Plan as further amended and restated herein shall be effective May 11, 1998, subject to stockholder approval. 8. Term of Plan. No option shall be granted pursuant to the Plan more than 10 years after the Effective Date, but options theretofore granted may extend beyond and be exercised after that date. EX-4.2 3 CONVERSE INC. EMPLOYEE STOCK PURCHASE PLAN EXHIBIT 4.2 CONVERSE INC. EMPLOYEE STOCK PURCHASE PLAN TABLE OF CONTENTS
Page ---- ARTICLE I. Introduction............................ 1 1.01 Statement of Purpose........................ 1 1.02 Internal Revenue Code Considerations........ 1 1.03 ERISA Considerations........................ 1 ARTICLE II. Definitions............................ 1 2.01 Board of Directors.......................... 1 2.02 Code........................................ 1 2.03 Committee................................... 1 2.04 Company..................................... 1 2.05 Effective Date.............................. 1 2.06 Election Date............................... 1 2.07 Eligible Employee........................... 1 2.08 Employee.................................... 1 2.09 Employer.................................... 1 2.10 Exchange Act................................ 1 2.11 Market Value................................ 1 2.12 Participant................................. 2 2.13 Plan........................................ 2 2.15 Purchase Agreement.......................... 2 2.16 Purchase Date............................... 2 2.17 Purchase Period............................. 2 2.18 Purchase Price.............................. 2 2.19 Stock....................................... 2 2.20 Subsidiary.................................. 2 ARTICLE III. Admission to Participation............ 2 3.01 Initial Participation....................... 2 3.02 Discontinuance of Participation............. 2 3.03 Readmission to Participation................ 2 ARTICLE IV. Stock Purchase and Resale.............. 3 4.01 Reservation of Shares....................... 3 4.02 Limitation on Shares Available.............. 3 4.03 Purchase Price of Shares.................... 3 4.04 Exercise of Purchase Privilege.............. 3 4.05 Payroll Deductions.......................... 3 4.06 Payment for Stock........................... 4 4.07 Share Ownership; Issuance of Certificates... 4 (i) 4.08 Withdrawal of Shares or Resale of Stock..... 5 ARTICLE V. Special Adjustments..................... 5 5.01 Shares Unavailable.......................... 5 5.02 Anti-Dilution Provisions.................... 5 5.03 Effect of Certain Transactions.............. 5 ARTICLE VI. Miscellaneous.......................... 5 6.01 Non-Alienation.............................. 5 6.02 Administrative Costs........................ 6 6.03 The Committee............................... 6 6.04 Amendment of the Plan....................... 6 6.05 Expiration and Termination of the Plan...... 6 6.06 Repurchase of Stock......................... 6 6.07 Notice...................................... 6 6.08 Government Regulation....................... 6 6.09 Headings, Captions, Gender.................. 6 6.10 Severability of Provisions, Prevailing Law.. 6
(ii) CONVERSE INC. EMPLOYEE STOCK PURCHASE PLAN ---------------------------- ARTICLE I. Introduction. 1.01 Statement of Purpose. The purpose of the Converse Inc. Employee -------------------- Stock Purchase Plan is to provide eligible employees of Converse Inc. (the "Company") and its Subsidiaries, who wish to become shareholders, an opportunity to purchase common stock of the Company. The Board of Directors of the Company believes that employee participation in stock ownership will be to the mutual benefit of both the employees and the Company. 1.02 Internal Revenue Code Considerations. The Plan is intended to ------------------------------------ constitute an "employee stock purchase plan" within the meaning of section 423 of the Internal Revenue Code of 1986, as amended. 1.03 ERISA Considerations. The Plan is not intended and shall not be -------------------- construed as constituting an "employee benefit plan," within the meaning of section 3(3) of the Employee Retirement Income Security Act of 1974, as amended. ARTICLE II. Definitions. 2.01 "Board of Directors" means the board of directors of the Company or a committee of the board of directors authorized to act on its behalf. 2.02 "Code" means the Internal Revenue Code of 1986, as amended. 2.03 "Committee" means the Company's Executive Compensation and Stock Option Committee. 2.04 "Company" means Converse Inc., a Delaware corporation. 2.05 "Effective Date" shall mean September 1, 1998. 2.06 "Election Date" means September 1 and March 1 within a Plan Year or such other dates as the Committee shall specify. 2.07 "Eligible Employee" means each Employee who (a) is classified by the Company as an employee (and not as an independent contractor no matter how characterized by a court or administrative agency), (b) is regularly scheduled to work more than 20 hours per week for the Employer, (c) has been an Employee for at least a 12 consecutive month period; and (d) is not deemed, for purposes of section 423(b)(3) of the Code, to own stock possessing five percent (5%) or more of the total combined voting power or value of all classes of stock of the Company or any Subsidiary. The term "Employee" shall not include any person employed by an Employer on a temporary basis nor shall it include any member of the Board who is not also employed by the Employer. 2.08 "Employee" means each person employed by an Employer. 2.09 "Employer" means the Company and each Subsidiary. 2.10 "Exchange Act" means the Securities Exchange Act of 1934, as amended, and as the same may hereafter be amended. 2.11 "Market Value" means the closing price of the Stock as reported in the Wall Street Journal as composite transactions for the relevant date (or the latest date for which such price was reported if such date is not a business day), or if not available, the last reported sale price thereof on the relevant date or (if there were no trades on that date) the latest preceding date upon which a sale was reported. 2.12 "Participant" means each Eligible Employee who elects to participate in the Plan. 2.13 "Plan" means the Converse Inc. Employee Stock Purchase Plan, as amended from time to time. 2.14 "Plan Year" means each 12 month period beginning each September 1 and ending on the next following August 31 during which the Plan is in effect. 2.15 "Purchase Agreement" means the instrument prescribed by the Committee pursuant to which an Eligible Employee may enroll as a Participant and subscribe for the purchase of shares of Stock on the terms and conditions offered by the Company. The Purchase Agreement is intended to evidence the Company's offer of an option to the Eligible Employee to purchase Stock on the terms and conditions set forth therein and herein. 2.16 "Purchase Date" means the last day of each Purchase Period. 2.17 "Purchase Period" means each period that begins on each Election Date coinciding with or following the Effective Date and ending on the day before the next Election Date or other period specified by the Committee during which the Participant's Stock purchase is funded through payroll deduction accumulations. 2.18 "Purchase Price" means the purchase price for shares of Stock purchased under the Plan, determined as set forth in Section 4.03. 2.19 "Stock" means the common stock of the Company. 2.20 "Subsidiary" means any present or future corporation (a) which constitutes a "subsidiary corporation" of the Company as that term is defined in section 424 of the Code, and (b) is designated as a participating entity in the Plan by the Committee. ARTICLE III. Admission to Participation. 3.01 Initial Participation. An Eligible Employee may elect to --------------------- participate in the Plan and may become a Participant effective as of any Election Date, by executing and filing with the Committee a Purchase Agreement at such time in advance of such Election Date as the Committee shall prescribe. The Purchase Agreement shall remain in effect until modified or canceled in accordance with the terms of this Plan. 3.02 Discontinuance of Participation. A Participant may voluntarily ------------------------------- cease his or her participation in the Plan and stop payroll deductions at any time by filing a notice of cessation of participation on such form and at such time in advance of the effective date as the Committee shall prescribe. Notwithstanding anything in the Plan to the contrary, if a Participant ceases to be an Eligible Employee, his or her participation automatically shall cease and no further purchase of Stock shall be made for the Participant. Any amounts withheld from a Participant's compensation that were not applied to the purchase of Stock prior to such cessation shall be returned to the Participant as soon as possible, without interest. 3.03 Readmission to Participation. Any Eligible Employee who has ---------------------------- previously been a Participant, who has discontinued participation (whether by cessation of eligibility or otherwise), and who wishes to be reinstated as a Participant may again become a Participant by executing and filing with the Committee a new Purchase Agreement. Reinstatement to Participant status shall be effective as of any Election Date, provided the Participant files a new Purchase Agreement with the Committee at such time in advance of the Election Date as the Committee shall prescribe. 2 ARTICLE IV. Stock Purchase and Resale. 4.01 Reservation of Shares. There shall be 500,000 shares of Stock --------------------- reserved for issuance or transfer under the Plan, subject to adjustment in accordance with the antidilution provisions hereinafter set forth. Except as provided in Section 5.02, the aggregate number of shares of Stock that may be purchased under the Plan shall not exceed the number of shares of Stock reserved under the Plan. 4.02 Limitation on Shares Available. Stock must be purchased in ------------------------------ whole shares only and the maximum number of shares of Stock that may be purchased for each Participant on a Purchase Date is the lesser of (a) the number of shares of Stock that can be purchased by applying the full balance of the Participant's withheld funds to the purchase of shares of Stock at the Purchase Price, or (b) the Participant's proportionate part of the maximum number of shares of Stock available under the Plan, as stated in Section 4.01. Notwithstanding the foregoing, if any person entitled to purchase shares pursuant to any offering under the Plan would be deemed for purposes of section 423(b)(3) of the Code to own stock (including any number of shares of Stock that such person would be entitled to purchase under the Plan) possessing five percent (5%) or more of the total combined voting power or value of all classes of stock of Company, the maximum number of shares of Stock that such person shall be entitled to purchase pursuant to the Plan shall be reduced to that number which, when added to the number of shares of stock that such person is deemed to own (excluding any number of shares of Stock that such person would be entitled to purchase under the Plan), is one less than such five percent (5%). Any amounts withheld from a Participant's compensation that cannot be applied to the purchase of Stock by reason of the foregoing limitation shall be returned to the Participant as soon as practicable, without interest. Notwithstanding the foregoing, however, any amounts withheld from a Participant's compensation that cannot be applied to the purchase of Stock solely by reason of the requirement that Stock be purchased in whole shares shall remain in the Plan and applied to the Participant's purchase of Stock during the subsequent Purchase Period, unless otherwise distributable under the terms of the Plan. 4.03 Purchase Price of Shares. Before the first day of each Purchase ------------------------ Period the Committee shall set the Purchase Price for such Purchase Period; provided, however, that in no event shall the Purchase Price per share of Stock sold to Participants pursuant to any offering under the Plan for any Purchase Period be less than the lesser of (a) 85% of the Market Value of such share on the first day of the Purchase Period, or (b) 85% of the Market Value of such share on the Purchase Date. 4.04 Exercise of Purchase Privilege. ------------------------------ (a) Each Participant shall be granted an option to purchase shares of Stock as of the first day of each Purchase Period at the Purchase Price specified in Section 4.03. The option shall continue in effect through the Purchase Date for the Purchase Period. Subject to the provisions of Section 4.02 above and of paragraph (c) of this Section 4.04, on each Purchase Date, the Participant shall automatically be deemed to have exercised his or her option to purchase shares of Stock. (b) There shall be purchased for the Participant on each Purchase Date, at the Purchase Price for the Purchase Period, the largest number of whole shares of Stock as can be purchased with the amounts withheld from the Participant's compensation during the Purchase Period. Each such purchase shall be deemed to have occurred on the Purchase Date occurring at the close of the Purchase Period for which the purchase was made. (c) In addition to the dollar limit prescribed under Section 4.02, a Participant may not purchase shares of Stock having an aggregate Market Value of more than $25,000, determined at the beginning of each Purchase Period, for any calendar year in which one or more offerings under this Plan are outstanding at any time, and a Participant may not purchase a share of Stock under any offering after the expiration of the Purchase Period for the offering. 4.05 Payroll Deductions. Each Participant shall authorize payroll ------------------ deductions from his or her compensation for the purpose of funding the purchase of Stock pursuant to his or her Purchase Agreement. In 3 the Purchase Agreement, each Participant shall authorize an after-tax payroll deduction from each payment of compensation during a Purchase Period of an amount not less than $10 per paycheck (in multiples of $10). Notwithstanding the foregoing, in no event shall a Participant authorize payroll deductions in excess of $10,000 for any Plan year. A Participant may change the deduction to any permissible level effective as of any Election Date. A change shall be made by the Participant's filing with the Committee a notice in such form and at such time in advance of the date on which the change is to be effective as the Committee shall prescribe. 4.06 Payment for Stock. The Purchase Price for all shares of Stock ----------------- purchased by a Participant under the Plan shall be paid out of the Participant's authorized payroll deductions. All funds received or held by the Company under the Plan are general assets of the Company, shall be held free of any trust or other restriction, and may be used for any corporate purpose. 4.07 Share Ownership; Issuance of Certificates. ----------------------------------------- (a) The shares of Stock purchased by a Participant on a Purchase Date shall, for all purposes, be deemed to have been issued or sold at the close of business on the Purchase Date. Prior to that time, none of the rights or privileges of a shareholder of the Company shall inure to the Participant with respect to such shares of Stock. All the shares of Stock purchased under the Plan shall be delivered by the Company in a manner as determined by the Committee and credited to a bookkeeping account maintained on behalf of such Participant and delivered in accordance with subsection (b). (b) The Committee, in its sole discretion, may determine that shares of Stock shall be delivered by the Company by (i) issuing and delivering to the Participant a certificate for the number of shares of Stock purchased by the Participant on a Purchase Date or during a calendar year or other period determined by the Committee, (ii) issuing and delivering a certificate or certificates for the number of shares of Stock purchased by all Participants on a Purchase Date or during a calendar year or other period determined by the Committee to a firm which is a member of the National Association of Securities Dealers, as selected by the Committee from time to time, which shares shall be maintained by such firm in a separate brokerage account for each Participant, or (iii) issuing and delivering a certificate or certificates for the number of shares of Stock purchased by all Participants on a Purchase Date or during the calendar year or other period determined by the Committee to a bank or trust company or affiliate thereof, as selected by the Committee from time to time, which shares may be held by such bank or trust company or affiliate in street name, but with a separate account maintained by such entity for each Participant reflecting such Participant's share interests in the Stock. Each certificate or account, as the case may be, may be in the name of the Participant or, if he or she designates on the Participant's Purchase Agreement, in the Participant's name jointly with the Participant's spouse, with right of survivorship. A Participant who is a resident of a jurisdiction that does not recognize such joint tenancy may have a certificate or account in the Participant's name as tenant in common with the Participant's spouse, with or without right of survivorship. No fractional shares may be purchased under the Plan and the balance of any amounts withheld from a Participant's compensation which are not applied to the purchase of Stock shall be returned to the Participant, without interest. (c) In addition to any restrictions or limitations on the resale of Stock purchased under the Plan set as forth in Section 4.08 or otherwise under the Plan, the Committee, in its sole discretion, may impose such restrictions or limitations as it shall determine on the resale of Stock, the issuance of individual stock certificates or the withdrawal from any shareholder accounts established for a Participant. (d) Any dividends payable with respect to shares of Stock credited to a shareholder account of a Participant established pursuant to Section 4.07(a) will be reinvested in shares of Stock and credited to the Participant's account. 4 4.08 Withdrawal of Shares or Resale of Stock. --------------------------------------- (a) A Participant may request a withdrawal of shares of Stock purchased under the Plan or order the sale of those shares at any time by making a request in such form and at such time as the Committee shall prescribe. (b) Notwithstanding the foregoing, in the event a Participant terminates his or her employment with all Employers or otherwise ceases to be an Eligible Employee, the Participant shall receive a distribution of his or her shares of Stock held in any shareholder account established pursuant to Section 4.07(a), unless the Participant elects to have the shares of Stock sold in accordance with such procedures as the Committee shall prescribe. (c) If a Participant is to receive a withdrawal or distribution of shares of Stock, or if shares are to be sold, the withdrawal, distribution or sale shall be made in whole shares of Stock. ARTICLE V. Special Adjustments. 5.01 Shares Unavailable. If, on any Purchase Date, the aggregate ------------------ funds available for the purchase of Stock would purchase a number of shares in excess of the number of shares of Stock then available for purchase under the Plan, the number of shares of Stock that would otherwise be purchased by each Participant for that Plan Year shall be proportionately reduced on the Purchase Date in order to eliminate such excess. The balance of any amounts withheld from a Participant's compensation which had not by such time been applied to the purchase of Company Stock shall be returned to the Participant, without interest. 5.02 Anti-Dilution Provisions. The aggregate number of shares of ------------------------ Stock reserved for purchase under the Plan, as provided in Section 4.01, and the calculation of the Purchase Price per share may be appropriately adjusted to reflect any increase or decrease in the number of issued shares of Stock resulting from a subdivision or consolidation of shares or other capital adjustment, or the payment of a stock dividend, or other increase or decrease in such shares, if effected without receipt of consideration by the Company. Any such adjustment shall be made by the Committee acting with the consent of, and subject to the approval of, the Board of Directors. 5.03 Effect of Certain Transactions. Subject to any required action ------------------------------ by the shareholders, if the Company shall be the surviving corporation in any merger or consolidation, any offering under the Plan shall pertain to and apply to the shares of stock of the Company. However, in the event of (a) a dissolution or liquidation of the Company, (b) a merger or consolidation in which the Company is not the surviving corporation, (c) any transaction that results in the Stock ceasing to be publicly traded, the Plan and any offering under the Plan shall terminate upon the effective date of such dissolution, liquidation, merger consolidation or transaction, and the balance of any amounts withheld from a Participant's compensation which had not by such time been applied to the purchase of Stock shall be returned to the Participant, without interest. ARTICLE VI. Miscellaneous. 6.01 Non-Alienation. The right to purchase shares of Stock under the -------------- Plan is personal to the Participant, is exercisable only by the Participant during the Participant's lifetime except as hereinafter set forth, and may not be assigned or otherwise transferred by the Participant. If a Participant dies, there shall be delivered to the executor, administrator or other personal representative of the deceased Participant such shares of Stock and such residual amounts as may remain to the Participant's credit from amounts withheld from the Participant's compensation as of the Purchase Date occurring at the close of the Purchase Period in which the Participant's death occurs, including shares of Stock purchased as of that date or prior thereto with moneys withheld from the Participant's compensation. 5 6.02 Administrative Costs. The Company shall pay all administrative -------------------- expenses associated with the operation of the Plan including expenses of issuance and sale of shares but excluding brokerage commissions on the sale of shares of Stock pursuant to Section 4.08. 6.03 The Committee. The Committee, shall have the authority and ------------- power to administer the Plan and to make, adopt, construe, and enforce rules and regulations not inconsistent with the provisions of the Plan and to make all required determinations including factual determinations. The Committee shall adopt and prescribe the contents of all forms required in connection with the administration of the Plan, including, but not limited to, the Purchase Agreement, payroll withholding authorizations, withdrawal documents, and all other notices required under the Plan. The Committee shall have the fullest discretion permissible under law in the discharge of its duties. The Committee's interpretations and decisions with respect to the Plan, shall be final, binding and conclusive. The Committee may, at its discretion, delegate or assign any or all of its day to day responsibilities, other than fiduciary and fiscal responsibilities, to the Company's Benefits Committee. 6.04 Amendment of the Plan. The Board of Directors may, at any time --------------------- and from time to time, amend the Plan in any respect, except that the shareholders of the Company must approve any amendment that increases the number of shares reserved for purposes of the Plan, any amendment that allows any person who is not an Eligible Employee to become a Participant, or any other amendment for which shareholder approval is required under Section 423 of the Code. 6.05 Expiration and Termination of the Plan. The Plan shall continue -------------------------------------- in effect for ten years from the Effective Date, unless terminated prior to that date pursuant to the provisions of the Plan or pursuant to action by the Board of Directors. The Board of Directors shall have the right to terminate the Plan at any time without prior notice to any Participant and without liability to any Participant. Upon the expiration or termination of the Plan, the balance, if any, then standing to the credit of each Participant from amounts withheld from the Participant's compensation which has not, by such time, been applied to the purchase of Stock shall be refunded to the Participant, without interest. 6.06 Repurchase of Stock. The Company shall not be required to ------------------- purchase or repurchase from any Participant any of the shares of Stock that the Participant acquires under the Plan. 6.07 Notice. A Purchase Agreement and any notice that a Participant ------ files pursuant to the Plan shall be on the form prescribed by the Committee and shall be effective only when received by the Committee. Delivery of such forms may he made by hand or by certified mail, sent postage prepaid, to Corporate Secretary, Converse Inc., Fordham Road, North Reading, MA 018642680. Delivery by any other mechanism shall be deemed effective at the option and discretion of the Committee. 6.08 Government Regulation. The Company's obligation to sell and to --------------------- deliver the Stock under the Plan is at all times subject to all approvals of any governmental authority required in connection with the authorization, issuance, sale or delivery of such Stock. 6.09 Headings, Captions, Gender. The headings and captions herein -------------------------- are for convenience of reference only and shall not be considered as part of the text. The masculine shall include the feminine, and vice versa. 6.10 Severability of Provisions, Prevailing Law. The provisions of ------------------------------------------ the Plan shall be deemed severable. In the event any such provision is determined to be unlawful or unenforceable by a court of competent jurisdiction or by reason of a change in an applicable statute, the Plan shall continue to exist as though such provision had never been included therein (or, in the case of a change in an applicable statute, had been deleted as of the date of such change). The Plan shall be governed by the laws of the State of Delaware to the extent such laws are not in conflict with, or superseded by, federal law. 6 EX-5 4 OPINION OF GENERAL COUNSEL OF THE REGISTRANT EXHIBIT 5 Converse Inc. One Fordham Road North Reading, Massachusetts 01864 August 27, 1998 Converse Inc. One Fordham Road North Reading, Massachusetts 01864 RE: CONVERSE INC. REGISTRATION STATEMENT ON FORM S-8 Ladies and Gentlemen: I am employed as General Counsel of Converse Inc., a Delaware corporation ("Converse" or the "Company"), and as such I, and attorneys working for me, have acted on behalf of Converse as counsel in connection with the preparation of the Registration Statement on Form S-8 (the "Registration Statement"), which Converse proposes to file with the Securities and Exchange Commission. The Registration Statement relates to the registration under the Securities Act of 1933, as amended (the "Securities Act"), of 1,500,000 shares of the Company's common stock, without par value (the "Shares"). The Shares are to be issued by the Company (i) upon exercise of certain stock options, and pursuant to awards of restricted stock, granted, or to be granted, to certain employees or consultants of Converse and its subsidiaries pursuant to the Converse Inc. 1994 Stock Option Plan, as amended and restated as of February 25, 1998 (the "1994 Plan") and (ii) upon purchase of shares by employees pursuant to the Converse Inc. Employee Stock Purchase Plan (the "Employee Stock Purchase Plan"). This opinion is rendered in accordance with the requirements of Item 601(b) (5) of Regulation S-K of the Securities and Exchange Commission. I, or such attorneys working for me, have examined or considered such matters of law and fact and such corporate records, certificates and other documents as I, or they, have deemed necessary. In the course of such examination, I, and such attorneys working for me, have assumed the genuineness of all signatures, the authenticity of all documents submitted as originals and the conformity to the originals of all documents submitted as certified, photostatic or conformed copies. I have relied, as to certain legal matters, on the advice of such attorneys working for me who are more familiar with such matters. Based on and subject to the foregoing and the qualifications set forth below, I am of the opinion that upon the issuance, delivery and, if applicable, payment for the Shares under the terms of the 1994 Plan and the Employee Stock Purchase Plan, as applicable, the Shares will be duly authorized, validly issued, fully paid and non-assessable. Converse Inc. August 27, 1998 Page 2 I am admitted to the Bar of the Commonwealth of Massachusetts, and I express no opinion as to the laws of any other jurisdiction other than the Delaware General Corporation Law. In that connection, you should be aware that I am not admitted to the Bar of the State of Delaware and am not an expert in the law of such jurisdiction. Accordingly, such opinions concerning the Delaware General Corporation Law are based upon my review of the Delaware General Corporation Law and my reasonable (although not necessarily complete) familiarity with the Delaware General Corporation Law as a result of my prior involvement in transactions involving such Law. I hereby consent to the filing of this opinion with the Securities and Exchange Commission as an Exhibit to the Registration Statement on Form S-8 being filed by the Company. In giving such consent, I do not thereby admit that I am acting within the category of persons whose consent is required under Section 7 of the Securities Act or the regulations of the Securities and Exchange Commission thereunder. Very truly yours, /s/ Jack A. Green ------------------ Jack A. Green EX-23.2 5 CONSENT OF INDEPENDENT ACCOUNTANT Exhibit 23.2: Consent of Independent Accountants ------------------------------------------------- We hereby consent to the incorporation by reference in this Registration Statement on Form S-8 of our report dated February 18, 1998, appearing on page F-2 of Converse Inc.'s Annual Report on Form 10-K for the year ended January 3, 1998. We also consent to the application of such report to the Financial Statement Schedule for the three years ended January 3, 1998 listed under Item 14(a) of Converse Inc.'s Annual Report on Form 10-K for the year ended January 3, 1998 when such schedule is read in conjunction with the financial statements referred to in our report. The audits referred to in such report also included this Financial Statement Schedule. We also consent to the reference to us under the heading "Experts" in such Registration Statement. /s/ PricewaterhouseCoopers LLP Boston, Massachusetts August 28, 1998 -----END PRIVACY-ENHANCED MESSAGE-----