Exhibit 10.39


 


Aspen
Technology, Inc.


 


2005
Stock Incentive Plan


 


Purpose


 


The purpose of this 2005 Stock Incentive Plan (the “Plan”) of Aspen
Technology, Inc., a Delaware corporation (the “Company”), is to advance
the interests of the Company’s stockholders by enhancing the Company’s ability
to attract, retain and motivate persons who are expected to make important
contributions to the Company and by providing such persons with equity
ownership opportunities and performance-based incentives that are intended to
align their interests with those of the Company’s stockholders.  Except where the context otherwise requires,
the term “Company” shall include any of the Company’s present or future parent
or subsidiary corporations as defined in Section 424(e) or (f) of
the Internal Revenue Code of 1986, as amended, and any regulations promulgated
thereunder (the “Code”) and any other business venture (including any joint
venture or limited liability company) in which the Company has a controlling
interest, as determined by the Board of Directors of the Company (the “Board”).


 


Eligibility


 


All of the Company’s employees, officers, directors, consultants and
advisors are eligible to receive options, stock appreciation rights, restricted
stock and other stock-based awards (each, an “Award”) under the Plan.  Each person who receives an Award under the
Plan is deemed a “Participant.”


 


Administration
and Delegation


 


Administration
by Board.  The Plan will be administered by the
Board.  The Board shall have authority to
grant Awards and to adopt, amend and repeal such administrative rules,
guidelines and practices relating to the Plan as it shall deem advisable.  The Board may correct any defect, supply any
omission or reconcile any inconsistency in the Plan or any Award in the manner
and to the extent it shall deem expedient to carry the Plan into effect and it
shall be the sole and final judge of such expediency.  All decisions by the Board shall be made in
the Board’s sole discretion and shall be final and binding on all persons
having or claiming any interest in the Plan or in any Award.  No director or person acting pursuant to the
authority delegated by the Board shall be liable for any action or
determination relating to or under the Plan made in good faith.


 


Appointment
of Committees.  To
the extent permitted by applicable law, the Board may delegate any or all of
its powers under the Plan to one or more committees or subcommittees of the
Board (a “Committee”).  All references in
the Plan to the “Board” shall mean the Board or a Committee of the Board or the
officers referred to in Section 3(c) to the extent that the Board’s
powers or authority under the Plan have been delegated to such Committee or
officers.


 


Delegation
to Officers.  To the extent permitted by applicable law,
the Board may delegate to one or more officers of the Company the power to
grant Awards to employees or officers of the Company or any of its present or
future subsidiary corporations and to exercise such other powers under the Plan
as the Board may determine, provided
that the Board shall fix the terms of the Awards to be granted by such officers
(including the exercise price of such Awards, which may include a formula by
which the exercise price will be determined) and the maximum number of shares subject
to Awards that the officers may grant; provided
further that no officer shall
be authorized to grant Awards to any “executive officer” of the Company (as
defined by Rule 3b-7 under the Securities Exchange Act of 1934, as amended
(the “Exchange Act”)) or to any “officer” of the Company (as defined by Rule 16a-1
under the Exchange Act).


 


Stock
Available for Awards


 


Number
of Shares.  Subject to adjustment under Section 9,
Awards may be made under the Plan for up to 4,000,000 shares of common stock,
$0.10 par value per share, of the Company (the “Common Stock”).  If any Award expires or is terminated,
surrendered or canceled without having been fully exercised or is forfeited in
whole or in part (including as the result of shares of Common Stock subject to
such Award being repurchased by the Company at the original issuance price
pursuant to a contractual repurchase right) or results in any Common Stock not
being issued, the unused Common Stock covered by such Award shall again be
available for the grant of Awards under the Plan.  In the case of Incentive Stock Options,
however, the foregoing provisions shall be subject to any limitations under the
Code.  Shares issued under the Plan may
consist in whole or in part of authorized but unissued shares or treasury
shares.


 


          (b) Per-Participant Sublimit.  Subject to adjustment under Section 9,
the maximum number of shares 


 

















 


of Common Stock with
respect to which Awards may be granted to any Participant under the Plan shall
be 1,000,000 per calendar year.  For purposes
of the foregoing limit, the combination of an Option in tandem with an SAR
(each as hereinafter defined) shall be treated as a single Award.  The per-Participant limit described in this Section 4(b) shall
be construed and applied consistently with Section 162(m) of the Code
or any successor provision thereto, and the regulations thereunder (“Section 162(m)”).


 

















 


Stock
Options


 


General.  The Board may grant options to purchase
Common Stock (each, an “Option”) and determine the number of shares of Common
Stock to be covered by each Option, the exercise price of each Option and the
conditions and limitations applicable to the exercise of each Option, including
conditions relating to applicable federal or state securities laws, as it
considers necessary or advisable.  An
Option that is not intended to be an Incentive Stock Option (as hereinafter
defined) shall be designated a “Nonstatutory Stock Option.”


 


Incentive
Stock Options.  An Option that the Board intends to be an “incentive
stock option” as defined in Section 422 of the Code (an “Incentive Stock
Option”) shall only be granted to employees of the Company, any of the Company’s
present or future parent or subsidiary corporations as defined in Section 424(e) or
(f) of the Code, and any other entities the employees of which are
eligible to receive Incentive Stock Options under the Code, and shall be
subject to and shall be construed consistently with the requirements of Section 422
of the Code.  The Company shall have no
liability to a Participant, or any other party, if an Option (or any part
thereof) that is intended to be an Incentive Stock Option is not an Incentive
Stock Option or for any action taken by the Board pursuant to Section 10(f),
including the conversion of an Incentive Stock Option to a Nonstatutory Stock
Option.


 


Exercise
Price.  The Board shall establish the exercise price
of each Option and specify such exercise price in the applicable option
agreement, provided that
the exercise price shall be not less than 100% of the Fair Market Value (as
defined below) at the time the Option is granted.


 


Duration
of Options.  Each Option shall be exercisable at such
times and subject to such terms and conditions as the Board may specify in the
applicable option agreement, provided that
no Option will be granted for a term in excess of 7 years.


 


Exercise
of Option.  Options may be exercised by delivery to the
Company of a written notice of exercise signed by the proper person or by any
other form of notice (including electronic notice) approved by the Board
together with payment in full as specified in Section 5(f) for the
number of shares for which the Option is exercised.  Shares of Common Stock subject to the Option
will be delivered by the Company following exercise either as soon as
practicable or, subject to such conditions as the Board shall specify, on a
deferred basis (with the Company’s obligation to be evidenced by an instrument
providing for future delivery of the deferred shares at the time or times
specified by the Board).


 


Payment
Upon Exercise.  Common Stock purchased upon the exercise of
an Option granted under the Plan shall be paid for as follows:


 


in
cash or by check, payable to the order of the Company;


 


except
as the Board may otherwise provide in an option agreement, by:


 


delivery
of an irrevocable and unconditional undertaking by a creditworthy broker to
deliver promptly to the Company sufficient funds to pay the exercise price and
any required tax withholding, or


 


delivery
by the Participant to the Company of a copy of irrevocable and unconditional
instructions to a creditworthy broker to deliver promptly to the Company cash
or a check sufficient to pay the exercise price and any required tax
withholding;


 


when
the Common Stock is registered under the Securities Exchange Act of 1934 (the “Exchange
Act”), by delivery of shares of Common Stock owned by the Participant valued at
their fair market value as determined by (or in a manner approved by) the Board
(“Fair Market Value”), provided:


 


such
method of payment is then permitted under applicable law,


 


such
Common Stock, if acquired directly from the Company, was owned by the
Participant for the minimum period of time, if any, as may be established by
the Board in its discretion, which minimum shall be, in the absence of a
determination by the Board to the contrary, six months, and


 


such
Common Stock is not subject to any repurchase, forfeiture, unfulfilled vesting
or other similar requirements;


 


to
the extent permitted by applicable law and by the Board, by:


 


delivery
of a promissory note of the Participant to the Company on terms determined by
the Board, or


 


payment
of such other lawful consideration as the Board may determine; or


 


by
any combination of the above permitted forms of payment.


 


Substitute
Options.  In connection with a merger or consolidation
of an entity with the Company or the acquisition by the Company of property or
stock of an entity, the Board may grant Options in substitution for any options
or other stock or stock-based awards granted by such entity or an affiliate
thereof.  Substitute Options may be
granted on such terms as the Board deems appropriate in the circumstances,
notwithstanding any limitations on Options contained in Section 2 or
elsewhere in this Section 5.


 

















 


Stock
Appreciation Rights


 


Nature of Stock Appreciation
Rights. A Stock Appreciation Right (“SAR”) is an Award entitling the holder
on exercise to receive an amount in cash or Common Stock or a combination
thereof (such form to be determined by the Board) determined in whole or in
part by reference to appreciation, from and after the date of grant, in the
fair market value of a share of Common Stock. 
SARs may be based solely on appreciation in the fair market value of
Common Stock or on a comparison of such appreciation with some other measure of
market growth such as (but not limited to) appreciation in a recognized market
index.  The date as of which such
appreciation or other measure is determined shall be the exercise date unless
another date is specified by the Board in the SAR Award.


 


Grants.  SARs may be granted in tandem with, or
independently of, Options granted under the Plan.


 


Rules
Applicable to Tandem Awards.  When SARs are expressly granted in tandem
with Options:


 


the SAR will be exercisable only at such time or times,
and to the extent, that the related
Option is exercisable (except to the extent designated by the Board in
connection with a Reorganization Event or a Change in Control Event) and will
be exercisable in accordance with the procedure required for exercise of the
related Option;


 


the
SAR will terminate and no longer be exercisable upon the termination or
exercise of the related Option, except to the extent designated by the Board in
connection with a Reorganization Event or a Change in Control Event and except
that a SAR granted with respect to less than the full number of shares covered
by an Option will not be reduced until the number of shares as to which the
related Option has been exercised or has terminated exceeds the number of
shares not covered by the SAR;


 


the
Option will terminate and no longer be exercisable upon the exercise of the
related SAR; and


 


the
SAR will be transferable only with the related Option.


 


Exercise of Independent
Stock Appreciation Rights.  A
SAR not expressly granted in tandem with an Option will become exercisable at
such time or times, and on such conditions, as the Board may specify in the SAR
Award.


 


Exercise.  A SAR may be exercised only by delivery to
the Company of a written notice of exercise signed by the proper person or
other form of notice (including electronic notice) approved by the Board,
together with any other documents required by the Board.


 


Restricted
Stock


 


Grants.  The Board may grant Awards entitling
recipients to acquire shares of Common Stock, subject to the right of the
Company to repurchase all or part of such shares at their issue price or other
stated or formula price (or to require forfeiture of such shares if issued at
no cost) from the recipient in the event that conditions specified by the Board
in the applicable Award are not satisfied prior to the end of the applicable
restriction period or periods established by the Board for such Award (each, a “Restricted
Stock Award”).  The conditions specified
by the Board shall be based in part or in whole on the achievement of
performance goals or standards established by the Board and shall not be based
solely on the passage of time.


 


Terms
and Conditions.  The Board shall determine the terms and
conditions of a Restricted Stock Award, including the conditions for repurchase
(or forfeiture) and the issue price, if any, subject to the latter sentence of Section 7(a).


 


Stock
Certificates.  Any stock certificates issued in respect of a
Restricted Stock Award shall be registered in the name of the Participant and,
unless otherwise determined by the Board, deposited by the Participant,
together with a stock power endorsed in blank, with the Company (or its
designee).  At the expiration of the
applicable restriction periods, the Company (or such designee) shall deliver
the certificates no longer subject to such restrictions to the Participant or
the Designated Beneficiary of such Participant. 
For these purposes, a “Designated Beneficiary” of a Participant shall be
(1) a beneficiary designated by such Participant, in a manner determined
by the Board, to receive amounts due or exercise rights of such Participant in
the event of such Participant’s death or (2) in the absence of such a
designation, the Participant’s estate.


 


Deferred
Delivery of Shares.  The Board may, at the time any Restricted
Stock Award is granted, provide that, at the time Common Stock would otherwise
be delivered pursuant to the Award, the Participant shall instead receive an
instrument evidencing the right to future delivery of Common Stock at such time
or times, and on such conditions, as the Board shall specify.  The Board may at any time accelerate the time
at which delivery of all or any part of the Common Stock shall take place.  The Board may also permit an exchange of
unvested shares of Common Stock that have already been delivered to a
Participant for an instrument evidencing the right to future delivery of Common
Stock at such time or times, and on such conditions, as the Board shall
specify.


 

















 


Limitations
on Vesting.  Notwithstanding any other provision of this
Plan, the Board may, in its discretion, either at the time a Restricted Stock
Award is made or at any time thereafter, waive its right to repurchase shares
of Common Stock (or waive the forfeiture thereof) or remove or modify any part
or all of the restrictions applicable to the Restricted Stock Award, provided
that the Board may only exercise such rights in extraordinary circumstances
that shall include:  death or disability
of the Participant; estate planning needs of the Participant; a merger,
consolidation, sale, reorganization, recapitalization, or change in control of
the Company; or any other nonrecurring significant event affecting the Company,
a Participant or the Plan.


 


Other
Stock-Based Awards


 


Other Awards of shares of Common Stock, and other Awards that are
valued in whole or in part by reference to, or are otherwise based on, shares
of Common Stock or other property, may be granted hereunder to Participants (“Other
Stock Unit Awards”), including Awards entitling recipients to receive shares of
Common Stock to be delivered in the future. 
Such Other Stock Unit Awards shall also be available as a form of
payment in the settlement of other Awards granted under the Plan or as payment
in lieu of compensation to which a Participant is otherwise entitled.  Other Stock Unit Awards may be paid in shares
of Common Stock or cash, as the Board shall determine.  Subject to the provisions of the Plan, the
Board shall determine the conditions of each Other Stock Unit Awards, including
any purchase price applicable thereto. 
At the time any Award is granted, the Board may provide that, at the
time Common Stock would otherwise be delivered pursuant to the Award, the
Participant will instead receive an instrument evidencing the Participant’s
right to future delivery of the Common Stock.


 


Adjustments
for Changes in Common Stock and Certain Other Events


 


Changes
in Capitalization.  In the event of any stock split, reverse
stock split, stock dividend, recapitalization, combination of shares,
reclassification of shares, spin-off or other similar change in capitalization
or event, or any distribution to holders of Common Stock other than an ordinary
cash dividend:


 


the
number and class of securities available under this Plan;


 


the
pre-Participant limit set forth in Section 4(b);


 


the
number and class of securities and exercise price per share of each outstanding
Option;


 


the
share and per-share provisions of each SAR,


 


the
repurchase price per share subject to each outstanding Restricted Stock Award;
and


 


the
share- and per-share-related provisions of each outstanding SAR and Other Stock
Unit Award,


 


shall be appropriately adjusted by the Company as
determined by the Board (or substituted Awards may be made, if applicable).


 


Reorganization
and Change in Control Events


 


Definitions


 


A
“Reorganization Event” shall mean:


 


any
merger or consolidation of the Company with or into another entity as a result
of which all of the Common Stock of the Company is converted into or exchanged
for the right to receive cash, securities or other property;


 


any exchange of all of the Common Stock of the
Company for cash, securities or other property pursuant to a share exchange
transaction; or


 


any liquidation or dissolution of the Company.


 


A
“Change in Control Event” shall mean:


 


the
acquisition by an individual, entity or group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Exchange Act) (a “Person”) of beneficial ownership of any
capital stock of the Company if, after such acquisition, such Person
beneficially owns (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) 50% or more of either (x) the then-outstanding shares of
common stock of the Company (the “Outstanding Company Common Stock”) or (y) the
combined voting power of the then-outstanding securities of the Company
entitled to vote generally in the election of directors (the “Outstanding
Company Voting Securities”); provided that
for purposes of this subsection (1), the following acquisitions shall not
constitute a Change in Control Event:  (I) any
acquisition directly from the Company (excluding an acquisition pursuant to the
exercise, conversion or exchange of any security exercisable for, convertible
into or exchangeable for common stock or voting securities of the Company,
unless the Person exercising, converting or exchanging such security acquired
such security directly from the Company or an 


 

















 


underwriter
or agent of the Company), (II) any acquisition by any employee benefit
plan (or related trust) sponsored or maintained by the Company or any
corporation controlled by the Company or (III) any acquisition by any
corporation pursuant to a Business Combination (as defined below) that complies
with clauses (x) and (y) of Section 9(b)(i)(B)(3); or


 


such time as the Continuing Directors (as defined
below) do not constitute a majority of the Board (or, if applicable, the Board
of Directors of a successor corporation to the Company), where the term “Continuing
Director” means at any date a member of the Board (x) who was a member of
the Board on the date of the initial adoption of this Plan by the Board or (y) who
was nominated or elected subsequent to such date by at least a majority of the
directors who were Continuing Directors at the time of such nomination or
election or whose election to the Board was recommended or endorsed by at least
a majority of the directors who were Continuing Directors at the time of such
nomination or election, provided that
there shall be excluded from this clause (y) any individual whose initial
assumption of office occurred as a result of an actual or threatened election
contest with respect to the election or removal of directors or other actual or
threatened solicitation of proxies or consents, by or on behalf of a person
other than the Board; or


 


the
consummation of a merger, consolidation, reorganization, recapitalization or
share exchange involving the Company or a sale or other disposition of all or
substantially all of the assets of the Company (a “Business Combination”),
unless, immediately following such Business Combination, each of the following
two conditions is satisfied:  (x) all
or substantially all of the individuals and entities who were the beneficial
owners of the Outstanding Company Common Stock and Outstanding Company Voting
Securities immediately prior to such Business Combination beneficially own,
directly or indirectly, more than 50% of the then-outstanding shares of common
stock and the combined voting power of the then-outstanding securities entitled
to vote generally in the election of directors, respectively, of the resulting
or acquiring corporation in such Business Combination (which shall include a
corporation that as a result of such transaction owns the Company or
substantially all of the Company’s assets either directly or through one or more
subsidiaries) (such resulting or acquiring corporation is referred to herein as
the “Acquiring Corporation”) in substantially the same proportions as their
ownership of the Outstanding Company Common Stock and Outstanding Company
Voting Securities, respectively, immediately prior to such Business
Combination, excluding
for all purposes of this clause (x) any shares of common stock or other
securities of the Acquiring Corporation attributable to any such individual’s
or entity’s ownership of securities other than Outstanding Company Common Stock
or Outstanding Company Voting Securities immediately prior to the Business
Combination); and (y) no Person (excluding the Acquiring Corporation or
any employee benefit plan (or related trust) maintained or sponsored by the
Company or by the Acquiring Corporation) beneficially owns, directly or
indirectly, 50% or more of the then-outstanding shares of common stock of the
Acquiring Corporation, or of the combined voting power of the then-outstanding
securities of such corporation entitled to vote generally in the election of
directors (except to the extent that such ownership existed prior to the
Business Combination); or


 


the
liquidation or dissolution of the Company.


 


“Good
Reason” shall mean any significant diminution in the Participant’s title,
authority, or responsibilities from and after such Reorganization Event or
Change in Control Event, as the case may be, or any reduction in the annual
cash compensation payable to the Participant from and after such Reorganization
Event or Change in Control Event, as the case may be.


 


“Cause”
shall mean any:


 


willful
failure by the Participant, which failure is not cured within 30 days of
written notice to the Participant from the Company, to perform his or her
material responsibilities to the Company, or


 


willful
misconduct by the Participant that affects the business reputation of the
Company.


 


Effect
on Options


 


Reorganization
Event.  Upon the occurrence of a Reorganization Event
(regardless of whether such event also constitutes a Change in Control Event),
or the execution by the Company of any agreement with respect to a
Reorganization Event (regardless of whether such event will result in a Change
in Control Event), the Board shall provide that all outstanding Options shall
be assumed, or equivalent options shall be substituted, by the acquiring or
succeeding corporation (or an affiliate thereof); provided
that if such Reorganization Event also constitutes a Change in Control Event,
except to the extent specifically provided to the contrary in the instrument
evidencing any Option or any other agreement between a Participant and the
Company, such assumed or substituted options shall become immediately
exercisable in full if, on or prior to the first anniversary of the date of the
consummation of the Reorganization Event, the Participant’s employment with the
Company or the acquiring or succeeding corporation is terminated for Good
Reason 


 

















 


by
the Participant or is terminated without Cause by the Company or the acquiring
or succeeding corporation.


 


For purposes hereof, an Option shall be considered to be assumed if,
following consummation of the Reorganization Event, the Option confers the
right to purchase, for each share of Common Stock subject to the Option
immediately prior to the consummation of the Reorganization Event, the
consideration (whether cash, securities or other property) received as a result
of the Reorganization Event by holders of Common Stock for each share of Common
Stock held immediately prior to the consummation of the Reorganization Event
(and if holders were offered a choice of consideration, the type of
consideration chosen by the holders of a majority of the outstanding shares of
Common Stock); provided that if
the consideration received as a result of the Reorganization Event is not
solely common stock of the acquiring or succeeding corporation (or an affiliate
thereof), the Company may, with the consent of the acquiring or succeeding
corporation, provide for the consideration to be received upon the exercise of
Options to consist solely of common stock of the acquiring or succeeding
corporation (or an affiliate thereof) equivalent in fair market value to the
per share consideration received by holders of outstanding shares of Common
Stock as a result of the Reorganization Event.


 


Notwithstanding the foregoing, if the acquiring or succeeding
corporation (or an affiliate thereof) does not agree to assume, or substitute
for, such Options, or in the event of a liquidation or dissolution of the
Company, the Board shall, upon written notice to the Participants, provide that
all then unexercised Options will become exercisable in full as of a specified
time prior to the Reorganization Event and will terminate immediately prior to
the consummation of such Reorganization Event, except to the extent exercised
by the Participants before the consummation of such Reorganization Event; provided that in the event of a Reorganization Event under
the terms of which holders of Common Stock will receive upon consummation
thereof a cash payment for each share of Common Stock surrendered pursuant to
such Reorganization Event (the “Acquisition Price”), then the Board may instead
provide that all outstanding Options shall terminate upon consummation of such
Reorganization Event and that each Participant shall receive, in exchange
therefore, a cash payment equal to the amount (if any) by which (1) the
Acquisition Price multiplied by the number of shares of Common Stock subject to
such outstanding Options (whether or not then exercisable), exceeds (2) the
aggregate exercise price of such Options.


 

















 


Change
in Control Event that is not a Reorganization Event.
Upon the occurrence of a Change in Control Event that does not also constitute
a Reorganization Event, except to the extent specifically provided to the
contrary in the instrument evidencing any Option or any other agreement between
a Participant and the Company, each such Option shall be immediately
exercisable in full if, on or prior to the first anniversary of the date of the
consummation of the Change in Control Event, the Participant’s employment with
the Company or the acquiring or succeeding corporation is terminated for Good
Reason by the Participant or is terminated without Cause by the Company or the
acquiring or succeeding corporation.


 


Effect
on Restricted Stock Awards


 


Reorganization
Event that is not a Change in Control Event.
Upon the occurrence of a Reorganization Event that is not a Change in Control
Event, the repurchase and other rights of the Company under each outstanding
Restricted Stock Award shall inure to the benefit of the Company’s successor
and shall apply to the cash, securities or other property that the Common Stock
was converted into or exchanged for pursuant to such Reorganization Event in
the same manner and to the same extent as they applied to the Common Stock
subject to such Restricted Stock Award.


 


Change
in Control Event.  Upon the occurrence of a Change in Control
Event (regardless of whether such event also constitutes a Reorganization Event),
except to the extent specifically provided to the contrary in the instrument
evidencing any Restricted Stock Award or any other agreement between a
Participant and the Company, each such Restricted Stock Award shall immediately
become free from all conditions or restrictions if, on or prior to the first
anniversary of the date of the consummation of the Change in Control Event, the
Participant’s employment with the Company or the acquiring or succeeding
corporation is terminated for Good Reason by the Participant or is terminated
without Cause by the Company or the acquiring or succeeding corporation.


 


Effect
on Other Stock Unit Awards.  The Board may specify in an Award at the time
of the grant the effect of a Reorganization Event and Change in Control Event
on any Other Stock Unit Award.


 


General
Provisions Applicable to Awards


 


Transferability
of Awards.  Except as the Board may otherwise determine
or provide in an Award, Awards shall not be sold, assigned, transferred,
pledged or otherwise encumbered by the person to whom they are granted, either
voluntarily or by operation of law, except by will or the laws of descent and
distribution or, other than in the case of an Incentive Stock Option, pursuant
to a qualified domestic relations order, and, during the life of the
Participant, shall be exercisable only by the Participant.  References to a Participant, to the extent
relevant in the context, shall include references to authorized transferees.


 


Documentation.  Each Award shall be evidenced in such form
(written, electronic or otherwise) as the Board shall determine.  Each Award may contain terms and conditions
in addition to those set forth in the Plan.


 


Board
Discretion.  Except as otherwise provided by the Plan,
each Award may be made alone or in addition or in relation to any other
Award.  The terms of each Award need not
be identical, and the Board need not treat Participants uniformly.


 


Termination
of Status.  The Board shall determine the effect on an
Award of the disability, death, retirement, authorized leave of absence or
other change in the employment or other status of a Participant and the extent
to which, and the period during which, the Participant, or the Participant’s
legal representative, conservator, guardian or Designated Beneficiary, may
exercise rights under the Award.


 


Withholding.  Each Participant shall pay to the Company, or
make provision satisfactory to the Company for payment of, any taxes required
by law to be withheld in connection with an Award to such Participant.  Except as the Board may otherwise provide in
an Award, for so long as the Common Stock is registered under the Exchange Act,
Participants may satisfy such tax obligations in whole or in part by delivery
of shares of Common Stock, including shares retained from the Award creating
the tax obligation, valued at their Fair Market Value; provided that, except as otherwise
provided by the Board, the total tax withholding where stock is being used to
satisfy such tax obligations cannot exceed the Company’s minimum statutory
withholding obligations (based on minimum statutory withholding rates for
federal and state tax purposes, including payroll taxes, that are applicable to
such supplemental taxable income). 
Shares surrendered to satisfy tax withholding requirements cannot be
subject to any repurchase, forfeiture, unfulfilled vesting or other similar
requirements.  The Company may, to the
extent permitted by law, deduct any such tax obligations from any payment of
any kind otherwise due to a Participant.


 


Amendment
of Award.  The Board may amend, modify or terminate any
outstanding Award, including substituting therefore another Award of the same
or a different type, changing the date of exercise or realization, and
converting an Incentive Stock Option to a Nonstatutory Stock Option, provided that the 


 

















 


Participant’s
consent to such action shall be required unless the Board determines that the
action, taking into account any related action, would not materially and
adversely affect the Participant.


 


Conditions
on Delivery of Stock.  The Company will not be obligated to deliver
any shares of Common Stock pursuant to the Plan or to remove restrictions from
shares previously delivered under the Plan until:


 


all
conditions of the Award have been met or removed to the satisfaction of the
Company,


 


in
the opinion of the Company’s counsel, all other legal matters in connection
with the issuance and delivery of such shares have been satisfied, including
any applicable securities laws and any applicable stock exchange or stock market
rules and regulations, and


 


the
Participant has executed and delivered to the Company such representations or
agreements as the Company may consider appropriate to satisfy the requirements
of any applicable laws, rules or regulations.


 


Acceleration.  The Board may at any time provide that any
Award shall become immediately exercisable in full or in part, free of some or
all restrictions or conditions, or otherwise realizable in full or in part, as
the case may be.


 


Performance
Conditions.


 


This
Section 10(i) shall be administered by a Committee approved by the
Board, all of the members of which are “outside directors” as defined by Section 162(m) (the
“Section 162(m) Committee”).


 


Notwithstanding
any other provision of the Plan, if the Section 162(m) Committee
determines at the time a Restricted Stock Award or Other Stock Unit Award is
granted to a Participant who is then an officer, that such Participant is, or
is likely to be as of the end of the tax year in which the Company would claim
a tax deduction in connection with such Award, a Covered Employee (as defined
in Section 162(m)), then the Section 162(m) Committee may
provide that this Section 10(i) is applicable to such Award.


 


If
a Restricted Stock Award or Other Stock Unit Award is subject to this Section 10(i),
than the lapsing of restrictions thereon and the distribution of cash or Shares
pursuant thereto, as applicable, shall be subject to the achievement of one or
more objective performance goals established by the Section 162(m) Committee,
which:


 


shall
be set by the Section 162(m) Committee within the time period
prescribed by, and shall otherwise comply with the requirements of, Section 162(m);


 


shall
be based on the attainment of specified levels of one or any combination of the
following:  (i) earnings per share, (ii) return
on average equity or average assets with respect to a pre-determined peer
group, (iii) earnings, (iv) earnings growth, (v) revenues, (vi) expenses,
(vii) stock price, (viii) market share, (ix) return on sales,
assets, equity or investment, (x) regulatory compliance, (xi) improvement
of financial ratings, (xii) achievement of balance sheet or income statement
objectives, (xiii) total shareholder return, (xiv) net operating profit after
tax, (xv) pre-tax or after-tax income, (xvi) cash flow or (xvii) such other
objective goals established by the Board;


 


may
be absolute in their terms or measured against or in relationship to other
companies comparably, similarly or otherwise situated;


 


may
be adjusted to exclude any one or more of (i) extraordinary items, (ii) gains
or losses on the dispositions of discontinued operations, (iii) the
cumulative effects of changes in accounting principles, (iv) the
write-down of any asset and (v) charges for restructuring and
rationalization programs; and


 


may
vary by Participant and may be different for different Awards.


 


Notwithstanding
any provision of the Plan, with respect to any Restricted Stock Award or Other
Stock Unit Award that is subject to this Section 10(i), the Section 162(m) Committee:


 


may
adjust downwards, but not upwards, the cash or number of Shares payable
pursuant to such Award; and


 


may
not waive the achievement of the applicable performance goals except in the
case of the death or disability of the Participant.


 


The
Section 162(m) Committee shall have the power to impose such other
restrictions on Awards subject to this Section 10(i) as it may deem
necessary or appropriate to ensure that such Awards satisfy all requirements
for “performance-based compensation” within the meaning of Section 162(m)(4)(C) of
the Code, or any successor provision thereto.


 


General


 


No
Right To Employment or Other Status.  No person shall have any claim or right to be
granted an Award, and the grant of an Award shall not be construed as giving a
Participant the right to continued employment or any other relationship with
the Company.  The Company expressly
reserves the right at any time to dismiss or otherwise terminate its
relationship with a Participant free from any liability or claim under the Plan,
except as expressly provided in the applicable Award.


 

















 


No
Rights As Stockholder.  Subject to the provisions of the applicable
Award, no Participant or Designated Beneficiary shall have any rights as a
stockholder with respect to any shares of Common Stock to be distributed with
respect to an Award until becoming the record holder of such shares.  Notwithstanding the foregoing, in the event
the Company effects a split of the Common Stock by means of a stock dividend
and the exercise price of and the number of shares subject to such Option are
adjusted as of the date of the distribution of the dividend (rather than as of
the record date for such dividend), then an optionee who exercises an Option
between the record date and the distribution date for such stock dividend shall
be entitled to receive, on the distribution date, the stock dividend with
respect to the shares of Common Stock acquired upon such Option exercise,
notwithstanding the fact that such shares were not outstanding as of the close
of business on the record date for such stock dividend.


 


Effective
Date and Term of Plan.  The Plan shall become effective on the date
on which it is adopted by the Board, but no Award may be granted unless and
until the Plan has been approved by the Company’s stockholders.  No Awards shall be granted under the Plan
after the tenth anniversary of the date on which the Plan was adopted by the
Board, but Awards previously granted may extend beyond that date.


 


Amendment
of Plan.  The Board may amend, suspend or terminate the
Plan or any portion thereof at any time; provided
that, to the extent determined by the Board, no amendment requiring stockholder
approval under any applicable legal, regulatory or listing requirement shall
become effective until such stockholder approval is obtained.  No Award shall be made that is conditioned
upon stockholder approval of any amendment to the Plan.


 


Provisions
for Foreign Participants.  The Board may modify Awards or Options
granted to Participants who are foreign nationals or employed outside the
United States or establish subplans or procedures under the Plan to recognize
differences in laws, rules, regulations or customs of such foreign
jurisdictions with respect to tax, securities, currency, employee benefit or
other matters.


 


Governing
Law.  The provisions of the Plan and all Awards
made hereunder shall be governed by and interpreted in accordance with the laws
of the Commonwealth of Massachusetts (without reference to the conflicts of
laws provisions thereof).


 


Construction.  The
headings of the Sections of this Plan are included only for convenience and
shall not affect the meaning or interpretation of this Plan.  References herein to Sections shall mean such
Sections of this Agreement, except as otherwise specified.  The words “herein” and “hereof” and other
words of similar import refer to this Plan as a whole and not to any particular
part of this Plan.  The word “including”
as used herein shall not be construed so as to exclude any other thing not
referred to or described.