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                                                                   Exhibit 10.5


                               MORNINGSTAR, INC.
                           2004 STOCK INCENTIVE PLAN
                           -------------------------




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                   MORNINGSTAR, INC. 2004 STOCK INCENTIVE PLAN
                   -------------------------------------------

                               TABLE OF CONTENTS

<Table>
<Caption>

                                                                         Page
                                                                         ----
<S>            <C>                                                       <C>
Article 1.     Establishment, Objectives and Duration...................   1
Article 2.     Definitions..............................................   1
Article 3.     Administration...........................................   7
Article 4.     Shares Subject to the Plan and Maximum Awards............   7
Article 5.     Eligibility and Participation............................   8
Article 6.     Options..................................................   9
Article 7.     Stock Appreciation Rights................................  13
Article 8.     Restricted Stock and Restricted Stock Units..............  13
Article 9.     Performance Shares.......................................  15
Article 10.    Performance Measures.....................................  16
Article 11.    Beneficiary Designation..................................  17
Article 12.    Deferrals................................................  17
Article 13.    Rights of Participants...................................  17
Article 14.    Amendment, Modification and Termination..................  17
Article 15.    Nontransferability of Awards.............................  18
Article 16.    Withholding..............................................  19
Article 17.    Indemnification..........................................  19
Article 18.    Successors...............................................  20
Article 19.    Breach of Restrictive Covenants..........................  20
Article 20.    Legal Construction.......................................  20
Appendix A     Special Provisions Applicable to Foreign Nationals
               and Employees Outside of the United States...............

</Table>









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                    MORNINGSTAR, INC. 2004 STOCK INCENTIVE PLAN
                    -------------------------------------------

ARTICLE 1.    ESTABLISHMENT, OBJECTIVES AND DURATION

      1.1     ESTABLISHMENT OF THE PLAN. Morningstar, Inc., an Illinois
corporation, hereby establishes this Morningstar, Inc. 2004 Stock Incentive
Plan (the "Plan") as set forth in this document. Capitalized terms used but
not otherwise defined herein will have the meanings given to them in Article
2. The Plan permits the grant of Nonstatutory Stock Options, Incentive Stock
Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units,
and Performance Shares. In addition, the Plan provides the opportunity for
the deferral of the payment of salary, bonuses and other forms of incentive
compensation.

      Subject to the approval of the Company's shareholders, the Plan will
become effective upon its approval by the Board of Directors, and will remain
in effect as provided in Section 1.3 hereof.

      1.2     PURPOSE OF THE PLAN. The purpose of the Plan is to promote the
success and enhance the value of the Company by linking the personal
interests of Participants to those of Company shareholders, and by providing
Participants with an incentive for outstanding performance. The Plan is
further intended to provide flexibility to the Company in its ability to
motivate, attract and retain the services of Participants upon whose
judgment, interest, and special effort the successful conduct of its business
is largely dependent.

      1.3     DURATION OF THE PLAN. The Plan will commence on the Effective
Date, as described in Article 2, and will remain in effect, subject to the
right of the Committee to amend or terminate the Plan at any time pursuant to
Article 14, until all Shares subject to it pursuant to Article 4 have been
issued or transferred according to the Plan's provisions. In no event may an
Award be granted under the Plan on or after the tenth annual anniversary of
the Effective Date.

      1.4     PLAN MERGER. The 2001 Morningstar Stock Option Plan, as
amended, the Amended and Restated 2000 Morningstar Stock Option Plan, and the
Amended and Restated 1993 Morningstar Stock Option Plan shall be merged into
this Plan as of the Effective Date. Stock options awarded under the Prior
Plans shall be governed by the terms of this Plan.

ARTICLE 2.    DEFINITIONS

      Whenever used in the Plan, the following terms have the meanings set
forth below, and when the meaning is intended, the initial letter of the word
is capitalized:

      "AFFILIATES" means (a) for purposes of Incentive Stock Options, any
corporation that is a Parent or Subsidiary of the Company, and (b) for all
other purposes hereunder, an entity that is (directly or indirectly)
controlled by, or controls, the Company.

      "AWARD" means, individually or collectively, a grant under this Plan to
a Participant of Nonstatutory Stock Options, Incentive Stock Options, Stock
Appreciation Rights, Restricted Stock, Restricted Stock Units, and
Performance Shares.

<Page>


      "AWARD AGREEMENT" means an agreement entered into by the Company and a
Participant setting forth the terms and provisions applicable to an Award or
Awards granted to the Participant or the terms and provisions applicable to
an election to defer compensation under Section 8.2.

      "BOARD" or "BOARD OF DIRECTORS" means the Board of Directors of the
Company.

      "CAUSE" shall mean the Participant's:

      (a)   willful neglect of or continued failure to substantially perform
            his or her duties with or obligations for the Company or an
            Affiliate in any material respect (other than any such failure
            resulting from his or her incapacity due to physical or mental
            illness);

      (b)   commission of a willful or grossly negligent act or the willful
            or grossly negligent omission to act that causes or is
            reasonably likely to cause material harm to the Company or an
            Affiliate; or

      (c)   commission or conviction of, or plea of NOLO CONTENDERE to,
            any felony or any crime significantly injurious to the Company
            or an Affiliate.

An act or omission is "willful" for this purpose if it was knowingly done, or
knowingly omitted, by the Participant in bad faith and without reasonable
belief that the act or omission was in the best interest of the Company or an
Affiliate. Determination of Cause shall be made by the Committee in its sole
discretion.

      "CHANGE IN CONTROL" means the occurrence of any one or more of the
following: (a) any "person" (as such term is defined in Section 3(a)(9) of
the Exchange Act and as used in Sections 13(d)(3) and 14(d)(2) of the
Exchange Act) who, after the Effective Date, becomes a "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
more than fifty percent (50%) of the Shares (other than Joe Mansueto, his
spouse and descendants, and any trustee or custodian for and on behalf of any
of them), (b) the consummation of a merger, consolidation, statutory share
exchange or similar form of corporate transaction involving the Company (a
"Business Combination"), unless immediately following such Business
Combination more than sixty percent (60%) of the total voting power of (i)
the company resulting from such Business Combination (the "Surviving
Company"), or (ii) if applicable, the ultimate parent company that directly
or indirectly has beneficial ownership of one hundred percent (100%) of the
voting securities eligible to elect directors of the Surviving Company (the
"Parent Company") is represented by Shares that were outstanding immediately
prior to such Business Combination (or, if applicable, is represented by
shares into which such Shares were converted pursuant to such Business
Combination), and such voting power among the holders thereof is in
substantially the same proportion as the voting power of such Shares among
the holders thereof immediately prior to the Business Combination, or (c) the
stockholders of the Company approve a plan of complete liquidation or
dissolution of the Company or a sale of all or substantially all of the
Company's assets.

      "CODE" means the Internal Revenue Code of 1986, as amended from
time to time.

                                      -2-
<Page>

      "COMMITTEE" shall mean the Compensation Committee of the Board of
Directors, the composition of which shall at all times satisfy the provisions
of Section 162(m) of the Code and shall consist of at least two directors who
are "independent directors" within the meaning of the NASDAQ marketplace
rules, and "nonemployee directors" within the meaning of Exchange Act Rule
16b-3.

      "COMPANY" means Morningstar, Inc., an Illinois corporation, and any
successor thereto as provided in Article 18.

      "CONSULTANT" means any person, including an advisor, engaged by the
Company or an Affiliate to render services to such entity and who is not a
Director or an Employee.

      "DIRECTOR" means any individual who is a member of the Board of
Directors.

      "DISABILITY" shall mean

      (a)   A physical or mental condition that would qualify a Participant
            for a disability benefit under the long-term disability plan of
            the Company applicable to him or her;

      (b)   If the Participant is not covered by such a long-term disability
            plan, disability as defined for purposes of eligibility for a
            disability award under the Social Security Act;

      (c)   When used in connection with the exercise of an Incentive
            Stock Option following termination of employment, disability within
            the meaning of Code Section 22(e)(3); or

      (d)   Such other condition as may be determined by the Committee
            in its sole discretion to constitute Disability.

      "EFFECTIVE DATE" means the date of the Plan's adoption by the Board
subject to the approval of the Plan by the Company's shareholders.

      "EMPLOYEE" means any person employed by the Company or an Affiliate in
a common law employee-employer relationship. A Participant shall not cease to
be an Employee for purposes of this Plan in the case of (i) any leave of
absence approved by the Company or (ii) transfers between locations of the
Company or among the Company, its Parent, any Subsidiary, or any successor.
For purposes of Incentive Stock Options, no such leave may exceed ninety (90)
days, unless reemployment upon expiration of such leave is guaranteed by
statute or contract. If reemployment upon expiration of a leave of absence
approved by the Company is not so guaranteed, on the one hundred and
eighty-first (181st) day of such leave any Incentive Stock Option held by the
Participant shall cease to be treated as an Incentive Stock Option and shall
be treated for tax purposes as a Nonstatutory Stock Option. Neither service
as a Director nor payment of a director's fee by the Company shall be
sufficient to constitute "employment" by the Company.

      "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor act thereto.

                                      -3-
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      "EXERCISE PRICE" means the price at which a Share may be purchased by a
Participant pursuant to an Option.

      "FAIR MARKET VALUE" shall be determined as follows:

      (a)   At all times prior to an IPO, "Fair Market Value" shall be
            determined pursuant to one or more Valuations conducted
            on behalf of the Company. The Committee shall determine Fair
            Market Value at its sole discretion, based upon the results
            of each Valuation, as more fully provided herein. At times
            when the Fair Market Value of a Share is determined pursuant
            to a Valuation, the following timing rules shall apply:

            (i)   In the event that the date on which a transaction
                  involving Shares occurs is within six (6) months
                  following the most recently completed Valuation, the
                  Fair Market Value of the Shares involved in the
                  transaction shall be determined by reference to the
                  results of the most recently completed Valuation.

           (ii)   In the event that the date on which a transaction involving
                  Shares occurs is six (6) months or more after the most
                  recently completed Valuation, the Fair Market Value of the
                  Shares involved in the transaction shall be determined by
                  reference to the results of the Valuation or Valuations that
                  the Committee, in its sole discretion, deems appropriate.

           The Committee shall have the authority to modify the results of any
           Valuation in any manner that it deems necessary to ensure the
           consistency of the determination of Fair Market Value throughout the
           term of the Plan.

      (b)   At all times following an IPO, "Fair Market Value" means

            (i)   the average of the high and low trading prices of the Shares
                  on the New York Stock Exchange or on such other national
                  securities exchange on which the Shares are listed, or, if the
                  Shares are not traded on any other exchange and are regularly
                  quoted on the NASDAQ National Market System, on the NASDAQ
                  National Market System if the Shares are admitted for
                  quotation thereon; or

           (ii)   if the Shares are not traded on any exchange or regularly
                  quoted on the NASDAQ National Market System, the mean between
                  the closing bid and asked prices of the Shares in the
                  over-the-counter market; or

          (iii)   if those bid and asked prices are not available, then the Fair
                  Market Value as of any given date shall be determined in good
                  faith by the Committee; or

           (iv)   the actual sale price of the Shares, where a Participant pays
                  the Exercise Price and/or any related withholding taxes to the
                  Company by tendering Shares issuable to the Participant upon
                  exercise of an Option.

                                      -4-
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      "FREESTANDING SAR" means a SAR that is granted independently of any
Options, as described in Article 7.

      "INCENTIVE STOCK OPTION" or "ISO" means an option to purchase Shares
granted under Article 6 that is designated as an Incentive Stock Option and
that is intended to meet the requirements of Code Section 422.

      "INITIAL PUBLIC OFFERING" or "IPO" means an initial public offering of
the Company's Shares pursuant to an effective registration statement filed
with the U.S. Securities and Exchange Commission.

      "NONSTATUTORY STOCK OPTION" or "NQSO" means an option to purchase
Shares granted under Article 6 that is not intended to meet the requirements
of Code Section 422.

      "OPTION" means an Incentive Stock Option or a Nonstatutory Stock
Option, as described in Article 6.

      "PARENT" means a "parent corporation," whether now or hereafter
existing, as defined in Code Section 424(e).

      "PARTICIPANT" means an Employee, Consultant or Director who the
Committee has selected to participate in the Plan pursuant to Section 5.2 and
who has an Award outstanding under the Plan.

      "PERFORMANCE-BASED EXCEPTION" means the performance-based exception
from the tax deductibility limitations of Code Section 162(m) and any
regulations promulgated thereunder.

      "PERFORMANCE PERIOD" means the time period during which performance
objectives must be met in order for a Participant to earn Performance Shares
granted under Article 9.

      "PERFORMANCE SHARE" means an Award of Shares with an initial value
equal to the Fair Market Value of a Share on the date of grant, which is
based on the Participant's attainment of certain performance objectives
specified in the Award Agreement, as described in Article 9.

      "PERSONAL LEAVE" means a leave of absence as described in Section 5.3.

      "PLAN" means the Morningstar, Inc. 2004 Stock Incentive Plan, as set
forth in this document, and as amended from time to time.

      "PRIOR PLANS" means the 2001 Morningstar Stock Option Plan, as amended,
the Amended and Restated 2000 Morningstar Stock Option Plan, and the Amended
and Restated 1993 Morningstar Stock Option Plan. The Prior Plans shall be
merged into this Plan as of the Effective Date and stock options awarded
under the Prior Plans shall be governed by the terms of this Plan.

      "RESTRICTION PERIOD" means the period during which the transfer of
Shares of Restricted Stock is limited in some way (based on the passage of
time, the achievement of performance objectives, or the occurrence of other
events as determined by the Committee, in its sole discretion) or the
Restricted Stock is not vested.

                                      -5-
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      "RESTRICTED STOCK" means a contingent grant of Shares awarded to a
Participant pursuant to Article 8. The Shares awarded to the Participant will
vest over the Restricted Period and according to the time-based or
performance-based criteria, specified in the Award Agreement.

      "RESTRICTED STOCK UNIT" or "RSU" means a notional account established
pursuant to an Award granted to a Participant, as described in Article 8,
that is (a) valued solely by reference to Shares, (b) subject to restrictions
specified in the Award Agreement, and (c) payable only in Shares. The RSUs
awarded to the Participant will vest according to the time-based or
performance-based criteria specified in the Award Agreement.

      "SERVICE" means the provision of services to the Company or its
Affiliates in the capacity of (i) an Employee, (ii) a Director, or (iii) a
Consultant. For purposes of this Plan, the transfer of an Employee from the
Company to an Affiliate, from an Affiliate to the Company or from an
Affiliate to another Affiliate shall not be a termination of Service.
However, if the Affiliate for which an Employee, Director or Consultant is
providing services ceases to be an Affiliate of the Company due to a sale,
transfer or other reason, and the Employee, Director or Consultant ceases to
perform services for the Company or any Affiliate, the Employee, Director or
Consultant shall incur a termination of Service.

      "SHARES" means the shares of common stock, no par value, of the Company.

      "STOCK APPRECIATION RIGHT" or "SAR" means an Award of the contingent
right to receive Shares or cash, as specified in the Award Agreement, in the
future, based on the value, or the appreciation in the value, of Shares,
pursuant to the terms of Article 7. SARs may be granted alone or in
connection with a related Option.

      "SUBSIDIARY" means a "subsidiary corporation", whether now or hereafter
existing, as defined in Code Section 424(f).

      "TANDEM SAR" means a SAR that is granted in connection with a related
Option pursuant to Article 7, the exercise of which requires forfeiture of
the right to purchase a Share under the related Option (and when a Share is
purchased under the Option, the Tandem SAR will similarly be canceled).

      "VALUATION" means a periodic valuation conducted on behalf of the
Company, pursuant to such terms and methodologies that the Committee, in its
sole discretion, deems appropriate. At all times prior to an IPO, the
Committee shall establish the Fair Market Value of Shares in reliance upon
one or more Valuations.

      "VESTED" means, with respect to an Option, that such Option has become
fully or partly exercisable; provided, however, that notwithstanding its
status as a Vested Option, an Option shall cease to be exercisable pursuant
to (and while exercisable shall be subject to) such terms as are set forth
herein and in the relevant Award Agreement. Similarly, terms such as "Vest,"
"Vesting," and "Unvested" shall be interpreted accordingly.

                                      -6-
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ARTICLE 3.    ADMINISTRATION

      3.1     THE COMMITTEE. The Plan will be administered by the Committee,
or by any other committee appointed by the Board whose composition satisfies
the "nonemployee director" requirements of Rule 16b-3 under the Exchange Act
and the regulations of Rule 16b-3 under the Exchange Act, the "independent
director" requirements of the NASDAQ marketplace rules, and the "outside
director" provisions of Code Section 162(m), or any successor regulations or
provisions.

      3.2     AUTHORITY OF THE COMMITTEE. Except as limited by law and
subject to the provisions of this Plan, the Committee will have full power
to: select Employees, Directors and Consultants to participate in the Plan;
determine the sizes and types of Awards; determine the terms and conditions
of Awards in a manner consistent with the Plan; construe and interpret the
Plan and any agreement or instrument entered into under the Plan; establish,
amend or waive rules and regulations for the Plan's administration; and
(subject to the provisions of Article 15) amend the terms and conditions of
any outstanding Award to the extent they are within the discretion of the
Committee as provided in the Plan. Further, the Committee will make all other
determinations that may be necessary or advisable to administer the Plan. As
permitted by law and consistent with Section 3.1, the Committee may delegate
some or all of its authority under the Plan, including to an officer of the
Company to designate the Employees (other than such officer himself or
herself) to receive Options and to determine the number of Shares subject to
the Options such Employees will receive.

      3.3     DECISIONS BINDING. All determinations and decisions made by the
Committee pursuant to the provisions of the Plan will be final, conclusive
and binding on all persons, including, without limitation, the Company, its
Board of Directors, its shareholders, all Affiliates, Employees, Participants
and their estates and beneficiaries.

      3.4     CHANGE IN CONTROL. In the event of a Change in Control, the
Committee shall have the discretion to accelerate the vesting of Awards,
eliminate any restrictions applicable to Awards, deem the performance
measures to be satisfied, or take such other action as it deems appropriate,
in its sole discretion.

ARTICLE 4.    SHARES SUBJECT TO THE PLAN AND MAXIMUM AWARDS

      4.1     NUMBER OF SHARES AVAILABLE FOR AWARDS.

      (a)     Subject to adjustment as provided below and in Sections 4.2 and
              4.3, the maximum number of Shares that may be issued or
              transferred to Participants under the Plan will be 5,628,843.
              The maximum number of Shares that may be issued or transferred to
              Participants as Incentive Stock Options is 1,000,000. The maximum
              number of Shares and Share equivalent units that may be granted
              during any calendar year to any one Participant under all types
              of Awards available under the Plan is 1,000,000 (on an aggregate
              basis); the foregoing limit will apply whether the Awards are paid
              in Shares or in cash. All limits described in this Section 4.1(a)
              are subject to adjustment as provided in Section 4.3.

      (b)     The Prior Plans shall be merged into and continued in the form
              of this Plan as of the Effective Date. Awards made and Shares
              awarded under the Prior Plans prior

                                      -7-
<Page>


              to the Effective Date, which remain outstanding on the Effective
              Date, shall be governed by the terms of this Plan, but shall not
              count against the number of Shares authorized under 4.1(a) above.
              No additional awards will be made under any Prior Plan on or after
              the Effective Date.

      4.2   LAPSED AWARDS. Any Shares (a) subject to an Award under the Plan
that are forfeited, canceled, settled or otherwise terminated without a
distribution of Shares to a Participant; or (b) delivered by attestation to,
or withheld by, the Company in connection with the exercise of an Option
awarded under the Plan or in payment of any required income tax withholding
for the exercise of an Option or the vesting of Restricted Stock awarded
under the Plan will thereafter be deemed to be available for Award. Any
Shares (a) subject to an Award under a Prior Plan that are forfeited,
canceled, settled or otherwise terminated without a distribution of Shares to
a Participant; or (b) delivered by attestation to, or withheld by, the
Company in connection with the exercise of an Option awarded under a Prior
Plan or in payment of any required income tax withholding for the exercise of
an Option awarded under a Prior Plan will not be available for Award under
this Plan or the Prior Plan.

      4.3   ADJUSTMENTS IN AUTHORIZED SHARES.

      (a)   In the event of any merger, reorganization, consolidation,
            recapitalization, separation, liquidation, split-up, share
            combination, or other such change in the corporate structure
            of the Company affecting the Shares, such adjustment shall be
            made in the number and class of Shares which may be delivered
            under the Plan, and in the number and class of and/or price of
            Shares subject to outstanding Awards granted under the Plan,
            as may be determined to be appropriate and equitable by the
            Committee, in its sole discretion, to prevent dilution or
            enlargement of rights and provided that the number of Shares
            subject to any Award shall always be a whole number.

      (b)   Fractional Shares resulting from any adjustment in Awards
            pursuant to this section may be settled in cash or otherwise as
            the Committee determines. The Company will give notice of any
            adjustment to each Participant who holds an Award that has been
            adjusted and the adjustment (whether or not that notice is given)
            will be effective and binding for all Plan purposes.

ARTICLE 5.  ELIGIBILITY AND PARTICIPATION

      5.1   ELIGIBILITY. An Employee shall be deemed eligible for
participation upon such Employee's first day of employment. Additionally,
non-Employee Directors and Consultants and/or their representatives who are
chosen from time to time at the sole discretion of the Company to receive one
or more Awards are also eligible to participate in the Plan.

      5.2   ACTUAL PARTICIPATION. Subject to the provisions of the Plan, the
Committee will, from time to time, select those Employees, non-Employee
Directors and Consultants to whom Awards will be granted, and will determine
the nature and amount of each Award.

      5.3   PERSONAL LEAVE STATUS.

                                      -8-
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       (a)  Notwithstanding anything in the Plan to the contrary, the Committee,
            in its sole discretion, reserves the right to designate a
            Participant's leave of absence as "Personal Leave." No Options shall
            be granted to a Participant during Personal Leave. A Participant's
            Unvested Options shall remain Unvested during such Personal Leave
            and the time spent on such Personal Leave shall not count towards
            the Vesting of such Options. A Participant's Vested Options that may
            be exercised pursuant to Section 6.6 hereof shall remain exercisable
            upon commencement of Personal Leave until the earlier of (i) a
            period of one year from the date of commencement of such Personal
            Leave; or (ii) the remaining exercise period of such Options.
            Notwithstanding the foregoing, if a Participant returns to the
            Company from a Personal Leave of less than one year and the
            Participant's Options have not lapsed, the Options shall remain
            exercisable for the remaining exercise period as provided at the
            time of grant and subject to the conditions contained herein.

      (b)   If the Participant leaves the employ of the Company within six (6)
            months' time of the date on which he or she returned from Personal
            Leave, the Fair Market Value figure used to calculate the purchase
            price of any Shares that the Company may choose to repurchase from
            that individual pursuant to Section 6.9(b) will be the lower of:
            (i) the Fair Market Value of the underlying Shares as of the date
            the Participant commenced his or her Personal Leave, and (ii) the
            Fair Market Value of such Shares as of the date of that departure.
            Upon returning to the Company from Personal Leave, the Participant
            must complete six (6) months of Service before the Participant will
            be eligible to receive any other Awards under the Plan.

      (c)   The Committee, in its sole discretion, may waive or alter the
            provisions of this Section 5.3 with respect to any Participant. The
            waiver or alteration of such provisions with respect to any
            Participant shall have no effect on any other Participant.

ARTICLE 6.  OPTIONS

      6.1   GRANT OF OPTIONS. Subject to the terms and provisions of the
Plan, Options may be granted to Employees, non-Employee Directors and
Consultants in the number, and upon the terms, and at any time and from time
to time, as determined by the Committee.

      6.2   AWARD AGREEMENT. Each Option grant will be evidenced by an
Award Agreement that specifies the Exercise Price, the duration of the
Option, the number of Shares to which the Option pertains, the manner, time
and rate of exercise or Vesting of the Option, and such other provisions as
the Committee determines. The Award Agreement will also specify whether the
Option is intended to be an ISO or an NQSO.

      6.3   EXERCISE PRICE. The Exercise Price for each Share subject
to an Option will be determined by the Committee; provided, however, that the
exercise price of Incentive Stock Options shall in all cases be equal or
greater to the Fair Market Value on the date the Option is granted.

                                      -9-
<Page>


      6.4   DURATION OF OPTIONS. Each Option will expire at the time
determined by the Committee at the time of grant, but no later than the tenth
anniversary of the date of its grant.

      6.5   DIVIDEND EQUIVALENTS. The Committee may, but will not be required
to, grant payments in connection with Options that are equivalent to
dividends declared and paid on the Shares underlying the Options. Such
dividend equivalent payments may be made in cash or in Shares, upon such
terms as the Committee, in its sole discretion, deems appropriate.

      6.6   EXERCISE OF OPTIONS. Options will be exercisable at such times
and be subject to such restrictions and conditions as the Committee in each
instance approves, which need not be the same for each Award or for each
Participant. Notwithstanding the foregoing, Vested Options granted under the
Plan may be exercised to purchase Shares only upon the earlier of: (a) the
date on which the Company completes an IPO; and (b) the date on which the
Company undergoes a Change in Control. The only exception to this requirement
that the Company first complete an IPO or undergo a Change in Control before
the Participant can exercise his or her Vested Options is in those instances
where the Participant's Service with the Company has terminated, as more
specifically set forth in Section 6.10.

      6.7   PAYMENT. The holder of an Option may exercise the Option only by
delivering a written notice, or if permitted by the Committee, in its
discretion and in accordance with procedures adopted by it, by delivering an
electronic notice, of exercise to the Company setting forth the number of
Shares as to which the Option is to be exercised, together with full payment
at the Exercise Price for the Shares and any withholding tax relating to the
exercise of the Option.

      The Exercise Price and any related withholding taxes will be payable to
the Company in full either: (a) in cash, or its equivalent, in United States
dollars; (b) if permitted in the governing Award Agreement, by tendering
Shares owned by the Participant for at least six months and duly endorsed for
transfer to the Company, or Shares issuable to the Participant upon exercise
of the Option; or (c) any combination of (a) and (b); or (d) by any other
means the Committee determines to be consistent with the Plan's purposes and
applicable law.

      6.8   SPECIAL PROVISIONS FOR ISOS. Notwithstanding any other provision
of this Article 6, the following special provisions shall apply to any Award
of Incentive Stock Options:

      (a)   The Committee may award Incentive Stock Options only to Employees.

      (b)   An Option will not constitute an Incentive Stock Option under
            this Plan to the extent it would cause the aggregate Fair
            Market Value of Shares with respect to which Incentive Stock
            Options are exercisable by the Participant for the first time
            during a calendar year (under all plans of the Company and its
            Affiliates) to exceed $100,000. Such Fair Market Value shall be
            determined as of the date on which each such Incentive Stock Option
            is granted.

      (c)   If the Employee to whom the Incentive Stock Option is granted
            owns stock possessing more than ten (10%) percent of the total
            combined voting power of all classes of the Company or any
            Affiliate, then: (i) the exercise Price for each Share subject
            to an Option will be at least one hundred ten percent (110%) of the
            Fair Market Value of the Share on the Effective Date of the Award;
            and (ii) the

                                     -10-
<Page>

            Option will expire upon the earlier of (A) the time
            specified by the Committee in the Award Agreement, or (B) the fifth
            anniversary of the date of grant.

      (d)   No Option that is intended to be an Incentive Stock Option may be
            granted under the Plan until the Company's shareholders approve the
            Plan. If such shareholder approval is not obtained within 12 months
            after the Board's adoption of the Plan, then no Options may be
            granted under the Plan that are intended to be Incentive Stock
            Options. No Option that is intended to be an Incentive Stock Option
            may be granted under the Plan after the tenth anniversary of the
            date the Company adopted the Plan or the Company's shareholders
            approved the Plan, whichever is earlier.

      (e)   An Incentive Stock Option must be exercised, if at all, by the
            earliest of (i) the time specified in the Award Agreement,
            (ii) three months after the Participant's termination of Service
            for a reason other than death or Disability, or (iii) twelve months
            after the Participant's termination of Service for death or
            Disability.

      6.9   RESTRICTIONS ON SHARE TRANSFERABILITY.

      (a)   The Committee may impose such restrictions on any Shares acquired
            through exercise of an Option as it deems necessary or advisable,
            including, without limitation, restrictions under applicable
            federal securities laws, under the requirements of any stock
            exchange or market upon which the Shares are then listed or traded,
            and under any blue sky or state securities laws applicable to the
            Shares.

      (b)   No person (the "Seller") may sell, assign or otherwise transfer
            or dispose of all or any part of his or her Shares acquired pursuant
            to an exercised Option under the Plan except to the Company. In the
            event the Seller desires to sell his or her Shares to the Company,
            the Seller shall give the Company notice of the desired transfer and
            the Company shall have the right, but not the obligation, anytime
            within thirty (30) days after the receipt of such notice, to
            purchase the Shares proposed for transfer at their Fair Market Value
            as of the date the Seller provides written notice to the Company of
            the desired transfer. Any payment of the purchase price, along with
            applicable interest thereon, may be made by the Company over a
            period of up to five (5) years and shall be subject to any
            additional limitations and/or restrictions that the Company may
            choose to impose at that time.

            The rights and obligations of the Seller and the Company, as set
            forth in this Section 6.9(b), shall terminate on the earlier of
            (i) the date on which the Company completes an IPO; and (ii) the
            date on which the Company undergoes a Change in Control.

      6.10  TERMINATION OF SERVICE. Unless the applicable Award Agreement
provides otherwise and subject to Section 6.8(e):

      (a)   In the event that the Service of a Participant is terminated by
            the Company for any reason other than Cause, Disability or death,
            Options that are exercisable at the

                                      -11-
<Page>

            time of such termination shall remain exercisable until the
            earlier of (i) the remaining exercise period or (ii) one year from
            the date of such Service termination. Options that are not
            exercisable at the time of such termination of Service shall expire
            at the close of business on the date of such termination.

      (b)   In the event that the Service of a Participant with the Company
            terminates on account of the Disability or death of the Participant,
            Options that are exercisable at the time of such termination shall
            remain exercisable until the expiration of the term of the Option.
            Options that are not exercisable at the time of such termination
            shall expire at the close of business on the date of such
            termination.

      (c)   In the event of termination of a Participant's Service for Cause,
            all outstanding Options granted to such Participant shall expire as
            of the commencement of business on the date of such termination.

      (d)   In the event of a Participant's termination of Service for any
            reason other than those described in subsections (a), (b) and (c) of
            this Section 6.10, Options that are exercisable at the time of such
            termination shall remain exercisable until the earlier of (i) the
            remaining exercise period or (ii) 30 days from the date of such
            termination. Options that are not exercisable at the time of such
            termination shall expire at the close of business on the date of
            such termination.

      (e)   Notwithstanding the foregoing, prior to the date of any IPO, the
            Company may, in its sole discretion, cancel the portion of any
            outstanding Option that is Vested as of the date of a Participant's
            termination of Service in return for a payment to the Participant.
            In such instance, the amount of money to which the Participant will
            be entitled will be equivalent to the difference between the Fair
            Market Value of the underlying Shares (as of the date of termination
            or as otherwise provided herein) and the Option Price on those
            Shares multiplied by the number of such Options cancelled. In the
            event of such a pay out, the Committee may, in its sole discretion,
            make such payment in installments over a period of up to five (5)
            years' time and may impose such additional limitations or
            restrictions that the Company otherwise deems appropriate. If
            payment is made in installments, the outstanding balance of the
            value of the Vested Options to be paid to the Participant shall earn
            interest (at the Company's expense) at a rate determined by the
            Committee.

      Each Option Award Agreement will set forth the extent to which the
Participant has the right to exercise the Option after his or her termination
of Service. These terms will be determined by the Committee in its sole
discretion, need not be uniform among all Options, and may reflect, among
other things, distinctions based on the reasons for termination of Service.
However, notwithstanding any other provision herein to the contrary, no
additional Options will Vest after a Participant's Service ceases or has
terminated for any reason, whether such cessation or termination is lawful or
unlawful.

                                     -12-
<Page>


ARTICLE 7.  STOCK APPRECIATION RIGHTS

      7.1   GRANT OF SARS. Subject to the terms and conditions of the Plan,
SARs may be granted to Participants at any time and from time to time, as
determined by the Committee. The Committee may grant Freestanding SARs,
Tandem SARs or any combination of the two, as specified in the Award
Agreement.

      Within the limits of Article 4, the Committee will have sole discretion
to determine the number of SARs granted to each Participant and, consistent
with the provisions of the Plan, to determine the terms and conditions
pertaining to SARs.

      The grant price for any SAR shall be determined by the Committee, but
in the case of a Tandem SAR, the grant price shall not be less than the
exercise price of the Option to which it relates.

      7.2   EXERCISE OF TANDEM SARS. Tandem SARs may be exercised for all or
part of the Shares subject to the related Option, upon the surrender of the
right to exercise the equivalent portion of the related Option. A Tandem SAR
may be exercised only with respect to the Shares for which its related Option
is then exercisable.

      7.3   EXERCISE OF FREESTANDING SARS. Freestanding SARs may be exercised
upon whatever terms and conditions the Committee, in its sole discretion,
imposes.

      7.4   AWARD AGREEMENT. Each SAR grant will be evidenced by an Award
Agreement that specifies the grant price, whether settlement of the SAR will
be made in cash or in Shares, the term of the SAR and such other provisions
as the Committee determines.

      7.5   TERM OF SARS. The term of a SAR will be determined by the
Committee, in its sole discretion, but may not exceed ten years.

      7.6   PAYMENT OF SAR AMOUNT. Upon exercise of a SAR with respect to a
Share, a Participant will be entitled to receive an amount equal to the
excess, if any, of the Fair Market Value on the date of exercise of the SAR
over the grant price specified in the Award Agreement. At the discretion of
the Committee, the payment that may become due upon SAR exercise may be made
in cash, in Shares or in some combination of the two.

      7.7   TERMINATION OF SERVICE. Each SAR Award Agreement will set forth
the extent to which the Participant has the right to exercise the SAR after
his or her termination of Service. These terms will be determined by the
Committee, in its sole discretion, need not be uniform among all SARs issued
under the Plan, and may reflect, among other things, distinctions based on
the reasons for termination of Service.

ARTICLE 8.  RESTRICTED STOCK AND RESTRICTED STOCK UNITS

      8.1   GRANT OF RESTRICTED STOCK OR RESTRICTED STOCK UNITS. Subject to
the terms and provisions of the Plan, the Committee may, at any time and from
time to time, grant Restricted Stock or Restricted Stock Units to
Participants in such amounts as it determines.

      8.2   DEFERRAL OF COMPENSATION INTO RESTRICTED STOCK UNITS. Subject to
the terms and provisions of the Plan, the Committee may, at any time and from
time to time, allow (or

                                     -13-
<Page>


require, as to bonuses) selected Employees and Directors to defer the payment
of any portion of their salary or bonuses or both pursuant to this section. A
Participant's deferral under this section will be credited to the Participant
in the form of Shares of Restricted Stock Units. The Committee will establish
rules and procedures for the deferrals, as it deems appropriate.

      If a Participant's compensation is deferred under this Section 8.2, he
or she will be credited, as of the date specified in the Award Agreement,
with a number of Restricted Stock Units no less than the amount of the
deferral divided by the Fair Market Value on that date, rounded to the
nearest whole unit.

      8.3   AWARD AGREEMENT. Each grant of Restricted Stock or Restricted
Stock Units will be evidenced by an Award Agreement that specifies the
Restriction Periods, the number of Shares or Share equivalent units granted,
and such other provisions as the Committee determines.

      8.4  OTHER RESTRICTIONS. Subject to Article 11, the Committee may
impose such other conditions or restrictions on any Restricted Stock or
Restricted Stock Units as it deems advisable, including, without limitation,
restrictions based upon the achievement of specific performance objectives
(Company-wide, business unit, individual, or any combination of them),
time-based restrictions on vesting, and restrictions under applicable federal
or state securities laws. The Committee may provide that restrictions
established under this Section 8.4 as to any given Award will lapse all at
once or in installments.

      The Company will retain the certificates representing Shares of
Restricted Stock in its possession until all conditions and restrictions
applicable to the Shares have been satisfied.

      8.5   PAYMENT OF AWARDS. Except as otherwise provided in this Article
8, Shares covered by each Restricted Stock grant will become freely
transferable by the Participant after the last day of the applicable
Restriction Period, and Share equivalent units covered by a Restricted Unit
will be paid out in cash or Shares to the Participant following the last day
of the applicable Restriction Period, or on the date provided in the Award
Agreement.

      8.6   VOTING RIGHTS. During the Restriction Period, Participants
holding Shares of Restricted Stock may exercise full voting rights with
respect to those Shares.

      8.7   DIVIDENDS AND OTHER DISTRIBUTIONS. During the Restriction Period,
Participants awarded Shares of Restricted Stock or Restricted Stock Units
hereunder will be credited with regular cash dividends or dividend
equivalents paid on those Shares or with respect to those Share equivalent
units. Dividends may be paid currently, accrued as contingent cash
obligations, or converted into additional Shares of Restricted Stock or
Restricted Stock Units upon such terms as the Committee establishes.

      The Committee may apply any restrictions it deems advisable to the
crediting and payment of dividends and other distributions. Without limiting
the generality of the preceding sentence, if the grant or vesting of
Restricted Stock is designed to qualify for the Performance-Based Exception,
the Committee may apply any restrictions it deems appropriate to the payment
of dividends declared with respect to the Restricted Stock, so that the
dividends and the Restricted Stock continue to be eligible for the
Performance-Based Exception.

                                     -14-
<Page>


      8.8   TERMINATION OF SERVICE. Each Award Agreement will set forth the
extent to which the Participant has the right to retain unvested Restricted
Stock or Restricted Stock Units after his or her termination of Service.
These terms will be determined by the Committee in its sole discretion, need
not be uniform among all Awards of Restricted Stock, and may reflect, among
other things, distinctions based on the reasons for termination of Service.

ARTICLE 9.  PERFORMANCE SHARES

      9.1   GRANT OF PERFORMANCE SHARES. Subject to the terms of the Plan,
Performance Shares may be granted to Participants in such amounts and upon
such terms, and at any time and from time to time, as the Committee
determines. The Award of Performance Shares may be based on the Participant's
attainment of performance objectives, or the vesting of an Award of
Performance Shares may be based on the Participant's attainment of
performance objectives, each as described in this Article 9.

      9.2   VALUE OF PERFORMANCE SHARES. Each Performance Share will have an
initial value equal to the Fair Market Value on the date of grant. The
Committee will set performance objectives in its discretion which, depending
on the extent to which they are met, will determine the number or value (or
both) of Performance Shares that will be paid out to the Participant. For
purposes of this Article 9, the time period during which the performance
objectives must be met will be called a "Performance Period" and will be set
by the Committee in its discretion.

      9.3   EARNING OF PERFORMANCE SHARES. Subject to the terms of this Plan,
after the applicable Performance Period has ended, the holder of Performance
Shares will be entitled to receive payout on the number and value of
Performance Shares earned by the Participant over the Performance Period, to
be determined as a function of the extent to which the corresponding
performance objectives have been achieved.

      9.4   AWARD AGREEMENT. Each grant of Performance Shares will be
evidenced by an Award Agreement specifying the material terms and conditions
of the Award (including the form of payment of earned Performance Shares),
and such other provisions as the Committee determines.

      9.5   FORM AND TIMING OF PAYMENT OF PERFORMANCE SHARES. Except as
provided in Article 12, payment of earned Performance Shares will be made as
soon as practicable after the close of the applicable Performance Period, in
a manner determined by the Committee in its sole discretion. The Committee
will pay earned Performance Shares in the form of cash, in Shares, or in a
combination of cash and Shares, as specified in the Award Agreement.
Performance Shares may be paid subject to any restrictions deemed appropriate
by the Committee.

      9.6   TERMINATION OF SERVICE. Each Award Agreement will set forth the
extent to which the Participant has the right to retain Performance Shares
after his or her termination of Service. These terms will be determined by
the Committee, in its sole discretion, need not be uniform among all Awards
of Performance Shares, and may reflect, among other things, distinctions
based on the reasons for termination of Service.

                                     -15-
<Page>



ARTICLE 10.  PERFORMANCE MEASURES

      Unless and until the Committee proposes and the Company's shareholders
approve a change in the general performance measures set forth in this
Article 10, the performance measure(s) to be used for purposes of Awards
designed to qualify for the Performance-Based Exception will be chosen from
among the following alternatives (or in any combination of such alternatives):

      (a)   net earnings;
      (b)   operating earnings or income;
      (c)   earnings growth;
      (d)   net income (absolute or competitive growth rates comparative);
      (e)   net income applicable to Shares;
      (f)   cash flow, including operating cash flow, free cash flow,
            discounted cash flow return on investment, and cash flow in excess
            of cost of capital;
      (g)   earnings per Share;
      (h)   return on shareholders' equity (absolute or peer-group comparative);
      (i)   stock price (absolute or peer-group comparative);
      (j)   absolute and/or relative return on common shareholders' equity;
      (k)   absolute and/or relative return on capital;
      (l)   absolute and/or relative return on assets;
      (m)   economic value added (income in excess of cost of capital);
      (n)   customer satisfaction;
      (o)   expense reduction;
      (p)   ratio of operating expenses to operating revenues;
      (q)   gross revenue or revenue by pre-defined business segment (absolute
            or competitive growth rates comparative);
      (r)   revenue backlog; and
      (s)   margins realized on delivered services.

      The Committee will have the discretion to adjust targets set for
preestablished performance objectives; however, Awards designed to qualify
for the Performance-Based Exception may not be adjusted upward, except to the
extent permitted under Code Section 162(m), to reflect accounting changes or
other events.

      If Code Section 162(m) or other applicable tax or securities laws
change to allow the Committee discretion to change the types of performance
measures without obtaining shareholder approval, the Committee will have sole
discretion to make such changes without obtaining shareholder approval. In
addition, if the Committee determines it is advisable to grant

                                     -16-
<Page>


Awards that will not qualify for the Performance-Based Exception, the
Committee may grant Awards that do not so qualify.

ARTICLE 11.  BENEFICIARY DESIGNATION

      Each Participant may, from time to time, name any beneficiary or
beneficiaries (who may be named contingently or successively) to whom any
benefit under the Plan is to be paid in case the Participant should die
before receiving any or all of his or her Plan benefits. Each beneficiary
designation will revoke all prior designations by the same Participant, must
be in a form prescribed by the Committee, and must be made during the
Participant's lifetime. If the Participant's designated beneficiary
predeceases the Participant or no beneficiary has been designated, benefits
remaining unpaid at the Participant's death will be paid to the Participant's
estate or other entity described in the Participant's Award Agreement.

ARTICLE 12.  DEFERRALS

      The Committee may permit or require a Participant to defer receipt of
cash or Shares that would otherwise be due to him or her by virtue of an
Option or SAR exercise, the lapse or waiver of restrictions on Restricted
Stock, or the satisfaction of any requirements or objectives with respect to
Performance Shares. If any such deferral election is permitted or required,
the Committee will, in its sole discretion, establish rules and procedures
for such deferrals. Notwithstanding the foregoing, the Committee in its sole
discretion may defer payment of cash or the delivery of Shares that would
otherwise be due to a Participant under the Plan if payment or delivery would
result in the Company's or an Affiliate's being unable to deduct compensation
under Code Section 162(m). Deferral of payment or delivery by the Committee
may continue until the Company or Affiliate is able to deduct the payment or
delivery under the Code.

ARTICLE 13.  RIGHTS OF PARTICIPANTS

      13.1   EMPLOYMENT AND SERVICE. Nothing in the Plan will confer upon any
Participant any right to continue in the employ of the Company or any
Affiliate, or interfere with or limit in any way the right of the Company or
any Affiliate to terminate any Participant's employment or Service at any
time.

      13.2   PARTICIPATION. No Employee, Consultant or Director will have the
right to receive an Award under this Plan, or, having received any Award, to
receive a future Award.

ARTICLE 14.  AMENDMENT, MODIFICATION AND TERMINATION

      14.1   AMENDMENT, MODIFICATION AND TERMINATION. The Committee may at
any time and from time to time, alter, amend, modify or terminate the Plan in
whole or in part. The Committee will not, however, increase the number of
Shares that may be issued or transferred to Participants under the Plan, as
described in the first sentence of Section 4.1 (and subject to adjustment as
provided in Sections 4.2 and 4.3).

      Subject to the terms and conditions of the Plan, the Committee may
modify, extend or renew outstanding Awards under the Plan, or accept the
surrender of outstanding Awards (to the extent not already exercised) and
grant new Awards in substitution of them (to the extent not already
exercised). The Committee will not, however, modify any outstanding Option so
as to

                                     -17-
<Page>


specify a lower Exercise Price, without the approval of the Company's
shareholders. Notwithstanding the foregoing, no modification of an Award will
materially alter or impair any rights or obligations under any Award already
granted under the Plan, without the prior written consent of the Participant.

      14.2   ADJUSTMENT OF AWARDS UPON THE OCCURRENCE OF CERTAIN UNUSUAL OR
NONRECURRING EVENTS. In recognition of unusual or nonrecurring events
(including, without limitation, the events described in Section 4.3)
affecting the Company or its financial statements, or in recognition of
changes in applicable laws, regulations, or accounting principles, and,
whenever the Committee determines that adjustments are appropriate in order
to prevent dilution or enlargement of the benefits or potential benefits
intended to be made available under the Plan, the Committee may, using
reasonable care, make adjustments in the terms and conditions of, and the
criteria included in, Awards. In case of an Award designed to qualify for the
Performance-Based Exception, the Committee will take care not to make an
adjustment that would disqualify the Award.

      14.3   AWARDS PREVIOUSLY GRANTED. No termination, amendment or
modification of the Plan will adversely affect in any material way any Award
already granted, without the written consent of the Participant who holds the
Award.

      14.4   COMPLIANCE WITH CODE SECTION 162(M). Awards will comply with the
requirements of Code Section 162(m), unless the Committee determines that
such compliance is not desired with respect to an Award available for grant
under the Plan. In addition, if changes are made to Code Section 162(m) to
permit greater flexibility as to any Award available under the Plan, the
Committee may, subject to this Article 14, make any adjustments it deems
appropriate.

ARTICLE 15.  NONTRANSFERABILITY OF AWARDS.

      Except as otherwise provided in a Participant's Award Agreement, no
Option, SAR, Performance Share, Restricted Stock, or Restricted Stock Unit
granted under the Plan may be sold, transferred, pledged, assigned, or
otherwise alienated or hypothecated, other than by will or by the laws of
descent and distribution, or pursuant to a domestic relations order (as
defined in Code Section 414(p)). All rights with respect to Performance
Shares, Restricted Stock and Restricted Stock Units will be available during
the Participant's lifetime only to the Participant or his or her guardian or
legal representative. Except as otherwise provided in a Participant's Award
Agreement or in paragraph (a) below, all Options and SARs will be exercisable
during the Participant's lifetime only by the Participant or his or her
guardian or legal representative. The Participant's beneficiary may exercise
the Participant's rights to the extent they are exercisable under the Plan
following the Participant's death. The Committee may, in its discretion,
require a Participant's guardian, legal representative or beneficiary to
supply it with the evidence the Committee deems necessary to establish the
authority of the guardian, legal representative or beneficiary to act on
behalf of the Participant.

      (a)   Notwithstanding the foregoing, with respect to any Nonstatutory
            Stock Options, each Participant shall be permitted at all times
            to transfer any or all of the Options, or, in the event the
            Options have not yet been issued to the Participant, the Company
            shall be permitted to issue any or all of the Options, to certain
            trusts

                                     -18-
<Page>


            designated by the Participant as long as such transfer or
            issuance is made as a gift (I.E., a transfer for no consideration,
            with donative intent), whether during lifetime or to take effect
            upon (or as a consequence of) his or her death, to his or her spouse
            or children. Gifts in trust shall be deemed gifts to every
            beneficiary and contingent beneficiary, and so shall not be
            permitted under this paragraph (a) if the beneficiaries or
            contingent beneficiaries shall include anyone other than such spouse
            or children. Transfers to a spouse or child for consideration,
            regardless of the amount, shall not be permitted under this Section.

      (b)   Any Options issued or transferred under this Article 15 shall be
            subject to all terms and conditions contained in the Plan and the
            applicable Award Agreement. If the Committee makes an Option
            transferable, such Option shall contain such additional terms and
            conditions, as the Committee deems appropriate.

ARTICLE 16.  WITHHOLDING

      16.1   TAX WITHHOLDING. The Company will have the power and the right
to deduct or withhold, or require a Participant to remit to the Company, the
minimum amount necessary to satisfy federal, state, and local taxes, domestic
or foreign, required by law or regulation to be withheld with respect to any
taxable event arising under this Plan.

      16.2   SHARE WITHHOLDING. With respect to withholding required upon the
exercise of Options or SARs, upon the lapse of restrictions on Restricted
Stock, or upon any other taxable event arising as a result of Awards granted
hereunder, the Company may satisfy the minimum withholding requirement for
supplemental wages, in whole or in part, by withholding Shares having a Fair
Market Value (determined on the date the Participant recognizes taxable
income on the Award) equal to the minimum withholding tax required to be
collected on the transaction. The Participant may elect, subject to the
approval of the Committee, to deliver the necessary funds to satisfy the
withholding obligation to the Company, in which case there will be no
reduction in the Shares otherwise distributable to the Participant.

ARTICLE 17.  INDEMNIFICATION

      Each person who is or has been a member of the Committee or the Board,
and any officer or Employee to whom the Committee has delegated authority
under Section 3.1 or 3.2 of the Plan, will be indemnified and held harmless
by the Company from and against any loss, cost, liability, or expense that
may be imposed upon or reasonably incurred by him or her in connection with
or as a result of any claim, action, suit or proceeding to which he or she
may be a party or in which he or she may be involved by reason of any action
taken, or failure to act, under the Plan. Each such person will also be
indemnified and held harmless by the Company from and against any and all
amounts paid by him or her in a settlement approved by the Company, or paid
by him or her in satisfaction of any judgment, of or in a claim, action, suit
or proceeding against him or her and described in the previous sentence, so
long as he or she gives the Company an opportunity, at its own expense, to
handle and defend the claim, action, suit or proceeding before he or she
undertakes to handle and defend it. The foregoing right of indemnification
will not be exclusive of any other rights of indemnification to which a
person who is or has been a member of the Committee or the Board may be
entitled under the

                                     -19-
<Page>


Company's Articles of Incorporation or By-Laws, as a matter of law, or
otherwise, or any power that the Company may have to indemnify him or her or
hold him or her harmless.

ARTICLE 18.  SUCCESSORS

      All obligations of the Company under the Plan or any Award Agreement
will be binding on any successor to the Company, whether the existence of the
successor results from a direct or indirect purchase of all or substantially
all of the business or assets of the Company or both, or a merger,
consolidation, or otherwise.

ARTICLE 19.  BREACH OF RESTRICTIVE COVENANTS

      An Award Agreement may provide that, notwithstanding any other
provision of this Plan to the contrary, if the Participant breaches any
competition, nonsolicitation or nondisclosure provisions contained in the
Award Agreement, whether during or after termination of Service, the
Participant will forfeit:

      (a)   any and all Awards granted or transferred to him or her under the
            Plan, including Awards that have become Vested; and

      (b)   the profit the Participant has realized on the exercise of any
            Options, which is the difference between the Exercise Price of the
            Options and the applicable Fair Market Value of the Shares (the
            Participant may be required to repay such difference to the
            Company).

ARTICLE 20.  LEGAL CONSTRUCTION

      20.1   NUMBER. Except where otherwise indicated by the context, any
plural term used in this Plan includes the singular and a singular term
includes the plural.

      20.2   SEVERABILITY. If any provision of the Plan is held illegal or
invalid for any reason, the illegality or invalidity will not affect the
remaining parts of the Plan, and the Plan will be construed and enforced as
if the illegal or invalid provision had not been included.

      20.3   REQUIREMENTS OF LAW. The granting of Awards and the issuance of
Share or cash payouts under the Plan will be subject to all applicable laws,
rules, and regulations, and to any approvals by governmental agencies or
national securities exchanges as may be required.

      20.4   SECURITIES LAW COMPLIANCE. As to any individual who is, on the
relevant date, an officer, director or ten percent beneficial owner of any
class of the Company's equity securities that is registered pursuant to
Section 12 of the Exchange Act, all as defined under Section 16 of the
Exchange Act, transactions under this Plan are intended to comply with all
applicable conditions of Rule 16b-3 under the Exchange Act, or any successor
rule. To the extent any provision of the Plan or action by the Committee
fails to so comply, it will be deemed null and void, to the extent permitted
by law and deemed advisable by the Committee.

      If at any time the Committee determines that exercising an Option or
SAR or issuing Shares pursuant to an Award would violate applicable
securities laws, the Option or SAR will not be exercisable, and the Company
will not be required to issue Shares. The Company may require a Participant
to make written representations it deems necessary or desirable to comply
with applicable securities laws. No person who acquires Shares under the Plan
may sell the

                                     -20-
<Page>


Shares, unless he or she makes the offer and sale pursuant to an effective
registration statement under the Exchange Act, which is current and includes
the Shares to be sold, or an exemption from the registration requirements of
the Exchange Act.

      20.5  AWARDS TO FOREIGN NATIONALS AND EMPLOYEES OUTSIDE THE UNITED
STATES. To the extent the Committee deems it necessary, appropriate or
desirable to comply with foreign law or practice and to further the purposes
of this Plan, the Committee may, without amending the Plan, (i) establish
rules applicable to Awards granted to Participants who are foreign nationals
or are employed outside the United States, or both, including rules that
differ from those set forth in this Plan, and (ii) grant Awards to such
Participants in accordance with those rules. Appendix A to this Plan contains
special provisions applicable to foreign nationals and employees outside the
United States.

      20.6  UNFUNDED STATUS OF THE PLAN. The Plan is intended to constitute
an "unfunded" plan for incentive and deferred compensation. With respect to
any payments or deliveries of Shares not yet made to a Participant by the
Company, the Participant's rights are no greater than those of a general
creditor of the Company. The Committee may authorize the establishment of
trusts or other arrangements to meet the obligations created under the Plan,
so long as the arrangement does not cause the Plan to lose its legal status
as an unfunded plan.

      20.7  GOVERNING LAW. To the extent not preempted by federal law, the
Plan and all agreements hereunder will be construed in accordance with and
governed by the laws of the State of Illinois.

      20.8  NO LIMITATION ON RIGHTS OF THE COMPANY. The grant of the Award
does not and will not in any way affect the right or power of the Company to
make adjustments, reclassifications or changes in its capital or business
structure, or to merge, consolidate, dissolve, liquidate, sell or transfer
all or any part of its business or assets.

      20.9  PARTICIPANT TO HAVE NO RIGHTS AS A SHAREHOLDER. Before the date
as of which he or she is recorded on the books of the Company as the holder
of any Shares underlying an Award, a Participant will have no rights as a
shareholder with respect to those Shares.

                                     -21-
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                                   APPENDIX A
                                   ----------

              SPECIAL PROVISIONS APPLICABLE TO FOREIGN NATIONALS AND
              ------------------------------------------------------
                       EMPLOYEES OUTSIDE OF THE UNITED STATES
                       --------------------------------------


The following special provisions apply to Awards to Employees who are foreign
nationals or are employed outside of the United States, or both. In addition
to these special provisions and in accordance with Section 20.5, to the
extent the Committee deems it necessary, appropriate or desirable to comply
with foreign law or practice and to further the purposes of the Plan, the
Committee may, without amending the Plan, (i) establish rules applicable to
Awards granted to Participants who are foreign nationals or are employed
outside the United States, or both, including rules that differ from those
set forth in this Plan, and (ii) grant Awards to such Participants in
accordance with those rules.

      1.    With respect to Options issued in Canada:

            in addition to any restrictions on resale and transfer in the Plan,
            Shares purchased under the Plan may be subject to certain
            restrictions on resale imposed by Canadian provincial securities
            laws. Participants will be encouraged to seek legal advice prior to
            any resale of such Shares. In general, Participants resident in
            Canada may not resell their Shares to purchasers within Canada; and

            personal information collected from Participants in furtherance of
            their participation in the Plan will be used and disclosed to an
            Option plan administrator for the purposes of managing and
            administering the Plan and communicating with Participants.

      2.    With respect to Options issued in France:

            the benefits under the Plan and the Plan itself are for a specified,
            limited duration and future benefits or plans are subject to the
            sole discretion of the Company; and

            notwithstanding any other provision of this Plan, a minimum
            four-year Vesting period will apply to any Options for which the
            Company seeks tax-advantaged treatment.

      3.    With respect to Options issued in Italy, the terms of the Plan
            may be amended as specified in the Award Agreement, the terms of
            which shall, to the extent they may be in contrast to the terms of
            the Plan, and for such purposes, prevail.

      4.    With respect to Options issued in the Netherlands, the term
            "Company" shall include both Morningstar, Inc. and Morningstar,
            Inc.'s Dutch subsidiary for purposes of Article 16 of the Plan.

      5.    With respect to Options issued in Spain, all beneficiaries shall be
            bound by the terms of the Plan and any applicable restrictions on
            the transfer of Shares under the Plan.

<Page>


      6.    With respect to Options issued in the U.K., where (i) a mechanism
            for collecting tax from a Participant's salary is in place; (ii) the
            salary of the Participant is insufficient to satisfy such tax; and
            (iii) the Participant has not otherwise remitted to the Company an
            amount of funds sufficient to satisfy such tax, the Company may
            satisfy the withholding requirement, in whole or in part, by
            withholding Shares having a Fair Market Value (determined in
            accordance with Section 16.2 of the Plan) equal to the minimum
            withholding tax required to be collected on the transaction.



















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