Exhibit
10.4


LIQUIDNET
HOLDINGS, INC.


 


AMENDED
AND RESTATED


2000
STOCK OPTION PLAN


 


WHEREAS, Liquidnet Holdings, Inc.
(the “Company”) adopted its 2000 Stock Option Plan (the “Original Plan”) on January 10,
2000 and the Original Plan was approved by the Company’s Stockholders on January 10,
2000; and


 


WHEREAS, the Board of Directors of the Company has determined
that the maximum aggregate number of shares of the Company’s Common stock
available for issuance pursuant to stock options awarded under the Original
Plan should be increased from 2,551,200 shares (such amount having previously
been adjusted to reflect a 10 for 1 stock split) to 3,001,200 shares and on June 29,
2004, a majority of the Company’s stockholders approved such share increase;
and


 


WHEREAS, the Board of Directors wishes to amend and
restate the Original Plan to effect and reflect such share increase and certain
other changes to the Plan it has determined are in the best interests of the
Company.


 


NOW, THEREFORE, the Original Plan is hereby amended
and restated, effective as of June 29, 2004 (the “Restatement Date”), as
follows:


 


1.             Purposes
of the Plan.  The purposes of this
Stock Option Plan are to attract and retain the best available personnel for
positions of substantial responsibility, to provide additional incentive to
Employees, Directors and Consultants and to promote the success of the Company’s
business.  Options granted under the Plan
may be Incentive Stock Options or Nonstatutory Stock Options, as determined by
the Administrator at the time of grant.


 


2.             Definitions.  As used herein, the following definitions
shall apply:


 


(a)   “Administrator” means
the Board or any of its Committees as shall be administering the Plan in
accordance with Section 4 hereof.


 


(b)   “Applicable Laws” means
the requirements relating to the administration of stock option plans under
U.S. state corporate laws, U.S. federal and state securities laws, the Code,
any stock exchange or quotation system on which the Common Stock is listed or
quoted and the applicable laws of any other country or jurisdiction in which
Options are granted under the Plan.


 


(c)   “Board” means the Board
of Directors of the Company.


 


(d)   “Code” means the
Internal Revenue Code of 1986, as amended.


 


(e)   “Committee” means a
committee of Directors appointed by the Board in accordance with Section 4
hereof.


 

















 


(f)    “Common Stock” means
the common stock of the Company, par value $.0001 per share.


 


(g)   “Company” means
Liquidnet Holdings, Inc., a Delaware corporation.


 


(h)   “Consultant” means any
person who is engaged by the Company or any Parent or Subsidiary to render
consulting or advisory services to such entity.


 


(i)    “Director” means a
member of the Board of Directors of the Company.


 


(j)    “Employee” means any
person, including Officers and Directors, employed by the Company or any Parent
or Subsidiary of the Company.  A Service
Provider shall not cease to be an Employee in the case of (i) any
military, sick leave or other bona fide leave of absence approved by the
Company or (ii) transfers between locations of the Company or between the
Company, its Parent, any Subsidiary, or any successor.  For purposes of Incentive Stock Options, no
such leave may exceed ninety days, unless reemployment upon expiration of such
leave is guaranteed by statute or contract. 
If the period of leave exceeds ninety (90) days and reemployment upon
expiration of such leave is not so guaranteed, any Incentive Stock Option held
by the Optionee shall cease to be treated as an Incentive Stock Option on the
180th day following the first day of such leave and shall thereafter
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.


 


(k)   “Exchange Act” means the
Securities Exchange Act of 1934, as amended.


 


(l)    “Fair Market Value”
means, as of any date, the value of Common Stock determined as follows:


 


(i)            If the Common Stock is
listed on any established stock exchange or a national market system, including
without limitation the Nasdaq National Market or The Nasdaq SmallCap Market of
the Nasdaq Stock Market, its Fair Market Value shall be the closing sales price
for such stock (or the closing bid, if no sales were reported) as quoted on such
exchange or system for the last market trading day prior to the time of
determination, as reported in The Wall Street Journal
or such other source as the Administrator deems reliable;


 


(ii)           If the Common Stock is
regularly quoted by a recognized securities dealer but selling prices are not
reported, its Fair Market Value shall be the mean between the high bid and low
asked prices for the Common Stock on the last market trading day prior to the
day of determination; or


 


(iii)          In the absence of an
established market for the Common Stock, the Fair Market Value thereof shall be
determined in good faith by the Administrator.


 


(m)  “Incentive Stock Option”
means an Option intended to qualify as an incentive stock option within the
meaning of Section 422 of the Code.


 


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(n)   “Non-employee Director”
means any Director that is not employed by the Company.


 


(o)   “Nonstatutory Stock Option”
means an Option not intended to qualify as an Incentive Stock Option.


 


(p)   “Officer” means a person
who is an officer of the Company within the meaning of Section 16 of the
Exchange Act and the rules and regulations promulgated thereunder.


 


(q)   “Option” means a stock
option granted pursuant to the Plan.


 


(r)    “Option Agreement”
means a written or electronic agreement between the Company and an Optionee
evidencing the terms and conditions of an individual Option grant.  The Option Agreement is subject to the terms
and conditions of the Plan.


 


(s)   “Option Exchange Program”
means a program whereby outstanding Options are exchanged for Options with a
lower exercise price.


 


(t)    “Optioned Stock” means
the Common Stock subject to an Option.


 


(u)   “Optionee” means the
holder of an outstanding Option granted under the Plan.


 


(v)   “Parent” means a “parent
corporation,” whether now or hereafter existing, as defined in Section 424(e) of
the Code.


 


(w)  “Plan” means this Amended
and Restated 2000 Stock Option Plan.


 


(x)    “Section 16(b)”
means Section 16(b) of the Securities Exchange Act of 1934, as
amended.


 


(y)   “Service Provider” means
an Employee, Director or Consultant.


 


(z)    “Share” means a share
of the Common Stock, as adjusted in accordance with Section 12 below.


 


(aa) “Subsidiary” means a “subsidiary
corporation,” whether now or hereafter existing, as defined in Section 424(f) of
the Code.


 


3.             Stock
Subject to the Plan. Subject to the provisions of Section 12 of the
Plan, the maximum aggregate number of Shares which may be subject to Options
and sold under the Plan is 3,001,200 Shares. 
The Shares may be authorized but unissued, or reacquired Common
Stock.  Subject to the provisions of Section 12
of the Plan, no one person participating in the Plan may receive an Option for
more than 100,000 shares of Common Stock in the aggregate during any calendar
year.


 


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If an Option expires or
becomes unexercisable without having been exercised in full, or is surrendered
pursuant to an Option Exchange Program, the unpurchased Shares which were
subject thereto shall become available for future grant or sale under the Plan
(unless the Plan has terminated). 
However, Shares that have actually been issued under the Plan, upon
exercise of an Option , shall not be returned to the Plan and shall not become
available for future distribution under the Plan.


 


4.             Administration of the Plan


 


(a)           The Plan shall be
administered by the Board or a Committee appointed by the Board, which
Committee shall be constituted to comply with Applicable Laws.


 


(b)           Powers of the
Administrator.  Subject to the
provisions of the Plan and, in the case of a Committee, the specific duties
delegated by the Board to such Committee, and subject to the approval of any
relevant authorities, the Administrator shall have the authority in its
discretion:


 


(i)            to determine the Fair
Market Value;


 


(ii)           to select the Service
Providers to whom Options may from time to time be granted hereunder;


 


(iii)          to determine the number
of Shares to be covered by each such award granted hereunder;


 


(iv)          to approve forms of agreement
for use under the Plan;


 


(v)           to determine the terms
and conditions, of any Option granted hereunder.  Such terms and conditions include, but are
not limited to, the exercise price, the time or times when Options may be
exercised (which may be based on performance criteria), any forfeiture of
Options due to a termination as a Service Provider for “cause”, any vesting
acceleration or waiver of forfeiture restrictions, and any restriction or
limitation regarding any Option or the Common Stock relating thereto, based in
each case on such factors as the Administrator, in its sole discretion, shall
determine;


 


(vi)          to determine whether and
under what circumstances an Option may be settled in cash under subsection 9(e) instead
of Common Stock;


 


(vii)         to reduce the exercise
price of any Option to the then current Fair Market Value if the Fair Market
Value of the Common Stock covered by such an Option has declined since the date
the Option was granted;


 


(viii)        to initiate an Option
Exchange Program:


 


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(ix)           to prescribe, amend and
rescind rules and regulations relating to the Plan, including rules and
regulations relating to sub-plans established for the purpose of qualifying for
preferred tax treatment under foreign tax laws;


 


(x)            to allow Optionees to
satisfy withholding tax obligations electing to have the Company withhold from
the Shares to be issued upon exercise of an Option that number of Shares having
a Fair Market Value equal to the amount required to be withheld.  The Fair Market Value of the Shares to be
withheld shall be determined on the date that the amount of tax to be withheld
is to be determined.  All elections by
Optionees to have Shares withheld for this purpose shall be made in such form
and under such conditions as the Administrator may deem necessary or advisable;
and


 


(xi)           to construe and
interpret the terms of the Plan and awards granted pursuant to the Plan.


 


(c)           Effect of
Administrator’s Decision.  All
decisions, determinations and interpretations of the Administrator shall be
final and binding on all Optionees.  The
Administrator shall not be liable for any action or determination made in good
faith with respect to the Plan or any Stock Option granted under it.


 


5.             Eligibility; Grants.


 


(a)     Nonstatutory Stock
Options may be granted to Service Providers. 
Incentive Stock Options may be granted only to Employees.


 


(b)     Each Option shall be
designated in the Option Agreement as either an Incentive Stock Option or a
Nonstatutory Stock Option.  However,
notwithstanding such designation, to the extent that the aggregate Fair Market
Value of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by the Optionee during any calendar year (under
all plans of the Company and any Parent or Subsidiary) exceeds $100,000, such
Options shall be treated as Nonstatutory Stock Options.  For purposes of this Section 5(b),
Incentive Stock Options shall be taken into account in the order in which they
were granted.  The Fair Market Value of
the Shares shall be determined as of the time the Option with respect to such
Shares is granted.


 


(c)     Neither the Plan nor any
Option shall confer upon any Optionee any right with respect to continuing the
Optionee’s relationship as a Service Provider with the Company, nor shall it
interfere in any way with his or her right or the Company’s right to terminate
such relationship at any time, with or without cause.


 


(d)     The Board or the Committee
shall have the right to issue to the Non-employee Directors options in such
amount at fair market value and at such times as shall be approved by the
entire Board.


 


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6.             Term
of Plan.  The Plan shall become
effective upon its adoption by the Board. 
It shall continue in effect for a term of ten (10) years unless
sooner terminated under Section 14 of the Plan.


 


7.             Term
of Option.  The term of each Option
shall be stated in the Option Agreement; provided, however, that the term shall
be no more than ten (10) years from the date of grant thereof.  In the case of an Incentive Stock Option
granted to an Optionee who, at the time the Option is granted, owns stock
representing more than ten percent (10%) of the voting power of all classes of
stock of the Company or any Parent or Subsidiary, the term of the Option shall
be five (5) years from the date of grant or such shorter term as may be
provided in the Option Agreement.


 


8.             Option
Exercise Price and Consideration.


 


(a)           The per share exercise
price for the Shares to be issued upon exercise of an Option shall be such
price as is determined by the Administrator, but shall be subject to the
following:


 


(i)            In the case of an Incentive Stock Option


 


(A)          granted to an Employee
who, at the time of grant of such Option, owns stock representing more than ten
percent (10%) of the voting power of all classes of stock of the Company or any
Parent or Subsidiary, the exercise price shall be no less that 110% of the Fair
Market Value per Share on the date of grant.


 


(B)           granted to any other
Employee, the per Share exercise price shall be no less than 100% of the Fair
Market Value per Share on the date of grant.


 


(ii)           Notwithstanding the
foregoing, Options may be granted with a per Share exercise price other than as
required above pursuant to a merger or other corporate transaction.


 


(b)           The consideration to be
paid for the Shares to be issued upon exercise of an Option, including the
method of payment, shall be determined by the Administrator (and, in the case
of an Incentive Stock Option, shall be determined at the time of grant).  Such consideration may consist of (1) cash,
(2) check, (3) promissory note, (4) other Shares which (x) in
the case of Shares acquired upon exercise of an Option, have been owned by the
Optionee for more than six months on the date of surrender, and (y) have a
Fair Market Value on the date of surrender equal to the aggregate exercise
price of the Shares as to which such Option shall be exercised, (5) consideration
received by the Company under a cashless exercise program implemented by the
Company in connection with the Plan, or (6) any combination of the
foregoing methods of payment.  In making
its determination as to the type of consideration to accept, the Administrator
shall consider if acceptance of such consideration may reasonably be expected
to benefit the Company.


 


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9.             Exercise
of Options.


 


(a)           Vesting; Procedure
for Exercise; Rights as a Stockholder. 
Any Option granted hereunder shall be exercisable according to the terms
hereof at such times and under such conditions as determined by the
Administrator and set forth in the Option Agreement.  Unless the Administrator provides otherwise,
vesting of Options granted hereunder shall be tolled during any unpaid leave of
absence.  An Option may not be exercised
for a fraction of a Share.


 


An Option shall be deemed
exercised when the Company receives: (i) written notice of exercise (in
accordance with the Option Agreement) from the person entitled to exercise the
Option, and (ii) full payment for the Shares with respect to which the
Option is exercised.  Full payment may
consist of any consideration and method of payment authorized by the
Administrator and permitted by the Option Agreement and the Plan.  Shares issued upon exercise of an Option
shall be issued in the name of the Optionee or, if requested by the Optionee,
in the name of the Optionee and his or her spouse.  Until the Shares are issued (as evidenced by
the appropriate entry on the books of the Company or of a duly authorized
transfer agent of the Company), no right to vote or receive dividends or any
other rights as a stockholder shall exist with respect to the Shares,
notwithstanding the exercise of the Option. 
The Company shall issue (or cause to be issued) such Shares promptly
after the Option is exercised.  No
adjustment will be made for a dividend or other right for which the record date
is prior to the date the Shares are issued, except as provided in Section 12
of the Plan.


 


Exercise of an Option in
any manner shall result in a decrease in the number of Shares thereafter
available, both for purposes of the Plan and for sale under the Option, by the
number of Shares as to which the Option is exercised.


 


(b)           Termination of
Relationship as a Service Provider. If an Optionee ceases to be an Employee
or Consultant, such Optionee may exercise his or her Option within such period
of time as is specified in the Option Agreement (of at least thirty (30) days)
to the extent that the Option is vested on the date of termination (but in no
event later than the expiration of the term of the Option as set forth in the
Option Agreement).  In the absence of a
specified time in the Option Agreement, the Option shall remain exercisable for
three (3) months following the Optionee’s termination.  If, on the date of termination, the Optionee
is not vested as to his or her entire Option, the Shares covered by the
unvested portion of the Option shall revert to the Plan.  If, after termination, the Optionee does not
exercise his or her Option within the time specified by the Administrator, the
Option shall terminate, and the Shares covered by such Option shall revert to
the Plan.


 


(c)           Disability of
Optionee.  If an Optionee ceases to
be an Employee or Consultant as a result of the Optionee’s disability, the
Optionee may exercise his or her Option within such period of time as is
specified in the Option Agreement to the extent the Option is vested on the
date of termination (but in no event later than the expiration of the term of
such Option as set forth in the Option Agreement).  In the absence of a specified time in the
Option Agreement, the Option shall remain exercisable for twelve (12) months
following the Optionee’s termination.  If
such disability is not a “disability” as such term is defined in Section 22(e)(3) of  


 


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the Code, in the case of
an Incentive Stock Option such Incentive Stock Option shall automatically cease
to be treated as an Incentive Stock Option and shall be treated for tax
purposes as a Nonstatutory Stock Option on the day three months and one day
following such termination.  If, on the
date of termination, the Optionee is not vested as to his or her entire Option,
the Shares covered by the unvested portion of the Option shall revert to the
Plan.  If, after termination, the
Optionee does not exercise his or her Option within the time specified herein,
the Option shall terminate, and the Shares covered by such Option shall revert
to the Plan.


 


(d)           Death of Optionee.  If an Optionee dies while an Employee or
Consultant, the Option may be exercised within the period of time as is
specified in the Option Agreement (but in no event later than the expiration of
the term of such Option as set forth in the Notice of Grant), by the Optionee’s
estate or by a person who acquires the right to exercise the Option by bequest
or inheritance, but only to the extent that the Option is vested on the date of
date of death.  In the absence of a
specified time in the Option Agreement, the Option shall remain exercisable for
twelve (12) months following the Optionee’s termination.  If, at the time of death, the Optionee is not
vested as to his or her entire Option, the Shares covered by the unvested
portion of the Option shall immediately revert to the Plan.  The Option may be exercised by the executor
or administrator of the Optionee’s estate or, if none, by the persons entitled
to exercise the Option under the Optionee’s will or the laws of descent or
distribution.  If the Option is not so
exercised within the time specified herein, the Option shall terminate, and the
Shares covered by such Option shall revert to the Plan.


 


(e)   Buyout Provisions.  The Administrator may at any time offer to
buy out for a payment in cash or Shares, an Option previously granted, based on
such terms and conditions as the Administrator shall establish and communicate
to the Optionee at the time that such offer is made.


 


(f)    Non-employee Director
Options.  Except as provided herein,
a Non-employee Director Option may be exercised at any time during its
term.  The Non-employee Director Option
shall not be affected by the Optionee thereunder ceasing to be a Director of
the Company or becoming an employee of the Company, any of its subsidiaries;
provided, however, that if he is terminated for cause, such Non-employee
Director Options then held by such Director shall terminate immediately.


 


10.           Non-Transferability
of Options.  Options may not be sold,
pledged, assigned, hypothecated, transferred, or disposed of in any manner
other than by will or by the laws of descent or distribution and may be
exercised, during the lifetime of the Optionee, only by the Optionee.


 


11.           [Intentionally
Omitted.]


 


12.           Adjustments upon Changes in Capitalization, Merger or
Asset Sale.


 


(a)           Changes in
Capitalization.  The maximum number
of shares of Common Stock for which Options may be issued to any single
individual in any calendar year, and the 


 


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number of shares of
Common Stock which have been authorized for issuance under the Plan but as to
which no Options have yet been granted or which have been returned to the Plan
upon cancellation or expiration of an Option, as well as the price per share of
Common Stock covered by each such outstanding Option, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of issued shares of Common Stock effected without
receipt of consideration by the Company. 
The conversion of any convertible securities of the Company shall not be
deemed to have been “effected without receipt of consideration.”  Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and
conclusive.  Except as expressly provided
herein, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or price
of shares of Common Stock subject to an Option.


 


(b)           Dissolution or
Liquidation.  In the event of the
proposed dissolution or liquidation of the Company, the Administrator shall
notify each Optionee as soon as practicable prior to the effective date of such
proposed transaction.  The Administrator
in its discretion may provide for an Optionee to have the right to exercise his
or her Option until fifteen (15) days prior to such transaction as to all of
the Optioned Stock covered thereby, including Shares as to which the Option
would not otherwise be exercisable.  In
addition, the Administrator may provide that any Company repurchase  option applicable to any Shares purchased
upon exercise of an Option shall lapse as to all such Shares, provided the
proposed  dissolution or liquidation
takes place at the time and in the manner contemplated.  To the extent it has not been previously
exercised, an Option will terminate immediately prior to the consummation of
such proposed action.


 


(c)           Merger or Asset Sale.  In the event of a merger of the Company with
or into another corporation, or the sale of substantially all of the assets of
the Company, each outstanding Option shall be assumed or an equivalent option
or right substituted by the successor corporation or a Parent or Subsidiary of
the successor corporation.  In the event
that the successor corporation refuses to assume or substitute for the Option ,
the Optionee shall fully vest in and have the right to exercise the Option as
to all of the Optioned Stock, including Shares as to which it would not
otherwise be vested or exercisable.  If
an Option becomes fully vested and exercisable in lieu of assumption or
substitution in the event of a merger or sale of assets, the Administrator
shall notify the Optionee in writing or electronically that the Option shall be
fully exercisable for a period of fifteen (15) days from the date of such
notice, and the Option shall terminate upon the expiration of such period.  For the purposes of this paragraph, the
Option shall be considered assumed if, following the merger or sale of assets,
the option or right confers the right to purchase or receive, for each Share of
Optioned Stock subject to the Option immediately prior to the merger or sale of
assets, the consideration (whether stock, cash, or other securities or
property) received in the merger or sale of assets by holders of Common Stock for
each Share held on the effective date of the transaction (and if holders were
offered a choice of consideration, the type of consideration chosen by the
holders of a majority of the outstanding Shares); provided, however, that if
such consideration received in the merger or sale of assets is not solely
common stock of the successor corporation or its Parent, the Administrator may,
with 


 


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the consent of the
successor corporation, provide for the consideration to be received upon the
exercise of the Option , for each Share of Optioned Stock subject to the Option
, to be solely common stock of the successor corporation or its Parent equal in
fair market value to the per share consideration received by holders of Common
Stock in the merger or sale of assets.


 


13.           Time
of Granting Options.  The date of
grant of an Option shall, for all purposes, be the date on which the
Administrator makes the determination granting such Option, or such other date
as is determined by the Administrator. 
Notice of the determination shall be given to each Employee or
Consultant to whom an Option is so granted within a reasonable time after the
date of such grant.


 


14.           Amendment
and Termination of the Plan.


 


(a)           Amendment and Termination.  The Board may at any time, amend, alter,
suspend or terminate the Plan.


 


(b)           Stockholder Approval.  The Board shall obtain stockholder approval
of any Plan amendment to the extent necessary and desirable to comply with
Applicable Laws.


 


(c)           Effect of Amendment
or Termination.  No amendment,
alteration, suspension or termination of the Plan shall impair the right of the
Optionee, unless mutually agreed otherwise between the Optionee and the
Administrator, which agreement must be in writing and signed by the Optionee
and the Company.  Termination of the Plan
shall not affect the Administrator’s ability to exercise the powers granted to
it hereunder with respect to Options granted under the Plan prior to the date
of such termination.


 


15.           Conditions Upon Issuance of Shares.


 


(a)           Legal Compliance.  Shares shall not be issued pursuant to the
exercise of an Option unless the exercise of such Option and the issuance and
delivery of such Shares shall comply with Applicable Laws and shall be further
subject to the approval of counsel for the Company with respect to such
compliance.


 


(b)           Investment
Representations.  As a condition to
the exercise of an Option, the Administrator may require the person exercising
such Option to represent and warrant at the time of any such exercise that the
Shares are being purchased only for investment and without any present
intention to sell or distribute such Shares if, in the opinion of counsel for
the Company, such a representation is required.


 


16.           Inability
to Obtain Authority.  The inability
of the Company to obtain authority from any regulatory body having
jurisdiction, which authority is deemed by the Company’s counsel to be
necessary to the lawful issuance and sale of any Shares hereunder, shall
relieve the Company of any liability in respect of the failure to issue or sell
such Shares as to which such requisite authority shall not have been obtained.


 


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17.           Reservation
of Shares.  The Company, during the
term of this Plan, shall at all times reserve and keep available such number of
Shares as shall be sufficient to satisfy the requirements of the Plan.


 


18.           Stockholder
Approval.  The Plan shall be subject
to approval by the stockholders of the Company within twelve (12) months after
the date the Plan is adopted.  Such
stockholder approval shall be obtained in the degree and manner required under
Applicable Laws.


 


19.           Information
to Optionees and Purchasers.  The
Company shall provide to each Optionee and to each individual who acquires
Shares pursuant to the Plan, not less frequently than annually during the
period such Optionee or purchaser has one or more Options outstanding and, in
the case of an individual who acquires Shares pursuant to the Plan, during the
period such individual owns such Shares, copies of annual financial
statements.  The Company shall not be
required to provide such statements to key employees whose duties in connection
with the Company assure their access to equivalent information.  This Section shall not apply to Options
awarded after the Restatement Date.


 


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