**Exh 10.1**

 

**INVESTORS FINANCIAL SERVICES CORP.**

 

**AMENDED AND RESTATED 1995 STOCK PLAN**

 

 

           **1.**          **Purpose.**The purpose of the Investors Financial Services Corp.****1995 Stock Plan (the “Plan”)is to encourage key employees of Investors Financial Services Corp.****(the“Company”) and of any present or future parent or subsidiary of the Company(collectively, “Related Corporations”) and other individuals who renderservices to the Company or a Related Corporation, by providing opportunities toparticipate in the ownership of the Company and its future growth through(a) the grant of options which qualify as “incentive stock options”(“ISOs”) under Section 422(b) of the Internal Revenue Code of 1986, as amended(the “Code”); (b) the grant of options which do not qualify as ISOs(“Non-Qualified Options”); (c) awards of stock in the Company (“Awards”);and (d) opportunities to make direct purchases of stock in the Company(“Purchases”).  Both ISOs andNon-Qualified Options are referred to hereafter individually as an “Option” andcollectively as “Options.”  Options,Awards and authorizations to make Purchases are referred to hereaftercollectively as “Stock Rights.”  As usedherein, the terms “parent” and “subsidiary” mean “parent corporation” and“subsidiary corporation,” respectively, as those terms are defined in Section424 of the Code.

 

                                **2.**          **Administration of the Plan.**

 

                                             **A.**         **Board or Committee Administration. **The Plan shall be administered by theBoard of Directors of the Company (the “Board”) or by a committee appointed bythe Board (the “Committee”); provided that the Plan shall be administered:(i) to the extent required by applicable regulations underSection 162(m) of the Code, by two or more “outside directors” (as definedin applicable regulations thereunder) and (ii) to the extent required byRule 16b-3 promulgated under the Securities Exchange Act of 1934 or anysuccessor provision (“Rule 16b-3”), by a disinterested administrator oradministrators within the meaning of Rule 16b-3.  Hereinafter, all references in this Plan to the “Committee” shallmean the Board if no Committee has been appointed.  Subject to ratification of the grant or authorization of eachStock Right by the Board (if so required by applicable state law), and subjectto the terms of the Plan, the Committee shall have the authority to(i) determine to whom (from among the class of employees eligible underparagraph 3 to receive ISOs) ISOs shall be granted, and to whom (fromamong the class of individuals and entities eligible under paragraph 3 toreceive Non-Qualified Options and Awards and to make Purchases) Non-QualifiedOptions, Awards and authorizations to make Purchases may be granted;(ii) determine the time or times at which Options or Awards shall begranted or Purchases made; (iii) determine the purchase price of sharessubject to each Option or Purchase, which prices shall not be less than theminimum price specified in paragraph 6; (iv) determine whether eachOption granted shall be an ISO or a Non-Qualified Option; (v) determine(subject to paragraph 7) the time or times when each Option shall becomeexercisable and the duration of the exercise period; (vi) extend theperiod during which outstanding Options may be exercised; (vii) determinewhether restrictions such as repurchase options are to be imposed on sharessubject to Options, Awards and Purchases and the nature of such restrictions,if any, and (viii) interpret the Plan and prescribe and rescind rules andregulations relating to it.  If the Committeedetermines to issue a Non-Qualified Option, it shall take whatever actions itdeems necessary, under Section 422 of the Code and the regulationspromulgated thereunder, to ensure that such Option is not treated as anISO.  The interpretation and constructionby the Committee of any provisions of the Plan or of any Stock Right grantedunder it shall be final unless otherwise determined by the Board.  The Committee may from time to time adoptsuch rules and regulations for carrying out the Plan as it may deemadvisable.  No member of the Board orthe Committee shall be liable for any action or determination made in goodfaith with respect to the Plan or any Stock Right granted under it.

 

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                                             **B.**         **Committee Actions. **The Committee may select one of itsmembers as its chairman, and shall hold meetings at such time and places as itmay determine.  A majority of theCommittee shall constitute a quorum and acts of a majority of the members ofthe Committee at a meeting at which a quorum is present, or acts reduced to orapproved in writing by all the members of the Committee (if consistent withapplicable state law), shall be the valid acts of the Committee.   From time to time the Board may increasethe size of the Committee and appoint additional members thereof, removemembers (with or without cause) and appoint new members in substitutiontherefor, fill vacancies however caused, or remove all members of the Committeeand thereafter directly administer the Plan.

 

                                             **C.**         **Grant of Stock Rights to Board Members. **Subject to the provisions ofparagraph 2(A) above, if applicable, Stock Rights may be granted tomembers of the Board.  All grants ofStock Rights to members of the Board shall in all other respects be made inaccordance with the provisions of this Plan applicable to other eligiblepersons.  Consistent with the provisionsof Paragraph 2(A) above, members of the Board who either (i) areeligible to receive grants of Stock Rights pursuant to the Plan or(ii) have been granted Stock Rights may vote on any matters affecting theadministration of the Plan or the grant of any Stock Rights pursuant to thePlan, except that no such member shall act upon the granting to himself orherself of Stock Rights, but any such member may be counted in determining theexistence of a quorum at any meeting of the Board during which action is takenwith respect to the granting to such member of Stock Rights.

 

           **3.**          **EligibleEmployees and Others. **ISOsmay be granted only to employees of the Company or any RelatedCorporation.  Non-Qualified Options,Awards and authorizations to make Purchases may be granted to any employee,officer or director (whether or not also an employee) or consultant of theCompany or any Related Corporation.  TheCommittee may take into consideration a recipient’s individual circumstances indetermining whether to grant a Stock Right. The granting of any Stock Right to any individual or entity shallneither entitle that individual or entity to, nor disqualify such individual orentity from, participation in any other grant of Stock Rights.

 

           **4.**          **Stock. **The stock subject to Stock Rights shallbe authorized but unissued shares of Common Stock of the Company, par value$.01 per share (the “Common Stock”), or shares of Common Stock reacquired bythe Company in any manner.  Theaggregate number of shares which may be issued pursuant to the Plan is7,640,000, subject to adjustment as provided in paragraph 13.  If any Stock Right granted under the Planshall expire or terminate for any reason without having been exercised in fullor shall cease for any reason to be exercisable in whole or in part or shall berepurchased by the Company, the shares of Common Stock subject to such StockRight shall again be available for grants of Stock Rights under the Plan.

 

           No employee of the Company or anyRelated Corporation may be granted Options to acquire, in the aggregate, morethan 1,792,000 shares of Common Stock under the Plan, subject to adjustment asprovided in paragraph 13.  If any Optiongranted under the Plan shall expire or terminate for any reason without havingbeen exercised in full or shall cease for any reason to be exercisable in wholeor in part or shall be repurchased by the Company, the shares subject to suchOption shall be included in the determination of the aggregate number of sharesof Common Stock deemed to have been granted to such employee under thePlan.  If, in accordance with the Plan,an optionee uses shares of common stock of the Company to pay the exerciseprice of an Option, only the number of shares issued net of shares tendered inpayment of such exercise price shall be deemed to be issued for purposes ofdetermining the maximum number of shares available under the Plan.

 

           **5.**          **Grantingof Stock Rights. **StockRights may be granted under the Plan at any time on or after August 15, 1995 andprior to August 1, 2005.  The date ofgrant of a Stock Right under the Plan will be the date specified by theCommittee at the time it grants the Stock Right; provided, however, that suchdate shall not be prior to the date on which the Committee acts to approve thegrant.  Options granted under 

 

 

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the Plan areintended to qualify as performance-based compensation to the extent requiredunder Treasury Regulation Section 1.162-27.

 

           **6.**          **MinimumOption Price; ISO Limitations.**

 

                                             **A.**         **Price for Non-Qualified Options, Awards and Purchases. **The exercise price per share specifiedin the agreement relating to each Non-Qualified Option granted, and thepurchase price per share of stock granted in any Award or authorized as aPurchase, under the Plan shall in no event be less than the minimum legalconsideration required therefor under the laws of any jurisdiction in which theCompany or its successors in interest may be organized.

 

                                             **B.**         **Price for ISOs. **The exercise price per share specified in the agreement relatingto each ISO granted under the Plan shall not be less than the fair market valueper share of Common Stock on the date of such grant.  In the case of an ISO to be granted to an employee owning stockpossessing more than ten percent (10%) of the total combined voting power ofall classes of stock of the Company or any Related Corporation, the price pershare specified in the agreement relating to such ISO shall not be less thanone hundred ten percent (110%) of the fair market value per share of CommonStock on the date of grant.  Forpurposes of determining stock ownership under this paragraph, the rules ofSection 424(d) of the Code shall apply.

 

                                             **C.**         **$100,000 Annual Limitation on ISO Vesting.** Each eligible employee may be granted Optionstreated as ISOs only to the extent that, in the aggregate under this Plan andall incentive stock option plans of the Company and any Related Corporation,ISOs do not become exercisable for the first time by such employee during anycalendar year with respect to stock having a fair market value (determined atthe time the ISOs were granted) in excess of $100,000.  The Company intends to designate any Optionsgranted in excess of such limitation as Non-Qualified Options.

 

                                             **D.**         **Determination of Fair Market Value. **If, at the time an Option is grantedunder the Plan, the Company’s Common Stock is publicly traded, “fair marketvalue” shall be determined as of the date of grant or, if the prices or quotesdiscussed in this sentence are unavailable for such date, the last business dayfor which such prices or quotes are available prior to the date of grant andshall mean (i) the average (on that date) of the high and low prices ofthe Common Stock on the principal national securities exchange on which theCommon Stock is traded, if the Common Stock is then traded on a nationalsecurities exchange; or (ii) the last reported sale price (on that date)of the Common Stock on the Nasdaq National Market, if the Common Stock is notthen traded on a national securities exchange; or (iii) the closing bidprice (or average of bid prices) last quoted (on that date) by an establishedquotation service for over-the-counter securities, if the Common Stock is notreported on the Nasdaq National Market. If the Common Stock is not publicly traded at the time an Option isgranted under the Plan, “fair market value” shall mean the fair value of theCommon Stock as determined by the Committee after taking into consideration allfactors which it deems appropriate, including, without limitation, recent saleand offer prices of the Common Stock in private transactions negotiated atarm’s length.

 

           **7.**          **OptionDuration. **Subject toearlier termination as provided in paragraphs 9 and 10 or in the agreementrelating to such Option, each Option shall expire on the date specified by theCommittee, but not more than (i) ten years from the date of grant in thecase of Options generally and (ii) five years from the date of grant inthe case of ISOs granted to an employee owning stock possessing more than tenpercent (10%) of the total combined voting power of all classes of stock of theCompany or any Related Corporation, as determined underparagraph 6(B).  Subject to earliertermination as provided in paragraphs 9 and 10, the term of each ISO shallbe the term set forth in the original instrument granting such ISO, except withrespect to any part of such ISO that is converted into a Non-Qualified Optionpursuant to paragraph 16.

 

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           **8.**          **Exerciseof Option. **Subject tothe provisions of paragraphs 9 through 12, each Option granted under thePlan shall be exercisable as follows:

 

                                             **A.**         **Vesting. **The Option shall either be fully exercisable on the date of grant orshall become exercisable thereafter in such installments as the Committee mayspecify.

 

                                             **B.**         **Full Vesting of Installments. **Once an installment becomes exercisableit shall remain exercisable until expiration or termination of the Option,unless otherwise specified by the Committee.

 

                                             **C.**         **Partial Exercise. **Each Option or installment may be exercised at any time orfrom time to time, in whole or in part, for up to the total number of shareswith respect to which it is then exercisable.

 

                                             **D.**         **Acceleration of Vesting. **The Committee shall have the right toaccelerate the date that any installment of any Option becomes exercisable;provided that the Committee shall not, without the consent of an optionee,accelerate the permitted exercise date of any installment of any Option grantedto any employee as an ISO (and not previously converted into a Non-Qualified Optionpursuant to paragraph 16) if such acceleration would violate the annualvesting limitation contained in Section 422(d) of the Code, as described inparagraph 6(C).

 

            **9.         Terminationof Employment. **Unlessotherwise specified in the agreement relating to such ISO, if an ISO optioneeceases to be employed by the Company and all Related Corporations other than byreason of death or disability as defined in paragraph 10, no furtherinstallments of his or her ISOs shall become exercisable, and his or her ISOsshall terminate on the earlier of (a) thirty (30) days after the  date of termination of his or heremployment, or (b)  their specified expiration dates, except to the extentthat such ISOs (or unexercised installments thereof) have been converted intoNon-Qualified Options pursuant to paragraph 16.  For purposes of this paragraph 9, employment shall beconsidered as continuing uninterrupted during any bona fide leave of absence(such as those attributable to illness, military obligations or governmentalservice) provided that the period of such leave does not exceed 90 daysor, if longer, any period during which such optionee’s right to reemployment isguaranteed by statute.  A bona fideleave of absence with the written approval of the Committee shall not beconsidered an interruption of employment under this paragraph 9, provided thatsuch written approval contractually obligates the Company or any RelatedCorporation to continue the employment of the optionee after the approvedperiod of absence.  ISOs granted underthe Plan shall not be affected by any change of employment within or among theCompany and Related Corporations, so long as the optionee continues to be anemployee of the Company or any Related Corporation.  Nothing in the Plan shall be deemed to give any grantee of anyStock Right the right to be retained in employment or other service by theCompany or any Related Corporation for any period of time.

 

                                    **10.      Death;Disability**.

 

                                                           **A.         Death.**  If an ISO optionee ceases to be employed bythe Company and all Related Corporations by reason of his or her death, any ISOowned by such optionee may be exercised, to the extent otherwise exercisable onthe date of death, by the estate, personal representative or beneficiary whohas acquired the ISO by will or by the laws of descent and distribution, untilthe earlier of (i) the specified expiration date of the ISO or (ii) one yearfrom the date of the optionee’s death.

 

                                                           **B.         Disability. **If an ISO optionee ceases to beemployed by the Company and all Related Corporations by reason of his or herdisability, such optionee shall have the right to exercise any ISO held by himor her on the date of termination of employment, for the number of shares forwhich he or she could have exercised on that date, until the earlier of (i) thespecified expiration date of the ISO or (ii) one year from the date of the termination of the optionee’semployment.  For the 

 

 

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                                purposes of the Plan, the term“disability” shall mean “permanent and total disability” as defined in Section22(e)(3) of the Code or any successor statute.

 

                **11.**          **Assignability.**Except as set forthbelow, (i) no Stock Right shall be transferable by any grantee other thanby will or by the laws of descent and distribution and (ii) Stock Rightsmay be exercised during the grantee’s lifetime only by the grantee (or, if thegrantee is disabled and so long as the Stock Right remains exercisable, by thegrantee’s duly appointed guardian or other legal representative). However, agrantee may transfer (i) a Non-Qualified Option pursuant to a validdomestic relations order and (ii) a Stock Right other than an ISO to, orfor the benefit of, family members or to other persons for estate planningpurposes.  Following any such transfer,any such Stock Right shall continue to be subject to the same terms andconditions as were applicable immediately prior to transfer, and references toa grantee, to the extent relevant in the context, shall include references toauthorized transferees.  The events andconsequences of termination of employment set forth in a grantee’s agreementpursuant to which such Stock Right is granted shall continue to be applied andtriggered with reference to the original grantee, following which the StockRight shall be exercisable by the transferee only to the extent and for theperiods specified in such agreement.

 

           **12.**        **Terms andConditions of Options. **Optionsshall be evidenced by instruments (which need not be identical) in such formsas the Committee may from time to time approve.  Such instruments shall conform to the terms and conditions setforth in paragraphs 6 through 11 hereof and may contain such otherprovisions as the Committee deems advisable which are not inconsistent with thePlan, including restrictions applicable to shares of Common Stock issuable uponexercise of Options.  The Committee mayspecify that any Non-Qualified Option shall be subject to the restrictions setforth herein with respect to ISOs, or to such other termination and cancellationprovisions as the Committee may determine. The Committee may from time to time confer authority and responsibilityon one or more of its own members and/or one or more officers of the Company toexecute and deliver such instruments. The proper officers of the Company are authorized and directed to takeany and all action necessary or advisable from time to time to carry out theterms of such instruments.

 

           **13.**        **Adjustments.**

 

                                             **A.**         **Stock Dividends and Stock Splits. **If the shares of Common Stock shall besubdivided or combined into a greater or smaller number of shares or if theCompany shall issue any shares of Common Stock as a stock dividend on itsoutstanding Common Stock, the number of shares of Common Stock deliverable uponthe exercise of Options shall be appropriately increased or decreasedproportionately, and appropriate adjustments shall be made in the purchaseprice per share to reflect such subdivision, combination or stock dividend.

 

                                             **B.**         **Consolidations or Mergers. **If the Company is to be consolidatedwith or acquired by another entity in a merger, sale of all or substantiallyall of the Company’s assets or otherwise (an “Acquisition”), the Committee orthe board of directors of any entity assuming the obligations of the Companyhereunder (the “Successor Board”), shall, as to outstanding Options, either(i) make appropriate provision for the continuation of such Options bysubstituting on an equitable basis for the shares then subject to such Optionseither (a) the consideration payable with respect to the outstandingshares of Common Stock in connection with the Acquisition, (b) shares ofstock of the surviving corporation or (c) such other securities as theSuccessor Board deems appropriate, the fair market value of which shall notmaterially exceed the fair market value of the shares of Common Stock subjectto such Options immediately preceding the Acquisition; or (ii) uponwritten notice to the optionees, provide that all Options must be exercised, tothe extent then exercisable, within a specified number of days of the date ofsuch notice, at the end of which period the Options shall terminate; or(iii) terminate all Options in exchange for a cash payment equal to theexcess of the fair market value of the shares subject to such Options (to theextent then exercisable) over the exercise price thereof.

 

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                                             **C.**         **Recapitalization or Reorganization. **In the event of a recapitalization orreorganization of the Company (other than a transaction described insubparagraph B above) pursuant to which securities of the Company or ofanother corporation are issued with respect to the outstanding shares of CommonStock, an optionee upon exercising an Option shall be entitled to receive forthe purchase price paid upon such exercise the securities he or she would havereceived if he or she had exercised such Option prior to such recapitalizationor reorganization.

 

                                             **D.**         **Modification of ISOs. **Notwithstanding the foregoing, anyadjustments made pursuant to subparagraphs A, B or C with respect to ISOsshall be made only after the Committee, after consulting with counsel for theCompany, determines whether such adjustments would constitute a “modification”of such ISOs (as that term is defined in Section 424 of the Code) or wouldcause any adverse tax consequences for the holders of such ISOs.  If the Committee determines that suchadjustments made with respect to ISOs would constitute a modification of suchISOs or would cause adverse tax consequences to the holders, it may refrainfrom making such adjustments.

 

                                             **E.**          **Dissolution or Liquidation. **In the event of the proposed dissolutionor liquidation of the Company, each Option will terminate immediately prior tothe consummation of such proposed action or at such other time and subject tosuch other conditions as shall be determined by the Committee.

 

                                             **F.**          **Issuances of Securities. **Except as expressly provided herein, noissuance by the Company of shares of stock of any class, or securitiesconvertible into shares of stock of any class, shall affect, and no adjustmentby reason thereof shall be made with respect to, the number or price of sharessubject to Options.  No adjustmentsshall be made for dividends paid in cash or in property other than securitiesof the Company.

 

                                             **G.**         **Fractional Shares. **No fractional shares shall be issuedunder the Plan and the optionee shall receive from the Company cash in lieu ofsuch fractional shares.

 

                                             **H.**         **Adjustments. **Upon the happening of any of the events described insubparagraphs A, B or C above, the class and aggregate number of sharesand the per participant limit set forth in paragraph 4 hereof that aresubject to Stock Rights which previously have been or subsequently may begranted under the Plan shall also be appropriately adjusted to reflect theevents described in such subparagraphs. The Committee or the Successor Board shall determine the specificadjustments to be made under this paragraph 13 and, subject toparagraph 2, its determination shall be conclusive.

 

           **14.**        **Means ofExercising Options. **AnOption (or any part or installment thereof) shall be exercised by givingwritten notice to the Company at its principal office address, or to suchtransfer agent as the Company shall designate. Such notice shall identify the Option being exercised and specify thenumber of shares as to which such Option is being exercised, accompanied byfull payment of the purchase price therefor either (a) in United Statesdollars in cash or by check, (b) at the discretion of the Committee,through delivery of shares of Common Stock having a fair market value equal asof the date of the exercise to the cash exercise price of the Option,(c) at the discretion of the Committee, by delivery of the grantee’spersonal recourse note bearing interest payable not less than annually at noless than 100% of the lowest applicable Federal rate, as defined inSection 1274(d) of the Code, (d) at the discretion of the Committeeand consistent with applicable law, through the delivery of an assignment tothe Company of a sufficient amount of the proceeds from the sale of the CommonStock acquired upon exercise of the Option and an authorization to the brokeror selling agent to pay that amount to the Company, which sale shall be at theparticipant’s direction at the time of exercise, or (e) at the discretionof the Committee, by any combination of (a), (b), (c) and (d) above.  If the Committee exercises its discretion topermit payment of the exercise price of an ISO by means of the methods setforth in clauses (b), (c), (d) or (e) of the preceding sentence, suchdiscretion shall be exercised in writing at the time of the grant of the ISO inquestion.  The holder of an Option shallnot have the rights of a stockholder with respect to the shares covered by suchOption until the date of issuance of a stock certificate to such holder for suchshares.  Except as expressly providedabove in 

 

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paragraph 13with respect to changes in capitalization and stock dividends, no adjustmentshall be made for dividends or similar rights for which the record date isbefore the date such stock certificate is issued.

 

           **15.**        **Term andAmendment of Plan. **ThisPlan was originally adopted by the Board on August 15, 1995, and approved bythe sole stockholder of the Company in August 1995.  The Plan shall expire at the end of the day on August 1, 2005(except as to Options outstanding on that date).  The Board may terminate or amend the Plan in any respect at anytime, except that, without the approval of the stockholders obtained within 12months before or after the Board adopts a resolution authorizing any of thefollowing actions: (a) the total number of shares that may be issued underthe Plan may not be increased (except by adjustment pursuant toparagraph 13); (b) the benefits accruing to participants under thePlan may not be materially increased; (c) the requirements as to eligibilityfor participation in the Plan may not be materially modified; (d) theprovisions of paragraph 3 regarding eligibility for grants of ISOs may notbe modified; (e) the provisions of paragraph 6(B) regarding theexercise price at which shares may be offered pursuant to ISOs may not bemodified (except by adjustment pursuant to paragraph 13); (f) theexpiration date of the Plan may not be extended; and (g) the Board may nottake any action which would cause the Plan to fail to comply withRule 16b-3.  Except as otherwiseprovided in this paragraph 15, in no event may action of the Board orstockholders alter or impair the rights of a grantee, without such grantee’sconsent, under any Option previously granted to such grantee.

 

           **16.**        **Conversionof ISOs into Non-Qualified Options.**  The Committee, at the written request or with the written consentof any optionee, may in its discretion take such actions as may be necessary toconvert such optionee’s ISOs (or any installments or portions of installmentsthereof) that have not been exercised on the date of conversion intoNon-Qualified Options at any time prior to the expiration of such ISOs,regardless of whether the optionee is an employee of the Company or a RelatedCorporation at the time of such conversion. Such actions may include, but shall not be limited to, extending theexercise period or reducing the exercise price of the appropriate installmentsof such ISOs.  At the time of suchconversion, the Committee (with the consent of the optionee) may impose suchconditions on the exercise of the resulting Non-Qualified Options as theCommittee in its discretion may determine, provided that such conditions shallnot be inconsistent with this Plan. Nothing in the Plan shall be deemed to give any optionee the right tohave such optionee’s ISOs converted into Non-Qualified Options, and no suchconversion shall occur until and unless the Committee takes appropriate action.

 

           **17.**        **ApplicationOf Funds. **The proceedsreceived by the Company from the sale of shares pursuant to Options granted andPurchases authorized under the Plan shall be used for general corporatepurposes.

 

           **18.**        **Notice toCompany of Disqualifying Disposition.**  By accepting an ISO granted under the Plan, each optionee agreesto notify the Company in writing immediately after such optionee makes aDisqualifying Disposition (as described in Sections 421, 422 and 424 ofthe Code and regulations thereunder) of any stock acquired pursuant to theexercise of ISOs granted under the Plan. A Disqualifying Disposition is generally any disposition occurring on orbefore the later of (a) the date two years following the date the ISOwas granted or (b) the date one year following the date the ISO wasexercised.

 

           **19.**        **Withholdingof Additional Income Taxes. **Uponthe exercise of a Non-Qualified Option, the transfer of a Stock Right, thegrant of an Award, the making of a Purchase of Common Stock for less than itsfair market value, the making of a Disqualifying Disposition (as defined in paragraph 18),the vesting or transfer of restricted stock or securities acquired on theexercise of an Option hereunder, or the making of a distribution or otherpayment with respect to such stock or securities, the Company may withholdtaxes in respect of amounts that constitute compensation includible in grossincome.  The Committee in its discretionmay condition (i) the exercise of an Option, (ii) the grant of anAward, (iii) the making of a Purchase of Common Stock for less than itsfair market value, or (iv) the vesting or transferability of restrictedstock or securities acquired by exercising an Option, on the grantee’s makingsatisfactory arrangement for such withholding. Such arrangement may include payment by the grantee in cash or by checkof the amount of the withholding taxes or, at the discretion of the Committee,by the 

 

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grantee’s deliveryof previously held shares of Common Stock or the withholding from the shares ofCommon Stock otherwise deliverable upon exercise of a Option shares having anaggregate fair market value equal to the amount of such withholding taxes.

 

           **20.**        **GovernmentalRegulation. **TheCompany’s obligation to sell and deliver shares of the Common Stock under thisPlan is subject to the approval of any governmental authority required inconnection with the authorization, issuance or sale of such shares.

 

           Government regulations may imposereporting or other obligations on the Company with respect to the Plan.  For example, the Company may be required tosend tax information statements to employees and former employees that exerciseISOs under the Plan, and the Company may be required to file tax informationreturns reporting the income received by grantees of Options in connection withthe Plan.

 

           **21.**        **GoverningLaw. **The validity andconstruction of the Plan and the instruments evidencing Options shall begoverned by the laws of the Commonwealth of Massachusetts, or the laws of anyjurisdiction in which the Company or its successors in interest may beorganized.

 

 

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