Ex-10.1 1998 Incentive & Nonqualified Stock Option





Exhibit 10.1



As amended through June 1, 2001



CHARLES RIVER ASSOCIATES INCORPORATED


1998 INCENTIVE AND NONQUALIFIED STOCK OPTION PLAN






     SECTION 1.  PURPOSE


     This 1998 Incentive and Nonqualified Stock Option Plan (the “Plan”) of
Charles River Associates Incorporated (the “Company”), is designed to provide
additional incentive to executives and other key employees of the Company, and
any parent or subsidiary of the Company, and to certain other individuals
providing services to or acting as directors of the Company or any such parent
or subsidiary. The Company intends that this purpose will be effected by the
granting of incentive stock options (“Incentive Stock Options”) as defined in
Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), and
nonqualified stock options (“Nonqualified Options”) under the Plan which afford
such executives, key employees or other individuals an opportunity to acquire
or increase their proprietary interest in the Company through the acquisition
of shares of its Common Stock. The Company intends that Incentive Stock
Options issued under the Plan will qualify as “incentive stock options” as
defined in Section 422 of the Code and the terms of the Plan shall be
interpreted in accordance with this intention. As used in the Plan the terms
“parent” and “subsidiary” shall have the respective meanings set forth in
Section 424 of the Code.


SECTION 2.  ADMINISTRATION



     2.1 The Plan Administrator. The Plan shall be administered by the Plan
Administrator (the Plan Administrator”), which shall consist of the Board of
Directors of the Company (the “Board”) or, if appointed by the Board, a
committee consisting of at least two “Disinterested Directors.” As used
herein, the term Disinterested Director means any director of the Company who
(i) is not a current employee of the Company or a member of an “affiliated
group,” as such term is defined in Section 1504(a) of the Code, which includes
the Company (an “Affiliate”), (ii) is not a former employee of the Company or
any Affiliate who receives compensation for prior services (other than benefits
under a tax-qualified retirement plan) during the Company’s or any Affiliate’s
taxable year (iii) has not been an officer of the Company or any Affiliate; and
(iv) does not receive remuneration from the Company or any Affiliate, either
directly or indirectly, in any capacity other than as a director. If the Plan
is not administered by the Board, none of the members of the Plan Administrator
shall be an officer or other employee of the Company. It is the intention of
the Company that the Plan, if not administered by the Board, shall be
administered by a committee having two or more “Non-Employee Directors” within
the meaning of Rule 16b-3 under the Securities Exchange Act of 1934, as amended
(the “1934 Act”), but the authority and validity of any act taken or not taken
by the Plan Administrator shall not be affected if any person administering the
Plan is not a Non-Employee Director. Except as specifically reserved to the
Board under the terms of the Plan, the Plan Administrator shall have full and
final authority to operate, manage and administer the Plan on


 






behalf of the
Company. Action by the Plan Administrator shall require the affirmative vote
of a majority of all members thereof.


     2.2 Powers of the Plan Administrator. Subject to the terms and conditions
of the Plan, the Plan Administrator shall have the power:



		
	 	     (a) To determine from time to time the persons eligible to receive
options and the options to be granted to such persons under the Plan and
to prescribe the terms, conditions, restrictions, if any, and provisions
(which need not be identical) of each option granted under the Plan to
such persons;




		
	 	     (b) To construe and interpret the Plan and options granted
thereunder and to establish, amend, and revoke rules and regulations for
administration of the Plan. In this connection, the Plan Administrator
may correct any defect or supply any omission, or reconcile any
inconsistency in the Plan, or in any option agreement, in the manner and
to the extent it shall deem necessary or expedient to make the Plan fully
effective. All decisions and determinations by the Plan Administrator in
the exercise of this power shall be final and binding upon the Company
and optionees;




		
	 	     (c) To make, in its sole discretion, changes to any outstanding
option granted under the Plan, including: (i) to reduce the exercise
price, (ii) to accelerate the vesting schedule or (iii) to extend the
expiration date; and




		
	 	     (d) Generally, to exercise such powers and to perform such acts as
are deemed necessary or expedient to promote the best interests of the
Company with respect to the Plan.



SECTION 3.  STOCK


     3.1 Stock to be Issued. The stock subject to the options granted under
the Plan shall be shares of the Company’s authorized but unissued common stock,
without par value (the “Common Stock”), or shares of the Company’s Common Stock
held in treasury. The total number of shares that may be issued pursuant to
options granted under the Plan shall not exceed an aggregate of 1,870,000
shares of Common Stock; provided, however, that the class and aggregate number
of shares which may be subject to options granted under the Plan shall be
subject to adjustment as provided in Section 8 hereof.


     3.2 Expiration, Cancellation or Termination of Option. Whenever any
outstanding option under the Plan expires, is cancelled or is otherwise
terminated (other than by exercise), the shares of Common Stock allocable to
the unexercised portion of such option may again be the subject of options
under the Plan.


     3.3 Limitation on Grants. In no event may any Plan participant be granted
options with respect to more than 150,000 shares of Common Stock in any
calendar year. The number of shares of Common Stock issuable pursuant to an
option granted to a Plan participant in a calendar year that is subsequently
forfeited, cancelled or otherwise terminated shall continue to


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count toward the
foregoing limitation in such calendar year. In addition, if the exercise price
of an option is subsequently reduced, the transaction shall be deemed a
cancellation of the original option and the grant of a new one so that both
transactions shall count toward the maximum shares issuable in the calendar
year of each respective transaction.


SECTION 4.  ELIGIBILITY


     4.1 Persons Eligible. Incentive Stock Options under the Plan may be
granted only to officers and other employees of the Company or any parent or
subsidiary of the Company. Nonqualified Options may be granted to officers or
other employees of the Company or any parent or subsidiary of the Company, and
to members of the Board and consultants or other persons who render services to
the Company or any such parent or subsidiary (regardless of whether they are
also employees), provided, however, that options may be granted to members of
the Board who are neither employees of the Company or any such parent or
subsidiary nor consultants who provide economic consulting services to or in
conjunction with the Company or any such parent or subsidiary (“Outside
Directors”) only as provided in Section 4.4.


     4.2 Greater-Than-Ten-Percent Stockholders. Except as may otherwise be
permitted by the Code or other applicable law or regulation, no Incentive Stock
Option shall be granted to an individual who, at the time the option is
granted, owns (including ownership attributed pursuant to Section 424(d) of the
Code) more than ten percent of the total combined voting power of all classes
of stock of the Company or any parent or subsidiary (a
“greater-than-ten-percent stockholder”), unless such Incentive Stock Option
provides that (i) the purchase price per share shall not be less than one
hundred ten percent of the fair market value of the Common Stock at the time
such option is granted, and (ii) that such option shall not be exercisable to
any extent after the expiration of five years from the date it is granted.


     4.3 Maximum Aggregate Fair Market Value. The aggregate fair market value
(determined at the time the option is granted) of the Common Stock with respect
to which Incentive Stock Options are exercisable for the first time by any
optionee during any calendar year (under the Plan and any other plans of the
Company or any parent or subsidiary for the issuance of incentive stock
options) shall not exceed $100,000 (or such greater amount as may from time to
time be permitted with respect to incentive stock options by the Code or any
other applicable law or regulation). Any option granted in excess of the
foregoing limitation shall be specifically designated as being a Nonqualified
Option.


     4.4 Option Grants to Outside Directors.



		
	 	     (a) Grant of Options Upon Election to Board. Each Outside Director
joining the Board at or subsequent to the meeting of the Company’s
stockholders at which the Plan is approved (the “Approval Meeting”) shall
automatically be granted, upon such Outside Director so joining the
Board, an initial Nonqualified Option to purchase 10,000 shares of Common
Stock. Such Nonqualified Option shall vest and become exercisable in
three equal annual installments cumulatively beginning on the first
anniversary of the date of grant.



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	 	     (b) Grant of Options Upon Re-Election to Board or Continuation on
the Board. Each Outside Director who shall be re-elected by the
stockholders of the Company to the Board at or subsequent to the Approval
Meeting shall automatically be granted, immediately following the meeting
of stockholders at which such Outside Director shall be re-elected, a
Nonqualified Option to purchase 5,000 shares of Common Stock. In
addition, each Outside Director whose term of office shall not expire at
any annual meeting of stockholders or special meeting in lieu thereof
subsequent to the Approval Meeting and who shall remain an Outside
Director after such meeting shall automatically be granted, immediately
following such meeting, a Nonqualified Option to purchase 5,000 shares of
Common Stock. Each Nonqualified Option described in this Section 4.4(b)
shall vest and become exercisable in full on the first anniversary of the
date of grant.




		
	 	     (c) Purchase Price. The purchase price per share of Common Stock
under each Nonqualified Option granted pursuant to this Section 4.4 shall
be equal to the fair market value of the Common Stock on the date the
Nonqualified Option is granted, such fair market value to be determined
in accordance with the provisions of Section 6.3.




		
	 	     (d) Expiration. Each Nonqualified Option granted to an Outside
Director under this Section 4.4 shall expire on the fifth anniversary of
the date of grant with respect to all Nonqualified Options so granted
prior to the date of the approval of this Plan by the Company’s
stockholders in 1999 and the tenth anniversary of the date of grant with
respect to all other Nonqualified Options so granted.



SECTION 5.  TERMINATION OF EMPLOYMENT OR DEATH OF OPTIONEE


     5.1 Termination of Employment. Except as may be otherwise expressly
provided herein, options shall terminate on the earlier of:



		
	 	     (a) the date of expiration thereof; or
	 
	 	     (b) immediately upon the termination of the optionee’s employment
with or performance of services for the Company (or any parent or
subsidiary of the Company) by the Company (or any such parent or
subsidiary) for cause (as determined by the Company or such parent or
subsidiary), without cause or voluntarily by the optionee;



provided, however, that Nonqualified Options granted to persons who are not
employees of the Company (or any parent or subsidiary of the Company) need not,
unless the Plan Administrator determines otherwise, be subject to the
provisions set forth in clause (b) above.


     An employment relationship between the Company (or any parent or
subsidiary of the Company) and the optionee shall be deemed to exist during any
period in which the optionee is employed by the Company (or any such parent or
subsidiary). Whether authorized leave of absence, or absence on military or
government service, shall constitute termination of the employment relationship
between the Company (or any parent or subsidiary of the Company) and the
optionee shall be determined by the Plan Administrator at the time thereof.


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     As used herein, “cause” shall mean (x) any material breach by the optionee
of any agreement to which the optionee and the Company (or any parent or
subsidiary of the Company) are both parties, (y) any act or omission to act by
the optionee which may have a material and adverse effect on the business of
the Company (or any such parent or subsidiary) or on the optionee’s ability to
perform services for the Company (or any such parent or subsidiary), including,
without limitation, the commission of any crime (other than ordinary traffic
violations), or (z) any material misconduct or material neglect of duties by
the optionee in connection with the business or affairs of the Company (or any
such parent or subsidiary) or any affiliate of the Company (or any such parent
or subsidiary).


     5.2 Death or Retirement of Optionee. In the event of the death of the
holder of an option that is subject to clause (b) of Section 5.1 above prior to
termination of the optionee’s employment with or performance of services for
the Company (or any parent or subsidiary of the Company) and before the date of
expiration of such option, such option shall terminate on the earlier of such
date of expiration or one year following the date of such death. After the
death of the optionee, his executors, administrators or any person or persons
to whom his option may be transferred by will or by the laws of descent and
distribution shall have the right, at any time prior to such termination, to
exercise the option to the extent the optionee was entitled to exercise such
option at the time of his death.


     If, before the date of the expiration of an option that is subject to
clause (b) of Section 5.1 above, the optionee shall be retired in good standing
from the Company for reasons of age or disability under the then established
rules of the Company, the option shall terminate on the earlier of such date of
expiration or ninety (90) days after the date of such retirement. In the event
of such retirement, the optionee shall have the right prior to the termination
of such option to exercise the option to the extent to which he was entitled to
exercise such option immediately prior to such retirement.


SECTION 6.  TERMS OF THE OPTION AGREEMENTS


     Each option agreement shall be in writing and shall contain such terms,
conditions, restrictions, if any, and provisions as the Plan Administrator
shall from time to time deem appropriate. Such provisions or conditions may
include, without limitation, restrictions on transfer, repurchase rights, or
such other provisions as shall be determined by the Plan Administrator;
provided, however, that such additional provisions shall not be inconsistent
with any other term or condition of the Plan and such additional provisions
shall not cause any Incentive Stock Option granted under the Plan to fail to
qualify as an incentive stock option within the meaning of Section 422 of the
Code.


     Option agreements need not be identical, but each option agreement by
appropriate language shall include the substance of all of the following
provisions:


     6.1 Expiration of Option. Notwithstanding any other provision of the Plan
or of any option agreement, each option shall expire on the date specified in
the option agreement, which date shall not, in the case of an Incentive Stock
Option, be later than the tenth anniversary (fifth


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anniversary in the case of a
greater-than-ten-percent stockholder) of the date on which the option was
granted or as specified in Section 5 of this Plan.


     6.2 Exercise. Each option may be exercised, so long as it is valid and
outstanding, from time to time in part or as a whole, subject to any
limitations with respect to the number of shares for which the option may be
exercised at a particular time and to such other conditions as the Plan
Administrator in its discretion may specify upon granting the option.


     6.3 Purchase Price. The purchase price per share under each option shall
be determined by the Plan Administrator at the time the option is granted;
provided, however, that the option price of any Incentive Stock Option shall
not, unless otherwise permitted by the Code or other applicable law or
regulation, be less than the fair market value of the Common Stock on the date
the option is granted (110% of the fair market value in the case of a
greater-than-ten-percent stockholder) and the option price of any Nonqualified
Option shall not be less than 85% of the fair market value of the Common Stock
on the date the option is granted. For the purpose of the Plan the fair market
value of the Common Stock shall be the closing price per share on the date of
grant of the option as reported by a nationally recognized stock exchange, or,
if the Common Stock is not listed on such an exchange, as reported by the
National Association of Securities Dealers Automated Quotation System
(“Nasdaq”) National Market System or, if the Common Stock is not listed on the
Nasdaq National Market System, the mean of the bid and asked prices per share
on the date of grant of the option or, if the Common Stock is not traded
over-the-counter, the fair market value as determined by the Plan
Administrator.


     6.4 Transferability of Options. Options shall not be transferable by the
optionee otherwise than by will or under the laws of descent and distribution,
and shall be exercisable, during his lifetime, only by the optionee.


     Notwithstanding the foregoing, the Plan Administrator may, in its sole
discretion, permit the transfer or assignment of a Nonqualified Option by the
original optionee for no consideration to: (i) any member of the optionee’s
Immediate Family; (ii) any trust solely for the benefit of members of the
optionee’s Immediate Family; (iii) any partnership whose only partners are
members of the optionee’s Immediate Family; or (iv) any limited liability
company or corporate entity whose only members or other equity owners are
members of the optionee’s Immediate Family. For purposes of this Section 6.4,
“Immediate Family” means an optionee’s parents, spouse, children and
grandchildren. Nothing contained in this Section 6.4 shall be construed to
require the Plan Administrator to give its approval to any transfer or
assignment of any Nonqualified Option or portion thereof, and approval to
transfer or assign any Nonqualified Option or portion thereof does not mean
that such approval will be given with respect to any other Nonqualified Option
or portion thereof. The transferee or assignee of any Nonqualified Option
shall be subject to all of the terms and conditions applicable to such
Nonqualified Option immediately prior to the transfer or assignment and shall
be subject to any conditions prescribed by the Plan Administrator with respect
to such Nonqualified Option. In particular, and without limiting the
generality of the foregoing, the termination of employment, retirement or death
of the original optionee shall continue to determine the term and time for
exercise of such Nonqualified Option for purposes of Sections 5.1 and 5.2
above.


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     6.5 Rights of Optionees. No optionee shall be deemed for any purpose to
be the owner of any shares of Common Stock subject to any option unless and
until the option shall have been exercised pursuant to the terms thereof, and
the Company shall have issued and delivered certificates representing such
shares to the optionee.


     6.6 Certain Rights of the Company. The Plan Administrator may in its
discretion provide upon the grant of any option hereunder that the Company
shall have an option to repurchase upon such terms and conditions as determined
by the Plan Administrator all or any number of shares purchased upon exercise
of such option or a right of first refusal in connection with subsequent
transfer of any or all of such shares. The repurchase price per share payable
by the Company shall be such amount or be determined by such formula as is
fixed by the Plan Administrator at the time the option for the shares subject
to repurchase is granted. In the event the Plan Administrator shall grant
options subject to the Company’s repurchase option or right of first refusal,
the certificates representing the shares purchased pursuant to such option
shall carry a legend satisfactory to counsel for the Company referring to the
Company’s repurchase option or right of first refusal.


     6.7 “Lockup” Agreement. The Plan Administrator may in its discretion
specify upon granting an option that upon request of the Company or the
underwriters managing any underwritten offering of the Company’s securities,
the optionee shall agree in writing that for a period of time (not to exceed
180 days) from the effective date of any registration of securities of the
Company, the optionee will not sell, make any short sale of, loan, grant any
option for the purchase of, or otherwise dispose of any shares issued pursuant
to the exercise of such option, without the prior written consent of the
Company or such underwriters, as the case may be.


SECTION 7.  METHOD OF EXERCISE; PAYMENT OF PURCHASE PRICE


     7.1 Method of Exercise. Any option granted under the Plan may be
exercised by the optionee by delivering to the Company on any business day a
written notice specifying the number of shares of Common Stock the optionee
then desires to purchase and specifying the address to which the certificates
for such shares are to be mailed (the “Notice”), accompanied by payment for
such shares.


     7.2 Payment of Purchase Price. Payment for the shares of Common Stock
purchased pursuant to the exercise of an option shall be made either by (i)
cash or check equal to the option price for the number of shares specified in
the Notice, or (ii) with the consent of the Plan Administrator, other shares of
Common Stock which (a) either have been owned by the optionee for more than six
(6) months on the date of surrender or were not acquired, directly or
indirectly, from the Company, and (b) have a fair market value on the date of
surrender not greater than the aggregate option price of the shares as to which
such option shall be exercised, (iii) with the consent of the Plan
Administrator, delivery of such documentation as the Plan Administrator and the
broker, if applicable, shall require to effect an exercise of the option and
delivery to the Company of the sale or loan proceeds required to pay the option
price, (iv) with the consent of the Plan Administrator, such other
consideration which is acceptable to the Plan Administrator and which has a
fair market value equal to the option price of such shares, or (v) with the
consent of the Plan Administrator, a combination of (i), (ii), (iii) or (iv).
For the purpose of the preceding


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sentence, the fair market value per share of
Common Stock so delivered to the Company shall be determined in the manner
specified in Section 6.3. As promptly as practicable after receipt of the
Notice and accompanying payment, the Company shall deliver to the optionee
certificates for the number of shares with respect to which such option has
been so exercised, issued in the optionee’s name; provided, however, that such
delivery shall be deemed effected for all purposes when the Company or a stock
transfer agent of the Company shall have deposited such certificates in the
United States mail, addressed to the optionee, at the address specified in the
Notice.


SECTION 8.  CHANGES IN COMPANY’S CAPITAL STRUCTURE


     8.1 Rights of Company. The existence of outstanding options shall not
affect in any way the right or power of the Company or its stockholders to make
or authorize, without limitation, any or all adjustments, recapitalizations,
reorganizations or other changes in the Company’s capital structure or its
business, or any merger or consolidation of the Company, or any issue of Common
Stock, or any issue of bonds, debentures, preferred or prior preference stock
or other capital stock ahead of or affecting the Common Stock or the rights
thereof, or the dissolution or liquidation of the Company, or any sale or
transfer of all or any part of its assets or business, or any other corporate
act or proceeding, whether of a similar character or otherwise.


     8.2 Recapitalizations, Stock Splits and Dividends. If the Company shall
effect a subdivision or consolidation of shares or other capital readjustment,
the payment of a stock dividend, or other increase or reduction of the number
of shares of the Common Stock outstanding, in any such case without receiving
compensation therefor in money, services or property, then (i) the number,
class, and price per share of shares of stock subject to outstanding options
hereunder shall be appropriately adjusted in such a manner as to entitle an
optionee to receive upon exercise of an option, for the same aggregate cash
consideration, the same total number and class of shares as he would have
received as a result of the event requiring the adjustment had he exercised his
option in full immediately prior to such event; (ii) the number and class of
shares with respect to which options may be granted under the Plan; and (iii)
the number and class of shares set forth in Sections 3.3 and 4.4, shall be
adjusted by substituting for the total number of shares of Common Stock then
reserved for issuance under the Plan that number and class of shares of stock
that the owner of an equal number of outstanding shares of Common Stock
immediately prior to the event requiring adjustment would own as the result of
such event.


     8.3 Merger without Change of Control. After a merger of one or more
corporations with or into the Company or after a consolidation of the Company
and one or more corporations in which the stockholders of the Company
immediately prior to such merger or consolidation own after such merger or
consolidation shares representing at least fifty percent (50%) of the voting
power of the Company or the surviving or resulting corporation, as the case may
be, each holder of an outstanding option shall, at no additional cost, be
entitled upon exercise of such option to receive in lieu of the shares of
Common Stock as to which such option was exercisable immediately prior to such
event, the number and class of shares of stock or other securities, cash or
property (including, without limitation, shares of stock or other securities of
another corporation or Common Stock) to which such holder would have been
entitled pursuant to the


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terms of the agreement of merger or consolidation if,
immediately prior to such merger or consolidation, such holder had been the
holder of record of a number of shares of Common Stock equal to the number of
shares for which such option shall be so exercised.


     8.4 Change of Control. If the Company is merged with or into or
consolidated with another corporation, other than a merger or consolidation
which would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity) more than fifty percent (50%) of the combined voting power of the
voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation; or if the Company is
liquidated, or sells or otherwise disposes of substantially all of its assets
to another corporation while unexercised options remain outstanding under the
Plan, then in such event either:



		
	 	     (a) subject to the provisions of clause (c) below, after the effective
date of such merger, consolidation, liquidation, sale or disposition, as the
case may be, each holder of an outstanding option shall be entitled, upon
exercise of such option, to receive, in lieu of the shares of Common Stock as
to which such option was exercisable immediately prior to such event, the
number and class of shares of stock or other securities, cash or property
(including, without limitation, shares of stock or other securities of another
corporation or common stock) to which such holder would have been entitled
pursuant to the terms of the merger, consolidation, liquidation, sale or
disposition if, immediately prior to such event, such holder had been the
holder of a number of shares of Common Stock equal to the number of shares as
to which such option shall be so exercised;
	 
	 	     (b) the Plan Administrator may accelerate the time for exercise of some or
all unexercised and unexpired options so that from and after a date prior to
the effective date of such merger, consolidation, liquidation, sale or
disposition, as the case may be, specified by the Plan Administrator such
accelerated options shall be exercisable in full; or
	 
	 	     (c) all outstanding options may be canceled by the Plan Administrator as
of the effective date of any such merger, consolidation, liquidation, sale or
disposition provided that (x) notice of such cancellation shall be given to
each holder of an option and (y) each holder of an option shall have the right
to exercise such option to the extent that the same is then exercisable or, if
the Plan Administrator shall have accelerated the time for exercise of all
unexercised and unexpired options, in full during the 10-day period preceding
the effective date of such merger, consolidation, liquidation, sale or
disposition.



     8.5 Adjustments to Common Stock Subject to Options. Except as
hereinbefore expressly provided, the issue by the Company of shares of stock of
any class, or securities convertible into shares of stock of any class, for
cash or property, or for labor or services, either upon direct sale or upon the
exercise of rights or warrants to subscribe therefore, or upon conversion of
shares or obligations of the Company convertible into such shares or other
securities, shall not affect, and no adjustment by reason thereof shall be made
with respect to, the number or price of shares of Common Stock then subject to
outstanding options.


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     8.6 Miscellaneous. Adjustments under this Section 8 shall be determined
by the Plan Administrator, and such determinations shall be conclusive. No
fractional shares of Common Stock shall be issued under the Plan on account of
any adjustment specified above.


SECTION 9.  GENERAL RESTRICTIONS


     9.1 Investment Representations. The Company may require any person to
whom an option is granted, as a condition of exercising such option, to give
written assurances in substance and form satisfactory to the Company to the
effect that such person is acquiring the Common Stock subject to the option for
his own account for investment and not with any present intention of selling or
otherwise distributing the same, and to such other effects as the Company deems
necessary or appropriate in order to comply with federal and applicable state
securities laws.


     9.2 Compliance
with Securities Laws. The Company shall not be required to
sell or issue any shares under any option if the issuance of such shares shall
constitute a violation by the optionee or by the Company of any provision of
any law or regulation of any governmental authority. In addition, in
connection with the Securities Act of 1933, as now in effect or hereafter
amended (the “Act”), upon exercise of any option, the Company shall not be
required to issue such shares unless the Plan Administrator has received
evidence satisfactory to it to the effect that the holder of such option will
not transfer such shares except pursuant to a registration statement in effect
under such Act or unless an opinion of counsel satisfactory to the Company has
been received by the Company to the effect that such registration is not
required. Any determination in this connection by the Plan Administrator shall
be final, binding and conclusive. In the event the shares issuable on exercise
of an option are not registered under the Act, the Company may imprint upon any
certificate representing shares so issued the following legend or any other
legend which counsel for the Company considers necessary or advisable to comply
with the Act and with applicable state securities laws:



		
	 	     The shares of stock represented by this certificate
have not been registered under the Securities Act of
1933 or under the securities laws of any State and may
not be pledged, hypothecated, sold or otherwise
transferred except upon such registration or upon
receipt by the Corporation of an opinion of counsel
satisfactory to the Corporation, in form and substance
satisfactory to the Corporation, that registration is
not required for such sale or transfer.



     The Company may, but shall in no event be obligated to, register any
securities covered hereby pursuant to the Act; and in the event any shares are
so registered the Company may remove any legend on certificates representing
such shares. The Company shall not be obligated to take any other affirmative
action in order to cause the exercise of an option or the issuance of shares
pursuant thereto to comply with any law or regulation of any governmental
authority.


     9.3 Employment Obligation. The granting of any option shall not impose
upon the Company (or any parent or subsidiary of the Company) any obligation to
employ or continue to employ any optionee; and the right of the Company (or any
such parent or subsidiary) to


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terminate the employment of any officer or other
employee shall not be diminished or affected by reason of the fact that an
option has been granted to him/her.


     9.4 Withholding Tax. Whenever under the Plan shares of Common Stock are
to be delivered upon exercise of an option, the Company shall be entitled to
require as a condition of delivery that the optionee remit an amount sufficient
to satisfy all federal, state and other governmental withholding tax
requirements related thereto.


SECTION 10.  AMENDMENT OR TERMINATION OF THE PLAN


     The Board of Directors may modify, revise or terminate this Plan at any
time and from time to time, except that (i) the class of persons eligible to
receive options and the aggregate number of shares issuable pursuant to this
Plan shall not be changed or increased, other than by operation of Section 8
hereof, without the consent of the stockholders of the Company and (ii) the
provisions of Section 4.4 shall not be amended more than once every six (6)
months, other than to comport with changes in the Code, the Employee Retirement
Income Security Act of 1974, or the rules thereunder.



SECTION 11.  NONEXCLUSIVITY OF THE PLAN


     Neither the adoption of the Plan by the Board of Directors nor the
submission of the Plan to the stockholders of the Company for approval shall be
construed as creating any limitations on the power of the Board of Directors to
adopt such other incentive arrangements as it may deem desirable, including,
without limitation, the granting of stock options otherwise than under the
Plan, and such arrangements may be either applicable generally or only in
specific cases.



SECTION 12.  EFFECTIVE DATE AND DURATION OF PLAN


     The Plan shall become effective upon its adoption by the Board of
Directors. No option may be granted under the Plan after the tenth anniversary
of the effective date. The Plan shall terminate (i) when the total amount of
Common Stock with respect to which options may be granted shall have been
issued upon the exercise of options or (ii) by action of the Board of Directors
pursuant to Section 10 hereof, whichever shall first occur.


* * * * * * * *


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APPENDIX A



     This Appendix constitutes the UK Approved Part of the Charles River Associates
Incorporated 1998 Incentive and Nonqualified Stock Option Plan. The terms of
the UK Approved Part are as follows:


1. INTERPRETATION



     (1)  The following words and expressions have the following meanings except
where the context otherwise requires:



	 	 	“Acquisition Price” the price, as determined by the Plan Administrator,
at which each Share subject to an Option may be acquired on the exercise
of that Option, which must not be less than the Market Value of a Share
at the Date of Grant or if the Option relates to unissued Shares, its
nominal value, if greater.
	 
	 	 	The Acquisition Price may be varied under Rule 11 and, if Rule 13 has
been applied, the “Acquisition Price” shall be the
price for the
acquisition of a share in the company whose shares are scheme shares
determined under Rule 13;
	 
	 	 	“Approval” approval of the UK Approved Part as a share option scheme
under Schedule 9 of the ICTA;
	 
	 	 	“Control” has the same meaning as in Section 840 of the ICTA;
	 
	 	 	“Date of Grant” the date on which an Option is granted under Rule
3;
	 
	 	 	“Eligible Employee” any person holding Employment who is not precluded
from participating in the Scheme by paragraph 8 of Schedule 9 of the
ICTA;
	 
	 	 	“Employment” employment as




	 	(a)	 	an employee of the Company or any Affiliate who is resident
in the United Kingdom or
	 
	 	(b)	 	a director of the Company or any Affiliate who is resident in
the United Kingdom and who is required to devote substantially the
whole of his working time, being not less than 25 hours per week
excluding meal breaks, to the performance of his duties;




	 	 	“Grant Period” the period of 42 days commencing on the day after any of
the following:




	 	(a)	 	the date on which the Company releases its interim results or
its final results for any financial period; or



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	 	(b)	 	the date on which listing particulars or a document
containing equivalent information relating to Shares is issued; or
	 
	 	(c)	 	the date on which Approval is given;




	 	 	provided that no Option may be granted until Approval has been obtained.
	 
	 	 	“Group” the Company and its Subsidiaries which are under the Control of
the Company;
	 
	 	 	“ICTA” Income and Corporation Taxes Act 1988;
	 
	 	 	“Issue or Reorganisation” any variation in the capital of the Company (or
any other company whose shares are scheme shares following an exchange of
options pursuant to Rule 13 arising from or in connection with a
capitalisation issue, an offer to the holders of Shares by way of rights,
a subdivision, consolidation, reduction or other variation of share
capital;
	 
	 	 	“Market Value” means an amount equal to the market value of a Share
determined in accordance with Part VIII of the Taxation of Chargeable
Gains Act 1992 agreed in advance for the purposes of the Scheme with the
Shares Valuation Division of the Inland Revenue;
	 
	 	 	“Option” means a right to acquire Shares under the UK Approved Part;
	 
	 	 	“Other Executive Option Scheme” any Other Option Scheme the grant of any
option under which is in practice substantially limited to persons of
executive status;
	 
	 	 	“Other Option Scheme” any employee share option scheme adopted by the
Company in the United Kingdom, other than the Plan, providing for the
issue of Shares;
	 
	 	 	“Participating Company” any company within the Group to which the Plan
Administrator from time to time extends the Scheme;
	 
	 	 	“Remuneration” at any particular time, an Eligible Employee’s relevant
emoluments for the current or preceding year of assessment (whichever of
those years gives the greater amount) or, if there were no relevant
emoluments for the preceding year of assessment, his relevant emoluments
for the period of twelve months beginning with the first day during the
current year of assessment in respect of which there are relevant
emoluments and “relevant emoluments” has the meaning ascribed to it in
paragraph 28(4) of Schedule 9 of the ICTA;
	 
	 	 	“Share” a share of common stock of the Company or, if Rule 13 has been
applied, the company whose shares are scheme shares which satisfies the
conditions of paragraphs 10 to 14 of Schedule 9 of the ICTA;
	 
	 	 	“Subsidiary” a company which is a subsidiary of the Company within the
meaning of Section 736 of the Companies Act 1985;



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	(2)	 	Other words or expressions, so far as not inconsistent with the context,
shall have the same meanings as in Schedule 9 of the ICTA or the rules of
the Plan.
	 
	(3)	 	Words importing the singular shall include the plural and vice versa and
words importing the masculine shall include the feminine.
	 
	(4)	 	Any reference, express or implied, to an enactment includes references to:




	 	(a)	 	that enactment as amended, extended or applied by or under
any other enactment; and
	 
	 	(b)	 	any enactment which that enactment re-enacts (with or without
modification).




	 	 	“UK Approved Part” the UK Approved Section of the Plan, in its present
form, as from time to time amended in accordance with the rules.
	 
	2.	 	ELIGIBILITY
	 
	 	 	No person is entitled as of right to participate in the UK Approved Part.
The Plan Administrator may decide from time to time which Eligible
Employee or Eligible Employees may participate and the extent of the
participation.
	 
	3.	 	GRANT OF OPTIONS
	 
	(1)	 	The Plan Administrator may adopt any procedure for granting Options.
Options may be granted by the Plan Administrator. The form for the time
being of any Option certificate or other document shall be determined by
the Plan Administrator subject to the approval of the Inland Revenue.
	 
	(2)	 	Options shall be granted by deed. A single deed of grant may be executed
in favour of any number of persons.
	 
	(3)	 	The Date of Grant of an Option shall be the day on which the deed granting
the Option is executed, or such later date as may be approved in the deed.
	 
	(4)	 	A participant who is granted an Option by deed may, with the consent of the
Plan Administrator, renounce the Option, in whole or in part, within 30 days of
the Date of Grant and, to the extent renounced, shall be treated as if it had
never been granted.
	 
	(5)	 	If Shares are listed or dealt in on the Unlisted Securities Market of the
London Stock Exchange the Date of Grant must be chosen so that each dealing day
used to determine the Acquisition Price lies within a Grant Period. However,
Options may be granted at any other time when the Plan Administrator considers
that there are exceptional circumstances justifying the grant of Options.



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	(6)	 	An Option certificate or deed of grant shall be sent to the Optionee as
soon as practicable after an Option has been granted. The Option certificate
or deed of grant sent to the Optionee shall state the Date of Grant, the number
of shares subject to the Option, the Acquisition Price and any further terms
and conditions imposed in accordance with Rule 4.
	 
	(7)	 	An Option shall constitute a contract between the Company and the Optionee
incorporating the provisions of the UK Approved Part and the Plan so far as
relevant.
	 
	(8)	 	An Option shall not be granted to an Eligible Employee if he is bound to
retire in accordance with the terms of his contract of employment within two
years of the Date of Grant.
	 
	4.	 	PERFORMANCE REQUIREMENTS
	 
	(1)	 	The Plan Administrator may grant an Option to an Eligible Employee subject
to such objective additional terms and conditions as they consider appropriate.
	 
	(2)	 	On the occurrence of an event which causes the Plan Administrator to
determine that all or any of the additional terms and conditions imposed under
sub-rule (1) are no longer appropriate, the Plan Administrator may alter or
waive any such additional terms and conditions provided that any alteration to
a term or condition relating to performance must be such that the altered term
or condition reflects a fairer measure of the performance required and is no
more difficult to satisfy than the term or condition at the Date of Grant.
	 
	(3)	 	The circumstances in which the Plan Administrator may alter or waive the
additional terms and conditions imposed shall be specified in the letter of
invitation (if the invitation procedure is used) or in the letter enclosing the
option certificate or in the deed of grant.
	 
	(4)	 	The Plan Administrator must act fairly and reasonably in imposing, altering
or waiving any terms and conditions.
	 
	(5)	 	Any additional terms and conditions to which an Option is subject under
sub-rule 4(1) shall be deemed to be waived in any of the circumstances
specified in Rules 8(1)(b), other than retirement at or after any age at which
he is bound to retire in accordance with the terms of his contract of
employment, 8(1)(c), 13 and 14.
	 
	5.	 	PROHIBITION ON ASSIGNMENT
	 
	(1)	 	No Option granted under the Scheme may be transferred, assigned, charged or
otherwise alienated (without prejudice to any right of a person’s legal
personal representatives to exercise the Option following death).
	 
	(2)	 	If an Optionee enters into a composition with his creditors in satisfaction
of his debts or a bankruptcy order is made against him his Option will lapse.



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	6.	 	LIMITS ON SHARES
	 
	(1)	 	The total number of Shares which may be issued under the Plan, including
the UK Approved Part, shall not exceed the number set forth in the Plan. In
the event of an Issue or Reorganisation this number of Shares may be adjusted
in such manner as the Plan Administrator decides.
	 
	(2)	 	No person shall be granted an Option under the UK Approved Part which would
cause the aggregate Market Value (at the time the Option is granted) of the
Shares which he may acquire in pursuance of rights obtained under the UK
Approved Part or under any other share option scheme, not being a savings
related share scheme, approved under Schedule 9 to the ICTA and established by
the Company (and not exercised) to exceed £30,000.
	 
	7.	 	EXERCISE OPTIONS
	 
	(1)	 	Save as provided in Rules 8, 9, 10, 13 and 14, an Option shall be capable
of being exercised in full at any time following the earliest of:




	 	(a)	 	the third anniversary of the Date of Grant;
	 
	 	(b)	 	the Optionee’s death or ceasing to be in Employment by reason
of retirement at any age at which the Optionee is bound to retire in
accordance with the terms of his contract of employment, redundancy,
injury or disability;
	 
	 	(c)	 	the Optionee ceasing to be in Employment by reason of the
Participating Company by which he is employed ceasing to be under
the Control of the Company or by reason of the transfer or sale of
the undertaking or part of the undertaking in which he is employed
to a person who is not under the Control of the Company;
	 
	 	(d)	 	the occurrence of the circumstances permitting the exercise
of Options specified in Rule 13 or 14.




	(2)	 	If an Option is subject to additional terms and conditions under Rule 4(2)
it may only be exercised in accordance with those terms and conditions.
	 
	(3)	 	An Optionee shall not be treated for the purposes of Rule 7, 8 or 9 as
ceasing to be in Employment until such time as he is no longer a director or
employee of any company within the Group and a female Optionee who ceases
Employment by reason of pregnancy or confinement and who is entitled to
exercise and subsequently exercises her statutory right (or any corresponding
contractual right) to return to work before exercising an Option shall be
treated for those purposes as not ceasing to be in Employment.
	 
	(4)	 	An Option may not be exercised by an Optionee at any time when he is
ineligible to participate in the UK Approved Part by virtue of paragraph 8 of
Schedule 9 of the ICTA.



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	8.	 	LAPSE OF OPTION
	 
	(1)	 	Unless provided otherwise elsewhere in the Rules, an Option shall lapse to
the extent that it has not been exercised (whether or not it became
exercisable) by the earliest of:






	 	(a)	 	the tenth anniversary of the Date of Grant;
	 
	 	(b)	 	the expiry of 90 days from the date on which the Optionee
ceases to be in Employment by reason of retirement at any age at
which the Optionee is bound to retire in accordance with the terms
of his contract of employment, redundancy, injury or disability, or
the date on which the Optionee ceases to be in Employment by reason
of the Participating Company by which he is employed ceasing to be
under the Control of the Company or the transfer or sale of the
undertaking or part of the undertaking in which he is employed to a
person who is not under the Control of the Company;
	 
	 	(c)	 	the expiry of the period referred to in Rule 13;
	 
	 	(d)	 	the expiry of the period referred to in Rule 14;
	 
	 	(e)	 	the date on which:
	 





	 	(i)	 	the Optionee gives or is given notice to leave
Employment if he subsequently ceases to be in Employment (and
for the avoidance of doubt any purported exercise of the
Option during the period of notice shall be of no effect); or
	 
	 	(ii)	 	the Optionee ceases to be in Employment without
any notice having been given





	 	 	 	in any circumstances other than death and those referred to in
sub-paragraphs (b) and (c) of this paragraph unless (being female)
she is entitled to exercise and subsequently does exercise the
statutory right (or any corresponding contractual right) to resume
Employment after an absence due to pregnancy or confinement.




	(2)	 	If an Optionee dies at any time when his Option is outstanding whether or
not it is then capable of being exercised, the Option shall be and remain
capable of exercise until the expiry of 90 days from the date of his death
but shall lapse earlier in the circumstances specified in Rule 13 or Rule
14.
	 
	(3)	 	An Option shall not lapse by virtue of this Rule if the occasion for
lapse falls in a period when the Option is capable of being exercised
under Rule 13 but the Option shall lapse on the expiry of that period or,
if earlier, one year after the date of the Optionee’s death.
	 
	9.	 	CESSATION OF EMPLOYMENT — SPECIAL CIRCUMSTANCES
	 
	(1)	 	If an Optionee ceases to be in Employment, whether or not within the
period specified in sub-rule 7(1)(a), in circumstances in which his Option
is not exercisable under Rule 7 or



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	 	 	would lapse immediately under Rule 8
the Plan Administrator, acting fairly and reasonably, may in its
discretion permit his Option to be exercisable in whole or in part during
such period (but not later than one year after his death) and on such
other terms as they may decide.
	 
	(2)	 	If an Option would lapse at the end of any period specified in Rule 8
following the cessation of the Optionee’s Employment the Plan
Administrator may defer the lapse of his Option until the end of such
longer period as it may determine, acting fairly and reasonably, but not
later than one year after his death and not exceeding a period which
expires three years and six months after the Date of Grant or, if longer,
three years and six months after the last occasion on which the Optionee
exercised an option in circumstances qualifying for relief from income tax
under Section 185 of the ICTA.
	 
	(3)	 	If an Optionee ceases to be in Employment but continues to provide
services to the Group on a part-time basis as an employee or a director or
on a self-employed basis the Plan Administrator may determine acting
fairly and reasonably that his Option shall neither become exercisable nor
lapse by virtue of such cessation and that Rules 8 to 10 shall apply when
he subsequently ceases to provide services to the Group, or in such other
circumstances as the Plan Administrator may determine, acting fairly and
reasonably, with such modifications as are necessary, provided that no
further Options can be granted to an Optionee who has ceased to be in
Employment.
	 
	10.	 	MANNER OF EXERCISE AND ISSUE OR TRANSFER OF SHARES
	 
	(1)	 	An Option may be exercised by the Optionee giving notice of exercise in a
form approved by the Plan Administrator accompanied by the relevant option
certificate or deed of grant and payment of the total Acquisition Price of
the Shares in respect of which the Option is exercised.
	 
	(2)	 	The Company shall allot or procure the transfer of the Shares in respect
of which the Option has been exercised within 30 days of the date of
exercise.
	 
	(3)	 	Shares issued under the UK Approved Part will rank pari passu in all
respects with issued Shares of the same class. However, they will not be
entitled to any rights attaching to Shares by reference to a record date
prior to the date of exercise of the Option.
	 
	(4)	 	An Option may be exercised in whole or in part and, in the event of an
Option being exercised in part the Plan Administrator may call in or
cancel any outstanding option certificate or deed of grant and furnish the
Optionee with details of the date on which the Option was last exercised
and the number of Shares outstanding under the Option. The Directors may
determine, acting fairly and reasonably, that the Option may only be
exercised in respect of a reasonable minimum number of Shares and/or in
respect of a multiple of any round number of Shares, or in respect of the
balance of Shares outstanding in the Option.
	 
	(5)	 	The allotment or transfer of Shares under the Plan is subject to
obtaining any approval or consent required under any applicable
regulations or enactment.



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	11.	 	ISSUE OR REORGANISATION
	 
	(1)	 	In the event of any Issue or Reorganisation:




	 	(a)	 	the number of Shares comprised in an Option; and/or
	 
	 	(b)	 	the Acquisition Price under an Option




	 	 	may be adjusted in such manner as the Plan Administrator decides subject
to the prior approval of the Inland Revenue and the written concurrence
of the Auditors that in their opinion the adjustment is fair and
reasonable.
	 
	(2)	 	Following an adjustment under paragraph (1) above, Shares must continue
to comply with paragraphs 10 to 14 of Schedule 9 of the ICTA.
	 
	(3)	 	If an Option relates to unissued Shares an adjustment under paragraph (1)
above may reduce or further reduce the Acquisition Price below the nominal
value of a Share if:




	 	(a)	 	a part of the reserves of the Company equal to the difference
between the adjusted Acquisition Price and the nominal value of the
Shares concerned (“Relevant Amount”) may be capitalised if the
Option is exercised so as to pay up the Relevant Amount; and
	 
	 	(b)	 	the Company has sufficient reserves available.




	(4)	 	The Plan Administrator may notify Optionees of any adjustments made under
this Rule 11 and may call in, cancel, endorse, issue or reissue any option
certificate or deed of grant following an adjustment.
	 
	12.	 	TAKEOVER AND RECONSTRUCTION
	 
	(1)	 	If:




	 	(a)	 	a general offer is made to acquire the whole of the issued
ordinary share capital of the Company (or such part thereof as is
not at the time owned by the offeror any company controlled by the
offeror and/or persons acting in concert with the offeror) and
after the announcement of the general offer the offeror (and any
such companies and/or persons) acquires Control of the Company, or
	 
	 	(b)	 	a general offer is made to acquire the whole of the issued
ordinary share capital of the Company (or such part thereof as
aforesaid) by any person who (together with any company controlled
by such person and/or persons acting in concert with him) has
Control of the Company,




	 	 	a participant may, subject to the provisions of Rule 7, be entitled to
exercise his Option at any time during the period of six months
following, in the case of an offer within paragraph (a) above, the date
of the acquisition of Control and, in the case of an offer



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	 	 	within paragraph (b) above, the date on which the offer is made or, if the offer
was conditional, the later date on which the offer becomes unconditional.
	 
	(2)	 	The Company shall use its best endeavours to procure that if a
participant is allotted Shares pursuant to the exercise of Options in
accordance with Rule 10(1) then if such Shares were not the subject of the
said general offer the offeror shall make an offer to acquire from the
participant his Shares upon the same terms as Shares of the same class
were acquired under the general offer.
	 
	13.	 	EXCHANGE OF OPTIONS
	 
	 	 	If any company (the “acquiring company”) obtains Control of the Company
as a result of making:






	 	(i)	 	a general offer to acquire the whole of the issued share
capital of the Company which is made on a condition such that if it
is satisfied the person making the offer will have Control of the
Company, or
	 
	 	(ii)	 	a general offer to acquire all the shares in the Company which
are of the same class as the scheme shares,




	 	 	any participant may at any time within the appropriate period, by
agreement with the acquiring company, release his Option (“old rights”)
in consideration of the grant to him of rights (“new rights”) which are
equivalent to his Option but relate to shares in a different company
(whether the acquiring company itself or some other company falling
within paragraph 10(b) or (c) of Schedule 9 of the ICTA). “The
appropriate period” and “equivalent” have the same meaning as in
paragraph 15 of Schedule 9 of the ICTA and accordingly the new rights
shall not be regarded for the purpose of the Scheme as equivalent to the
old rights unless:




	 	(a)	 	the shares to which they relate satisfy the conditions
specified, in relation to scheme shares, in paragraphs 10 to 14 of
Schedule 9 of the ICTA; and
	 
	 	(b)	 	the new rights will be exercisable in the same manner as the
old rights and subject to the provisions of the Scheme as it had
effect immediately before the release of the old rights; and
	 
	 	(c)	 	the total Market Value, immediately before the release, of the
shares which were subject to the participant’s old rights is equal
to the total market value, immediately after the grant of the
shares in respect of which the new rights are granted to the
participant; and
	 
	 	(d)	 	the total amount payable by the participant for the acquisition
of shares in pursuance of the new rights is equal to the total
amount that would have been payable for the acquisition of shares
in pursuance of the old rights.



-20-










	 	 	The new rights shall for the purposes of the UK Approved Part be treated
as having been granted at the time when the old rights were granted and
references to Shares shall, in relation to the new rights, be taken as
references to the shares of the company whose shares are scheme shares.
References to the Company shall be taken to be references to the company
whose shares are scheme shares in Rules 6, 7, 8, 9, 10, 11 and 12.
	 
	14.	 	VOLUNTARY WINDING UP
	 
	 	 	If a resolution for a shareholders’ voluntary winding up of the Company
is passed an Optionee may exercise his Option, subject to Rule 8, within
three months of the date of the resolution.
	 
	15.	 	AMENDMENT
	 
	(1)	 	Subject to paragraph (2) below the Plan Administrator may by resolution
at any time amend the rules of the UK Approved Part in any respect except
that any amendment made when the UK Approved Part is approved under
Schedule 9 of the ICTA shall not have effect without the prior approval of
the Inland Revenue.
	 
	(2)	 	Subject to paragraph (4) below, no amendment to the UK Approved Part to
the advantage of Optionees or Eligible Employees may be made:




	 	(a)	 	to the number of Shares specified in Rule 6 and the
provisions for adjustment of that number (except as provided in Rule
6);
	 
	 	(b)	 	to the definitions of “Acquisition Price”, “Eligible
Employee”, “Employment”, “Grant Period”, “Group Remuneration” and
“Issue or Reorganisation”;
	 
	 	(c)	 	which would alter to the advantage of Eligible Employees or
Optionees, any of the provisions of Rules 4, 5, 6, 7, 8, 9, 11(4),
11(6), 12, 13, paragraph (2) of this Rule or to the Schedules




	 	 	without the prior approval of a majority of the stockholders of the
Company present at a meeting of stockholders.
	 
	(3)	 	No amendment shall be made under paragraph (1) which would abrogate or
materially affect adversely the subsisting rights of an Optionee unless it
is made with his written consent or by a resolution passed as if the
Options constituted a separate class of share capital and the provisions
of the Articles of Organisation of the Company relating to class meetings
applied to that class mutatis mutandis.
	 
	(4)	 	Paragraph (2) shall not apply to any amendment which:




	 	(a)	 	is confined to Options which do not involve the issue of new
Shares (including the eligibility requirements and the terms of such
Options insofar as they do not involve the issue of new Shares); or



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	 	(b)	 	is not so confined and affects the limit in Rule 7(3)
provided that the Plan Administrator is reasonably satisfied that
the purpose or effect of the amendment is substantially to comply
with any current published guidelines issued by institutional
investors; or
	 
	 	(c)	 	is not so confined and:
	 





	 	(i)	 	is necessary or desirable in order to obtain or
maintain Inland Revenue approval of the Approved Part under
Schedule 9 of the ICTA or any other enactment, or to comply
with or take account of the provisions of any proposed or
existing legislation or of any Inland Revenue practice or
concession, or to obtain or maintain favourable taxation
treatment of the Company, any Subsidiary or any Optionee; and
	 
	 	(ii)	 	does not affect the basic principles of the
Approved Part.




	16.	 	DURATION AND TERMINATION
	 
	 	 	No Options may be granted under the Approved Part more than ten years
after the date of adoption of the Approved Part by the Company. The Plan
Administrator may at any time terminate the Approved Part and no further
Options will be granted after that date, but Options granted before that
date will continue to be valid and exercisable in accordance with these
Rules.
	 
	17.	 	DISAPPLICATION OF PLAN RULES
	 
	 	 	The following sections of the Plan shall not apply to the UK Approved
Part:




	 	(a)	 	Section 2.2(c);
	 
	 	(b)	 	Section 6.6 and 6.7;
	 
	 	(c)	 	Section 7.2(ii)-(v);
	 
	 	(d)	 	Section 9.4 as far as it pertains to US taxes; and
	 
	 	(e)	 	any reference to “Incentive Stock Options”.



* * * * * * * *



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