6302003 10Q Exhibit 10.9






                                                           Exhibit 10.9




BARRA, INC.

                  DIRECTORS OPTION PLAN



SECTION 1 - PURPOSE



The purpose of the Barra, Inc. Directors Option Plan is to
provide a means whereby Barra, Inc., a Delaware corporation (the "Corporation"),
may attract and retain able persons as members of the Board (as defined below)
and to provide a means whereby those Board members can acquire and maintain
stock ownership, thereby strengthening their concern for the long-term welfare
of the Corporation.  A further purpose of the Plan (as defined below) is to
provide such Board members with additional incentive and reward opportunities
designed to enhance the profitable growth of the Corporation over the long term.
Accordingly, the Plan provides for granting Incentive Stock Options (as defined
below), options that do not constitute Incentive Stock Options, or any
combination of the foregoing, as is best suited to the circumstances of the
particular Board member as provided herein.



SECTION 2 - DEFINITIONS



The following definitions shall be applicable during the term
of the Plan unless specifically modified by any paragraph:






	Award means, individually or collectively, any
Option granted pursuant to the Plan.




	Board means the board of directors of Barra,
Inc.




	Code means the Internal Revenue Code of 1986, as
amended.  Reference in the Plan to any Section of the Code shall be deemed to
include any amendments or successor provisions to such Section and any
regulations under such Section.




	Common Stock means the common stock of Barra,
Inc.




	Corporation means Barra, Inc.




	Corporate Change means one of the following
events:  (i) the merger, consolidation or other reorganization of the
Corporation in which the outstanding Common Stock is converted into or exchanged
for a different class of securities of the Corporation, a class of securities of
any other issuer (except a Subsidiary or Parent Corporation), cash or other
property other than (a) a merger, consolidation or reorganization of the
Corporation which would result in the voting stock of the Corporation
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity), in combination with the ownership of any trustee or other
fiduciary holding securities under an employee benefit plan of the Corporation,
at least sixty percent (60%) of the combined voting power of the voting stock of
the Corporation or such surviving entity outstanding immediately after such
merger, consolidation or reorganization of the Corporation, or (b) merger,
consolidation or reorganization of the Corporation effected to implement a
recapitalization of the Corporation (or similar transaction) in which no person
acquires more than forty-nine percent (49%) of the combined voting power of the
Corporation's then outstanding stock; (ii) the sale, lease or exchange of
all or substantially all of the assets of the Corporation to any other
corporation or entity (except a Subsidiary or Parent Corporation);
(iii) the adoption by the stockholders of the Corporation of a plan of
liquidation and dissolution; (iv) the acquisition (other than acquisition
pursuant to any other clause of this definition) by any person or entity,
including without limitation a "group" as contemplated by Section 13(d)(3) of
the Exchange Act, of beneficial ownership, as contemplated by such Section, of
more than twenty-five percent (25%) (based on voting power) of the Corporation's
outstanding capital stock or acquisition by a person or entity who currently has
beneficial ownership which increases such person's or entity's beneficial
ownership to fifty percent (50%) or more (based on voting power) of the
Corporation's outstanding capital stock; or (v) as a result of or in
connection with a contested election of directors, the persons who were
directors of the Corporation before such election shall cease to constitute a
majority of the Board.  Notwithstanding the provisions of clause (iv)
above, a Corporate Change shall not be considered to have occurred upon the
acquisition (other than acquisition pursuant to any other clause of the
preceding sentence) by any person or entity, including without limitation a
"group" as contemplated by Section 13(d)(3) of the Exchange Act, of
beneficial ownership, as contemplated by such Section, of more than twenty-five
percent (25%) (based on voting power) of the Corporation's outstanding capital
stock or the requisite percentage to increase their ownership to fifty percent
(50%) resulting from a public offering of securities of the Corporation under
the Securities Act of 1933, as amended.




	Exchange Act means the Securities Exchange Act of
1934, as amended.




	Fair Market Value means, as of any specified date,
the average of the last best reported bid and asked prices of the Common Stock
on the National Association of Securities Dealers Automated Quotation (NASDAQ)
system (or, if the Common Stock is not listed on such exchange, such other
national securities exchange on which the Common Stock is then listed) on that
date, or if no prices are reported on that date, on the last preceding date on
which such prices of the Common Stock are so reported.  If the Common Stock is
not then listed on any national securities exchange but is traded over the
counter at the time determination of its Fair Market Value is required to be
made hereunder, its Fair Market Value shall be deemed to be equal to the average
between the reported high and low sales prices of Common Stock on the most
recent date on which Common Stock was publicly traded.  If the Common Stock is
not publicly traded at the time a determination of its value is required to be
made hereunder, the determination of its Fair Market Value shall be made by the
Board in such manner as it deems appropriate (such determination will be made in
good-faith as required by Section 422(c)(1) of the Code and may be based on the
advice of an independent investment banker or appraiser recognized to be expert
in making such valuations).




	Holder means an individual who has been granted an
Award.




	Incentive Stock Option means an Option within the
meaning of Section 422 of the Code.




	Non-Employee Director means a member of the Board
who is not an employee of the Corporation, its Parent Corporation or its
Subsidiary.




	Option means an Award granted under Section 7
of the Plan and includes both Incentive Stock Options to purchase Common Stock
and Options which do not constitute Incentive Stock Options to purchase Common
Stock.




	Option Agreement means a written agreement between
the Corporation and an employee or director with respect to an Option.




	Optionee means an employee, director or individual
who has been granted an Option. 




	Outside Director refers to a member of the Board
who qualifies as an "outside director" as such term is used in
Section 162(m) of the Code and defined in any applicable Treasury
Regulations promulgated thereunder, including Treasury Regulation
Section 1.162-27(e)(3).




	Parent Corporation shall have the meaning set
forth in Section 424(e) of the Code.




	Plan means the Barra, Inc. Directors Option
Plan.




	Rule 16b-3 means Rule 16b-3 of the General Rules
and Regulations of the Securities and Exchange Commission under the Exchange
Act, as such rule is currently in effect or as hereafter modified or
amended.




	Subsidiary means a company (whether a corporation,
partnership, joint venture or other form of entity) in which the Corporation, or
a corporation in which the Corporation owns a majority of the shares of capital
stock, directly or indirectly, owns an equity interest of fifty percent (50%) or
more, except solely with respect to the issuance of Incentive Stock Options the
term "Subsidiary" shall have the same meaning as the term "subsidiary
corporation" as defined in Section 424(f) of the Code.

 

SECTION 3 - EFFECTIVE DATE AND DURATION OF THE PLAN



The Plan shall be effective as of April 24, 1997 the
date of its adoption by the Board, provided that the Plan is approved by the
stockholders of the Corporation within twelve (12) months before or thereafter
and on or prior to the date of the first annual meeting of stockholders of the
Corporation held subsequent to the acquisition of an equity security by a Holder
hereunder for which exemption is claimed under Rule 16b-3.  Notwithstanding
any provision of the Plan or of any Option Agreement, no Option shall be
exercisable prior to such stockholder approval.  No further Awards may be
granted under the Plan after ten (10) years from the date the Plan is adopted by
the Board or the date the Plan is approved by the Corporation's shareholders,
whichever is earlier.  Subject to the provisions of Section 9, the Plan
shall remain in effect until all Options granted under the Plan have been
exercised or have expired by reason of lapse of time and all restrictions
imposed upon restricted stock awards have lapsed.  Any option exercised before
shareholder approval is obtained must be rescinded if shareholder approval is
not obtained within twelve (12) months before or after the Plan is adopted.
Such shares shall not be counted in determining whether such approval is
granted.



SECTION 4 - ADMINISTRATION



(a)The Plan shall be administered by the Committee,
which shall be composed as hereinafter set forth in Section 4(b).  

(b)The Committee shall consist solely of not less than
two Outside Directors elected by the Board.  The Board may from time to time
increase (and thereafter may decrease) the size of the Committee, elect or
remove members thereto (with or without cause) and fill any vacancies however
created; provided, however, that the minimum number of members on the Committee
must be two.  

(c)The Committee shall meet at such times and places and
upon such notice as the Committee's Chair determines.  A majority of the
Committee shall constitute a quorum. Any acts by the Committee may be taken at
any meeting at which a quorum is present and shall be by majority vote of those
members entitled to vote. 

(d)The Committee shall determine which directors of Barra
shall be granted Awards under the Plan, the timing of such Awards, the terms
thereof and the number of shares of Common Stock subject to each Award.  

(e)The Committee shall have the sole authority, in its
absolute discretion, to adopt, amend and rescind such rules and regulations as,
in its opinion, may be advisable in the administration of the Plan, to construe
and interpret the Plan, its rules and regulations, and the instruments
evidencing Awards granted under the Plan, and to make all other determinations
deemed necessary or advisable for the administration of the Plan.  All
decisions, determinations and interpretations of the Committee shall be binding
on all Optionees.



SECTION 5 - GRANT OF OPTIONS SUBJECT TO THE PLAN




(a)Award Limits.





	The Committee shall grant Options which do not constitute
Incentive Stock Options for 5,000 shares of Common Stock to all current Non-
Employee Directors on April 24, 1997, pursuant to the terms of the Plan.  In the
event that a new Non-Employee Director is appointed to the Board or that a
current member of the Board becomes a Non-Employee Director, the Committee shall
grant Options which do not constitute Incentive Stock Options for 25,000 shares
of Common Stock to such Non-Employee Director on the date such person becomes a
Non-Employee Director, pursuant to the terms of the Plan.




	On each anniversary of the date of the initial Option
grant in Section 5(a)(i) of the Plan, the Committee shall grant Options which do
not constitute Incentive Stock Options for 8,000 shares of Common Stock to all
current Non-Employee Directors, pursuant to the terms of the Plan.




	The Committee shall also have the discretion to grant
Options to all members of the Board, whether or not they are Non-Employee
Directors, pursuant to the terms of the Plan.  In addition, in and to the extent
that the Code so permits, any Option granted under this Section 5(iii) of the
Plan may be an Incentive Stock Option.




(b)Shares Subject to the Plan.  The aggregate number
of shares of Common Stock that may be issued under the Plan shall not exceed
250,000 shares.  Any of such shares which remain unissued and which are not
subject to outstanding Options at the termination of the Plan shall cease to be
subject to the Plan but, until termination of the Plan, the Corporation shall at
all times reserve a sufficient number of shares to meet the requirements of the
Plan.  Shares shall be deemed to have been issued under the Plan only to the
extent actually issued and delivered pursuant to an Award.  To the extent that
an Award lapses or the rights of its Holder terminate, any shares of Common
Stock subject to such Award shall again be available for the grant of an Award.
The aggregate number of shares which may be issued under the Plan shall be
subject to adjustment in the same manner as provided in Section 8 of the
Plan with respect to shares of Common Stock subject to Options then outstanding.
Separate stock certificates shall be issued by the Corporation for those shares
acquired pursuant to the exercise of an Incentive Stock Option and for those
shares acquired pursuant to the exercise of any Option that does not constitute
an Incentive Stock Option.  The maximum number of Shares of Common Stock with
respect to which Options may be granted during any calendar year to any Optionee
shall not exceed 20,000 shares.




(c)Stock Offered. The stock to be offered pursuant to
the grant of an Award may be authorized but unissued Common Stock or Common
Stock previously issued and outstanding and reacquired by the
Corporation.




SECTION 6 - ELIGIBILITY



An Incentive Stock Option Award made pursuant to the Plan may
be granted only to an individual who, at the time of grant, is a director of the
Corporation who is also an employee of the Corporation, a Parent or a
Subsidiary.  An Award of an Option, which is not an Incentive Stock Option, may
be granted only to an individual who, at the time of grant, is a director of the
Corporation.  An Award made pursuant to the Plan may be granted on more than one
occasion to the same person, and such Award may include an Incentive Stock
Option, an Option which is not an Incentive Stock Option, or any combination
thereof.  Each Award shall be evidenced by a written instrument duly executed by
or on behalf of the Corporation.



SECTION 7 - STOCK OPTIONS



(a)Stock Option Agreement.  Each Option shall be
evidenced by an Option Agreement between the Corporation and the Optionee which
shall contain such terms and conditions as may be approved by the Committee and
agreed upon by the Holder.  The terms and conditions of the respective option
Agreements need not be identical. Under each Option Agreement, a Holder shall
have the right to appoint any individual or legal entity in writing as his or
her beneficiary under the Plan in the event of his death.  Such designation may
be revoked in writing by the Holder at any time and a new beneficiary may be
appointed in writing on the form provided by the Committee for such purpose.  In
the absence of such appointment, the beneficiary shall be the legal
representative of the Holder's estate.



(b)Option Period.  The term of each Option shall
be as specified by the Committee at the date of grant and shall be stated in the
Option Agreement; provided, however, that an option may not be exercised more
than one hundred twenty (120) months from the date it is granted.



(c)Limitations on Exercise of Option.  Any Option
granted pursuant to Section 5(a)(i) of the Plan shall be vested and exercisable
at the rate of twenty percent (20%) per year over the five (5) years from the
date it is granted so long as the Optionee is continuously a director of the
Corporation.  Any Option granted pursuant to Section 5(a)(ii) shall be
automatically vested and exercisable on the date it is granted.  Any Option
granted pursuant to Section 5(a)(iii) of the Plan shall be vested and
exercisable at the discretion of the Committee; provided, however, that the rate
of vesting shall be not longer than twenty percent (20%) per year over the five
(5) years from the date it is granted.



(d)Special Limitations on Incentive Stock Options.
To the extent that the aggregate Fair Market Value (determined at the time the
respective Incentive Stock Option is granted) of Common Stock with respect to
which Incentive Stock Options are exercisable for the first time by an
individual during any calendar year under all incentive stock option plans of
the Corporation (and any Parent Corporation or Subsidiary) exceeds one hundred
thousand dollars ($100,000), such excess Incentive Stock Options shall be
treated as Options which do not constitute Incentive Stock Options.  The
Committee shall determine, in accordance with applicable provisions of the Code,
Treasury Regulations and other administrative pronouncements, which of an
Optionee's Incentive Stock Options will not constitute Incentive Stock Options
because of such limitation and shall notify the Optionee of such determination
as soon as practicable after such determination.  No Incentive Stock Option
shall be granted to an individual if, at the time the Option is granted, such
individual owns stock possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Corporation or of its
Parent Corporation or a Subsidiary, within the meaning of Section 422(b)(6) of
the Code, unless (i) at the time such Option is granted the Option price is at
least one hundred ten percent (110%) of the Fair Market Value of the Common
Stock subject to the Option and (ii) such Option by its terms is not exercisable
after the expiration of five years from the date of grant.



(e)Option Price. The purchase price of Common
Stock issued under each Option shall be the Fair Market Value of Common Stock
subject to the Option on the date the Option is granted, except that, for
Incentive Stock Options, the price shall be one hundred ten percent (110%) of
the Fair Market Value in the case of any person or entity who owns stock
comprising more than ten percent (10%) of the total combined voting power of all
classes of stock of the Corporation or its Parent Corporation or Subsidiary.




(f)Termination of Service as a Director. If an
Optionee's service as a director of the Corporation terminates for any reason,
including death and disability, then: (1) unless otherwise determined at the
discretion of the Board, the Options which are not vested and not exercisable
shall automatically terminate; (2) except in the event of the Optionee's death
or permanent and total disability (within the meaning of Section 22(e)(3) of the
Code), the Options which are vested and exercisable on the date of such
termination may not be exercised later than ninety (90) days (or such other
period of time as determined by the Committee) after the termination date; and
(3) in the event of the Optionee's death or permanent and total disability
(within the meaning of Section 22(e)(3) of the Code), the Options which are
vested and exercisable on the date of such termination may not be exercised
later than twelve (12) months (or such other period of time as determined by the
Committee) after the termination date.  



SECTION 8 - RECAPITALIZATION OR REORGANIZATION



(a)Except as hereinafter otherwise provided, the
aggregate number of shares which may be issued pursuant to an Award and the
outstanding Awards shall be subject to an automatic pro rata adjustment by the
Committee as to the number and price of shares of Common Stock in the event of
changes in the outstanding Common Stock by reason of stock dividends, stock
splits, reverse stock splits, reclassifications, recapitalizations,
reorganizations or other relevant changes in capitalization occurring after the
date of the grant of any such Options.



(b)The existence of the Plan and the Awards granted
hereunder shall not affect in any way the right or power of the Board or the
stockholders of the Corporation to make or authorize any adjustment,
recapitalization, reorganization or other change in the capital structure of the
Corporation, a Parent Corporation or a Subsidiary or their business, any merger
or consolidation of the Corporation, a Parent Corporation or a Subsidiary, any
issue of debt or equity securities having any priority or preference with
respect to or affecting Common Stock or the rights thereof, the dissolution or
liquidation of the Corporation, a Parent Corporation or a Subsidiary, or any
sale, lease, exchange or other disposition of all or any part of their assets or
business or any other corporate act or proceeding.



(c)The shares with respect to which Options may be
granted are shares of Common Stock as presently constituted but if and whenever,
prior to the expiration of an Option theretofore granted, the Corporation shall
effect a subdivision or consolidation of shares of Common Stock or the payment
of a stock dividend on Common Stock without receipt of consideration by the
Corporation, the number of shares of Common Stock with respect to which such
Option may thereafter be exercised (i) in the event of an increase in the number
of outstanding shares shall be proportionately increased , and the purchase
price per share shall be proportionately reduced, and (ii) in the event of a
reduction in the number of outstanding shares shall be proportionately reduced,
and the purchase price per share shall be proportionately increased.



(d)If the Corporation recapitalizes or otherwise changes
its capital structure, thereafter upon any exercise of an Option theretofore
granted, the Optionee shall be entitled to purchase under such Option, in lieu
of the number of shares of Common Stock as to which such Option shall then be
exercisable, the number and class of shares of stock and securities, and the
cash and other property to which the Optionee would have been entitled pursuant
to the terms of the recapitalization if, immediately prior to such
recapitalization, the Optionee had been the holder of such record of the number
of shares of Common Stock then covered by such Option.



(e)In the event of a Corporate Change, unless such time
period is otherwise deemed to be impractical by the Committee, then no later
than (i) two business days prior to any Corporate Change referenced in
Clause (i), (ii), (iii) or (v) of the definition thereof or (ii) ten
business days after any Corporate Change referenced in Clause (iv) of the
definition thereof, the Committee shall act to accelerate the time at which
Options then outstanding may be exercised so that such Options may be exercised
in full for a limited period of time on or before a specified date (before or
after such Corporate Change) fixed by the Committee, after which specified date
all unexercised Options and all rights of Optionees thereunder shall
terminate.



(f)Except as hereinbefore expressly provided, issuance by
the Corporation of shares of stock of any class or securities convertible into
shares of stock of any class, for cash, property, labor or services, upon direct
sale, upon the exercise of rights or warranty to subscribe therefore, or upon
conversion of shares or obligations of the Corporation convertible into such
shares or other securities, and in any case whether or not for fair value, shall
not affect, and no adjustment by reason thereof shall be made with respect to,
the number of shares of Common Stock subject to Options theretofore granted, or
the purchase price per share of Common Stock subject to Options.



SECTION 9 - AMENDMENT OR TERMINATION OF THE PLAN



The Board in its discretion may terminate the Plan or any
Option or alter or amend the Plan or any part thereof or any Option from time to
time; provided that no change in any Award previously granted may be made which
would impair the rights of the Holder without the consent of the Holder, and
provided further, that the Board may not, without approval of the stockholders,
amend the plan:



(a)to increase the aggregate number of shares which may
be issued pursuant to the provisions of the Plan on exercise or surrender of
Options;



(b)to change the minimum Option exercise price;



(c)to change the class of employees eligible to receive
Awards or increase materially the benefits accruing to employees under the
Plan;



(d)to extend the maximum period during which Awards may
be granted under the Plan;



(e)to modify materially the requirements as to
eligibility for participation in the Plan; or



(f)to decrease any authority granted to the Committee
hereunder in contravention of Rule 16b-3.



SECTION 10 - OTHER



(a)No Right to an Award.  Neither the adoption of
the Plan nor any action of the Committee shall be deemed to give an employee or
director any right to be granted an Option to purchase Common Stock or any other
rights hereunder except as may be evidenced by an Option Agreement duly executed
on behalf of the Corporation, and then only to the extent of and on the terms
and conditions expressly set forth therein.  The Plan shall be unfunded.  The
Corporation shall not be required to establish any special or separate fund or
to make any other segregation of funds or assets to assure the payment of any
Award.



(b)No Employment Rights Conferred.  Nothing
contained in the Plan or in any Award made hereunder shall (i) confer upon any
employee or director any right with respect to employment with the Corporation
or any Parent Corporation or Subsidiary, or (ii) interfere in any way with the
right of the Corporation or any Parent Corporation or Subsidiary to terminate
his or her employment or his or her service as a member of the Board at any
time.



(c)Other Laws; Withholding. No fractional shares
of Common Stock shall be delivered, nor shall any cash in lieu of fractional
shares be paid.  The Corporation shall have the right to deduct in connection
with all Awards any taxes required by law to be withheld and to require any
payments necessary to enable it to satisfy its withholding obligations.  The
Committee may permit the Holder of an Award to elect to surrender, or authorize
the Corporation to withhold shares of Common Stock (valued at their Fair Market
Value on the date of surrender or withholding of such shares) in satisfaction of
the Corporation's withholding obligation, subject to such restrictions as the
Committee deems necessary to satisfy the requirements of Rule 16b-3.



(d)No Restriction of Corporate Action.  Nothing
contained in the Plan shall be construed to prevent the Corporation or any
Parent Corporation or Subsidiary from taking any corporate action which is
deemed by the Corporation or such Parent Corporation or Subsidiary to be
appropriate or in its best interest, whether or not such action would have an
adverse effect on the Plan or any Award made under the Plan.  No employee,
director, beneficiary or other person shall have any claim against the
Corporation or any Parent Corporation or Subsidiary as a result of such
action.



(e)Restrictions on Transfer.  An Award shall not
be transferable otherwise than by will or the laws of descent and distribution
and shall be exercisable during the lifetime of the Holder only by such Holder
or the Holder's guardian or legal representative.



(f)Information to Employees.  Optionees under the
Plan shall receive financial statements annually regarding the corporation
during the period the options are outstanding.



(g)Rule 16b-3.  It is intended that the Plan and
any grant of an Award made to a person subject to Section 16 of the
Exchange Act meet all of the requirements of Rule 16b-3.  If any provisions
of the Plan or any such Award would disqualify the Plan or such Award hereunder,
or would otherwise not comply with Rule 16b-3, such provision or Award shall be
construed or deemed amended to conform to Rule 16b-3.



(h)Governing Law.  The Plan and securities issued
hereunder shall be construed in accordance with the laws of the State of
California and all applicable federal law.



                   ADOPTED BY THE COMMITTEE AS OF APRIL 24, 1997

                   APPROVED BY THE SHAREHOLDERS AS OF JULY 31, 1997

                   AMENDED BY THE BOARD OF DIRECTORS AS OF AUGUST 5, 1999

                   AMENDED BY THE BOARD OF DIRECTORS AS OF AUGUST 3, 2000

                   AMENDED BY THE BOARD OF DIRECTORS AS OF MAY 15, 2003