Exhibit 10.46


 


META GROUP, INC.


 


2004 STOCK PLAN


 


1.             Purpose.  The purpose of the META Group, Inc. 2004
Stock Plan (the “Plan”)
is to encourage the employees of META Group, Inc. (the “Company”) and of any
present or future parent or subsidiary of the Company (collectively, “Related Corporations”)
and other individuals who render services to the Company or a Related
Corporation, by providing compensation to such persons, including through the
opportunity to participate in the ownership of the Company and its future
growth through (a) the grant of options which qualify as “incentive stock
options” (“ISOs”)
under Section 422(b) of the Internal Revenue Code of 1986, as amended (the “Code”); (b) the
grant of options which do not qualify as ISOs (“Non-Qualified Options”); (c) awards
of stock in the Company (including in the form of stock bonus awards,
restricted stock unit awards, stock appreciation rights, phantom stock rights
and similar awards, each referred to as a “Stock Grant” and collectively referred to as “Stock Grants”); and
(d) opportunities to make direct purchases of stock in the Company (“Purchase Rights”).  Both ISOs and Non-Qualified Options are
referred to hereafter individually as an “Option” and collectively as “Options.”  Options, Stock Grants and authorizations to
make Purchase Rights are referred to hereafter collectively as “Stock Rights.”  In addition, the Company may also issue
Stock Grants that may be settled in cash (in addition to or in lieu of being
settled in stock),  the value of which awards
are made with reference to the Company’s Common Stock (“Cash Awards”).  Stock Rights and Cash Awards are
collectively referred to as “Awards.”  As used
herein, the terms “parent”
and “subsidiary”
mean “parent corporation” and “subsidiary corporation,” respectively, as those
terms are defined in Section 424 of the Code. 
Certain additional terms used in the Plan are defined paragraph 24.


 


2.             Administration
of the Plan.


 


A.            Board or
Committee Administration.  The
Plan shall be administered by the Board of Directors of the Company (the “Board”) or by one or
more committees appointed by the Board (the “Committee”); provided that the Plan shall be administered: (i) to
the extent required (or made advisable) by applicable regulations under
Section 162(m) of the Code, by two or more “outside directors” (as defined
in applicable regulations thereunder); and (ii) to the extent required (or
made advisable) by Rule 16b-3 promulgated under the Securities Exchange
Act of 1934 or any successor provision (“Rule 16b-3”), by a disinterested
administrator or administrators within the meaning of Rule 16b-3; and
(iii) in any event in accordance with the requirements of the Applicable
Laws.  If and to the extent permitted by
the Applicable Laws, the Board may appoint one or more officers to administer
the Plan with respect to certain classes of participants.  All references in the Plan to the
“Committee” shall mean the Board if no Committee has been appointed.  Subject to the terms of the Plan, the
Committee shall have full authority to administer the Plan, prescribe the terms
and conditions of Awards granted under the Plan, interpret the Plan and
agreements reflecting Awards granted under the Plan, and establish and rescind
the rules governing the Plan and Awards granted hereunder, which actions and
interpretations will be final and binding on all parties.  The authority granted to the Committee
includes the authority to:


 


(i) determine to whom (from among the parties
eligible under paragraphs 2.C and 3) Awards will be granted and the number
of Shares subject (either directly or by reference) thereto;


 


(ii) determine the time or times at which Awards
will be granted;


 


(iii) determine the terms and conditions of
Awards granted under the Plan (which terms and conditions need not be the same
as between different recipients), including without limitation the purchase
price of shares subject to an Option or Purchase Rights (which prices will not
be less than the minimum price specified in paragraph 6), the vesting or
exercisability schedule that applies to an Award (which may include time-based,
performance or other conditions, and may include acceleration conditions or
conditions relating to the waiver of forfeiture provisions), any pro-rata
adjustment to the vesting or exercisability schedule of an Award as a result of
the recipient’s transitioning from full- to part-time service (or vice versa),
acceptable forms of consideration, the term of Awards, and any


 

















 


repurchase or other
forfeiture conditions or restrictions that apply to an Award, based in each
case on such factors as the Committee in its sole discretion may deem
appropriate;


 


(iv) approve the forms of agreements reflecting
Awards;


 


(v) determine whether each Option granted shall
be an ISO or a Non-Qualified Option;


 


(vi) amend the terms and conditions of
outstanding Awards in a manner that is consistent with the requirements of the
Plan (including paragraph 17) with respect to newly-granted Awards, including
without limitation to extend the period during which outstanding Options may be
exercised;


 


(vii) establish the performance criteria, if any,
applicable to Awards and to determine whether and to what extent such
performance criteria applicable to Awards have been satisfied;


 


(viii) determine whether and to what extent an
individual qualifies as an employee for purposes of the Plan, whether and to
what extent an individual or entity qualifies as a consultant or advisor for
purposes of the Plan, and when any such service relationship has terminated;
and


 


(ix) in order to
fulfill the purposes of the Plan and without amending the Plan, establish
subplans to the Plan or modify grants of Awards to persons who are foreign
nationals or employed outside of the United States in order to recognize
differences in local law, tax policies or customs.


 


B.            Committee
Actions.  The Committee
may select one of its members as its chairman, and shall hold meetings at such
time and places as it may determine.  A
majority of the Committee shall constitute a quorum and acts of a majority of
the members of the Committee at a meeting at which a quorum is present, or acts
reduced to or approved in writing by all the members of the Committee (if
consistent with applicable state law), shall be the valid acts of the
Committee.  From time to time the Board
may increase the size of the Committee and appoint additional members thereof,
remove members (with or without cause) and appoint new members in substitution
therefor, fill vacancies however caused, or remove all members of the Committee
and thereafter directly administer the Plan. 
No member of the Board or the Committee shall be liable for any action
or determination made in good faith with respect to the Plan or any Award
granted under it.


 


C.            Grant of
Awards to Board Members.  Subject
to the provisions of the first sentence of paragraph 2.A above, if
applicable, and the requirements of the Applicable Laws, Awards may be granted
to members of the Board.  All grants of
Awards to members of the Board shall in all other respects be made in
accordance with the provisions of this Plan applicable to other eligible
persons.  Consistent with the provisions
of the first sentence of Paragraph 2.A above, members of the Board who
either (i) are eligible to receive grants of Awards pursuant to the Plan
or (ii) have been granted Awards may vote on any matters affecting the
administration of the Plan or the grant of any Awards pursuant to the Plan,
except that no such member shall act upon the granting to himself or herself of
Awards, but any such member may be counted in determining the existence of a
quorum at any meeting of the Board during which action is taken with respect to
the granting to such member of Awards.


 


3.             Eligible
Employees and Other Eligible Service Providers.  ISOs may be granted only to employees of
the Company or any Related Corporation. 
Non-Qualified Options, Stock Grants, Purchase Rights and Cash Awards may
be granted to any employee, officer or director (whether or not also an
employee) or consultant or advisor of the Company or any Related Corporation.  The Committee may take into consideration a
recipient’s individual circumstances in determining whether to grant an
Award.  The granting of any Award to any
individual or entity shall neither entitle that individual or entity to, nor
disqualify such individual or entity from, participation in any other grant of
Awards.


 


4.             Stock.  The stock subject to Awards shall be
authorized but unissued shares of Common Stock of the Company, par value $0.01
per share (the “Common Stock”), or shares of Common Stock reacquired by the
Company in any manner.  Subject to
adjustment as provided in paragraph 15, the
maximum aggregate number of


 


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shares of Common Stock
that may be issued and sold pursuant to the Plan is 600,000 shares, plus (1) an
additional 600,000 shares (or such lesser number as is determined by the Board)
on the first day of each of our fiscal years 2005, 2006, 2007 and 2008 (for a
maximum aggregate number of shares of 2,400,000), and (2) up to an additional
1,500,000 shares that (a) remain available for issuance under the Company’s
1995 Stock Plan upon termination of the 1995 Stock Plan, and (b) are subject to
options and other awards granted under the 1995 Stock Plan upon cancellation or
expiration of such options and other awards where such cancellations and
expirations occur after termination of the 1995 Stock Plan.  If any Award granted under the Plan expires
or terminates for any reason without having been exercised in full or ceases
for any reason to be exercisable in whole or in part, or the shares subject to
an Award are repurchased by or otherwise forfeited to the Company, the shares
of Common Stock subject to such Award shall again be available for grants of
Awards under the Plan.


 


Subject to the provisions of paragraph 15, the maximum
aggregate number of shares that may be made subject to Awards to any individual
employee during any fiscal year of the Company will not exceed 500,000;  provided
however if the Award is made in connection with the participant’s
initial hiring by the Company such limit will be 1,000,000  shares. 
If any Option granted under the Plan shall expire or terminate for any
reason without having been exercised in full or shall cease for any reason to
be exercisable in whole or in part or shall be repurchased by the Company, the
shares subject to such Option shall be included in the determination of the
aggregate number of shares of Common Stock deemed to have been granted to such
employee under the Plan.


 


5.             Granting
of Awards.  Awards may be
granted under the Plan at any time on or after May, 24, 2004 and prior to May
24, 2014.  The date of grant of an Award under the Plan
will be the date specified by the Committee at the time it grants the Award; provided, however, that such date shall
not be prior to the date on which the Committee acts to approve the grant.  Options granted under the Plan are intended
to qualify as performance-based compensation to the extent required or permitted
under Proposed Treasury Regulation Section 1.162-27.


 


6.             Minimum
Price Applicable to Awards; ISO Limitations.


 


A.            Price for
Stock Rights.  Subject further to the requirements of
paragraphs 6.B and 6.C below, the purchase price per share of stock
granted in any Stock Right under the Plan shall in no event be less than the
minimum legal consideration required therefor under the laws of any
jurisdiction in which the Company or its successors in interest may be
organized, and if no minimum legal consideration is prescribed, shall be any
such amount (including no amount) as is determined by the Committee in its sole
discretion.


 


B.            Price for
Non-Qualified Options.  The
exercise price per share specified in the agreement relating to each
Non-Qualified Option granted under the Plan shall not be less than the Fair
Market Value per share of Common Stock on the date of such grant.


 


C.            Price for
ISOs.  The exercise price
per share specified in the agreement relating to each ISO granted under the
Plan shall not be less than the Fair Market Value per share of Common Stock on
the date of such grant.  In the case of
an ISO to be granted to an employee owning stock possessing more than ten
percent (10%) of the total combined voting power of all classes of stock of the
Company or any Related Corporation, the price per share specified in the
agreement relating to such ISO shall not be less than one hundred ten percent
(110%) of the fair market value per share of Common Stock on the date of
grant.  For purposes of determining
stock ownership under this paragraph, the rules of Section 424(d) of the
Code shall apply.


 


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


 


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7.             Option
Duration.  Subject to
earlier termination as provided in paragraphs 9 and 10 or in the agreement
relating to such Option, each Option shall expire on the date specified by the
Committee, but not more than (i) ten years from the date of grant in the
case of Options generally and (ii) five years from the date of grant in the
case of ISOs granted to an employee owning stock possessing more than ten
percent (10%) of the total combined voting power of all classes of stock of the
Company or any Related Corporation, as determined under
paragraph 6.C.  Subject to earlier
termination as provided in paragraphs 9 and 10, the term of each ISO shall
be the term set forth in the original instrument granting such ISO, except with
respect to any part of such ISO that is converted into a Non-Qualified Option
pursuant to paragraph 18.


 


8.             Exercise
of Option.  Subject to
the provisions of paragraphs 9 through 12, each Option granted under the
Plan shall be exercisable as follows:


 


A.            Vesting.  The Option may be subject to vesting and
may either be fully exercisable on the date of grant (in which case it may also
be subject to a Company repurchase right or other forfeiture feature) or may
become exercisable only as the optionee vests in the Option shares thereafter
in such installments or on such basis as the Committee may specify.


 


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


 


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


 


D.            Acceleration
of Vesting.  The
Committee shall have the right to accelerate the date that any installment of any
Option becomes vested and exercisable; provided that the Committee shall not,
without the consent of an optionee, accelerate the permitted exercise date of
any installment of any Option granted to any employee as an ISO (and not
previously converted into a Non-Qualified Option pursuant to paragraph 18)
if such acceleration would violate the annual vesting limitation contained in
Section 422(d) of the Code, as described in paragraph 6.D.


 


E.             Rights as
Stockholder.  The holder of an
Option shall not have the rights of a stockholder with respect to the shares
covered by such Option until the date of the shares are issued (as evidenced by
appropriate entry on the books of the Company or a duly authorized transfer
agent of the Company) to the holder. 
Except as expressly provided above in paragraph 15 with respect to
changes in capitalization and stock dividends, no adjustment shall be made to
an Option for dividends or similar rights for which the record date is before
the date such stock certificate is issued.


 


9.             Termination of
Employment or Service Relationship.


 


A.            Affect of
Termination on Awards Generally.  The Committee shall specify what effect, if
any, termination of the participant’s employment or other service relationship
with the Company and all Related Corporations has on an Award, including the
effect of such termination on the term of the Award and the exercisability of
the Award following termination.  Unless
otherwise specifically provided for by the Committee, termination of employment
will terminate all vesting applicable to an Award.  Generally, employment shall be considered as continuing
uninterrupted during any bona fide leave of absence (such as those attributable
to illness, military obligations or governmental service) provided that the period
of such leave does not exceed 90 days or, if longer, any period during
which such optionee’s right to reemployment is guaranteed by statute.  A bona fide leave of absence with the
written approval of the Committee shall not be considered an interruption of
employment under this paragraph 9, provided that such written approval
contractually obligates the Company or any Related Corporation to continue the
employment of the participant after the approved period of absence.


 


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B.            Effect of Termination on ISOs.  Unless otherwise specified in the agreement
relating to such ISO, if an ISO optionee ceases to be employed by the Company
and all Related Corporations other than by reason of death or disability as defined
in paragraph 10, no further installments of his or her ISOs shall become
vested or exercisable, and his or her ISOs shall terminate on the earlier of
(a) ninety (90) days after the date of termination of his or her
employment, or (b) their specified expiration dates, except to the extent
that such ISOs (or unvested or unexercised installments thereof) have been
converted into Non-Qualified Options pursuant to paragraph 18.


 


C.            Change in Service Status.  ISOs granted under the Plan shall not be
affected by any change of employment within or among the Company and Related
Corporations, so long as the optionee continues to be an employee of the
Company or any Related Corporation. 
With respect to service-related requirements applicable to Awards other
than ISOs granted under the Plan, and unless otherwise specified in the Award
agreement, such Awards will not be affected by any change of employment within
or among the Company and Related Corporations, and will not be affected by
changes in status from one type of service-provider to another, so long as the
participant continues to be an employee, director, consultant or advisor of or
to the Company or any Related Corporation.


 


D.            No Guarantee of
Employment.  Nothing in the Plan
shall be deemed to give any grantee of any Award the right to be retained in
employment or in any other service relationship by the Company or any Related
Corporation for any period of time.


 


10.          Affect of Death and
Disability of Participant on ISOs.


 


A.            Death.  If an ISO optionee ceases to be employed
by the Company and all Related Corporations by reason of his or her death, any
ISO owned by such optionee may be exercised, to the extent otherwise
exercisable on the date of death, by the estate, personal representative or
beneficiary who has acquired the ISO by will or by the laws of descent and
distribution, until the earlier of (i) the specified expiration date of
the ISO, or (ii) one year from the date of the optionee’s death.


 


B.            Disability.  If an ISO optionee ceases to be employed
by the Company and all Related Corporations by reason of his or her disability,
such optionee shall have the right to exercise any ISO held by him or her on
the date of termination of employment, for the number of shares for which he or
she was vested in anc could have exercised it on that date, until the earlier
of (i) the specified expiration date of the ISO or (ii) 180 days
from the date of the termination of the optionee’s employment.  For the purposes of the Plan, the term “disability” shall
mean “permanent and total disability” as defined in Section 22(e)(3) of
the Code or any successor statute.


 


11.          Assignability.  Generally,
no Award will be assignable or transferable by the grantee except by
will, by the laws of descent and distribution or pursuant to a valid domestic
relations order.  Except as set forth in
the previous sentence, during the lifetime of a grantee each Stock Right shall
be exercisable only by such grantee. 
Notwithstanding the above, the Committee may in its discretion grant
Awards with limited transferability rights provided such rights conform to the
requirements of the Applicable Laws (including without limitation the rules and
instructions of Form S-8 (or any successor form) and the rules and regulations
governing Incentive Stock Options).


 


12.          Terms and Conditions of Options.  Options shall be evidenced by
instruments (which need not be identical) in such forms as the Committee may
from time to time approve.  Such
instruments shall conform to the terms and conditions set forth in
paragraphs 6 through 11 hereof and may contain such other provisions as
the Committee deems advisable which are not inconsistent with the Plan,
including restrictions applicable to shares of Common Stock issuable upon
exercise of Options.  The Committee may
specify that any Non-Qualified Option shall be subject to the restrictions set
forth herein with respect to ISOs, or to such other termination and
cancellation provisions as the Committee may determine.  The Committee may from time to time confer
authority and responsibility on one or more of its own members and/or one or
more officers of the Company to execute and deliver such instruments.  The proper officers of the Company are
authorized and directed to take any and all action necessary or advisable from
time to time to carry out the terms of such instruments.


 


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13.          Stock Grants and
Purchases Rights.


 


A.            Agreement.  The agreement reflecting a Stock Grant or Purchase Right will
contain provisions regarding (i) the number of shares subject to the Award or a
formula for determining such number; (ii) subject to paragraph 6 above and
paragraph 16 below, the purchase price (if any) applicable to the Award and the
means of payment for the shares subject thereto; (iii) the performance criteria
(if any) and level of achievement versus these criteria that will determine the
number of shares to be granted, issued, retainable and/or vested; (iv) the
terms and conditions of the grant, issuance, vesting and/or forfeiture of the
shares; (v) the time or times upon which the Award may be settled; (vi)
arrangements for deferred distribution of shares issuable pursuant to the
Award; (vii) restrictions on transferability of the Award or Award shares;
(vii) any other restrictions applicable to the Award or the shares issued
pursuant to the Award (including without limitation, and if permitted under the
Applicable Laws, restrictions on the right to receive dividends or vote
unvested or unissued shares subject to an Award); and (ix) such further terms
and conditions in each case not inconsistent with the Plan as may be determined
by the Committee.


 


B.            Restrictions and Performance Criteria.  Performance criteria may be based on
financial or other corporate performance measures, the participant’s personal
performance evaluations and/or completion of service by the participant.


 


C.            Rights as Stockholder.  Unless otherwise provided by the Committee,
the participant will have the rights equivalent to those as a stockholder and
will be a stockholder only after shares subject to an Award are issued (as
evidenced by appropriate entry on the books of the Company or a duly authorized
transfer agent of the Company) to the participant.  Unless otherwise provided for by the Committee at the time of
grant of a restricted stock unit Award, the participant holding such Award will
be entitled to receive dividend payments as if he or she were an actual
stockholder with respect to the shares subject to the restricted stock unit
Award.


 


14.          Cash Awards.  When granting a Stock Grant (or subject to
the final sentence of paragraph 17, through amendment after grant), the
Committee may provide that such Award may be settled in cash, either as an
alternative or in addition to being settled in stock.  To the extent the Committee makes provision for such cash
settlement, it will reflect this provision and the terms thereof in the Award
agreement, which agreement may contain the same terms and conditions, adjusted
to apply to the cash-settlement feature, as are outlined in paragraph 13.A
above.


 


15.          Adjustments.  Upon the occurrence of any of the following events, a
participant’s rights with respect to Awards granted to such participant
hereunder shall be adjusted as hereinafter provided, unless otherwise specifically
provided in the written agreement between the participant and the Company
relating to such Award:


 


A.            Stock
Dividends and Stock Splits.  Subject
to any action required under Applicable Laws by the stockholders of the
Company, the number of shares of Common Stock covered by each outstanding
Award, the specific share numbers set
forth in paragraph 4 above (including the number of shares that have
been authorized for issuance under the Plan as set forth in paragraph 4 but as
to which no Awards have yet been granted or that have been returned to the Plan
upon cancellation, expiration, forfeiture or repurchase of an Award or Award
shares), as well as the price per share of Common Stock (including the price at
which any repurchase right with respect to shares can be exercised) covered by
each such outstanding Award, shall be proportionately adjusted for any increase
or decrease in the number of issued shares of Common Stock resulting from a
stock split, reverse stock split, stock dividend, combination, recapitalization
or reclassification of the Common Stock, or any other increase or decrease in
the number of issued shares of Common Stock effected without receipt of
consideration by the Company; provided,
however, that conversion of any convertible securities of the
Company shall not be deemed to have been “effected without receipt of
consideration.”  Such adjustment shall
be made by the Committee, whose determination in that respect shall be final,
binding and conclusive.  Except as
expressly provided herein, no issuance by the Company of shares of stock of any
class, or securities convertible into shares of stock of any class, shall
affect, and no adjustment by reason thereof shall be made with respect to, the
number or price of shares of Common Stock subject to an Award.


 


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B.            Consolidations
or Mergers.  If the
Company is to be consolidated with or acquired by another entity in a merger,
sale of all or substantially all of the Company’s assets or otherwise (an “Acquisition”), the
Committee or the board of directors of any entity assuming the obligations of
the Company hereunder (the “Successor Board”), shall, as to outstanding Awards,
either (i) make appropriate provision for the continuation of such Awards
by substituting on an equitable basis for the shares then subject to such
Awards either (a) the consideration payable with respect to the
outstanding shares of Common Stock in connection with the Acquisition,
(b) shares of stock of the surviving corporation or (c) such other
securities as the Successor Board deems appropriate, the fair market value of
which shall not materially exceed the fair market value of the shares of Common
Stock subject to such Awards immediately preceding the Acquisition; or (ii) upon
written notice to the participants, provide that all Awards must be exercised,
to the extent then exercisable, within a specified number of days of the date
of such notice, at the end of which period the Awards shall terminate; or
(iii) terminate all Awards in exchange for a cash payment equal to the
excess of the fair market value of the shares subject to such Awards (to the
extent then exercisable) over the exercise price thereof.


 


C.            Recapitalization
or Reorganization.  In
the event of a recapitalization or reorganization of the Company (other than a
transaction described in subparagraph B above) pursuant to which
securities of the Company or of another corporation are issued with respect to
the outstanding shares of Common Stock, a participant upon exercising or being
issued shares pursuant to an Award shall be entitled to receive for the
purchase price paid upon such exercise (or upon any other issuance) of the
securities he or she would have received if he or she had exercised such Award
prior to such recapitalization or reorganization.


 


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


 


E.             Dissolution
or Liquidation.  In the
event of the proposed dissolution or liquidation of the Company, each
outstanding Award will terminate immediately prior to the consummation of such
proposed action or at such other time and subject to such other conditions as
shall be determined by the Committee.


 


F.             Issuances
of Securities.  Except as
expressly provided herein, no issuance by the Company of shares of stock of any
class, or securities convertible into shares of stock of any class, shall
affect, and no adjustment by reason thereof shall be made with respect to, the
number or price of shares subject to Awards. 
No adjustments shall be made for dividends paid in cash or in property
other than securities of the Company.


 


G.            Fractional
Shares.  No fractional
shares shall be issued under the Plan and the participant shall receive from
the Company cash in lieu of such fractional shares.


 


16.          Means of
Exercising Awards.  An
Award (or any part or installment thereof) shall be exercised by giving written
notice to the Company at its principal office address, or to such transfer
agent as the Company shall designate. 
Such notice shall identify the Award being exercised and specify the
number of shares as to which such Award is being exercised, accompanied by full
payment of the purchase price (if any) therefor either (a) in United
States dollars in cash, check or wire transfer, (b) at the discretion of
the Committee and subject to such conditions as the Committee may impose,
through delivery of shares of Common Stock having a fair market value equal as
of the date of the exercise to the cash exercise price of the Award,
(c) with respect to Options, at the discretion of the Committee and
consistent with the Applicable Laws, through the delivery of an assignment to
the Company of a sufficient amount of the proceeds from the sale of the Common
Stock acquired upon exercise of the Option and an authorization to the broker
or selling agent to pay that amount to the Company, which sale shall be at the
participant’s direction at the time of exercise, or (d) at the discretion
of the Committee, by any combination of (a), (b) or (c) above, or through any
other method of consideration that is permitted under the Applicable Laws.  If the


 


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Committee exercises its
discretion to permit payment of the exercise price of an ISO by means of the
methods set forth in clauses (b), (c) or (d) of the preceding sentence, such
discretion shall be exercised in writing at the time of the grant of the ISO in
question.


 


17.          Term and
Amendment of Plan.  This
Plan was originally adopted by the Board on  April __, 2004 and approved by the stockholders of the Company on May 24,
2004.  The Plan shall expire at the end
of the day on May 24, 2014 (except as to Awards outstanding on that date).  The Board may terminate or amend the Plan in
any respect at any time, except that, without the approval of the stockholders
the Board may not:  (a) increase
the total number of shares that may be issued under the Plan (except by
adjustment pursuant to paragraph 15); (b) materially increase the benefits
accruing to participants under the Plan (provided
that exercise of the Committee’s expressly permitted authority under
the Plan shall not in any event constitute such a material increase in
benefits); (c) materially modify the requirements as to eligibility for
participation in the Plan; (e) modify the provisions of paragraph 6
regarding the minimum prices at which shares must be purchased subject to
Awards (except by adjustment pursuant to paragraph 15); (f) extend
the expiration date of the Plan; (g) expand the types of Awards that may be
granted under the Plan (provided
that the Committee’s interpretation of the types of Awards that may be granted
as Stock Grants and Cash Awards shall not be construed as an expansion of the
types of Awards permitted under the Plan so long as the terms of those Awards,
in whatever form they take, otherwise comply with the Plan);  (h) reprice outstanding Options; or
(i) take any other action for which stockholder approval is mandated under
the Applicable Laws.


 


Except as otherwise provided in this
paragraph 17, in no event may action of the Board, the Committee or
stockholders alter or impair the rights of a Plan participant with respect to
an outstanding Award, without such participant’s consent.


 


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


 


19.          Application
Of Funds.  The proceeds
received by the Company from the sale of shares pursuant to Awards granted
under the Plan shall be used for general corporate purposes.


 


20.          Notice to
Company of Disqualifying Disposition.  By accepting an ISO granted under the Plan, each optionee agrees
to notify the Company in writing immediately after such optionee makes a
Disqualifying Disposition (as described in Sections 421, 422 and 424 of
the Code and regulations thereunder) of any stock acquired pursuant to the
exercise of ISOs granted under the Plan. 
A “Disqualifying
Disposition”is generally any disposition occurring on or before the later of
(a) the date two years following the date the ISO was granted or
(b) the date one year following the date the ISO was exercised.


 


21.          Withholding of Additional Income Taxes.  As a condition of the grant, vesting or
settlement of, or the issuance of shares subject to, an Award granted under the
Plan, or upon a Disqualifying Disposition (as defined in paragraph 20), the
participant (or in the case of the participant’s death, the person exercising
the Award or otherwise entitled to receive shares or other property subject to
an Award) will make such arrangements as the Committee may require for the
satisfaction of any applicable federal, state, local or foreign withholding tax
obligations that may arise in connection with such grant, vesting or exercise
of the Award or the issuance of shares. 
The Company will not be required to issue any shares under the Plan
until such obligations are satisfied by the


 


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participant (or
such other person).  If the Committee
allows the withholding of shares subject to an Award to satisfy a participant’s
tax withholding obligations under this paragraph 21, the Committee will not
allow withholding of shares in an amount that exceeds the minimum statutory
withholding rates for federal and state tax purposes, including payroll
taxes.  All elections by a participant
to have shares withheld for this purpose will be subject to the Applicable Laws
and will be made in such form and under such conditions as the Committee may
provide.


 


22.          Governmental
Regulation.  The
Company’s obligation to sell and deliver shares of the Common Stock under this
Plan is subject to the approval of any governmental authority required in
connection with the authorization, issuance or sale of such shares.  Notwithstanding any other provision of the
Plan or any agreement entered into by the Company pursuant to the Plan, the
Company shall not be obligated, and shall have no liability for failure, to
issue or deliver any shares or other property under the Plan unless such
issuance or delivery would comply with the Applicable Laws, with such
compliance determined by the Company in consultation with its legal
counsel.  As a condition to the grant or
exercise of an Award, the Company may require the person receiving or
exercising the Award to represent and warrant at the time of any such event
that the shares are being received or purchased are for investment only and
that the recipient of such shares does not have any present intention to sell
or distribute such shares if, in the opinion of counsel for the Company, such a
representation is required by law.


 


Government regulations may impose reporting or other
obligations on the Company with respect to the Plan.  For example, the Company may be required to send tax information
statements to employees and former employees that exercise ISOs under the Plan,
and the Company may be required to file tax information returns reporting the
income received by recipients of Awards under the Plan.


 


23.          Governing
Law.  The validity and
construction of the Plan and the instruments evidencing Options shall be
governed by the laws of the State of Delaware, or the laws of any jurisdiction
in which the Company or its successors in interest may be organized.


 


24.          Definitions.  As used in this Plan, the following
definitions apply:


 


(a)           “Applicable Laws” means the legal requirements relating to
the administration of stock option, restricted purchase and stock award plans,
including under applicable U.S. state corporate laws, U.S. federal and
applicable state securities laws, other U.S. federal and state laws, the Code,
any Stock Exchange rules or regulations and the applicable laws, rules and
regulations of any other country or jurisdiction where Stock Rights are granted
under the Plan, as such laws, rules, regulations and requirements shall be in
place from time to time.


 


(b)           “Fair Market Value” means, as of the date of grant of an
Award or as of the applicable date for any other purpose under the Plan, or if
the prices or quotes discussed in this sentence are unavailable for such date,
the last business day for which such prices or quotes are available prior to
such date:  (i) the average (on that
date) of the high and low prices of the Common Stock on the principal Stock
Exchange on which the Common Stock is traded, if the Common Stock is then
traded on a Stock Exchange; or (ii) the closing bid price (or average of
bid prices) last quoted (on that date) by an established quotation service for
over-the-counter securities, if the Common Stock is not reported on a Stock
Exchange.  If the Common Stock is not
publicly traded at the time an Award is granted under the Plan, “fair market
value” shall mean the value of the Common Stock as determined by the Committee
after taking into consideration all factors which it deems appropriate,
including, without limitation, recent sale and offer prices of the Common Stock
in private transactions negotiated at arm’s length.


 


(c)           “Stock Exchange” means any stock exchange or consolidated
stock price reporting system on which prices for the Common Stock are quoted at
any given time.


 


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