Document:

Exhibit 10.1

 

[FORM OF 2004 STOCK INCENTIVE PLAN EMPLOYEE
RESTRICTED STOCK UNIT

AWARD AGREEMENT]

 

ARCHIPELAGO HOLDINGS

2004 STOCK INCENTIVE PLAN

RESTRICTED STOCK UNIT AWARD AGREEMENT

 

THIS AWARD AGREEMENT, made this
             day
of               ,
2005 (the “Grant Date”), by and between Archipelago Holdings, Inc.,
a Delaware corporation (the “Company”),
and                                    
(the “Employee”) pursuant to the Archipelago Holdings 2004 Stock
Incentive Plan (the “Plan”).

 

W I T N E S S E T H:

 

WHEREAS, the Company has adopted the Plan and
determined that it is in the interest of the Company to enter into this Award
Agreement.

 

NOW, THEREFORE, in consideration of the covenants and
agreements herein contained, the parties hereto hereby agree as follows:

 

1.             Grant of RSUs.  The Company hereby
grants to the Employee pursuant to the
Plan                
restricted stock units (“RSUs” or “RSU Grant”), subject to
the vesting provisions of Section 3, relating to the Company’s common stock (“Shares”).  Each
RSU represents the right to receive one (1) Share.  The Company shall
hold the RSUs in book-entry form.  The Employee shall have no direct
secured claim in any specific assets of the Company or the Shares to be issued
upon vesting, and will have the status as a general unsecured creditor of the
Company.  If an executed copy of
this Award Agreement is not returned to the Company
by                             ,
2005, the RSU Grant hereunder shall be null and void, unless the Company
determines, in its sole discretion, that any delay was for good cause.

 

2.             Additional Documents; Definitions.  The
Plan, which is incorporated in this Award Agreement by reference and made a
part hereof, shall govern all aspects of this Award Agreement except as
otherwise specifically stated herein.  For purposes of this Award
Agreement all terms not defined in this Award Agreement or in Annex A attached
hereto shall have the respective meanings specified under the Plan.

 

3.             Vesting.  Except as otherwise provided herein,
the RSU shall vest in equal installments
on                                
(i.e.,      % per year).

 

4.             Dividend Equivalents.  As of each dividend
date with respect to Shares, a dollar amount equal to the amount of the
dividend that would have been paid on the number of Shares equal to the number
of RSUs held by the Employee as of the close of business on the record date for
such dividend shall be converted into a number of RSUs equal to the number of
whole and fractional Shares that could have been purchased at the closing price
on the dividend declared on Shares which is payable in Shares, the Employee
shall be credited with an additional numbers of RSUs equal to the product of
(a) the number of his RSUs then held on the related dividend record date multiplied
by (b) the number of Shares (including any fraction thereof) distributable

 

 

as a dividend on a
Share.  All such dividend equivalents credited to the Employee shall
be added to and in all respects thereafter be treated as RSUs hereunder.

 

5.             Termination of Employment.

 

(a)           Upon Employee’s Termination of
Employment for any reason other than death or Disability, the unvested portion
of the RSU Grant shall be immediately forfeited.

 

(b)           Upon the Employee’s Termination of
Employment for Disability, the RSU Grant shall continue to vest as if the
Employee was still employed with the Company as long as the Employee continues
to have a Disability.

 

(c)           If an Employee dies while employed by
the Company or while the Employee has a Disability covered under Section 5(b),
the RSU Grant shall immediately vest.

 

6.             Issuance of Shares.  As promptly as
practical after the date on which a portion or all of the RSU Grant vests, and
after receipt of any required tax withholding and receipt of such Consents as
the Company deems necessary or desirable, the Company shall issue or transfer
to the Employee the number of Shares with respect to which the RSU Grant has
become vested (less Shares withheld in satisfaction of tax withholding
obligations, if any), and shall deliver to the Employee a certificate or
certificates therefor, registered in the Employee’s name.  The
Company may postpone such delivery until it receives satisfactory proof that
the issuance or transfer of such Shares will not violate any of the provisions
of the Securities Act of 1933, as amended (the “Securities Act”),
or the Securities Exchange Act of 1934, as amended, any rules or regulations of
the Securities and Exchange Commission promulgated thereunder, or the
requirements of applicable state law relating to authorization, issuance or
sale of securities, or until there has been compliance with the provisions of
such acts or rules.  The foregoing provisions of this Section 6 to
the contrary notwithstanding, the date of any distribution of Shares shall be
postponed to such date as may be necessary to avoid an acceleration of income
and imposition of tax penalties and interest under Section 409A of the Internal
Revenue Code.

 

7.             Rights as Shareholder.  Neither the
Employee nor any permitted transferee of an RSU shall have any of the rights of
a member or shareholder with respect to any Shares except to the extent that a
certificate or certificates for such Shares shall have been issued upon vesting
of the RSU as provided herein, and no adjustment shall be made for cash
distributions in respect of such Shares for which the distribution date (or
record date, in the event the Company becomes a corporation) is prior to the
date upon which such Employee or permitted transferee shall become the holder
of record thereof.

 

8.             Restrictions.

 

(a)           Securities Law Restrictions.  Regardless
of whether the offering and sale of Shares under the Plan have been registered
under the Securities Act or have been registered or qualified under the
securities laws of any state, the Company at its discretion may impose
restrictions upon the sale, pledge or other transfer of such Shares (including
the placement of appropriate legends on certificates or the imposition of
stop-transfer instructions) if, in the judgment of the Company, such restrictions
are necessary

 

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or desirable in order to
achieve compliance with the Securities Act, the securities laws of any state or
any other law.

 

(b)           Market Stand-Off.  In
connection with any underwritten public offering by the Company of its equity
securities pursuant to an effective registration statement filed under the
Securities Act, including the Company’s Initial Public Offering, the Employee
shall not directly or indirectly sell, make any short sale of, loan,
hypothecate, pledge, offer, grant or sell any RSU or other contract for the
purchase of, purchase any RSU or other contract for the sale of, or otherwise
dispose of or transfer, or agree to engage in any of the foregoing transactions
with respect to, any Shares acquired under this Award Agreement without the
prior written consent of the Company.  Such restriction (the “Market Stand-Off”)
shall be in effect for one hundred eighty (180) days following the date of the
final prospectus for the offering.

 

In the event of any adjustment of, changes in or
additions to the Shares, any new, substituted or additional interests or
securities which are by reason of such adjustment, change or addition
distributed with respect to any Shares subject to the Market Stand-Off, or into
which such Shares thereby become convertible, shall immediately be subject to
the Market Stand-Off.  In order to enforce the Market Stand-Off, the
Company may impose stop-transfer instructions with respect to the Shares acquired
under this Award Agreement until the end of the applicable stand-off
period.  The Company’s underwriters shall be beneficiaries of the
agreement set forth in this Section 8(b).  This Section 8(b) shall
not apply to Shares that are registered in the public offering under the
Securities Act.

 

9.             Right of Recapture.  If at any time within
six (6) months after the date on which the Employee vests in a portion or all
of the RSU Grant:  (a) there is a Termination of Employment for Cause
(or, if still employed by the Company, engages in any activity that would
constitute a basis for a Termination of Employment for Cause); or (b) the
Employee engages in any activity determined in the discretion of the Company to
be Competitive Activity, then any proceeds of the RSU Grant realized by the
Employee within that six (6)-month period (“Proceeds”) shall be paid by
the Employee to the Company upon notice from the Company.  Such
Proceeds shall be determined as of the date of vesting without regard to any
subsequent change in the Fair Market Value of a Share.  The Company
shall have the right to offset such Proceeds against any amounts otherwise owed
to the Employee by the Company (including, without limitation, against any
wages, vacation pay, or pursuant to any benefit plan or other compensatory
arrangement) to the maximum extent permitted by law.

 

10.           Right of Offset.  The
Company shall have the right to offset against the obligation to deliver Shares
in respect of any Award Agreement, any outstanding amounts then owed by the Employee
to the Company.

 

11.           Notices.  All
notices required or permitted hereunder shall be given in writing by personal
delivery, by confirmed facsimile transmission (with a copy dispatched by
express delivery or registered or certified mail), or by express delivery via
express mail or any reputable express courier service.  Notices shall
be addressed:

 

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(a)           if to the Company, at 100 South
Wacker Drive, 20th Floor, Chicago, IL  60606,
Attention:               ;
Fax:  at
                  ;
Confirm                   ;
or

 

(b)           if to the Employee, at the address
set forth on the signature page; or

 

(c)           as to either party, at such other
address as may be designated by notice in the manner set forth herein.

 

Notices which
are delivered personally, by confirmed facsimile transmission, or by courier as
aforesaid, shall be effective on the date of delivery.

 

12.           Binding Effect.

 

(a)           Any action taken or decision made by
the Committee arising out of or in connection with the construction,
administration, interpretation or effect of this Award Agreement shall lie
within its sole and absolute discretion, as the case may be, and shall be
final, conclusive and binding on the Employee and all persons claiming under or
through the Employee.

 

(b)           Subject to Section 10 hereof, this
Award Agreement shall be binding upon the heirs, executors, administrators and
successors of the parties hereto.

 

13.           No Right to Perform Services.  The
granting of RSUs hereunder shall not be construed as granting Employee any
right to perform services for, or remain an employee of, the
Company.  The right of the Company to terminate Employee’s services
and employment at any time and for any reason is specifically reserved.

 

14.           Governing Law.  This
Award Agreement shall be construed and interpreted in accordance with the laws
of the State of Delaware.

 

15.           Severability.  If
any provision of this Award Agreement shall hereafter be held to be invalid,
unenforceable or illegal in whole or in part, in any jurisdiction under any
circumstances for any reason, (a) such provision shall be reformed to the
minimum extent necessary to cause such provision to be valid, enforceable and
legal while preserving the intent of the parties as expressed in, and the benefits
to the parties provided by, this Award Agreement or (b) if such provision
cannot be so reformed, such provision shall be severed from this Agreement and
an equitable adjustment shall be made to this Award Agreement (including,
without limitation, addition of necessary further provisions of this Award
Agreement) so as to give effect to the intent as so expressed and the benefits
so provided.  Such holding shall not affect or impair the validity,
enforceability or legality of such provision in any other jurisdiction or under
any other circumstances.  Neither such holding nor such reformation
or severance shall affect or impair the legality, validity or enforceability of
any other provision of this Award Agreement.

 

16.           Terms of Other Agreements.  To
the extent the terms of an employment agreement or change in control severance
agreement between the Company and the Employee are more beneficial to the
Employee than the terms of this Award Agreement, then the terms of such
employment or change in control severance agreement shall govern.

 

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17.           Merger, Sale or Liquidation of the Company.  Upon
a merger, sale or liquidation of the Company, the RSUs will be subject to the
same terms and conditions as provided in Section 18 of the Archipelago
Holdings, L.L.C. 2003 Long-Term Incentive Plan.

 

18.           Entire Award Agreement.  This
Award Agreement and the Plan comprise the whole agreement between the parties
hereto with respect to the subject matter hereof, and may not be modified or
terminated orally.

 

[signature
page follows]

 

5

 

IN WITNESS WHEREOF, the parties hereto have executed
this Award Agreement as of the day and year first above written.

 

 

	
   

  	
  Archipelago
  Holdings, Inc.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Employee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
					

 

6

 

Annex A

Certain Definitions

 

As used in this Award Agreement, the following terms
shall have the following meanings:

 

(a)           “Cause” shall mean (i)
conviction, or plea of nolo contendere (or a similar plea), in a criminal
proceeding, whether in respect of a felony or misdemeanor;
(ii) misconduct; (iii) dishonesty; (iv) material violation of the
Company’s policies or procedures; (v) willful or repeated failure or refusal to
perform the Employee’s duties satisfactorily after receiving notice from the
Company; (vi) engaging in Detrimental Activity; or (vii) such other or
different circumstances as the Committee may determine to constitute Cause; in
each case as determined by the Committee, which determination shall be final,
binding and conclusive.

 

(b)           “Competitive Activity”
shall mean engaging in activity with the New York Stock Exchange, Inc.,
American Stock Exchange LLC, NASDAQ Stock Market, Inc., Instinet Group
Incorporated, Brut ECN L.L.C. and any of their subsidiaries, parent entities
and successors (other than the Company).

 

(c)           “Consents” shall mean (i) any
and all listings, registrations or qualifications in respect thereof upon any
securities exchange or under any Federal, state or local law, rule or
regulation, (ii) any and all written agreements and representations by the
Employee with respect to the disposition of Shares, or with respect to any
other matter, which the Committee shall deem necessary or desirable to comply
with the terms of any such listing, registration or qualification or to obtain
an exemption from the requirement that any such listing, qualification or
registration be made, (iii) any and all consents, clearances and approvals by
any governmental or other regulatory bodies, and (iv) and any all consents or
authorizations required to comply with, or required to be obtained under,
applicable local law or otherwise required by the Committee.

 

(d)           “Detrimental Activity”
means (i) using confidential information received during employment with the
Company relating to the business affairs of the Company or any of its clients,
in breach of such person’s undertaking to keep such information confidential;
(ii) direct or indirect persuasion or any attempt to persuade by any means, any
employee of the Company to terminate their employment with the Company or to
breach any of the terms of their employment with the Company; or (iii) any
other activity otherwise deemed to be detrimental, inimical, contrary or
harmful to the interests of the Company, in each case as determined by the
Committee, which determination shall be final, binding and conclusive.

 

(e)           “Disability” of an Employee
shall mean the Employee’s inability to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment
which can be expected to result in death or which has lasted or can be expected
to last for a continuous period of not less than six (6) months.  An
Employee shall not be considered to be permanently and totally disabled unless
such Employee furnishes proof satisfactory to the Company in its sole
discretion of the

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existence thereof in such
form and manner, and at such times, as the Committee may require.

 

(f)            “Termination of Employment”
shall mean the Employee’s ceasing to be employed by the Company.  The
Committee, in its discretion, may determine (a) whether any leave of absence
constitutes a termination of employment for purposes of this Award Agreement
and (b) when a change in the Employee’s association or status with the Company
constitutes a Termination of Employment for purposes of this Award
Agreement.  The Committee shall have the right to determine whether an
Employee’s Termination of Employment is a dismissal for Cause and the date of
termination in such case, which date the Committee may retroactively deem to be
the date of the action that is cause for dismissal.  Such
determinations of the Committee shall be final, binding and conclusive.

 

8Exhibit
10.4

 

Date:

 

Incentive Stock Option Granted

 

 

by

 

 

CHARLES RIVER ASSOCIATES
INCORPORATED

 

(hereinafter called the “Company”)

 

 

to

 

 

 

 

(hereinafter called the “Holder”)

 

under the

 

1998 INCENTIVE AND NONQUALIFIED
STOCK OPTION PLAN

 

WITNESSETH:

 

For valuable consideration, the receipt of which is hereby
acknowledged, the Company hereby grants to the Holder the following option:

 

FIRST:  Subject to the terms and
conditions hereinafter set forth, the Holder is hereby given the right and
option to purchase from the Company an aggregate of            
shares of Common Stock of the Company, without par value, at the time and in
the manner hereinafter stated.  Schedule A
attached hereto and hereby incorporated herein sets forth with respect to this
option (i) its expiration date, (ii) its exercise price per share, (iii) its
vesting rate, and (iv) certain other terms and conditions applicable to this
option and incorporated herein.

 

This option is and shall be subject in every respect to the provisions
of the Company’s 1998 Incentive and Nonqualified Stock Option Plan (the “Plan”),
as amended from time to time, which is incorporated herein by reference and
made a part hereof.  In the event of any
conflict or 

 

 

inconsistency between the terms hereof and
those of the Plan, the latter shall prevail. 
References herein to the Plan Administrator shall mean the Plan
Administrator as defined in the Plan.

 

This option shall be exercised by the delivery of written notice to the
Company (the “Notice”) setting forth the number of shares with respect to which
the option is to be exercised and the address to which the certificates for
such shares are to be mailed, together with (i) cash or check payable to the
order of the Company for an amount equal to the option price for the number of
shares specified in the Notice, or (ii) with the consent of the Plan
Administrator, shares of Common Stock of the Company which (a) either have been
owned by the Holder 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 option price
for the shares as to which such option is being exercised, (iii) with the
consent of the Plan Administrator, delivery of such documentation as the Plan
Administrator and a 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 of the shares for which the option is being exercised,
(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 for the shares as to which the option is being exercised, or
(v) with the consent of the Plan Administrator, a combination of (i), (ii),
(iii), (iv) and/or (v).  For the purpose
of the preceding sentence, the fair market value per share of the Common Stock
so delivered to the Company shall be the closing price per share on the date of
delivery 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 delivery or, if the Common Stock is not traded over-the-counter, the
fair market value per share as determined by the Plan Administrator.

 

SECOND: 
The Company, in its discretion, may file a registration statement on
Form S-8 under the Securities Act of 1933 to register shares of Common Stock
reserved for issuance under the Plan.  At
any time at which such a registration statement is not in effect, it shall be
an additional condition precedent to any exercise of this option that the
Holder shall deliver to the Company a customary “investment letter”
satisfactory to the Company and its counsel in which, among other things, the
Holder shall state that the Holder is purchasing the shares for investment and
acknowledges that they are not freely transferable except in compliance with
state and federal securities laws.

 

THIRD: 
Within a reasonable time after receipt by the Company of the Notice and
payment for any shares to be purchased hereunder and, if required as a
condition to exercise, the investment letter described in paragraph SECOND, the
Company will deliver or cause to be delivered to the Holder (or if any other
individual or individuals are exercising this option, to such individual or
individuals) at the address specified in the Notice a certificate or
certificates for the number of shares with respect to which the option is then
being exercised, registered in the name or names of the individual or
individuals exercising the option, either alone or jointly with another person
or persons with rights of survivorship, as the individual or individuals
exercising the option shall prescribe in writing to the Company at or prior to
such purchase; provided, however, that if any law or regulation or order of the
Securities and Exchange Commission or other body having jurisdiction in the
premises shall require the Company or the 

 

2

 

Holder (or the individual or individuals
exercising this option) to take any action in connection with the shares then
being purchased, the date for the delivery of the certificates for such shares
shall be extended for the period necessary to take and complete such action, it
being understood that the Company shall have no obligation to take and complete
any such action.  The Company may imprint
upon such certificate the legend set forth in the Plan or such other legends
referencing stock transfer restrictions which counsel for the Company considers
appropriate.  Delivery by the Company of
the certificates for such shares 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 Holder, at the address
specified in the Notice.

 

FOURTH: 
The existence of this option shall not affect in any way the right or
power of the Company or its stockholders to make or authorize 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.

 

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 the number, class, and price per share of shares of stock
subject to this option shall be appropriately adjusted in such a manner as to
entitle the Holder to receive upon exercise of this option, for the same
aggregate cash consideration, the same total number and class of shares as the
Holder would have received as a result of the event requiring the adjustment
had the Holder exercised this option in full immediately prior to such event.

 

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, the Holder shall, at no additional cost, be
entitled upon exercise of this option to receive in lieu of the shares of
Common Stock as to which this 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 the Holder would have been
entitled pursuant to the terms of the agreement of merger or consolidation if,
immediately prior to such merger or consolidation, the Holder had been the
holder of record of a number of shares of Common Stock equal to the number of
shares for which this option shall be so exercised.

 

If the Company is merged with or into or consolidated with another
corporation, other than a merger or consolidation in which the stockholders of
the Company immediately prior to such merger or consolidation continue to own
after such merger or consolidation shares 

 

3

 

representing at least fifty percent (50%) of
the voting power of the Company or the surviving or resulting corporation, as
the case may be, or if the Company is liquidated, or sells or otherwise
disposes of substantially all its assets to another corporation while this
option remains outstanding, then (i) subject to the provisions of clause (iii)
below, after the effective date of such merger, consolidation, liquidation,
sale or disposition, as the case may be, the Holder of this option shall be
entitled, upon exercise of this option, to receive, in lieu of the shares of
Common Stock as to which this 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 the Holder would have been
entitled pursuant to the terms of the merger, consolidation, liquidation, sale
or disposition if, immediately prior to such event, the 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; (ii) the Plan Administrator may
accelerate the time for exercise of this option, 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 (iii) this option 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 the Holder and (y) the Holder shall have
the right to exercise this option to the extent that the same is then
exercisable or, if the Plan Administrator shall have accelerated the time for
exercise of this option pursuant to clause (ii) above, in full during the 10-day
period preceding the effective date of such merger, consolidation, liquidation,
sale or disposition.

 

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 therefor, 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.

 

FIFTH: 
No person shall, by virtue of the granting of this option to the Holder,
be deemed to be a holder of any shares purchasable under this option or to be
entitled to the rights or privileges of a holder of such shares unless and
until this option has been exercised with respect to such shares and they have
been issued pursuant to that exercise of this option.

 

The Company shall, at all times while any portion of this option is
outstanding, reserve and keep available, out of shares of its authorized and
unissued stock or reacquired shares, a sufficient number of shares of its
Common Stock to satisfy the requirements of this option; shall comply with the
terms of this option promptly upon exercise of the option rights; and shall pay
all fees or expenses necessarily incurred by the Company in connection with the
issuance and delivery of shares pursuant to the exercise of this option.

 

SIXTH: 
This option is not transferable by the Holder otherwise than by will or
under the laws of descent and distribution. 
The granting of this option shall not impose upon the Company any
obligation to employ or to continue to employ the Holder.  The right of the Company to 

 

4

 

terminate the employment of the Holder shall
not be diminished or affected by reason of the fact that this option has been
granted to such Holder.

 

This option is exercisable, subject to the vesting rate and certain
other terms and conditions contained in Schedule A attached hereto
and incorporated herein, at any time prior to the date of expiration of this
option and during the Holder’s lifetime, only by the Holder, and by the Holder
only while the Holder is an employee of the Company, except that in the event
the employment of the Holder terminates for cause (as determined by the
Company), without cause or voluntarily by the Holder and other than in the
event of death or retirement in good standing from the Company for reasons of
age or disability under the then established rules of the Company, this option
shall terminate immediately.

 

As used herein, “cause” shall mean (x) any material breach by the
Holder of any agreement to which the Holder and the Company (or any parent or
subsidiary) are both parties, (y) any act or omission to act by the Holder
which may have a material and adverse effect on the business of the Company (or
any parent or subsidiary) or on the Holder’s ability to perform services for
the Company (or any 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 Holder in
connection with the business or affairs of the Company (or any parent or
subsidiary) or any affiliate of the Company (or any such parent or subsidiary).

 

In the event of the retirement of the Holder in good standing from the
employ of the Company for reasons of age or disability under the then
established rules of the Company, this option shall terminate on the earlier of
its expiration date and a date ninety (90) days after the Holder’s
retirement.  After such retirement the
Holder shall have the right, at any time prior to such termination, to exercise
this option to the extent the Holder was entitled to exercise such option
immediately prior to such retirement.

 

In the event of the death of the Holder while the Holder is in the
employ of the Company (or any parent or subsidiary of the Company) and before
the expiration date of this option, this option shall terminate on the earlier
of its expiration date and a date one (1) year after his death.  After the death of the Holder, the Holder’s
executors, administrators or any person or persons to whom the Holder’s option
has been transferred by will or by the laws of descent and distribution shall
have the right to exercise this option at any time prior to the earlier of the
date of expiration of this option or one (1) year after the date of the death
of the original Holder.

 

SEVENTH: 
Any notice to be given to the Company hereunder shall be deemed
sufficient if addressed to the Company and delivered by hand or by mail to the
Treasurer of the Company, 200 Clarendon Street, Boston, Massachusetts 02116 or
such other address as the Company may hereafter designate.

 

Any notice to be given to the Holder hereunder shall be deemed
sufficient if addressed to and delivered in person to the Holder or when
deposited in the mail, postage prepaid, addressed to the Holder at the Holder’s
address furnished to the Company.

 

5

 

EIGHTH: 
This option is subject to all laws, regulations and orders of any
governmental authority which may be applicable thereto and, notwithstanding any
of the provisions hereof, the Holder agrees that the Holder will not exercise
the option granted hereby nor will the Company be obligated to issue or sell
any shares of stock hereunder if the exercise thereof or the issuance or sale
of such shares, as the case may be, would constitute a violation by the Holder
or the Company of any such law, regulation or order or any provision
thereof.  The Company shall not be
obligated to take any affirmative action in order to cause the exercise of this
option or the issuance or sale of shares pursuant hereto to comply with any
such law, regulation, order or provision.

 

NINTH: 
This option shall be governed by, and construed and enforced in
accordance with, the substantive laws of The Commonwealth of Massachusetts.

 

IN WITNESS WHEREOF, the Company has caused this instrument to be
executed in its name and on its behalf as of the date first written above.

 

	
   

  	
  CHARLES RIVER
  ASSOCIATES INCORPORATED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Its: 

  	
   

  	
   

  

 

ATTEST: (Seal)

 

 

	
   

  	
   

  
	
   

  
	
  Clerk or Assistant Clerk

  

 

6

 

SCHEDULE A

CHARLES RIVER ASSOCIATES
INCORPORATED

 

Incentive Stock Option

 

Date
of Grant:

 

Name
of Holder:

 

Address:

 

City,
State, Zip:

 

Social
Security Number:

 

Maximum number of shares for which

this
option is exercisable:     

 

Exercise
(purchase) price per share:

 

Expiration
date of option:

 

Vesting Rate:                     

 

Position
in, or relationship to, the Company:

 

Other terms and conditions:  To the maximum extent permitted by the
Internal Revenue Code of 1986, as amended, this option is intended to be an
Incentive Stock Option.  If for any
reason this option (or any portion thereof) shall not qualify as an Incentive
Stock Option, then, to the extent of such nonqualification, this option (or
portion thereof) shall be regarded as a Nonqualified Option appropriately
granted under the Plan.  The Holder
agrees that upon request of the Company or the underwriters managing any
underwritten offering of the Company’s securities, the Holder shall agree in
writing that for a period of time not to exceed one hundred eighty (180) days
from the effective date of any registration of securities of the Company the
Holder will not sell, make any short sale of, loan, grant any option for the
purchase of, or otherwise dispose of any shares of Common Stock issued pursuant
to the exercise of this option without the prior written consent of the Company
or such underwriters, as the case may be.

 

*     *    
*

 

The undersigned Holder acknowledges receipt of the stock option of
which this Schedule A is a part and agrees to its terms; and further
acknowledges receipt of the Plan, as amended, the prospectus describing the
Plan (documents incorporated by reference in the prospectus are available upon
request), and the annual report for the most recent fiscal year.

 

	
   

  	
   

  	
   

  
	
   

  	
  Holder’s Signature

  
	
   

  	
  Print Name:

  

 

7

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