Document:

Exhibit
10.2

AFFILIATED
MANAGERS GROUP, INC.

2006 STOCK OPTION
AND INCENTIVE PLAN

MAY 31, 2006

SECTION 1. GENERAL PURPOSE
OF THE PLAN; DEFINITIONS

The name of the plan is the Affiliated Managers Group, Inc.
2006 Stock Option and Incentive Plan (the “Plan”). The purpose of the Plan is
to encourage and enable the officers, employees, directors (including Independent
Directors) and other key persons (including consultants and advisors) of
Affiliated Managers Group, Inc. (the “Company”) and its Affiliates upon whose
judgment, initiative and efforts the Company largely depends for the successful
conduct of its business to acquire a proprietary interest in the Company. It is
anticipated that providing such persons with a direct stake in the Company’s
welfare will assure a closer identification of their interests with those of
the Company, thereby stimulating their efforts on the Company’s (or its
Affiliates’) behalf and strengthening their desire to remain with the Company
(or its Affiliates). In
the case of an Award intended to be eligible for the performance-based
compensation exception under Section 162(m), the Plan and such Award shall
be construed to the maximum extent permitted by law in a manner consistent with
qualifying the Award for such exception.

The following terms shall be defined as set forth
below:

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

“Administrator” is
defined in Section 2(a).

“Affiliate” means any corporation
or other entity that stands in a relationship to the Company that would result
in the Company and such corporation or other entity being treated as one
employer under Section 414(b) or Section 414(c) of the Code.
The Company may apply Sections 414(b) and 414(c) of the Code by
substituting “at least 50%” for “at least 80%” under Section 1563(a)(1), (2) and
(3) of the Code and Treas. Regs. § 1.414(c)-2; and may, to the extent permitted
under Section 409A, use “at least 20%” in lieu of “at least 50%”; provided, that the lower ownership
threshold described in this definition (50% or 20% as the case may be) shall
apply only if the same definition of affiliation is used consistently with
respect to all compensatory stock options or stock awards and rights (whether under
the Plan or another plan), and any designation of a different permissible
ownership threshold percentage may not be made effective until 12 months after
the adoption of such change (or such other period as required by Section 409A).
The Company may at any time by amendment provide that different ownership
thresholds (consistent with Section 409A) apply.

“Award” or “Awards,” means Incentive Stock Options, Non-Qualified
Stock Options and SARs.

“Board” means the
Board of Directors of the Company.

“Change of Control”
is defined in Section 10.

“Code” means the
Internal Revenue Code of 1986, as amended, and any successor Code, and related
rules, regulations and interpretations.

“Committee” means
the Committee of the Board referred to in Section 2.

“Covered Employee”
means an employee who is a “covered employee” within the meaning of Section 162(m) of
the Code.

“Effective Date”
means the date on which the Plan is approved by stockholders as set forth in Section 12.

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“Fair Market Value”means,
with respect to Stock, (i) for so long as such Stock is readily tradeable
on an established securities market (within the meaning of Section 409A),
the closing price on the trading day of the grant, and (ii) otherwise, the
fair market value of such Stock determined by the Committee by a reasonable
application of a reasonable valuation method (within the meaning of Section 409A).

“Incentive Stock Option”
means any Stock Option designated and qualified as an “incentive stock option”
as defined in Section 422 of the Code.

“Independent Director”
means a member of the Board who is not also an employee of the Company or any Affiliate
and who, if a member of the Committee, meets the requirements of such
membership as set forth in Section 2(a).

“Non-Qualified Stock Option”
means any Stock Option that is not an Incentive Stock Option.

“Option” or “Stock Option” means any option to
purchase shares of Stock granted pursuant to Section 5.

“Person” means an individual,
partnership, joint venture, association, corporation, trust, estate, limited
liability company, limited liability partnership, unincorporated entity of any
kind, governmental entity or any other legal entity.

“Stock
Appreciation Right” or “SAR” has the
meaning set forth in Section 5.

“Section 409A” means Section 409A
of the Code and the applicable regulatory guidance thereunder (including, as
applicable, proposed, final or temporary regulations and Notice 2005-1).

“Stock” means the
Common Stock, par value $.01 per share, of the Company, subject to adjustments
pursuant to Section 3.

SECTION 2.
ADMINISTRATION OF PLAN; ADMINISTRATOR AUTHORITY TO SELECT PARTICIPANTS AND
DETERMINE AWARDS

(a)   Committee.   The
Plan shall be administered by a committee of not less than two Independent
Directors (the “Administrator”). Each member of the Committee shall be an “outside
director” within the meaning of Section 162(m) of the Code and the
regulations promulgated thereunder and a “non-employee director” within the
meaning of Rule 16b-3(b)(3)(i) promulgated under the Act, or
any successor definition under said rule.

(b)   Powers of Administrator.   The
Administrator shall have the power and authority to grant Awards consistent
with the terms of the Plan, including the power and authority, subject to terms
and restrictions contained in the Plan,:

            (i)  to select the individuals to whom Awards may
from time to time be granted;

           (ii)  to determine the time or times of grant, and
the extent, if any, of Incentive Stock Options, Non-Qualified Stock Options and
SARs, or any combination of the foregoing, granted to any one or more
participants;

          (iii)  to determine the number of shares of Stock to
be covered by any Award;

         (iv)  to determine and modify from time to time the
terms and conditions, including restrictions, not inconsistent with the terms
of the Plan, of any Award, which terms and conditions may differ among
individual Awards and participants, and to approve the form of written
instruments evidencing the Awards;

          (v)  to accelerate at any time the exercisability
or vesting of all or any portion of any Award or the lapsing at any time of any
restrictions on transfer of all or any portion of any Award;

         (vi)  subject to the provisions of Section 5(a)(ii),
to extend at any time the period in which Stock Options or SARs may be
exercised;

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        (vii)  to determine at any time whether, to what
extent, and under what circumstances distribution or the receipt of Stock and
other amounts payable with respect to an Award shall be deferred either
automatically or at the election of the participant and whether and to what
extent the Company shall pay or credit amounts constituting interest (at rates
determined by the Administrator) or dividends or deemed dividends on such
deferrals; and

       (viii)  at any time to adopt, alter and repeal such
rules, guidelines and practices for administration of the Plan and for its own
acts and proceedings as it shall deem advisable; to interpret the terms and
provisions of the Plan and any Award (including related written instruments);
to make all determinations it deems advisable for the administration of the
Plan; to decide all disputes arising in connection with the Plan; and to
otherwise supervise the administration of the Plan.

All decisions of and interpretations by the
Administrator shall be binding on all persons, including the Company and Plan
participants.

(c)   Limited Delegation of Authority to
Grant Awards.   The Administrator, in its discretion,
may delegate to the Chief Executive Officer of the Company all or part of the
Administrator’s authority and duties with respect to the granting of Awards at
Fair Market Value, but only with respect to individuals who are not subject to
the reporting and other provisions of Section 16 of the Act and who are
not Covered Employees. Any such delegation by the Administrator shall include a
limitation as to the amount of Awards that may be granted during the period of
the delegation and shall contain guidelines as to the determination of the
exercise price of any Option or SAR, any conversion ratio and the vesting
criteria. The Administrator may revoke or amend the terms of a delegation at
any time but such action shall not invalidate any prior actions of the Administrator’s
delegate or delegates that were consistent with the terms of the Plan.

SECTION 3. STOCK ISSUABLE
UNDER THE PLAN; MERGERS; SUBSTITUTION

(a)   Stock Issuable.   The
maximum number of shares of Stock reserved and available for issuance under the
Plan shall be 3,000,000. For purposes of this limitation, the shares of Stock
underlying any Awards which are forfeited, cancelled or satisfied without the
issuance of Stock or otherwise terminated (other than by exercise) shall be
added back to the shares of Stock available for issuance under the Plan. Any
shares of Stock tendered by Plan participants as full or partial payment to the
Company upon exercise of Stock Options, shares of Stock reserved for issuance
upon the grant of SARs to the extent the number of reserved shares exceeds the
number of shares of Stock actually issued upon exercise of the SARs, and shares
of Stock withheld by, or otherwise remitted to, the Company to satisfy a Plan
participant’s tax withholding obligations upon the exercise of Awards or upon
any other payment or issuance of shares of Stock under the Plan shall not be
added back to the shares of Stock available for issuance under the Plan. Subject
to such overall limitation, shares of Stock may be issued up to such maximum
number pursuant to any type or types of Award; provided, however, that Stock
Options and SARs with respect to no more than 600,000 shares of Stock may be
granted to any one individual participant during any one calendar year period. The
shares available for issuance under the Plan may be authorized but unissued
shares of Stock or shares of Stock reacquired by the Company and held in its
treasury.

(b)   Changes in Stock.   If,
as a result of any reorganization, recapitalization, reclassification, stock
dividend, stock split, reverse stock split or other similar change in the
Company’s capital stock, the outstanding shares of Stock are increased or
decreased or are exchanged for a different number or kind of shares or other
securities of the Company, or additional shares or new or different shares or
other securities of the Company or other non-cash assets are distributed with
respect to such shares of Stock or other securities, the Administrator shall
make appropriate adjustments in (i) the maximum number of shares reserved
for issuance under the Plan, (ii) the number of Stock Options and SARs that
can be granted to any one individual participant, (iii) the number and
kind of shares or other securities subject to any then outstanding Stock Option
and SAR Awards under the Plan, and (iv) the price for each share subject
to any then outstanding Stock Options and SARs under the Plan, without changing
the aggregate 

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exercise price (i.e., the
exercise price multiplied by the number of Stock Option or SARs, as applicable)
as to which such Stock Options or SARs remain exercisable. The adjustment by
the Administrator shall be final, binding and conclusive. No fractional shares
of Stock shall be issued under the Plan resulting from any such adjustment, but
the Administrator in its discretion may make a cash payment in lieu of
fractional shares.

The Administrator may also adjust the number of shares
subject to outstanding Awards and the exercise price and the terms of
outstanding Awards to take into consideration material changes in accounting
practices or principles, extraordinary dividends, acquisitions or dispositions
of stock or property or any other event if it is determined by the
Administrator that such adjustment is appropriate to avoid distortion in the
operation of the Plan, provided that no such adjustment shall be made in the
case of an Incentive Stock Option, without the consent of the participant, if
it would constitute a modification, extension or renewal of the Option within
the meaning of Section 424(h) of the Code. Unless the Committee
determines otherwise, any adjustment hereunder shall be done on terms and
conditions consistent with Section 409A and, in the case of Awards intended to qualify for the
performance-based compensation exception Section 162(m) of the Code,
having due regard for continued qualification for that exception.

(c)   Certain Transactions.   In
contemplation of and subject to the consummation of a consolidation or merger
or a sale, lease, exchange or other transfer of all or substantially all of the
assets of the Company in which outstanding shares of Stock are exchanged for
securities, cash or other property of an unrelated corporation (or other business
entity) or in the event of a liquidation of the Company (in each case, a “Transaction”),
the Board, and/or the board of directors of any corporation (or other business
entity) assuming the obligations of the Company, may, in its discretion, take
any one or more of the following actions, as to outstanding Awards:  (i) provide that such Awards shall be
assumed or equivalent awards shall be substituted, by the acquiring or
succeeding corporation (or an affiliate thereof), and/or (ii) upon written
notice to the participants, provide that all Awards will terminate immediately
prior to the consummation of the Transaction. In the event that, pursuant to
clause (ii) above, Awards will terminate immediately prior to the
consummation of the Transaction, all vested Awards shall be fully settled, in
cash or in kind, subject to Section 5(a), in an amount equal to the difference
between (A) the consideration payable per share of Stock pursuant to the
business combination (the “Merger Price”) times the number of shares of Stock
subject to such outstanding Stock Options or SARs (to the extent then
exercisable at prices not in excess of the Merger Price), as applicable, and (B) the
respective aggregate exercise price of all such outstanding Stock Options or
SARs; provided, however, that each participant shall be permitted, within a
specified period determined by the Administrator prior to the consummation of
the Transaction, to exercise all outstanding Stock Options and SARs, including
any that would not then be exercisable (but for this proviso), subject to the
consummation of the Transaction, and provided, further, that any restrictions
on transfer then in effect with respect to any outstanding Stock Options or
SARs shall lapse and be of no further force or effect.

(d)   Substitute Awards.   The
Administrator may grant Awards under the Plan in substitution for stock and
stock based awards held by employees of another corporation who become
employees of the Company or an Affiliate as the result of a merger or
consolidation of the employing corporation with the Company or an Affiliate or
the acquisition by the Company or an Affiliate of property or stock of the
employing corporation. The Administrator may direct that the substitute awards
be granted on such terms and conditions as the Administrator considers
appropriate in the circumstances.

SECTION 4. ELIGIBILITY

Participants in the Plan will be those full and
part-time officers, other employees, directors (including Independent
Directors) and key persons (including consultants and advisors) of the Company
and its Affiliates who are responsible for or contribute to the management,
growth or profitability of the Company and its Affiliates as are selected from
time to time by the Administrator in its sole discretion.

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SECTION 5. STOCK OPTIONS &
SARS

Any Stock Option or SAR granted under the Plan shall
be in such form as the Administrator may from time to time approve. Stock
Options granted under the Plan may be either Incentive Stock Options or
Non-Qualified Stock Options. Incentive Stock Options may be granted only to
employees of the Company or any Affiliate that is a “subsidiary corporation”
within the meaning of Section 424(f) of the Code. To the extent that
any Option does not qualify as an Incentive Stock Option, it shall be deemed a
Non-Qualified Stock Option. No Award shall be granted under the Plan more than
ten (10) years after the Effective Date of the Plan. 

(a)   Grant of Awards.   The
Administrator in its discretion may grant Stock Options and SARs to any
eligible person described in Section 4. Stock Options and SARs granted
pursuant to this Section 5(a) shall be subject to the following terms
and conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of the Plan, as the Administrator shall deem
desirable. Grants of SARs will be settled in Common Stock and the
Administrator at the time of grant or thereafter may define the manner of
determining the excess in value of the shares of Common Stock.

(i)   Exercise Price.   The
exercise price per share for the Stock covered by an Award granted pursuant to
this Section 5(a) shall be determined by the Administrator at the
time of grant but shall not be less than 100 percent of the Fair Market Value
on the date of grant. If an employee owns or is deemed to own (by reason of the
attribution rules of Section 424(d) of the Code) more than 10
percent of the combined voting power of all classes of stock of the Company or
any parent or subsidiary corporation and an Incentive Stock Option is granted
to such employee, the option price of such Incentive Stock Option shall be not
less than 110 percent of the Fair Market Value on the grant date.

(ii)   Term.   The
term of each Award shall be fixed by the Administrator, but no Award shall be
exercisable more than seven (7) years after the date the Award is granted.
If an employee owns or is deemed to own (by reason of the attribution rules of
Section 424(d) of the Code) more than 10 percent of the combined
voting power of all classes of stock of the Company or any parent or subsidiary
corporation and an Incentive Stock Option is granted to such employee, the term
of such option shall be no more than five (5) years from the date of
grant.

(iii)   Exercisability; Rights of a
Stockholder.   Awards shall become exercisable at
such time or times and any Stock issued or issuable thereunder shall become
free of any restrictions on transfer, whether or not in installments, as shall
be determined by the Administrator at or after the grant date. The
Administrator may at any time accelerate the exercisability or the lapsing of
any restriction on transfer, as the case may be, of all or any portion of any Award.
Participants shall have the rights of a stockholder only as to shares acquired
upon the exercise of an Award, subject to any applicable restrictions on
transfer on the issued Stock, and not as to any unexercised Awards.

(iv)   Method of Exercise.   Awards
may be exercised in whole or in part, by giving written notice of exercise to
the Company, specifying the number of shares to be purchased (in case of Stock
Options) or the number of shares as to which an Award is being exercised (in
case of SARs). In case of Stock Options, payment of the purchase price may be
made by one or more of the following methods to the extent provided in the
Option Award agreement:

          (A)  In cash, by certified or bank check or other
instrument acceptable to the Administrator;

          (B)  Through the delivery (or attestation to the
ownership) of shares of Stock that are not then subject to restrictions under
any Company plan and that have been purchased by the optionee on the open
market or have been beneficially owned by the optionee for at least six months,
if permitted by the Administrator in its discretion. Such surrendered shares
shall be valued at Fair Market Value on the exercise date; or

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          (C)  By the optionee delivering to the Company a
properly executed exercise notice together with irrevocable instructions to a
broker to promptly deliver to the Company cash or a check payable and
acceptable to the Company for the purchase price; provided that in the event
the optionee chooses to pay the purchase price as so provided, the optionee and
the broker shall comply with such procedures and enter into such agreements of
indemnity and other agreements as the Administrator shall prescribe as a
condition of such payment procedure.

Payment instruments will be received subject to
collection. The delivery of certificates representing the shares of Stock to be
purchased pursuant to the exercise of a Stock Option will be contingent upon
receipt from the optionee (or a purchaser acting in his stead in accordance
with the provisions of the Stock Option) by the Company of the full purchase
price for such shares and the fulfillment of any other requirements contained
in the Stock Option or applicable provisions of laws. In the event an optionee
chooses to pay the purchase price by delivery of previously-owned shares of
Stock through the attestation method, the number of shares of Stock transferred
to the optionee upon the exercise of the Stock Option shall be net of the
number of shares attested to.

(v)   Annual Limit on Incentive Stock
Options.   To the extent required for “incentive
stock option” treatment under Section 422 of the Code, the aggregate Fair
Market Value (determined as of the time of grant) of the shares of Stock with
respect to which Incentive Stock Options granted under this Plan and any other
plan of the Company or its parent and subsidiary corporations become
exercisable for the first time by an optionee during any calendar year shall
not exceed $100,000. To the extent that any Stock Option exceeds this limit, it
shall constitute a Non-Qualified Stock Option.

(b)   Non-transferability of Awards.   No
Stock Option or SAR shall be transferable by the optionee otherwise than by
will or by the laws of descent and distribution and all Stock Options and SARs shall
be exercisable, during the optionee’s lifetime, only by the optionee. Notwithstanding
the foregoing, the Administrator, in its sole discretion, may provide in the
Award agreement regarding a given Option or SAR that the optionee or holder of
the SAR, as applicable, may transfer, without consideration for the transfer,
his Non-Qualified Stock Options or SARs to members of his immediate
family, to trusts for the benefit of such family members, or to partnerships in
which such family members are the only partners, provided that the transferee
(and, as required by the Administrator, the beneficiaries, partners or members
of such transferee) agrees in writing with the Company to be bound by all of
the terms and conditions of this Plan and the applicable Option or SAR, as the
case may be.

(c)   Termination.   Subject
to Section 7, immediately upon the cessation of the Participant’s
employment or other service relationship with the Company and its Affiliates an
Award requiring exercise will cease to be exercisable and all Awards to the
extent not already fully vested will be forfeited, (A) except as
may otherwise be provided by the Administrator either in the Award agreement
or, subject to Section 8 below, in writing after the Award agreement is
issued (but in all events subject to Section 5(a)(ii)), and (B) except
that:

(i)     All Options and SARs held by a participant
immediately prior to his or her death, to the extent then exercisable, will
remain exercisable by such participant’s executor or administrator or the
person or persons to whom the Option or SAR is transferred by will or the
applicable laws of descent and distribution, in each case for the lesser of (i) the
one year period ending with the first anniversary of the participant’s death or
(ii) the period ending on the latest date on which such Option or SAR
could have been exercised without regard to this subsection (c), and shall
thereupon terminate; and

(ii)    all Options and SARs held by the participant
immediately prior to the cessation of the Participant’s employment or other
service relationship for reasons other than death, to the extent then
exercisable, will remain exercisable for the lesser of (1) a period of
three months or (2) the period ending on the latest date on which such
Option or SAR could have been exercised without regard to this subsection (e),
and shall thereupon terminate.

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(iii)   Unless the Administrator expressly
provides otherwise, a participant’s “employment or other service relationship
with the Company and its Affiliates” will be deemed to have ceased, in the case
of an employee participant, upon termination of the participant’s employment
with the Company and its Affiliates (whether or not the participant continues
in the service of the Company or its Affiliates in some capacity other than
that of an employee of the Company or its Affiliates), and in the case of any
other participant, when the service relationship in respect of which the Award
was granted terminates (whether or not the Participant continues in the service
of the Company or its Affiliates in some other capacity).

SECTION 6. TAX WITHHOLDING

(a)   Payment by Participant.   Each
participant shall, no later than the date as of which the value of an Award or
of any Stock or other amounts received thereunder first becomes includable in
the gross income of the participant for Federal income tax purposes, pay to the
Company, or make arrangements satisfactory to the Administrator regarding
payment of, any Federal, state, or local taxes of any kind required by law to
be withheld with respect to such income. The Company and its Affiliates shall,
to the extent permitted by law, have the right to deduct any such taxes from
any payment of any kind otherwise due to the participant. The Company’s
obligation to deliver stock certificates to any participant is subject to and
conditioned on tax obligations being satisfied by the participant.

(b)   Payment in Stock.   Subject
to approval by the Administrator, a participant may elect to have the minimum
tax withholding obligation satisfied, in whole or in part, by (i) authorizing
the Company to withhold from shares of Stock to be issued pursuant to any Award
a number of shares with an aggregate Fair Market Value (as of the date the
withholding is effected) that would satisfy the minimum withholding amount due,
or (ii) transferring to the Company shares of Stock owned by the participant
with an aggregate Fair Market Value (as of the date the withholding is
effected) that would satisfy the minimum withholding amount due.

SECTION 7. TRANSFER, LEAVE
OF ABSENCE, ETC.

For purposes of
the Plan, the following events shall not be deemed a termination of employment:

(a)    a transfer
to the employment of the Company from an Affiliate or from the Company to an
Affiliate, or from one Affiliate to another; or

(b)    an
approved leave of absence for military service or sickness, or for any other purpose
approved by the Company, if the employee’s right to re-employment is guaranteed
either by a statute or by contract or under the policy pursuant to which the
leave of absence was granted or if the Administrator otherwise so provides in
writing.

SECTION 8. AMENDMENTS AND
TERMINATION

The Board may, at any time, amend or discontinue the
Plan and the Administrator may, at any time, amend or cancel any outstanding
Award for the purpose of satisfying changes in law or for any other lawful
purpose, but no such action shall adversely affect rights under any outstanding
Award without the holder’s consent. If and to the extent determined by the
Administrator to be required by the Code to ensure that Incentive Stock Options
granted under the Plan are qualified under Section 422 of the Code or to
ensure that compensation earned under Awards qualifies as performance-based
compensation under Section 162(m) of the Code, if and to the extent
intended to so qualify, Plan amendments shall be subject to approval by the Company
stockholders entitled to vote at a meeting of stockholders. Except as provided
in Section 3(b) or 3(c), any action by the Board or the Administrator
to reduce the exercise price of any outstanding Award or to cancel any
outstanding Award and re-grant such Award at a lower exercise price, shall be
subject to approval by the Company’s stockholders entitled to vote at a meeting
of stockholders. Furthermore, if a Plan amendment would (i) materially increase
the benefits accruing to Participants under the Plan, (ii) materially
increase the number of securities that may be issued under the Plan, or 

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(iii) materially
modify the requirements as to eligibility in the Plan, then, such amendment
shall be subject to approval by the Company’s stockholders entitled to vote at
a meeting of stockholders. Nothing in this Section 8 shall limit the Board’s
authority to take any action permitted pursuant to Section 3(c).

SECTION 9. STATUS OF PLAN

With respect to the portion of any Award that has not
been exercised and any payments in cash, Stock or other consideration not
received by a participant, a participant shall have no rights greater than
those of a general creditor of the Company unless the Administrator shall
otherwise expressly determine in connection with any Award or Awards. In its
sole discretion, the Administrator may authorize the creation of trusts or
other arrangements to meet the Company’s obligations to deliver Stock or make
payments with respect to Awards hereunder, provided that the existence of such
trusts or other arrangements is consistent with the foregoing sentence.

SECTION 10. CHANGE OF
CONTROL PROVISIONS

Upon the
occurrence of a Change of Control as defined in this Section 10:

(a)    Except as
otherwise provided in the applicable Award agreement, each outstanding Stock
Option shall automatically become fully exercisable and free of any
restrictions on transfer.

(b)    “Change of Control” shall mean the
occurrence of any one of the following events:

(i)     any “person,” as such term is used in Sections
13(d) and 14(d) of the Act (other than the Company, any of its Affiliates,
or any trustee, fiduciary or other person or entity holding securities under
any employee benefit plan or trust of the Company or any of its Affiliates),
together with all “affiliates” and “associates” (as such terms are defined in Rule 12b-2
under the Act) of such person, shall become the “beneficial owner” (as such
term is defined in Rule 13d-3 under the Act), directly or
indirectly, of securities of the Company representing 25 percent or more of the
combined voting power of the Company’s then outstanding securities having the
right to vote in an election of the Company’s Board of Directors (“Voting
Securities”) (in such case other than as a result of an acquisition of
securities directly from the Company); or

(ii)    the
consummation of (A) any consolidation or merger of the Company where the
stockholders of the Company, immediately prior to the consolidation or merger,
would not, immediately after the consolidation or merger, beneficially own (as
such term is defined in Rule 13d-3 under the Act), directly or
indirectly, shares representing in the aggregate 50 percent or more of the
voting shares of the corporation (or other business entity) issuing cash or
securities in the consolidation or merger (or of its ultimate parent, if any), (B) any
sale, lease, exchange or other transfer (in one transaction or a series of
transactions contemplated or arranged by any party as a single plan) of all or
substantially all of the assets of the Company or (C) the liquidation or
dissolution of the Company.

Notwithstanding the foregoing, a “Change of Control”
shall not be deemed to have occurred for purposes of the foregoing clause (i) solely
as the result of an acquisition of securities by the Company which, by reducing
the number of shares of Voting Securities outstanding, increases the
proportionate number of shares of Voting Securities beneficially owned by any
person to 25 percent or more of the combined voting power of all then
outstanding Voting Securities; provided, however, that if any person referred to in this sentence
shall thereafter become the beneficial owner of any additional shares of Voting
Securities (other than pursuant to a stock split, stock dividend, or similar
transaction or as a result of an acquisition of securities directly from the
Company), then a “Change of Control”
shall be deemed to have occurred for purposes of the foregoing clause (i).

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SECTION 11. GENERAL
PROVISIONS

(a)   No Distribution; Compliance with
Legal Requirements.   The Administrator may require
each person acquiring Stock pursuant to an Award to represent to and agree with
the Company in writing that such person is acquiring the shares without a view
to distribution thereof.

No shares of Stock shall be issued pursuant to an
Award until all applicable securities law and other legal and stock exchange or
similar requirements have been satisfied. The Administrator may require the
placing of such stop-orders and restrictive legends on certificates for Stock
and Awards as it deems appropriate.

(b)   Delivery of Stock Certificates.   Stock
certificates to participants under this Plan shall be deemed delivered for all
purposes when the Company or a stock transfer agent of the Company shall have
mailed such certificates in the United States mail, addressed to the
participant, at the participant’s last known address on file with the Company.

(c)   Other Compensation Arrangements; No
Employment Rights.   Nothing contained in this Plan
shall prevent the Board from adopting other or additional compensation arrangements,
including trusts, and such arrangements may be either generally applicable or
applicable only in specific cases. The adoption of this Plan and the grant of
Awards do not confer upon any employee any right to continued employment with
the Company or any Affiliate.

(d)   Trading Policy Restrictions.   Option
exercises and other Awards under the Plan shall be subject to such Company’s
insider-trading-policy-related restrictions, terms and conditions as may be
established by the Administrator, or in accordance with policies set by the Administrator,
from time to time.

(e)   Application
of Code Section 409A.   Awards
under the Plan are intended either to be exempt from the rules of Section 409A
or to satisfy those rules, and shall be construed accordingly. Granted Awards
may be modified at any time, in the Committee’s discretion, so as to increase
the likelihood of exemption from or compliance with the rules of Section 409A.

SECTION 12. EFFECTIVE DATE
OF PLAN

This Plan is effective when approved by the Company’s stockholders.

SECTION 13. GOVERNING LAW

This Plan and all Awards and actions taken thereunder
shall be governed by, and construed in accordance with, the laws of the State
of Delaware, applied without regard to conflict of law principles.

 9Exhibit 10.3

Description
of the 2006 Stock Option and Incentive Plan

Summary of the 2006 Plan

The following description is only a summary of the
material features of the 2006 Plan and does not describe all of its provisions.

Introduction.   The 2006 Plan permits the grant of
stock options to purchase shares of Common Stock that are incentive stock
options (“Incentive Options”) under the Internal Revenue Code of 1986, as
amended (the “Code”) and stock options that do not so qualify (“Non-Qualified
Options”). In addition, the 2006 Plan also permits the grant of stock
appreciation rights (“SARs”). A SAR entitles the holder upon exercise to
receive Common Stock equal in value to the excess of the fair market value of
the shares of Common Stock subject to the right over the fair market value of
such shares on the date of grant. Stock options and SARs to purchase no more
than 600,000 shares of Common Stock may be granted to any one individual in any
calendar year. The term of each option and SAR may not exceed seven years
(and, in the case of Incentive Options granted to certain ten percent (or
greater) stockholders, five years). 3,000,000 shares of Common Stock have
been authorized and reserved for issuance under the 2006 Plan. The 2006
Plan is not required to be qualified under Section 401 of the Code nor is
it subject to the provisions of the Employee Retirement Income Security Act of
1974.

Plan
Administration.   The
2006 Plan will be administered by the Compensation Committee (the “Committee”)
of the Board of Directors. All members of the Committee must be “non-employee
directors” as that term is defined under Rule 16b-3 promulgated
under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and
“outside directors” as defined in Section 162(m) of the Code and the
regulations promulgated thereunder. The Committee acting as the administrator
of the 2006 Plan (in such role the Committee will be referred to as the “Administrator”)
will have the power and authority to select participants under the 2006 Plan,
to make any combination of awards to participants, and to determine (and modify
from time to time) the specific terms and conditions of each award, all subject
to the provisions of the 2006 Plan. All decisions of and interpretations by the
Administrator shall be binding on all persons, including the Company and 2006
Plan participants.

Eligibility.   Persons eligible to
participate in the 2006 Plan are those full and part-time officers, other
employees, directors and key persons (including consultants and advisors), of
the Company and its affiliates who are responsible for or contribute to the
management, growth or profitability of the Company and its affiliates, as
selected from time to time by the Administrator in its sole discretion.
However, only employees of the Company and its subsidiaries may be granted
Incentive Options.

Stock
Options and Stock Appreciation Rights.   The stock
option and SAR exercise price of each stock option and SAR will be determined
by the Administrator but may not be less than 100% of the fair market value of
the Common Stock on the date of grant. Each grant will be subject to such
vesting requirements as determined by the Administrator.

Termination
of Service.   In general, upon termination of a
participant’s service relationship with the Company (or its affiliates), any
award requiring exercise will cease to be exercisable and any award to the extent
not already fully vested will be forfeited except that, all stock options and
SARs (i) held by a participant prior to his or her death, to the extent
then exercisable, will remain exercisable for one year, and (ii) held by a
participant prior to termination of such relationship for other reasons will,
to the extent then exercisable, remain exercisable for three months. However,
in no event will such stock options or SARs remain exercisable beyond their
otherwise scheduled expiration date. In addition, the Administrator may provide
in an award (or subsequent writing) for other exceptions to forfeiture on
termination (but in no event will such stock awards remain exercisable beyond
their otherwise scheduled expiration date).

Tax
Withholding.   Participants
under the 2006 Plan are responsible for the payment of any federal, state or
local taxes and the Company may deduct any such taxes from any payment
otherwise due to a participant. Subject to the Administrator’s approval,
participants may elect to have the minimum tax withholding obligations
satisfied either by authorizing the Company to withhold from shares of Common
Stock otherwise issuable or by transferring to the Company shares of Common
Stock having a value equal to the amount of such taxes.

Amendments
and Termination.   The
Board of Directors may at any time amend or discontinue the 2006 Plan and the
Administrator may at any time amend or cancel outstanding awards for the
purpose of satisfying changes in the law or for any other lawful purpose. No
such action may be taken, however, which adversely affects any rights under an
outstanding award without the holder’s consent, and prior stockholder approval
is required to lower the exercise price of an outstanding grant or to cancel
and re-grant awards at a lower exercise price. Further,

 

amendments to the 2006
Plan are subject to stockholder approval if and to the extent such amendments
would (i) materially increase the benefits accruing to Participants under
the Plan, (ii) materially increase the number of securities that may be
issued under the Plan, (iii) materially modify the requirements as to
eligibility in the Plan, or (iv) are required by the Code to preserve the
qualified status of Incentive Options or to preserve tax deductibility of
compensation earned under stock options and SARs.

Adjustments
to Awards.   As a result of certain transactions
(such as any reorganization, recapitalization, reclassification, stock
dividend, stock split, reverse stock split or other similar change in the
Company’s capital stock), the outstanding shares of the Company’s Common Stock
may be increased or decreased or exchanged for a different number or kind of
shares or other securities. Also, as a result of such transactions, cash or
in-kind distributions may be made with respect to such shares of Common Stock
or other securities. In such cases, the Administrator will make appropriate
adjustments in the maximum number of shares reserved for issuance under the
2006 Plan, the number of stock options and SARs that can be granted to any one
individual participant, the number and kind of shares or other securities
subject to any then outstanding option and SAR awards under the 2006 Plan, and
the price for each share subject to any then outstanding stock options and SARs
under the 2006 Plan, without changing the aggregate exercise price (i.e., the
exercise price multiplied by the number of stock options or SARs) as to which
such stock options and SARs remain exercisable. The adjustment by the
Administrator will be final, binding and conclusive. The Administrator may also
adjust the number of shares subject to outstanding awards and the exercise
price and the terms of outstanding awards to take into consideration material
changes in accounting practices or principles, extraordinary dividends,
acquisitions or dispositions of stock or property or any other event if the
Administrator determines that such adjustment is appropriate to avoid
distortion in the operation of the 2006 Plan.

Change
of Control and Other Transaction Provisions.   The 2006 Plan provides that in the
event of a Change of Control (and except as provided in an award agreement)
each option and SAR issued under the 2006 Plan will become fully exercisable or
free of any restrictions on transfer, as the case may be. For this purpose a “Change
of Control” generally includes an event in which any person, directly or
indirectly, becomes the beneficial owner of 25% or more of the voting power of
the Company’s voting securities. A Change of Control also includes the
consummation of any consolidation or merger where the Company’s stockholders
immediately before such consolidation or merger would not own immediately after
such consolidation or merger at least 50% of the voting shares of the surviving
corporation or other business entity (or its ultimate parent). Finally, a
Change of Control also includes the consummation of a sale, lease, exchange or
other transfer of all or substantially all of the Company’s assets as well as
the Company’s liquidation or dissolution.

Moreover, in connection with certain transactions
(such as a consolidation, merger, sale, lease, exchange or other transfer of
all or substantially all of the Company’s assets or a liquidation of the
Company), the Board of Directors may, in its discretion, provide for the
assumption or substitution of the awards under the 2006 Plan and/or, upon
written notice to the participants, the termination of such awards immediately
prior to the consummation of such transaction. In the event such termination
will occur, all vested awards will be fully settled in cash or in kind as
permitted under the terms of the 2006 Plan in an amount equal to the difference
between the consideration to be paid pursuant to the transaction for the Common
Stock issuable upon exercise of such stock options or SARs and their respective
aggregate exercise price, provided that each participant will be permitted
within a specified period determined by the Administrator prior to the
consummation of such transaction, to exercise all outstanding stock options and
SARs, including (subject to the consummation of the transaction) any that
otherwise would not then be exercisable.

New
2006 Plan Benefits.   The future benefits or amounts that would be received
under the 2006 Plan by executive officers and non-executive officers are
discretionary and are therefore not determinable at this time. Similarly, the
benefits or amounts which would have been received by or allocated to such
persons for the last completed fiscal year if the 2006 Plan had been in effect
would have been discretionary and are, therefore, indeterminable.

Registration
Statement.   If stockholders approve the 2006
Plan, the Company intends to file a registration statement on Form S-8
under the Securities Act of 1933, as amended, to register the shares of Common
Stock that may be issuable pursuant to the 2006 Plan. This registration
statement is expected to become effective upon filing.

 

Tax Aspects of Any
Awards Under the U.S. Internal Revenue Code

The following is a summary of the principal federal
income tax consequences of transactions under the 2006 Plan. It does not
describe all federal tax consequences under the 2006 Plan, nor does it describe
state, local, foreign tax or non-income tax consequences.

Incentive
Options.   No
taxable income is generally realized by the optionee upon the grant or exercise
of an Incentive Option. If shares of Common Stock issued to an optionee
pursuant to the exercise of an Incentive Option are sold or transferred after
two years from the date of grant of the stock option and after one year from
the date of exercise, then (i) upon sale of such shares, any amount
realized in excess of the exercise price will be taxed to the optionee as a
long-term capital gain, and any loss sustained will be a long-term capital
loss, and (ii) there will be no deduction for the Company for federal
income tax purposes. The exercise of an Incentive Option will give rise to an
item of tax preference that may result in alternative minimum tax liability for
the optionee.

If shares of Common Stock acquired upon the exercise
of an Incentive Option are disposed of prior to the expiration of the two-year
and one-year holding periods described above (a “disqualifying disposition”),
generally (i) the optionee will realize ordinary income in the year of
disposition in an amount equal to the excess (if any) of the fair market value
of the shares of Common Stock on the date of exercise (or, if less, of the
amount realized on a sale of such shares of Common Stock) over the exercise
price, and (ii) the Company will be entitled to deduct such amount. Any
additional gain recognized on the disposition is treated as a capital gain for
which the Company is not entitled to a deduction.

If an Incentive Option is exercised at a time when it
no longer qualifies for the tax treatment described above, the stock option is
treated as a Non-Qualified Option. Generally, an Incentive Option will not be
eligible for the tax treatment described above if it is exercised more than
three months following termination of employment. In general, an Incentive
Option that is exercised more than three months after termination of employment
is treated as a Non-Qualified Option. Special rules apply in the case of
permanent disability or death. Incentive Options are also treated as
Non-Qualified Options to the extent that, in the aggregate, they first become
exercisable by an individual in any calendar year for shares having a fair
market value (determined as of the date of grant) in excess of $100,000.

Non-Qualified
Options.   With
respect to Non-Qualified Options under the 2006 Plan, no income is realized by
the optionee at the time the stock option is granted and the Company does not receive a tax
deduction at such time. Generally (i) at exercise, ordinary income
is realized by the optionee in an amount equal to the excess (if any) of the
fair market value of the shares of Common Stock on the date of exercise over
the exercise price, and the Company receives a tax deduction for the same
amount, and (ii) at disposition of such Common Stock, any appreciation or
depreciation after the date of exercise is treated as either short-term or
long-term capital gain or loss depending on how long the shares of Common Stock
have been held.

Stock
Appreciation Rights.   The grant
of a SAR will not result in income for the participant or in a tax deduction to
the Company. Upon the exercise of a SAR, the participant will recognize
ordinary income in an amount that equals the fair market value of any shares of
Common Stock received, and the Company will be entitled to a tax deduction in
the same amount. Upon disposition of any such Common Stock received on
exercise, any appreciation or depreciation after the date of exercise is
treated as either short-term or long-term capital gain or loss depending on how
long the shares of Common Stock have been held.

Parachute
Payments.   The
vesting of any portion of any option or SAR that is accelerated due to the
occurrence of a Change of Control may cause all or a portion of the payments
with respect to such accelerated awards to be treated as “parachute payments”
as defined in the Code. Any such parachute payments may be non-deductible to
the Company, in whole or in part, and may subject the recipient to a
non-deductible 20% federal excise tax on all or a portion of such payment (in
addition to other taxes ordinarily payable).

Section 162(m).   Under Section 162(m) of the Internal
Revenue Code, certain remuneration in excess of $1,000,000 may be nondeductible
if paid by a publicly traded corporation to any of its chief executive officer
or other four most highly compensated officers. Option and SAR awards under the
2006 Plan are intended to be eligible for exemption from the Section 162(m) deduction
limit.

Section 409A.   As part of the American Jobs Creation Act of 2004,
Congress passed Section 409A of the Internal Revenue of Code (“Section 409A”).
Option and SAR awards under the 2006 Plan are intended either to be exempt from
the rules of Section 409A or to satisfy those rules, and shall be
construed accordingly. Granted option and SAR awards may be modified at any
time, in the Committee’s discretion, so as to increase the likelihood of
exemption from or compliance with the rules of Section 409A. If such
awards were subject to Section 409A and the requirements of Section 409A
were not satisfied, such awards (generally including any earnings thereon)
would be subject to current tax plus a 20% penalty tax and additional interest.

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