Document:

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                                 EXHIBIT 10.06

                          CONCORD COMMUNICATIONS, INC.
                                 1997 STOCK PLAN
           (AS AMENDED ON MARCH 12, 1998, MARCH 1, 1999, MAY 15, 1999
                               AND MARCH 8, 2000)

         1. PURPOSE; TERMINATION OF PRIOR PLAN. The purpose of the 1997 Stock
Plan (the "Plan") is to encourage key employees of Concord Communications, 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 opportunities 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 ("Awards"); and (d) opportunities to make
direct purchases of stock in the Company ("Purchases"). Both ISOs and
Non-Qualified Options are referred to hereafter individually as an "Option" and
collectively as "Options." Options, Awards and authorizations to make Purchases
are referred to hereafter collectively as "Stock Rights." 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. The Company's 1995 Stock Plan (the "1995 Stock Plan") is terminated
effective as of October 16, 1997 and henceforth, the Company shall make no
grants under the 1995 Stock Plan. The 1995 Stock Plan shall, however, continue
to govern all options, awards and other grants granted and outstanding under the
1995 Stock Plan.

         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, subject to paragraph 2(D) (relating to compliance
                  with Section 162(m) of the Code), by a committee appointed by
                  the Board of two or more of its members (the "Committee").
                  Hereinafter, all references in this Plan to the "Committee"
                  shall mean the Board if no Committee has been appointed.
                  Subject to ratification of the grant or authorization of each
                  Stock Right by the Board (if so required by applicable state
                  law), and subject to the terms of the Plan, the Committee
                  shall have the authority to (i) determine to whom (from among
                  the class of employees eligible under paragraph 3 to receive
                  ISOs) ISOs shall be granted, and to whom (from among the class
                  of individuals and entities eligible under paragraph 3 to
                  receive Non-Qualified Options and Awards and to make
                  Purchases) Non-Qualified Options, Awards and authorizations to
                  make Purchases may be granted; (ii) determine the time or
                  times at which Options or Awards shall be granted or Purchases
                  made; (iii) determine the purchase price of shares subject to
                  each Option or Purchase, which prices shall not be less than
                  the minimum price specified in paragraph 6; (iv) determine
                  whether each Option granted shall be an ISO or a Non-Qualified
                  Option; (v) determine (subject to paragraph 7) the time or
                  times when each Option shall become exercisable and the
                  duration of the exercise period; (vi) determine whether
                  restrictions such as repurchase options are to be

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                  imposed on shares subject to Options, Awards and Purchases and
                  the nature of such restrictions, if any; and (vii) interpret
                  the Plan and prescribe and rescind rules and regulations
                  relating to it. If the Committee determines to issue a
                  Non-Qualified Option, it shall take whatever actions it deems
                  necessary, under Section 422 of the Code and the regulations
                  promulgated thereunder, to ensure that such Option is not
                  treated as an ISO. The interpretation and construction by the
                  Committee of any provisions of the Plan or of any Stock Right
                  granted under it shall be final unless otherwise determined by
                  the Board. The Committee may from time to time adopt such
                  rules and regulations for carrying out the Plan as it may deem
                  best. No member of the Board or of the Committee shall be
                  liable for any action or determination made in good faith with
                  respect to the Plan or any Stock Right granted under it.

                           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.

                           C. GRANT OF STOCK RIGHTS TO BOARD MEMBERS.
                  Notwithstanding the provisions of paragraph 2.A., no Stock
                  Rights shall be granted to any person who is, at the time of
                  the proposed grant, a member of the Board unless such grant is
                  approved by a majority vote of the disinterested members of
                  the Board. All grants of Stock Rights to members of the Board
                  shall in all respects be made in accordance with the
                  provisions of this Plan applicable to other eligible persons.
                  Members of the Board who either (i) are eligible to receive
                  grants of Stock Rights pursuant to the Plan or (ii) have been
                  granted Stock Rights may vote on any matters affecting the
                  administration of the Plan or the grant of any Stock Rights
                  pursuant to the Plan, except that no such member shall act
                  upon the granting to himself or herself of Stock Rights, 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 Stock
                  Rights. Notwithstanding any other provision of this paragraph
                  2, in the event the Company registers any class of any equity
                  security pursuant to Section 12 of the Securities Exchange Act
                  of 1934, as amended (the "Exchange Act"), any grants to
                  members of the Board of Options made at any time from the
                  effective date of such registration until six months after the
                  termination of such registration shall be made only by the
                  Board; provided, however, that if a majority of the Board is
                  eligible to participate in the Plan or in any other stock
                  option or other stock plan

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                  of the Company or any of its affiliates, or has been so
                  eligible at any time within the preceding year, any grant to
                  directors of Options must be made by, or only in accordance
                  with the recommendation of, a Committee consisting of three or
                  more persons, who may but need not be members of the Board or
                  employees of the Company, appointed by the Board but having
                  full authority to act in the matter, none of whom is eligible
                  to participate in this Plan or any other stock option or other
                  stock plan of the Company or any of its affiliates, or has
                  been eligible at any time within the preceding year. The
                  requirements imposed by the preceding sentence shall also
                  apply with respect to grants to officers who are not also
                  members of the Board. Once appointed, the Committee shall
                  continue to serve until otherwise directed by the Board.

                           D. PERFORMANCE-BASED COMPENSATION. The Board, in its
                  discretion, may take such action as may be necessary to ensure
                  that Stock Rights granted under the Plan qualify as "qualified
                  performance-based compensation" within the meaning of Section
                  162(m) of the Code and applicable regulations promulgated
                  thereunder ("Performance-Based Compensation"). Such action may
                  include, in the Board's discretion, some or all of the
                  following (i) if the Board determines that Stock Rights
                  granted under the Plan generally shall constitute
                  Performance-Based Compensation, the Plan shall be
                  administered, to the extent required for such Stock Rights to
                  constitute Performance-Based Compensation, by a Committee
                  consisting solely of two or more "outside directors" (as
                  defined in applicable regulations promulgated under Section
                  162(m) of the Code), (ii) if any Non-Qualified Options with an
                  exercise price less than the fair market value per share of
                  Common Stock are granted under the Plan and the Board
                  determines that such Options should constitute
                  Performance-Based Compensation, such options shall be made
                  exercisable only upon the attainment of a pre-established,
                  objective performance goal established by the Committee, and
                  such grant shall be submitted for, and shall be contingent
                  upon shareholder approval and (iii) Stock Rights granted under
                  the Plan may be subject to such other terms and conditions as
                  are necessary for compensation recognized in connection with
                  the exercise or disposition of such Stock Right or the
                  disposition of Common Stock acquired pursuant to such Stock
                  Right, to constitute Performance-Based Compensation.

         3. ELIGIBLE EMPLOYEES AND OTHERS. ISOs may be granted only to employees
of the Company or any Related Corporation. Non-Qualified Options, Awards and
authorizations to make Purchases may be granted to any employee, officer or
director (whether or not also an employee) or consultant of the Company or any
Related Corporation. The Committee may take into consideration a recipient's
individual circumstances in determining whether to grant a Stock Right. The
granting of any Stock Right 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 Stock Rights.

         4. STOCK. The stock subject to Stock Rights shall be authorized but
unissued shares of Common Stock of the Company, par value $.01 per share (the
"Common Stock"), or shares of

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Common Stock reacquired by the Company in any manner. The aggregate number of
shares which may be issued pursuant to the Plan is 3,250,000, subject to
adjustment as provided in paragraph 13. 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 unpurchased shares of Common Stock subject to
such Option shall again be available for grants of Stock Rights under the Plan.

         No employee of the Company or any Related Corporation may be granted
Options to acquire, in the aggregate, more than 70% of the aggregate number of
shares of Common Stock which may be issued pursuant to the Plan during any
fiscal year of the Company. 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 STOCK RIGHTS. Stock Rights may be granted under the Plan
at any time on or after October 16, 1997 and prior to October 15, 2007. The date
of grant of a Stock Right under the Plan will be the date specified by the
Committee at the time it grants the Stock Right; provided, however, that such
date shall not be prior to the date on which the Committee acts to approve the
grant.

         6.       MINIMUM OPTION PRICE; ISO LIMITATIONS.

                           A. PRICE FOR NON-QUALIFIED OPTIONS, AWARDS AND
                  PURCHASES. Subject to paragraph 2(D) (relating to compliance
                  with Section 162(m) of the Code), the exercise price per share
                  specified in the agreement relating to each Non-Qualified
                  Option granted, and the purchase price per share of stock
                  granted in any Award or authorized as a Purchase, under the
                  Plan may be less than the fair market value of the Common
                  Stock of the Company on the date of grant; provided that, in
                  no event shall such exercise price or such purchase price be
                  less than the lesser of (i) the book value per share of Common
                  Stock as of the end of the fiscal year of the Company
                  immediately preceding the date of such grant, or (ii) 50
                  percent of the fair market value per share of Common Stock on
                  the date of such grant.

                           B. 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.

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                  For purposes of determining stock ownership under this
                  paragraph, the rules of Section 424(d) of the Code shall
                  apply.

                           C. $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
                  to designate any Options granted in excess of such limitation
                  as Non-Qualified Options, and the Company shall issue separate
                  certificates to the optionee with respect to Options that are
                  Non-Qualified Options and Options that are ISOs.

                           D. DETERMINATION OF FAIR MARKET VALUE. If, at the
                  time an Option is granted under the Plan, the Company's Common
                  Stock is publicly traded, "fair market value" shall be
                  determined as of the date of grant 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 the date of grant and shall mean (i) the
                  average (on that date) of the high and low prices of the
                  Common Stock on the principal national securities exchange on
                  which the Common Stock is traded, if the Common Stock is then
                  traded on a national securities exchange; or (ii) the last
                  reported sale price (on that date) of the Common Stock on the
                  Nasdaq National Market, if the Common Stock is not then traded
                  on a national securities exchange; or (iii) 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 the Nasdaq
                  National Market. If the Common Stock is not publicly traded at
                  the time an Option is granted under the Plan, "fair market
                  value" shall mean the fair 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.

         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(B). 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 16.

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         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 shall either be fully
                  exercisable on the date of grant or shall become exercisable
                  thereafter in such installments as the Committee may specify.

                           B. FULL VESTING OF INSTALLMENTS. Once an installment
                  becomes exercisable, it shall remain 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 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
                  16) if such acceleration would violate the annual vesting
                  limitation contained in Section 422(d) of the Code, as
                  described in paragraph 6(C).

         9. TERMINATION OF EMPLOYMENT. 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 exercisable, and his or her ISOs shall terminate after the passage of 60
days from the date of termination of his or her employment, but in no event
later than on the specified expiration dates of such ISOs, except to the extent
that such ISOs (or unexercised installments thereof) have been converted into
Non-Qualified Options pursuant to paragraph 16. For purposes of this paragraph
9, a leave of absence with the written approval of the Committee shall not be
considered an interruption of employment under the Plan, provided that such
written approval contractually obligates the Company or any Related Corporation
to continue the employment of the employee after the approved period of absence.
Employment shall also be considered as continuing uninterrupted during any other
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 or by contract. 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 optionee after the approved period of absence.
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. Nothing
in the Plan

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shall be deemed to give any grantee of any Stock Right the right to be retained
in employment or other service by the Company or any Related Corporation for any
period of time.

         10.      DEATH; DISABILITY.

                           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, at any time prior to the earlier of (i) the
                  specified expiration date of the ISO or (ii) 180 days 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 could have exercised it on that date, at any time
                  prior to 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. No ISO shall be assignable or transferable by the
optionee except by will or by the laws of descent and distribution, and during
the lifetime of the optionee shall be exercisable only by such optionee. Stock
Rights other than ISOs shall be transferable to the extent set forth in the
agreement relating to such Stock Right.

         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.

                  13. ADJUSTMENTS. Upon the occurrence of any of the following
events, an optionee's rights with respect to Options granted to such optionee
hereunder shall be adjusted as hereinafter provided, unless otherwise
specifically provided in the written agreement between the optionee and the
Company relating to such Option:

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                           A. STOCK DIVIDENDS AND STOCK SPLITS. If the shares of
                  Common Stock shall be subdivided or combined into a greater or
                  smaller number of shares or if the Company shall issue any
                  shares of Common Stock as a stock dividend on its outstanding
                  Common Stock, the number of shares of Common Stock deliverable
                  upon the exercise of Options shall be appropriately increased
                  or decreased proportionately, and appropriate adjustments
                  shall be made in the purchase price per share to reflect such
                  subdivision, combination or stock dividend.

                           B. CONSOLIDATIONS OR MERGERS. If the Company is to be
                  consolidated with or acquired by another entity in a merger or
                  other reorganization in which the holders of the outstanding
                  voting stock of the Company immediately preceding the
                  consummation of such event, shall, immediately following such
                  event, hold, as a group, less than a majority of the voting
                  securities of the surviving or successor entity, or in the
                  event of a sale of all or substantially all of the Company's
                  assets or otherwise (each, an "Acquisition"), the Committee
                  may take one or more of the following actions: (i) provide for
                  the acceleration and/or termination of any time period
                  relating to the exercise of the Options, (ii) provide for the
                  purchase of the Options, upon the optionee's request, for the
                  amount in cash that could have been received upon the exercise
                  of the Options and sale of the shares obtained thereby, (iii)
                  adjust the terms of the Options in a manner determined by the
                  Committee, (iv) cause the Options to be assumed, or new rights
                  substituted therefor, by another entity or (v) make such other
                  provision as the Committee may consider equitable and in the
                  best interests of the Company.

                           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, an optionee upon exercising an Option shall be entitled
                  to receive for the purchase price paid upon such exercise the
                  securities he or she would have received if he or she had
                  exercised such Option 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.

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                           E. RESTRICTED SECURITIES. If any person or entity
                  owning restricted Common Stock obtained by exercise of an
                  Option made hereunder receives new or additional or different
                  shares or securities ("New Securities") in connection with a
                  transaction described in subparagraphs A, B or C above, as a
                  result of owning such restricted Common Stock, such New
                  Securities shall be subject to all of the conditions and
                  restrictions applicable to the restricted Common Stock with
                  respect to which such New Securities were issued.

                           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 Options. 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. Any fractional shares which, but for
                  this subparagraph G, would have been issued to an optionee
                  pursuant to an Option, shall be deemed to have been issued and
                  immediately sold to the Company for their fair market value,
                  and the optionee shall receive from the Company cash in lieu
                  of such fractional shares.

                           H. ADJUSTMENTS. Upon the happening of any of the
                  events described in subparagraphs A, B or C above, the class
                  and aggregate number of shares set forth in paragraph 4 hereof
                  that are subject to Stock Rights which previously have been or
                  subsequently may be granted under the Plan shall also be
                  appropriately adjusted to reflect the events described in such
                  subparagraphs. The Committee shall determine the specific
                  adjustments to be made under this paragraph 13 and, subject to
                  paragraph 2, its determination shall be conclusive.

         14. MEANS OF EXERCISING OPTIONS. An Option (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 Option being exercised and specify the
number of shares as to which such Option is being exercised, accompanied by full
payment of the purchase price therefor either (a) in United States dollars in
cash or by check, (b) at the discretion of the Committee, 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 Option, (c) at the discretion of the
Committee, by delivery of the optionee's personal recourse note bearing interest
payable not less than annually at no less than 100% of the lowest applicable
Federal rate, as defined in Section 1274(d) of the Code, (d) at the discretion
of the Committee and consistent with applicable law, 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 (e) at the
discretion of the Committee, by any combination of (a), (b), (c) and (d) above.
If the Committee exercises its discretion to permit payment of the exercise
price of an ISO by means of the methods set forth in

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clauses (b), (c), (d) or (e) of the preceding sentence, such discretion shall be
exercised in writing at the time of the grant of the ISO in question. The holder
of an Option shall not have the rights of a shareholder with respect to the
shares covered by such Option until the date of issuance of a stock certificate
to such holder for such shares. Except as expressly provided above in paragraph
13 with respect to changes in capitalization and stock dividends, no adjustment
shall be made for dividends or similar rights for which the record date is
before the date such stock certificate is issued.

         15. TERM AND AMENDMENT OF PLAN. This Plan was adopted by the Board in
July 1997 and by the stockholders of the Company on September 9, 1997. The Plan
was amended on March 12, 1998 to increase the number of shares authorized for
issuance under the Plan by 750,000 shares to 1,500,000, and such amendment was
approved by the stockholders of the Company at the Annual Meeting held on April
30, 1998. On March 1, 1999, the Board of Directors further amended the Plan to
increase the number of Shares authorized for issuance under the Plan by
1,000,000 shares to 2,500,000 shares and to make certain other minor
modifications, and such amendment was approved by the stockholders of the
Company at the Annual Meeting held on April 27, 1999. On May 15, 1999, the Board
of Directors further amended the Plan by adding Section 22 to the Plan. On March
8, 2000, the Board of Directors further amended the Plan to increase the number
of shares authorized for issuances under the Plan by 750,000 to 3,250,000 and
such amendment was approved by the stockholders of the Company at the Annual
Meeting held on April 25, 2000. The Plan shall expire at the end of the day on
October 15, 2007 (except as to Options outstanding on that date). Subject to the
provisions of paragraph 5 above, Options may be granted under the Plan prior to
the date of stockholder approval of the Plan. The Board may terminate or amend
the Plan in any respect at any time, except that, without the approval of the
stockholders obtained within 12 months before or after the Board adopts a
resolution authorizing any of the following actions: (a) the total number of
shares that may be issued under the Plan may not be increased (except by
adjustment pursuant to paragraph 13); (b) the provisions of paragraph 3
regarding eligibility for grants of ISOs may not be modified; (c) the provisions
of paragraph 6(B) regarding the exercise price at which shares may be offered
pursuant to ISOs may not be modified (except by adjustment pursuant to paragraph
13); and (d) the expiration date of the Plan may not be extended. Except as
otherwise provided in this paragraph 15, in no event may action of the Board or
stockholders alter or impair the rights of a grantee, without such grantee's
consent, under any Stock Right previously granted to such grantee.

         16. MODIFICATIONS OF ISOS; CONVERSION OF ISOS INTO NON-QUALIFIED
OPTIONS. Subject to paragraph 13(D), without the prior written consent of the
holder of an ISO, the Committee shall not alter the terms of such ISO (including
the means of exercising such ISO) if such alteration would constitute a
modification (within the meaning of Section 424(h)(3) of the Code). 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

<PAGE>   11
                                      -11-

exercise period 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.
Upon the taking of such action, the Company shall issue separate certificates to
the optionee with respect to Options that are Non-Qualified Options and Options
that are ISOs. The Committee, with the consent of the optionee, may also
terminate any portion of any ISO that has not been exercised at the time of such
conversion.

         17. APPLICATION OF FUNDS. The proceeds received by the Company from the
sale of shares pursuant to Options granted and Purchases authorized under the
Plan shall be used for general corporate purposes.

         18. 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.

         19. WITHHOLDING OF ADDITIONAL INCOME TAXES. Upon the exercise of a
Non-Qualified Option, the transfer of a Non-Qualified Stock Option pursuant to
an arm's-length transaction, the grant of an Award, the making of a Purchase of
Common Stock for less than its fair market value, the making of a Disqualifying
Disposition (as defined in paragraph 18), the vesting or transfer of restricted
stock or securities acquired on the exercise of an Option hereunder, or the
making of a distribution or other payment with respect to such stock or
securities, the Company may withhold, or may require the grantee to pay,
additional withholding taxes in respect of amounts that constitute compensation
includible in gross income. The Committee in its discretion may condition (i)
the exercise of an Option, (ii) the transfer of a Non-Qualified Stock Option,
(iii) the grant of an Award, (iv) the making of a Purchase of Common Stock for
less than its fair market value, or (v) the vesting or transferability of
restricted stock or securities acquired by exercising an Option, on the
grantee's making satisfactory arrangement for such withholding. Such arrangement
may include payment by the grantee in cash or by check of the amount of the
withholding taxes or, at the discretion of the Committee, by the grantee's
delivery of previously held shares of Common Stock or the withholding from the
shares of Common Stock otherwise deliverable upon exercise of a Option shares
having an aggregate fair market value equal to the amount of such withholding
taxes.

         20. 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. Government regulations may impose reporting or
other obligations on the Company with respect to the Plan.

<PAGE>   12
                                      -12-

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 grantees of Options in connection with the Plan.

         21. GOVERNING LAW. The validity and construction of the Plan and the
instruments evidencing Stock Rights shall be governed by the laws of the
Commonwealth of Massachusetts, or the laws of any jurisdiction in which the
Company or its successors in interest may be organized.

         22. REPRICING. Without the prior approval of the Company's
stockholders, Options issued under the Plan shall not be repriced, replaced or
regranted through cancellation or by lowering the Option exercise price of a
previously granted Option.<PAGE>   1
                                 EXHIBIT 10.08

                          CONCORD COMMUNICATIONS, INC.

                  1997 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
                          (AS AMENDED ON MARCH 8, 2000)

         1. PURPOSE. This Non-Qualified Stock Option Plan, to be known as the
1997 Non-Employee Director Stock Option Plan (hereinafter, this "Plan") is
intended to promote the interests of CONCORD COMMUNICATIONS, INC. (hereinafter,
the "Company") by providing an inducement to obtain and retain the services of
qualified persons who are not employees or officers of the Company to serve as
members of its Board of Directors (the "Board").

         2. AVAILABLE SHARES. The total number of shares of Common Stock, par
value $.01 per share, of the Company (the "Common Stock") for which options may
be granted under this Plan shall not exceed one hundred thirty thousand
(130,000) shares, subject to adjustment in accordance with Section 10 of this
Plan; provided, however, that such number of shares shall not be subject to
adjustment by reason of the stock split in the form of a stock dividend declared
by the Board of the Directors of the Company on August 7, 1997. Shares subject
to this Plan are authorized but unissued shares or shares that were once issued
and subsequently reacquired by the Company. If any options granted under this
Plan are surrendered before exercise or lapse without exercise, in whole or in
part, the shares reserved therefor shall continue to be available under this
Plan.

         3. ADMINISTRATION. This Plan shall be administered by the Board or by a
committee appointed by the Board (the "Committee"). In the event the Board fails
to appoint or refrains from appointing a Committee, the Board shall have all
power and authority to administer this Plan. In such event, the word "Committee"
wherever used herein shall be deemed to mean the Board. The Committee shall,
subject to the provisions of the Plan, have the power to construe this Plan, to
determine all questions hereunder, and to adopt and amend such rules and
regulations for the administration of this Plan as it may deem desirable. No
member of the Board or the Committee shall be liable for any action or
determination made in good faith with respect to this Plan or any option granted
under it.

         4. AUTOMATIC GRANT OF OPTIONS. Subject to the availability of shares
under this Plan, (a) each person who becomes a member of the Board on or after
October 16, 1997 and who is not an employee or officer of the Company during the
term of the Plan (a "Non-Employee Director"), shall be automatically granted on
the date such person is first elected to the Board, without further action by
the Board, an option to purchase 20,000 shares of the Common Stock, and (b)
starting with the 1998 Annual Meeting of Stockholders of the Company, each
person who is a Non-Employee Director immediately following the final
adjournment of each Annual Meeting of Stockholders of the Company during the
term of this Plan shall be automatically granted on each such date an option to
purchase 5,000 shares of the Common Stock. The options to be granted under this
Section 4 shall be the only options ever to be granted at any time to such
member under this Plan. The number of shares covered by options granted under
this Section 4 shall be subject to adjustment in accordance with the provisions
of Section 10 of this Plan.

<PAGE>   2
                                      -2-

         5. OPTION PRICE. The purchase price of the stock covered by an option
granted pursuant to this Plan shall be 100% of the fair market value of such
shares on the day the option is granted. The option price will be subject to
adjustment in accordance with the provisions of Section 10 of this Plan. For
purposes of this Plan, if, at the time an option is granted under the Plan, the
Company's Common Stock is publicly traded, "fair market value" shall be
determined as of the last business day for which the prices or quotes discussed
in this sentence are available prior to the date such option is granted and
shall mean (i) the average (on that date) of the high and low prices of the
Common Stock on the principal national securities exchange on which the Common
Stock is traded, if the Common Stock is then traded on a national securities
exchange; or (ii) the last reported sale price (on that date) of the Common
Stock on the Nasdaq National Market, if the Common Stock is not then traded on a
national securities exchange; or (iii) 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 the Nasdaq
National Market List. However, if the Common Stock is not publicly traded at the
time an option is granted under the Plan, "fair market value" shall be deemed to
be the fair 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.

         6. PERIOD OF OPTION. Unless sooner terminated in accordance with the
provisions of Section 8 of this Plan, an option granted hereunder shall expire
on the date which is ten (10) years after the date of grant of the option.

         7. (a) VESTING OF SHARES AND NON-TRANSFERABILITY OF OPTIONS. Options
granted under this Plan shall not be exercisable until they become vested.
Options granted under this Plan shall vest in the optionee and thus become
exercisable, in accordance with the following schedule, provided that the
optionee has continuously served as a member of the Board through such vesting
date:

     PERCENTAGE OF OPTION
     SHARES FOR WHICH
     OPTION WILL BE EXERCISABLE      DATE OF VESTING
     --------------------------      ---------------
               25%                   one year from the date of grant

               6.25%                 per quarter on the last day of the quarter
                                     beginning the quarter ending immediately
                                     following the date to occur which is one
                                     year from the date of grant

         The number of shares as to which options may be exercised shall be
cumulative, so that once the option shall become exercisable as to any shares it
shall continue to be exercisable as to said shares, until expiration or
termination of the option as provided in this Plan.

<PAGE>   3
                                      -3-

            (b) Non-transferability. Any option granted pursuant to this Plan
shall not be assignable or transferable other than by will or the laws of
descent and distribution or pursuant to a domestic relations order and shall be
exercisable during the optionee's lifetime only by him or her.

         8. TERMINATION OF OPTION RIGHTS.

            (a) In the event an optionee ceases to be a member of the Board for
any reason other than death or permanent disability, any then unexercised
portion of options granted to such optionee shall, to the extent not then
vested, immediately terminate and become void; any portion of an option which is
then vested but has not been exercised at the time the optionee so ceases to be
a member of the Board may be exercised, to the extent it is then vested, by the
optionee within 60 days of the date the optionee ceased to be a member of the
Board; and all options shall terminate after such 60 days have expired.

            (b) In the event that an optionee ceases to be a member of the Board
by reason of his or her death or permanent disability, any option granted to
such optionee may be exercised, to the extent of the number of shares with
respect to which he or she could have exercised it on the date of death or
permanent disability, by the optionee (or by the optionee's personal
representative, heir or legatee, in the event of death) until the scheduled
expiration date of the option.

         9. EXERCISE OF OPTIONS AND RESALE RESTRICTIONS.

            (a) EXERCISE OF OPTION. Subject to the terms and conditions of this
Plan and the option agreements, an option granted hereunder shall, to the extent
then exercisable, be exercisable in whole or in part by giving written notice to
the Company by mail or in person addressed to the Chief Financial Officer at 33
Boston Post Road West, Marlboro, Massachusetts 01752, its principal executive
offices, stating the number of shares with respect to which the option is being
exercised, accompanied by payment in full for such shares. Payment may be (a) in
United States dollars in cash or by check, (b) in whole or in part in shares of
the Common Stock of the Company already owned by the person or persons
exercising the option or shares subject to the option being exercised (subject
to such restrictions and guidelines as the Board may adopt from time to time),
valued at fair market value determined in accordance with the provisions of
Section 5 or (c) consistent with applicable law, 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; provided, however,
that there shall be no such exercise at any one time as to fewer than one
hundred (100) shares or all of the remaining shares then purchasable by the
person or persons exercising the option, if fewer than one hundred (100) shares.
The Company's transfer agent shall, on behalf of the Company, prepare a
certificate or certificates representing such shares acquired pursuant to
exercise of the option, shall register the optionee as the owner of such shares
on the books of the Company and shall cause the fully executed certificate(s)
representing such shares to be delivered to the optionee as soon as practicable
after payment of the option price in

<PAGE>   4
                                      -4-

full. The holder of an option shall not have any rights of a stockholder with
respect to the shares covered by the option, except to the extent that one or
more certificates for such shares shall be delivered to him or her upon the due
exercise of the option.

            (b) RESALE RESTRICTIONS. Under no circumstances may shares acquired
pursuant to the exercise of options granted pursuant to this Plan be disposed of
on or prior to the date that is six months after the date such options were
granted.

         10. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION AND OTHER EVENTS. Upon
the occurrence of any of the following events, an optionee's rights with respect
to options granted to him or her hereunder shall be adjusted as hereinafter
provided:

            (a) STOCK DIVIDENDS AND STOCK SPLITS. If the shares of Common Stock
shall be subdivided or combined into a greater or smaller number of shares or if
the Company shall issue any shares of Common Stock as a stock dividend on its
outstanding Common Stock, the number of shares of Common Stock deliverable upon
the exercise of options shall be appropriately increased or decreased
proportionately, and appropriate adjustments shall be made in the purchase price
per share to reflect such subdivision, combination or stock dividend.

            (b) RECAPITALIZATION ADJUSTMENTS. In the event of a reorganization,
recapitalization, merger, consolidation, or any other change in the corporate
structure or shares of the Company, to the extent permitted by Rule 16b-3 under
the Securities Exchange Act of 1934, adjustments in the number and kind of
shares authorized by this Plan and in the number and kind of shares covered by,
and in the option price of outstanding options under this Plan necessary to
maintain the proportionate interest of the optionee and preserve, without
exceeding, the value of such option, shall be made. Notwithstanding the
foregoing, no such adjustment shall be made which would, within the meaning of
any applicable provisions of the Internal Revenue Code of 1986, as amended,
constitute a modification, extension or renewal of any Option or a grant of
additional benefits to the holder of an Option.

            (c) 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 options. No adjustments shall be made for dividends paid in cash or
in property other than securities of the Company.

            (d) ADJUSTMENTS. Upon the happening of any of the foregoing events,
the class and aggregate number of shares set forth in Sections 2 and 4 of this
Plan that are subject to options which previously have been or subsequently may
be granted under this Plan shall also be appropriately adjusted to reflect such
events. The Board shall determine the specific adjustments to be made under this
Section 10 and its determination shall be conclusive.

            (e) CONSOLIDATIONS OR MERGERS. If the Company is to be consolidated
with or acquired by another entity in a merger or other reorganization in which
the holders of the outstanding voting stock of the Company immediately preceding
the consummation of such

<PAGE>   5
                                      -5-

event, shall, immediately following such event, hold, as a group, less than a
majority of the voting securities of the surviving or successor entity, or in
the event of a sale of all or substantially all of the Company's assets or
otherwise (each, an "Acquisition"), the vesting of all outstanding options
issued pursuant hereto will be accelerated so that all outstanding options are
vested and exercisable in full prior to the consummation of any such
Acquisition. If such options are not exercised prior to the consummation of such
Acquisition, and are not assumed or replaced by the successor entity, such
options will terminate.

         11. RESTRICTIONS ON ISSUANCE OF SHARES. Notwithstanding the provisions
of Sections 4 and 9 of this Plan, the Company shall have no obligation to
deliver any certificate or certificates upon exercise of an option until one of
the following conditions shall be satisfied:

            (i) The issuance of shares with respect to which the option has been
exercised is at the time of the issue of such shares effectively registered
under applicable Federal and state securities laws as now in force or hereafter
amended; or

            (ii) Counsel for the Company shall have given an opinion that the
issuance of such shares is exempt from registration under Federal and state
securities laws as now in force or hereafter amended; and the Company has
complied with all applicable laws and regulations with respect thereto,
including without limitation all regulations required by any stock exchange upon
which the Company's outstanding Common Stock is then listed.

         12. LEGEND ON CERTIFICATES. The certificates representing shares issued
pursuant to the exercise of an option granted hereunder shall carry such
appropriate legend, and such written instructions shall be given to the
Company's transfer agent, as may be deemed necessary or advisable by counsel to
the Company in order to comply with the requirements of the Securities Act of
1933 or any state securities laws.

         13. REPRESENTATION OF OPTIONEE. If requested by the Company, the
optionee shall deliver to the Company written representations and warranties
upon exercise of the option that are necessary to show compliance with Federal
and state securities laws, including representations and warranties to the
effect that a purchase of shares under the option is made for investment and not
with a view to their distribution (as that term is used in the Securities Act of
1933).

         14. OPTION AGREEMENT. Each option granted under the provisions of this
Plan shall be evidenced by an option agreement, which agreement shall be duly
executed and delivered on behalf of the Company and by the optionee to whom such
option is granted. The option agreement shall contain such terms, provisions and
conditions not inconsistent with this Plan as may be determined by the officer
executing it.

         15. TERMINATION AND AMENDMENT OF PLAN. Options may no longer be granted
under this Plan ten (10) years after the Approval Date, and this Plan shall
terminate when all options granted or to be granted hereunder are no longer
outstanding. The Board may at any time terminate this Plan or make such
modification or amendment thereof as it deems advisable;

<PAGE>   6
                                      -6-

provided, however, that the Board may not, without approval of the stockholders,
modify or amend this Plan, without approval of the stockholders, if such
approval is required by the Federal securities laws or applicable regulatory
authorities (at the time of any such modification or amendment). Termination or
any modification or amendment of this Plan shall not, without consent of a
participant, affect his or her rights under an option previously granted to him
or her. The Plan was adopted by the board in July 1997 and by the stockholders
of the Company on September 9, 1997. The Plan was amended on March 8, 2000 by
The Board of Directors to increase the number of shares authorized for issuance
under the Plan by 35,000 subject to approval of the amendment of the Plan by the
stockholders of the Company at the next meeting of stockholders.

         16. WITHHOLDING OF INCOME TAXES. Upon the exercise of an option, the
Company, in accordance with Section 3402(a) of the Internal Revenue Code, may
require the optionee to pay withholding taxes in respect of amounts considered
to be compensation includible in the optionee's gross income.

         17. COMPLIANCE WITH REGULATIONS. It is the Company's intent that the
Plan comply in all respects with Rule 16b-3 under the Securities Exchange Act of
1934 (or any successor or amended provision thereof) and any applicable
Securities and Exchange Commission interpretations thereof. If any provision of
this Plan is deemed not to be in compliance with Rule 16b-3, the provision shall
be null and void.

         18. GOVERNING LAW. The validity and construction of this Plan and the
instruments evidencing options shall be governed by the laws of the Commonwealth
of Massachusetts, without giving effect to the principles of conflicts of law
thereof.

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