Document:

Exhibit

10.7

 

	

  Notice of Grant of Stock Options

  and Non-Qualified Stock Option Agreement

  	

   

  	

  META

  Group, Inc.

  

 

Effective 8/14/2002, you have been granted a Non-Qualified Stock Option

to buy 50,000 shares of META Group, Inc. (the Company) stock at $2.4300 per share.

 

The total option price of

the shares granted is $121,500.00.

 

Shares in each period

will become exercisable on the date shown.

 

	

  Shares

  	

   

  	

  Vest Type

  	

   

  	

  Full Vest

  	

   

  	

  Expiration

  	

   

  
	

  12,500

  	

   

  	

  On Vest Date

  	

   

  	

  8/14/2003

  	

   

  	

  8/14/2012

  	

   

  
	

  12,500

  	

   

  	

  On Vest Date

  	

   

  	

  8/14/2004

  	

   

  	

  8/14/2012

  	

   

  
	

  12,500

  	

   

  	

  On Vest Date

  	

   

  	

  8/14/2005

  	

   

  	

  8/14/2012

  	

   

  
	

  12,500

  	

   

  	

  On Vest Date

  	

   

  	

  8/14/2006

  	

   

  	

  8/14/2012

  	

   

  

 

By your signature and the Company’s signature below,

you and the Company agree that these options are granted under and governed by

the terms and conditions of the Company’s Stock Plan as amended and the Option

Agreement, all of which are attached and made a part of this document.

 

	

  /s/ John A. Piontkowski

  	

   

  	

   

  	

  8/14/02

  	

   

  
	

  META Group, Inc.

  	

   

  	

  Date

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

  /s/ Dale Kutnick

  	

   

  	

   

  	

  8/14/02

  	

   

  
	

  Name:  Dale

  Kutnick

  	

   

  	

  Date

  

 

1

 

META Group, Inc., a Delaware Corporation (the

“Company”), hereby grants as of August 14, 2002 to you (the “Optionee”), an

option to purchase shares (the “Option Shares”) of its Common Stock, $.01 par

value per share (the “Common Stock”), at the price of $2.43  per share.  The quantity of Option Shares granted and

vesting schedule is defined on the cover page hereof.  The Option Shares are granted on the following terms and

conditions:

 

1.                                      Grant Under

Second Amended and Restated 1995 Stock Plan.  This option is granted pursuant to and is

governed by the Company’s Second Amended and Restated 1995 Stock Plan (the

“Plan”) and, unless the context otherwise requires, terms used herein shall

have the same meaning as in the Plan. 

Determinations made in connection with this option pursuant to the Plan

shall be governed by the Plan as it exists on this date.

 

2.                                      Grant as

Non-Qualified Option; Other Options.  This option shall be treated for federal income tax purposes as a

Non-Qualified Option (rather than an incentive stock option). This option is in

addition to any other options heretofore or hereafter granted to the Optionee

by the Company or any Related Corporation (as defined in the Plan), but a duplicate

original of this instrument shall not effect the grant of another option.

 

3.                                      Vesting

of Option if Business Relationship Continues; Acceleration on Certain Events.

 

(a)           Subject

to Section 3(b), if Optionee continues to serve the Company or any Related Corporation

in the capacity of an employee, officer, director or consultant (such service

is described herein as maintaining or being involved in a “Business

Relationship with the Company”) through the dates listed under the column

entitled “Full Vest” on the cover page hereof, Optionee may exercise this

option for the number of shares of Common Stock set forth opposite the

applicable date.

 

(b)           In

addition to the foregoing, but subject to Section 4, (i) if Optionee’s Business

Relationship with the Company and all Related Corporations is terminated (x) by

the Company without “Cause” (as defined in the Severance Agreement between the

Company and Optionee dated as of July 31, 2002 (the “Severance Agreement”)),

(y) in the event of Optionee’s death or Disability, or (z) on or after the date

that is 30 days from the Effective Date (as defined in the Severance Agreement)

and provided that no facts or circumstances that would constitute Cause then

exist, by Optionee for any reason, and, in each case, Optionee (or in

the event of Optionee’s death or Disability, the executor of Optionee’s estate

or Optionee’s guardian, as the case may be) executes the Release attached as Exhibit

D to the Severance Agreement (the “Release

 

2

 

Agreement”) and the revocation period of such Release Agreement has

expired without Optionee having exercised his revocation rights, or (ii) upon a

“Change of Control” (as defined below), then, in each case, this option shall

become exercisable for an additional number of Option Shares, if any, equal to

the total number of Option Shares with respect to which this option is not yet

exercisable at the time of any such termination or Change of Control, as the

case may be.

 

(c)           Notwithstanding

the foregoing, in accordance with and subject to the provisions of the Plan,

the Committee may, in its discretion, further accelerate the date that any

installment of this Option becomes exercisable.  The foregoing rights are cumulative and (subject to Sections 4 or

5 hereof if Optionee ceases to maintain or be involved in a Business

Relationship with the Company and all Related Corporations) may be exercised on

or before the date that is ten years from the date this option is granted.

 

(d)           “Change

of Control” shall mean:  (i) the sale of

the Company by merger, exchange, tender offer or similar transaction in which

the shareholders of the Company in their capacity as such no longer own a

majority of the outstanding equity securities of the Company (or its

successor); (ii) any sale of all or substantially all of the assets or capital

stock of the Company (other than in a spin-off or similar transaction) or (iii)

any other acquisition of the business of the Company, as determined by the

Board of Directors in its sole discretion.

 

4.                                      Termination

of Business Relationship.

 

(a)           Termination

Other Than for Cause: 

If Optionee’s Business Relationship with the Company and all Related

Corporations is terminated due to Optionee’s voluntary resignation of his

employment for any reason (other than a resignation specified in subsection (i)

of the next sentence), no further installments of this option shall become

exercisable, and this option shall terminate (and may no longer be exercised)

after the passage of 90 days from the date the Business Relationship ceases,

but in no event later than the scheduled expiration date.  If Optionee’s Business Relationship with the

Company and all Related Corporation’s is terminated (i) due to Optionee’s

voluntary resignation of his employment for any reason on or after the date

that is 30 days from the Effective Date and provided no facts or circumstances

that would constitute Cause then exist or (ii) by the Company without Cause, in

each case no further installments of this option shall become exercisable

(other than as specified in Section 3(b)), and this option shall terminate (and

may no longer be exercised) after the passage of two years from Optionee’s last

day of employment, but in no event later than the scheduled expiration date.  In the foregoing cases, Optionee’s only

rights hereunder shall be those that are properly exercised before the

termination of this option.

 

3

 

(b)           Termination

for Cause or Breach of Severance Agreement:  Notwithstanding the provisions of Sections 3

and 4, if Optionee’s Business Relationship with the Company and all Related

Corporations is terminated for Cause or Optionee breaches Section 1 of the

“Noncompetition Agreement” (as defined in the Severance Agreement) and/or materially

breaches his obligations under the Noncompetition Agreement (other than Section

1) or the Severance Agreement, this option shall terminate upon Optionee’s

receipt of written notice of such termination or breach and shall thereafter

not be exercisable to any extent whatsoever.

 

5.                                      Death;

Disability.

 

(a)           Death:  If Optionee dies while involved in a

Business Relationship with the Company or any Related Corporation, Optionee’s

estate, personal representative or beneficiary to whom this option has been

assigned pursuant to Section 9 hereof may exercise this option, to the extent

this option is otherwise exercisable on the date of Optionee’s death (taking

into account Section 3(b)), at any time within two years after the date of

death, but not later than the scheduled expiration date.

 

(b)           Disability:  If Optionee’s Business Relationship with the

Company and all Related Corporations is terminated by reason of his

“Disability” (as defined in the Plan), this option may be exercised, to the

extent otherwise exercisable on the date the Business Relationship was

terminated (taking into account Section 3(b)), at any time within two years

after such cessation, but not later than the scheduled expiration date.

 

(c)           Effect

of Termination: 

At the expiration of the two-year period provided in paragraph (a) or

(b) of this Section 5 or the scheduled expiration date, whichever is the

earlier, this option shall terminate (and shall no longer be exercisable) and

the only rights hereunder shall be those as to which the option was properly

exercised before such termination.

 

6.                                      Partial

Exercise.  This option

may be exercised in part at any time and from time to time within the above

limits, except that this option may not be exercised for a fraction of a share

unless such exercise is with respect to the final installment of stock subject

to this option and cash in lieu of a fractional share must be paid, in

accordance with Paragraph 13(G) of the Plan, to permit the Optionee to

exercise completely such final installment. 

Any fractional share with respect to which an installment of this option

cannot be exercised because of the limitation contained in the preceding

sentence shall remain subject to this option and shall be available for later

purchase by the Optionee in accordance with the terms hereof.

 

4

 

7.                                      Payment

of Price.

 

(a)                                  Form of

Payment:  The option

price shall be paid in the following manner:

 

(i)            in

cash or by check;

 

(ii)           subject

to paragraph 7(b) below, by delivery of shares of the Company’s Common

Stock having a fair market value (as determined by the Committee) equal as of

the date of exercise to the option price;

 

(iii)          by

delivery of an assignment satisfactory in form  and substance to the Company

of a sufficient amount of the proceeds from the sale of the Option Shares and

an instruction to the broker or selling agent to pay that amount to the

Company; or

 

(iv)          by

any combination of the foregoing.

 

(b)                                  Limitations

on Payment by Delivery of Common Stock:  If the Optionee delivers Common Stock held

by the Optionee (“Old Stock”) to the Company in full or partial payment of the

option price, and the Old Stock so delivered is subject to restrictions or

limitations imposed by agreement between the Optionee and the Company, an

equivalent number of Option Shares shall be subject to all restrictions and

limitations applicable to the Old Stock to the extent that the Optionee paid

for the Option Shares by delivery of Old Stock, in addition to any restrictions

or limitations imposed by this Agreement. 

Notwithstanding the foregoing, the Optionee may not pay any part of the

exercise price hereof by transferring Common Stock to the Company unless such

Common Stock has been owned by the Optionee free of any substantial risk of

forfeiture for at least six months.

 

8.                                      Method of

Exercising Option. 

Subject to the terms and conditions of this Agreement, this option may

be exercised by written notice to the Company, at the principal executive

office of the Company, or to such transfer agent as the Company shall

designate.  Such notice shall state the

election to exercise this option and the number of Option Shares for which it

is being exercised and shall be signed by the person or persons so exercising

this option.  Such notice shall be accompanied

by payment of the full purchase price of such shares, and the Company shall

deliver a certificate or certificates representing such shares as soon as

practicable after the notice shall be received.   Such certificate or certificates shall be registered in the name

of the person or persons so exercising this option (or, if this option is

exercised by the Optionee and if the Optionee shall so request in the notice

exercising this option, shall be registered in the name of the Optionee and

another person jointly, with right of survivorship).  If any person or persons other than the Optionee exercises this

option pursuant to Section 5 hereof, such notice shall be accompanied by

appropriate proof of the right of such person or persons to exercise this

option.

 

5

 

9.                                      Option

Not Transferable.  This

option is not transferable or assignable except by will or by the laws of

descent and distribution or pursuant to a valid domestic relations order.  Except as set forth in the preceding

sentence, during the Optionee’s lifetime, only the Optionee may exercise this

option.

 

10.                               No

Obligation to Exercise Option. 

The grant and acceptance of this option imposes no obligation on the

Optionee to exercise it.

 

11.                               No Obligation

to Continue Business Relationship.  Neither the Plan, this Agreement, nor the grant of this option

imposes any obligation on the Company or any Related Corporation to continue to

maintain a Business Relationship with the Optionee.

 

12.                               No Rights

as Stockholder until Exercise. 

The Optionee has no rights as a stockholder with respect to the Option

Shares until such time as the Optionee has exercised this option by delivering

a notice of exercise and has paid in full the purchase price for the number of

shares for which this option is to be so exercised in accordance with Section

8.  Except as is expressly provided in

the Plan with respect to certain changes in the capitalization of the Company,

no adjustment shall be made for dividends or similar rights for which the

record date is prior to such date of exercise.

 

13.                               Capital

Changes and Business Successions.  The Plan contains provisions covering the treatment of options in

a number of contingencies such as stock splits and mergers.  Provisions in the Plan for adjustment with

respect to stock subject to options and the related provisions with respect to

successors to the business of the Company are hereby made applicable hereunder

and are incorporated herein by reference.

 

14.                               Withholding

Taxes.  If the Company or

any Related Corporation in its discretion determines that it is obligated to

withhold any tax in connection with the exercise of this option, or in

connection with the transfer of, or the lapse of restrictions on, any Common

Stock or other property acquired pursuant to this option, the Optionee hereby

agrees that the Company or any Related Corporation may withhold from the

Optionee’s wages or other remuneration the appropriate amount of tax.  At the discretion of the Company or Related

Corporation, the amount required to be withheld may be withheld in cash from

such wages or other remuneration or in kind from the Common Stock or other

property otherwise deliverable to the Optionee on exercise of this option.  The Optionee further agrees that, if the

Company or Related Corporation does not withhold an amount from the Optionee’s

wages or other remuneration sufficient to satisfy the withholding obligation of

the Company or Related Corporation, the Optionee shall make reimbursement on

demand, in cash, for the amount underwithheld.

 

6

 

15.                               Lock-up

Agreement.  The Employee

agrees that in connection with an underwritten public offering of Common Stock,

upon the request of the Company or the principal underwriter managing such

public offering, this Option and the Option Shares may not be sold, offered for

sale or otherwise disposed of without the prior written consent of the Company

or such underwriter, as the case may be, for at least 270 days after the effectiveness

of the Registration Statement filed in connection with such offering, or such

longer period of time as the Board of Directors may determine if all of the

Company’s directors and officers agree to be similarly bound.  The lock-up agreement established pursuant

to this paragraph 15 shall have perpetual duration.

 

16.                               Arbitration.

 Any dispute, controversy, or claim

arising out of, in connection with, or relating to the performance of this

Agreement or its termination shall be settled by arbitration in the State of

Connecticut, pursuant to the rules then pertaining of the American Arbitration

Association.  Any award shall be final,

binding and conclusive upon the parties and a judgment rendered thereon may be

entered in any court having jurisdiction thereof.

 

17.                               Provision

of Documentation to Employee. 

By signing this Agreement the Optionee acknowledges receipt of a copy of

this Agreement and a copy of the Plan.

 

18.                               Miscellaneous.

 

(a) 

Notices:  All notices hereunder shall be in writing

and shall be deemed given when sent by certified or registered mail, postage

prepaid, return receipt requested, to the address set forth below.  The addresses for such notices may be

changed from time to time by written notice given in the manner provided for

herein.

 

(b) 

Entire

Agreement; Modification: 

This Agreement constitutes the entire agreement between the parties

relative to the subject matter hereof, and supersedes all proposals, written or

oral, and all other communications between the parties relating to the subject

matter of this Agreement.  This

Agreement may be modified, amended or rescinded only by a written agreement

executed by both parties.

 

(c) 

Severability:  The invalidity, illegality or

unenforceability of any provision of this Agreement shall in no way affect the

validity, legality or enforceability of any other provision.

 

(d) 

Successors

and Assigns: This Agreement shall be binding upon and inure to

the benefit of the parties hereto and their respective successors and assigns,

subject to the limitations set forth in Section 9 hereof.

 

7

 

(e)           Governing

Law:  This Agreement

shall be governed by and interpreted in accordance with the laws of the State

of Delaware, without giving effect to the principles of the conflicts of laws

thereof.  The preceding choice of law

provision shall apply to all claims, under any theory whatsoever, arising out

of the relationship of the parties contemplated herein.

 

8Exhibit 10.9

 

AMENDMENT No. 1

to

ASSET PURCHASE

AGREEMENT

 

This Amendment No. 1 (“Amendment”) is entered into as of July 31, 2002

(the “Amendment Effective Date”) between Rubin Systems Inc. as Seller, Howard

Rubin as Rubin and as Stockholder, and META Group, Inc. as Buyer. Terms not

otherwise defined in this Amendment shall have the same meaning ascribed to

them in the Asset Purchase Agreement dated October 27, 2000 (the “Agreement”).

 

Whereas, the Parties have mutually agreed, insofar as the payment due

March 31, 2002 under the Agreement, that — based on ambiguities in the

Agreement and difficulties in measuring and tracking performance in calculating

such amount — a negotiated 75% amount thereof is equitable, in return for

waiver by Seller and Rubin of breaches, if any, by Buyer up to the date of this

Amendment.

 

Therefore, for good and valuable consideration, the receipt and

sufficiency of which is hereby acknowledged, the Parties hereby agree to amend

the Agreement as follows:

 

GLOSSARY of

definitions of terms used in this Amendment and in Exhibit A (as amended) to

the Agreement (the “Revised Exhibit A”):

 

“CY” is defined as calendar

year.

 

“Consideration to be Paid” is

defined as the total potential amount in U.S. dollars that Rubin can earn in a

CY based on performance milestones achieved.

 

 “Direct Margin” is defined as a percent and is

calculated as: Revenues (in accordance with U.S. Generally Accepted Accounting Principles [“GAAP”] as determined

by Buyer’s CFO) as shown by

Buyer’s Lawson accounting software system, minus all direct expenses for staff

salary and travel & entertainment, outside consultant expenses, direct

event costs, royalty payments, commissions, draws, direct marketing and other

direct expenses, all divided by Revenues.

 

“MM Consulting

Direct Margin” is defined as a percent and calculated as: MM (as defined below)

Consulting Revenues (in accordance with GAAP as determined by Buyer’s CFO),

plus Pure Outside Consultant Revenue (as defined below), minus all direct

expenses for staff salary and travel & entertainment, outside consultant

expenses, direct event costs, royalty payments, commissions, draws, direct

marketing and other direct expenses, all divided by MM Consulting Revenues.

 

“Metricnet

Direct Margin” is defined as a percent and calculated as: Metricnet Revenues

(in accordance with GAAP as determined by Buyer’s CFO), minus all direct

expenses for staff salary and travel & entertainment, outside consultant

expenses, direct event costs, (royalty payments and commissions for CY 2002 only),

direct marketing and other direct expenses, all divided by Metricnet Revenues.

 

“Direct Margin Target” is

defined as a performance level percentage, set forth in Table 1 below in

Revised Exhibit A, used for determining that portion of Rubin’s CY Earn Out for

MM Consulting and Metricnet Direct Margins, which has been achieved.

 

1

 

“Earn Out” is defined as the amount (for the CY periods in Table 1

below) Buyer is to pay Rubin pursuant to the Agreement as amended, which

results from taking the Consideration to be Paid (in Table 1 below in Revised

Exhibit A) and adjusting it based on MM Net Billings Target Achieved, Direct

Margin achieved for MM (as defined below) Consulting and Metricnet, and Outside

Consultant Use, all as described in the Revised Exhibit A to the Agreement

dated contemporaneously with this Amendment No. 1 to the Agreement.

 

“GAAP” means United States Generally Accepted Accounting

Principles.

 

“META Measurements” (“MM”) is

defined as the Division — which is the

Business (as defined in the Agreement), after the Closing (as defined in the

Agreement) of the Agreement, acquired and operated by Buyer as a separate

division of Buyer (until on or about 1/1/02, after which there was no separate

division) — PLUS the following 3 META Group Consulting (“MGC”) services

reporting to Rubin: Sourcing (“SOP”),

Process and Metrics (“PMP”), and Operations and Benchmarking (“OEP”).

Note: For purposes of

clarification, MM includes performance results from Metricnet publications and

services. Note: MM product codes

and staff are identified in Schedule I and Schedule II, respectively.

 

“Metricnet” is defined as those

publications and services product codes specified in Schedule 1 to the

Agreement.

 

“Net Billings” is defined as

amounts invoiced by Buyer, for domestic U.S. consulting, domestic U.S. products

and domestic U.S. services only, through Buyer’s Lawson accounting software

system and sent to Buyer’s clients for payment by clients to Buyer, reduced by

any invoice change & cancellation forms (“ICCFs”) processed by Buyer; and

shall represent a valid receivable on Buyer’s balance sheet. For purposes of

this Amendment, valid Net Billings are those net billings generated from

product codes only listed in Schedule 1.

 

“Net Billings Target Achieved”

is defined as a performance level percentage, used for determining that portion

of Rubin’s CY Earn Out for Net Billings, which has been achieved.  This is calculated as Net Billings achieved,

divided by Net Billings Target (defined below).

 

“Net Billings Target” is

defined as a CY performance level, used for determining that portion of Rubin’s

CY Earn Out.  Specific Targets are set

forth in Table 1 below.

 

“Outside Consultant(s)” is

defined as any non-Buyer personnel contracted directly by Rubin and/or by Buyer

for or on behalf of Rubin to fulfill on any MM work.

 

“Outside Consultant Use” is

defined as a percent and calculated as total MM Outside Consultant expenses for

a CY Earn Out period, divided by total MM staffing expense for that CY Earn Out

period.

 

“Pure Outside Consultant

Revenue” is defined as Revenue generated through consulting work fulfilled

solely by  Outside Consultants minus all Buyer expenses (including but

not limited to all direct and indirect expenses, e.g., sales commissions,

marketing costs, and general and administrative costs); such consulting work is

treated as Net Billings for all calculations of Net Billings Target Achieved,

and is treated as 100% MM Consulting Direct Margin for all calculations of Direct

Margin Target achieved. Buyer’s CFO and Rubin need to mutually agree before

Revenue can be classified as “Pure Outside Consultant Revenue”.

 

“Revenue” is defined as amounts (as

shown by Buyer’s Lawson accounting software system) invoiced by Buyer, for domestic U.S.

consulting, domestic U.S. products and domestic U.S. services only, that Buyer has recognized as income on

Buyer’s profit & loss statement. 

Revenue,

 

2

 

unlike Net Billings, is recognized when or as

the services have been fulfilled or products have been delivered to Buyer

client(s) in accordance with GAAP as determined by Buyer’s CFO.

 

“Sales CY” is defined as the

12-month period from February 1 of one CY to January 31 of the following CY, subject

to modification of such start and end dates by Company’s management (including

alteration of the period being 12 months).

 

1. Section 2 (c) (i) is deleted

and replaced with the following:

 

“Purchase Price.  Buyer agrees to pay Seller the following revised

consideration for the Acquired Assets:

 

(i)            Cash and Buyer

Shares.  Subject to the achievement

of certain revenue and profitability milestones described below and in Exhibit

A (sometimes referred to as Payment Milestone Exhibit A), and in Exhibit A

as amended and attached to this Amendment No. 1 (“Revised Exhibit A”), Buyer

shall pay Seller Four Million Nine Hundred and Fifteen Thousand Dollars

($4,915,000, which is the $5,000,000 sum originally agreed to by the Parties in

the Agreement as the cash portion, less $85,000 which the Parties agreed to in

September 2001) in cash, and issue to Seller shares of Buyer’s common stock,

$0.01 par value per share (“Buyer Common Stock”), having an aggregate

value equal to Two Million, Five Hundred Thousand Dollars ($2,500,000) (the “Buyer Shares”)

as follows:” [the next Subsections A through C remain unchanged.]

 

2. Section 2 (c) (i) (D) is

deleted and replaced with the following:

 

“Consideration Paid on September 30, 2001.  Buyer paid Seller on or about September 30,

2001 the sum of Five Hundred Forty Thousand Dollars ($540,000) in cash by wire

transfer. The Parties agree that such wire transfer payment was a mutually

agreed upon amount in full satisfaction of earnout for the first half of the

calendar year 2001.”

 

Further, the Parties agree that

such wire transfer payment was reduced by $25,000 for the early disbursement by

Buyer to Rubin, which took place prior to September 30, 2001.

 

3. Section 2 (c) (i) (E) is

deleted and replaced with the following:

 

“Consideration to be Paid on the Amendment Effective Date.

Buyer hereby agrees with Seller that Buyer has, prior to the Amendment

Effective Date, paid Rubin Four Hundred Sixty Eight Thousand Seven Hundred

Fifty Dollars ($468,750) in cash by wire transfer to an account at a bank

identified by Seller to Buyer, and will (x) pay Rubin on the Amendment

Effective Date One Hundred Thousand Dollars ($100,000) in cash by wire transfer

or delivery of other immediately available funds to one or more accounts at

bank(s) identified by Seller to Buyer in writing, and  (y) issue to Seller, as soon as reasonably practicable after the

Amendment Effective Date and prior to or including July 31, 2002, a number of

Buyer Shares equal to Three Hundred Sixty Eight Thousand Seven Hundred Fifty

Dollars ($368,750) divided by the Average Price. Note: Upon mutual agreement of

Buyer and Rubin in writing (where Email is an acceptable form of writing), the

dollar amount of Buyer Shares in (y) above may be paid by Buyer to Rubin in

lieu of Buyer Shares. Buyer shall

undertake to use commercially

reasonable efforts to file with the Securities and Exchange Commission

(“SEC”) a registration statement on Form S-3 (or to amend an existing

registration statement) (the “Registration Statement”) in order to register

said Buyer Shares issued to Buyer on the Amendment Effective Date, such filing

to occur within ninety (90) days of the

Amendment Effective Date hereof; and for Buyer Shares, if any, to be issued in

CYs 2003 and thereafter, such filing is intended to occur within ninety (90)

days of the payment of the Consideration to be Paid. Rubin and Buyer’s

representative appointed by Buyer’s CFO (currently, Matthew Jarboe) agree to

 

3

 

review Net

Billings and Direct Margin performance on a monthly basis from the Amendment

Effective Date going forward.”

 

4. Section 2 (c) (i) (F) is

deleted and replaced with the following:

 

“Consideration to be Paid on March 31, 2003.

If, but only if, (i) Rubin continues to be employed by Buyer or any of its

Affiliates, and (ii) Rubin achieves the Net Billings Target and Direct Margin

Targets as specified in Revised Exhibit A for calendar year 2002, Buyer shall

(x) pay Seller on March 31, 2003 Five Hundred Forty One Thousand Six Hundred

Sixty Seven Dollars ($541,667.00) in cash by wire transfer or delivery of other

immediately available funds to one or more accounts at bank(s) identified by

Seller to Buyer in writing, and (y) issue to Seller on March 31, 2003 a number

of Buyer Shares equal to Two Hundred Seventy Thousand Eight Hundred Thirty

Three Dollars ($270,833.00) divided by the Average Price. Note: Upon mutual

agreement of Buyer and Rubin (where Email is an acceptable form of writing),

the dollar amount of Buyer Shares in (y) above may be paid by Buyer to Rubin in

lieu of Buyer Shares. Buyer and Rubin agree that year to date April 2002 total

MM, MM Consulting and Metricnet Net Billings and Direct Margins have been

accurately identified and agreed to. “

 

5. Section 2 (c) (i) (G) is deleted

and replaced with the following:

 

“Consideration to be Paid on March 31, 2004.  If, but only if, (i) Rubin continues to be

employed by Buyer or any of its Affiliates, and (ii) Rubin achieves the Net

Billings Target and Direct Margin Targets as specified in Revised Exhibit A for

calendar year 2003, Buyer shall (x) pay to Seller on March 31, 2004 Five

Hundred Forty One Thousand Six Hundred Sixty Seven Dollars ($541,667.00) in

cash by wire transfer or delivery of other immediately available funds to one or

more accounts at bank(s) identified by Seller to Buyer in writing, and (y)

issue to Seller on March 31, 2004 a number of Buyer Shares equal to Two Hundred

Seventy Thousand Eight Hundred Thirty Three Dollars ($270,833.00) divided by

the Average Price. Note: Upon mutual agreement of Buyer and Rubin (where Email

is an acceptable form of writing), the dollar amount of Buyer Shares in (y)

above may be paid by Buyer to Rubin in lieu of Buyer Shares.”

 

6. Section 2 (c) (i) (H) is

deleted and replaced with the following:

 

“Consideration to be Paid on March 31, 2005.  If, but only if, (i) Rubin continues to be

employed by Buyer or any of its Affiliates, and (ii) Rubin achieves the Net

Billings Target and Direct Margin Targets as specified in Revised Exhibit A for

calendar year 2004, Buyer shall (x) pay to Seller on March 31, 2005 Five

Hundred Forty One Thousand Six Hundred Sixty Seven Dollars ($541,667.00) in

cash by wire transfer or delivery of other immediately available funds to one

or more accounts at bank(s) identified by Seller to Buyer in writing, and (y)

issue to Seller on March 31, 2005 a number of Buyer Shares equal to Two Hundred

Seventy Thousand Eight Hundred Thirty Three Dollars ($270,833.00) divided by

the Average Price. Note: Upon mutual agreement of Buyer and Rubin (where Email

is an acceptable form of writing), the dollar amount of Buyer Shares in (y)

above may be paid by Buyer to Rubin in lieu of Buyer Shares.”

 

7. Section 2 (c) (i) (I) is

deleted and replaced with the following:

 

“Consideration to be Paid on March 31, 2006.  If, but only if, (i) Rubin continues to be

employed by the Buyer or any of its Affiliates, and (ii) Rubin achieves the Net

Billings Target and Direct Margin Target as specified in Revised Exhibit A for

calendar year 2005, Buyer shall (x) pay Seller on March 31, 2006 Five Hundred

Forty One Thousand Six Hundred Sixty Seven Dollars ($541,667.00) in cash by

wire transfer or delivery of

 

4

 

other

immediately available funds to one or more accounts at bank(s) identified by

Seller to Buyer in writing, and (y) issue to Seller on March 31, 2006 a number

of Buyer Shares equal to Two Hundred Seventy Thousand Eight Hundred Thirty

Three Dollars ($270,833.00) divided by the Average Price.  Note: Upon mutual agreement of Buyer and

Rubin (where Email is an acceptable form of writing), the dollar amount of

Buyer Shares in (y) above may be paid by Buyer to Rubin in lieu of Buyer

Shares.”

 

8. A new Section 2 (c) (i) (J)

is inserted, after Section 2 (c) (i) (I), which shall read as follows:

 

“Consideration to be Paid on March 31, 2007.  If, but only if, (i) Rubin continues to be

employed by the Buyer or any of its Affiliates, and (ii) Rubin achieves the Net

Billings Target and Direct Margin Target as specified in Revised Exhibit A for

calendar year 2006, Buyer shall (x) pay Seller on March 31, 2007 Five Hundred

Forty One Thousand Six Hundred Sixty Seven Dollars ($541,667.00) in cash by

wire transfer or delivery of other immediately available funds to one or more

accounts at bank(s) identified by Seller to Buyer in writing, and (y) issue to

Seller on March 31, 2007 a number of Buyer Shares equal to Two Hundred Seventy

Thousand Eight Hundred Thirty Three Dollars ($270,833.00) divided by the

Average Price. Note: Upon mutual agreement of Buyer and Rubin (where Email is

an acceptable form of writing), the dollar amount of Buyer Shares in (y) above

may be paid by Buyer to Rubin in lieu of Buyer Shares.”

 

9. Section 2 (c) (ii) is

deleted in its entirety, and replaced with the following:

 

“Rubin agrees to forego the additional

compensation in the form of publication sales commissions referred to as

MetricNet which would have been due Rubin for the months of April, May, June of

2002 and that portion of July 2002 up to the Amendment Effective Date.”

 

10. Section 2 (c) (iii) is

deleted in its entirety.

 

11. A new Section 10 (q) is

inserted, after Section 10 (p), which shall read as follows:

 

“(q) Status of Outside Consultant. At

the beginning of each new calendar year, Rubin will be responsible to deliver

to Buyer’s Human Resource Department confirmation of Outside Consultant status

for all outside Metricnet and consultants privately contracted by Rubin or

Buyer for MM work, and for Buyer’s work. In case of a workers compensation

dispute, Rubin agrees to reimburse Buyer for any workers compensation

litigation and expenses arising or attributable to the use of such outside

consultants. If Outside Consultants are re-classified as employees by the U.S.

Department of Labor, Rubin will bear full financial responsibility for said

re-classification and any cost or penalties incurred. For purposes of this

Agreement, Outside Consultants are defined as any non-Buyer personnel

contracted directly by Rubin to fulfill on any MM work. At the Amendment

Effective Date Rubin shall deliver to Buyer’s Human Resource Department  confirmation of CY2002  Outside Consultant status for all outside

Metricnet and consultants privately contracted by Rubin or Buyer for MM work,

and for Buyer’s work.”

 

12. Section 6 (e) (i) first two

lines are deleted and replaced with the following:

 

“For the

period commencing on the date hereof and ending on December 31, 2005 (the

“Noncompetition Period”):”

 

13. Section 6 (k) (i) is

deleted and replaced with the following:

 

“The Company shall use

commercially reasonable efforts to file with the Securities and Exchange

Commission (“SEC”) a registration statement on Form S-3 (or to amend an

existing registration statement) (the “Registration Statement”) in order to

register the

 

5

 

Buyer Shares issued to the

Seller on the Closing Date, and on March 31, 2001 and on the date hereof (the

“Registrable Shares”). Notwithstanding any other provision hereof, (x) the

rights granted by the Buyer pursuant to the preceding sentence shall terminate

on the earlier of (i) June 30, 2003, or (ii) the date on which all Registrable

Shares shall have been transferred pursuant to the Registration Statement, or

to an exemption from registration or otherwise, and (y) the term “Registrable

Shares” shall not include (and the Buyer shall have no obligation to continue

to register) any Buyer Shares that may be sold without limitation pursuant to

Rule 144 under the U.S. Securities Act of 1933, as amended, or any successor

rule or regulation.

 

Buyer complied

with its responsibility to use commercially reasonable efforts to file with the

Securities and Exchange Commission (“SEC”) a registration statement on Form S-3

(or to amend an existing registration statement) (the “Registration Statement”)

in order to register the Buyer Shares issued to Buyer on the Closing Date and

issued to Buyer on or prior to March 31, 2001, as follows:

 

On December 18, 2001, the Company filed with

the SEC a Registration Statement on Form S-3. On January 15, 2002, the SEC

responded with a Comment Letter to the Company regarding the S-3. The Company filed its response to the Comment

Letter on February 8, 2002. Subsequently, the Company received notification

from the SEC that, as filed, the S-3 is not permitted to become effective.

Accordingly, the Company will use commercially reasonable efforts to amend the

S-3 to allow it to be approved by the SEC and become effective.

 

Subject to securities laws restrictions on sales by affiliates, the

shares of Buyer Common Stock underlying the Options shall be covered by a

Registration Statement on Form S-8.”

 

14.  Seller, for himself

personally and for Rubin Systems Inc., and Stockholder hereby waive, release

and hold Buyer harmless from and against: (a) any breaches of any provision(s)

of the Agreement committed or alleged to have been committed by Buyer from the

Closing Date to the date of this Amendment, including but not limited to

failure to file the registration statement on Form S-3 with the Securities and

Exchange Commission as set forth in Section 6 (k) (i) of the Agreement in a

timely manner; and (b) and claims of any kind including but not limited to

damages or losses of any kind related thereto for such period. The Parties

agree that: (a) from and after the date of this Amendment, only breaches which

have a financial impact upon Seller in excess of $50,000 may be cited by

Seller; (b) Buyer shall continue its good faith efforts to complete the

registration statement on Form S-3 (including the Buyer Shares issued at the

Closing and at March 31, 2001) which is pending before the Securities and

Exchange Commission as of the date of this Amendment; and (c) for Buyer Shares

issued to Seller by Buyer under this Agreement after March 31, 2001, Buyer

shall use commercially reasonable efforts to register the Buyer Shares within

one hundred twenty (120) days following issuance by Seller to Buyer; and (d)

any items or issues that may arise where interpretation under this Agreement is

deemed necessary by the Parties shall be submitted to the Compensation

Committee of the Board of Directors of Buyer.

 

15. In Section 9 (a) (ii) and

(iii), the time period “15” days is replaced with “60”.

 

16. In Section 10 (h), add the

following for an additional copy to Buyer:

 

and Attention: General Counsel

META Group, Inc.

208 Harbor Drive

Stamford,

CT  06912

Fax:  (203) 388-2545”.

 

6

 

17. The parties agree (a) that ANNEX I in the form attached to the

Instrument of Assumption, which in turn is attached to the Agreement, is no

longer accurate as of the date hereof; and (b) that they will mutually agree on

modification thereto from time to time as necessary.

 

18. The parties mutually agree to cooperate with each other in good faith

to resolve any differences that may arise between them in the course of

implementing the Agreement as amended herein.

 

19. Exhibit A to the Agreement is superseded as of the date of this

Amendment by Revised Exhibit A attached hereto and incorporated herein by

reference. All references in the Agreement to Exhibit A hereafter shall be

deemed to be to Revised Exhibit A unless otherwise specified.

 

20. In the event of any

inconsistency between the terms of this Amendment and the terms of the

Agreement, this Amendment shall take precedence.

 

21. Except as expressly amended

as set forth herein, the Agreement shall remain in full force and effect in

accordance with its terms.

 

22. This Amendment may be

executed in several counterparts, all of which taken together shall constitute

one single agreement of the parties.

 

IN WITNESS WHEREOF, the parties

have caused this Amendment to be executed by their duly authorized

representatives as of the date first written above.

 

	

   

  	

  BUYER:

  	

   

  
	

   

  	

  META GROUP, INC.

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ John A. Piontkowski

  	

   

  
	

   

  	

  Name: 

  	

  John A. Piontkowski

  	

   

  
	

   

  	

  Title: 

  	

  Chief Financial Officer

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  SELLER:

  
	

   

  	

  RUBIN SYSTEMS INC.

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Howard Rubin

  	

   

  
	

   

  	

  Name:

  	

  Howard Rubin

  	

   

  
	

   

  	

  Title:

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  HOWARD RUBIN and STOCKHOLDER:

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Howard Rubin

  	

   

  
	

   

  	

   

  	

  Name: Howard Rubin

  	

   

  
										

 

7

 

SCHEDULE I

 

MM Product Codes

 

	

  Product Type

  	

   

  	

  Product

  Code

  	

   

  	

  Product Description

  	

   

  	

  META

  Measurement

  P&L

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Service

  	

   

  	

  MWB

  	

   

  	

  Worldwide IT Trends & Benchmark Report 2001:

  Premium Edition

  	

   

  	

  Rubin

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Service

  	

   

  	

  MW2

  	

   

  	

  Worldwide IT Trends & Benchmark Report 2002,

  Premium Edition

  	

   

  	

  Rubin

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Consulting

  	

   

  	

  OEP

  	

   

  	

  Operations Excellence (Operation Practice)

  	

   

  	

  MGC-OEP

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Consulting

  	

   

  	

  RUB

  	

   

  	

  Howard Rubin Consulting (Rubin Retainer)

  	

   

  	

  Rubin

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Consulting

  	

   

  	

  SOP

  	

   

  	

  Sourcing (Performance Benchmarking Practice)

  	

   

  	

  MGC-SOP

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Consulting

  	

   

  	

  PMP

  	

   

  	

  Process and Metrics

  	

   

  	

  MGC-PMP

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Publication

  	

   

  	

  WB0

  	

   

  	

  2000 Worldwide Benchmark Report

  	

   

  	

  Rubin

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Publication

  	

   

  	

  WB1

  	

   

  	

  Worldwide IT Trends & Benchmark Report, 2001

  	

   

  	

  Rubin

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Publication

  	

   

  	

  WB2

  	

   

  	

  Worldwide IT Trends & Benchmark Report 2002

  	

   

  	

  Rubin

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Publication

  	

   

  	

  WW5

  	

   

  	

  The Worldwide IT Trends & Benchmark Report:

  European Analysis

  	

   

  	

  Rubin

  	

   

  

 

 

NOTE: Changes to this list of

product codes will be made periodically in writing (including email) as needed

and as determined by Buyer’s CFO, or by an individual appointed by META’s CFO,

with the agreement of Rubin.

 

Buyer and

Rubin agree that Buyer shall determine whether new products, if any, developed

by, or existing products subsumed by, Rubin are to be classified for purposes

of accounting, Earn Out calculation, Direct Margin Targets and performance

evaluation, as either MM Consulting or Metricnet publications.

 

8

 

SCHEDULE II

 

MM staff personnel

 

	

  MGC - Metric Net:

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

  Employee Name

  	

   

  	

  Job Title

  	

   

  
	

  Linda Tracy

  	

   

  	

  Senior

  Consultant

  	

   

  
	

  Kimberly Cusack

  	

   

  	

  Program

  Manager, Metric Net Operations  (support staff)

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

  Metric Net - Outside Consultants:

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

  Employee Name

  	

   

  	

  Job Title

  	

   

  
	

  Susan Iventosch

  	

   

  	

  Contractor

  	

   

  
	

  Margaret Johnson

  	

   

  	

  Contractor

  	

   

  
	

  Jed Rubin

  	

   

  	

  Contractor

  	

   

  
	

  Eddie Wallace

  	

   

  	

  Contractor

  	

   

  
	

  Rosemary Washburn

  	

   

  	

  Contractor

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

  MGC - Operations Practice

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

  Employee Name

  	

   

  	

  Job Title

  	

   

  
	

  Shafqat Azim

  	

   

  	

  Sr. VP &

  Practice Leader

  	

   

  
	

  Robert

  Donnellan

  	

   

  	

  Vice President

  	

   

  
	

  Andre Gravel

  	

   

  	

  Director

  	

   

  
	

  Carlean Moser

  	

   

  	

  Director

  	

   

  
	

  Leonard Neely

  	

   

  	

  Director

  	

   

  
	

  Stephanie Fonseca

  	

   

  	

  Manager

  	

   

  
	

  James McPhee

  	

   

  	

  Manager

  	

   

  
	

  Clinton Olive

  	

   

  	

  Senior

  Consultant

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

  MGC - Performance Benchmarking Practice:

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

  Employee Name

  	

   

  	

  Job Title

  	

   

  
	

  Christopher  Engle

  	

   

  	

  Sr. VP &

  Practice Leader

  	

   

  
	

  Mark Levin

  	

   

  	

  Vice

  President

  	

   

  
	

  Robert

  Ouellette

  	

   

  	

  Vice President

  	

   

  
	

  David Perara

  	

   

  	

  Vice

  President

  	

   

  
	

  Jeff Rumburg

  	

   

  	

  Vice

  President

  	

   

  
	

  Ralph Baxter

  	

   

  	

  Director

  	

   

  
	

  Robert Fodor

  	

   

  	

  Director

  	

   

  
	

  Robert Kelley

  	

   

  	

  Director

  	

   

  
	

  Christopher Pattacini

  	

   

  	

  Director

  	

   

  
	

  Douglas Plotkin

  	

   

  	

  Director

  	

   

  
	

  Michael Shott

  	

   

  	

  Director

  	

   

  
	

  Adam Strichman

  	

   

  	

  Director

  	

   

  
	

  Gary Yeck

  	

   

  	

  Director

  	

   

  
	

  David McDonald

  	

   

  	

  Manager

  	

   

  
	

  Lloyd Spann

  	

   

  	

  Manager

  	

   

  
	

  Shelby Speno

  	

   

  	

  Manager

  	

   

  
	

  Adrianne Gershberg

  	

   

  	

  Admin

  	

   

  

 

NOTE: Changes to this list of

MM staff personnel will be made periodically in writing (including email) as

needed and as determined by Buyer’s CFO, or by an individual appointed by

META’s CFO, with the agreement of Rubin.

 

9

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