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Exhibit 4.2

BY-LAWS

OF

FAIR ISAAC CORPORATION

(as of April 1, 2004)

ARTICLE I

Offices

     1.1 Registered Office. The registered office shall be in the City of
Wilmington, County of New Castle, State of Delaware.

     1.2 Additional Offices. The Corporation may also have offices at such
other places both within and without the State of Delaware as the Board of
Directors may from time to time determine or the business of the Corporation
may require.

ARTICLE II

Stockholders

     2.1 Annual Meetings. An annual meeting of stockholders shall be held for
the election of directors and scheduled for the first Tuesday of February of
each year, at 10:00 A.M. or, should such day fall upon a legal holiday, at the
same time on the next business day thereafter that is not a legal holiday, or
at such other date and time as may be designated by the Board of Directors from
time to time. The annual meeting of stockholders may be held at such place
either within or without the State of Delaware, or by means of remote
communication, as may be designated by the Board of Directors from time to
time; in the absence of any such designation, the annual meeting shall be held
at the principal executive offices of the Corporation. At such meeting, the
stockholders shall elect directors and transact such other business as may be
properly brought before the meeting.

     To be properly brought before the annual meeting, business must be either
(a) specified in the notice of meeting (or any supplement thereto) given by or
at the direction of the Board of Directors, (b) otherwise properly brought
before the meeting by or at the direction of the Board of Directors, or (c)
otherwise properly brought before the meeting by a stockholder of record. In
addition to any other applicable requirements, for business to be properly
brought before the annual meeting by a stockholder, the stockholder must have
given timely notice thereof in writing to the Secretary of the Corporation. To
be timely, a stockholder’s notice must be delivered by a nationally recognized
courier service or mailed by first class United States mail, postage or
delivery charges prepaid, and received at the principal executive offices of
the Corporation, addressed to the attention of the Secretary of the
Corporation, not less than 60 days nor more than 90 days prior to the scheduled
date of the meeting (regardless of any postponements, deferrals or adjournments
of that meeting to a later date); provided, however, that in the event that the
annual meeting is held at a date other than the first Tuesday of February, or
the next business day if such Tuesday is a legal holiday and less than 70 days’
notice or prior public disclosure of the date of the scheduled meeting is given
or made to stockholders, notice by the stockholder to be timely must be so
received not later than the earlier of (a) the close of business on the 10th
day following the day on which such notice of the date of the scheduled annual
meeting was mailed or such public disclosure was made, whichever first occurs,
and (b) two days prior to the date of the scheduled meeting.

 

 

A stockholder’s notice to the Secretary shall set forth as to each matter
the stockholder proposes to bring before the annual meeting (i) a brief
description of the business desired to be brought before the annual meeting,
(ii) the name and record address of the stockholder proposing such business,
(iii) the class, series and number of shares of the Corporation that are owned
beneficially by the stockholder, and (iv) any material interest of the
stockholder in such business. Notwithstanding anything in these by-laws to the
contrary, no business shall be conducted at the annual meeting except in
accordance with the procedures set forth in this Section 2.1; provided,
however, that nothing in this Section 2.1 shall be deemed to preclude
discussion by any stockholder of any business properly brought before the
annual meeting.

     The Chairman of the Board of Directors (or such other person presiding at
the meeting in accordance with Section 2.7 of these by-laws) shall, if the
facts warrant, determine and declare to the meeting that business was not
properly brought before the meeting in accordance with the provisions of this
Section 2.1, and if he or she should so determine, he or she shall so declare
to the meeting and any such business not properly brought before the meeting
shall not be transacted.

     2.2 Special Meetings. Special meetings of stockholders may be called at
any time only by the Chairman of the Board of Directors, if any, the Vice
Chairman of the Board of Directors, if any, the President or the Board of
Directors, to be held at such date, time and place (if any) as may be stated in
the notice of the meeting. Business transacted at any special meeting of
stockholders shall be limited to the purposes stated in the notice of the
meeting.

     2.3 Notice of Meetings. Whenever stockholders are required or permitted
to take any action at a meeting, notice of the meeting shall be given in
accordance with Section 2.4 which shall state the place (if any), date and hour
of the meeting, the means of remote communication (if any) by which
stockholders and proxyholders may be deemed to be present in person and vote at
such meeting and, in the case of a special meeting, the purpose or purposes for
which the meeting is called. Unless otherwise provided by law, the notice of
any meeting shall be given not less than ten nor more than sixty days before
the date of the meeting to each stockholder entitled to vote at such meeting.

     2.4 Manner Of Giving Notice. Notice of any meeting of stockholders shall
be given personally, by mail, by electronic transmission or by other written
communication, addressed to the stockholder at the address, number, electronic
mail address or other location of that stockholder appearing on the books of
the Corporation or given by the stockholder to the Corporation for the purpose
of notice. If no such address, number, email address or other location appears
on the Corporation’s books or is given, notice shall be deemed to have been
given if sent to that stockholder by mail or telegraphic or other written
communication to the Corporation’s principal executive office, or if published
at least once in a newspaper of general circulation in the county where that
office is located. Notice shall be deemed to have been given at the time when
delivered personally or deposited in the mail or, if sent by electronic
transmission, as follows: (i) if by facsimile telecommunication, when directed
to a number at which the stockholder has consented to receive notice, (ii) if
by electronic mail, when directed to an electronic mail address at which the
stockholder has consented to receive notice, (iii) if by a posting on an
electronic network together with separate notice to the stockholder of such
specific posting, upon the later of (a) such posting and (b) the giving of such
separate notice, and (iv) if by any other form of electronic transmission, when
directed to the stockholder.

     An affidavit of mailing or of electronic transmission of any notice or
report in accordance with the provisions of this Section 2.4, executed by the
Secretary, Assistant Secretary or any transfer agent or other agent, shall be
prima facie evidence of the giving of the notice.

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     2.5 Adjournments. Any meeting of stockholders, annual or special, may
adjourn from time to time to reconvene at the same or some other place (if
any), and notice need not be given of any such adjourned meeting if the time
and place (if any) thereof are announced at the meeting at which the
adjournment is taken. At the adjourned meeting the Corporation may transact
any business which might have been transacted at the original meeting. If the
adjournment is for more than thirty days, or if after the adjournment a new
record date is fixed for the adjourned meeting, a notice of the adjourned
meeting shall be given to each stockholder of record entitled to vote at the
meeting.

     2.6 Quorum. At each meeting of stockholders, except where otherwise
provided by law or the certificate of incorporation or these by-laws, the
holders of a majority of the outstanding shares of each class of stock entitled
to vote at the meeting, present in person or represented by proxy, shall
constitute a quorum. For purposes of the foregoing, two or more classes or
series of stock shall be considered a single class if the holders thereof are
entitled to vote together as a single class at the meeting. In the absence of
a quorum the stockholders so present may, by majority vote, adjourn the meeting
from time to time in the manner provided by Section 2.5 of these by-laws until
a quorum shall attend. Shares of its own capital stock belonging on the record
date for the meeting to the Corporation or to another corporation, if a
majority of the shares entitled to vote in the election of directors of such
other corporation is held, directly or indirectly, by the Corporation, shall
neither be entitled to vote nor be counted for quorum purposes; provided,
however, that the foregoing shall not limit the right of the Corporation to
vote stock, including but not limited to its own stock, held by it in a
fiduciary capacity.

     If authorized by the Board of Directors in its sole discretion, and
subject to such guidelines and procedures as the Board of Directors may adopt,
stockholders and proxyholders not physically present at a meeting of
stockholders may, by means of remote communication:

     (1) participate in a meeting of stockholders; and

     (2) be deemed present in person and vote at a meeting of
stockholders whether such meeting is to be held at a designated place or
solely by means of remote communication, provided that (i) the
Corporation shall implement reasonable measures to verify that each
person deemed present and permitted to vote at the meeting by means of
remote communication is a stockholder or proxyholder, (ii) the
Corporation shall implement reasonable measures to provide such
stockholders and proxyholders a reasonable opportunity to participate in
the meeting and to vote on matters submitted to the stockholders,
including an opportunity to read or hear the proceedings of the meeting
substantially concurrently with such proceedings, and (iii) if any
stockholder or proxyholder votes or takes other action at the meeting by
means of remote communication, a record of such vote or other action
shall be maintained by the Corporation.

     2.7 Organization. Meetings of stockholders shall be presided over by the
Chairman of the Board of Directors, if any, or in the absence of the Chairman
of the Board of Directors by the President, or in the absence of the President
by a Vice President, or in the absence of the foregoing persons by a chairman
designated by the Board of Directors, or in the absence of such designation by
a chairman chosen at the meeting. The Secretary shall act as secretary of the
meeting, or in the absence of the Secretary by an Assistant Secretary, or in
their absence the chairman of the meeting may appoint any person to act as
secretary of the meeting.

     2.8 Voting; Proxies. Unless otherwise provided in the certificate of
incorporation, each stockholder entitled to vote at any meeting of stockholders
shall be entitled to one vote for each share of stock held by such stockholder
which has voting power upon the matter in question. Each stockholder entitled
to vote at a meeting of stockholders or to express consent or dissent to
corporate action in writing

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without a meeting may authorize another person or persons to act for such
stockholder by proxy, but no such proxy shall be voted or acted upon after
three years from its date, unless the proxy provides for a longer period. A
duly executed proxy shall be irrevocable if it states that it is irrevocable
and if, and only as long as, it is coupled with an interest sufficient in law
to support an irrevocable power. A stockholder may revoke any proxy which is
not irrevocable by attending the meeting, whether in person or by other means
provided for in these by-laws or the certificate of incorporation, and voting
or by filing an instrument in writing revoking the proxy or another duly
executed proxy bearing a later date with the Secretary of the Corporation.
Voting at meetings of stockholders need not be by written ballot and need not
be conducted by inspectors unless the holders of a majority of the outstanding
shares of all classes of stock entitled to vote thereon present in person or by
proxy at such meeting shall so determine. If authorized by the Board of
Directors, votes may be submitted by electronic transmission, provided that any
such electronic transmission must either set forth or be submitted with
information from which it can be determined that the electronic transmission
was authorized by the stockholder or proxyholder. At all meetings of
stockholders for the election of directors a plurality of the votes cast shall
be sufficient to elect. With respect to other matters, unless otherwise
provided by law or by the certificate of incorporation or these by-laws, the
affirmative vote of the holders of a majority of the shares of all classes of
stock present in person or represented by proxy at the meeting and entitled to
vote on the subject matter shall be the act of the stockholders, provided that
(except as otherwise required by law or by the certificate of incorporation)
the Board of Directors may require a larger vote upon any such matter. Where a
separate vote by class is required, the affirmative vote of the holders of a
majority of the shares of each class present in person or represented by proxy
at the meeting shall be the act of such class, except as otherwise provided by
law or by the certificate of incorporation or these by-laws.

     2.9 Fixing Date for Determination of Stockholders of Record. In order
that the Corporation may determine the stockholders entitled to notice of or to
vote at any meeting of stockholders or any adjournment thereof, or to express
consent to corporate action in writing without a meeting, or entitled to
receive payment of any dividend or other distribution or allotment of any
rights, or entitled to exercise any rights in respect of any change, conversion
or exchange of stock or for the purpose of any other lawful action, the Board
of Directors may fix, in advance, a record date, which shall not be more than
sixty nor less than ten days before the date of such meeting, nor more than
sixty days prior to any other action. If no record date is fixed: (1) the
record date for determining stockholders entitled to notice of or to vote at a
meeting of stockholders shall be at the close of business on the day next
preceding the day on which notice is given, or, if notice is waived, at the
close of business on the day next preceding the day on which the meeting is
held; (2) the record date for determining stockholders entitled to express
consent to corporate action in writing without a meeting, when no prior action
by the Board of Directors is necessary, shall be the day on which the first
written consent is expressed; and (3) the record date for determining
stockholders for any other purpose shall be at the close of business on the day
on which the Board of Directors adopts the resolution relating thereto. A
determination of stockholders of record entitled to notice of or to vote at a
meeting of stockholders shall apply to any adjournment of the meeting;
provided, however, that the Board of Directors may fix a new record date for
the adjourned meeting.

     2.10 List of Stockholders Entitled To Vote. The Secretary shall prepare
and make, at least ten days before every meeting of stockholders, a complete
list of the stockholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address of each stockholder and the number
of shares registered in the name of each stockholder. Nothing contained herein
shall require the Corporation to include electronic mail address or other
electronic contact information on such list. Such list shall be open to the
examination of any stockholder, for any purpose germane to the meeting for a
period of at least ten days prior to the meeting: (i) on a reasonably
accessible electronic network,

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provided that the information required
to gain
access to such list is provided with the notice of the meeting, or (ii) during ordinary business hours at the principal place of
business of the Corporation. In the event the meeting is to be held at a
place, the list shall be produced and kept at the time and place of the meeting
during the whole time thereof, and may be inspected by any stockholder who is
present. If the meeting is to be held solely by means of remote communication,
then the list shall also be open to examination of any stockholder during the
whole time of the meeting on a reasonably accessible electronic network, and
the information required to access such list shall be provided with the notice
of the meeting.

     2.11 Consent of Stockholders in Lieu of Meeting. Unless otherwise
provided in the certificate of incorporation, any action required by law to be
taken at any annual or special meeting of stockholders of the Corporation, or
any action which may be taken at any annual or special meeting of such
stockholders, may be taken without a meeting, without prior notice and without
a vote, if a consent in writing, setting forth the action so taken, shall be
signed by the holders of outstanding stock having not less than the minimum
number of votes that would be necessary to authorize or take such action at a
meeting at which all shares entitled to vote thereon were present and voted.
Prompt notice of the taking of the corporate action without a meeting by less
than unanimous written consent shall be given to those stockholders who have
not consented in writing.

ARTICLE III

Board of Directors

     3.1 Powers; Number; Qualifications. The business and affairs of the
Corporation shall be managed by or under the direction of the Board of
Directors, except as may be otherwise provided by law or in the certificate of
incorporation. The number of directors which shall constitute the Board of
Directors shall be nine (9). Directors need not be stockholders.

     3.2 Election; Term of Office; Resignation; Removal; Vacancies;
Nominations. Each director shall hold office until the annual meeting of
stockholders next succeeding his or her election and until his or her successor
is elected and qualified or until his or her earlier resignation or removal.
Any director may resign at any time upon notice in writing or electronic
transmission to the Board of Directors or to the President or the Secretary of
the Corporation. Such resignation shall take effect at the time specified
therein, and unless otherwise specified therein no acceptance of such
resignation shall be necessary to make it effective. Any director or the
entire Board of Directors may be removed, with or without cause, by the holders
of a majority of the shares then entitled to vote at an election of directors.
Unless otherwise provided in the certificate of incorporation or these by-laws,
vacancies and newly created directorships resulting from any increase in the
authorized number of directors or from any other cause may be filled by a
majority of the directors then in office, although less than a quorum, or by
the sole remaining director.

     Only persons who are nominated in accordance with the following procedures
shall be eligible for election as directors. Nominations of persons for
election to the Board of Directors at the annual meeting, by or at the
direction of the Board of Directors, may be made by any Nominating Committee or
person appointed by the Board of Directors; nominations may also be made by any
stockholder of record of the Corporation entitled to vote for the election of
directors at the meeting who complies with the notice procedures set forth in
this Section 3.2. Such nominations, other than those made by or at the
direction of the Board of Directors, shall be made pursuant to timely notice in
writing to the Secretary of the Corporation. To be timely, a stockholder’s
notice shall be delivered by a nationally recognized courier service or mailed
by

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first class United States mail, postage
or delivery charges prepaid, and received at the principal executive offices of the Corporation addressed
to the attention of the Secretary of the Corporation not less than 60 days nor
more than 90 days prior to the scheduled date of the meeting (regardless of any
postponements, deferrals or adjournments of that meeting to a later date);
provided, however, that, in the case of an annual meeting and in the event that
the annual meeting is held at a date other than the first Tuesday of February,
or the next business day if such Tuesday is a legal holiday and less than 70
days’ notice or prior public disclosure of the date of the scheduled meeting is
given or made to stockholders, notice by the stockholder to be timely must be
so received not later than the earlier of (a) the close of business on the 10th
day following the day on which such notice of the date of the scheduled meeting
was mailed or such public disclosure was made, whichever first occurs, or (b)
two days prior to the date of the scheduled meeting. Such stockholder’s notice
to the Secretary shall set forth (a) as to each person whom the stockholder
proposes to nominate for election or reelection as a director, (i) the name,
age, business address and residence address of the person, (ii) the principal
occupation or employment of the person, (iii) the class, series and number of
shares of capital stock of the Corporation that are owned beneficially by the
person, (iv) a statement as to the person’s citizenship, and (v) any other
information relating to the person that is required to be disclosed in
solicitations for proxies for election of directors pursuant to Section 14 of
the Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder; and (b) as to the stockholder giving the notice, (i)
the name and record address of the stockholder and (ii) the class, series and
number of shares of capital stock of the Corporation that are owned
beneficially by the stockholder. The Corporation may require any proposed
nominee to furnish such other information as may reasonably be required by the
Corporation to determine the eligibility of such proposed nominee to serve as
director of the Corporation. No person shall be eligible for election as a
director of the Corporation unless nominated in accordance with the procedures
set forth herein.

     In connection with any annual meeting, the Chairman of the Board of
Directors (or such other person presiding at such meeting in accordance with
Section 2.7 of these by-laws) shall, if the facts warrant, determine and
declare to the meeting that a nomination was not made in accordance with the
foregoing procedure, and if he or she should so determine, he or she shall so
declare to the meeting and the defective nomination shall be disregarded.

     3.3 Regular Meetings. Regular meetings of the Board of Directors may be
held at such places within or without the State of Delaware and at such times
as the Board of Directors may from time to time determine, and if so determined
notice thereof need not be given.

     3.4 Special Meetings. Special meetings of the Board of Directors may be
held at any time or place within or without the State of Delaware whenever
called by the Chairman of the Board of Directors, if any, by the Vice Chairman
of the Board of Directors, if any, by the President or by any two directors.
Reasonable notice thereof shall be given by the person or persons calling the
meeting.

     3.5 Participation in Meetings by Conference Telephone Permitted. Unless
otherwise restricted by the certificate of incorporation or these by-laws,
members of the Board of Directors, or any committee designated by the Board of
Directors, may participate in a meeting of the Board of Directors or of such
committee, as the case may be, by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and participation in a meeting pursuant to this
by-law shall constitute presence in person at such meeting.

     3.6 Quorum; Vote Required for Action. At all meetings of the Board of
Directors one third of the entire Board of Directors, but not less than two
shall constitute a quorum for the transaction of business. The vote of a
majority of the directors present at a meeting at which a quorum is present
shall be the act of the Board of Directors unless the certificate of
incorporation or these by-laws shall require a

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vote of a greater number. In case at any meeting of the Board of
Directors a quorum shall not be present, the members of the Board of Directors
present may adjourn the meeting from time to time until a quorum shall attend.

     3.7 Organization. Meetings of the Board of Directors shall be presided
over by the Chairman of the Board of Directors, if any, or in the absence of
the Chairman of the Board of Directors by the Vice Chairman of the Board of
Directors, if any, or in the absence of the Vice Chairman of the Board of
Directors by the President, or in their absence by a chairman chosen at the
meeting. The Secretary, or in the absence of the Secretary an Assistant
Secretary, shall act as secretary of the meeting, but in the absence of the
Secretary and any Assistant Secretary the chairman of the meeting may appoint
any person to act as secretary of the meeting.

     3.8 Action by Directors Without a Meeting. Unless otherwise restricted by
the certificate of incorporation or these by-laws, any action required or
permitted to be taken at any meeting of the Board of Directors, or of any
committee thereof, may be taken without a meeting if all members of the Board
of Directors or of such committee, as the case may be, consent thereto in
writing or electronic transmission, and the writing or writings or electronic
transmission or transmissions are filed with the minutes of proceedings of the
Board of Directors or committee. All such actions by written consent or
electronic transmission shall have the same force and effect as a unanimous
vote of such directors.

     3.9 Compensation of Directors. The Board of Directors shall have the
authority to fix the compensation of directors.

ARTICLE IV

Committees

     4.1 Executive Committee. The Board of Directors may, by resolution
approved by at least a majority of the authorized number of directors,
establish and appoint one or more members of the Board of Directors to
constitute an Executive Committee (the “Executive Committee”), with such powers
as may be expressly delegated to it by resolution of the Board of Directors.
The Executive Committee shall act only in the intervals between meetings of the
Board of Directors and shall be subject at all times to the control of the
Board of Directors.

     4.2 Committees. In addition to the Executive Committee, the Board of
Directors may, by resolution passed by a majority of the whole Board of
Directors, designate one or more other committees, each committee to consist of
one or more of the directors of the Corporation. The Board of Directors may
designate one or more directors as alternate members of any committee, who may
replace any absent or disqualified member at any meeting of the committee. In
the absence or disqualification of a member of a committee, the member or
members thereof present at any meeting and not disqualified from voting,
whether or not such member or members constitute a quorum, may unanimously
appoint another member of the Board of Directors to act at the meeting in place
of any such absent or disqualified member. Any such committee, to the extent
provided in the resolution of the Board of Directors, shall have and may
exercise all the powers and authority of the Board of Directors in the
management of the business and affairs of the Corporation, and may authorize
the seal of the Corporation to be affixed to all papers which may require it;
but no such committee shall have power or authority in reference to amending
the certificate of incorporation (except that a committee may, to the extent
authorized in the resolution or resolutions providing for the issuance of
shares of stock adopted by the Board of Directors as provided in Section 151(a)
of the General Corporation Law of Delaware fix any of the preferences or rights
of such

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shares relating to dividends, redemption, dissolution, any distribution of
assets of the Corporation or the conversion into, or the exchange of such
shares for, shares of any other class or classes or any other series of the
same or any other class or classes of stock of the Corporation), adopting an
agreement of merger or consolidation, recommending to the stockholders the
sale, lease or exchange of all or substantially all of the Corporation’s
property and assets, recommending to the stockholders a dissolution of the
Corporation or a revocation of dissolution, removing or indemnifying directors
or amending these by-laws; and, unless the resolution expressly so provides, no
such committee shall have the power or authority to declare a dividend or to
authorize the issuance of stock or adopt a certificate of ownership and merger.

     4.3 Committee Rules. Unless the Board of Directors otherwise provides,
the committee designated by the Board of Directors may adopt, amend and repeal
rules for the conduct of its business. In the absence of a provision by the
Board of Directors or a provision in the rules of such committee to the
contrary, a majority of the entire authorized number of members of such
committee shall constitute a quorum for the transaction of business, the vote
of a majority of the members present at a meeting at the time of such vote if a
quorum is then present shall be the act of such committee, and in other
respects each committee shall conduct its business in the same manner as the
Board of Directors conducts its business pursuant to Article III of these
by-laws.

ARTICLE V

Officers

     5.1 Officers; Election. As soon as practicable after the annual meeting
of stockholders in each year, the Board of Directors shall elect a President
and a Secretary, and it may, if it so determines, elect from among its members
a Chairman of the Board of Directors. The Board of Directors may also elect
one or more Vice Presidents, one or more Assistant Vice Presidents, one or more
Assistant Secretaries, a Treasurer and one or more Assistant Treasurers and
such other officers as the Board of Directors may deem desirable or appropriate
and may give any of them such further designations or alternate titles as it
considers desirable. Any number of offices may be held by the same person;
provided, however, that the offices of President and Secretary shall not be
held by the same person.

     5.2 Term of Office; Resignation; Removal; Vacancies. Except as otherwise
provided in the resolution of the Board of Directors electing any officer, each
officer shall hold office until the first meeting of the Board of Directors
after the annual meeting of stockholders next succeeding his or her election,
and until his or her successor is elected and qualified or until his or her
earlier resignation or removal. Any officer may resign at any time upon
written notice to the Board of Directors or to the President or the Secretary
of the Corporation. Such resignation shall take effect at the time specified
therein, and unless otherwise specified therein no acceptance of such
resignation shall be necessary to make it effective. The Board of Directors
may remove any officer with or without cause at any time. Any such removal
shall be without prejudice to the contractual rights of such officer, if any,
with the Corporation, but the election of an officer shall not of itself create
contractual rights. Any vacancy occurring in any office of the Corporation by
death, resignation, removal or otherwise may be filled for the unexpired
portion of the term by the Board of Directors at any regular or special
meeting.

     5.3 Powers and Duties. The officers of the Corporation shall have such
powers and duties in the management of the Corporation as shall be stated in
these by-laws or in a resolution of the Board of Directors which is not
inconsistent with these by-laws and, to the extent not so stated,

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as generally
pertain to their respective offices, subject to the control of the Board of
Directors. The Board of Directors may require any officer, agent or employee to give security for
the faithful performance of his or her duties.

     5.4 Chairman of the Board of Directors. The Chairman of the Board of
Directors, if there shall be such an officer, shall, if present, preside at all
meetings of the Board of Directors and exercise and perform such other powers
and duties as may be from time to time assigned to him by the Board of
Directors or prescribed by the by-laws.

     5.5 President. The President shall be the chief executive officer of the
Corporation. Subject to such supervisory powers, if any, as may be given by
the Board of Directors to the Chairman of the Board of Directors, if there be
such an officer, and subject to the provisions of these by-laws and to the
direction of the Board of Directors, the President shall have supervision over
and may exercise general executive powers of the business and affairs of the
Corporation and shall perform all duties and have all powers which are commonly
incident to the office of chief executive or which are delegated to him by the
Board of Directors. He shall have power to sign all stock certificates,
contracts and other instruments of the Corporation which are authorized and
shall have general supervision and direction of all of the other officers,
employees and agents of the Corporation. The President shall be ex officio, a
member of all the standing committees, including the Executive Committee. In
the absence of the Chairman of the Board of Directors, the President shall
preside at all meetings of the Board of Directors.

     5.6 Vice President. In the absence of the President or in his inability
or refusal to act, the Vice President (or in the event there be more than one
Vice President, the Vice Presidents in the order designated by the directors,
or in the absence of any designation, then in the order of their election)
shall perform the duties of the President, and when so acting, shall have all
the powers of and be subject to all the restrictions upon the President. The
Vice Presidents shall perform such other duties and have such other powers as
the Board of Directors may from time to time prescribe.

     5.7 Secretary. The Secretary shall attend all meetings of the Board of
Directors and all meetings of the stockholders and record all the proceedings
of the meetings of the Corporation and of the Board of Directors in a book to
be kept for that purpose and shall perform like duties for the standing
committees when required. He shall give, or cause to be given, notice of all
meetings of the stockholders and special meetings of the Board of Directors,
and shall perform such other duties as may be prescribed by the Board of
Directors or president, under whose supervision he shall be. He shall have
custody of the corporate seal of the Corporation and he, or an Assistant
Secretary, shall have authority to affix the same to any instrument requiring
it and when so affixed, it may be attested by his signature or by the signature
of such Assistant Secretary. The Board of Directors may give general authority
to any other officer to affix the seal of the Corporation and to attest the
affixing by his signature.

     5.8 Assistant Secretary. The Assistant Secretary, or if there be more
than one, the Assistant Secretaries in the order determined by the Board of
Directors (or if there be no such determination, then in the order of their
election) shall, in the absence of the Secretary or in the event of his
inability or refusal to act, perform the duties and exercise the powers of the
Secretary and shall perform such other duties and have such other powers as the
Board of Directors may from time to time prescribe.

     5.9 Treasurer. The Treasurer shall have the custody of the corporate
funds and securities and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the Corporation and shall deposit all
moneys and other valuable effects in the name and to the credit of the
Corporation in such depositories as may be designated by the Board of
Directors. He shall disburse the funds of the Corporation as may be ordered by
the Board of Directors, taking proper vouchers for such disbursements, and
shall render to the President and the Board of

9

 

Directors, at its regular
meetings, or when the Board of Directors so requires, an account of all his
transactions as Treasurer and of the financial condition of the Corporation.

     5.10 Assistant Treasurer. The Assistant Treasurer, or if there shall be
more than one, the Assistant Treasurers in the order determined by the Board of
Directors (or if there be no such determination, then in the order of their
election) shall, in the absence of the Treasurer or in the event of his
inability or refusal to act, perform the duties and exercise the powers of the
Treasurer and shall perform such other duties and have such other powers as the
Board of Directors may from time to time prescribe.

ARTICLE VI

Stock

     6.1 Certificates. The shares of stock of the Corporation shall either be
represented by certificates or uncertificated, as determined by the Board of
Directors; provided, however, that every holder of stock in the Corporation
shall be entitled to have a certificate signed by or in the name of the
Corporation by the Chairman or Vice Chairman of the Board of Directors, if any,
or the President or a Vice President, and by the Treasurer or an Assistant
Treasurer, or the Secretary or any Assistant Secretary, of the Corporation,
certifying the number of shares owned by such holder in the Corporation. If
such certificate is manually signed by one officer or manually countersigned by
a transfer agent or by a registrar, any other signature on the certificate may
be a facsimile. In case any officer, transfer agent or registrar who has
signed or whose facsimile signature has been placed upon a certificate shall
have ceased to be such officer, transfer agent or registrar before such
certificate is issued, it may be issued by the Corporation with the same effect
as if such person were such officer, transfer agent or registrar at the date of
issue.

     Upon the face or back of each stock certificate issued to represent any
partly paid shares, or upon the books and records of the Corporation in the
case of uncertificated partly paid shares, shall be set forth the total amount
of the consideration to be paid therefor and the amount paid thereon shall be
stated. If the Corporation shall be authorized to issue more than one class of
stock or more than one series of any class, the powers, designations,
preferences and relative, participating, optional or other special rights of
each class of stock or series thereof and the qualification, limitations or
restrictions of such preferences and/or rights shall be set forth in full or
summarized on the face or back of the certificate which the Corporation shall
issue to represent such class or series of stock, provided that, except as
otherwise provided in Section 202 of the General Corporation Law of Delaware,
in lieu of the foregoing requirements, there may be set forth on the face or
back of the certificate which the Corporation shall issue to represent such
class or series of stock, a statement that the Corporation will furnish without
charge to each stockholder who so requests the powers, designations,
preferences and relative, participating, optional or other special rights of
each class of stock or series thereof and the qualifications, limitations or
restrictions of such preferences and/or rights.

     6.2 Lost, Stolen or Destroyed Stock Certificates; Issuance of New
Certificates. The Corporation may issue a new certificate of stock in the
place of any certificate theretofore issued by it, alleged to have been lost,
stolen or destroyed, and the Corporation may require the owner of the lost,
stolen or destroyed certificate, or such owner’s legal representative, to give
the Corporation a bond sufficient to indemnify it against any claim that may be
made against it on account of the alleged loss, theft or destruction of any
such certificate or the issuance of such new certificate.

10

 

     6.3 Transfer of Stock. Upon surrender to the Corporation or the transfer
agent of the Corporation of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignation or authority to
transfer, it shall be the duty of the Corporation to issue a new certificate to
the person entitled thereto, cancel the old certificate and record the
transaction upon its books. Transfer of uncertificated shares of stock shall
be made on the books of the Corporation upon receipt of proper transfer
instructions from the registered owner of the uncertificated shares, an
instruction from an approved source duly authorized by such owner or from an
attorney lawfully constituted in writing. The Corporation may impose such
additional conditions to the transfer of its stock as may be necessary or
appropriate for compliance with applicable law or to protect the Corporation, a
transfer agent or the registrar from liability with respect to such transfer.

     6.4 Fixing Record Date. In order that the Corporation may determine the
stockholders entitled to notice of or to vote at any meeting of stockholders or
any adjournment thereof, or to express consent to corporate action in writing
without a meeting, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock or for the purpose of
any other lawful action, the Board of Directors may fix, in advance, a record
date, which shall not be more than sixty nor less than ten days before the date
of such meeting, nor more than sixty days prior to any other action. A
determination of stockholders of record entitled to notice of or to vote at a
meeting of stockholders shall apply to any adjournment of the meeting;
provided, however, that the Board of Directors may fix a new record date for
the adjourned meeting.

     6.5 Registered Stockholders. The Corporation shall be entitled to
recognize the exclusive right of a person registered on its books as the owner
of shares to receive dividends, and to vote as such owner, and to hold liable
for calls and assessments a person registered on its books as the owner of
shares, and shall not be bound to recognize any equitable or other claim to or
interest in such share or shares on the part of any other person, whether or
not it shall have express or other notice thereof, except as otherwise provided
by the laws of Delaware.

ARTICLE VII

Miscellaneous

     7.1 Fiscal Year. The fiscal year of the Corporation shall be determined
by the Board of Directors.

     7.2 Seal. The Corporation may have a corporate seal which shall have the
name of the Corporation inscribed thereon and shall be in such form as may be
approved from time to time by the Board of Directors. The corporate seal may
be used by causing it or a facsimile thereof to be impressed or affixed or in
any other manner reproduced.

     7.3 Waiver of Notice of Meetings of Stockholders, Directors and
Committees. Whenever notice is required to be given by law or under any
provision of the certificate of incorporation or these by-laws, a written
waiver thereof, signed by the person entitled to notice, whether before or
after the time stated therein, shall be deemed equivalent to notice.
Attendance of a person at a meeting shall constitute a waiver of notice of such
meeting, except when the person attends a meeting for the express purpose of
objecting, at the beginning of the meeting, to the transaction of any business
because the meeting is not lawfully called or convened. Neither the business
to be transacted at, nor the purpose of, any regular

11

 

or special meeting of the stockholders, directors, or members of a committee
of directors need be specified in any written waiver of notice unless so
required by the certificate of incorporation or these by-laws.

     7.4 Interested Directors; Quorum. No contract or transaction between the
Corporation and one or more of its directors or officers, or between the
Corporation and any other corporation, partnership, association or other
organization in which one or more of its directors or officers are directors or
officers, or have a financial interest, shall be void or voidable solely for
this reason, or solely because the director or officer is present at or
participates in the meeting of the Board of Directors or committee thereof
which authorizes the contract or transaction, or solely because his or her or
their votes are counted for such purpose, if: (1) the material facts as to his
or her relationship or interest and as to the contract or transaction are
disclosed or are known to the Board of Directors or the committee, and the
Board of Directors or committee in good faith authorizes the contract or
transaction by the affirmative votes of a majority of the disinterested
directors, even though the disinterested directors be less than a quorum; or
(2) the material facts as to his or her relationship or interest and as to the
contract or transaction are disclosed or are known to the stockholders entitled
to vote thereon, and the contract or transaction is specifically approved in
good faith by vote of the stockholders; or (3) the contract or transaction is
fair as to the Corporation as of the time it is authorized, approved or
ratified, by the Board of Directors, a committee thereof or the stockholders.
Common or interested directors may be counted in determining the presence of a
quorum at a meeting of the Board of Directors or of a committee which
authorizes the contract or transaction.

     7.5 Amendment of By-Laws. These by-laws may be amended or repealed, and
new by-laws adopted, by the Board of Directors, but the stockholders entitled
to vote may adopt additional by-laws and may amend or repeal any by-law whether
or not adopted by them.

12

 

CERTIFICATE OF SECRETARY

     I hereby certify that:

     I am the duly elected and acting Assistant Secretary of Fair Isaac
Corporation, a Delaware corporation (the “Corporation”); and

     Attached hereto is a complete and accurate copy of the by-laws of the
Corporation which became effective February 03, 2003, pursuant to a written
action duly adopted by the Board of Directors on December 20, 2002, and
reflecting the change of the Corporation’s name effective March 31, 2003, and
said by-laws are presently in effect.

     IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed the
seal of the Corporation this 1st day of April, 2004.

	 	 	 
	 

	 	/s/ Nancy E. Fraser
	

	 	
 
	

	 	Nancy E. Fraser
	

	 	Assistant Secretary

13<PAGE>

                                                                    EXHIBIT 10.1

                           COLOR KINETICS INCORPORATED
               1998 INCENTIVE AND NON-STATUTORY STOCK OPTION PLAN
                 (as amended July 17, 2001 and October 24, 2002)

SECTION 1. PURPOSE

         This 1998 Incentive and Non-Statutory Stock Option Plan (the "Plan") is
intended as a performance incentive for officers and employees of Color Kinetics
Incorporated, a Delaware corporation (the "Company"), or its Subsidiaries (as
hereinafter defined) and for certain other individuals providing services to or
acting as directors of the Company or its Subsidiaries, to enable the persons to
whom options are granted (an "Optionee" or "Optionees") to acquire or increase a
proprietary interest in the Company and its success. The Company intends that
this purpose will be effected by the granting of incentive stock options
("Incentive Options") as defined in Section 422 of the Internal Revenue Code of
1986, as amended (the "Code"), and other stock options ("Non-Statutory Options")
under the Plan. The term "Subsidiaries" means any corporations in which stock
possessing 50% or more of the total combined voting power of all classes of
stock of such corporation or corporations is owned directly or indirectly by the
Company.

SECTION 2. OPTIONS TO BE GRANTED AND ADMINISTRATION

         2.1      Options to be Granted. Options granted under the Plan may be
either Incentive Options or Non-Statutory Options.

         2.2      Administration. The Plan shall be administered by the Board of
Directors of the Company, whose construction and interpretation of the terms and
provisions of the Plan shall be final and conclusive. The Board of Directors may
in its sole discretion grant Options to purchase shares of Common Stock, and
issue shares upon exercise of such Options as provided in the Plan. The Board
shall have authority, subject to the express provisions of the Plan, to construe
option agreements and the Plan, to prescribe, amend and rescind rules and
regulations relating to the Plan, to determine the terms and provisions of
option agreements, and to make all other determinations in the judgment of the
Board of Directors necessary or desirable for the administration of the Plan.
The Board of Directors may correct any defect or supply any omission or
reconcile any inconsistency in the Plan or in any option agreement in the manner
and to the extent it shall deem expedient to carry the Plan into effect and it
shall be the sole and final judge of such expediency. No director or person
acting pursuant to authority delegated by the Board of Directors shall be liable
for any action or determination under the Plan made in good faith. The Board of
Directors may, to the full extent permitted by or consistent with applicable
laws or regulations (including, without limitation, applicable state law),
delegate any or all of its powers under the Plan to a committee (the
"Committee") appointed by the Board of Directors, and if the Committee is so
appointed all references to the Board of Directors in the Plan shall mean and
relate to such Committee.

SECTION 3. STOCK

<PAGE>

         3.1      Shares Subject to Plan. The stock subject to the options
granted under the Plan shall be shares of the Company's authorized but unissued
common stock, $.001 par value per share ("Common Stock"). The total number of
shares that may be issued pursuant to options granted under the Plan shall not
exceed an aggregate of 4,235,000 shares of Common Stock. Such number of shares
shall be subject to adjustment as provided in Section 7 hereof.

         3.2      Lapsed or Unexercised Options. Whenever any outstanding option
under the Plan expires, is cancelled or is otherwise terminated (other than by
exercise), the shares of Common Stock allocable to the unexercised portion of
such option shall be restored to the Plan and shall again become available for
the grant of other options under the Plan.

SECTION 4. ELIGIBILITY

         4.1      Eligible Optionees. Incentive Options may be granted only to
officers and other employees of the Company or its Subsidiaries, including
members of the Board who are also employees of the Company or a Subsidiary.
Non-Statutory Options may be granted to officers or other employees of the
Company or its Subsidiaries, to members of the Board or the board of directors
of any Subsidiary whether or not employees of the Company or such Subsidiary,
and to certain other individuals providing services to the Company or its
Subsidiaries.

         4.2      Limitations on 10% Stockholders. No Incentive Option shall be
granted to an individual who, at the time the Incentive Option is granted, owns
(including ownership attributed pursuant to Section 424(d) of the Code) more
than 10% of the total combined voting power of all classes of stock of the
Company or any parent or Subsidiary of the Company (a "greater-than-10%
stockholder"), unless such Incentive Option provides that (i) the purchase price
per share shall not be less than 110% of the fair market value of the Common
Stock at the time such Incentive Option is granted, and (ii) that such Incentive
Option shall not be exercisable to any extent after the expiration of five years
from the date on which it is granted.

         4.3      Limitation on Exercisable Options. The aggregate fair market
value (determined at the time the Incentive Option is granted) of the Common
Stock with respect to which Incentive Options are exercisable for the first time
by any person during any calendar year under the Plan and under any other option
plan of the Company (or a parent or subsidiary as defined in Section 424 of the
Code) shall not exceed $100,000. Any option granted in excess of the foregoing
limitation shall be specifically designated as being a Non-Statutory Option.

SECTION 5. TERMS OF THE OPTION AGREEMENTS

         5.1      Mandatory Terms. Each option agreement shall contain such
provisions as the Board or the Committee shall from time to time deem
appropriate. Option agreements need not be identical, but each option agreement
by appropriate language shall include the substance of all of the following
provisions:

                  (a)      Expiration. Notwithstanding any other provision of
the Plan or of any option agreement, each option shall expire on the date
specified in the option agreement, which date shall not be later than the tenth
anniversary of the date on which the option was granted (fifth anniversary in
the case of an Incentive Option granted to a greater-than-10% stockholder).

                                      -2-
<PAGE>

                  (b)      Exercise. Each option shall be exercisable in full or
in installments (which need not be equal) and at such times as designated by the
Board or the Committee. To the extent not exercised, installments shall
accumulate and be exercisable, in whole or in part, at any time after becoming
exercisable, but not later than the date the option expires.

                  (c)      Purchase Price. The purchase price per share of the
Common Stock under each Incentive Option shall be not less than the fair market
value of the Common Stock on the date the option is granted (110% of the fair
market value in the case of a greater-than-10% stockholder). For the purpose of
the Plan the fair market value of the Common Stock shall be determined by the
Board or the Committee. The price at which shares may be purchased pursuant to
Non-Statutory Options shall be specified by the Board or the Committee at the
time the option is granted, and may be less than, equal to or greater than the
fair market value of the shares of Common Stock on the date such Non-Statutory
Option is granted, but shall not be less than the par value of shares of Common
Stock.

                  (d)      Transferability of Options. Options granted under the
Plan and the rights and privileges conferred thereby may not be transferred,
assigned, pledged or hypothecated in any manner (whether by operation of law or
otherwise) other than by will or by applicable laws of descent and distribution,
and shall not be subject to execution, attachment or similar process. Upon any
attempt so to transfer, assign, pledge, hypothecate or otherwise dispose of any
option under the Plan or any right or privilege conferred hereby, contrary to
the provisions of the Plan, or upon the sale or levy or any attachment or
similar process upon the rights and privileges conferred hereby, such option
shall thereupon terminate and become null and void.

                  (e)      Termination of Employment; Disability or Death of
Optionee. Except as may be otherwise expressly provided in the terms and
conditions of the option granted to an Optionee, options granted hereunder shall
terminate on the earliest to occur of:

                           (i)      the date of expiration thereof;

                           (ii)     if the Optionee is employed by the Company
and such employment is terminated by the Optionee for any reason or is
terminated by the Company for cause as hereinafter defined, on the date of such
termination;

                           (iii)    if the Optionee is employed by the Company
and such employment is terminated for any reason other than death or a reason
set forth in the foregoing clause (ii), on the earlier of the date of expiration
thereof or 30 days following the date of such termination. Until the date on
which the option so expires, the Optionee may exercise that portion of his
option which is exercisable at the time of termination of such relationship; or

                           (iv)     If the Optionee retires in good standing
from employment by the Company by reason of age or disability under the then
established rules of the Company, the Optionee shall have the right to exercise
this option at any time within 90 days after his retirement (but not after the
termination date of this option) with respect to the shares which were
purchasable by the Holder at the date of such retirement.

         An employment relationship between the Company and the Optionee shall
be deemed to exist during any period during which the Optionee is employed by
the Company or by any

                                      -3-
<PAGE>

Subsidiary. Whether authorized leave of absence or absence on military
government service shall constitute termination of the employment relationship
between the Company and the Optionee shall be determined by the Board or the
Committee at the time thereof.

         For purposes of this Section 5.1(e), the term "cause" shall mean (a)
any material breach by the Optionee of any agreement to which the Optionee and
the Company are both parties, (b) any act (other than retirement) or omission to
act by the Optionee which may have a material and adverse effect on the
Company's business or on the Optionee's ability to perform services for the
Company, including, without limitation, the commission of any crime (other than
minor traffic violations), or (c) any material misconduct or material neglect of
duties by the Optionee in connection with the business or affairs of the Company
or any Subsidiary or affiliate of the Company.

         In the event of the death of an Optionee while in an employment or
other relationship with the Company and before the date of expiration of such
option, such option shall terminate on the earlier of such date of expiration or
180 days following the date of such death. After the death of the Optionee, his
executor, administrator or any person or persons to whom his option may be
transferred by will or by laws of descent and distribution, shall have the
right, at any time prior to such termination, to exercise the option to the
extent the Optionee was entitled to exercise such option as of the date of his
death.

                  (f)      Rights of Optionees. No Optionee shall be deemed for
any purpose to be the owner of any shares of Common Stock subject to any option
unless and until (i) the option shall have been exercised with respect to such
shares pursuant to the terms thereof, and (ii) the Company shall have issued and
delivered a certificate representing such shares. Thereupon, the Optionee shall
have full voting, dividend and other ownership rights with respect to such
shares of Common Stock.

         5.2      Certain Optional Terms. The Board or the Committee may in its
discretion provide, upon the grant of any option hereunder, that the Company
shall have the right from time to time to repurchase all or any number of shares
purchased upon exercise of such option. The repurchase price per share payable
by the Company shall be such amount or be determined by such a manner as is
fixed or determined by the Board or the Committee at the time the option for the
shares subject to repurchase was granted. The Board or the Committee may also
provide that the Company shall have a right of first refusal with respect to the
transfer or proposed transfer of any shares purchased upon exercise of an option
granted hereunder. In the event the Board or the Committee shall grant options
subject to the Company's repurchase rights or rights of first refusal, the
certificate or certificates representing the shares purchased pursuant to the
exercise of such option shall carry a legend satisfactory to counsel for the
Company referring to such rights.

SECTION 6. METHOD OF EXERCISE; PAYMENT OF PURCHASE PRICE

         6.1      Notice of Exercise. Any option granted under the Plan may be
exercised by the Optionee by delivering to the Company on any business day a
written notice specifying the number of shares of Common Stock the Optionee then
desires to purchase and specifying the address to which the certificates for
such shares are to be mailed (the "Notice"), accompanied by payment for such
shares.

                                      -4-
<PAGE>

         6.2      Means of Payment and Delivery. Payment for the shares of
Common Stock purchased pursuant to the exercise of an option shall be made
either (i) in cash equal to the option price for the number of shares specified
in the Notice (the "Total Option Price"), or (ii) if authorized by the
applicable option agreement, in shares of Common Stock of the Company having a
fair market value equal to or less than the Total Option Price, plus cash in an
amount equal to the excess, if any, of the Total Option Price over the fair
market value of such shares of Common Stock. For the purpose of the preceding
sentence, the fair market value of the shares of Common Stock so delivered to
the Company shall be determined in the manner specified in Section 5.1(c)
hereof. As promptly as practicable after receipt of such written notification
and payment, the Company shall deliver to the Optionee certificates for the
number of shares with respect to which such Option has been so exercised, issued
in the Optionee's name; provided, however, that such delivery shall be deemed
effected for all purposes when the Company or a stock transfer agent of the
Company shall have deposited such certificates in the United States mail,
addressed to the Optionee, at the address specified pursuant to Section 6.1.

SECTION 7. ADJUSTMENT UPON CHANGES IN CAPITALIZATION

         7.1      No Effect of Options upon Certain Corporate Transactions. The
existence of outstanding options shall not affect in any way the right or power
of the Company or its stockholders to make or authorize any or all adjustments,
recapitalizations, reorganizations or other changes in the Company's capital
structure or its business, or any merger or consolidation of the Company, or any
issue of Common Stock, or any issue of bonds, debentures, preferred or prior
preference stock ahead of or affecting the Common Stock or the rights thereof,
or the dissolution or liquidation of the Company, or any sale or transfer of all
or any part of its assets or business, or any other corporate act or proceeding,
whether of a similar character or otherwise.

         7.2      Stock Dividends, Recapitalizations, Etc. If the Company shall
effect a subdivision or consolidation of shares or other capital readjustment,
the payment of a stock dividend, or other increase or reduction of the number of
shares of the Common Stock outstanding, without receiving compensation therefor
in money, services or property, then: (i) the number, class and per share price
of shares of stock subject to outstanding options hereunder shall be
appropriately adjusted in such a manner as to entitle an Optionee to receive
upon exercise of an option, for the same aggregate cash consideration, the same
total number and class of shares that the owner of an equal number of
outstanding shares of Common Stock would own as a result of the event requiring
the adjustment; and (ii) the number and class of shares with respect to which
options may be granted under the Plan shall be adjusted by substituting for the
total number of shares of Common Stock then reserved for issuance under the Plan
that number and class of shares of stock that the owner of an equal number of
outstanding shares of Common Stock would own as the result of the event
requiring the adjustment.

         7.3      Determination of Adjustments. Adjustments under this Section 7
shall be determined by the Board or the Committee and such determinations shall
be conclusive. The Board or the Committee shall have the discretion and power in
any such event to determine and to make effective provision for acceleration of
the time or times at which any option or portion thereof shall become
exercisable. No fractional shares of Common Stock shall be issued under the Plan
on account of any adjustment specified above.

                                      -5-
<PAGE>

         7.4      No Adjustment in Certain Cases. Except as hereinbefore
expressly provided, the issue by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, for cash or property
or for labor or services, either upon direct sale or upon the exercise of rights
or warrants to subscribe therefor, or upon conversion of shares or obligations
of the Company convertible into such shares or other securities, shall not
affect, and no adjustment by reason thereof shall be made with respect to, the
number or price of shares of Common Stock then subject to outstanding options.

SECTION 8. EFFECT OF CERTAIN TRANSACTIONS

         If the Company is a party to a reorganization or merger with one or
more other corporations, whether or not the Company is the surviving or
resulting corporation, or if the Company consolidates with or into one or more
other corporations, or if the Company is liquidated or sells or otherwise
disposes of substantially all of its assets or capital stock to another
corporation (each hereinafter referred to as a "Transaction"), in any such event
while unexercised options remain outstanding under the Plan, then: (i) subject
to the provisions of clause (iii) below, after the effective date of such
Transaction unexercised options shall remain outstanding and shall be
exercisable in shares of Common Stock, or, if applicable, shares of such stock
or other securities, cash or property as the holders of shares of Common Stock
received pursuant to the terms of such Transaction; (ii) the Board may
accelerate the time for exercise of all unexercised and unexpired options to and
after a date prior to the effective date of such Transaction; or (iii) all
outstanding options may be cancelled by the Board as of the effective date of
such Transaction, provided that (x) notice of such cancellation shall be given
to each holder of an option and (y) each holder of an option shall have the
right to exercise such option to the extent that the same is then exercisable
or, if the Board shall have accelerated the time for exercise of all unexercised
and unexpired options, in full, during the 10-day period preceding the effective
date of such Transaction.

SECTION 9. AMENDMENT OF THE PLAN

         The Board may terminate the Plan at any time, and may amend the Plan at
any time and from time to time. The Company recognizes that options issued
pursuant to an amendment which (i) increases the number of shares of Common
Stock as to which options may be granted under the Plan or (ii) changes in
substance the provisions of Section 4 hereof relating to eligibility to
participate in the Plan will not be Incentive Options unless such amendment is
approved by the Company's stockholders within twelve (12) months of its
adoption.

         Except as provided in Sections 7 and 8 hereof, rights and obligations
under any option granted before termination or amendment of the Plan shall not
be altered or impaired by such termination or amendment except with the consent
of the Optionee.

SECTION 10. NON-EXCLUSIVITY OF THE PLAN; NON-UNIFORM DETERMINATIONS

         Neither the adoption of the Plan by the Board nor the approval of the
Plan by the stockholders of the Company shall be construed as creating any
limitations on the power of the Board to adopt such other incentive arrangements
as it may deem desirable, including without

                                      -6-
<PAGE>

limitation the granting of stock options otherwise than under the Plan, and such
arrangements may be either applicable generally or only in specific cases.

         The Board's or Committee's determinations under the Plan need not be
uniform and may be made by it selectively among persons who receive or are
eligible to receive options under the Plan (whether or not such persons are
similarly situated). Without limiting the generality of the foregoing, the Board
or the Committee shall be entitled, among other things, to make non-uniform and
selective determinations, and to enter into non-uniform and selective option
agreements, as to (i) the persons to receive options under the Plan, (ii) the
terms and provisions of options, (iii) the exercise by the Board or the
Committee of its discretion in respect of the exercise of options pursuant to
the terms of the Plan, and (iv) the treatment of leaves of absence pursuant to
Section 5.1(e) hereof.

SECTION 11. GOVERNMENT AND OTHER REGULATIONS; GOVERNING LAW; WITHHOLDING TAXES

         The obligation of the Company to sell and deliver shares of Common
Stock with respect to options granted under the Plan shall be subject to all
applicable laws, rules and regulations, including all applicable federal and
state securities laws, and the obtaining of all such approvals by government
agencies as may be deemed necessary or appropriate by the Board or the
Committee. All shares sold under the Plan shall bear appropriate legends. The
Company may, but shall in no event be obligated to, register or qualify any
shares covered by options under applicable federal and state securities laws;
and in the event that any shares are so registered or qualified the Company may
remove any legend on certificates representing such shares. The Company shall
not be obligated to take any other affirmative action in order to cause the
exercise of an option or the issuance of shares pursuant thereto to comply with
any law or regulation of any governmental authority. The Plan shall be governed
by and construed in accordance with the laws of The Commonwealth of
Massachusetts.

         Whenever under the Plan shares are to be delivered upon exercise of an
option, the Company shall be entitled to require as a condition of delivery that
the Optionee remit an amount sufficient to satisfy all federal, state and other
governmental withholding tax requirements related thereto.

SECTION 12. "LOCKUP" AGREEMENT

         The Board or the Committee may in its discretion specify upon granting
an option that the Optionee shall agree, for a period of time (not to exceed 180
days) from the effective date of any registration of securities of the Company,
upon request of the Company or the underwriter or underwriters managing any
underwritten offering of the Company's securities, not to sell, make any short
sale of, loan, grant any option for the purchase of, or otherwise dispose of any
shares issued pursuant to the exercise of such option, without the prior written
consent of the Company or such underwriter or underwriters, as the case may be.

SECTION 13. EFFECTIVE DATE OF PLAN

                                      -7-
<PAGE>
         The effective date of the Plan is March 19, 1998, the date on which it
was approved by the Board. No option may be granted under the Plan after the
tenth anniversary of such effective date.

                                      -8-

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