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EXHIBIT 4.1
BARRA, INC.
DIRECTORS OPTION PLAN
SECTION 1 - PURPOSE
The purpose of the BARRA, Inc. Directors Option Plan is to provide a means
whereby BARRA, Inc., a Delaware corporation (the "Corporation"), may attract and
retain able persons as members of the Board (as defined below) and to provide a
means whereby those Board members can acquire and maintain stock ownership,
thereby strengthening their concern for the long-term welfare of the
Corporation. A further purpose of the Plan (as defined below) is to provide such
Board members with additional incentive and reward opportunities designed to
enhance the profitable growth of the Corporation over the long term.
Accordingly, the Plan provides for granting Incentive Stock Options (as defined
below), options which do not constitute Incentive Stock Options, or any
combination of the foregoing, as is best suited to the circumstances of the
particular Board member as provided herein.
SECTION 2 - DEFINITIONS
The following definitions shall be applicable during the term of the Plan unless
specifically modified by any paragraph:
(a) AWARD means, individually or collectively, any Option granted pursuant
to the Plan.
(b) BOARD means the board of directors of BARRA, Inc.
(c) CODE means the Internal Revenue Code of 1986, as amended. Reference in
the Plan to any Section of the Code shall be deemed to include any
amendments or successor provisions to such Section and any regulations
under such Section.
(d) COMMON STOCK means the common stock of BARRA, Inc.
(e) CORPORATION means BARRA, Inc.
(f) CORPORATE CHANGE means one of the following events: (i) the merger,
consolidation or other reorganization of the Corporation in which the
outstanding Common Stock is converted into or exchanged for a different
class of securities of the Corporation, a class of securities of any
other issuer (except a Subsidiary or Parent Corporation), cash or other
property other than (a) a merger, consolidation or reorganization of the
Corporation which would result in the voting stock of the Corporation
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of
the surviving entity), in combination with the ownership of any trustee
or other fiduciary holding securities under an employee benefit plan of
the Corporation, at least sixty percent (60%) of the combined voting
power of the voting stock of the Corporation or such surviving entity
outstanding immediately after such merger,
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consolidation or reorganization of the Corporation, or (b) merger,
consolidation or reorganization of the Corporation effected to implement
a recapitalization of the Corporation (or similar transaction) in which
no person acquires more than forty-nine percent (49%) of the combined
voting power of the Corporation's then outstanding stock; (ii) the sale,
lease or exchange of all or substantially all of the assets of the
Corporation to any other corporation or entity (except a Subsidiary or
Parent Corporation); (iii) the adoption by the stockholders of the
Corporation of a plan of liquidation and dissolution; (iv) the
acquisition (other than acquisition pursuant to any other clause of this
definition) by any person or entity, including without limitation a
"group" as contemplated by Section 13(d)(3) of the Exchange Act, of
beneficial ownership, as contemplated by such Section, of more than
twenty-five percent (25%) (based on voting power) of the Corporation's
outstanding capital stock or acquisition by a person or entity who
currently has beneficial ownership which increases such person's or
entity's beneficial ownership to fifty percent (50%) or more (based on
voting power) of the Corporation's outstanding capital stock; or (v) as
a result of or in connection with a contested election of directors, the
persons who were directors of the Corporation before such election shall
cease to constitute a majority of the Board. Notwithstanding the
provisions of clause (iv) above, a Corporate Change shall not be
considered to have occurred upon the acquisition (other than acquisition
pursuant to any other clause of the preceding sentence) by any person or
entity, including without limitation a "group" as contemplated by
Section 13(d)(3) of the Exchange Act, of beneficial ownership, as
contemplated by such Section, of more than twenty-five percent (25%)
(based on voting power) of the Corporation's outstanding capital stock
or the requisite percentage to increase their ownership to fifty percent
(50%) resulting from a public offering of securities of the Corporation
under the Securities Act of 1933, as amended.
(g) EXCHANGE ACT means the Securities Exchange Act of 1934, as amended.
(h) FAIR MARKET VALUE means, as of any specified date, the average of the
last best reported bid and asked prices of the Common Stock on the
National Association of Securities Dealers Automated Quotation (NASDAQ)
system (or, if the Common Stock is not listed on such exchange, such
other national securities exchange on which the Common Stock is then
listed) on that date, or if no prices are reported on that date, on the
last preceding date on which such prices of the Common Stock are so
reported. If the Common Stock is not then listed on any national
securities exchange but is traded over the counter at the time
determination of its Fair Market Value is required to be made hereunder,
its Fair Market Value shall be deemed to be equal to the average between
the reported high and low sales prices of Common Stock on the most
recent date on which Common Stock was publicly traded. If the Common
Stock is not publicly traded at the time a determination of its value is
required to be made hereunder, the determination of its Fair Market
Value shall be made by the Board in such manner as it deems appropriate
(such determination will be made in good-faith as required by Section
422(c)(1) of the Code and may be based on the advice of an independent
investment banker or appraiser recognized to be expert in making such
valuations).
(i) HOLDER means an individual who has been granted an Award.
(j) INCENTIVE STOCK OPTION means an Option within the meaning of Section 422
of the Code.
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(k) NON-EMPLOYEE DIRECTOR means a member of the Board who is not an employee
of the Corporation, its Parent Corporation or its Subsidiary.
(l) OPTION means an Award granted under Section 7 of the Plan and includes
both Incentive Stock Options to purchase Common Stock and Options which
do not constitute Incentive Stock Options to purchase Common Stock.
(m) OPTION AGREEMENT means a written agreement between the Corporation and
an employee or director with respect to an Option.
(n) OPTIONEE means an employee, director or individual who has been granted
an Option.
(o) OUTSIDE DIRECTOR refers to a member of the Board who qualifies as an
"outside director" as such term is used in Section 162(m) of the Code
and defined in any applicable Treasury Regulations promulgated
thereunder, including Treasury Regulation Section 1.162-27(e)(3).
(p) PARENT CORPORATION shall have the meaning set forth in Section 424(e) of
the Code.
(q) PLAN means the BARRA, Inc. Directors Option Plan.
(r) RULE 16B-3 means Rule 16b-3 of the General Rules and Regulations of the
Securities and Exchange Commission under the Exchange Act, as such rule
is currently in effect or as hereafter modified or amended.
(s) SUBSIDIARY means a company (whether a corporation, partnership, joint
venture or other form of entity) in which the Corporation, or a
corporation in which the Corporation owns a majority of the shares of
capital stock, directly or indirectly, owns an equity interest of fifty
percent (50%) or more, except solely with respect to the issuance of
Incentive Stock Options the term "Subsidiary" shall have the same
meaning as the term "subsidiary corporation" as defined in Section
424(f) of the Code.
SECTION 3 - EFFECTIVE DATE AND DURATION OF THE PLAN
The Plan shall be effective as of April 24, 1997 the date of its adoption by the
Board, provided that the Plan is approved by the stockholders of the Corporation
within twelve (12) months before or thereafter and on or prior to the date of
the first annual meeting of stockholders of the Corporation held subsequent to
the acquisition of an equity security by a Holder hereunder for which exemption
is claimed under Rule 16b-3. Notwithstanding any provision of the Plan or of any
Option Agreement, no Option shall be exercisable prior to such stockholder
approval. No further Awards may be granted under the Plan after ten (10) years
from the date the Plan is adopted by the Board or the date the Plan is approved
by the Corporation's shareholders, whichever is earlier. Subject to the
provisions of Section 9, the Plan shall remain in effect until all Options
granted under the Plan have been exercised or have expired by reason of lapse of
time and all restrictions imposed upon restricted stock awards have lapsed. Any
option exercised before shareholder approval is obtained must be rescinded if
shareholder approval is not obtained within twelve (12) months before or after
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the Plan is adopted. Such shares shall not be counted in determining whether
such approval is granted.
SECTION 4 - ADMINISTRATION
(a) The Plan shall be administered by the Committee, which shall be composed as
hereinafter set forth in Section 4(b).
(b) The Committee shall consist solely of not less than two Outside Directors
elected by the Board. The Board may from time to time increase (and thereafter
may decrease) the size of the Committee, elect or remove members thereto (with
or without cause) and fill any vacancies however created; provided, however,
that the minimum number of members on the Committee must be two.
(c) The Committee shall meet at such times and places and upon such notice as
the Committee's Chair determines. A majority of the Committee shall constitute a
quorum. Any acts by the Committee may be taken at any meeting at which a quorum
is present and shall be by majority vote of those members entitled to vote.
(d) The Committee shall determine which directors of BARRA shall be granted
Awards under the Plan, the timing of such Awards, the terms thereof and the
number of shares of Common Stock subject to each Award.
(e) The Committee shall have the sole authority, in its absolute discretion, to
adopt, amend and rescind such rules and regulations as, in its opinion, may be
advisable in the administration of the Plan, to construe and interpret the Plan,
its rules and regulations, and the instruments evidencing Awards granted under
the Plan, and to make all other determinations deemed necessary or advisable for
the administration of the Plan. All decisions, determinations and
interpretations of the Committee shall be binding on all Optionees.
SECTION 5 - GRANT OF OPTIONS SUBJECT TO THE PLAN
(A) AWARD LIMITS.
(i) The Committee shall grant Options which do not constitute Incentive
Stock Options for 5,000 shares of Common Stock to all current Non-Employee
Directors on April 24, 1997, pursuant to the terms of the Plan. In the event
that a new Non-Employee Director is appointed to the Board or that a current
member of the Board becomes a Non-Employee Director, the Committee shall grant
Options which do not constitute Incentive Stock Options for 15,000 shares of
Common Stock to such Non-Employee Director on the date such person becomes a
Non-Employee Director, pursuant to the terms of the Plan.
(ii) On each anniversary of the date of the initial Option grant in Section
5(a)(i) of the Plan, the Committee shall grant Options which do not constitute
Incentive Stock Options for 4,000 shares of Common Stock to all current
Non-Employee Directors, pursuant to the terms of the Plan.
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(iii) The Committee shall also have the discretion to grant Options to all
members of the Board, whether or not they are Non-Employee Directors, pursuant
to the terms of the Plan. In addition, in and to the extent that the Code so
permits, any Option granted under this Section 5(iii) of the Plan may be an
Incentive Stock Option.
(B) SHARES SUBJECT TO THE PLAN. The aggregate number of shares of Common Stock
that may be issued under the Plan shall not exceed 250,000 shares. Any of such
shares which remain unissued and which are not subject to outstanding Options at
the termination of the Plan shall cease to be subject to the Plan but, until
termination of the Plan, the Corporation shall at all times reserve a sufficient
number of shares to meet the requirements of the Plan. Shares shall be deemed to
have been issued under the Plan only to the extent actually issued and delivered
pursuant to an Award. To the extent that an Award lapses or the rights of its
Holder terminate, any shares of Common Stock subject to such Award shall again
be available for the grant of an Award. The aggregate number of shares which may
be issued under the Plan shall be subject to adjustment in the same manner as
provided in Section 8 of the Plan with respect to shares of Common Stock subject
to Options then outstanding. Separate stock certificates shall be issued by the
Corporation for those shares acquired pursuant to the exercise of an Incentive
Stock Option and for those shares acquired pursuant to the exercise of any
Option that does not constitute an Incentive Stock Option. The maximum number of
Shares of Common Stock with respect to which Options may be granted during any
calendar year to any Optionee shall not exceed 20,000 shares.
(C) STOCK OFFERED. The stock to be offered pursuant to the grant of an Award may
be authorized but unissued Common Stock or Common Stock previously issued and
outstanding and reacquired by the Corporation.
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SECTION 6 - ELIGIBILITY
An Incentive Stock Option Award made pursuant to the Plan may be granted only to
an individual who, at the time of grant, is a director of the Corporation who is
also an employee of the Corporation, a Parent or a Subsidiary. An Award of an
Option, which is not an Incentive Stock Option, may be granted only to an
individual who, at the time of grant, is a director of the Corporation. An Award
made pursuant to the Plan may be granted on more than one occasion to the same
person, and such Award may include an Incentive Stock Option, an Option which is
not an Incentive Stock Option, or any combination thereof. Each Award shall be
evidenced by a written instrument duly executed by or on behalf of the
Corporation.
SECTION 7 - STOCK OPTIONS
(a) STOCK OPTION AGREEMENT. Each Option shall be evidenced by an Option
Agreement between the Corporation and the Optionee which shall contain such
terms and conditions as may be approved by the Committee and agreed upon by the
Holder. The terms and conditions of the respective option Agreements need not be
identical. Under each Option Agreement, a Holder shall have the right to appoint
any individual or legal entity in writing as his or her beneficiary under the
Plan in the event of his death. Such designation may be revoked in writing by
the Holder at any time and a new beneficiary may be appointed in writing on the
form provided by the Committee for such purpose. In the absence of such
appointment, the beneficiary shall be the legal representative of the Holder's
estate.
(b) OPTION PERIOD. The term of each Option shall be as specified by the
Committee at the date of grant and shall be stated in the Option Agreement;
provided, however, that an option may not be exercised more than one hundred
twenty (120) months from the date it is granted.
(c) LIMITATIONS ON EXERCISE OF OPTION. Any Option granted pursuant to Section
5(a)(i) of the Plan shall be vested and exercisable at the rate of twenty
percent (20%) per year over the five (5) years from the date it is granted so
long as the Optionee is continuously a director of the Corporation. Any Option
granted pursuant to Section 5(a)(ii) shall be automatically vested and
exercisable on the date it is granted. Any Option granted pursuant to Section
5(a)(iii) of the Plan shall be vested and exercisable at the discretion of the
Committee; provided, however, that the rate of vesting shall be not longer than
twenty percent (20%) per year over the five (5) years from the date it is
granted.
(d) SPECIAL LIMITATIONS ON INCENTIVE STOCK OPTIONS. To the extent that the
aggregate Fair Market Value (determined at the time the respective Incentive
Stock Option is granted) of Common Stock with respect to which Incentive Stock
Options are exercisable for the first time by an individual during any calendar
year under all incentive stock option plans of the Corporation (and any Parent
Corporation or Subsidiary) exceeds one hundred thousand dollars ($100,000), such
excess Incentive Stock Options shall be treated as Options which do not
constitute Incentive Stock Options. The Committee shall determine, in accordance
with applicable provisions of the Code, Treasury Regulations and other
administrative pronouncements, which of an Optionee's Incentive Stock Options
will not constitute Incentive Stock Options because of such limitation and shall
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notify the Optionee of such determination as soon as practicable after such
determination. No Incentive Stock Option shall be granted to an individual if,
at the time the Option is granted, such individual owns stock possessing more
than ten percent (10%) of the total combined voting power of all classes of
stock of the Corporation or of its Parent Corporation or a Subsidiary, within
the meaning of Section 422(b)(6) of the Code, unless (i) at the time such Option
is granted the Option price is at least one hundred ten percent (110%) of the
Fair Market Value of the Common Stock subject to the Option and (ii) such Option
by its terms is not exercisable after the expiration of five years from the date
of grant.
(e) OPTION PRICE. The purchase price of Common Stock issued under each Option
shall be the Fair Market Value of Common Stock subject to the Option on the date
the Option is granted, except that, for Incentive Stock Options, the price shall
be one hundred ten percent (110%) of the Fair Market Value in the case of any
person or entity who owns stock comprising more than ten percent (10%) of the
total combined voting power of all classes of stock of the Corporation or its
Parent Corporation or Subsidiary.
(f) TERMINATION OF SERVICE AS A DIRECTOR. If an Optionee's service as a director
of the Corporation terminates for any reason, including death and disability,
then: (1) unless otherwise determined at the discretion of the Board, the
Options which are not vested and not exercisable shall automatically terminate;
(2) except in the event of the Optionee's death or permanent and total
disability (within the meaning of Section 22(e)(3) of the Code), the Options
which are vested and exercisable on the date of such termination may not be
exercised later than ninety (90) days (or such other period of time as
determined by the Committee) after the termination date; and (3) in the event of
the Optionee's death or permanent and total disability (within the meaning of
Section 22(e)(3) of the Code), the Options which are vested and exercisable on
the date of such termination may not be exercised later than twelve (12) months
(or such other period of time as determined by the Committee) after the
termination date.
SECTION 8 - RECAPITALIZATION OR REORGANIZATION
(a) Except as hereinafter otherwise provided, the aggregate number of shares
which may be issued pursuant to an Award and the outstanding Awards shall be
subject to an automatic pro rata adjustment by the Committee as to the number
and price of shares of Common Stock in the event of changes in the outstanding
Common Stock by reason of stock dividends, stock splits, reverse stock splits,
reclassifications, recapitalizations, reorganizations or other relevant changes
in capitalization occurring after the date of the grant of any such Options.
(b) The existence of the Plan and the Awards granted hereunder shall not affect
in any way the right or power of the Board or the stockholders of the
Corporation to make or authorize any adjustment, recapitalization,
reorganization or other change in the capital structure of the Corporation, a
Parent Corporation or a Subsidiary or their business, any merger or
consolidation of the Corporation, a Parent Corporation or a Subsidiary, any
issue of debt or equity securities having any priority or preference with
respect to or affecting Common Stock or the rights thereof, the dissolution or
liquidation of the Corporation, a Parent Corporation or a Subsidiary, or any
sale,
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lease, exchange or other disposition of all or any part of their assets or
business or any other corporate act or proceeding.
(c) The shares with respect to which Options may be granted are shares of Common
Stock as presently constituted but if and whenever, prior to the expiration of
an Option theretofore granted, the Corporation shall effect a subdivision or
consolidation of shares of Common Stock or the payment of a stock dividend on
Common Stock without receipt of consideration by the Corporation, the number of
shares of Common Stock with respect to which such Option may thereafter be
exercised (i) in the event of an increase in the number of outstanding shares
shall be proportionately increased , and the purchase price per share shall be
proportionately reduced, and (ii) in the event of a reduction in the number of
outstanding shares shall be proportionately reduced, and the purchase price per
share shall be proportionately increased.
(d) If the Corporation recapitalizes or otherwise changes its capital structure,
thereafter upon any exercise of an Option theretofore granted, the Optionee
shall be entitled to purchase under such Option, in lieu of the number of shares
of Common Stock as to which such Option shall then be exercisable, the number
and class of shares of stock and securities, and the cash and other property to
which the Optionee would have been entitled pursuant to the terms of the
recapitalization if, immediately prior to such recapitalization, the Optionee
had been the holder of such record of the number of shares of Common Stock then
covered by such Option.
(e) In the event of a Corporate Change, unless such time period is otherwise
deemed to be impractical by the Committee, then no later than (i) two business
days prior to any Corporate Change referenced in Clause (i), (ii), (iii) or (v)
of the definition thereof or (ii) ten business days after any Corporate Change
referenced in Clause (iv) of the definition thereof, the Committee shall act to
accelerate the time at which Options then outstanding may be exercised so that
such Options may be exercised in full for a limited period of time on or before
a specified date (before or after such Corporate Change) fixed by the Committee,
after which specified date all unexercised Options and all rights of Optionees
thereunder shall terminate.
(f) Except as hereinbefore expressly provided, issuance by the Corporation of
shares of stock of any class or securities convertible into shares of stock of
any class, for cash, property, labor or services, upon direct sale, upon the
exercise of rights or warranty to subscribe therefore, or upon conversion of
shares or obligations of the Corporation convertible into such shares or other
securities, and in any case whether or not for fair value, shall not affect, and
no adjustment by reason thereof shall be made with respect to, the number of
shares of Common Stock subject to Options theretofore granted, or the purchase
price per share of Common Stock subject to Options.
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SECTION 9 - AMENDMENT OR TERMINATION OF THE PLAN
The Board in its discretion may terminate the Plan or any Option or alter or
amend the Plan or any part thereof or any Option from time to time; provided
that no change in any Award previously granted may be made which would impair
the rights of the Holder without the consent of the Holder, and provided
further, that the Board may not, without approval of the stockholders, amend the
plan:
(a) to increase the aggregate number of shares which may be issued
pursuant to the provisions of the Plan on exercise or surrender of Options;
(b) to change the minimum Option exercise price;
(c) to change the class of employees eligible to receive Awards or increase
materially the benefits accruing to employees under the Plan;
(d) to extend the maximum period during which Awards may be granted under the
Plan;
(e) to modify materially the requirements as to eligibility for
participation in the Plan; or
(f) to decrease any authority granted to the Committee hereunder in
contravention of Rule 16b-3.
SECTION 10 - OTHER
(a) NO RIGHT TO AN AWARD. Neither the adoption of the Plan nor any action of the
Committee shall be deemed to give an employee or director any right to be
granted an Option to purchase Common Stock or any other rights hereunder except
as may be evidenced by an Option Agreement duly executed on behalf of the
Corporation, and then only to the extent of and on the terms and conditions
expressly set forth therein. The Plan shall be unfunded. The Corporation shall
not be required to establish any special or separate fund or to make any other
segregation of funds or assets to assure the payment of any Award.
(b) NO EMPLOYMENT RIGHTS CONFERRED. Nothing contained in the Plan or in any
Award made hereunder shall (i) confer upon any employee or director any right
with respect to employment with the Corporation or any Parent Corporation or
Subsidiary, or (ii) interfere in any way with the right of the Corporation or
any Parent Corporation or Subsidiary to terminate his or her employment or his
or her service as a member of the Board at any time.
(c) OTHER LAWS; WITHHOLDING. No fractional shares of Common Stock shall be
delivered, nor shall any cash in lieu of fractional shares be paid. The
Corporation shall have the right to deduct in connection with all Awards any
taxes required by law to be withheld and to require any payments necessary to
enable it to satisfy its withholding obligations. The Committee may permit the
Holder of an Award to elect to surrender, or authorize the Corporation to
withhold shares of Common Stock (valued at their Fair Market Value on the date
of surrender or withholding of such shares) in
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satisfaction of the Corporation's withholding obligation, subject to such
restrictions as the Committee deems necessary to satisfy the requirements of
Rule 16b-3.
(d) NO RESTRICTION OF CORPORATE ACTION. Nothing contained in the Plan shall be
construed to prevent the Corporation or any Parent Corporation or Subsidiary
from taking any corporate action which is deemed by the Corporation or such
Parent Corporation or Subsidiary to be appropriate or in its best interest,
whether or not such action would have an adverse effect on the Plan or any Award
made under the Plan. No employee, director, beneficiary or other person shall
have any claim against the Corporation or any Parent Corporation or Subsidiary
as a result of such action.
(e) RESTRICTIONS ON TRANSFER. An Award shall not be transferable otherwise than
by will or the laws of descent and distribution and shall be exercisable during
the lifetime of the Holder only by such Holder or the Holder's guardian or legal
representative.
(f) INFORMATION TO EMPLOYEES. Optionees under the Plan shall receive financial
statements annually regarding the corporation during the period the options are
outstanding.
(g) RULE 16B-3. It is intended that the Plan and any grant of an Award made to a
person subject to Section 16 of the Exchange Act meet all of the requirements of
Rule 16b-3. If any provisions of the Plan or any such Award would disqualify the
Plan or such Award hereunder, or would otherwise not comply with Rule 16b-3,
such provision or Award shall be construed or deemed amended to conform to Rule
16b-3.
(h) GOVERNING LAW. The Plan and securities issued hereunder shall be construed
in accordance with the laws of the State of California and all applicable
federal law.
ADOPTED BY THE COMMITTEE AS OF APRIL 24, 1997
APPROVED BY THE SHAREHOLDERS AS OF JULY 31, 1997
AMENDED BY THE BOARD OF DIRECTORS AS OF AUGUST 5, 1999
AMENDED BY THE BOARD OF DIRECTORS AS OF AUGUST 3, 2000
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